C
y
c
l
o
p
h
a
r
m
L
i
m
i
t
e
d
A
n
n
u
a
l
R
e
p
o
r
t
2
0
2
1
Annual
Report
2021
Nuclear Medicine
Innovative
solutions in nuclear
medicine
Cyclopharm Limited is a health technology
company that is a world leader in functional
lung ventilation imagery. Our imaging product
Technegas™ is a clinical market leader in
nuclear medicine diagnostic imaging and is
available in over 60 countries.
Contents
01 2021 Highlights
02 What is Pulmonary Embolism?
04 Chairman’s Letter
06 Managing Director’s Review
18 Directors’ Report
33 Auditor’s Independence Declaration
34 Consolidated Financial Statements
38 Notes to the Consolidated Financial Statements
75 Directors’ Declaration
76 Independent Auditor’s Report
80 Shareholder Information
81 Corporate Directory
2021 Highlights
Record Group
sales revenue
$17.70m
up 20.6%
Third-party
distribution
revenues
$4.10m
USFDA
Clinical trials
for Technegas™
have met Primary
and Secondary
endpoints
Maintained
full year
Dividends at
1.0cps
Summary Financials
Sales Revenue
Technegas™ Division
Molecular Imaging Division
Total Sales Revenue
Net Loss Before Tax
Technegas™ Division
Molecular Imaging Division
Total Net Loss Before Tax
Loss After Tax
Full Year ending 31 December
Diluted Loss Per Share
Sales revenue
Five year history
2019
$'000
14,079
–
14,079
(3,171)
746
(2,425)
(2,912)
2019
cents
(4.28)
2020
$'000
14,523
153
14,676
(5,983)
139
(5,844)
(6,044)
2020
cents
(7.89)
2021
$'000
17,312
392
17,704
(4,652)
305
(4,347)
(5,040)
2021
cents
(5.62)
Change
%
19.2%
156.2%
20.6%
(22.3%)
119.4%
(25.6%)
(16.6%)
Change
%
(28.8%)
up
20.6%
$17.70m
2021
$14.68m
2020
$14.08m
2019
$13.19m
2017
$13.40m
2018
1
Cyclopharm Limited | annual report 2021 What is
Pulmonary
Embolism?
Pulmonary embolism (PE) is a blood clot in the lung…
the clot starves the body of Oxygen.
It is estimated that approximately 3 million people suffer from
a PE every year, however, the number is likely to be much higher.
If left untreated, 30% of PE is fatal. That is why there’s so much
effort in trying to diagnose the condition.
This is where Technegas™ comes in…
Comparison of V/Q SPECT and CT Angiography for the Diagnosis of
Chronic Thromboembolic Pulmonary Hypertension
A
B
B
—
A
Ventilation scan (with Technegas™)
CT imaging
Fusion of Ventilation and CT imaging
With the advent of 3D imaging or SPECT imaging, nuclear medicine
provides the most accurate method for diagnosing pulmonary embolism
than any other modality.
2
Cyclopharm Limited | annual report 2021 Technegas™ has been used
in over 4.4 million patient studies globally.
3
Cyclopharm Limited | annual report 2021 Chairman’s
Letter
Dear Shareholders,
Cyclopharm delivered another solid financial
performance in 2021 while continuing to
work with the United States Food and Drug
Administration (USFDA) on the final stage of
the approval process to sell the company’s
core Technegas™ products in the US market.
Cyclopharm’s ability to deliver a record
revenue performance in 2021 despite the
ongoing challenges and disruption in our
markets from the global COVID-19 pandemic
demonstrates the resilience of our business.
Alongside supporting the approval process
needed to initiate Technegas™ sales in the
US, your company made significant progress
in developing new revenue streams through
third-party distribution agreements and in
advancing the ‘Beyond PE’ growth initiatives.
The key focus for Cyclopharm throughout
2021 was supporting the progress of the
USFDA approval process for Technegas™.
Commencing sales in the US market is a
transformational business opportunity that
is estimated to be worth US$180 million
annually. The approval process is in its
final stages following a request from the
USFDA for additional information that
Cyclopharm is highly confident of supplying
in the second half of 2022. The additional
information request from the USFDA did
not relate to the demonstrated efficacy and
safety of Technegas™.
Cyclopharm’s confidence of achieving
USFDA approval of Technegas™ is
also demonstrated by the continuing
preparations for US commercialisation of
Technegas™. Your company is investing to
build the inventory, sales capabilities and
infrastructure to support a rapid entry into
the US upon USFDA approval, expected
within 6 months of satisfying the additional
information request.
In 2021, Cyclopharm also continued to
leverage its regulatory expertise and
operational footprint to secure third-party
distribution agreements in Europe and Asia
Pacific. These partnerships demonstrate the
success of the Company’s strategy to pursue
additional revenue streams from distributing
third parties’ products. During the year, the
third-party distribution business contributed
$4.1 million of revenue to the business,
nearly double the 2020 figure. In the current
financial year, the Company plans to expand
this revenue stream further by entry into
new markets, including Australia.
Cyclopharm’s ‘Beyond PE’ initiatives are
designed to develop a new pipeline of growth
opportunities through the use of Technegas™
in diagnostic applications beyond Pulmonary
Embolism (PE). Your Company is funding
multiple studies and supporting clinicians
working to demonstrate Technegas’™
potential as a diagnostic tool to manage
Chronic Obstructive Pulmonary Disease
(COPD), asthma and other respiratory
diseases states. Cyclopharm estimates COPD
alone to be a market 30 times the size of PE.
The ‘Beyond PE’ initiatives have recently
expanded into clinical research investigating
the use of Technegas™ for patients suffering
from long-COVID. Preliminary results from
the ‘Beyond PE’ initiatives are promising
and Cyclopharm is expecting peer reviewed
results to start to be published in the first
half of 2022.
4
Cyclopharm Limited | annual report 2021 Toronto, Canada
Atlanta, USA
Dublin, Ireland
Bristol, UK
Stockholm, Sweden
Leverkusen, Germany
Brussels, Belgium
Available now
Coming soon
CYC subsidiaries
Head office
Technegas™ is available
in over 60 countries
Cyclopharm ended the financial year
with a strong balance sheet and a cash
balance of $29.25 million, reflecting the
capital raising undertaken during the
financial year, and ongoing operational
cashflows. The proceeds of the capital
raise will be used to fund the ongoing FDA
approval process, the anticipated launch
of Technegas™ into the US market, R&D
activities and working capital to fund
continuing organic growth.
We expect 2022 to be another successful
and productive year. Our expectations
is the commencement of sales of
Technegas™ in the US, will significantly
improve the underlying profitability of
Cyclopharm. In addition, we are also
anticipating sales of Technegas™ in
our existing markets will rebound to
beyond pre-COVID-19 levels, as the
world emerges from the pandemic. We
also expect our third-party distribution
revenues to continue to grow and be an
important source of additional earnings
for Cyclopharm, particularly as we expand
third-party distribution into Australia.
Cyclopharm’s balance sheet strength and
continuing clinical studies supporting the
‘Beyond PE’ initiatives mean the Company is
well placed to extend its market leadership
in lung imaging and drive ongoing growth.
In line with good corporate governance
practices, Cyclopharm’s Board continues
to evaluate its skills and composition
to ensure they appropriately support
the Company’s growth and governance
requirements. In anticipation of US market
entry and the expansion of Technegas™
Sydney, Australia
beyond the PE market, the Board appointed
Ms Dianne Angus, an experienced Executive
and Director in the biotechnology sector
as an additional Non-Executive Director
during 2021.
In December 2021, Independent Director,
Mr Tom McDonald, retired from the Board
of Cyclopharm due to health reasons.
The Board acknowledges and thanks
Mr McDonald for his significant and valuable
contribution as a director of the Company
since joining the Board in 2017. The
Company intends to commence a search
process for Mr McDonald’s replacement on
the Board and will advise shareholders of
the outcome of this process in due course.
On behalf of the Board, I thank our
Managing Director, all our staff and wider
stakeholders for their commitment to the
company and I thank you, the shareholders,
for your continuing support.
David Heaney
Chairman
5
Cyclopharm Limited | annual report 2021
Managing
Director’s
Review
Key features of Cyclopharm’s
financial results for the 2021 year
include:
Record Group revenue
• $17.70 million, up 20.6%
Technegas™ sales increased
• Up 7.0% to $13.21 million
Growth in third-party
distribution revenue
• Delivers $4.10 million of revenue
in FY2021
Net cash position at year-end
of $29.25 million
• Following a successful share
placement and retail share
purchase plan in February 2021
that raised $33.0 million
• Cyclopharm is now fully funded
for the next phase of growth
Approved R&D tax incentive
• Resulting in Other Income
of $2.29 million received
in January 2022
Technegas™ now in the
final stages of the USFDA
Approval Process
• $1.30 million investment in 2021
• Final USFDA response to be
submitted in Q3 2022
Processes in place for
rapid commercialisation
of Technegas™
• United States sales to
commence following receipt
of USFDA approval
Solid progress in
developing new ‘Beyond PE’,
clinical applications
• Large, long-term growth
opportunities for Technegas™
Final dividend
• Maintained at 0.5 cents per share,
bringing total unfranked dividends
for FY2021 to 1.0 cps
6
Cyclopharm Limited | annual report 2021 4 millionth PAS
Dear Shareholders,
Cyclopharm delivered another solid financial performance
in 2021 and continues to make progress in executing on growth
strategies and opportunities.
Cyclopharm has four major strategies for growth:
1
Grow
2
Expand
3
4
Develop
Leverage
Grow Technegas™
sales
Expand the use
of Technegas™
Identify, develop
and commercialise
complementary
innovative
technology
Leverage core
strengths to
accelerate our
third-party
distribution business
Against these objectives, during 2021, Cyclopharm delivered a record revenue
performance and entered the final stage of the approval process to commence sales of
Technegas™ in the USA market in 2022.
The company focussed its attention on progressing United States Food and Drug
Administration (USFDA) approval, while continuing to invest in further R&D and support
of clinicians to expand the use of Technegas™ in new diagnostic applications as part of
our ‘Beyond PE’ initiatives.
With new offices in Brussels, Belgium and Bristol, England, the company also continued
to leverage our operational infrastructure, regulatory resources and direct marketing
capabilities to expand our distribution partnerships which now include Jubilant
Draximage, ROTOP, Lucerno and Tema Sinergie.
7
Cyclopharm Limited | annual report 2021 Financial performance
Cyclopharm generated record total revenues
in FY2021 of $17.70 million, up 20.6% on the
prior year. Revenue from sales of Technegas™
generators and Patient Administration Set (PAS)
consumables have remained robust, slightly
exceeding FY2020 revenues, with unit sales of
each also exceeding those of FY2020.
Sales in our core proprietary technology
Technegas™, used in functional lung imaging
primarily for the detection of pulmonary
embolism, continued to be impacted by delays to
medical procedures in certain markets caused by
the ongoing pandemic. In addition, Technegas™
service revenue declined marginally over the
period, with generator servicing also being
impacted globally by travel and access restrictions
associated with COVID-19. Consumables revenue
increased modestly, by 5% year on year, from
$9.07m to $9.54m.
Earnings from the distribution of third-party
products in Europe, a new revenue stream
introduced in FY2020, added $4.10 million of
additional revenues for FY2021, growth of 89%
compared to FY2020. This supplemented our
Technegas™ business. Third-party distribution
revenue is driven by a mix of radiopharmaceuticals,
capital equipment and associated consumables.
These products, whilst at lower margins than our
proprietary Technegas™ products, are contributing
strongly as an ongoing source of complementary
profits. In the current financial year, the Company
expects to expand this revenue stream in new
markets, including Australia.
Cyclopharm recorded a loss after tax of
approximately $5.04 million, an improvement
of $1.00 million on the prior year’s loss of
$6.04 million. This performance primarily reflects
the ongoing investment required for Cyclopharm
to meet global regulatory requirements, which
include the heavy investment required for
the USFDA approval process. Expenditure on
the Technegas™ USFDA regulatory approval
process in 2021 was $1.30 million, compared to
$3.31 million in the prior year. As a sign of the
Board’s confidence,a total of $14.69 million has
been expensed on the current USFDA approval
process project up to 31 December 2021
Net loss before tax for the year was $4.35 million
compared to net loss before tax of $5.84 million
in the prior year. The 2021 result includes
$1.09 million in legal costs associated with
the current actions to protect the Company’s
commercial interests in Europe and Australia,
and an increase in salaries and wages expense of
approximately $1.00 million in order to comply
with extensive new regulatory compliance
regulations globally and establishment of sales
and service operations in Belgium and the
United Kingdom.
Cyclopharm ended the financial year with a
strong balance sheet and a cash balance of
$29.25 million, reflecting the capital raising
undertaken during the financial year, and ongoing
operational cashflows. This cash balance ensures
the company remains well capitalised to fund the
ongoing FDA approval process, the anticipated
launch of Technegas™ into the US market, R&D
activities and working capital to fund continuing
organic growth.
The proceeds of the capital raise are also being
selectively invested into new larger growth
opportunities for Technegas™ in the ‘Beyond PE’
respiratory medicine market.
Cyclopharm completed its Research and
Development Tax incentive claim for the 2021
financial year and received a cash payment
in January 2022 of $2.30 million from the ATO
(vs 2020 $3.10 million).
Based on ongoing and planned research and
development activities, Cyclopharm also expects
to receive an R&D tax incentive in respect of
the current financial year. The exact amount of
any future R&D tax incentive will be subject to
the nature, timing and value of R&D activities
undertaken each year, some elements of which
are outside of the company’s control.
8
Cyclopharm Limited | annual report 2021 $13.21m
$12.35m
3,079
2,782
57
51
$4.10m
$2.17m
2020
2021
2020
2021
2020
2021
2020
2021
Technegas™
Sales ($m)
Technegas™ PAS
Sales (units)
Technegas™ Generator
Sales (units)
Third-party Distribution
Revenues ($m)
Operations and strategy
During the year to 31 December 2021, we
continued to execute the Company’s growth
strategy of leveraging its significant intellectual
property, technology and technical expertise to
broaden sales into new countries and expand
end-use device applications and complementary
businesses.
Cyclopharm successfully delivered a number of
significant achievements, including:
– Final Response documentation related to the
USFDA application to market and distribute
Technegas™ in the United States on track for
submission Q3 2022
– Processes in place for rapid roll out of
Technegas™ in the US following USFDA
approval, including personnel training and
inventory build
– Strong support for Technegas™ in the USA
continues to be expressed from frontline
healthcare workers based on clinical outcomes
and the strong safety profile of Technegas™
– Initiation of further pilot clinical trials
targeting new applications for Technegas™
in chronic respiratory disease states and post
COVID-19 infection
– Technegas™ procedures rebounded following
initial impact of the COVID-19 pandemic
– Technegas™ H2 consumable sales recovered to
pre-pandemic levels in key markets
– Favourable progress with regard to litigation in
Australia and Germany to defend Cyclopharm’s
intellectual property is expected to continue
throughout 2022
– In anticipation of US market entry, the Board
appointed Ms Dianne Angus, an experienced
Executive and Director in the biotechnology
sector as an additional Non-Executive Director
during 2021
Expand Technegas™ revenues
Technegas™ sales grew by 7% to $13.21 million,
edging closer to pre-pandemic levels of
approximately $14 million.
Sales of Patient Administration Sets (PAS)
represented 72.2% of Technegas™ revenue 3,079
boxes of PAS were sold (equal to 153,950 patient
procedures), which is 297 more than the previous
year, an increase of 11%. PAS revenue rebounded
strongly in the major established markets of
France, Germany and Canada, by 25%, 27% and
18% respectively. Declines in sales were recorded
in other smaller-user European countries and
Asia. All other markets recorded gains in sales,
with overall PAS revenue up 5%.
Canada remains the largest country market by
volume with 822 PAS boxes sold, closely followed
by France with 750 PAS boxes sold in 2021.
A total of 57 Technegas™ Generators were sold
compared to 51 sold in FY2020.
The Technegas™ division benefited from new
third-party distribution revenues increasing
by $1.93 million to $4.10 million, from products
manufactured by Rotop, TEMA and Draximage.
Sales of generators and other service revenue
represented 27.8% of Technegas™ total revenue,
up slightly from 26.6% in FY2020. Technegas
has been recognised as a safer alternative to
other nuclear medicine ventilation imaging
agents in reducing the spread of COVID-19. The
increase was primarily a result of a conversion of
customers from competitive products in response
to the risk of COVID-19 contamination.
9
Cyclopharm Limited | annual report 2021 Sales by Region 2021
Asia Pacific $3.27m
Canada $2.44m
Europe $11.51m
Rest of World $0.09m
Regional review
Europe
Europe was the best performing region in 2021
delivering sales of $11.51 million up 10% on 2020.
– The European result benefited from
$3.00 million of sales generated through
Cyclopharm’s third-party distribution
agreements.
– The underlying sales of Technegas™ products
and services in Europe improved 3% to
$8.51 million, with the rebound in sales from
France making it the largest European country
market for Technegas™ products.
– In total 1,609 PAS sets were sold in Europe,
up from 1,399 in 2020 and 37 generators were
sold, up from 33 in 2020.
– PAS sales in Germany continued to perform
strongly in line with the recovery in imaging
services flowing from the initial COVID-19
outbreak. This resulted in PAS sales of 157 in
2021, up from 122 in 2020.
Asia-Pacific
The Asia-Pacific region was robust, with
revenues up 45% from $2.26 million in 2020 to
$3.27 million in 2021.
– Generator sales across the Asia-Pacific region
were stable at 10 units in 2021, comprising
6 Units in Asia (FY2020: 3 units) and 4 units in
Australia/NZ (FY2020: 7 units).
– Asia-Pacific PAS sales of 588 in 2021 were down
8% from 642 in 2020.
– The ongoing impact of COVID-19 in reducing
the number of diagnostic procedures across
the Asia-Pacific region is starting to abate,
albeit modestly. The gradual resumption of
non-urgent elective medical procedures in
these markets is providing the impetus for a
modest recovery in 2022.
Canada
Canada reported a strong recovery in sales of
$2.44 million in 2021, up 39% compared to sales
of $1.76 million in 2020.
– Canada saw generator sales rise by 2 to 9
in 2021 due to continuing market share
penetration.
– Canadian PAS sales grew by 18% to 822
reflecting the lessening impact of COVID-19
and a strong market position.
Rest of the World
Revenue in South Africa and Latin America
continued to be severely impacted by COVID-19,
but showing some green shoots of recovery, rising
by 55%, from $62,506 in 2020 to $97,023 in 2021.
– PAS sales in Latin America were up 47% from
30 in 2020 to 44 in 2021.
– There were no generators sold in Latin America
during 2021.
– South African PAS sales rose from 15 in 2020
to 16 in 2021, a rise of 7%.
– There was one generator sale in South Africa
in 2021, up from zero in 2020.
Sales by region
Canada
Europe
APAC
Rest of the World
Total
Technegas™
Technegas™
Third-party Sales
Technegas™
Third-party Sales
Technegas™
2018
$m
2.14
8.35
0
2.66
0
0.25
13.40
2019
$m
2.55
8.74
0
2.35
0
0.44
14.08
2020
$m
1.76
8.27
2.17
2.26
0
0.06
14.52
2021
$m
2.44
8.51
3.00
2.17
1.10
0.09
17.31
Change
FY2020
TO 2021
39%
3%
38%
(4%)
100%
50%
19%
10
Managing Director’s Review (CONTINUED)Cyclopharm Limited | annual report 2021 The existing market
for PE in the USA
is estimated to be
US$180m
annually
USFDA approval process
The most significant business opportunity for
Cyclopharm is gaining USFDA approval to sell
Technegas™ in the US market. This process
is now in its final stages, following a request
from the USFDA in June 2021 for additional
information arising from a pre-approval
inspection. The additional information request
does not relate to the demonstrated efficacy and
safety of Technegas™.
The Company met with the USFDA in late
January 2022 to discuss its progress on the
request for additional information and other
matters. Based on work undertaken and the
significant engagement with the regulator to
date, Cyclopahem is highly confident it will
submit this information in Q3 2022 and all items
and recommendations identified by the USFDA
will be addressed and finalised in FY2022.
Cyclopharm is also continuing its preparations
for US commercialisation of Technegas™,
including personnel training and inventory
build, to ensure a rapid commencement of
sales once USFDA approval is granted. The USA
presents Cyclopharm with a transformational
market opportunity that we estimate is worth
US$180 million annually. The Company’s
strategy for Technegas™’s rapid entry into the
US is built around the supply of generators to
targeted US hospitals to support easy adoption
of Technegas™.
Strong clinical support in the USA
The impact of the COVID-19 pandemic in
the USA has been a catalyst for expressions
of support for Technegas™ and accelerated
support for the technology from US medical
professionals including:
– June 2020, 77 US based Nuclear Medicine
physicians wrote to the USFDA requesting an
expedited NDA review for Technegas™
– November 2020, a second letter was sent to the
FDA with 90 physicians’ signatures imploring
both Cyclopharm and the FDA to move quickly
towards approval
– November 2020, a group of 102 front-line
Nuclear Medicine Technologists asked the
USFDA to expedite the approval of Technegas™
stating: “We ask the FDA to finalize the
approval of the Technegas™ application with
utmost expediency
– January 2021, the 16,000-member Society
of Nuclear Medicine and Molecular Imaging
(SNMMI) wrote a letter requesting “Fast Track
Approval” of Technegas™
This high level of support from US medical
professionals reinforces the Board’s expectation
there will be strong initial sales demand for
Technegas™ following USFDA approval.
11
Cyclopharm Limited | annual report 2021 Cyclopharm is building
inventory to rapidly roll out
Technegas™ in the USA
once USFDA approval has
been achieved
US Market entry and sales model
As previously announced, Cyclopharm is
undertaking a number of activities to ensure
it is well placed to rapidly roll out Technegas™
in the USA once USFDA approval has been
achieved. These activities include, building
inventory reserves, the Company has grown its
inventories from $4.7 million to $5.5 million at
year end; pursuing agreements for third-party
distribution, service and installation, and
administrative support.
It is very important to emphasise that US health
insurance reimbursement for Technegas™ will be
based on established nuclear medicine procedures
that are agnostic to the approved agents being
used. Therefore, in the US market Technegas™
will be reimbursable from day-one.
The US nuclear medicine ventilation imaging
market for pulmonary embolism alone is
estimated to be approximately US$180 million
annually. Cyclopharm intends to access this
market in two stages
Stage one
– Address the current US market worth
US$90 million.
– Based on the Canadian market, Cyclopharm
remains confident that Technegas™ can achieve
a 50% share of the USA market over the first
2 to 3 years.
– A US market share of 80% should be achievable
over a 5 to 7-year period.
Stage two
– Increasing the pulmonary embolism diagnostic
market that is imaged through nuclear
medicine, from 15% to 30% of procedures.
– The unique properties of Technegas™, which
improve imaging outcomes, are expected to
drive adoption by the USA nuclear medicine
market of the 3-D imaging technique referred to
as Single Photon Emission Tomography (SPECT)
for PE imaging rather than the current 2-D CT
pulmonary angiogram (CTPA) scan or Planar
imaging that currently represent 85% of all
PE imaging in the USA.
Quality management system
In parallel with the clinical elements of our
USFDA New Drug Application, Cyclopharm is
implementing an updated Quality Management
System to include an Electronic Quality
Management System (EQMS) at our manufacturing
facility in Sydney. The Company has initiated a
comprehensive documentation review of both our
medical devices and pharmaceutical products
to ensure Cyclopharm meets the compliance
requirements of the most recent USFDA guidelines
as well as the new International Medical Device
Single Audit Program (MDSAP) implemented in
2019 and upcoming compliance with European
Medical Device Regulations (MDR) that was
effective as of 2021.
MDSAP is a regulatory harmonisation initiative
between Australia, Brazil, Japan, Canada and the
United States. MDSAP compliance will minimise
disruptions due to multiple regulatory audits,
provide predictable audit schedules and incorporate
the ISO 13485 compliance required for our CE
mark in Europe. The Company attained MDSAP
certification during 1H 2019.
Renewal of European regulatory approval
Technegas™ achieved renewal of its CE mark
under the extensive new European Medical Device
Regulations in January 2022.
The MDR replaced the Medical Device Directive
(93/42/EEC) and Active Implantable Medical Device
Directive (90/385/EEC). The MDR brings with it
more scrutiny of technical documentation; it
requires a higher level of assessment pertaining to
the elements of product safety and performance by
placing stricter requirements on clinical evaluation
and post-market clinical follow-up; MDR also
requires increased traceability of devices through
the supply chain.
The renewal follows a significant achievement in
light of sweeping European regulatory changes
associated with the transition of medical device
regulation from the MDD directive to the new
MDR regulation. It reflects significant investment
to updating Cyclopharm’s quality management
system to current regulatory standards.
12
Managing Director’s Review (CONTINUED)Cyclopharm Limited | annual report 2021 Over 500 million
patients suffering with
COPD and Asthma could
benefit from the use
of Technegas™
‘Beyond PE’ – substantially expanding
the use of Technegas™
Cyclopharm is confident that the extension of
Technegas™ into new applications such as the
diagnosis and monitoring of COPD, asthma
and other respiratory disease states will create
opportunities to exponentially expand the market
for Technegas™ beyond its traditional PE market.
Technegas™ remains the recognised functional
ventilation imaging agent used in diagnosing
Pulmonary Embolism as referenced in both
the recently published Canadian Association of
Nuclear Medicine Guidelines(1) and the updated
2019 European Association of Nuclear Medicine
Guidelines(2). Both guidelines reinforce the
superior use of Technegas™ particularly in
patients with COPD and the potential for nuclear
medicine imaging.
Cyclopharm estimates the global COPD market
is approximately 30 times the size of the PE
market and over 500 million patients suffering
with COPD and Asthma could benefit from the
use of Technegas™ in diagnosis and ongoing
patient monitoring/management. These markets
represent significant opportunities to expand
sales of Technegas™ and drive shareholder value
over the medium term.
Cyclopharm continues to sponsor a number of
clinical trials that investigate new applications
for Technegas™. The diagnosis and monitoring
of COPD, asthma and other respiratory disease
states, are all being considered.
One example of these trials is a study into the
use of Technegas™ in patients with severe
small airways disease, being conducted at The
University of Newcastle, Hunter Regional Medical
Institute (HRMI) and John Hunter Hospital.
The 100-patient study included a 39-patient
subset who underwent tests using Technegas™
to determine their response to therapy. The study
images are currently being analysed with findings
expected to be published later this year.
In addition to the Newcastle study, there are
five additional clinical initiatives that are
sponsored by Cyclopharm to include applications
in patients with COPD, lung transplant and
implications related to patients who are suffering
lasting effects of COVID-19, often referred to as
‘Long-COVID’.
The Company’s ‘Beyond PE’ initiatives are
linked to significant Research and Development
activities, which have been impacted by COVID-19
as the rate of patient recruitment for trials has
been challenging. In addition, the Company has
received enquiries from several third-parties in
the USA interested in conducting additional trials
on Technegas™, including for matters associated
with patients who had contracted COVID-19.
Advancing these initiatives could expand the use
of Technegas™ by improving the diagnosis and
management of patients with COPD; other small
airways diseases and those who are recovering
from COVID-19 Related Lung Ventilation and
Perfusion Injury.
1. Leblanc et. Al. CANM Guidelines for Ventilation/Perfusion (V/P SPECT) In Pulmonary Embolism. November 2018
2. Bajc et. Al. EANM guideline for ventilation/perfusion single-photon emission computed tomography (SPECT) for diagnosis
of pulmonary embolism and beyond. European Journal of Nuclear Medicine and Molecular Imaging. July 2019. https://doi.
org/10.1007/s00259-019-04450-0
13
Cyclopharm Limited | annual report 2021 Ultralute™ extends
the useful life of
Molybdenum-99
generators by
up to 50%
– Rutting – Effect of combination inhaled
therapy on ventilation distribution measured
by SPECT/CT imaging in uncontrolled asthma
(https://doi.org/10.1152/japplphysiol.01068.2020)
– Bajc – Pulmonary Functional Imaging,
Basics and Clinical Application of
Nuclear Medicine and Hybrid Imaging
(https://doi.org/10.1007/978-3-030-43539-4_7)
– Al-Mashat – Pulmonary perfusion
and NYHA classification improve after
cardiac resynchronization therapy
(https://doi.org/10.1007/s12350-021-02848-8)
Whilst achieving USFDA approval remains a
major objective for Cyclopharm, the potential in
applications ‘Beyond PE’ represents a significant
opportunity for the Company.
Commercialising new technologies –
Ultralute™
Ultralute™ is a proprietary technology owned
by Cyclopharm that extends the useful life of
Molybdenum-99 (Mo-99) generators by up to 50%.
This technology improves operating efficiencies
in nuclear medicine departments and can lead to
better health outcomes for patients.
Changes in the European Union (EU) have
required regulators to reassess and recertify all
existing medical devices against more onerous
Medical Device Regulations, and the scale of
this task has slowed the introduction of new
products into the EU region.
This has delayed the registration of Ultralute™
in Europe, and consequently, revenues from the
sale of Ultralute™ did not commence in 2021.
Indicative results from sponsored initiatives,
like the following case study and abstract,
indicate the clinical utility in these disease states
with published results expected in the first half
of 2022.
– McDonald – Imaging for precision medicine:
can V-P SPECT measure mepolizumab response
in asthma? (DOI: https://doi.org/10.1002/rcr2.717)
– Tahir – Investigating the Origin of the Frequency
Dependence of Respiratory Resistance to Airflow
in Post Lung Transplant Patients as a Marker
for Chronic Lung Allograft Dysfunction (https:
ajrccm-conference.2021.203.1_MeetingAbstracts.
A4612 (atsjournals.org)
With the extensive clinical use of Technegas
globally, during any given year publications,
independent of the Company, highlight the
importance of functional ventilation imaging with
Technegas in numerous respiratory conditions.
A sampling of the independent 2021 publications
referencing Technegas™ include:
– Bajc – Assessment of Ventilation and Perfusion
in patients with COVID-19 discloses unique
information of pulmonary function to a
clinician: case reports of V/P SPECT (https:
10.1177/11795484211030159. eCollection 2021)
– Currie G – A Technical Overview of
Technegas as a Lung Ventilation Agent
(https://doi.org/10.2967/jnmt.121.262887)
– Blanc-Beguin – 68Ga-Labelled Carbon
Nanoparticles for Ventilation PET/
CT Imaging: Physical Properties Study
and Comparison with Technegas®
(https://doi.org/10.1007/s11307-020-01532-6)
– Bahloul – Signs of tracheobronchitis may
constitute the principal finding on the lung
SPECT/CT images of COVID-19 patients
(https://doi.org/10.1007/s00259-020-05139-5)
– Ma – A Feasibility Study on Using Single-Photon
Emission Computed Tomography Pulmonary
Perfusion/Ventilation Imaging for the Diagnosis
of Chronic Thromboembolic Pulmonary
Hypertension and Patient Risk Assessment
(https://doi.org/10.2147/IJGM.S335051)
14
Managing Director’s Review (CONTINUED)Cyclopharm Limited | annual report 2021 5-year agreement with
Jubilant Draximage Inc of
Canada to help drive increase
in third-party revenues
Other businesses
Cyclopharm’s distribution business secures
new contracts
In 2021, Cyclopharm has continued to leverage
its regulatory expertise and operational
footprint to secure third-party distribution
agreements in Europe and Asia Pacific. These
partnerships demonstrate the success of the
Company’s strategy to pursue revenue from
distributing third-parties’ products, following
the acquisition of certain of the Company’s
European distributors.
During the year, the third-party distribution
business contributed $4.10 million of revenue to
the business. This additional revenue stream has
been particularly advantageous during both 2020
and 2021, years in which COVID-19 has impacted
our Technegas™ business.
In line with our strategy to build complementary
revenue streams, we recently initiated the
first sales of a 5-year agreement with Jubilant
Draximage Inc of Canada, to distribute its
RUBY-FILL® Generators and accessories in 14
European countries. Subject to achieving certain
sales targets, Cyclopharm anticipates the contract
will contribute up to approximately €500,000 to
gross annual profit before tax by FY2023.
Macquarie Medical Imaging
Cyclopharm continues to maintain its 20%
equity ownership in Macquarie Medical
Imaging (MMI). It is anticipated that MMI will
be de-registered upon the finalisation of its
accounts payable and receivables.
Litigation Update
As previously announced, Cyclopharm continues
to defend its valuable Intellectual Property
vigorously and successfully. In 2019, the Company
successfully brought an initial civil case against
its former employee in the German market,
Mr Bjorn Altmann and Almedis Altmann GmbH
(“Almedis”).
Litigation expenses were $1.09 million in FY2021
compared to $1.44 million in FY2020. The
Company continues to defend its intellectual
property in German and Australian courts,
and while progress is being made to resolve
each matter, legal proceedings are expected to
continue throughout 2022.
Corporate Governance
In line with good corporate governance practices,
Cyclopharm’s Board continues to evaluate
its skills and composition to ensure they
appropriately support the Company’s growth and
governance requirements.
Specifically, in anticipation of US market entry
and the ongoing work required to expand the use
of Technegas™ beyond the PE market, the Board
appointed Ms Dianne Angus, an experienced
Executive and Director in the biotechnology
sector as an additional Non-Executive Director
during 2021.
In December 2021, Independent Director,
Mr McDonald, retired from the Board of
Cyclopharm due to health reasons. The Board
acknowledges and thanks Mr McDonald for his
significant and valuable contribution as a director
of the Company since joining the Board in 2017.
The Company intends to commence a search
process for Mr McDonald’s replacement on the
Board and will advise shareholders of the outcome
of this process in due course.
15
Cyclopharm Limited | annual report 2021 Leadership Team
Cyclopharm is at the point where a USFDA
approval to market Technegas™ in the US
market will create a step change in financial and
operational performance and mark a new phase
in the growth of the business.
Cyclopharm has, over several years, gathered
some of the best talent in the industry to take
advantage of this transformational opportunity.
The breadth and depth of experience and the
integration of complementary skills across the
Cyclopharm management team will ensure we
can rapidly take advantage of entry into the US
market and the opportunities that will flow from
our ‘Beyond PE’ initiatives.
Summary and outlook
Cyclopharm’s revenue performance proved
to be resilient in 2021. Our ability to deliver
record revenues despite the global pandemic
validates our decision to take control of our
distribution arrangements in Europe. The new
revenue streams from third-party distribution
agreements will support the Company’s financial
performance, ability to maintain dividend
payments and create value for our shareholders
in the years to come. Revenue from Technegas™
Generator and PAS sales in existing markets is
expected to continue to rebound to pre-pandemic
levels or beyond in 2022.
Securing approval to sell Technegas™ in the
US market remains the most significant near
term business opportunity for Cyclopharm. The
Company met with the USFDA in late January
2022 and remains highly confident the requested
information to support the approval process will
be submitted in Q3 2022.
Cyclopharm is continuing its preparations for
a rapid entry into the US market, including
building our inventory and sales capabilities and
infrastructure. USFDA approval is expected to
be secured within 6 months of submission of the
requested additional information.
Cyclopharm is also progressing the Company’s
‘Beyond PE’ strategy with multiple studies
underway to demonstrate Technegas’™ potential
as diagnostic tools that can be deployed in the
treatment of conditions beyond Pulmonary
Embolism, in particular Chronic Obstructive
Pulmonary Disease (COPD). Cyclopharm’s view is
our ‘Beyond PE’ initiatives have the potential to
significantly expand Technegas’™ revenue and
profitability over the medium to longer term in
indications valued at US $900 million per annum.
In 2021, we invested $0.21 million in progress
payments in ‘Beyond PE’ trials, which follows on
from $0.17 million in 2020.
The company’s balance sheet is strong, reflecting
ongoing operations performance and the
completion of a highly successful institutional
placement and retail share purchase plan (SPP) in
early 2021, that raised $33.0 million. The company
will use this new capital to support the rapid
USA commercialisation of Technegas™ and to
selectively support the ‘Beyond PE’ strategy.
16
Managing Director’s Review (CONTINUED)Cyclopharm Limited | annual report 2021 The combination of the Company’s resilient
financial performance and strong capital position
have supported the Board’s decision to maintain a
consistent dividend policy. In this regard, the final
dividend was maintained at 0.5 cents per share
(CPS), giving a total dividend for 2021 to 1.0 cps.
We expect 2022 to be another successful and
productive year that will include the completion
of the final step to support the USFDA approval
process. Cyclopharm has a strong balance sheet
and broad scope of supportive clinical studies
underway that mean the Company is well placed
to extend its market leadership in lung imaging
and drive ongoing growth.
Finally, I thank all my colleagues, the Cyclopharm
Board, with a special thanks to my entire global
team, who collectively have contributed to the
growth of the Company over recent years. On
behalf of the Cyclopharm management team,
with the ongoing support of the Board, we are
absolutely committed to delivering positive health
outcomes for our patients and growing financial
rewards to our shareholders.
James McBrayer
Managing Director
17
Cyclopharm Limited | annual report 2021 Directors’
Report
The Directors of Cyclopharm submit their report
for the year ended 31 December 2021.
Directors
The names and details of the Company’s Directors
in office during the financial year and until the
date of this report are as follows. Directors were in
office for this entire year unless otherwise stated.
Managing Director at Lipa Pharmaceuticals,
Australia’s largest contract manufacturer of over-
the-counter products and senior management
positions with Brambles Cleanaway business and
Syncor, the world’s largest radioactive diagnostic
and therapeutic pharmaceutical provider.
Mr D J Heaney
Non Executive Chairman (Independent)
Mr Heaney was appointed to the Cyclopharm
Board on 20 November 2006 and is currently
the Chairman of Cyclopharm and Chairman
of the Remuneration and Board Nomination
Committees. He was formerly Chairman of the
Audit and Risk Committee until 28 February
2019. Mr Heaney has been re-appointed as acting
Chairman of the Audit and Risk Committee
effective 1 December 2021.
Mr Heaney has also served as a Non-Executive
Director of a number of ASX-listed and non-listed
companies.
Mr Heaney has more than 40 years experience
in all aspects of wholesale banking and finance,
gained in senior management roles with National
Australia Bank Limited and subsidiary companies
in both Australia and the US.
Mr J S McBrayer
Managing Director and Company Secretary
BSPharm, GDM, FAICD, AIM
Mr McBrayer has been a member of the Board
since 3 June 2008 at which time he accepted the
role of Managing Director. Mr McBrayer serves as
a member of the Board Nominations Committee.
Mr McBrayer has more than 30 years experience
in nuclear medicine and is a trained Nuclear
Pharmacist. Mr McBrayer held the role of
Mr T A McDonald
Non Executive Director (Independent)
(ceased on 1 December 2021)
B.Com, FCPA
Mr McDonald was appointed to the Board on
3 April 2017 and has been appointed Chairman of
the Audit and Risk Committee effective 1 March
2019 until his cessation as a Board member
on 1 December 2021. He holds a Bachelor of
Commerce from UNSW and is a Post Graduate
of University of Technology Sydney in Business
Finance. He is a Fellow of CPA Australia, a
member of the Australian Institute of Company
Directors, an Associate with the Governance
Institute Australia and Associate of Chartered
Governance Institute (UK).
Mr McDonald has more than 30 years experience
in the pharmaceutical and technology industries
and has held global senior executive roles with
international biotech Beckman Instruments Inc,
with roles based in USA and Asia Pacific.
Mr McDonald currently does not hold any
other listed directorships but has previously
served as a non-executive director of ASX-listed
FE Investments Group Limited (finance) and
ASX-listed Wolfstrike Group Limited (technology).
He has also previously held senior positions with
ASX-listed Allomak Limited, CK Life Sciences Int’l
Inc., ASX-listed LIPA Pharmaceuticals Limited
and ASX-listed Keycorp Limited.
18
Cyclopharm Limited | annual report 2021 Dividends
On 23 February 2022, the Directors declared
a final unfranked dividend of 0.5 cents per
share in respect of the financial year ended
31 December 2021, to be paid on 12 April 2022
to those shareholders registered on 5 April 2022.
An interim unfranked dividend of 0.5 cents per
share was paid on 13 September 2021.
A final unfranked dividend of 0.5 cents per
share in respect of the financial year ended
31 December 2020 was paid on 13 April 2021.
The balance of franking credits available for
future dividend payments is $1,059.
Principal Activities
During the year, the principal activities
of the consolidated entity consisted of the
manufacture and sale of medical equipment
and radiopharmaceuticals, including associated
research and development and distribution
of third-party products to the diagnostic
imaging sector.
There were no significant changes in the nature
of the consolidated entity’s principal activities
during the financial year.
Ms D M Angus
Non Executive Director (Independent)
(appointed on 10 August 2021)
B.Sc (Hons), M.(Biotechnology)
Ms Angus was appointed to the Board on 10 August
2021. She holds a Master of Biotechnology, Bachelor
of Science (Hons) and a Graduate Diploma of
Intellectual Property Law. Ms Angus is a registered
patent attorney and a member of the Institute of
Company Directors.
Ms Angus is currently a Non-Executive Director
of ASX Listed Companies Imagion Biosystems
Limited and Neuren Pharmaceuticals Limited.
She brings deep executive experience in the
Biotechnology industry and has previously
held senior positions with Prana Biotechnology
Limited (now Alterity Therapeutics) and Florigene
Limited. Ms Angus also has wide expertise
in corporate strategy, innovative product
development, governance and compliance in the
pharmaceutical sector.
Mr J S McBrayer
Company Secretary
Mr McBrayer was appointed as Company
Secretary on 25 March 2011.
Interests in the shares and options of the
Company and related bodies corporate
The number of ordinary Cyclopharm shares
and options on issue held directly, indirectly
or beneficially, by Directors, including their
personally-related entities as at the date of this
report is as follows:
Directors
Mr D J Heaney
Mr J S McBrayer
Ms T A McDonald
As at report date
No. of
shares
No. of
options
Interest
BI
254,500
BI 5,109,580
–
BI
5,364,080
–
200,000
–
200,000
BI: Beneficial interest
19
Cyclopharm Limited | annual report 2021 Operating and Financial Review
Operating results for the year
For the financial year, Cyclopharm recorded a
consolidated loss after tax of $5,040,166. Loss
after tax from the operations of the Technegas™
division was $4,888,814.
Technegas™ divisional revenue of $17,312,091
was 19.2% higher than the previous
year (2020: $14,523,071) with $4,098,985
(2020: $2,173,227) from distributing third-party
products to the diagnostic imaging sector.
Technegas™ division Loss Before Tax of
$4,651,577 (2020: $5,983,277) recorded an
unfavourable variance of $1,331,700 impacted
by higher employee benefits expense of
$8,848,778 (2020: $7,852,257) associated with
ongoing investment in human capital to meet
global regulatory requirements which includes
compliance to USFDA guidelines. USFDA clinical
trial costs totalling $1,303,372 (2020: $3,311,715)
also contributed to the Technegas™ division
Loss Before Tax.
Income from the business venture collaboration
contributed $392,483 to total revenue, up from
$153,086 in 2020.
Financial position
Net assets increased to $43,067,734 at
31 December 2021 (2020: $17,115,850) assisted
by gross proceeds of $33,000,003 in connection
with an institutional share placement and share
purchase plan offset by the net loss after tax
of $5,040,166.
Net cash balance was $29,249,255 at 31 December
2021.
Further details of Cyclopharm’s Operating and
Financial Review are set out on pages 6 to 17 of
the Managing Director’s Review.
Significant changes in state of affairs
Shares issued and cancelled during
the year
(i) On 1 February 2021, 11,538,462 ordinary
shares were issued at a price of $2.60 per new
share in connection with an institutional
share placement,
(ii) On 19 February 2021, 1,153,847 ordinary
shares were issued at a price of $2.60 per new
share in connection with a share purchase
plan to eligible shareholders and
(iii) 408,059 LTIP shares were issued at an
exercise price of $3.20 per share.
There were no other shares issued and cancelled
during the year.
Options issued during the year
No options were issued and cancelled during
the year.
Incorporation of Cyclomedica New Zealand
Limited
On 19 July 2021, Cyclomedica New Zealand
Limited was incorporated in New Zealand as a
wholly owned subsidiary of Cyclomedica Australia
Pty Ltd.
Other than as set out above, there were no
significant changes in the state of affairs of the
Cyclopharm Group during the year.
Significant events after balance date
Final dividend
On 23 February 2022, the Directors declared a
final unfranked dividend of 0.5 cents per share in
respect of the financial year ended 31 December
2021, payable on 12 April 2022.
Other than the above, no matters or
circumstances have arisen since the end of the
financial year, not otherwise dealt with in the
financial report, which significantly affected or
may significantly affect the operations of the
Group, financial position or the state of affairs
of the Group in future financial periods.
20
Directors’ Report (CONTINUED)Cyclopharm Limited | annual report 2021 Likely developments
and future results
Technegas™
The opportunities for developing additional
Technegas™ indications, particularly for asthma
and COPD, will continue to be a key priority. If
successful, there is significant potential to expand
Technegas’™ revenue and profitability over the
medium to longer term.
The Directors maintain their view that FDA
approval to sell Technegas™ into the USA market
provides Cyclopharm with the opportunity to
significantly expand its sales and profitability.
This process is now in its final stages, following
a request from the USFDA in June 2021 for
additional information arising from a pre-
approval inspection. The additional information
request does not relate to the demonstrated
efficacy and safety of Technegas™. Cyclopharm is
highly confident the items and recommendations
identified by the USFDA will be addressed and
finalised in 2022.
The Company met with the USFDA in
late January 2022 to discuss its progress on the
request for additional information and other
matters. Based on work undertaken and the
significant engagement with the regulator to
date, the Company is confident it will submit this
information in Q3 2022.
The Company is also continuing its preparations
for commercialisation of Technegas™, in the
USA including personnel training and inventory
build, to ensure a rapid commencement of
sales once USFDA approval is granted. The USA
presents Cyclopharm with a transformational
market opportunity estimated at US$180 million
annually.
Ultralute™
Cyclopharm is currently seeking to register
Ultralute™, in Europe, as a medical device to
support better acceptance of this new first in
class technology. Changes in the European Union
(EU) have required regulators to reassess and
recertify all existing medical devices against more
onerous Medical Device Regulations, and the scale
of this task has slowed the introduction of new
products into the EU region. Consequently, the
Company does not anticipate Ultralute™ receiving
registration in Europe in 2022 but remains
confident of its ultimate revenue potential.
Further details are set out on page 14 of the
Managing Director’s Review.
Material business risks
The Directors have identified the following
material business risks which may, if they
eventuate, substantially impact on the future
performance of the Cyclopharm Group, along with
its approach to managing these risks. The risk
factors listed below are not exhaustive. Additional
risks may also adversely affect the financial
performance of Cyclopharm.
Regulatory
Future expansion of Cyclopharm’s range of
products and services may be governed by
regulatory controls in each target market and it
is not possible for Cyclopharm to guarantee that
approvals in all target markets will be obtained
and maintained in the future.
The Technegas™ System is required to be
registered with the relevant regulatory bodies
in each country or relevant jurisdiction. If
for any reason such product registrations are
withdrawn, cancelled (or otherwise lose their
registered status) or are not renewed, it may have
a significant effect on the sales of products which
rely on them in the relevant country or countries.
The manufacture of Technegas™ does not involve
the emission of any environmentally sensitive
materials and the Cyclopharm Group is not
required to hold any environmental licence or
consent under the Environmental Protection Act
(Cth). However, in order to expand the Company’s
research and development capabilities, in 2018,
Cyclopharm secured a Radiation Management
Licence from the NSW EPA to sell, possess or store
regulated materials.
It is possible that licensing requirements could
change with the development of new products
and any additional regulatory requirements could
impact upon the profitability of the group.
The Cyclopharm Group has obtained:
– a listing on the Australian Register
of Therapeutic Goods Register for the
TechnegasPlus Technegas™ generator and
the Patient Administration Set (radio-aerosol
administration set);
– CE Mark approvals under the more stringent
European Medical Device Regulations for
Technegas™Plus Technegas™ Generator
and Patient Administration Set (PAS) of the
Technegas™ System;
– a Marketing Authorisation for the Pulmotec™
carbon crucible, which is the drug (medicine)
aspect of Technegas™ in Europe;
– a Medical Device Single Assessment Program
(MDSAP) certificate; and
21
Cyclopharm Limited | annual report 2021 – Notified Body recognition that our Quality
Management System (QMS) complies with the
requirements of ISO13485:2016 for the design,
manufacture, installation and repair service of
the Technegas™ System.
Ongoing regulatory audits/inspections are
necessary for the retention and re-certification
of the above-named certificates/licences for
continued international distribution of the
Technegas™ System.
In 2021, the company has had regulatory
inspections/audits of the Kingsgrove
manufacturing premises and the company’s
QMS conducted by the US Food and Drug
Administration, the British Standards Institute
(an internationally renowned European Notified
Body), and other international regulatory bodies
including TÜV SÜD and TÜV Rheinland. The
company successfully obtained CE certification
under the new European Medical Device
Regulations (2017/745/EU).
Cyclopet Pty Limited, which is involved in
the operations of the cyclotron, is subject to
significant environmental regulations under the
Radiation Control Act, 1990 by the Department of
Environment, Climate Change and Water.
Competition
To date, Cyclopharm has demonstrated that it can
compete effectively in the medical equipment/
drug market in Australia and many other parts of
the world.
The medical equipment/drug industry is
very competitive and characterised by large
international companies supplying much of the
global market requirements. The emergence of
new and/or unauthorised generic technologies
could in certain circumstances make the
Technegas™ System redundant or negatively
impact on the Cyclopharm Group’s plans to
develop its Ultralute™ business.
Accordingly, there is a business risk in that
Cyclopharm’s key revenue source from the
Technegas™ System could be severely disrupted
or reduced. There are products that do compete
with Technegas™, in particular Computed
Tomography and DTPA. These products could
replace Technegas™ and therefore negatively
impact Cyclopharm Group’s revenue and
profitability. The Directors note that the lengthy
periods it takes to achieve regulatory approval
and gain medical practitioners’ approval
and acceptance of new or generic products,
Cyclopharm Group’s reputation for timely and
quality service, the safety record of Technegas™
and its competitive pricing, mitigate these risks.
In addition, the Cyclopharm Group’s business plan
and stated strategy is to continue to develop sales
in new and existing international markets and to
develop new diagnostic purposes for Technegas™.
Reputation
The performance of Cyclopharm Group’s products
is critical to its reputation and to its ability to
achieve market acceptance of these products.
Any product failure could have a material adverse
effect on Cyclopharm Group’s reputation as a
supplier of these products. Technegas™ has had
no contraindications or adverse patient events
since the commencement of sales.
COVID-19
In many markets around the world during 2021,
imaging procedures continued to be impacted
by subsequent waves of COVID-19. The Directors
believe that any delays in the use of Technegas™
in noncritical procedures are short term and
are expected to rebound once restrictions are
fully lifted.
Disruption of Business Operations
As a manufacturer, the Cyclopharm Group
is exposed to a range of operational risks
relating to both current and future operations.
Such operational risks include supply chain
disruptions, equipment failures, IT system
failures, external services failure (including
energy supply), industrial action or disputes
and natural disasters. If one or more such
operational risks materialise, they may have an
adverse impact on the operating and financial
performance of Cyclopharm.
Reliance on Distributors/Loss of
key customers
The Cyclopharm Group operates through a series
of contractual relationships with customers,
suppliers, distributors and independent
contractors. To date, the Cyclopharm Group has
generally provided products and services on the
basis of tenders submitted to customers, followed
by purchase orders incorporating the customer’s
standard terms and conditions of trade as a
condition of the acceptance.
Cyclopharm Group maintains a spread of
customers through direct and indirect sales
channels. The loss of a major distributor
could have a significant, adverse impact on
Cyclopharm’s projected earnings. The majority of
sales through distributors or agents are managed
through contractual arrangements. Whilst the
Cyclopharm Group has distribution agreements
in place, some may be terminated by the
distributor with up to six months’ notice prior to
the expiration of the current terms (which vary).
22
Directors’ Report (CONTINUED)Cyclopharm Limited | annual report 2021 Other sales arrangements are not in writing and
depend on the ongoing goodwill of the parties.
The Directors are concerned to ensure that all
such relationships are formalised.
All contracts, including those entered into
by the Cyclopharm Group, carry a risk that
the respective parties will not adequately or
fully comply with their respective contractual
rights and obligations or that these contractual
relationships may be terminated.
Cyclopharm’s financial result could be adversely
affected by the loss of large customers, a change
in the terms of business with a large customer,
or by such customers not adequately or fully
complying with their respective contractual rights
and obligations. However, the risks are mitigated
by the existence of numerous alternatives
available given that Technegas™ is a highly
sought after product.
Currency and Exchange Rate Fluctuations
The financial contribution to the Cyclopharm
Group of the Technegas™ System will depend
on the movement in exchange rates between
the Australian dollar and a number of foreign
currencies, particularly the Euro.
The exchange rate between various currencies
may fluctuate substantially and the result of
these fluctuations may have a material adverse
impact on Cyclopharm’s operating results and
financial position. In the long term, Cyclopharm’s
ability to compete against imported products
may be adversely affected by an expectation of
a sustained period of a high Australian dollar
that would reduce the Cyclopharm Group’s price
competitiveness.
The majority of the Cyclopharm Group’s
operational expenses are currently payable
in Australian dollars. The Cyclopharm Group
also supplies its product to overseas markets
and hence is exposed to movements in the A$
exchange rate. The Cyclopharm Group does not
enter into forward exchange contracts to hedge
its anticipated purchase and sale commitments
denominated in foreign currencies. As such,
Cyclopharm is exposed to exchange rate
fluctuations.
Doing Business Internationally
As the Cyclopharm Group is and will continue
operating in numerous countries, the Cyclopharm
Group will be exposed to risks such as unexpected
changes in regulatory requirements (including
taxation), longer payment cycles, problems in
collecting debts, fluctuation in currency exchange
rates, foreign exchange controls which restrict
or prohibit repatriation of funds and potentially
adverse tax consequences, all of which could
adversely impact on Cyclopharm.
The Cyclopharm Group currently requires, and in
the future may require further, licenses to operate
in foreign countries which may be difficult to
obtain and retain depending on government
policies and political circumstances.
Intellectual Property Rights
The Cyclopharm Group’s success may be affected
by its ability to maintain patent protection for
products and processes, to preserve its trade
secrets and to operate without infringing the
proprietary rights of third-parties.
Patents
Unless challenged, the validity of a patent or
trademark may be assumed. Any patent or
trademark may be challenged on a number of
grounds but the onus is on the party seeking
revocation to establish those grounds.
All patents and trademarks require renewal at
regular dates and if not renewed will expire. It
is the Cyclopharm Group’s practice to renew
its patents and trademarks as required. The
Directors note that whilst some patents have
expired or have not been renewed, or remain
to be transferred or licensed to Cyclopharm
Group companies, there remains sufficient
protection in these countries through other patent
arrangements in place or being put in place.
The validity and breadth of claims covered
in patents involve complex legal and factual
questions and therefore may be highly uncertain.
No assurance can be given that the pending
applications will result in patents being issued,
that such patents or the current patents
will provide a competitive advantage or that
competitors of the Cyclopharm Group will not
design around any patents issued. Further, any
information contained in the patent applications
will become part of the public domain, so that it
will not be protected as confidential information.
As legal regulations and standards relating to the
validity and scope of patents evolve, the degree
of future protection of the Cyclopharm Group’s
proprietary rights is uncertain. However, those
regulations and standards in the field of nuclear
medicine (in which the Cyclopharm Group’s
technology resides) are relatively well established
and non-controversial.
23
Cyclopharm Limited | annual report 2021 Environmental Regulations
Cyclopet Pty Limited, a member of the
consolidated group’s operations is subject to
significant environmental regulations under the
Radiation Control Act, 1990 by the Department
of Environment, Climate Change and Water. The
Board believe that the consolidated group has
adequate systems in place for the management of
its environmental requirements as they apply to
the consolidated group.
Retirement, Election and
Continuation in Office of Directors
In accordance with the Company’s Constitution,
all Directors have been elected by members at the
Annual General Meeting (AGM) with the exception
of Mr McBrayer. Mr McBrayer was appointed as
Managing Director on 3 June 2008 and under the
Constitution is exempt from election by members.
Indemnification and
Insurance of Officers
In accordance with clause 49.1 of Cyclopharm’s
constitution and section 199A of the Corporations
Act 2001 the Company has resolved to indemnify
its Directors and Officers for a liability to a
third-party provided that:
1.
2.
the liability does not arise from conduct
involving a lack of good faith; or
the liability is for costs and expenses incurred
by the Director or Officer in defending
proceedings save as not permitted by law.
During or since the financial year, the Company
has paid premiums in respect of a contract
insuring all the Directors against legal costs
incurred in defending proceedings for conduct
involving:
a) a wilful breach of duty; or
b) a contravention of sections 182 or 183 of
the Corporations Act 2001, as permitted by
section 199B of the Corporations Act 2001.
The total amount of insurance contract
premiums paid for the year ending 31 December
2021 is $32,132 (for the year ended 31 December
2020: $31,397).
The Officers of the Company covered by the
insurance policy include the Directors, the
Company Secretary and Executive Officers. The
indemnification of the Directors and Officers will
extend for a period of at least 6 years in relation
to events taking place during their tenure (unless
the Corporations Act 2001 otherwise precludes
this time frame of protection.)
The liabilities insured include costs and
expenses that may be brought against the
Officers in their capacity as Officers of the
Company that may be incurred in defending
civil or criminal proceedings that may be
brought against the Officers of the Company or
a controlled 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 33.
Fees of $40,222 (2020: $38,170) have been paid
for share registry services and fees of $18,982
(2020: $30,771) for taxation services to an
associate of Nexia Sydney Audit Pty Ltd for the
year ended 31 December 2021 for non-audit
related services. The Board of Directors is
satisfied that the provision of non-audit services
during the year is compatible with the general
standard of independence for auditors imposed
by the Corporations Act 2001. The nature and
scope of each type of non-audit service does not
compromise the general principles relating to
auditor independence in accordance with APES
110: Code of Ethics for Professional Accountants
set by the Accounting Professional and Ethical
Standards Board.
The Company has not otherwise, during or
since the financial year, indemnified or agreed
to indemnify an auditor of the Company or any
related body corporate.
Remuneration Report (Audited)
The Remuneration Report outlines the director
and executive remuneration arrangements of the
Company and the group and the remuneration
disclosures required in accordance with the
requirements of the Corporations Act 2001
and its Regulations. For the purposes of this
report Key Management Personnel of the group
are defined as those persons having authority
and responsibility for planning, directing and
controlling the major activities of the Company
and the group, directly or indirectly, including
any Director (whether executive or otherwise) of
the parent Company.
For the purposes of this report, the term
‘executive’ encompasses the Chief Executive,
senior executives, general managers and
secretaries of the parent and the group.
24
Directors’ Report (CONTINUED)Cyclopharm Limited | annual report 2021 Director and Executive Remuneration Table 2021
Short-term employee benefits
Post
employment
benefits
Other
long-term
benefits
Share-
based
payment
Perform-
ance
related
Total
Salary
and Fees
$
Cash
Bonus
$
Non-
monetary
benefits
$
Super-
annuation
$
Consolidated
2021
Directors
David Heaney
Non-Executive Director
Tom McDonald*
Non-Executive Director
Dianne Angus**
Non-Executive Director
Executive Director
James McBrayer***
Managing Director
Total Directors’
Compensation
69,517
50,069
19,607
–
–
–
426,920
30,000
566,113
30,000
Key Management Personnel
Mathew Farag
Chief Operating Officer
Total Key Management
Personnel’s Compensation
Total Compensation
300,033
–
300,033
866,146
–
30,000
$
%
$
–
–
–
$
–
–
–
72,993
20,069
21,568
3,476
–
1,961
42,914
8,512
448,589
956,935
48,351
8,512
448,589 1,101,565
29,253
5,908
97,336
432,530
29,253
77,604
5,908
14,420
97,336
432,530
545,925 1,534,095
* Mr McDonald ceased as a member of the Board on 1 December 2021.
** Ms Angus was appointed to the Board on 10 August 2021.
Director and Executive Remuneration Table 2020
Short-term employee benefits
Post
employment
benefits
Other
long-term
benefits
Share-
based
payment
Perform-
ance
related
Total
Salary
and Fees
$
Cash
Bonus
$
Non-
monetary
benefits
$
Super-
annuation
$
Consolidated
2020
Directors
David Heaney
Non-Executive Director
Tom McDonald
Non-Executive Director
Executive Director
James McBrayer***
Managing Director
Total Directors’
Compensation
75,559
53,971
–
–
406,251
50,000
535,781
50,000
Key Management Personnel
Mathew Farag
Chief Operating Officer
Total Key Management
Personnel’s Compensation
Total Compensation
292,600
–
292,600
828,381
–
50,000
$
%
$
–
–
$
–
–
75,559
53,971
–
–
41,835
37,840
650,662
1,186,588
41,835
37,840
650,662 1,316,118
27,797
4,883
63,822
389,102
27,797
69,632
4,883
42,723
63,822
389,102
714,484 1,705,220
*** Mr McBrayer is employed on a rolling contract. His bonus (which relates to the previous year’s performance), up to a maximum of $50,000,
is based on achieving certain benchmarks and targets, which in the absence of any formal agreement will default to achieving the budgeted
underlying operating EBITDA approved by the Board of Directors effective 2017.
25
0%
0%
0%
50%
43%
23%
23%
38%
0%
0%
59%
53%
16%
16%
45%
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Cyclopharm Limited | annual report 2021
Details of Managing Director and Key Management Personnel’s
Share-based payments 2021
Number
of LTIP
shares
granted
250,000
Fair
Value
at grant
date
$0.201
Exercise
price
per LTIP
share
scheme
$1.550
Amount
payable
– limited
recourse
loan
$387,500
Term
4 years
Name
Mathew Farag
Expiry
date Performance Hurdle
1/7/2022 Approval of Technegas' use and
distribution in the United States by
the United States Food and Drug
Administration ("USFDA")
Mathew Farag
250,000
$0.201
$1.550
$387,500
4 years
1/7/2022 Continuous employment with the
Other non-Key
Management
Personnel
James McBrayer
(options)
Other non-Key
Management
Personnel
Mathew Farag
Other non-Key
Management
Personnel
200,000
$0.392
$1.500
$300,000
200,000
$1.310
$0.000
$0
Cyclopharm Group until 31 March 2021
3 years 29/5/2022 The USFDA has approved the use and
distribution of Technegas in the United
States and continuous employment
with the Cyclopharm Group until
23 May 2021
6 years 31/7/2025 The Company receiving approval
from the USFDA for the distribution
of Technegas products in the United
States
215,000
$0.308
$1.220
$262,300
2 years
3/5/2022 Continuous employment with the
Cyclopharm Group until 30 April 2022
500,000
$0.380
$1.220
$610,000
3 years
3/5/2023 50% on approval by the United States
Food and Drug Administration on the
use and distribution of Technegas in the
United States and 50% upon continuous
employment with the Cyclopharm
Group until 30 April 2023
330,000
$0.380
$1.220
$402,600
3 years
3/5/2023 1. 25% on achievement of 2020 revenue
and gross margin budget, 25% on
achievement of 2021 revenue and
gross margin budget and 50% upon
continuous employment with the
Cyclopharm Group until 30 April 2023
2. USFDA Approval and Continuous
employment with the Cyclopharm
Group until 30 April 2023
James McBrayer
500,000
$0.315
$1.830
$915,000 1.85 years 31/5/2022 Continuous employment with
Cyclopharm Limited as Managing
Director for 2 years until the Annual
General Meeting held in 2022
Mathew Farag
15,002
$1.012
$3.200
$48,006
3 years 18/2/2024 Continuous employment with
the Cyclopharm Group until
31 December 2023
50,000
$1.012
$3.200
$160,000
3 years 18/2/2024 50% year on year increase in third-party
revenue at minimum of 20% gross
margin for 2021, 2022 & 2023
100,000
$1.012
$3.200
$320,000
3 years 18/2/2024 Global harmonisation documentation
submitted by June 2023 for Europe,
North America, China and ANZ
50,000
$1.012
$3.200
$160,000
3 years 18/2/2024 50% year on year increase in third-party
service revenue for 2021, 2022 & 2023
190,057
$1.012
$3.200
$608,182
3 years 18/2/2024 Continuous employment with
the Cyclopharm Group until
31 December 2023
3,000
$1.447
$3.200
$9,600
6 years 18/2/2027 Continuous employment with
the Cyclopharm Group until
31 December 2026
2,853,059
$4,570,688
Other non-Key
Management
Personnel
Other non-Key
Management
Personnel
Other non-Key
Management
Personnel
Other non-Key
Management
Personnel
Other non-Key
Management
Personnel
26
Directors’ Report (CONTINUED)Cyclopharm Limited | annual report 2021 Details of Managing Director and Key Management Personnel’s
Share-based payments 2021 (continued)
Number
of LTIP
shares
granted
1,721,554
269,614
257,750
225,000
41,318
Fair
Value
at grant
date
$0.061
$1.065
$1.410
$0.349
$0.061
Exercise
price
per LTIP
share
scheme
Amount
payable
– limited
recourse
loan
Term
Expiry
date
$0.900 $1,549,399
$0.000
$0.000
$0.900
$0.900
$202,500
$37,186
5 years
$0 2.41 years
$0 1.80 years
9/5/2022
9/5/2022
9/5/2022
5 years 18/4/2025
5 years 31/8/2022
75,000
$0.270
$1.200
$90,000
5 years 25/7/2023
Vested but
unexercised during
the year
James McBrayer
James McBrayer
James McBrayer
Mathew Farag
Other non-Key
Management
Personnel
Other non-Key
Management
Personnel
2,590,236
$1,879,085
Details of Managing Director and Key Management Personnel’s
Share-based payments 2020
Number
of LTIP
shares
granted
250,000
Fair
Value
at grant
date
$0.153
Exercise
price
per LTIP
share
scheme
$1.550
Amount
payable
– limited
recourse
loan
$387,500
Term
3 years
Name
Mathew Farag
Mathew Farag
250,000
$0.153
$1.550
$387,500
3 years
Expiry
date Performance Hurdle
1/7/2021 Approval of Technegas' use and
distribution in the United States by
the United States Food and Drug
Administration (USFDA)
1/7/2021 Continuous employment with the
Other non-Key
Management
Personnel
James McBrayer
(options)
Other non-Key
Management
Personnel
Mathew Farag
Other non-Key
Management
Personnel
200,000
$0.318
$1.500
$300,000
200,000
$1.310
$0.000
$0
Cyclopharm Group until 31 March 2021
2 years 29/5/2021 The USFDA has approved the use and
distribution of Technegas in the United
States and continuous employment
with the Cyclopharm Group until
23 May 2021
6 years 31/7/2025 The Company receiving approval
from the USFDA for the distribution
of Technegas products in the United
States
215,000
$0.308
$1.220
$262,300
2 years
3/5/2022 Continuous employment with the
Cyclopharm Group until 30 April 2022
500,000
$0.380
$1.220
$610,000
3 years
3/5/2023 50% on approval by the USFDA on the
use and distribution of Technegas in the
United States and 50% upon continuous
employment with the Cyclopharm
Group until 30 April 2023
330,000
$0.380
$1.220
$402,600
3 years
3/5/2023 1. 25% on achievement of 2020 revenue
and gross margin budget, 25% on
achievement of 2021 revenue and
gross margin budget and 50% upon
continuous employment with the
Cyclopharm Group until 30 April 2023
2. USFDA approval and continuous
employment with the Cyclopharm
until Group 30 April 2023
James McBrayer
500,000
$0.315
$1.830
$915,000 1.85 years 31/5/2022 Continuous employment with the
Cyclopharm Limited as Managing
Director for 2 years until the Annual
General Meeting held in 2022
2,445,000
$3,264,900
27
Cyclopharm Limited | annual report 2021 Details of Managing Director and Key Management Personnel’s
Share-based payments 2020 (continued)
Vested but
unexercised during
the year
James McBrayer
James McBrayer
James McBrayer
Mathew Farag
Other non-Key
Management
Personnel
Other non-Key
Management
Personnel
Number
of LTIP
shares
granted
1,721,554
269,614
257,750
225,000
41,318
Fair
Value
at grant
date
$0.061
$1.065
$1.410
$0.196
$0.061
Exercise
price
per LTIP
share
scheme
Amount
payable
– limited
recourse
loan
Term
Expiry
date
$0.900 $1,549,399
$0.000
$0.000
$0.900
$0.900
$202,500
$37,186
5 years
$0 2.41 years
$0 1.80 years
9/5/2022
9/5/2022
9/5/2022
5 years 18/4/2025
5 years 31/8/2022
75,000
$0.270
$1.200
$90,000
5 years 25/7/2023
2,590,236
$1,879,085
Interests in the shares and options of the Company and related bodies corporate
The movement during the reporting period in the number of ordinary Cyclopharm shares and options on issue held
directly, indirectly or beneficially, by Directors and key management personnel, including their personally-related
entities is as follows:
31
December
2020
No. of
shares
232,000
5,109,580
43,214
–
5,384,794
Interest
BI
BI
NBI
BI
No. of
shares
–
–
–
–
–
–
Granted
under
long term
incentive
schemes
Sunscribed
pursant to
share
purchase
plan
On market
purchases
Cessation
as director
No. of
shares
No. of
shares
No. of
shares
31
December
2021
No. of
shares
9,270
–
2,363
–
11,633
3,230
–
12,015
–
15,245
–
–
(57,592)
–
244,500
5,109,580
–
–
(57,592) 5,354,080
BI
1,245,000
15,002
–
12,000
–
1,272,000
Directors
Mr D J Heaney
Mr J S McBrayer
Mr T A McDonald
Ms D M Angus
Key Management Personnel
Mr M Farag
BI: Beneficial interest
NBI: Non beneficial interests
As at 31 December 2021, Mr McBrayer holds 200,000 share options (2020: 200,000).
28
Directors’ Report (CONTINUED)Cyclopharm Limited | annual report 2021 Remuneration Committee
The Remuneration Committee currently
comprises of Mr Heaney, who is the Chairman of
the Remuneration Committee and Ms Angus.
The Remuneration Committee is responsible for:
– reviewing and approving the remuneration of
Directors and other senior executives; and
– reviewing the remuneration policies of the
Company generally.
Remuneration philosophy
The performance of the Company depends upon
the quality of its Directors and executives. To
prosper, the Company must attract, motivate and
retain highly skilled Directors and executives.
To this end, the Company embodies the following
principles in its remuneration framework:
– provide competitive rewards to attract high
calibre executives;
– link executive rewards to shareholder value;
– have a significant portion of executive
remuneration ‘at risk’; and
– establish appropriate, demanding performance
hurdles for variable executive remuneration.
Remuneration structure
In accordance with best practice corporate
governance, the structure of non-executive
Director and executive remuneration is separate
and distinct.
Non-executive Director remuneration
Objective
The Board seeks to set aggregate remuneration at
a level that provides the Company with the ability
to attract and retain Directors of the highest
calibre, whilst incurring a cost that is acceptable
to Shareholders.
Structure
The Constitution and the ASX Listing Rules
specify that the aggregate remuneration of non-
executive Directors shall be determined from
time to time by a general meeting. The latest
determination was at the Annual General Meeting
held in May 2021 when Shareholders approved an
aggregate remuneration increase from $250,000 to
$350,000 per year.
The amount of aggregate remuneration sought
to be approved by Shareholders and the fee
structure is reviewed annually. The Board
considers advice from external consultants as
well as the fees paid to non-executive Directors
of comparable companies when undertaking the
annual review process.
Each director receives a fee as set out in the
Director and Executive Remuneration Table
for being a director of the Company. Directors’
fees cover all main Board activities and the
membership of committees. There are no
additional fees for committee membership. These
fees exclude any additional ‘fee for service’ based
on arrangements with the Company, which may
be agreed from time to time. Agreed out of pocket
expenses are payable in addition to Directors’
fees. There is no retirement or other long service
benefits that accrue upon appointment to the
Board. Retiring non-executive Directors are
not currently entitled to receive a retirement
allowance.
Executive remuneration
Objective
The Company aims to reward executives
with a level and mix of remuneration
commensurate with their position and
responsibilities within the Company so as to:
– reward executives for Company, business unit
and individual performance against targets set
by reference to appropriate benchmarks;
– align the interests of executives with those of
Shareholders; and
– ensure total remuneration is competitive by
market standards.
In determining the level and make-up of executive
remuneration, the Remuneration Committee
engages external consultants as needed to provide
independent advice.
The Remuneration Committee has entered into
a detailed contract of employment with the
Managing Director and a standard contract with
other executives. Details of these contracts are
provided below.
Remuneration consists of the following key
elements:
– Fixed remuneration (base salary,
superannuation and non-monetary benefits);
and
– Variable remuneration
» short term incentive (STI); and
» long term incentive (LTI).
The proportion of fixed remuneration and variable
remuneration (potential short term and long term
incentives) for each executive is set out in the
Director and Executive Remuneration Table.
29
Cyclopharm Limited | annual report 2021 Fixed Remuneration
Objective
Fixed remuneration is reviewed annually by the
Remuneration Committee. The process consists
of a review of Company, business unit and
individual performance, relevant comparative
remuneration in the market and internally and,
where appropriate, external advice on policies
and practices. As noted above, the Committee
has access to external advice independent of
management.
Structure
Executives are given the opportunity to receive
their fixed (primary) remuneration in a variety
of forms including cash and fringe benefits. It
is intended that the manner of payment chosen
will be optimal for the recipient without creating
undue cost for the Group. All forms of executive
remuneration are detailed in the Remuneration
Report.
Variable remuneration – Short Term
Incentive (STI)
The objective of the STI is to link the achievement
of the Group’s operational targets with
remuneration received by the executives charged
with meeting those targets. The total potential
STI available is set at a level so as to provide
sufficient incentive to the executive to achieve the
operational targets and such that the cost to the
Group is reasonable in the circumstances.
Actual STI payments granted to each executive
depends on the extent to which specific targets
set at the beginning of the year are met. The
targets consist of a number of Key Performance
Indicators (KPI’s) covering both financial and
non-financial, corporate and individual measures
of performance. Typically included measures are
sales, net profit after tax, customer service, risk
management and leadership/team contribution.
These measures were chosen as they represent the
key drivers for short term success of the business
and provide a framework for long term value.
The Group has predetermined benchmarks
that must be met in order to trigger payments
under the STI scheme. On an annual basis, after
consideration of performance against KPI’s, the
Remuneration Committee, in line with their
responsibilities, determine the amount, if any,
of the short term incentive to be paid to each
executive. This process usually occurs within 3
months of reporting date.
The aggregate of annual STI payments available
for executives across the Group is subject to
the approval of the Remuneration Committee.
Payments are delivered as a cash bonus in the
following reporting period. Participation in the
Short Term Incentive Plan is at the Directors’
discretion.
Variable remuneration – Long Term
Incentive (LTI)
Long Term incentives are delivered under the
Long Term Incentive Plan (LTIP), which is designed
to reward sustainable, long-term performance in
a transparent manner. Under the LTIP, individuals
are granted LTIP shares, which have a two or
three year performance periods (Term). The
number of LTIP shares is determined by the Board.
The number of LTIP shares that an individual will
be entitled to at the end of the Term will depend
on the extent to which the hurdle has been met.
Performance hurdles are determined by the
Board to align individual performance with the
Company’s performance.
At the Annual General Meeting held on 8 May
2007, Shareholders approved the Company’s Long
Term Incentive Plan (“Plan”). An updated Plan was
approved by Shareholders on 29 May 2018 and 4
May 2021.
The purpose of the Plan is to encourage
employees, Directors and officers to share in
the ownership of the Company and therefore
retain and motivate senior executives to drive
performance at both the individual and corporate
level. Performance hurdles have been determined
by the Board to align individual performance with
the Company’s key success factors.
30
Directors’ Report (CONTINUED)Cyclopharm Limited | annual report 2021 – As approved by shareholders at the May 2019
AGM, 200,000 options were granted on 27 May
2019 and 539,525 shares comprising 269,911
ordinary shares and 269,614 LTIP shares were
issued in accordance with the Company’s Long
Term Incentive Plan on 11 December 2019 to
Mr McBrayer.
– As approved by shareholders at the July 2020
AGM, 1,015,500 shares comprising 257,750
ordinary shares and 757,750 LTIP shares were
issued in accordance with the Company’s
Long Term Incentive Plan on 24 July 2020 to
Mr McBrayer.
Other Executives (standard contracts)
All executives have rolling contracts. The
Company may terminate the executive’s
employment agreement by providing (depending
on the individual’s contract) between 1 to 3
months’ written notice or providing payment in
lieu of the notice period. Where termination with
cause occurs the executive is only entitled to that
portion of remuneration that is fixed, and only
up to the date of termination.
Related Parties
The Directors disclose any conflict of interests
in Directors’ meetings as per the requirements
under the Corporations Act (2001). Any
disclosures that are considered to fall under
the definition of related parties as per AASB
124 ‘Related Party Disclosures’ are made in the
Directors’ meetings and minuted.
End of Remuneration Report
Employment contracts
Managing Director
The Managing Director, Mr McBrayer, is
employed under a rolling contract. Mr McBrayer’s
current contract was executed on 3 May 2021.
Mr McBrayer’s remuneration for 2021 and 2020
is disclosed in the tables on page 25. Under the
terms of the present contract:
– Each year from 1 January to 31 December,
Mr McBrayer may be entitled to receive
additional amounts up to a maximum of
20% of base remuneration based on the
Company’s performance and achieving certain
Key Performance Indicator thresholds. This
amount is entirely performance based and
seeks to strengthen the alignment of the
Managing Director’s interests with those of the
Company’s shareholders.
– Mr McBrayer may resign from his position
and thus terminate this contract by giving
6 months written notice unless a mutually
agreeable date can be agreed upon.
– The Company may terminate this employment
agreement by providing 6 months written
notice or providing payment in lieu of the
notice period.
– The Company may terminate the contract at
any time without notice if serious misconduct
has occurred. Where termination with cause
occurs the Managing Director is only entitled to
that portion of remuneration that is fixed, and
only up to the date of termination.
– Mr McBrayer is entitled to receive strictly
limited recourse loans under the Company’s
LTIP to purchase shares.
– On 13 July 2015, a strictly limited recourse
loan was made to Mr McBrayer under the
Company’s LTIP to purchase shares for a
period of 2 years. The loan was to enable the
purchase of 1,721,554 shares at the price of
90 cents per share. The LTIP shares vested on
9 May 2017, the date of the 2017 AGM.
– On 9 May 2017, Mr McBrayer exercised his
rights to purchase 1,721,554 LTIP shares
and the Company extended a loan totalling
$1,549,398.60 for the purchase of the Plan
Shares. The loan is repayable in full within
5 years.
31
Cyclopharm Limited | annual report 2021 Directors’ Meetings
The number of meetings of Directors (including
meetings of committees of Directors) held during
the year and the numbers of meetings attended
by each director were as follows:
Director
Mr D J Heaney
Mr J S McBrayer
Mr T A McDonald
Ms D M Angus
Cyclopharm
Board
Meetings
Audit
& Risk
Committee
Board
Nomination
Committee
Remun-
eration
Committee
H
12
12
12
5
A
12
12
7
5
H
3
–
3
2
A
3
–
1
2
H
2
2
2
–
A
2
2
1
–
H
3
–
2
2
A
3
–
1
2
H: Held and eligible to attend, A: Attended
Share Options
200,000 share options (2020: 200,000) are on issue
as at year end.
Proceedings on behalf of the company
No person has applied to the Court under section
237 of the Corporations Act 2001 for leave to
bring proceedings on behalf of the Company,
or to 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
part of those proceedings.
No proceedings have been brought or
intervened in on behalf of the Company with
leave of the Court under section 237 of the
Corporations Act 2001.
This report is made and signed in accordance with
a resolution of the Directors:
James McBrayer
Managing Director and CEO
Sydney, 31 March 2022
32
Directors’ Report (CONTINUED)Cyclopharm Limited | annual report 2021 Auditor’s Independence Declaration
33
To the Board of Directors of Cyclopharm Limited Auditor’s Independence Declaration under section 307C of the Corporations Act 2001 As lead audit director for the audit of the financial statements of Cyclopharm Limited for the financial year ended 31 December 2021, I declare that to the best of my knowledge and belief, there have been no contraventions of: (a) the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and (b) any applicable code of professional conduct in relation to the audit. Yours sincerely Nexia Sydney Audit Pty Ltd Stephen Fisher Director Date: 31 March 2022 Cyclopharm Limited | annual report 2021 Consolidated Statement of Profit or Loss
and Other Comprehensive Income
For the year ended 31 December 2021
Continuing Operations
Sales revenue
Finance revenue
Other revenue
Total revenue
Cost of materials and manufacturing
Employee benefits expense
Advertising and promotion expense
Depreciation and amortisation expense
Freight and duty expense
Research and development expense
Administration expense
Other expense
Loss before tax and finance costs
Finance costs
Loss before income tax
Income tax
Loss for the year
Other comprehensive income after income tax
Items that will be re-classified subsequently to profit and loss
when specific conditions are met:
Exchange differences on translating foreign controlled entities (net of tax)
Total comprehensive loss for the year
Loss per share (cents per share)
– basic loss per share from continuing operations
– basic loss per share
– diluted loss per share
Notes
Consolidated
2021
$
Consolidated
2020
$
5
5
5
5a
5e
5c
5d
5f
5g
5b
6
Notes
7
17,704,574
3,950
2,432,578
20,141,102
(5,042,295)
(8,848,778)
(298,143)
(758,731)
(724,029)
(1,660,167)
(6,806,880)
(259,636)
(4,257,557)
(89,314)
(4,346,871)
(693,295)
(5,040,166)
14,676,157
4,410
3,004,893
17,685,460
(3,963,469)
(7,852,257)
(212,876)
(910,291)
(632,846)
(3,537,517)
(5,649,611)
(562,843)
(5,636,250)
(207,859)
(5,844,109)
(199,527)
(6,043,636)
(225,440)
(5,265,606)
(143,856
(6,187,492)
2021
cents
(5.62)
(5.62)
(5.62)
2020
cents
(7.89)
(7.89)
(7.89)
The Statement of Profit or Loss and Other Comprehensive Income is to be read in conjunction
with the notes to the financial statements.
34
Cyclopharm Limited | annual report 2021 Consolidated Statement of
Financial Position
As at 31 December 2021
Assets
Current Assets
Cash and cash equivalents
Trade and other receivables
Inventories
Current tax asset
Other assets
Total Current Assets
Non-current Assets
Property, plant and equipment
Right-of-use assets
Investments
Intangible assets
Deferred tax assets
Total Non-current Assets
Total Assets
Liabilities
Current Liabilities
Trade and other payables
Lease liabilities
Provisions
Tax liabilities
Total Current Liabilities
Non-current Liabilities
Lease liabilities
Provisions
Deferred tax liabilities
Deferred income liabilities
Total Non-current Liabilities
Total Liabilities
Net Assets
Equity
Contributed equity
Employee equity benefits reserve
Foreign currency translation reserve
Accumulated losses
Total Equity
Notes
Consolidated
2021
$
Consolidated
2020
$
8
9
10
6
11
12
13
14
6
15
16
17
6
16
17
6
18
19
28
28
29,249,255
8,040,708
5,511,375
58,761
392,284
43,252,383
2,416,648
3,829,204
–
5,422,263
820,406
12,488,521
55,740,904
5,907,628
178,265
1,234,259
98,132
7,418,284
4,331,502
25,929
–
897,455
5,254,886
12,673,170
43,067,734
1,874,285
8,837,397
4,736,017
233,904
297,366
15,978,969
1,903,129
3,911,432
–
5,291,899
1,189,696
12,296,156
28,275,125
4,400,270
148,567
1,021,395
114,053
5,684,285
4,557,905
23,885
–
893,200
5,474,990
11,159,275
17,115,850
62,974,440
2,593,561
(921,540)
(21,578,727)
43,067,734
31,632,219
1,836,973
(696,100)
(15,657,242)
17,115,850
The Statement of Financial Position is to be read in conjunction with the notes to the financial statements.
35
Cyclopharm Limited | annual report 2021 Consolidated Statement of
Cash Flows
For the year ended 31 December 2021
Operating activities
Receipts from customers
Receipt from business venture collaboration
Payments to suppliers and employees
Interest received
Borrowing costs paid
Income tax received/(paid)
Net cash flows used in operating activities
Investing activities
Payment of deferred consideration on acquisition of subsidiary
Purchase of property, plant and equipment
Payments for intangible assets
Net cash flows used in investing activities
Financing activities
Proceeds from issue of shares
Share issue cost (net of tax)
Settlement of loan for Long Term Incentive Plan Shares
Dividends paid
Payment for lease liabilities
Net cash flows from/(used in) financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents
– at beginning of the period
– net foreign exchange differences from translation of cash and
cash equivalents
– at end of the year
Notes
Consolidated
2021
$
Consolidated
2020
$
8
21,244,553
392,483
(25,910,356)
3,950
(89,314)
2,729,274
(1,629,410)
–
(842,845)
(318,179)
(1,161,024)
33,000,003
(1,657,782)
–
(881,319)
(288,707)
30,172,195
27,381,761
14,659,216
153,086
(23,296,949)
4,410
(207,859)
(246,772)
(8,934,868)
(343,209)
(193,796)
(337,186)
(874,191)
–
–
56,216
(752,419)
(289,758)
(985,961)
(10,795,020)
1,874,285
12,660,323
(6,791)
29,249,255
8,982
1,874,285
8
The Statement of Cash Flows is to be read in conjunction with the notes to the financial statements.
36
Cyclopharm Limited | annual report 2021 Consolidated Statement of
Changes in Equity
For the year ended 31 December 2021
Contributed
Equity
Other
Contributed
Equity
Total
Contributed
Equity
Retained
Earnings/
(Accumulated
Losses)
Foreign
Currency
Translation
Reserve
(Note 28(b))
Employee
Equity
Benefits
Reserve
(Note 28(a))
Consolidated
$
$
$
$
$
$
Total
$
Balance at 1 January 2020
36,909,161
(5,333,158) 31,576,003
(8,861,187)
(552,244)
1,041,373 23,203,945
Loss for the year
Other comprehensive loss
Total comprehensive loss
for the year
Payment of loan for Long Term
Incentive Plan shares
Dividends paid
Cost of share based payments
Total transactions with
owners and other transfers
–
–
–
56,216
–
–
56,216
–
–
–
–
–
–
–
–
–
–
(6,043,636)
–
–
(143,856)
(6,043,636)
(143,856)
–
–
–
(6,043,636)
(143,856)
(6,187,492)
56,216
–
–
–
(752,419)
–
56,216
(752,419)
–
–
–
–
–
–
795,600
56,216
(752,419)
795,600
795,600
99,397
Balance at 31 December 2020
36,965,377
(5,333,158) 31,632,219 (15,657,242)
(696,100)
1,836,973 17,115,850
Contributed
Equity
Other
Contributed
Equity
Total
Contributed
Equity
Retained
Earnings/
(Accumulated
Losses)
Foreign
Currency
Translation
Reserve
(Note 28(b))
Employee
Equity
Benefits
Reserve
(Note 28(a))
Consolidated
$
$
$
$
$
$
Total
$
Balance at 1 January 2021
36,965,377
(5,333,158) 31,632,219 (15,657,242)
(696,100)
1,836,973 17,115,850
Loss for the year
Other comprehensive loss
Total comprehensive loss
for the year
Issue of shares
Share issue cost (net of tax)
Dividends paid
Cost of share based payments
Total transactions with
owners and other transfers
–
–
–
33,000,003
(1,657,782)
–
–
–
–
–
–
–
–
–
33,000,003
(1,657,782)
–
–
–
–
(881,319)
–
–
–
–
–
–
–
–
–
756,588
33,000,003
(1,657,782)
(881,319)
756,588
756,588 31,217,490
31,342,221
– 31,342,221
(881,319)
–
–
–
(5,040,166)
–
–
(225,440)
(5,040,166)
(225,440)
–
–
–
(5,040,166)
(225,440)
(5,265,606)
Balance at 31 December 2021
68,307,598
(5,333,158) 62,974,440 (21,578,727)
(921,540)
2,593,561 43,067,734
The Statement of Changes in Equity is to be read in conjunction with the notes to the financial statements.
37
Cyclopharm Limited | annual report 2021 1. Corporate information
The financial report of Cyclopharm Limited
(“Cyclopharm” or “the Company”) for the year ended
31 December 2021 was authorised for issue by a
resolution of the Directors as at the date of this report.
Cyclopharm is a Company limited by shares
incorporated and domiciled in Australia. The shares
are publicly traded on the Australian Securities
Exchange (“ASX”) under the code “CYC”.
During the year, the principal continuing activities
of the consolidated entity (“the Group”) consisted of
the manufacture and sale of medical equipment and
radiopharmaceuticals, including associated research
and development, and distribution of third-party
products to the diagnostic imaging sector.
Summary of significant accounting policies
2.
(a) Basis of Preparation
The financial statements are general purpose financial
statements that have 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.
The Group is a for-profit entity for financial reporting
purposes under Australian Accounting Standards.
Australian Accounting Standards set out accounting
policies that the AASB has concluded would result in
financial statements containing relevant and reliable
information about transactions, events and conditions.
Compliance with Australian Accounting Standards
ensures that the financial statements and notes
also comply with International Financial Reporting
Standards as issued by the IASB. Material accounting
policies adopted in the preparation of these financial
statements are presented below and have been
consistently applied unless stated otherwise.
Except for cash flow information, the financial
statements have been prepared on an accruals
basis and are based on historical costs, modified,
where applicable, by the measurement at fair value
of selected non-current assets, financial assets and
financial liabilities.
The financial report is presented in Australian dollars.
(b) New and Amended Accounting Policies
Adopted by the Group
Consolidated financial statements
The Group has adopted all of the new or amended
Accounting Standards and Interpretations issued by
the Australian Accounting Standards Board (‘AASB’)
that are mandatory for the current reporting period.
Any new or amended Accounting Standards or
Interpretations that are not yet mandatory have not
been early adopted.
(c)
New Accounting Standards and Interpretations
Not Yet Mandatory or Early Adopted
Australian Accounting Standards and Interpretations
that have recently been issued or amended but are
not yet mandatory, have not been early adopted by
the Group for the annual reporting period ended
31 December 2021. The Group has not yet assessed the
impact of these new or amended Accounting Standards
and Interpretations
(d) Basis of consolidation
Cyclopharm Limited is the ultimate parent entity (“the
Parent”) in the wholly owned group. The consolidated
financial statements comprise the financial statements
of Cyclopharm and its subsidiaries as at 31 December
each year (‘the Group’).
The Group’s financial statements consolidate those
of the parent company and all of its subsidiaries as of
31 December 2021. All subsidiaries have a reporting
date of 31 December.
Subsidiaries
Subsidiaries are consolidated from the date on
which control is transferred to the Group and cease
to be consolidated from the date on which control
is transferred out of the Group. Where there is loss
of control of a subsidiary, the consolidated financial
statements include the results for the part of the
reporting period during which the Parent has control.
The financial statements of subsidiaries are prepared
for the same reporting period as the parent Company,
using consistent accounting policies. Adjustments
are made to bring into line any dissimilar accounting
policies that may exist.
Transactions eliminated on consolidation
Intercompany transactions, balances and unrealised
gains on transactions between entities in the
consolidated entity are eliminated. Unrealised losses
are also eliminated unless the transaction provides
evidence of the impairment of the asset transferred.
Accounting policies of subsidiaries have been changed
where necessary to ensure consistency with the
policies adopted by the consolidated entity.
For business combinations involving entities under
common control, which are outside the scope of
AASB 3 Business Combinations, the Company applies the
purchase method of accounting by the legal parent.
38
Cyclopharm Limited | annual report 2021Notes to the Consolidated Financial StatementsFOR THE YEAR ENDED 31 DECEMBER 2021 (CONTINUED) 2.
Summary of significant accounting policies (continued)
(e) Foreign currency translation
Functional and presentation currency
The functional currency of each of the group’s entities
is measured using the currency of the primary
economic environment in which that entity operates.
The consolidated financial statements are presented in
Australian dollars (AUD $) which is the parent entity’s
functional and presentation currency.
Transactions and balances
Transactions in foreign currencies are initially recorded
in the functional currency at the exchange rates
ruling at the date of the transaction. Foreign currency
monetary items are translated at the year-end
exchange rate. Non-monetary items that are measured
in terms of historical cost continue to be carried at
the exchange rate at the date of the transaction. Non-
monetary items measured at fair value are reported at
the exchange rate when the fair value was determined.
Exchange differences arising on the translation of
monetary items are recognised in the Statement of
Profit or Loss and Other Comprehensive Income, except
where deferred in equity as a qualifying cash flow
hedge or net investment hedge. On disposal of a foreign
entity the deferred cumulative amount in equity is
recognised in the Statement of Comprehensive Income.
Group companies
The functional currency of the overseas subsidiaries
Cyclomedica Ireland Limited, Cyclomedica Germany
GmbH, Cyclomedica Europe Limited, and Cyclomedica
Benelux bvba, is European Euro (Euro €), Cyclomedica
Nordic AB is Swedish Kroner (SEK), Cyclomedica
Canada Limited is Canadian dollars (Can $) and
Cyclomedica UK Ltd is Great British Pound (GBP).
The financial results and position of foreign operations
whose functional currency is different from the group’s
presentation currency are translated as follows:
– Assets and liabilities are translated at year-end
exchange rates prevailing at the reporting date.
– Income and expenses are translated at the average
exchange rates for the period.
– Retained profits/equity are translated at the
exchange rates prevailing at the date of the
transaction.
Exchange differences arising on the translation
of foreign operations are recognised in other
comprehensive income and are transferred directly
to the Group’s foreign currency translation reserve in
the Statement of Financial Position. On disposal of a
foreign operation, the related cumulative translation
differences recognised in equity are reclassified to profit
or loss and are recognised as part of the gain or loss on
disposal. Exchange differences are charged or credited
to other comprehensive income and recognised in the
currency translation reserve in equity.
(f) Income tax
Income tax on the profit and loss for the year
comprises current and deferred tax. Income tax
is recognised in the Statement of Comprehensive
Income, except to the extent that it relates to items
recognised directly to equity, in which case it is
recognised in equity. Current tax is the expected
tax payable on the taxable income for the year,
using tax rates enacted or substantially enacted at
the Statement of Financial Position date, and any
adjustment to tax payable in respect of previous years.
Deferred tax is provided using the Statement of
Financial Position liability method, providing for
temporary differences between the carrying amounts
of assets and liabilities for financial reporting purposes
and the amounts used for taxation purposes. The
amount of deferred tax provided is based on the
expected manner of realisation or settlement of
the carrying amount of assets and liabilities, using
tax rates enacted or substantially enacted at the
Statement of Financial Position date and are expected
to apply when the deferred tax asset is realised or the
deferred tax liability is settled. A deferred tax asset is
recognised only to the extent that it is probable that
future taxable profits will be available against which
the asset can be utilised. Deferred tax assets are
reduced to the extent that it is no longer probable that
the related tax benefit will be realised.
Tax consolidation
Cyclopharm Limited is the head entity of the tax
consolidated group comprising all the Australian
wholly owned subsidiaries. The implementation date
for the tax consolidated group was 31 May 2006.
Current tax expense/income, deferred tax liabilities
and deferred tax assets arising from temporary
differences of the members of the tax consolidated
group are recognised in the separate financial
statements of the members of the tax consolidated
group using a “stand-alone basis without adjusting for
intercompany transactions” approach by reference to
the carrying amounts of assets and liabilities in the
separate financial statements of each entity and the
tax values applying under consolidation.
Any current Australian tax liabilities (or assets) and
deferred tax assets arising from unused tax losses of
the subsidiaries is assumed by the head entity in the
tax consolidated group and are recognised as amounts
payable (receivable) to (from) other entities in the tax
consolidated group. Any difference between these
39
Cyclopharm Limited | annual report 2021Notes to the Consolidated Financial StatementsFOR THE YEAR ENDED 31 DECEMBER 2021 (CONTINUED) 2.
Summary of significant accounting policies (continued)
(h) Property, plant and equipment
Plant and equipment is measured at cost less
accumulated depreciation and impairment losses.
The cost of fixed assets constructed within the economic
entity includes the cost of materials, direct labour,
borrowing costs and an appropriate proportion of fixed
and variable overheads. Subsequent costs are included in
the asset’s carrying amount or recognised as a separate
asset, as appropriate, only when it is probable that future
economic benefits associated with the item will flow
to the group and the cost of the item can be measured
reliably. All other repairs and maintenance are charged
to the Statement of Comprehensive Income during the
financial period in which they are incurred.
Impairment
The carrying amount of plant and equipment
is reviewed annually by Directors to consider
impairment. The recoverable amount is assessed on
the basis of the expected net cash flows that will be
received from the assets employment and subsequent
disposal. The expected net cash flows have been
discounted to their present values in determining
recoverable amounts.
Depreciation
The depreciable amount of all fixed assets including
capitalised lease assets are depreciated on a straight-
line basis over their useful lives commencing from
the time the asset is held ready for use. Leasehold
improvements are depreciated over the shorter
of either the unexpired period of the lease or the
estimated useful lives of the improvements.
Depreciation is calculated on a straight-line basis over
the estimated useful life of the asset as follows:
Plant and equipment
Leasehold Improvements 7.5 – 10%
Motor vehicles
Basis
5 – 33%
Method
Straight-line method
Straight-line method
16.67 – 25% Straight-line method
An item of property, plant and equipment is
derecognised upon disposal or when no future economic
benefits are expected to arise from the continued use of
the asset. Any gain or loss arising on de-recognition of
the asset (calculated as the difference between the net
disposal proceeds and the carrying amount of the item)
is included in the Statement of Comprehensive Income
in the year the item is derecognised.
amounts is recognised by the head entity as an equity
contribution or distribution.
Cyclopharm Limited recognises deferred tax assets
arising from unused tax losses of the tax consolidated
group to the extent that it is probable that future
taxable profits of the tax consolidated group will be
available against which the asset can be utilised.
Any subsequent period adjustments to deferred tax
assets arising from unused tax losses as a result of
revised assessments of the probability of recoverability
is recognised by the head entity only.
(g) Right-of-use assets
A right-of-use asset is recognised at the
commencement date of a lease. The right-of-use asset is
measured at cost, which comprises the initial amount
of the lease liability, adjusted for, as applicable, any
lease payments made at or before the commencement
date net of any lease incentives received, any initial
direct costs incurred, and, except where included in the
cost of inventories, an estimate of costs expected to be
incurred for dismantling and removing the underlying
asset, and restoring the site or asset.
Right-of-use assets are depreciated on a straight-
line basis over the unexpired period of the lease or
the estimated useful life of the asset, whichever
is the shorter. Where the Group expects to obtain
ownership of the leased asset at the end of the lease
term, the depreciation is over its estimated useful
life. Right-of-use assets are subject to impairment or
adjusted for any remeasurement of lease liabilities.
The Group has elected not to recognise a right-of-use
asset and corresponding lease liability for short-term
leases with terms of 12 months or less and leases of
low-value assets. Lease payments on these assets are
expensed to profit or loss as incurred.
40
Cyclopharm Limited | annual report 2021Notes to the Consolidated Financial StatementsFOR THE YEAR ENDED 31 DECEMBER 2021 (CONTINUED) 2.
Summary of significant accounting policies (continued)
(i)
investments accounted for using the
equity method
Associates are companies in which the Group has
significant influence through holding, directly or
indirectly, 20% or more of the voting power of the
Group. Investments in associates are accounted for
in the financial statements by applying the equity
method of accounting, whereby the investment is
initially recognised at cost and adjusted thereafter
for the post-acquisition change in the Group’s share
of net assets of the associate company. In addition,
the Group’s share of the profit or loss of the associate
company is included in the Group’s profit or loss.
The carrying amount of the investment includes
goodwill relating to the associate. Any discount on
acquisition whereby the Group’s share of the net fair
value of the associate exceeds the cost of investment is
recognised in profit or loss in the period in which the
investment is acquired. The carrying amount of the
investment also includes loans made to the associate
which are not expected to be repaid in the short term.
Profit and losses resulting from transactions between
the Group and the associate are eliminated to the
extent of the Group’s interest in the associate.
When the Group’s share of losses in an associate equals
or exceeds its interest in the associate, the Group
discontinues recognising its share of further losses
unless it has incurred legal or constructive obligations
or made payments on behalf of the associate. When the
associate subsequently makes profits, the Group will
resume recognising its share of those profits once its
share of the profits equals the share of the losses not
recognised.
Details of the Group’s investments in associates are
provided in Note 13.
(j) Intangibles
Intangible assets
Intangible assets acquired as part of a business
combination other than goodwill, are initially
measured at their fair value at the date of the
acquisition. Intangible assets acquired separately are
initially recognised at cost.
Indefinite life intangible assets are not amortised and
are subsequently measured at cost less any impairment.
Finite life intangible assets are subsequently measured
at cost less amortisation and any impairment.
The gains and losses recognised in profit or loss
arising from the derecognition of intangible assets
are measured as the difference between net disposal
proceeds and the carrying amount of the intangible
assets. The method and useful lives of finite life
intangible assets are reviewed annually.
Internally generated intangible assets, excluding
development costs, are not capitalised and are recorded
as an expense in the Statement of Profit or Loss.
Intangible assets are tested for impairment where
an indicator of impairment exists, and in the case
of indefinite life intangibles, at each reporting date,
either individually or at the cash generating unit level.
Useful lives are also examined on an annual basis
and adjustments, where applicable, are made on a
prospective basis.
Expenditure on the development of the
Technegas™Plus and Ultralute generator has been
capitalised. Costs will be amortised once the asset
development is completed and the asset ready for
use. No impairment provision has been deemed
appropriate. The Directors are satisfied that the
future economic benefits will eventuate to justify
the capitalisation of the expenditure incurred.
Development expenditure is tested annually for
impairment or more frequently if events or changes in
circumstances indicate that it might be impaired.
Useful lives
Method used
Impairment test/
Recoverable
Amount testing
New Patents
and licences
Patents – Finite
Licenses – Finite
8–10 years –
Straight-line
Annually and
where an indicator
of impairment
exists
Technegas
Development costs
Finite
9 years –
Straight-line
Amortisation
method reviewed
at each financial
year-end;
Reviewed annually
for indicator of
impairment
41
Cyclopharm Limited | annual report 2021Notes to the Consolidated Financial StatementsFOR THE YEAR ENDED 31 DECEMBER 2021 (CONTINUED) 2.
Summary of significant accounting policies (continued)
Research and development costs
(m) Cash and cash equivalents
Expenditure on research activities is recognised as
an expense when incurred.
Expenditure on development activities is capitalised
only when it is probable that the project will be a
success considering its commercial and technical
feasibility; the Group is able to use or sell the asset;
the Group has sufficient resources; and intend to
complete the development and its costs can be
measured reliably. Development expenditure is
measured at cost less any accumulated amortisation
and impairment losses. Amortisation is calculated
using a straight-line method to allocate the costs
over a period during which the related benefits are
expected to be realised.
(k) Inventories
Inventories are valued at the lower of cost and net
realisable value where net realisable value is the
estimated selling price in the ordinary course of
business, less estimated costs of completion and the
estimated costs necessary to make the sale.
Costs incurred in bringing each product to its present
location and conditions are accounted for as follows:
– Raw materials: purchase cost on a first-in, first-out
basis;
– Finished goods and work-in-progress: cost of direct
materials and labour and an appropriate portion
of manufacturing overheads based on normal
operating capacity but excluding borrowing costs.
(l) Trade and other receivables
Trade receivables are initially recognised at fair value
and subsequently measured at amortised cost using
the effective interest method, less any allowance for
expected credit losses. Trade receivables are generally
due for settlement within 90 days. The Group has
applied the simplified approach to measuring expected
credit losses, which uses a lifetime expected loss
allowance. To measure the expected credit losses, trade
receivables have been grouped based on days overdue.
Cash and cash equivalents comprise cash on hand,
deposits held at call with banks, short-term deposits
with an original maturity of three months or less and
bank overdrafts. For the purposes of the Statement of
Cash Flows, cash and cash equivalents consist of cash
and cash equivalents as defined above.
(n) Trade and other payables
Trade payables and other payables are carried at
amortised cost and represent liabilities for goods and
services provided to the Group prior to the end of the
financial year that are unpaid and arise when the Group
becomes obliged to make future payments in respect
of the purchase of these goods and services. Trade
payables are normally settled within 30 to 60 days.
(o) Interest-bearing loans and borrowings
All loans and borrowings are initially recognised
at cost, being the fair value of the consideration
received net of issue costs associated with the
borrowing. After initial recognition, interest-bearing
loans and borrowings are subsequently measured
at amortised cost using the effective interest rate
method. Amortised cost is calculated by taking into
account any issue costs and any discount or premium
on settlement. Gains and losses are recognised in
the Statement of Comprehensive Income when the
liabilities are derecognised and as well as through the
amortisation process.
(p) Lease liabilities
A lease liability is recognised at the commencement
date of a lease. The lease liability is initially recognised
at the present value of the lease payments to be
made over the term of the lease, discounted using
the interest rate implicit in the lease or, if that rate
cannot be readily determined, the Group’s incremental
borrowing rate. Lease payments comprise of fixed
payments less any lease incentives receivable, variable
lease payments that depend on an index or a rate,
amounts expected to be paid under residual value
guarantees, exercise price of a purchase option when
the exercise of the option is reasonably certain to
occur, and any anticipated termination penalties.
The variable lease payments that do not depend on
an index or a rate are expensed in the period in which
they are incurred.
42
Cyclopharm Limited | annual report 2021Notes to the Consolidated Financial StatementsFOR THE YEAR ENDED 31 DECEMBER 2021 (CONTINUED) 2.
Summary of significant accounting policies (continued)
Lease liabilities are measured at amortised cost using
the effective interest method. The carrying amounts
are remeasured if there is a change in the following:
future lease payments arising from a change in an
index or a rate used; residual guarantee; lease term;
certainty of a purchase option and termination
penalties. When a lease liability is remeasured, an
adjustment is made to the corresponding right-of-use
asset, or to profit or loss if the carrying amount of the
right-of-use asset is fully written down.
(q) Provisions
Provisions are recognised when the Group has a
present obligation (legal or constructive) as a result of
past events, for which it is probable that an outflow of
economic benefits will result and that an outflow can
be reliably measured. Where the Group expects some
or all of a provision to be reimbursed, for example
under an insurance contract, the reimbursement
is recognised as a separate asset but only when the
reimbursement is virtually certain. The expense
relating to any provision is presented in the Statement
of Comprehensive Income net of any reimbursement.
(r) Employee entitlements
Provision is made for employee benefits accumulated
as a result of employees rendering services up to the
reporting date. These benefits include wages and
salaries, annual leave and long service leave.
Employee benefits expected to be settled within
twelve months of the reporting date are measured
at their nominal amounts based on remuneration
rates which are expected to be paid when the
liability is settled plus related on-costs. All other
employee benefit liabilities are measured at the
present value of the estimated future cash outflow
(after applying probability) to be made in respect of
services provided by employees up to the reporting
date. In determining the present value of future cash
outflows, the market yield as at the reporting date
on national government bonds, which have terms
to maturity approximating the terms of the related
liability, are used.
Employee benefit expenses and revenues arising
in respect of wages and salaries, non-monetary
benefits, annual leave, long service leave and other
leave benefits; and other types of employee benefits
are recognised against profits on a net basis in their
respective categories.
(s) Employee share and performance share schemes
The fair value of performance rights issued under
the Cyclopharm Long Term Incentive Plan are
recognised as a personnel expense over the vesting
period with a corresponding increase in Employee
Equity Benefits Reserve.
The fair value of the implied option attached to shares
granted is determined using a pricing model that
takes into account factors that include exercise price,
the term of the performance option, the vesting and
performance criteria, the share price at grant date and
the expected price volatility of the underlying share.
The fair value calculation excludes the impact of any
non-market vesting conditions. Non-market vesting
conditions are included in assumptions about the
number of performance options that are expected to
become exercisable. At each balance date, the entity
revises its estimate of the number of performance
rights that are expected to become exercisable. The
personnel exp ense recognised each period takes into
account the most recent estimate.
Shares issued under employee and executive share
plans are held in trust until vesting date. Unvested
shares held by the trust are consolidated into the
group financial statements.
(t) Revenue recognition
The consolidated entity recognises revenue as follows:
Revenue from contracts with customers
Revenue is recognised at an amount that reflects
the consideration to which the consolidated entity is
expected to be entitled in exchange for transferring
goods or services to a customer. For each contract
with a customer, the consolidated entity: identifies the
contract with a customer; identifies the performance
obligations in the contract; determines the transaction
price which takes into account estimates of variable
consideration and the time value of money; allocates
the transaction price to the separate performance
obligations on the basis of the relative stand-alone
selling price of each distinct good or service to be
delivered; and recognises revenue when or as each
performance obligation is satisfied in a manner that
depicts the transfer to the customer of the goods or
services promised.
43
Cyclopharm Limited | annual report 2021Notes to the Consolidated Financial StatementsFOR THE YEAR ENDED 31 DECEMBER 2021 (CONTINUED) 2.
Summary of significant accounting policies (continued)
Variable consideration within the transaction price,
if any, reflects concessions provided to the customer
such as discounts, rebates and refunds, any potential
bonuses receivable from the customer and any other
contingent events. Such estimates are determined
using either the ‘expected value’ or ‘most likely
amount’ method. The measurement of variable
consideration is subject to a constraining principle
whereby revenue will only be recognised to the extent
that it is highly probable that a significant reversal in
the amount of cumulative revenue recognised will not
occur. The measurement constraint continues until the
uncertainty associated with the variable consideration
is subsequently resolved. Amounts received that are
subject to the constraining principle are recognised as
a refund liability.
Sale of goods
Revenue from the sale of goods is recognised at the
point in time when the customer obtains control of the
goods, which is generally at the time of delivery.
Rendering of services
Revenue from a contract to provide services is
recognised over time as the services are rendered
based on either a fixed price or an hourly rate.
(u) Other Revenue
Interest
Interest revenue is recognised as interest accrues using
the effective interest method. This is a method of
calculating the amortised cost of a financial asset and
allocating the interest income over the relevant period
using the effective interest rate, which is the rate
that exactly discounts estimated future cash receipts
through the expected life of the financial asset to the
net carrying amount of the financial asset.
Research & Development Tax Incentive
Government grants, including Research and
Development incentives, are recognised at fair value
where there is reasonable assurance that the grant will
be received and all grant conditions will be met.
Grants relating to cost reimbursements are recognised
as other income in profit or loss in the period when the
costs were incurred or when the incentive meets the
recognition requirements (if later).
All revenue is stated net of the amount of goods and
services tax (“GST”).
(v) Other taxes
Revenues, expenses and assets are recognised net of
the amount of GST except where the GST incurred is
not recoverable from the Australian Taxation Office
(“ATO”) and is therefore recognised as part of the
asset’s cost or as part of the expense item. Receivables
and payables are stated inclusive of GST. The net
amount of GST recoverable from, or payable to, the
ATO is included as part of receivables or payables in
the Statement of Financial Position. Cash flows are
presented in the Statement of Cash Flows on a gross
basis and the GST component of cash flows arising
from investing and financing activities, which is
recoverable from, or payable to the taxation authority
are classified as operating cash flows.
(w) Financial instruments
Financial assets and liabilities are recognised when the
entity becomes a party to the contractual provisions to
the instrument.
Loans and receivables
Loans and receivables are non-derivative financial
assets with fixed or determinable payments that
are not quoted in an active market and are stated at
amortised cost using the effective interest rate method.
Derivative financial instruments
Derivatives are initially recognised at fair value on
the date a derivative contract is entered into and are
subsequently remeasured to their fair value at each
reporting date. The accounting for subsequent changes
in fair value depends on whether the derivative is
designated as a hedging instrument, and if so, the
nature of the item being hedged.
De-recognition of financial instruments
Financial liabilities
A financial liability is derecognised when the obligation
under the liability is discharged or cancelled or
expires. When an existing financial liability is replaced
by another from the same lender on substantially
different terms, or the terms of an existing liability
are substantially modified, such an exchange or
modification is treated as a de-recognition of the
original liability and the recognition of a new liability,
and the difference in the respective carrying amounts
is recognised in profit or loss.
Impairment of financial assets
The Group assesses at each Statement of Financial
Position date whether a financial asset or group of
financial assets is impaired.
44
Cyclopharm Limited | annual report 2021Notes to the Consolidated Financial StatementsFOR THE YEAR ENDED 31 DECEMBER 2021 (CONTINUED) 2.
Summary of significant accounting policies (continued)
(x) Contributed equity
Share capital
(y) Earnings per share
Basic earnings per share
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.
Other contributed equity
In accordance with AASB112 Income Taxes, additional
contributed equity was recorded to recognise the
transfer of tax liabilities from Vita Medical Limited
to Vita Life Sciences Limited, being the parent of the
Australian tax consolidated group at the relevant
time. This event occurred prior to Cyclopharm
Limited acquiring its interests in the net assets of
Vita Medical Limited.
As part of the restructure a subsidiary of Cyclopharm
Limited, Vita Medical Australia Pty Ltd acquired all
the assets, liabilities and business from Vita Medical
Limited, the former group parent.
With effect from 31 May 2006, Cyclopharm Limited
also acquired 100% of the other group operating
subsidiaries from the ultimate holding company,
Vita Life Sciences Limited. Accordingly, the group
comprises Cyclopharm Limited and the following
wholly owned subsidiaries:
– Cyclomedica Australia Pty Ltd
(formerly Vita Medical Australia Pty Ltd)
– Cyclomedica Ireland Ltd
(formerly Vitamedica Europe Ltd)
– Cyclomedica Europe Ltd
– Cyclomedica Canada Limited
(formerly Vita Medical Canada Ltd)
– Cyclomedica Germany GmbH
– Allrad 28 Pty Ltd (deregistered 16 July 2017)
– Allrad 29 Pty Ltd (deregistered 16 July 2017)
These entities collectively comprise the medical
diagnostic equipment and associated consumables
business formerly operated as the Vita Medical Group –
now known as the Cyclopharm Group. The transaction
has been accounted for as a ‘reverse acquisition’
as defined in AASB 3 Business Combinations
whereby Cyclopharm Limited is the legal parent and
Cyclomedica Australia Pty Limited is the financial
parent, which for accounting purposes is deemed to be
the acquirer.
The consideration for the minority interests of the
controlled entities and costs of acquisition have been
charged to other contributed equity in accordance with
AASB 10 Consolidated Financial Statements.
Basic earnings per share is determined by dividing
the net profit/(loss) after income tax attributable to
members of the Company by the weighted average
number of ordinary shares outstanding during the
financial year. Where there is a change in the number
of ordinary shares on issue without a corresponding
change in recognised resources during the year, the
number of ordinary shares for all periods presented are
correspondingly adjusted as if the event had occurred
at the beginning of the earliest period presented.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in
the determination of basic earnings per share to take
into account the after-income tax effect of interest
and other financing costs associated with dilutive
potential ordinary shares and the weighted average
number of shares assumed to have been issued for no
consideration in relation to dilutive potential ordinary
shares. Where there is a change in the number of
ordinary shares on issue without a corresponding
change in recognised resources during the year, the
number of ordinary shares for all periods presented are
correspondingly adjusted as if the event had occurred
at the beginning of the earliest period presented.
(z) Fair Value
The Group subsequently measures some of its assets
at fair value on a non-recurring basis. Fair value is
the price the Group would receive to sell an asset
in an orderly (i.e. unforced) transaction between
independent, knowledgeable and willing market
participants at the measurement date.
As fair value is a market-based measure, the closest
equivalent observable market pricing information
is used to determine fair value. Adjustments to
market values may be made having regard to the
characteristics of the specific asset. The fair values
of assets that are not traded in an active market are
determined using one or more valuation techniques.
These valuation techniques maximise, to the extent
possible, the use of observable market data.
45
Cyclopharm Limited | annual report 2021Notes to the Consolidated Financial StatementsFOR THE YEAR ENDED 31 DECEMBER 2021 (CONTINUED) 2.
Summary of significant accounting policies (continued)
Useful lives of property, plant and equipment
The estimation of the useful lives of assets has been
based on historical experience as well as lease terms
and turnover policies. In addition, the condition of the
assets is assessed at least once per year and considered
against the remaining useful life. Adjustments to
useful lives are made when considered necessary.
Lease term
The lease term is a significant component in the
measurement of both the right-of-use asset and
lease liability. Judgement is exercised in determining
whether there is reasonable certainty that an option
to extend the lease or purchase the underlying asset
will be exercised, or an option to terminate the lease
will not be exercised, when ascertaining the periods
to be included in the lease term. In determining the
lease term, all facts and circumstances that create
an economical incentive to exercise an extension
option, or not to exercise a termination option, are
considered at the lease commencement date. Factors
considered may include the importance of the asset to
the Company’s operations; comparison of terms and
conditions to prevailing market rates; incurrence of
significant penalties; existence of significant leasehold
improvements; and the costs and disruption to
replace the asset. The Company reassesses whether
it is reasonably certain to exercise an extension
option, or not exercise a termination option, if
there is a significant event or significant change in
circumstances.
Incremental borrowing rate
Where the interest rate implicit in a lease cannot be
readily determined, an incremental borrowing rate
is estimated to discount future lease payments to
measure the present value of the lease liability at the
lease commencement date. Such a rate is based on
what the Company estimates it would have to pay a
third-party to borrow the funds necessary to obtain an
asset of a similar value to the right-of-use asset, with
similar terms, security and economic environment.
To the extent possible, market information is extracted
from either the principal market for the asset (i.e. the
market with the greatest volume and level of activity
for the asset) or, in the absence of such a market, the
most advantageous market available to the entity
at the end of the reporting period (i.e. the market
that maximises the receipts from the sale of the
asset after taking into account transaction costs and
transport costs). For non-financial assets, the fair
value measurement also takes into account a market
participant’s ability to use the asset in its highest and
best use or to sell it to another market participant that
would use the asset in its highest and best use.
(aa) Significant Accounting Judgements and Estimates
The preparation of financial statements requires
management to make judgements, estimates and
assumptions that effect the application of accounting
policies and the reported amounts of assets, liabilities,
income and expenses.
The following are the critical judgements and estimates
that the directors have made in the process of applying
the Group’s accounting policies and that have the most
significant effect on the amounts recognised in the
financial statements.
Key Estimates
Impairment – general
The Group assesses impairment at the end of each
reporting period by evaluating conditions and events
specific to the Group that may be indicative of
impairment triggers. Recoverable amounts of relevant
assets are reassessed using value-in-use calculations
which incorporate various key assumptions.
The Group’s property, plant and equipment relating
to the Cyclotron facility have been fully impaired,
based on management’s assessment that the fair
value of those assets is nil in the current industry
circumstances and the condition of the damaged assets.
Extensive damage to the Cyclotron facility caused by
substantial water damage in June 2014, delayed any
decisions about the future use of the Cyclotron facility
until it is restored to its former operational status. In
2019, the Company entered into a Business Venture
Collaboration Agreement with Cyclotek Australia Pty
Ltd and Pettech, a wholly owned subsidiary of ANSTO.
In parallel the Company entered into a Business Sale
Transfer agreement for the operations conducted at
the Company’s Cyclotron facility located at Macquarie
University Hospital.
The assumptions used in the estimation of recoverable
amount and the carrying amount of intangible assets
are discussed in Note 14. No impairment has been
recognised in respect of intangible assets at the end of
the reporting period.
46
Cyclopharm Limited | annual report 2021Notes to the Consolidated Financial StatementsFOR THE YEAR ENDED 31 DECEMBER 2021 (CONTINUED) 2.
Summary of significant accounting policies (continued)
Share based payment transactions
The Group measures the cost of equity-settled
transactions with employees by reference to the fair
value of the equity instruments at the date at which
they are granted. The 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 expenses
and equity.
The Group measures the cost of share-based payments
at fair value at the grant date using the Black-Scholes
formula, taking into account the terms and conditions
upon which the instruments were granted. Refer to
Note 26 for details of the Company’s Share Based
Payment Plan.
Key Judgements
Taxation
The Group’s accounting policy for taxation requires
management’s judgement as to the types of
arrangements considered to be a tax on income
in contrast to an operating cost. Judgement is also
required in assessing whether deferred tax assets
and certain deferred tax liabilities are recognised
on the statement of financial position. Deferred tax
assets, including those arising from unrecouped
tax losses, capital losses and temporary differences,
are recognised only where it is considered more
likely than not that they will be recovered, which
is dependent on the generation of sufficient future
taxable profits.
Judgements are also required about the application
of income tax legislation. These judgements and
assumptions are subject to risk and uncertainty, hence
there is a possibility that changes in circumstances
will alter expectations, which may impact the
amount of deferred tax assets and deferred tax
liabilities recognised on the statement of financial
position and the amount of other tax losses and
temporary differences not yet recognised. In such
circumstances, some or all of the carrying amounts
of recognised deferred tax assets and liabilities may
require adjustment, resulting in a corresponding
credit or charge to the consolidated statement of
comprehensive income.
47
Cyclopharm Limited | annual report 2021Notes to the Consolidated Financial StatementsFOR THE YEAR ENDED 31 DECEMBER 2021 (CONTINUED) 3. Revenue from contracts with customers
Set out below is the disaggregation of the Group’s revenue from contracts with customers:
For the year ended 31 December 2021
Technegas
$
11,591,344
3,773,257
–
1,621,761
325,729
17,312,091
3,237,027
11,510,851
2,456,613
107,600
17,312,091
17,097,962
214,129
17,312,091
Molecular
Imaging
$
–
–
392,483
–
–
392,483
392,483
–
–
–
392,483
Total
$
11,591,344
3,773,257
392,483
1,621,761
325,729
17,704,574
3,629,510
11,510,851
2,456,613
107,600
17,704,574
392,483
–
392,483
17,490,445
214,129
17,704,574
For the year ended 31 December 2020
Technegas
$
11,075,305
2,014,557
–
1,274,539
158,670
14,523,071
2,235,541
10,135,320
2,051,757
100,453
14,523,071
14,333,375
189,696
14,523,071
Molecular
Imaging
$
–
–
153,086
–
–
153,086
153,086
–
–
–
153,086
Total
$
11,075,305
2,014,557
153,086
1,274,539
158,670
14,676,157
2,388,627
10,135,320
2,051,757
100,453
14,676,157
153,086
–
153,086
14,486,461
189,696
14,676,157
Segments
Type of goods or service
Sales of equipment and consumables – Technegas
Sales of equipment and consumables – third-party products
Income from business venture collaboration
After sales services – Technegas
After sales services – third-party products
Total revenue from contracts with customers
Geographical markets
Asia Pacific
Europe
Canada
Other
Total revenue from contracts with customers
Timing of revenue recognition
Goods transferred at a point in time
Services transferred over time
Total revenue from contracts with customers
Segments
Type of goods or service
Sales of equipment and consumables – Technegas
Sales of equipment and consumables – third-party products
Income from business venture collaboration
After sales services – Technegas
After sales services – third-party products
Total revenue from contracts with customers
Geographical markets
Asia Pacific
Europe
Canada
Other
Total revenue from contracts with customers
Timing of revenue recognition
Goods transferred at a point in time
Services transferred over time
Total revenue from contracts with customers
There are no impairment losses on receivables.
48
Cyclopharm Limited | annual report 2021Notes to the Consolidated Financial StatementsFOR THE YEAR ENDED 31 DECEMBER 2021 (CONTINUED) 4. Operating segments
The Group has identified its operating segments based on the internal reports that are reviewed and used by the Board
of Directors (chief operating decision makers) in assessing performance and determining the allocation of resources.
The Group is managed primarily on the basis of product category as the Group’s risks and returns are affected
predominantly by differences in the products and services produced. The Group also monitors the performance of the
business on a geographical basis.
The operating businesses are organised and managed separately according to the nature of the products and services
provided, with each segment representing a strategic business unit that offers different products and serves different
markets.
The Technegas™ segment is a supplier of diagnostic equipment and consumables used by physicians in the detection
of pulmonary embolism and a distributor of third-party products to the diagnostic imaging sector.
The Molecular Imaging segment will produce radiopharmaceuticals to be used by physicians in the detection of cancer,
neurological disorders and cardiac disease.
Transfer prices between business segments are set on an arm’s length basis in a manner similar to transactions with
third-parties. Segment revenue, segment expense and segment result include transfers between business segments.
Those transfers are eliminated on consolidation.
Business segments
The tables under the heading business segments present revenue and profit information and certain asset and liability
information regarding business segments for the years ended 31 December 2021 and 31 December 2020.
Geographical segments
The tables under the heading geographical segment present revenue and asset information regarding geographical
segments for the years ended 31 December 2021 and 31 December 2020.
Business Segments
For the year ended 31 December 2021
Revenue
Sales – Technegas
Income from business venture collaboration
Sales – third-party products
Sales to external customers
Finance revenue
Other revenue
Total revenue
Result
(Loss)/profit before tax and finance costs
Finance costs
(Loss)/profit before income tax
Income tax
Loss after income tax
Assets and liabilities
Segment assets
Segment asset increases for the period:
– capital expenditure
Segment liabilities
Other segment information
Depreciation and amortisation
Technegas
$
13,213,106
–
4,098,985
17,312,091
3,624
2,432,578
19,748,293
(4,565,182)
(86,395)
(4,651,577)
(237,237)
(4,888,814)
Consolidated
Molecular
Imaging
$
Total
$
–
392,483
–
392,483
326
–
392,809
13,213,106
392,483
4,098,985
17,704,574
3,950
2,432,578
20,141,102
307,625
(2,919)
304,706
(456,058)
(151,352)
(4,257,557)
(89,314)
(4,346,871)
(693,295)
(5,040,166)
54,549,989
1,190,915
55,740,904
842,845
(12,567,046)
–
(106,124)
842,845
(12,673,170)
(758,731)
–
(758,731)
49
Cyclopharm Limited | annual report 2021Notes to the Consolidated Financial StatementsFOR THE YEAR ENDED 31 DECEMBER 2021 (CONTINUED) Technegas
$
12,349,844
–
2,173,227
14,523,071
3,407
3,004,893
17,531,371
(5,777,936)
(205,341)
(5,983,277)
(70,490)
(6,053,767)
Consolidated
Molecular
Imaging
$
–
153,086
–
153,086
1,003
–
154,089
141,686
(2,518)
139,168
(129,037)
10,131
Total
$
12,349,844
153,086
2,173,227
14,676,157
4,410
3,004,893
17,685,460
(5,636,250)
(207,859)
(5,844,109)
(199,527)
(6,043,636)
27,103,927
1,171,198
28,275,125
316,214
(11,122,986)
–
(36,289)
316,214
(11,159,275)
(910,291)
–
(910,291)
Asia Pacific
$
Europe
$
3,629,510
2,794
2,291,383
5,923,687
11,510,851
1,156
141,195
11,653,202
Consolidated
Canada
$
2,456,613
–
–
2,456,613
Other
$
Total
$
107,600
–
–
107,600
17,704,574
3,950
2,432,578
20,141,102
46,467,809
8,745,806
527,289
–
55,740,904
Asia Pacific
$
Europe
$
2,388,627
4,055
3,004,893
5,397,575
10,135,320
355
–
10,135,675
Consolidated
Canada
$
2,051,757
–
–
2,051,757
Other
$
Total
$
100,453
–
–
100,453
14,676,157
4,410
3,004,893
17,685,460
18,704,437
8,442,980
1,127,708
–
28,275,125
4. Segment reporting (continued)
Business Segments
For the year ended 31 December 2020
Revenue
Sales – Technegas
Income from business venture collaboration
Sales – third-party products
Sales to external customers
Finance revenue
Other revenue
Total revenue
Result
(Loss)/profit before tax and finance costs
Finance costs
(Loss)/profit before income tax
Income tax
(Loss)/profit after income tax
Assets and liabilities
Segment assets
Segment asset increases for the period :
– capital expenditure
Segment liabilities
Other segment information
Depreciation and amortisation
Geographical Segments
For the year ended 31 December 2021
Revenue
Sales to external customers
Finance revenue
Other revenue
Total segment revenue
Assets
Segment assets
For the year ended 31 December 2020
Revenue
Sales to external customers
Finance revenue
Other revenue
Total segment revenue
Assets
Segment assets
50
Cyclopharm Limited | annual report 2021Notes to the Consolidated Financial StatementsFOR THE YEAR ENDED 31 DECEMBER 2021 (CONTINUED)
5. Revenues and expenses
Revenue
Sales revenue
Income from business venture collaboration
Total revenue
Finance revenue – Interest received from other parties
Other Revenue
Insurance recoveries
R&D Tax incentive refund
Total other revenue
(Note 3 discloses the disaggregation of the Group’s revenue from contracts with customers)
Expenses
(a) Cost of materials and manufacturing
Cost of materials and manufacturing
(b) Finance costs
Interest paid on loans from external parties
Interest on leased assets (AASB 16)
Total finance costs
(c) Depreciation and amortisation
Depreciation of plant and equipment
Depreciation of leasehold improvements
Depreciation of leased assets (AASB 16)
Amortisation of intangibles
(d) Research & development expense
FDA expenses
Pilot Clinical Trial expenses
Research expenses
(e) Employee benefits expense
Salaries and wages
Defined contribution superannuation expense
Non-Executive Director fees
Share-based payments expense
(f) Administration expense
Legal and professional costs
Office and facility costs
Reversal of doubtful debts
Travel and motor vehicle costs
(g) Other expense
Realised Foreign exchange (gains)/losses
Unrealised Foreign exchange (gains)/losses
Recoveries from litigation
Jobkeeper grant
Other
Notes
Consolidated
2021
$
2020
$
17,312,091
392,483
17,704,574
3,950
14,523,071
153,086
14,676,157
4,410
141,195
2,291,383
2,432,578
–
3,004,893
3,004,893
5,042,295
3,963,469
16,515
72,799
89,314
161,276
168,050
288,707
140,698
758,731
1,303,372
214,893
141,902
1,660,167
7,395,884
548,200
148,106
756,588
8,848,778
4,868,162
1,453,745
(5,427)
490,400
6,806,880
(26,377)
(232,134)
–
–
518,147
259,636
26a
18,215
189,644
207,859
143,522
340,417
289,758
136,594
910,291
3,311,715
173,851
51,951
3,537,517
6,397,977
529,150
129,530
795,600
7,852,257
3,567,193
1,617,731
(5,601)
470,288
5,649,611
43,786
609,085
(2,969)
(491,500)
404,441
562,843
51
Cyclopharm Limited | annual report 2021Notes to the Consolidated Financial StatementsFOR THE YEAR ENDED 31 DECEMBER 2021 (CONTINUED)
6. Income tax
The components of income tax expense comprise:
Current income tax expense
Deferred tax expense
A reconciliation of income tax expense applicable to accounting loss
before income tax at the statutory income tax rate to income tax expense
at the Group’s effective income tax rate is as follows:
Accounting loss before income tax
Statutory income tax rate of 26% (2020: 27.5%)
Effects of lower rates on overseas income
Expenditure not allowable for income tax purposes
Non-assessable income
Temporary differences recognised (reversed) in Australian group
Tax losses not recognised in Australia
Total income tax expense
Effective income tax rate
Current income tax asset
Current income tax liability
Deferred tax relating to capital raising costs, credited directly to equity
Deferred tax assets
Deferred tax assets from temporary differences on:
Investments
Provisions and accruals
Other
Total deferred tax assets
Movements in deferred tax assets
Opening balance
Temporary differences brought to account (reversed)
Closing balance
Deferred tax assets for which no benefit has been recognised:
– arising from temporary differences – at 25% (2020:26%)
– arising from revenue tax losses – at 25% (2020:26%)
– arising from capital tax losses – at 25% (2020:26%)
2021
$
2020
$
(324,005)
(369,290)
(693,295)
(173,128)
(26,399)
(199,527)
(4,346,871)
(5,844,109)
1,674,705
232,616
(1,221,402)
595,760
(369,290)
(1,605,684)
(693,295)
15.9%
1,215,570
168,208
(1,627,043)
826,346
(26,399)
(756,209)
(199,527)
3.4%
58,761
98,132
–
233,904
114,053
–
(1,228,684)
1,460,084
589,006
820,406
(667,429)
1,517,795
339,330
1,189,696
1,189,696
(369,290)
820,406
1,493,663
(303,967)
1,189,696
582,288
2,581,039
19,715
636,836
1,078,595
20,503
52
Cyclopharm Limited | annual report 2021Notes to the Consolidated Financial StatementsFOR THE YEAR ENDED 31 DECEMBER 2021 (CONTINUED) 7. Net tangible assets and loss per share
Net Tangible Assets per share
Net assets per share
Net tangible assets per share
Number of ordinary shares for net assets per share
Net assets
Less: Intangible assets
Net tangible assets
Consolidated
2021
$
0.46
0.40
2020
$
0.21
0.15
Number
93,374,823
Number
80,274,455
2021
$
43,067,734
(5,422,263)
37,645,471
2020
$
17,115,850
(5,291,899)
11,823,951
The number of ordinary shares includes the effects of 408,059 Long Term Incentive Performance (‘LTIP’) shares issued
on 19 February 2021 (2020: 1,045,000 Long Term Incentive Performance (‘LTIP’) shares issued on 4 May 2020 and 757,750
LTIP shares issued on 24 July 2020) and excludes 24,443 expired LTIP shares cancelled on 5 May 2020 as set out in Note 19.
The net assets includes both right-of-use assets and lease liabilities accounted for in accordance with AASB 16 Leases.
Loss per share
Basic loss per share for continuing operations
Basic loss per share
Diluted loss per share
Weighted average number of ordinary shares for basic loss per share
Weighted average number of ordinary shares for diluted loss per share
Loss used to calculate basic earnings per share
Loss used to calculate diluted earnings per share
Consolidated
2021
cents
(5.62)
(5.62)
(5.62)
2020
cents
(7.89)
(7.89)
(7.89)
Number
89,690,122
89,690,122
Number
76,590,677
76,590,677
2021
$
(5,040,166)
(5,040,166)
2020
$
(6,043,636)
(6,043,636)
The weighted average number of ordinary shares for basic loss per share excludes the effects of 408,059 LTIP shares
issued on 19 February 2021, 1,045,000 LTIP shares issued on 4 May 2020, 500,000 LTIP shares issued on 24 July 2020,
200,000 LTIP shares issued on 30 May 2019 and 500,000 LTIP shares issued on 2 July 2018 set out in Note 19 as they are
contingently returnable.
53
Cyclopharm Limited | annual report 2021Notes to the Consolidated Financial StatementsFOR THE YEAR ENDED 31 DECEMBER 2021 (CONTINUED) 8. Cash and cash equivalents
Cash at bank and in hand
Total cash and cash equivalents
Cash at bank and in hand earns interest at floating rates based on daily bank deposit rates.
The fair value of cash equivalents is $29,249,255 (2020: $1,874,285).
Reconciliation of Statement of Cash Flows
For the purpose of the Statement of Cash Flows, cash and cash equivalents
comprise the following:
Cash at bank and in hand
(a) Reconciliation of net loss after tax to net cash flows from operations
Net loss after tax
Adjustments for non-cash income and expense items:
Depreciation
Amortisation
Movement provision for employee benefits
Movement in foreign exchange
Movement in employee benefits reserve
Movement in other provisions
Increase/decrease in assets and liabilities:
Decrease/(Increase) in receivables
Increase in inventories
Decrease/(Increase) in other receivables
Decrease/(Increase) in current tax asset
Decrease in deferred tax assets
Increase in creditors
(Decrease)/Increase in current tax liabilities
Decrease in deferred tax liabilities
Increase in deferred income liability
Net cash flow used in operating activities
Consolidated
2021
$
2020
$
29,249,255
29,249,255
1,874,285
1,874,285
Consolidated
2021
$
2020
$
29,249,255
29,249,255
1,874,285
1,874,285
(5,040,166)
(6,043,636)
618,033
140,698
214,908
(218,649)
756,588
(5,427)
(3,534,015)
685,026
(775,358)
16,745
175,143
369,290
1,445,425
(15,921)
–
4,255
(1,629,410)
773,697
136,594
370,003
(152,838)
795,600
(5,601)
(4,126,181)
(1,783,104)
(2,240,574)
(3,122,390)
(8,319)
303,967
2,128,848
91,121
(277,568)
99,332
(8,934,868)
(b) Non-cash financing and investing activities
All Long Term Incentive Plan (LTIP) shares as set out in Note 26 Share Based Payment Plans are issued by way of loans.
During 2020, 225,000 LTIP shares vested and an election was made to extend the exercise period for up to 5 years,
whilst 24,443 LTIP shares lapsed and were cancelled. Refer to Note 19 Contributed Equity and Note 25 Share Based
Payment Plans.
The following LTIP shares were issued by way of loans:
– 408,059 LTIP shares issued on 19 February 2021 (2020: 1,045,000 LTIP shares issued on 4 May 2020 and 757,750 LTIP
shares issued on 24 July 2020).
54
Cyclopharm Limited | annual report 2021Notes to the Consolidated Financial StatementsFOR THE YEAR ENDED 31 DECEMBER 2021 (CONTINUED) 9. Trade and other receivables
Current
Trade receivables, third-parties
Allowance for expected credit loss
Net Trade receivables, third-parties
Other receivables
Total Current trade and other receivables
Total trade and other receivables
Terms and conditions
Notes
(i)
(ii), (iii)
Consolidated
2021
$
2020
$
4,774,505
(110,415)
4,664,090
3,376,618
8,040,708
8,040,708
5,453,528
(104,412)
5,349,116
3,488,281
8,837,397
8,837,397
Terms and conditions relating to the above financial instruments
(i)
Trade receivables are non-interest bearing and generally on 30 and 60-day terms.
(ii) Other receivables are non-interest bearing and have repayment terms between 30 and 90 days.
(iii) Other receivables include accrued R&D Tax Incentive of $2,295,638 (2020: $3,104,225) which was received in January
2022 (2020: February 2021).
(iv) Related party details are set out in the Note 22 Related Party Disclosures.
Movements in the allowance for expected credit losses are as follows:
Opening balance
Additional provisions recognised
Unused amounts reversed
Closing balance
10. Inventories
Current
Raw materials at cost
Finished goods at lower of cost or net realisable value
Provision for obsolescence
Total inventory
Consolidated
2021
$
104,412
6,003
–
110,415
2020
$
107,259
–
(2,847)
104,412
Consolidated
2021
$
2020
$
3,870,499
1,692,090
(51,214)
5,511,375
2,938,687
1,840,807
(43,477)
4,736,017
55
Cyclopharm Limited | annual report 2021Notes to the Consolidated Financial StatementsFOR THE YEAR ENDED 31 DECEMBER 2021 (CONTINUED) 11. Property, plant and equipment
Year ended 31 December 2021
Consolidated
1 January 2021
at written down value
Additions/Transfers
Depreciation for the year
31 December 2020
at written down value
1 January 2021
Cost value
Impairment – Molecular Imaging*
Accumulated depreciation
Net carrying amount
31 December 2021
Cost value
Impairment – Molecular Imaging*
Accumulated depreciation
Net carrying amount
Year ended 31 December 2020
Consolidated
1 January 2020
at written down value
Additions/Transfers
Depreciation for the year
31 December 2020
at written down value
1 January 2020
Cost value
Impairment – Molecular Imaging*
Accumulated depreciation
Net carrying amount
31 December 2020
Cost value
Impairment – Molecular Imaging*
Accumulated depreciation
Net carrying amount
Leasehold
Land and
Buildings
$
289,866
40,960
(10,071)
Leasehold
Improvements
Plant and
Equipment
$
$
1,001,216
454,272
(168,050)
520,326
341,946
(151,205)
320,755
1,287,438
711,067
2,394,333
(1,881,960)
(222,507)
289,866
4,871,944
(2,608,912)
(1,261,816)
1,001,216
8,672,821
(4,369,291)
(3,783,204)
520,326
2,435,293
(1,881,960)
(232,578)
320,755
5,326,216
(2,608,912)
(1,429,866)
1,287,438
9,014,767
(4,369,291)
(3,934,409)
711,067
Leasehold
Land and
Buildings
$
299,655
724
(10,513)
Leasehold
Improvements
Plant and
Equipment
$
$
1,288,500
53,133
(340,417)
411,038
242,297
(133,009)
289,866
1,001,216
520,326
2,393,609
(1,881,960)
(211,994)
299,655
4,818,811
(2,608,912)
(921,399)
1,288,500
8,430,524
(4,369,291)
(3,650,195)
411,038
2,394,333
(1,881,960)
(222,507)
289,866
4,871,944
(2,608,912)
(1,261,816)
1,001,216
8,672,821
(4,369,291)
(3,783,204)
520,326
Leased
Plant and
Equipment
$
–
–
–
–
120,901
–
(120,901)
–
120,901
–
(120,901)
–
Leased
Plant and
Equipment
$
–
–
–
–
120,901
–
(120,901)
–
120,901
–
(120,901)
–
Capital
Work in
Progress
$
91,721
5,667
–
Total
$
1,903,129
842,845
(329,326)
97,388
2,416,648
91,721
–
–
91,721
97,388
–
–
97,388
Capital
Work in
Progress
$
71,661
20,060
–
16,151,720
(8,860,163)
(5,388,428)
1,903,129
16,994,565
(8,860,163)
(5,717,754)
2,416,648
Total
$
2,070,854
316,214
(483,939)
91,721
1,903,129
71,661
–
–
71,661
91,721
–
–
91,721
15,835,506
(8,860,163)
(4,904,489)
2,070,854
16,151,720
(8,860,163)
(5,388,428)
1,903,129
*
Impairment arising from the Group’s decision to cease commercial production at its cyclotron facility at the end of April 2014. A collaboration
agreement was signed in 2019 between the Group, Cyclotek (Aust) Pty Ltd and the Australian Nuclear Science and Technology Organisation
whereby Cyclotek NSW Pty Ltd, a wholly owned subsidiary of Cyclotek (Aust) Pty Ltd, will leverage the cyclotron facility to manufacture
new PET diagnostics and undertake research and development activities. However, extensive damage to the cyclotron facility was caused
by substantial water damage in June 2014. Restoration to its former operational status has been delayed due to the COVID-19 pandemic.
Accordingly, the suspended cyclotron business is not considered to be a discontinued operation pending completion of the restoration.
The Group initially recognises and measures its Land and Buildings, Plant and Equipment and Leasehold Improvements at cost. The Group
subsequently measures some of its Buildings, Plant and Equipment and its Leasehold Improvements at fair value on a non-recurring basis
in accordance with AASB 136: Impairment of Assets. Refer Note 2(aa).
56
Cyclopharm Limited | annual report 2021Notes to the Consolidated Financial StatementsFOR THE YEAR ENDED 31 DECEMBER 2021 (CONTINUED) 11. Property, plant and equipment (continued)
Fair Value Measurement
AASB 13 Fair Value Measurement requires the
disclosure of fair value information by level of the
fair value hierarchy, which categorises fair value
measurements into one of three possible levels based
on the lowest level that an input that is significant to
the measurement can be categorised into, as follows:
– Level 1: Measurements based on quoted prices in
active markets for identical assets that the entity
can access at the measurement date.
– Level 2: Measurements based on inputs other than
the quoted prices included in Level 1, but that are
observable for the asset, either directly or indirectly.
– Level 3: Measurements based on unobservable
inputs for the asset or liability.
Cyclopharm’s management considers that the inputs
used for the fair value measurement are Level 2 inputs.
Valuation techniques
AASB 13 requires the valuation technique used to
be consistent with one of the following valuation
approaches:
– Market approach: techniques that use prices and
other information generated by market transactions
for identical or similar assets.
– Income approach: techniques that convert future
cash flows or income and expenses into a single
discounted present value.
– Cost approach: techniques that reflect the current
replacement cost of an asset at its current service
capacity.
The Cyclopharm Board decided to cease commercial
production at its Cyclotron facility at the end of April
2014 due to the impact on the Group’s profits of the
government-owned competition. In making that
decision, the Board valued the Cyclotron facility,
comprised of buildings, leasehold improvements and
plant and equipment at a fair value of nil, using the
market approach and income approach techniques.
The market technique predominantly used recent
observable market data for similar new equipment
in Australia, adjusted for loss in value caused by
physical deterioration, functional obsolescence,
economic obsolescence and the industry specific
aspects affecting this highly specialised asset i.e. the
government-owned competition which had rendered
further participation in the molecular imaging industry
uneconomic and its future use uncertain. The same
industry specific factors were applied to the income
approach technique. Both techniques resulted in a fair
value of nil being recognised for the Cyclotron facility
as at 31 December 2014. Cyclopharm considers that the
same conditions still apply at 31 December 2021 as the
Cyclotron facility, although now repaired and largely
restored, has not been fully restored to its former
functionality as intended, after substantial water
damage in June 2014. Accordingly, Cyclopharm has
concluded that the fair value of the Cyclotron remains
at nil as at 31 December 2021.
Inputs used in the market approach technique to
measure Level 2 fair values were:
– current replacement cost of the property being
appraised less the loss in value caused by physical
deterioration, functional obsolescence and economic
obsolescence, and industry specific factors set out
above.
– historical cost and relevant market data and
industry expertise.
– sales comparison for assets where available.
The assessments of the physical condition, functional
obsolescence and economic obsolescence are
considered Level 3 inputs.
Non-Recurring fair value measurements:
Buildings
Plant and equipment
Leasehold improvements
Total non-financial assets
recognised at fair value
Level 2
Level 2
2021
$
–
–
–
–
2020
$
–
–
–
–
The highest and best use of the assets in normal
circumstances is the value in continued use, using the
income approach technique. However, in the current
unusual circumstances as set out above, the fair value
using this approach is nil.
12. Right-of-use assets
Land and buildings –
right-of-use
Less: Accumulated
depreciation
Motor vehicle –
right-of-use
Less: Accumulated
depreciation
Total right-of-use assets
Consolidated
2021
$
2020
$
5,195,492
5,196,359
(1,538,421)
3,657,071
(1,309,943)
3,886,416
287,747
151,046
(115,614)
172,133
3,829,204
(126,030)
25,016
3,911,432
The Group leases land and buildings for its offices,
manufacturing facilities and warehouse under
agreements of between two to ten years with, in some
cases, options to extend. The leases have various
escalation clauses. On renewal, the terms of the
leases are negotiated. The Group also leases plant and
equipment under agreements of four years.
57
Cyclopharm Limited | annual report 2021Notes to the Consolidated Financial StatementsFOR THE YEAR ENDED 31 DECEMBER 2021 (CONTINUED)
13. Investments accounted for using the equity method
Equity accounted investments
Associated companies
Name
Macquarie Medical
Imaging Pty Ltd
Principal
Activities
Imaging
centre
Principal
place of
business
Sydney,
Australia
Measurement
Method
Equity
method
Notes
(a)
Consolidated
2021
$
–
2020
$
–
Ownership Interest
2021
20%
2020
20%
Macquarie Medical Imaging Pty Ltd (“MMI”) is a private entity that provided medical imaging facilities for Macquarie
University Hospital. From 7 December 2019, the business operations of MMI have been transferred to MQ Health, an
entity associated with Macquarie University Hospital.
Extract from the associate’s statement of financial position:
Current Assets
Current Liabilities
Net Liabilities
Share of associate’s Net Liabilities
Extract from the associate’s statement of comprehensive income:
Revenue
Net Loss
Consolidated
2021
$
4,058,487
(17,495,145)
(13,436,658)
(2,687,332)
2020
$
4,130,592
(17,533,962)
(13,403,370)
(2,680,674)
Consolidated
2021
$
–
(33,289)
2020
$
131,905
(804,347)
Notes
(a)
Notes
(a)
(a)
The share of the associate’s loss not recognised during the year was $6,657 (2020: loss of $160,869) and the
cumulative share of the associate’s loss not recognised as at 31 December 2021 was $2,732,718 (31 December 2020:
$2,726,061).
The share of loss of associate not recognised as at 31 December 2021 is extracted from the unaudited financial
report of the associate, and it may be revised when that financial report has been audited.
The fair value of the Group’s investment in Macquarie Medical Imaging Pty Ltd was $nil (2020: $nil). It is anticipated
that MMI will be de-registered upon the finalisation of its accounts payable and receivables.
Contingent liabilities
(b) In December 2019, a business venture collaboration agreement combined CycloPet Pty Ltd and Pettech Solutions
Limited’s cyclotron facilities under a single operating enterprise known as Cyclotek NSW Pty Limited (Cyclotek
NSW). Cyclopharm and Cyclotek NSW have entered into a sub-lease agreement as tenants in common whereby
Cyclotek NSW is solely responsible for the tenant’s obligations except for make good obligations until such time
as it exercises the right to transfer its interest as tenant in common to Cyclopharm. Being a tenant in common,
Cyclopharm’s contingent liabilities as at 31 December 2021 amounts to $3,366,657 (2020: $3,366,657) if Cyclotek
NSW is unable to fulfil its obligations as tenant. The amount comprises payments under a sub-lease agreement
commencing 1 January 2020 until the expiry of two options to renew expiring on 31 December 2039 with a rent-free
period until 31 December 2022.
There were no other contingent liabilities as at the date of this report (2020: $nil).
58
Cyclopharm Limited | annual report 2021Notes to the Consolidated Financial StatementsFOR THE YEAR ENDED 31 DECEMBER 2021 (CONTINUED)
14. Intangible assets
Consolidated
Balance at 1 January 2021
Additions
Amortisation
Balance at 31 December 2021
31 December 2021
Non-Current
Total
31 December 2020
Non-Current
Total
Intellectual
Property
Goodwill on
consolidation*
$
413,244
93,581
(55,482)
451,343
$
865,273
–
–
865,273
Licences
$
577,883
–
(85,216)
492,667
Technegas
Development
$
788,588
–
–
788,588
Target
Ultralute
Total
$
27,419
–
–
27,419
$
2,619,492
177,481
–
2,796,973
$
5,291,899
271,062
(140,698)
5,422,263
451,343
451,343
865,273
865,273
492,667
492,667
788,588
788,588
27,419
27,419
2,796,973
2,796,973
5,422,263
5,422,263
413,244
413,244
865,273
865,273
577,883
577,883
788,588
788,588
27,419
27,419
2,619,492
2,619,492
5,291,899
5,291,899
* Goodwill on consolidation arising upon the acquisition of Inter Commerce Medical bvba on 1 October 2017 and Medicall Analys AB on 1 May
2018.
The following assumptions are noted in respect of the following intangible assets: (a) Goodwill, (b) Technegas™
Development and (c) Ultralute.
The recoverable amount of intangible assets have been assessed using a discounted cash flow methodology forecasting
five years of pre-tax cash flows.
The following describes each key assumption on which management has based its value in use calculations:
(a)
Five-year pre-tax cash flow projections, based upon management approved budgets and growth rates covering
a one year period, with the subsequent periods based upon management expectations of growth excluding the
impact of possible future acquisitions, business improvement capital expenditure and restructuring, together with
a terminal value.
(b) The pre-tax discount rates used were between 5.92% to 25% (2020: between 12% to 25%). The discount rates reflect
management’s estimate of the time value of money and the Group’s adjusted weighted average cost of capital to
reflect the current market risk–free rate but also price for the uncertainty inherent in the assets.
(c)
Management believes the projected 4% revenue growth rate for existing markets (no sales to the US market is
assumed) is prudent and justified, based on the rebound in Technegas™ sales after the prior year pandemic impact.
No changes in estimations were made by management compared to prior years. The key assumptions used for assessing
the carrying value of intangible assets reflects the risk estimates of the business and respective assets.
There were no other key assumptions for Goodwill, Technegas™ Development costs and Ultralute costs.
The Directors have concluded that the recoverable amount of Goodwill, Technegas™ Development costs, and Ultralute
costs exceed their carrying values. Based on the above, no impairment charge was recognised.
Sensitivity
As disclosed in note 2(aa), the Directors have made judgements and estimates in respect of impairment. Should these
judgements and estimates not occur the resulting carrying amounts may change.
Goodwill
All other assumptions remaining constant, the sensitivity in the value of goodwill is that revenue would need to
decrease by more than 6%.
Management believes that other reasonable changes in the key assumptions on which the recoverable amount of
Goodwill is calculated would not cause the carrying amount to exceed its recoverable amount.
Technegas™ development and Ultralute development costs
Sensitivity analysis has been performed by adjusting underlying assumptions by up to 10%. The analysis indicated that
headroom exists in the cash flow projections to support the carrying value of the intangible assets.
59
Cyclopharm Limited | annual report 2021Notes to the Consolidated Financial StatementsFOR THE YEAR ENDED 31 DECEMBER 2021 (CONTINUED) 15. Trade and other payables
Current
Trade payables, third-parties
Other payables and accruals
Deposits from customers
Total current trade and other payables
Total trade and other payables
Notes
(i)
(ii)
Consolidated
2021
$
2020
$
2,174,047
1,521,898
2,211,683
5,907,628
5,907,628
3,296,913
1,103,357
–
4,400,270
4,400,270
Terms and conditions
Terms and conditions relating to the above financial instruments:
(i) Trade payables are non-interest bearing and are normally settled on 30-60 day terms.
(ii) Other payables and accruals are non-interest bearing and have an average term of 4 months.
(iii) Related party details are set out in the Note 22 Related party disclosures.
16. Lease liabilities
Current
Lease liabilities
Lease liabilities (current)
Non-current
Lease liabilities
Lease liabilities (non-current)
Total lease liabilities
Consolidated
2021
$
2020
$
178,265
178,265
148,567
148,567
4,331,502
4,331,502
4,509,767
4,557,905
4,557,905
4,706,472
60
Cyclopharm Limited | annual report 2021Notes to the Consolidated Financial StatementsFOR THE YEAR ENDED 31 DECEMBER 2021 (CONTINUED) 17. Provisions
Balance at 1 January 2021
Arising during the year
Utilised
Balance at 31 December 2021
31 December 2021
Current
Non-Current
Total
Number of employees
Number of employees at year end
31 December 2020
Current
Non-Current
Total
Number of employees
Number of employees at year end
Consolidated
Employee
Entitlements
$
1,045,280
432,589
(217,681)
1,260,188
Total
$
1,045,280
432,589
(217,681)
1,260,188
1,234,259
25,929
1,260,188
1,234,259
25,929
1,260,188
1,021,395
23,885
1,045,280
1,021,395
23,885
1,045,280
51
48
A provision has been recognised for employee entitlements relating to long service and annual leave. The measurement
and recognition criteria relating to employee benefits have been disclosed in Note 2(r).
18. Deferred income liabilities
Deferred income liabilities
2021
$
2020
$
897,455
893,200
A portion of the Research & Development Grant refund received during the year has been recognised as deferred
income liabilities and will be amortised over the same period as the amortisation of the related intangible development
asset.
61
Cyclopharm Limited | annual report 2021Notes to the Consolidated Financial StatementsFOR THE YEAR ENDED 31 DECEMBER 2021 (CONTINUED)
19. Contributed equity
Issued and paid up capital
Ordinary shares
Other contributed equity
Total issued and paid up capital
(a) Ordinary shares
Balance at the beginning of the period
Issue of Long Term Incentive Plan shares
Issue of shares to Managing Director
Issue of shares
Share issue cost (net of tax)
Cancellation of expired Long Term Incentive Plan shares
Settlement of loan for Long Term Incentive Plan shares
Balance at end of period
(b) Other contributed equity
Balance at the beginning and end of the period
Notes
(a)
(b)
(i)
(ii)
(iii)
(iv)
(v)
Consolidated
2021
Number
2020
Number
2021
$
2020
$
93,374,823
–
93,374,823
80,274,455
–
80,274,455
68,307,598
(5,333,158)
62,974,440
36,965,377
(5,333,158)
31,632,219
80,274,455
408,059
–
12,692,309
–
–
–
93,374,823
78,238,398
1,802,750
257,750
–
–
(24,443)
–
80,274,455
36,965,377
–
–
33,000,003
(1,657,782)
–
–
68,307,598
36,909,161
–
–
–
–
–
56,216
36,965,377
–
–
(5,333,158)
(5,333,158)
Ordinary shares have the right to receive dividends as declared and, in the event of winding up the Company, to
participate in the proceeds from the sale of all surplus assets in proportion to the number of and amounts paid up on
shares held. Ordinary shares entitle their holder to one vote, either in person or by proxy, at a meeting of the Company.
(i)
On 19 February 2021, 408,059 LTIP shares were issued at an exercise price of $3.20 per share under the non-
recourse loan payment plan, 1,045,000 LTIP shares were issued on 4 May 2020 and 757,750 LTIP shares were issued
on 24 July 2020 as set out in Note 26.
(ii) On 24 July 2020, the Company issued 257,750 ordinary shares to the Managing Director for nil consideration as
approved by shareholders on 9 July 2020 and 21 May 2019.
(iii) On 1 February 2021, 11,538,462 ordinary shares were issued at a price of $2.60 per new share in connection with
an institutional share placement and on 19 February 2021, 1,153,847 ordinary shares were issued at a price of $2.60
per new share in connection with a share purchase plan to eligible shareholders.
(iv) 24,443 expired LTIP shares were cancelled on 5 May 2020.
(v)
Proceeds from settlement of loan to acquire LTIP shares.
When managing capital, management’s objective is to ensure the entity continues as a going concern as well as to
maintain optimal returns for 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.
Management constantly assesses the capital structure to take advantage of favourable costs of capital and/or high
returns on assets. As the market is continually changing, management may issue dividends to shareholders, issue new
shares, increase the entity’s short or long term borrowings or sell assets to reduce borrowings.
As at 31 December 2021, the Group has no interest bearing loans and borrowings.
Total interest bearing loans and borrowings
Less: cash and cash equivalents
Net cash
Total equity
Gearing ratio
Notes
8
Consolidated
2021
$
–
(29,249,255)
(29,249,255)
43,067,734
0.0%
2020
$
–
(1,874,285)
(1,874,285)
17,115,850
0.0%
62
Cyclopharm Limited | annual report 2021Notes to the Consolidated Financial StatementsFOR THE YEAR ENDED 31 DECEMBER 2021 (CONTINUED) 19. Contributed equity (continued)
Dividends
During the current financial year, the Directors declared an unfranked interim dividend of 0.5 cent per share in respect
of the financial year ended 31 December 2021 and an unfranked final dividend of 0.5 cent per share in respect of the
financial year ended 31 December 2020. During the 2020 financial year, the Directors declared an unfranked interim
dividend of 0.5 cent per share in respect of the financial year ended 31 December 2020 and an unfranked final dividend
of 0.5 cent per share in respect of the financial year ended 31 December 2019.
The final unfranked dividend of 0.5 cent per share in respect of the financial year ended 31 December 2021 has not been
recognised in these consolidated financial statements as it was declared subsequent to 31 December 2021.
Fully paid ordinary shares
Final dividend in respect of the previous financial year
– No franking credits attached
Interim dividend in respect of the current financial year
– No franking credits attached
Consolidated
2021
Cents
per share
2020
Cents
per share
2021
$
2020
$
0.50
0.50
1.00
0.50
440,659
375,566
0.50
1.00
440,660
881,319
376,853
752,419
20. Financial risk management objectives
The Group’s principal financial instruments comprise receivables, payables, cash and short-term deposits. The Group
manages its exposure to key financial risks, including interest rate and currency risk in accordance with the Group’s
financial risk management policy. The objective of the policy is to support the delivery of the Group’s financial targets
while protecting future financial security.
The Group uses different methods to measure and manage different types of risks to which it is exposed. These
include monitoring levels of exposure to interest rate, foreign exchange risk and assessments of market forecasts for
interest rate, foreign exchange and commodity prices. Ageing analysis and monitoring of specified credit allowances
are undertaken to manage credit risk, liquidity risk is monitored through the development of future rolling cash flow
forecasts.
The Board review and agrees policies for managing each of these risks as summarised below.
Primary responsibility for identification and control of financial risks rests with the Audit and Risk Committee under
the authority from the Board. The Board reviews and agrees policies for managing each of the risks identified below,
including for interest rate risk, credit allowances and cash flow forecast projections. It is, and has been throughout the
year under review, the Group’s policy that no trading in financial instruments shall be undertaken.
Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of
measurement and the basis on which income and expenses are recognised, in respect of each class of financial asset,
financial liability and equity instrument are disclosed in Note 2.
63
Cyclopharm Limited | annual report 2021Notes to the Consolidated Financial StatementsFOR THE YEAR ENDED 31 DECEMBER 2021 (CONTINUED) 20 Financial risk management objectives (continued)
(a) Interest rate risk
As the Group has moved into a no debt, strong cash position, the main interest rate risk is now in cash assets exposure.
The following sensitivity analysis is based on the interest rate risk exposures in existence at the Statement of Financial
Position date.
At 31 December 2021, if interest rates had moved, as illustrated in the table below, with all other variables held constant,
pre-tax profit would have been affected as follows:
Judgements of reasonably possible movements:
Loss before income tax
+1.0% (100 basis points)
–0.5% (50 basis points)
Consolidated
2021
$
2020
$
292,493
(146,246)
18,743
(9,371)
The movements in profit are due to possible higher or lower interest income from cash balances.
At balance date, the Group had the following mix of financial assets and liabilities exposed to variable interest rate risk:
Weighted
average
interest rate
Non
interest
bearing
Fixed interest maturing in
Floating
interest rate
1 year
or less
1 to 5
years
More than
5 years
Note
%
$
$
0.03%
n/a
– 29,249,255
8,040,708
–
8,040,708 29,249,255
$
–
–
–
$
–
–
–
Total
$
$
– 29,249,255
–
8,040,708
– 37,289,963
n/a
4.50%
–
5,907,628
178,265
–
178,265
5,907,628
2,133,080 29,249,255 (178,265)
–
–
–
5,907,628
–
–
812,760
4,509,767
3,518,742
812,760 3,518,742 10,417,395
(812,760) (3,518,742) 26,872,568
Weighted
average
interest rate
Non
interest
bearing
Fixed interest maturing in
Floating
interest rate
1 year
or less
1 to 5
years
More than
5 years
Note
%
$
$
0.08%
n/a
–
1,874,285
–
8,837,397
8,837,397 1,874,285
$
–
–
–
$
–
–
–
Total
$
$
–
1,874,285
8,837,397
–
– 10,711,682
n/a
4.50%
–
4,400,270
–
–
4,400,270
–
4,437,127 1,874,285
–
148,567
148,567
(148,567)
4,400,270
–
–
711,863
4,706,472
3,846,042
711,863 3,846,042 9,106,742
(711,863) (3,846,042) 1,604,940
8
9
15
16
8
9
15
16
Consolidated
Year ended 31 December 2021
Financial Assets
Cash and cash equivalents
Trade and other receivables
Total financial assets
Financial Liabilities
Trade payables, third-parties
Leases, third-party
Total financial liabilities
Net exposure
Consolidated
Year ended 31 December 2020
Financial Assets
Cash and cash equivalents
Trade and other receivables
Total financial assets
Financial Liabilities
Trade payables, third-parties
Leases, third-party
Total financial liabilities
Net exposure
64
Cyclopharm Limited | annual report 2021Notes to the Consolidated Financial StatementsFOR THE YEAR ENDED 31 DECEMBER 2021 (CONTINUED) 20 Financial risk management objectives (continued)
(b) Credit risk
Credit risk arises from the financial assets of the Group, which comprise cash and cash equivalents and trade and other
receivables. The Group’s exposure to credit risk arises from potential default of the counter party, with a maximum
exposure equal to the carrying amount of these instruments. Exposure at balance date is addressed in each applicable
note.
The Group does not hold any credit derivatives to offset its credit exposure.
The Group trades only with recognised, creditworthy third-parties and as such collateral is not requested nor is it the
Group’s policy to scrutinise its trade and other receivables. It is the Group’s policy that all customers who wish to trade
on credit terms are subject to credit verification procedures such as reviewing their industry reputation, financial
position and credit rating. In addition, receivable balances are monitored on an ongoing basis with the result that the
Group’s exposure to bad debts is constantly managed.
There are no significant unprovided concentrations of credit risk within the Group.
(c) Liquidity risk
The Group’s objective is to maintain a balance between continuity of funding and flexibility through the use of bank
overdrafts and bank loans. The Group has no borrowings as at 31 December 2021.
Refer to the table above in Note 20(a) Interest Rate Risk, which reflects all contractually fixed pay-offs for settlement of
financial liabilities and collection of financial assets. Trade payables and other financial liabilities generally originate
from the financing of assets used in our ongoing operations such as investments in working capital e.g. inventories and
trade receivables and investment in property, plant and equipment. These assets are considered in the Group’s overall
liquidity risk. To monitor existing financial assets and liabilities as well as to enable an effective controlling of future
risks, the Board and management monitor the Group’s expected settlement of financial assets and liabilities on an
ongoing basis.
The Group monitors the rolling forecast of liquidity reserves based on expected cash flow.
Consolidated
Year ended 31 December 2021
Trade payables, third-parties
Leases, third-party
Consolidated
Year ended 31 December 2020
Trade payables, third-parties
Leases, third-party
Note
15
16
Note
15
16
Less than
6 months
$
5,907,628
88,188
5,995,816
Less than
6 months
$
4,400,270
79,797
4,480,067
6 months
to 1 year
$
–
90,077
90,077
6 months
to 1 year
$
–
68,770
68,770
1 year
to 5 years
Greater than
5 years
$
–
812,760
812,760
$
–
3,518,742
3,518,742
Total
$
5,907,628
4,509,767
10,417,395
1 year
to 5 years
Greater than
5 years
$
–
711,863
711,863
$
–
3,846,042
3,846,042
Total
$
4,400,270
4,706,472
9,106,742
(d) Commodity price risk
The Group’s exposure to commodity price risk is minimal.
65
Cyclopharm Limited | annual report 2021Notes to the Consolidated Financial StatementsFOR THE YEAR ENDED 31 DECEMBER 2021 (CONTINUED) 20 Financial risk management objectives (continued)
(e) Foreign currency risk
As a result of significant investment operations in Europe, the Group’s Statement of Financial Position can be affected
significantly by movements in the EURO/A$ exchange rates. The Group does not hedge this exposure but mitigates this
risk by maintaining bank accounts in Australia denominated in USD.
The Group also has transactional currency exposures. Such exposure arises from sales or purchases by an operating
unit in currencies other than the unit’s functional currency. Approximately 79% (2020: 83%) of the Group’s sales
are denominated in currencies other than the functional currency of the operating unit making the sale, whilst
approximately 53% (2020: 56%) of costs are denominated in the unit’s functional currency.
At 31 December 2021, the Group had the following financial instrument exposure to foreign currency fluctuations:
United States dollars
Amounts payable
Amounts receivable
Euros
Amounts payable
Amounts receivable
Canadian dollars
Amounts payable
Amounts receivable
Swedish Kroners
Amounts payable
Amounts receivable
Japanese Yen
Amounts payable
Amounts receivable
Great British Pound
Amounts payable
Amounts receivable
Net exposure
Consolidated
2021
$
2020
$
237,136
–
694,078
–
147,022
1,909,390
3,811,291
3,444,878
80,011
237,393
355,769
923,908
10,104
5,771
48,144
569,256
5,757
922,566
10,648
–
8,054
244,716
(2,483,082)
–
–
(366,782)
Management believe the balance date risk exposures are representative of the risk exposure inherent in the financial
instruments.
Forward Exchange Contracts
The Company has not entered into foreign exchange forward contracts as at 31 December 2021.
Fair values
All of the Group’s financial instruments recognised in the Statement of Financial Position have been assessed at their
fair values using Level 1 inputs: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the
entity can access at the measurement date.
66
Cyclopharm Limited | annual report 2021Notes to the Consolidated Financial StatementsFOR THE YEAR ENDED 31 DECEMBER 2021 (CONTINUED) 20 Financial risk management objectives (continued)
Foreign currency sensitivity
Currency risk is measured using sensitivity analysis. A portion of Cyclopharm’s receivables and payables are exposed
to movements in the values of those currencies relative to the Australian dollar. Cyclopharm management have
determined that it is not cost effective to hedge against other foreign currency fluctuations.
Cyclopharm is most exposed to European Euro (Euro), Canadian Dollar (CAD), US Dollar (USD), Swedish Kroner (SEK)
and Great British Pound (GBP) movements. The following table details Cyclopharm’s sensitivity to a 10% change in the
Australian dollar against those respective currencies with all other variables held constant as at reporting date for
unhedged foreign exposure risk. A positive number indicates an increase in net profit/equity.
A sensitivity has been selected as this is considered reasonable given the current level of exchange rates and the
volatility observed on a historic basis and market expectation for future movement.
Euro
31 December 2021
Net (loss)/profit
Equity (decrease)/increase
31 December 2020
Net profit/(loss)
Equity increase/(decrease)
CAD
31 December 2021
Net (loss)/profit
Equity (decrease)/increase
31 December 2020
Net (loss)/profit
Equity (decrease)/increase
USD
31 December 2021
Net profit/(loss)
Equity increase/(decrease)
31 December 2020
Net profit/(loss)
Equity increase/(decrease)
SEK
31 December 2021
Net (loss)/profit
Equity (decrease)/increase
31 December 2020
Net (loss)/profit
Equity (decrease)/increase
GBP
31 December 2021
Net (loss)/profit
Equity (decrease)/increase
31 December 2020
Net (loss)/profit
Equity (decrease)/increase
Consolidated
Increase in
AUD of 10%
$
Decrease in
AUD of 10%
$
(130,113)
(130,113)
143,125
143,125
74,164
74,164
(81,580)
(81,580)
(14,307)
(14,307)
(47,374)
(47,374)
21,558
21,558
63,098
63,098
(51,649)
(51,649)
(83,346)
(83,346)
15,738
15,738
52,111
52,111
(23,714)
(23,714)
(69,408)
(69,408)
56,814
56,814
91,681
91,681
(21,515)
(21,515)
23,666
23,666
–
–
–
–
67
Cyclopharm Limited | annual report 2021Notes to the Consolidated Financial StatementsFOR THE YEAR ENDED 31 DECEMBER 2021 (CONTINUED) 21. Commitments & contingencies
(a) Capital commitments
The Company has the following capital expenditure commitments contracted for property, plant and equipment:
Not later than one year
Total
Consolidated
2021
$
879,772
879,722
2020
$
–
–
Cyclomedica Australia Pty Ltd has entered into contracts to upgrade the cleanroom, ventilation and air conditioning
facilities at its Kingsgrove manufacturing premises.
Cyclopharm has entered into agreements to fund research projects with unrelated institutions. The commitments for
these projects total $326,211 (2020: $476,291) and will be expensed when incurred. Payments will be made based on the
achievement of certain milestones.
There were no other capital commitments as at the date of this report.
(b) Contingent liabilities
In December 2019, a business venture collaboration agreement combined CycloPet Pty Ltd and Pettech Solutions
Limited’s cyclotron facilities under a single operating enterprise known as Cyclotek NSW Pty Limited (“Cyclotek NSW”).
Cyclopharm and Cyclotek NSW have entered into a sub-lease agreement as tenants in common whereby Cyclotek NSW
is solely responsible for the tenant’s obligations except for make good obligations until such time as it exercises the
right to transfer its interest as tenant in common to Cyclopharm. Being a tenant in common, Cyclopharm’s contingent
liabilities as at 31 December 2021 amounts to $3,366,657 (2020: $3,366,657) if Cyclotek NSW is unable to fulfil its
obligations as tenant. The amount comprises payments under a sub-lease agreement commencing 1 January 2020
until the expiry of two options to renew expiring on 31 December 2039 with a rent-free period until 31 December 2022.
There were no other contingent liabilities as at the date of this report (2020: $nil).
68
Cyclopharm Limited | annual report 2021Notes to the Consolidated Financial StatementsFOR THE YEAR ENDED 31 DECEMBER 2021 (CONTINUED) 22. Related party disclosures
The consolidated financial statements include the financial statements of Cyclopharm and its subsidiaries as listed
below. Balances and transactions between the Company and its subsidiaries, which are related parties of the Company
have been eliminated on consolidation and are not disclosed in this note.
The following table provides the total amount of transactions that were entered into with related parties for the relevant
financial year (for information regarding outstanding balances at year-end, refer to Note 9 Trade and Other Receivables
and Note 15 Trade and Other Payables):
Cell Structures Pty Ltd
Cell Structures Pty Ltd
Ultimate parent entity
Purchases
from related
parties
Amounts
owed by/(to)
related parties
$
50,069
53,971
$
–
(25,035)
2021
2020
Cyclopharm Limited is the ultimate parent entity in the wholly owned group.
Terms and conditions of transactions with related parties
– During the year, payments of $50,069 (2020: $53,971) were made to Cell Structures Pty Ltd (an entity controlled by
Director, Mr. Tom McDonald). All payments relate to Mr. McDonald’s role as a non-executive director including
consultancy services provided by him.
Transactions between related parties are at normal commercial prices and on normal commercial terms and conditions
no more favourable than those available to other parties unless otherwise stated.
Controlled Entities
Name
Cyclopharm Limited
Controlled entities
CycloPET Pty Ltd
Cyclomedica Australia Pty Limited
Cyclomedica Ireland Limited
Cyclomedica Europe Limited
Cyclomedica Benelux bvba
(formerly known as Inter Commerce Medical bvba)
Cyclomedica Nordic AB
(formerly known as Medicall Analys AB)
Cyclomedica Germany GmbH
Cyclomedica Canada Limited
Cyclomedica USA LLC
Cyclomedica UK Ltd
Cyclomedica New Zealand Limited
Country of
Incorporation
Australia
Australia
Australia
Ireland
Ireland
Belgium
Sweden
Germany
Canada
United States of America
United Kingdom
New Zealand
Note
1,2
2
2
3
3
4
5
6
7
8
9
10
Percentage of equity
interest held
2021
2020
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
–
Notes
1. Cyclopharm Limited is the ultimate parent entity in the wholly owned group.
2. Audited by Nexia Sydney Audit Pty Ltd, Australia.
3. Audited by Andrew P.Quinn & Associates Limited, Republic of Ireland.
4. Audited by HLB Dodemont – Van Impe, Belgium.
5. Audited by Nexia Revision, Stockholm, Sweden.
6. Audited by Bilanzia GmbH Wirtschaftsprufungsgesellschaft, Germany.
7. Audited by Schwartz Levitsky & Feldman LLP, Toronto, Canada.
8. Dormant.
9. Unaudited as results are not material.
10. Dormant.
69
Cyclopharm Limited | annual report 2021Notes to the Consolidated Financial StatementsFOR THE YEAR ENDED 31 DECEMBER 2021 (CONTINUED) 23. Events after the balance date
Final dividend
On 23 February 2022, the Directors declared a final unfranked dividend of 0.5 cent per share in respect of the financial
year ended 31 December 2021, payable on 12 April 2022.
The consequences of the Coronavirus (COVID-19) pandemic are continuing to be felt around the world, and its impact
on the consolidated entity, if any, has been reflected in its published results to date. Whilst it would appear that control
measures and related government policies, including the roll out of the vaccine, have started to mitigate the risks caused
by COVID-19, it is not possible at this time to state that the pandemic will not subsequently impact the consolidated
entity’s operations going forward. The consolidated entity now has experience in the swift implementation of business
continuation processes should future lockdowns of the population occur, and these processes continue to evolve to
minimise any operational disruption. Management continues to monitor the situation both locally and internationally.
No other matters or circumstances have arisen since the end of the financial year, not otherwise dealt with in the
financial report, which significantly affected or may significantly affect the operations of the economic entity, the
results of those operations, or the state of affairs of the economic entity in future financial periods.
24. Auditors’ remuneration
The following total remuneration was received, or is due and receivable, by auditors of the Company in respect of:
Amounts received or due and receivable by the auditor of the parent entity
and associated entities for:
Audit and review of the financial statements
Other services:
– tax compliance
– share registry
Amounts received or due and receivable by other audit firms for:
Audit of the financial statements of controlled entities
Other services
Consolidated
2021
$
2020
$
140,670
139,611
18,982
40,222
199,874
133,471
113,159
246,630
30,771
38,170
208,552
132,809
113,559
246,368
70
Cyclopharm Limited | annual report 2021Notes to the Consolidated Financial StatementsFOR THE YEAR ENDED 31 DECEMBER 2021 (CONTINUED) 25. Director and key management personnel disclosure
Individual Directors and executives compensation disclosures
Information regarding individual Directors and executives’ compensation and some equity instruments disclosures as
required by Corporations Regulation 2M.3.03 are provided in the Remuneration Report Section of the Directors’ report.
Summary of remuneration of Directors & Key Management Personnel:
2021
2020
Short-term
employee benefits
Post
employment
benefits
Other
long-term
benefits
Share-
based
payment
Salary
and Fees
$
866,146
828,381
Cash
Bonus
$
30,000
50,000
Super-
annuation
$
77,604
69,632
$
14,420
42,723
$
545,925
714,484
Total
$
1,534,095
1,705,220
Short-term salary, bonus, fees and leave
These amounts include fees and benefits paid to the non-executive Chair and non-executive directors as well as salary,
paid leave benefits, fringe benefits and cash bonuses awarded to executive directors and other Key Management
Personnel.
Post-employment benefits
These amounts are the current-year’s estimated cost of providing for superannuation contributions made during the
year.
Other long term benefits
These amounts represent long service leave benefits accruing during the year.
Termination benefits
These amounts represent termination benefits paid out during the year (where applicable).
Share based payment expense
These amounts represent the expense related to the participation of Key Management Personnel in equity-settled
benefit schemes as measured by the fair value of the Implied Options granted on grant date.
Further information in relation to Key Management Personnel remuneration can be found in the Directors’ Report.
71
Cyclopharm Limited | annual report 2021Notes to the Consolidated Financial StatementsFOR THE YEAR ENDED 31 DECEMBER 2021 (CONTINUED) 26. Share based payment plans
(a) Recognised share-based payment expenses
The expense recognised for employee services received in relation to share based payments during the year is
shown in the table below:
Expense arising from equity-settled share-based payment transactions (note 5)
The share-based payment reserve at 31 December 2021 was $2,593,561 (2020: $1,836,973).
Consolidated
2021
$
756,588
2020
$
795,600
(b) Share-based payment other than implied options
During the previous year, the Company issued 257,750 ordinary shares to the Managing Director for nil
consideration. These shares were freely traded on and from the date of issue as approved by shareholders on 9 July
2020.
(c) Type of share based payment plans
The share-based payment plan is described below. An updated Plan was approved by members at the Annual General
Meetings held on 29 May 2018 and 4 May 2021.
Shares
Long Term Incentive Plan (“Plan”) Shares (“Shares”) are granted to certain Directors and certain employees.
In valuing transactions settled by way of issue of shares, performance conditions and market conditions linked to the
price of the shares of Cyclopharm Limited are taken into account. All shares issued have market performance conditions
so as to align shareholder return and reward for the Company’s selected management and staff (“Participants”).
The Shares vest upon the satisfaction of certain performance conditions (“Hurdles”) within the term (“Term”) specified
for Participants in the Plan. The Board has residual discretion to accelerate vesting (i.e. reduce or waive the Hurdles)
and exercise of Shares in the event of a takeover or merger or any other circumstance in accordance with the terms of
the Plan.
Shares in relation to which Hurdles have not been satisfied (i.e. that do not vest) will lapse and will not be able to
be exercised, except in the circumstances described below. However, the Board may at any time amend any rules
governing the operation of the Plan or waive or modify the application of the rules in relation to any Participant. Shares
which have not vested will lapse where a Participant ceases employment with Cyclopharm other than on retirement,
redundancy, death or total and permanent disablement or unless as otherwise determined by the Board in its absolute
discretion.
Where a Participant has ceased employment with Cyclopharm as a result of resignation, retirement, redundancy,
death or total and permanent disablement prior to the end of a performance period, only shares that have vested may
be retained by the Participant on a pro-rata basis. If a Participant ceases employment for any reasons mentioned above
prior to the first anniversary of the grant date, the Participant forfeits all entitlement to Shares.
LTIP Shares issued
At the Annual General Meeting held on 8 May 2007, Shareholders approved the Company’s Plan with an updated Plan
approved by Shareholders on 29 May 2018 and 4 May 2021.
Implied Options
AASB 2 Share Based Payments requires that the benefit to an employee arising from an employee share scheme such as
the Cyclopharm Long Term Incentive Plan be treated as an expense over the vesting period. All of the issues of Plan
shares have been treated as Plan Share Options (“Implied Options”) in accordance with AASB 2. The employee benefit
is deemed to be the Implied Option arising from the Plan. Consequently, the value of the discount which has been
determined using the Black Scholes option pricing model will be charged to the Statement of Comprehensive Income
and credited to the Employee Equity Benefits Reserve over the vesting period.
Where employee shares are issued under a non-recourse loan payment plan, the loan assets and the increments to
Contributed Equity are not recognised at grant date but rather the increments to Contributed Equity are recognised
when the share loans are settled by the relevant employees.
72
Cyclopharm Limited | annual report 2021Notes to the Consolidated Financial StatementsFOR THE YEAR ENDED 31 DECEMBER 2021 (CONTINUED) 26. Share based payment plans (continued)
(d) Summary of Options and Implied Options granted
The following table summarises the movements in Options and Implied Options during the current year:
Balance at the beginning of the year
Granted during the year
Vested but unexercised during the year
Balance at the end of the year
Vested but unexercised at the end of the year
(i) No LTIP shares (2020: 225,000) vested during the year.
Consolidated
Weighted Average
Exercise Price
2021
Number
2,445,000
408,059
–
2,853,059
2,590,236
2020
Number
1,125,000
1,802,750
(482,750)
2,445,000
2,590,236
(i)
2021
$
1.34
3.20
–
1.33
2020
$
1.14
1.38
–
1.34
(e) Range of exercise price, weighted average remaining contractual life and weighted average fair value
The weighted average exercise price for Options and Implied Options at the end of the year was $1.33 (2020: $1.02). The
weighted average remaining contractual life for the Options and Implied Options outstanding as at 31 December 2021
is 0.91 years (2020: 1.61 years). The weighted average fair value of Options and Implied Options granted during the year
was $1.02 (2020: $0.50).
(f) Implied Option pricing models
The following assumptions were used to derive a value for the Implied Options granted using the Black Scholes Option
model as at the grant date, taking into account the terms and conditions upon which the Shares were granted:
Options
Implied
Options
Implied
Options
Implied
Options
Implied
Options
Implied
Options
Implied
Options
Implied
Options
Implied
Options
Implied
Options
Implied
Options
1
$0.00
200,000
27/5/19
–
Exercise price per
Option
Number of
recipients
Number of
Options
Grant date
Dividend yield
Expected annual
volatility
Risk-free interest
rate
Expected life
of Option (years) 6.18 years
Fair value
per Option
Share price
at grant date
Model used
42.99%
$1.431
1.23%
$1.47
Expensed
at market
price at
grant
date over
expected
life of
Option
$1.55
$1.55
$1.50
$0.00
$1.22
$1.22
$1.83
$0.00
$3.20
$3.20
1
1
2
1
23
4
1
1
34
1
225,000
19/4/17
–
500,000
2/7/18
–
200,000
30/5/19
–
269,614
11/12/19
–
215,000
4/5/20
–
830,000
4/5/20
–
500,000
24/7/20
–
257,750
24/7/20
–
405,059
19/2/21
–
3,000
19/2/21
–
44.00%
41.00%
42.99%
42.99%
51.00%
51.00%
58.00%
58.00%
61.00%
61.00%
1.80%
2.09%
1.23%
0.80%
0.22%
0.26%
0.26%
0.26%
0.08%
0.37%
8 years
4 years
3 years
2.5 years
2 years
3 years 1.85 years 1.80 years
3 years
6 years
$0.349
$0.201
$0.392
$1.065
$0.308
$0.380
$0.315
$1.410
$1.012
$1.447
$0.76
Black
Scholes
$0.99
Black
Scholes
$1.49
Black
Scholes
$1.065
Expensed
at market
price at
grant
date over
expected
life of
Option
$1.16
Black
Scholes
$1.16
Black
Scholes
$1.41
Black
Scholes
$2.79
Black
Scholes
$2.79
Black
Scholes
$1.41
Expensed
at market
price at
grant
date over
expected
life of
Option
Expected volatility percentages used for the Option pricing calculations were determined using historic data over
24 months and were adjusted to reflect comparable companies in terms of industry and market capitalisation. The
Options are not listed and as such do not have a market value.
73
Cyclopharm Limited | annual report 2021Notes to the Consolidated Financial StatementsFOR THE YEAR ENDED 31 DECEMBER 2021 (CONTINUED) 27. Parent entity disclosure
(i) Financial Position
Assets
Current Assets
Non-current Assets
Total Assets
Liabilities
Current Liabilities
Non-current Liabilities
Total Liabilities
Net assets
Equity
Contributed equity
Employee equity benefits reserve
Accumulated Losses
Total Equity
(ii) Financial Performance
(Loss)/profit for the year
Other comprehensive income
Total comprehensive income for the year
28. Reserves
Nature and purpose of reserves:
(a) Employee equity benefits reserve
2021
$
2020
$
22,779,449
41,677,103
64,456,552
3,564,080
30,193,540
33,757,620
253,730
10,323,448
10,577,178
53,879,374
752,575
10,319,193
11,071,768
22,685,852
63,174,973
2,593,561
(11,889,160)
53,879,374
31,832,959
1,836,973
(10,984,080)
22,685,852
(23,761)
–
(23,761)
490,449
–
490,449
The employee share based payments reserve is used to record the value of share based payments provided to employees,
including key management personnel, as part of their remuneration.
(b) Foreign currency Translation Reserve
The foreign currency translation reserve is used to record exchange differences arising from the translation of the
financial statements of foreign subsidiaries.
74
Cyclopharm Limited | annual report 2021Notes to the Consolidated Financial StatementsFOR THE YEAR ENDED 31 DECEMBER 2021 (CONTINUED) Directors’ Declaration
In the opinion of the Directors of
Cyclopharm Limited:
1.
(a) The financial statements and notes of
the consolidated entity as set out on
pages 34 to 74 are in accordance with the
Corporations Act 2001, including:
(i) giving a true and fair view of the
consolidated entity’s financial position
as at 31 December 2021 and of its
performance for the year ended on that
date; and
(ii) complying with Accounting Standards
which, as stated in accounting policy
Note 2(a) to the financial statements,
constitutes explicit and unreserved
compliance with International Financial
Reporting Standards (IFRS); and
(b) There are reasonable grounds to believe
that the consolidated entity will be able to
pay its debts as and when they become due
and payable.
2. The Directors have been given the
declarations required by section 295A of
the Corporations Act 2001 from the chief
executive officer and chief financial officer for
the financial year ended 31 December 2021.
Signed in accordance with a resolution of
the Directors:
James McBrayer
Managing Director and CEO
Sydney, 31 March 2022
75
Cyclopharm Limited | annual report 2021
Independent Auditor’s Report to the Members of Cyclopharm Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Cyclopharm Limited (the Company and its subsidiaries (the Group)),
which comprises the consolidated statement of financial position as at 31 December 2021, the consolidated
statement of profit or loss and other comprehensive income, consolidated statement of changes in equity
and consolidated statement of cash flows for the year then ended, and notes to the financial statements,
including a summary of significant accounting policies, and the directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act
2001, including:
i) giving a true and fair view of the Group’s financial position as at 31 December 2021 and of its
financial performance for the year then ended; 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 & Ethical Standards Board’s APES 110 Code of Ethics
for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit
of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with
the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been given
to the directors of the Company, would be in the same terms if given to the directors as at the time of this
auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our
audit of the financial report of the current period. These matters were addressed in the context of our
audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide a
separate opinion on these matters.
76
Cyclopharm Limited | annual report 2021
Key audit matter
How our audit addressed the key audit matter
Capitalised Development Costs for Ultralute
($2,796,973)
Refer to note 14
Included in the Group’s intangible assets are
capitalised development costs $2,796,973 in
respect of the Ultralute product. Capitalised
Ultralute development costs are considered to be
a key audit matter due to the quantum of the
asset; the degree of management judgement and
assumptions applied in measuring the carrying
value of the asset; and assessing the presence of
impairment of a development phase asset.
The most significant and sensitive judgments
incorporated into the assessment for impairment
of capitalised development costs include
projections of cash flows, discount rates applied
and assumptions regarding the Group’s ability to
exploit new markets.
Other considerations and judgments include
whether the capitalised costs qualify for
capitalisation as development phase costs in
accordance with AASB 138 Intangible Assets.
This includes an understanding of the Group’s
process for recording and measuring internally
developed assets and the Group's ability to
complete the development and demonstrate its
ability to generate future cash flows from that
asset.
Inventory Valuation and existence
($5,511,375)
Refer to note 10
The Group holds a significant amount of inventory
which are complex medical machines with
significant useful lives. Inventory may be held for
long periods of time before sale making it
vulnerable to obsolescence or theft. Further,
deterioration in global economic conditions can
potentially lead to this inventory being sold at
reduced prices or lead to a reduction in revenue.
The inventory is considered to be a key audit
matter due to the significant increase of inventory
at year end in anticipation of entering new
markets. As a result, there is a risk that inventory
is carried in excess of its net realisable value.
Our procedures included, amongst others:
We assessed the project against the
requirements for capitalisation contained in
AASB 138 Intangible Assets.
We tested material expenditure capitalised
during the year and checked that they were
appropriately allocated to the development
asset.
We assessed management’s determination of
the Group’s cash generating units based on
our understanding of the nature of the
Group’s business and how earnings streams
are monitored and reported.
We tested the Group’s assumptions and
estimates used to determine the recoverable
value of its assets, including those relating to
forecast revenue, cost, capital expenditure,
and discount rates by corroborating the key
market related assumptions to external data
and by reference to our understanding of the
business.
We performed sensitivity analysis in two main
areas to assess whether the carrying value of
the capitalised development costs exceeded
its recoverable amount. These were the
discount rate and growth assumptions.
Our procedures included, amongst others:
We performed stocktake procedures on a
sample of inventory items to ascertain their
existence at balance date.
We agreed a sample of inventory items to
purchase invoices to test that costs assigned
to inventories are appropriate.
We agreed a sample of raw materials
through to the assembled finished good to
determine whether these were assembled in
accordance with the underlying sub-
assemblies and related bill of materials.
We obtained evidence that inventory did not
exceed its net realisable value by:
- Checking a sample of inventory items to
subsequent selling prices;
77
Cyclopharm Limited | annual report 2021
Key audit matter
How our audit addressed the key audit matter
- Reviewing aged inventory report for any
slow moving items; and
- Considering management’s plans for
entering new markets.
Other information
The directors are responsible for the other information. The other information comprises the information
in Cyclopharm Limited’s annual report for the year ended 31 December 2021, but does not include the
financial report and the auditor’s report thereon. Our opinion on the financial report does not cover the
other information and we do not express any form of assurance conclusion thereon. In connection with
our audit of the financial report, our responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent with the financial report or our
knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of the other
information we are required to report that fact. We have nothing to report in this regard.
Directors’ responsibility for the financial report
The directors of the Company are responsible for the preparation of the financial report that gives a true
and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for
such internal control as the directors determine is necessary to enable the preparation of the financial
report that gives a true and fair view and is free from material misstatement, whether due to fraud or
error.
In preparing the financial report, the directors are responsible for assessing the Group’s ability to continue
as a going concern, disclosing, as applicable, matters related to going concern and using the going
concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibility for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes
our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be expected to influence the economic decisions of
users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at The Australian
Auditing and Assurance Standards Board website at:
www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf. This description forms part of our auditor’s
report.
78
Cyclopharm Limited | annual report 2021
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 24 to 31 of the directors’ Report for the year
ended 31 December 2021.
In our opinion, the Remuneration Report of Cyclopharm Limited for the year ended 31 December 2021,
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration
Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an
opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing
Standards.
Nexia Sydney Audit Pty Ltd
Stephen Fisher
Director
Dated: 31 March 2022
79
Cyclopharm Limited | annual report 2021
ASX Additional Information
The following information is current at 28 February 2022.
A. Substantial Shareholders
The following have advised that they have a relevant interest in the capital of Cyclopharm Limited. The holding of a
relevant interest does not infer beneficial ownership. Where two or more parties have a relevant interest in the same
shares, those shares have been included for each party
Shareholder
Anglo Australian Christian and Charitable Fund
Barings Acceptance Limited
HSBC Custody Nominees (Australia) Limited – A/c 2
National Nominees Limited
Chemical Overseas Limited
CVC Limited
Mr James McBrayer
B. Distribution of Equity Security Holders
(i) Analysis of numbers of equity security holders by size of holding as at 28 February 2022.
Category
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Total
(ii) There were 140 holders of less than a marketable parcel of ordinary shares.
C. Equity Security Holders
Twenty largest quoted equity security holders
Anglo Australian Christian and Charitable Fund
Barings Acceptance Limited
HSBC Custody Nominees (Australia) Limited – A/c 2
1
2
3
4 National Nominees Limited
Chemical Overseas Limited
5
CVC Limited
6
Citicorp Nominees Pty Limited
7
8
CS Third Nominees Pty Limited
9 McBrayer Reid Investments Pty Ltd – LTIP 6
10 Chemical Overseas Limited
11 Phillips River Pty Ltd
12 Lloyds & Casanove Investment Partners Ltd
13 CS Fourth Nominees Pty
14 Mr James McBrayer
15 Mr James McBrayer
16 South Seas Holdings Pty Limited
17 City & Westminster Limited
18 Mathew Farag
19 McBrayer Reid Investments Pty Limited
20 Malackey Holdings Pty Ltd
Other equity security holders
Total
No. of ordinary
shares held
13,211,332
11,444,962
9,708,240
9,533,466
8,005,769
6,644,758
5,109,580
Percentage held
of issued
ordinary capital
14.15%
12.26%
10.40%
10.21%
8.57%
7.12%
5.47%
Ordinary
Shareholders
364
538
233
276
55
1,466
Percentage held
of issued
ordinary capital
0.18%
1.68%
1.95%
8.05%
88.14%
100.00%
Number
held
13,211,332
11,444,962
9,708,240
9,533,466
8,005,769
6,644,758
3,226,788
1,982,189
1,721,554
1,182,239
1,038,914
987,503
972,281
861,728
861,728
686,538
556,327
500,000
500,000
431,758
74,058,074
19,316,749
93,374,823
Percentage of
issued shares
14.15%
12.26%
10.40%
10.21%
8.57%
7.12%
3.46%
2.12%
1.84%
1.27%
1.11%
1.06%
1.04%
0.92%
0.92%
0.74%
0.60%
0.54%
0.54%
0.46%
79.31%
20.69%
100.00%
D. Voting Rights
The Company’s constitution details the voting rights of members and states that every member, present in person or
by proxy, shall have one vote for every ordinary share registered in his or her name.º
80
Cyclopharm Limited | annual report 2021 81
Corporate directoryDirectorsDavid HeaneyNon-Executive ChairmanJames McBrayerManaging Director & CEODianne Angus Non-Executive DirectorCompany SecretaryJames McBrayerCyclomedica Australia Pty LimitedUnit 4, 1 The Crescent Kingsgrove NSW 2208 Australia T: 02 9541 0411 F: 02 9543 0960CycloPET Pty LimitedUnit 4, 1 The Crescent Kingsgrove NSW 2208 AustraliaCyclomedica Canada LimitedSuite 23, 35 Main St N. Waterdown Ontario L0R 2H0 CanadaCyclomedica Germany GMBHMarie-Curie Strasse 8 51377 Leverkusen GermanyCyclomedica Europe LtdUnit A5 Calmount Business Park Ballymount Dublin 12, D12 AX06 IrelandCyclomedica Nordic AB Gustavslundsvagen 145 SE-16751 Bromma SwedenCyclomedica Benelux bvba Rue des Francs 79 Etterbeek 1040 BelgiumCyclomedica UK LtdSuite 1 Braebourne House Axis 4/5 Woodlands Almondsbury Business Park Bristol United Kingdom BS32 4JTAuditors Nexia Sydney Audit Pty Limited Level 16, 1 Market Street Sydney NSW 2000 AustraliaShare RegistryAutomic Pty Limited trading as Automic (AIC 22031) Level 5, 126 Philip Street Sydney NSW 2000 Australia T: 1300 288 664 T: 02 9698 5414 F: 02 8583 3040 E: hello@automic.com.au W: www.automic.com.auBankersNational Australia Bank Level 21, 255 George Street Sydney NSW 2000 AustraliaSolicitorsHWL Ebsworth Level 19, 480 Queen Street Brisbane QLD 4001 AustraliaSecurities Exchange ListingThe ordinary shares of Cyclopharm Limited are listed on the Australian Securities Exchange Ltd (code: CYC).Corporate Governance Statementhttps://www.cyclopharm.com/corporate-governance/Cyclopharm Limited | annual report 2021 C
y
c
l
o
p
h
a
r
m
L
i
m
i
t
e
d
A
n
n
u
a
l
R
e
p
o
r
t
2
0
2
1
Nuclear Medicinewww.cyclopharm.com