Dimerix Limited
Dimerix Limited
ACN 001 285 230
Annual Report for the year ended
30 June 2018
Dimerix Limited
Corporate directory
Board of Directors
Dr James Howard Williams
Dr Sonia Maria Poli
Mr David Franklyn
Mr Hugh Alsop
Dr Nina Webster
Company Secretary
Mr Ian Hobson
Chairman
Non-Executive Director
Non-Executive Director
Non-Executive Director
CEO and Managing Director (Appointed on 27 August 2018)
Registered Office
Suite 5, 95 Hay Street
Subiaco, Western Australia 6008
Tel:
Fax:
+61 8 9388 8290
+61 8 9388 8256
Postal Address
PO Box 226
Subiaco, Western Australia 6904
Website
Website: www.dimerix.com
Auditors
Stantons International
Level 2, 1 Walker Avenue
West Perth, Western Australia 6005
Share Registry
Automic Registry Services
Suite 1a, Level 1
7 Ventnor Avenue
West Perth, Western Australia 6005
+61 8 9324 2099
Tel:
+61 8 9321 2337
Fax:
Stock Exchange
Australian Securities Exchange
Level 40, Central Park
152-158 St Georges Terrace
Perth, Western Australia 6000
ASX Code
DXB
1 |
Annual report for the year ended
30 June 2018
Contents
CHAIRMAN’S LETTER
DIRECTORS’ REPORT
AUDITOR’S INDEPENDENCE DECLARATION
INDEPENDENT AUDITOR’S REPORT
DIRECTORS’ DECLARATION
Dimerix Limited
3
5
24
25
29
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR
THE YEAR ENDED 30 JUNE 2018
30
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2018
31
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2018 32
CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2018
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018
ASX ADDITIONAL INFORMATION AS AT 28 AUGUST 2018
33
34
61
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Dimerix Limited
Chairman’s letter
Dear Shareholders,
It is my pleasure to open Dimerix's FY2018 annual report, looking back across a year of strong
operational execution.
During the year, we concluded the Phase 2a human clinical trial for our lead therapeutic
program, DMX-200. We opened up that trial to patients of multiple Chronic Kidney Disease
types - it was exploratory - and designed primarily to show how safe the therapy would be. We
also tested for some secondary efficacy endpoints.
The study showed that DMX-200 not only had an extremely strong safety and tolerability
profile, it also showed clinically meaningful efficacy signals and strong result in a sub-group of
patients. The group that stood out was patients with Diabetic Kidney Disease, or DKD. Indeed,
the results of the Phase 2a trial were so compelling, to us and our clinical advisors, that the
Company decided to move ahead with two additional Phase 2 trials, which we are soon to
commence.
The first is for patients with Focal Segmental Glomerulosclerosis (or FSGS), the orphan disease
area for which DMX-200 has received orphan drug designation from the US FDA. With 120,000
patients per year in the US and no currently acceptable treatment options, FSGS is an area of
high unmet patient need.
The potential for Dimerix to fill a significant treatment gap for FSGS patients resonates with us.
We also believe the disease area commercially attractive, as given the smaller number of
patients with the disease, we can run smaller trials, which makes them achievable within the
means of a company of our size. To add to that, our orphan drug status means the Company
can access assistance from the FDA to see DMX-200 moved faster through the path to market.
Following approval, financial returns from orphan indication can approach, or even exceed,
those of larger indications due to the typical pricing premium that is available for treatments
for these rare disorders.
Our second trial is in the area of DKD, the disease area for which we saw strong Phase 2a trial
data. The number of patients suffering DKD are much greater, estimated at a fast growing 3%
of the US population or 9 million patients, being driven by the global diabetes epidemic.
Completing a clinical trial is not easy, but under Kathy Harrison’s oversight, our Phase 2a trial
was well structured and carefully managed. We also had assistance from Associate Professor
David Packham, who was a Principal Investigator on the Phase 2a trial, and later in the
reporting period, was appointed to the role of Chief Medical Officer of Dimerix. On behalf of
the Board, I thank Kathy, and the broader team for all their efforts.
We are strongly encouraged by the partnering discussions that evolved during the period
following the release of our Phase 2a trial results and those discussions have been used to
inform the design of the upcoming studies to ensure we are meeting the expectations required
to ultimately secure a transaction. We will continue to progress our communications with
identified potential partners as we move through the next key inflection points in our trials.
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Dimerix Limited
Despite the strong intrinsic value created through the trial data accumulated to date,
recognition of Dimerix’s efforts from potential partners and an intellectual property position
which was considerably strengthened during FY2018, the Board is cognisant that the
achievements have not translated into sustained value accretion at the share price level.
With this in mind and the load that comes with running two Phase 2a clinical trials, we
announced during the reporting period that the Company would be recruiting a new CEO,
while our incumbent CEO, Kathy Harrison would take on the role of Chief Operating Officer,
giving her the opportunity to focus on running the complex operational aspects of the
business.
We reported this week that Nina Webster had accepted the position of CEO and commenced
on August 27th, 2018. Nina will use her decades of experience in the pharmaceutical and
biotech industries to steer Dimerix, with a particular focus on investor relations and business
development, and complementing the exceptional operational team already established.
In closing, I thank both our longstanding and new shareholders who bought into the Company
on market, or through our oversubscribed capital raise during the period. Your ongoing
support is appreciated as we look ahead to a year which we expect will be one of significant
achievement and value creation for Dimerix and its shareholders.
Yours sincerely,
Dr James Williams
Chairman
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Dimerix Limited
Directors’ report
The directors of Dimerix Limited (“Dimerix” or “the Company”) submit herewith the financial report of
the Company and its subsidiary (“Group or Consolidated Entity”) for the financial year ended 30 June
2018. In order to comply with the provisions of the Corporations Act 2001, the directors report as
follows:
Information about the directors
The names and particulars of the directors of the Group during or since the end of the financial year
are:
Name
Dr James Williams
BSc (Hons), MBA, PhD,
GAICD
Dr Sonia Poli
PhD
Mr David Franklyn
BEcon
Particulars
Non-executive Chairman, joined the Board in July 2015. Dr Williams is the
co-founder of Dimerix Bioscience Pty Ltd as well as co-founder and
investment director of Yuuwa Capital LP, a venture capital firm based in
Western Australia. Prior to establishing Yuuwa Capital, he was managing
director of two medical device companies, ASX-listed Resonance Health
Limited and Argus Biomedical Pty Ltd, both of which secured regulatory
approvals under his leadership. Dr Williams conceived, co-founded and is a
former CTO and Director of iCeutica Inc., a clinical stage nano drug
reformulation company. iCeutica was acquired by Philadelphia-based Iroko
Pharmaceuticals in 2011. Dr Williams is a director of Yuuwa investee
companies Adalta Limited, PolyActiva Pty Ltd, and iCetana Pty Ltd. He is also
a director of Linear Clinical Research Ltd, a specialist early phase trial unit,
and a member of the “Panel of Experts” for the University of Western
Australia’s Pathfinder Fund.
Non-Executive Director, joined the Board in July 2015. Dr Poli is an
accomplished R&D professional with 20 years international experience in
large and small pharmaceutical companies. She has broad knowledge of
small molecule drug design, optimisation and early clinical development,
with expertise which encompasses multiple therapeutic areas. She is the co-
inventor of a new anti-emetic medicine, recently included in the National
Comprehensive Cancer Network Antiemesis Guidelines as a recommended
option. Dr Poli has worked within the Swiss Stock Exchange listed companies
Hoffman la Roche and Addex Therapeutics Ltd, where she has held
leadership and executive positions across various disciplines
in drug
discovery, pre-clinical development and translational science. She has
served as the Chief Scientific Officer at Addex Therapeutics Limited.
Non-Executive Director, joined the Board in November 2015. David has
extensive experience in finance, funds management, corporate governance,
compliance and business strategy. His career includes 25 years in the
Australian stockbroking industry and funds management sectors, as well as
experience in company management and business strategy. He is an
experienced company director, having been Chairman, executive director
and non-executive director of various ASX listed companies. David has
strong
company
restructuring, strategy development, people management, corporate
culture, and corporate compliance and governance. David was Chairman of
Onterran Ltd until April 2015 and is currently managing director of Village
National Holdings Ltd.
business management
incorporating
expertise
5 |
Mr Hugh Alsop
BSc(Hons), MBA
Nina Webster
PhD, MIPLaw, MBA
Dimerix Limited
Non-executive director, joined the Board on 1 May 2017. Hugh is an
accomplished and commercially-focused pharmaceutical and biotechnology
executive with more than 20 years of experience in international business
development, partnering, drug development and leadership of scientific
teams. Melbourne-based, he has held senior positions in the Australian
industry and has been responsible for several drug development programs
for the
In particular, as Director of Business
Development at Acrux Limited and as Chief Executive Officer of venture-
backed private company Hatchtech, he
led teams which completed
successful Phase 3 programs, two significant exit transactions and the filing
of two New Drug Applications with the US Food & Drug Administration
(FDA).
international market.
Nina joined Dimerix as CEO and Managing Director on 27th August 2018.
Nina has over twenty five years of experience in the pharmaceutical
industry, with leadership roles in investor relations, business development,
and prosecution of intellectual property matters, as well as leading and
managing the strategic, scientific and operational aspects of product
development. Nina was formerly the Commercial Director for Acrux Limited
(ASX: ACR), an Australian drug pharmaceutical company that has
successfully developed and commercialised three products globally. Prior to
Acrux, Nina was Director of Commercialisation and Intellectual Property for
Immuron Limited (ASX: IMC), and previously spent 6 years in new product
development with Wyeth Pharmaceuticals in the UK. Nina holds a Ph.D in
Pharmaceutics from Cardiff University, a Bachelor degree in Pharmacology,
a Masters degree in Intellectual Property Law from Melbourne University
and an MBA from RMIT.
At the date of this report Nina remains also employed by Acrux Limited.
Nina commenced with Dimerix on 27 August 2018 on a part time basis of
two days per week and will transition to full time following completion of
her notice requirements from her prior role - expected to be no later than
27 November 2018.
With the exception of Nina Webster the above-named directors held office during the whole of the
financial year and since the end of the financial year.
Directors’ shareholdings
The following table sets out each director’s relevant interest in shares, debentures and rights or options
in shares or debentures of the Company or a related body corporate as at the date of this report:
Fully paid ordinary shares
Number
Share options
Number
Performance shares
Number
Directors
James Williams
Sonia Poli
David Franklyn
Hugh Alsop
Nina Webster
2,252,355
130,000**
462,157
-
-
175,000*
125,000
125,000
125,000
-
*Options were issued to a related party of James Williams.
**Pre-consolidation 2,600,000 shares / 20 = 130,000 shares.
-
-
-
-
-
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Dimerix Limited
Share options granted to directors and senior management
During and since the end of the financial year, 550,000 share options were granted to the directors.
Kathy Harrison in her capacity as CEO was issued 1,829,948 options (post consolidation) in August 2017
pursuant to the Company’s ESOP exercisable at $0.40 per option, vesting in 30 equal monthly
instalments commencing 1 February 2018 and expiring 1 February 2022.
Company Secretary
Ian Hobson B.Bus, FCA, ACIS, MAICD
Mr Hobson is a chartered accountant and chartered company secretary with 30 years’ experience. Ian acts
as non-executive director and company secretary for ASX listed companies and is experienced in the areas
of biotech, technology, finance, mining exploration, marine and mining services. Ian is a governance
professional and facilitates governance courses for AICD.
Dividends
No dividends have been paid or declared since the start of the financial year and the directors have not
recommended the payment of a dividend in respect of the financial year.
Unissued shares under option /performance shares
Details of unissued shares or interests under option as at the date of this report are:
Performance
Shares
Issuing entity
Dimerix Limited
Dimerix Limited
Dimerix Limited
Dimerix Limited
Dimerix Limited
-
-
-
-
-
i Represent Class C performance shares respectively which convert to fully paid ordinary shares following achievement of numerous milestones
$0.286 13 November 2020
Class of shares
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Expiry date
of options
Exercise
price of
option
$0.40 30 June 2019
$0.40 31 March 2020
$0.40 1 February 2022
$0.40 20 April 2021
Number of
shares under
option
500,000
500,000
1,829,948
550,000
90,515
(refer to ASX announcement dated 3 July 2015).
The holders of these options and performance shares do not have the right to participate in any share issue
or interest issue of the Company or of any other body corporate or registered scheme.
No shares were issued during the year as a result of achieving performance share milestones. The receipt
of ethics approval for two studies triggered Milestone C of the Class C Performance Shares resulting in
3,750,044 Class C Performance Shares converting to 3,750,044 ordinary shares on 18 July 2018. 446,429
shares were issued during the year or since the end of the financial year as a result of exercise of options
(2017: 1,148,810 post-consolidation).
447,620 options expired during the year or since the end of the financial year.
Indemnification of officers and auditors
During the financial year, the Group paid a premium in respect of a contract insuring the directors of the
Group (as named above), the company secretary and all executive officers of the Group and of any related
body corporate against a liability incurred as such a director, secretary or executive officer to the extent
permitted by the Corporations Act 2001. The contract of insurance prohibits disclosure of the nature of the
liability and the amount of the premium.
The Group has not otherwise, during or since the end of the financial year, except to the extent permitted
by law, indemnified or agreed to indemnify an officer or auditor of the Group or of any related body
corporate against a liability incurred as such an officer or auditor.
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Dimerix Limited
Directors’ meetings
The following table sets out the number of directors’ meetings (including meetings of committees of
directors) held during the financial year and the number of meetings attended by each director (while they
were a director or committee member). During the financial year, 13 board meetings were held.
Directors
Dr James Williams
Dr Sonia Poli
Mr David Franklyn
Mr Hugh Alsop
Board of Directors
Held
13
13
13
13
Attended
13
13
13
13
Proceedings on behalf of the Group
No person has applied for leave of Court to bring proceedings on behalf of the Group or intervene in any
proceedings to which the Group is a party for the purpose of taking responsibility on behalf of the Group
for all or any part of those proceedings.
Non-audit services
Details of amounts paid or payable to the auditor for non-audit services provided during the year by the
auditor are outlined in note 24 to the financial statements.
In the event non-audit services are provided by the auditor, the Board has established procedures to
ensure that the provision of non-audit services is compatible with the general standard of independence
for auditors imposed by the Corporations Act 2001. These include:
• all non-audit services are reviewed and approved to ensure that they do not impact the integrity
and objectivity of the auditor; and
• non-audit services do not undermine the general principles relating to auditor independence as set
out in APES 110 ‘Code of Ethics for Professional Accountants’ issued by the Accounting Professional
& Ethical Standards Board, including reviewing or auditing the auditor’s own work, acting in a
management or decision-making capacity for the Company, acting as advocate for the Company or
jointly sharing economic risks and rewards.
Auditor’s independence declaration
The auditor’s independence declaration is included on page 25 of the financial report.
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Dimerix Limited
Operating and financial review
Principal activities
The focus of the company (including all majority owned entities) (referred to hereafter as the
‘Company’) during the year has been the development of its DMX-200 clinical asset for the treatment of
Chronic Kidney Disease (CKD), and the broader commercialisation of Dimerix’s underlying drug
discovery technology.
Operating results
The loss of the Group for the year ended 30 June 2018, after accounting for income tax benefit,
amounted to $3,319,726 (2017: $1,758,532). The year ended 30 June 2018 operating results are
attributed to the following:
• Research and development costs of $2,051,282 (2017: $878,118)
• Share based payments in respect of transaction options issued to employees and contractors of
$300,854 (2017: $52,860); and
• Corporate and administration expenses of $1,812,878 (2017: $1,382,171).
Review of operations
Summary
The Company completed a Phase 2a clinical study of DMX-200 in CKD during the financial year. Positive
results of the trial were announced on 12 July 2017 confirming the clinical trial had met its primary end
point of safety and tolerability, and showed encouraging signs of efficacy in CKD, with sub group
analysis released on 2 November 2017 showing compelling data in the Diabetic Kidney Disease cohort.
A top line summary of key announcements from the year is as follows:
12th July 2017 – Top line Phase 2 clinical trial data
1st August 2017 – Board and executive team restructure
5th September 2017 – Tablet manufacture and human pharmacokinetic study timeline
13th September 2017 – Share consolidation
18th October 2017 – Medical Advisory Board appointed
24th October 2017 – Ethics approval for pharmacokinetic trial
2nd November 2017 – Phase 2a clinical trial sub group analysis shows efficacy signals
8th January 2018 – DMX-200 dosage optimisation study complete
24th January 2018 – Share entitlement offer raises $3m
21st February 2018 – Share placement raises further $4.5m
27th March 2018 – CMO appointment
30th April 2018 – Management team reorganisation and expansion
2nd May 2018 – Unmarketable share parcel sale facility completed
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Dimerix Limited
7th May 2018 – Lead investigator engaged for next stage DMX-200 Phase 2 clinical efficacy trials
15th May 2018 – Dual Phase 2 clinical efficacy trial designs released for sub groups; FSGS and DKD
Key announcements immediately post period end
2nd July 2018 – US patent notice of allowance received around additional IP protection for DMX-200
18th July 2018 – Ethics approval secured enabling DMX-200 Phase 2 clinical efficacy trials to commence
27th August – CEO and MD appointment
Overview of Company strategy
The Company’s focus during the year was the development of DMX-200, Dimerix’s clinical asset for the
treatment of CKD. During the year, a Phase 2a clinical trial was completed in CKD. The trial confirmed
that patients could safely tolerate the drug, and also showed encouraging signs of efficacy in CKD
patients.
Results from the trial were used to shape the next stage of clinical trial development looking at two CKD
sub groups; Focal Segmental Glomerulosclerosis (FSGS) and Diabetic Kidney Disease (DKD). Dimerix has
Orphan Drug Designation (ODD) in the USA for FSGS. Ethics committee approval for the trials to
commence was received post the period, on 18 July 2018 and Dimerix is on track to commence patient
recruitment in the September quarter. Preliminary data is expected for both studies late in calendar
2019.
In parallel, Dimerix plans to leverage its drug discovery technology to build a pipeline of additional pre-
clinical and clinical assets with the intention of becoming a company with multiple, high potential value,
commercial opportunities.
Dimerix’s proprietary technology, Receptor HIT, gives the Company a key advantage in drug discovery,
in that it examines how different cell receptors function together when a molecule, such as a naturally
occurring hormone or drug, binds to them, as opposed to traditional lab testing that only examines how
cell receptors respond independently of each other.
Using Receptor HIT, Dimerix discovered that when the safe anti-inflammatory drug, propagermanium,
was added to the standard of care treatment for Chronic Kidney Disease, irbesartan, the two drugs
would work together to block the signals that cause inflammation, which is a major contributor to the
disease’s progression. There is an enhanced effect when the two drugs are used together.
The platform has in the past been used under contract or license by pharmaceutical companies for their
internal drug development programs. Future focus on platform development will emphasise long term
strategic development opportunities to build longer term relationships and value.
The DMX-200 Program
DMX-200 is an adjunct therapy for CKD in which patients are taking the standard of care drug,
irbesartan and are administered DMX-200 (an existing drug with a known safety profile,
propagermanium).
Irbesartan is an off-patent angiotensin II type I receptor blocker, indicated for the treatment of
hypertension and nephropathy in Type II diabetic patients. Propagermanium (PPG) is a chemokine
receptor (CCR2) blocker used for its anti-inflammatory properties.
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Dimerix Limited
The DMX-200 Phase 2a trial design
The trial design of DMX-200 in CKD was a single arm, open-label trial in adult patients with CKD
(exhibiting proteinuria). The patients on the Phase 2a clinical study suffered from CKD of several
causes, and 27 patients passed screening and received at least one dose of DMX-200. Patients dosed
were diagnosed with diabetic nephropathy (10), IgA nephropathy (6), and other proteinuric diseases
(11). DMX-200 was given to patients orally during the trial, and each patient received a dose three
times per day.
The primary objective, or end point of the Phase 2a clinical trial was the incidence and severity of
adverse events and the clinically significant changes in the safety profile of participants. The median
dosing period was 28 weeks.
The secondary objective, or endpoint was to evaluate the effect of DMX-200 on various biomarkers,
specifically including proteinuria. The levels of proteinuria give both an indication of likely future
deterioration of the kidney as well as high levels contributing to the damage itself, creating a vicious
cycle.
Analysis of biomarker data, including proteinuria, occurred at each time point and included an
assessment of change from baseline, and identification of those patients who were defined as
responders. Responders were defined in the protocol as those participants achieving normalisation of
proteinuria (proteinuria within normal limits) or those participants achieving a 50% reduction in
proteinuria. The 50% reduction level was selected as it was considered clinically significant following
advice from key opinion leaders throughout Australia, the US and Europe.
Dimerix reported positive results from its DMX-200 Phase 2a clinical trial on 12th July 2017.
Key outcomes of the trial were:
• The primary endpoint of safety and tolerability was met, and no serious safety concerns were
observed
• Encouraging efficacy signals were demonstrated as a secondary endpoint, evaluating the effect
of DMX-200 on various biomarkers, and were deemed “clinically meaningful” with 25% of
patients showing a reduction in excess protein in the urine (proteinuria) of over 50%, beyond
that achieved with the highest dosage of current standard of care therapy (irbesartan)
• On recommendation of their treating physicians, 45% of patients applied for and were granted
Special Access to the drug under the Therapeutic Goods Administration’s (TGA) Special Access
Scheme, following completion of their dosing under the trial.
The key safety parameters of blood pressure control, general kidney function and health measures, and
the levels of potassium in the blood stream, did not vary to any clinically relevant extent across the
study, highlighting a good outcome. Importantly, the adverse events seen in this study were consistent
with those expected in this patient population, and DMX-200 appears to have been well tolerated by
the patient group.
On 2nd November 2017, the Company presented a detailed analysis of the data from the Phase 2a
clinical trial at the American Society of Nephrology (ASN) annual Kidney Week, a world leading forum
attended by more than 13,000 international kidney specialists.
In this presentation the Diabetic Kidney Disease (DKD*) sub group of patients showed a clinically and
statistically significant efficacy response that far exceeded other investigational agents in development.
The data in patients with DKD was overwhelmingly compelling to support a follow up trial of DMX-200
in this large and commercially attractive patient group.
*DKD was previously known as diabetic nephropathy, or DN.
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Dimerix Limited
DMX-200 Phase 2 sub group clinical efficacy trials development activities
The next stage to follow Dimerix’s completed Phase 2a ‘all comers’ clinical trial in 2017 will see Dimerix
conduct Phase 2 clinical trials in both FSGS (which it has Orphan Drug Designation (ODD) in the USA)
and DKD.
The two sub group studies will investigate the AT1R and CCR2 Targets for Inflammatory Nephrosis, and
have been titled ACTION.
ACTION for FSGS – Phase 2a trial will study the effects of DMX-200 in around 10 patients with FSGS
with endpoints including safety and efficacy (proteinuria reduction).
ACTION for DKD – Phase 2b trial will study the effects of DMX-200 in around 40 patients with DKD with
primary endpoint change in 24hr albumin creatinine ratio (ACR) based on identified patient responses
in the Phase 2a study.
Both trials will be randomised, double blind placebo-controlled, crossover studies, to maximise
potential for data while being highly efficient and cost effective.
Principal Investigator and Contract Research Organisation (CRO) appointed
Principal Investigator Professor Simon Roger, Director of Renal Research (private practice) in Gosford,
New South Wales, was appointed during the period to lead the DMX-200 Phase 2 trials. Prof. Roger is a
preeminent Australian investigator and has had a role in the majority of the significant Phase 2 and 3
trials performed in clinical nephrology in Australia within the past two decades.
IQVIA (previously QuintilesIMS) was appointed contract research organisation (CRO), a key vendor to
facilitate the ACTION studies.
Pharmacokinetic dosing administration optimised
During the period, dosing data from Dimerix’s pharmacokinetic (PK) study was analysed by
pharmacometric specialists to finalise the dosing for the Phase 2b clinical trials.
An optimised dosing regime will see two instead of three capsules taken daily. This is expected to
support compliance rates from patients both in the Company's upcoming Phase 2 trials and also for the
marketed product, once commercially available.
Manufacturer identified for commercial-scale product
In line with activities necessary to prepare DMX-200 to be commercially ready, during the period,
Dimerix engaged a third party manufacturer, to produce the compound at commercial scale and quality
to GMP standards.
This activity was undertaken as it is important for potential pharmaceutical partners; will enable the
filing of an Investigational New Drug Application (IND), key to the preparation of DMX-200 for eventual
registration with the US FDA.
Dimerix and Proteomics partner to improve treatment of CKD
In December 2017, Dimerix and Proteomics (ASX: PIQ) announced a collaboration under which the two
parties would work together to evaluate the performance of Proteomics' PromarkerD diagnostic test
alongside DMX-200 in Dimerix’s pharmacokinetic testing and the coming Phase 2 DMX-200 clinical
trials.
12 |
Dimerix Limited
PromarkerD is a predictive and diagnostic test for Diabetic Kidney Disease (DKD) which measures a
protein biomarker in the blood. It has the potential to serve as a companion diagnostic test in clinical
trials to help measure and monitor the effectiveness of the DMX-200 drug. A companion diagnostic can
help identify at risk patients who might benefit from taking the drug, enable more accurate dosing, and
help monitor clinical end points and side effects.
If PromarkerD proves successful as a companion diagnostic test to support the use of DMX-200 as
treatment for CKD, Dimerix will have the option to licence PromarkerD for ongoing use.
Investor activity
Dimerix attended the Gold Coast Investment Showcase on 20 & 21 June at Surfers Paradise, where
Kathy Harrison presented to and met with potential and existing investors.
On 26 April, Dimerix concluded a share sale facility initiative for shareholders with unmarketable parcels
to opt to sell their shares to Dimerix.
The receipt of ethics approval for the next Phase 2 clinical trials for DMX-200, announced post year end,
triggering Milestone C of the Class C Performance Shares which were issued to Dimerix Bioscience
shareholder vendors on 3 July 2015. As a result, 3,750,002 Class C Performance Shares converted to
3,750,002 ordinary shares on 18 July, 2018. This allocation represents the last tranche of Performance
Shares associated with the 2015 transaction.
Post year end, Dimerix’s Chief Medical Officer, Associate Professor David Packham, presented at the
Bioshares Biotech Summit annual conference held in Queenstown, New Zealand on the 27th July.
Partnering and industry conferences
Dimerix continued to explore opportunities for licensing the DMX-200 program and the Company’s
other assets with potential partners.
In November 2017, shortly after the release of sub set analysis from Dimerix's Phase 2a trial in CKD, one
of the Principal Investigators, Professor David Power, presented at the American Society of
Nephrology's Annual Kidney Week, attended by around 13,000 international kidney specialists. This
conference provided a significant opportunity for Dimerix to further identify and speak with potential
partners for DMX-200. Later in the month, Dimerix’s now Chief Medical Officer Associate Professor
David Packham, presented at the World Congress of Clinical Trials in Diabetes.
In January 2018, Kathy Harrison and Dimerix's Chairman and Co-Founder, Dr James Williams attended
San Francisco during the JP Morgan healthcare conference period to conduct further partnering
discussions.
In June, Kathy Harrison was in Boston for the commencement of the BIO conference to meet with
potential partners and collaborators. During the same trip the Company attended NephCure Kidney
Internationals’ 12th International Podocyte conference in Montreal. The event was important for
understanding the broader research landscape of kidney diseases and supporting collaborations with
non-clinical and clinical experts for our DMX-200 program. The event also provided the opportunity to
market the Dimerix programs with leading research nephrologists.
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Dimerix Limited
Management team reorganisation and expansion
On 30 April, Dimerix announced its intention to undertake management team changes designed to
support the Company in the next phase of its lead program for DMX-200 and in developing its Receptor
HIT platform technology.
Kathy Harrison has since transitioned to the newly created Chief Operating Officer role, with the major
focus on running the DMX-200 Phase 2 trials.
Nina Webster accepted the position of CEO and commenced on August 27th, 2018.
Liquidity and capital resources
Dimerix ended the financial year with cash of $6,284,322, and expects to receive a Research and
Development tax incentive refund of $825,104* following 30 June 2018, further boosting capital
resources.
*Note this amount is based on the criteria of eligible expenditure set out by AusIndustry. The Group has
submitted an Overseas Finding application with AusIndustry. Should the application be successful this
amount may increase.
Financial position
Cash and cash equivalents
Net assets / total equity
Contributed equity
Accumulated losses
30 June 2018
$
30 June 2017
$
6,284,322
6,857,955
20,287,429
(14,055,459)
2,244,500
2,629,675
13,012,842
(10,735,733)
The directors believe the Group is in a strong and stable financial position to expand and grow its current
operations.
Significant changes in state of affairs
There were no significant changes in the state of affairs in the year ended 30 June 2018.
Events after the reporting period
Ethics committee approval
Post year end, Dimerix secured ethics committee approval, and notified this to the Australian TGA,
enabling site initiation and patient recruitment to commence, with recruitment on track to begin in the
September quarter of 2018 and preliminary data is expected for both studies late in calendar 2019.
Conversion of Class C Performance shares to ordinary shares
On 18 July 2018 The Company considered the C Milestone under the Implementation Agreement to be
achieved by the announcement of ethics approval for both FSGS and DKD, allowing these studies to
commence recruitment.
The event triggered the conversion of 3,750,044 Class C Performance Shares to ordinary shares which
were issued to the Dimerix Bioscience vendors on 3 July 2015.
14 |
Dimerix Limited
US patent application allowed for DMX-200
Post year end on 2 July, Dimerix announced the receipt of a Notice of Allowance from the US Patent and
Trade Mark Office of a further US patent application for its lead therapeutic program DMX-200.
The newly allowed patent application, number 15/086,823, entitled ‘Combination Therapy’ claims a
pharmaceutical composition comprising a broad range of angiotensin receptor blockers and chemokine
2 receptor (CCR2) antagonists. US15/086,823 will issue as U.S. Patent No. 10,058,555 on 28 August
2018 and the patent will provide protection until 2032.
The allowed claims relate to the class of compounds used in Dimerix’s DMX-200 program, under which
an initial Phase 2a trial in Chronic Kidney Disease was successfully reported in 2017 and which will be
studied again in the Company’s ACTION trials.
Future developments, prospects and business strategies
Following receipt of ethics approval for Dimerix’s two Phase 2 clinical trials for DMX-200 in July 2018,
Dimerix is on track to commence patient recruitment in the September quarter, followed by patient
dosing. Preliminary data is expected for both studies late in calendar 2019.
Dimerix has commenced development of a GMP process to manufacture propagermanium, supporting
partnership discussions, filing an IND and later stage clinical trials. The CRO Patheon, is on track to
manufacture a demonstration batch of the final active pharmaceutical ingredient (API) during the
second half of calendar 2018.
The Company also intends to progress filing of an Orphan Drug Designation application in Europe for
FSGS in the second half of calendar 2018.
If positive, the data from the commenced FSGS and DKD studies will support partnering discussions for
DMX-200, while in parallel the Company will plan to enter Phase 3 clinical trials for the FSGS during
calendar year 2020 either alone or with a partner.
The Company will provide updates on its pipeline programs and further commercial applications of its
Receptor HIT platform technology during the coming financial year. It is the Company’s intention to
leverage its drug discovery technology to build a pipeline of additional pre-clinical and clinical assets
and become a company with multiple high potential value commercial opportunities.
Environmental issues
The Group’s operations are not subject to significant environmental regulation under the Australian
Commonwealth or State Law.
15 |
Dimerix Limited
Remuneration report (audited)
This remuneration, which forms part of the directors’ report, sets out information about the
remuneration of Dimerix Limited’s key management personnel for the financial year ended
30 June 2018. The term ‘key management personnel’ refers to those persons having authority and
responsibility for planning, directing and controlling the activities of the Group, directly or indirectly,
including any director (whether executive or otherwise) of the Group. The prescribed details for each
person covered by this report are detailed below under the following headings:
• key management personnel
•
•
•
• key terms of employment contracts.
remuneration policy
relationship between the remuneration policy and Group performance
remuneration of key management personnel
Key management personnel
The directors and other key management personnel of the Group during the financial year were:
Non-executive directors
Mr James Williams (Transitioned from Executive
Chairman to non-executive chairman 1 August 2017)
Mr David Franklyn
Dr Sonia Maria Poli
Mr Hugh Alsop
Executive Employees
Kathy Harrison
Position
Executive Chairman
Non-executive director
Non-executive director
Non-executive director
Position
Chief Executive Officer/Chief
Operating Officer
Except as noted, the named persons held their current position for the whole of the financial year and
since the end of the financial year.
Remuneration policy
The board of directors of the Group is currently responsible for determining and reviewing
compensation arrangements for key management personnel. The Group does not currently operate a
Remuneration Committee. The remuneration policy, which is set out below, is designed to promote
superior performance and long-term commitment to the Group.
Non-executive director remuneration
Non-executive directors are remunerated by way of fees, in the form of cash, non-cash benefits,
superannuation contributions or salary sacrifice into equity and do not normally participate in schemes
designed for the remuneration of executives.
Shareholders approval must be obtained in relation to the overall limit set for the non-executive
directors’ fees. The maximum aggregate remuneration approved by shareholders for non-executive
directors is $250,000 per annum. The directors set the individual non-executive director fees within the
limit approved by shareholders. Non-executive directors are not provided with retirement benefits.
Executive director remuneration
Executive directors receive a base remuneration which is at market rates, and may be entitled to
performance based remuneration, which is determined on an annual basis. Overall remuneration
policies are subject to the discretion of the board and can be changed to reflect competitive and
business conditions where it is in the interests of the Group and shareholders to do so. Executive
remuneration and other terms of employment are reviewed annually by the board having regard to the
performance, relevant comparative information and expert advice.
16 |
Dimerix Limited
The board’s remuneration policy reflects its obligation to align executive remuneration with
shareholders’ interests and to retain appropriately qualified executive talent for the benefit of the
Group. The main principles are:
(a) remuneration reflects the competitive market in which the Group operates;
(b) individual remuneration should be linked to performance criteria if appropriate; and
(c) executives should be rewarded for both financial and non-financial performance.
The total remuneration of executives consists of the following:
(a) salary – executives receive a fixed sum payable monthly in cash plus superannuation at 9.5% of
salary;
(b) cash at risk component – executives may participate in share and option schemes generally made in
accordance with thresholds set in plans approved by shareholders if deemed appropriate.
However, the board considers it appropriate to issue shares and options to executives outside of
approved schemes in exceptional circumstances;
(c) other benefits – executives may, if deemed appropriate by the board, be provided with a fully
expensed mobile phone and other forms of remuneration; and
(d) performance bonus.
The board has not formally engaged the services of a remuneration consultant to provide
recommendations when setting the remuneration received by directors or other key management
personnel during the financial year.
Relationship between the remuneration policy and Group performance
The board considers that at this time, evaluation of the Group’s financial performance using generally
accepted measures such as profitability, total shareholder return or per Group comparison are not
relevant as the Group is at an early stages of the DMX-200 Phase II trial which is continuing as outlined
in the directors’ report.
Remuneration of key management personnel
Short-term employee
benefits
2018
Non-executive
directors
Sonia Poli
David Franklyn
Hugh Alsop
Executive
directors
James
Williams
Salary &
fees
$
45,000
41,096
41,096
100,000
Bonus2
$
Other1
$
-
-
-
-
-
-
-
-
-
-
-
Chief
Executive
Officer
30,000
Kathy Harrison
30,000
Total
1 Other comprises annual leave expense for the year
2 Performance bonus for the year based on agreed criteria
225,000
452,192
4,693
4,693
Post-
employme
nt benefits
Superannu
ation
$
Share-
based
payment
Options
$
Total
$
Performance
related %
-
3,904
3,904
15,633
15,633
15,633
60,633
60,633
60,633
26%
26%
26%
9,500
21,887
131,387
17%
-
-
-
21,375
38,683
183,064
251,850
464,132
777,418
46%
17 |
Short-term employee
benefits
Salary &
fees
$
Bonus4
$
Other3
$
Post-
employment
benefits
Superannuation
$
Share-
based
payment
Options
$
Total
$
Dimerix Limited
Performance
related %
-
-
-
50,000
41,096
20,125
6,849
100,000
-
-
-
-
-
-
3,904
-
651
-
-
-
-
50,000
45,000
20,125
7,500
9,500
-
109,500
-
-
-
-
-
-
191,237 43,750
-
12,448
-
21,492
-
49,193
-
318,120
29%
409,307 43,750
12,448
35,547
49,193
550,245
2017
Non-
executive
directors
Sonia Poli
David
Franklyn
Liz
Jazwinska1
Hugh Alsop2
Executive
directors
James
Williams
CEO / GM
Kathy
Harrison
Total
1 Resigned 3 November 2016
2 Appointed 1 May 2017
3 Other comprises annual leave expense for the year
4 Performance bonus for the year
Hugh Alsop was a consultant with the Company prior to his appointment as a Non-Executive Director.
No key management personnel appointed during the year received a payment as part of his or her
consideration for agreeing to hold the position.
Bonuses and share-based payments granted as compensation for the current financial year
Bonuses
Kathy Harrison achieved the milestones for a performance bonus of $30,000 during the financial year
(2017: $43,750) which forms part of salary and fees.
Incentive share-based payments arrangements
During the financial year, the following share-based payment arrangements were in existence:
No of
options.
Grant date
Expiry date
500,000 6 September 2016
30 June 2019
Vesting date
Grant
date
fair
value
$0.12* 1/3rd Vest on date of grant
1/3rd vest on 30 June 2017
1/3rd vest on 30 June 2018
500,000
27 March 2017
31 March 2020 $0.038*
1,829,948
16 August 2017
1 February 2022
$0.156
½ vest on 31 March 2018
½ vest on 31 March 2019
Vesting in 30 equal
monthly instalments
18 |
550,000
90,515
19 October 2017
17 November
2017
20 April 2021
13 November
2020
$0.125
$0.108
Dimerix Limited
commencing 1 February
2018 and expiring 1
February 2022
20 February 2018
17 November 2017
*The grant date fair values have been converted to post consolidation amounts.
There has been no alteration of the terms and conditions of the above share-based payment
arrangements since the grant date.
Share options issued to key management personnel as remuneration during the year are set out below
(2017: 17,219,494). No share options were exercised by key management personnel during the year
(2017: nil).
1,829,948 options were issued to Kathy Harrison during the year with an exercise price of $0.40 (post-
consolidation) with an expiry date of 1 February 2022. Vesting in 30 equal monthly instalments
commencing 1 February 2018 and expiring 1 February 2022. The grant date fair value of the options
issued was $285,318.
175,000 options were issued to a related party of James Williams during the year with an exercise price
of $0.40 (post-consolidation) with an expiry date of 20 April 2021. The options vested on 20 February
2018. The grant date fair value of the options issued was $21,887.
125,000 options were issued to Sonia Poli during the year with an exercise price of $0.40 with an expiry
date of 20 April 2021. The options vested on 20 February 2018. The grant date fair value of the options
issued was $15,633.
125,000 options were issued to David Franklyn during the year with an exercise price of $0.40 (post-
consolidation) with an expiry date of 20 April 2021. The options vested on 20 February 2018. The grant
date fair value of the options issued was $15,633.
125,000 options were issued to Hugh Alsop during the year with an exercise price of $0.40 (post-
consolidation) with an expiry date of 20 April 2021. The options vested on 20 February 2018. The grant
date fair value of the options issued was $15,633.
Key terms of employment contracts
On 3 July 2015, Dr James Williams was appointed Executive Chairman and his remuneration and other
terms of appointment were formalised in a letter of appointment, the key terms and conditions of
which are:
• Term of agreement – 12 months commencing 3 July 2015 (casual basis) and monthly thereafter
until terminated by the Company.
• After the initial term of the agreement employment may be terminated by either party giving
one month’s notice.
• Remuneration will be $109,500 per annum inclusive of statutory superannuation.
19 |
Dimerix Limited
On 1 August 2017, Dr James Williams transitioned to Non-Executive Chairman and his remuneration
and other terms of appointment were formalised in a letter of appointment, the key terms and
conditions of which are:
• The Executive Chairman Term of agreement ceased;
• Term of Agreement – monthly until termination by the Company or until the next AGM.
• No entitlement to any compensation or damage or payment of any further director’s fees for
any period after termination
• No entitlement to any compensation or damage or payment of any further director’s fees for
any period after termination.
• Remuneration will be $60,000 per annum plus superannuation.
In addition to the above James Williams entered into a three-month contract with the Company on 1
August 2017 for remuneration of $10,000 plus superannuation. The contract was subsequently
extended on 1 November 2017, 1 February 2018 and 1 May 2018 for an additional three months at the
time of each extension for $10,000 plus superannuation.
On 3 July 2015, Dr Sonia Poli was appointed as Non-Executive Director and her remuneration and other
terms of appointment were formalised in a letter of appointment, the key terms and conditions of
which are:
• Term of agreement – monthly until termination by the Company or until the next AGM.
• No entitlement to any compensation or damage or payment of any further director’s fees for
any period after termination
• No entitlement to any compensation or damage or payment of any further director’s fees for
any period after termination.
• Remuneration will be $45,000 per annum (plus GST if applicable).
Dimerix Bioscience Pty Ltd entered into a consulting agreement with Dr Poli on 1 April 2016 to provide
additional consulting services at the rate of $5,000 per month for four months.
On 23 November 2015 Mr David Franklyn was appointed as Non-Executive Director and the terms of
the appointments were formalised in a letter of appointment with the following key terms and
conditions:
• Term of agreement – monthly until termination by the Company or until the next AGM.
• No entitlement to any compensation or damage or payment of any further director’s fees for
any period after termination.
• Remuneration will be $45,000 per annum (inclusive of superannuation).
On 1 May 2017 Mr Hugh Alsop was appointed as Non-Executive Director and the terms of the
appointments were formalised in a letter of appointment with the following key terms and conditions:
• Term of agreement – monthly until termination by the Company or until the next AGM.
• No entitlement to any compensation or damage or payment of any further director’s fees for
any period after termination.
• Remuneration will be $45,000 per annum (inclusive of superannuation).
Ms Kathy Harrison was appointed as General Manager of Dimerix Bioscience Pty Ltd on 25 March 2014
with the following key terms and conditions
• Term of agreement – employment may be terminated by either party giving one month’s
notice.
• Remuneration will be $175,000 per annum plus superannuation.
• Performance bonus of up to 20% of base salary ($35,000) with capacity for additional 5% for
over performance.
20 |
Dimerix Limited
On 7 November 2016, Ms Kathy Harrison was appointed to the role of Chief Executive officer on the
following key terms and conditions:
• Term of agreement – employment may be terminated by either party giving two month’s
notice.
• Remuneration will be $200,000 per annum plus superannuation.
Performance bonus of up to 25% of base salary ($50,000), an increase from 20% of base salary.
On 1 July 2017 Kathy Harrison’s Remuneration employment agreement was updated to reflect the
following key terms and conditions:
• Term of agreement – employment may be terminated by either party giving two month’s notice.
• Remuneration of $225,000 per annum plus superannuation, an increase from $200,000 plus
superannuation.
Performance bonus of up to 30% of base salary ($67,500), an increase from 25% of base salary.
On 30 April 2018 the Company announced a search had commenced to appoint a new CEO. Upon
appointment of the new CEO, Kathy Harrison transitioned to the newly created Chief Operating Officer
role.
On 27 August 2018 Nina Webster was appointed CEO and Managing Director on 27 August 2018 with
the following key terms and conditions:
• Remuneration of $300,000 per annum inclusive of superannuation and short-term incentives of
up to 30% base salary against agreed stretch milestones.
• Term of agreement – employment may be terminated by either party giving three month’s
notice.
On appointment to the board, all non-executive directors are required to sign a letter of appointment
with the Company. The letter of appointment summarises the board policies and terms, including
compensation relevant to the office or director.
Key management personnel equity holdings
Fully paid ordinary shares of Dimerix Limited
2018
Balance at
1 July
Granted as
compensation
James Williams1
Sonia Poli1
David Franklyn2
Hugh Alsop6
Kathy Harrison
No.
33,293,382
2,600,000
3,311,443
-
3,333,334
No.
-
-
-
-
-
Received on
exercise of
options/
performance
shares
No.
Net other
change
Balance on
Resignation
Balance at
30 June
No.
(31,162,043)
(2,470,000)
(2,863,084)
-
(3,000,001)
-
-
-
-
-
No.
2,131,339
130,000
448,359
-
333,333
-
-
-
-
-
21 |
Dimerix Limited
Net other
change
Balance on
Resignation
Balance at
30 June
No.
4,250,000
2,600,000
-
-
-
3,333,334
No.
33,293,382
2,600,000
3,311,443
-
-
3,333,334
-
-
-
-
-
-
Received on
exercise of
options/
performance
shares
No.
-
-
-
-
-
-
2017
Balance at
1 July
Granted as
compensation
James Williams1
Sonia Poli1
David Franklyn2
Liz Jazwinska3
Hugh Alsop6
Kathy Harrison
No.
29,043,382
-
3,311,443
-
-
-
No.
-
-
-
-
-
-
1 Appointed 3 July 2015 2 Appointed 23 November 2015
3 Appointed 17 December 2015, resigned 3 November 2016
4Resigned 24 November 2015 5Resigned 3 July 2015
6 Appointed 1 May 2017
The shares shown in the 2017 table are pre-consolidation of 1:20 which occurred on 13 September 2017.
Share options of Dimerix Limited
2018
Balance at
1 July
Granted as
compens-
ation
Exercise
d
/ Lapsed
Balance at 30
June
Balance
vested at
30 June
Vested and
exercisable
No.
-
-
-
-
500,000
No.
175,000
125,000
125,000
125,000
1,829,948
No.
-
-
-
-
-
No.
175,000
125,000
125,000
125,000
2,329,948
No.
175,000
125,000
125,000
125,000
804,991
No.
175,000
125,000
125,000
125,000
804,991
Options
vested
during year
No.
175,000
125,000
125,000
125,000
471,658
Balance at
1 July
Granted as
compens-
ation
No.
No.
Exercised
No.
10,762,183
2,152,437
2,152,437
-
-
-
-
-
-
-
(10,762,183)
(2,152,437)
(2,152,437)
-
-
Balance
on
resignati
on
No.
-
-
-
-
-
Balance at
30 June
Balance
vested at
30 June
Vested and
exercisable
Options
vested
during year
No.
No.
No.
No.
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,152,437 10,000,000
(2,152,437)
- 10,000,000 6,666,666
6,666,666
6,666,666
1 The options lapsed during the year were issued in 2016.
The options shown in the 2017 table are pre-consolidation of 1:20 which occurred on 13 September
2017.
22 |
James Williams
Sonia Poli1
David Franklyn2
Hugh Alsop6
Kathy Harrison
2017
James
Williams
Sonia Poli1
David
Franklyn2
Liz
Jazwinska3
Hugh
Alsop6
Kathy
Harrison
Key management personnel equity holdings
Performance shares of Dimerix Limited
2018
Balance at
1 July
Granted as
compensation
Net other
change No.
James Williams1
Sonia Poli2
David Franklyn2
Hugh Alsop6
Kathy Harrison
No.
2,420,283
-
275,954
-
-
No.
-
-
-
-
-
(2,299,267)
-
(262,156)
-
-
2017
Balance at
1 July
Granted as
compensation
Net other
change No.
Dimerix Limited
Balance on
Resignation
Balance at
30 June
Conversion to
fully paid
ordinary
shares
No.
-
-
-
-
-
No.
121,016
-
13,798
-
-
-
-
-
-
-
Balance on
Resignation
Balance at
30 June
Conversion to
fully paid
ordinary
shares
No.
James Williams
Sonia Poli
David Franklyn
Liz Jazwinska2
Hugh Alsop1
No.
2,420,283
-
275,954
-
-
No.
-
-
-
-
-
1 Appointed 1 May 2017
2 Resigned 3 November 2016
-
-
-
-
-
-
-
-
-
-
No.
2,420,283
-
275,954
-
-
-
-
-
-
-
The performance shares shown in the 2017 table are pre-consolidation of 1:20 which occurred on 13
September 2017.
This directors’ report, incorporating the remuneration report, is signed in accordance with a resolution
made pursuant to s.298(2) of the Corporations Act 2001.
On behalf of the directors
Dr James Williams
Chairman
Perth, 30 August 2018
23 |
PO Box 1908
West Perth WA 6872
Australia
Level 2, 1 Walker Avenue
West Perth WA 6005
Australia
Tel: +61 8 9481 3188
Fax: +61 8 9321 1204
ABN: 84 144 581 519
www.stantons.com.au
Stantons International Audit and Consulting Pty Ltd
trading as
Chartered Accountants and Consultants
30 August 2018
Board of Directors
Dimerix Limited
Suite 5, 95 Hay Street
SUBIACO WA 6008
Dear Directors
RE:
DIMERIX LIMITED
In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the following
declaration of independence to the directors of Dimerix Limited.
As Audit Director for the audit of the financial statements of Dimerix Limited for the year ended 30 June
2018, I declare that to the best of my knowledge and belief, there have been no contraventions of:
(i)
the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
(ii)
any applicable code of professional conduct in relation to the audit.
Yours sincerely
STANTONS INTERNATIONAL AUDIT AND CONSULTING PTY LTD
(Trading as Stantons International)
(An Authorised Audit Company)
Martin Michalik
Director
Liability limited by a scheme approved
under Professional Standards Legislation
Stantons International Audit and Consulting Pty Ltd
trading as
Chartered Accountants and Consultants
PO Box 1908
West Perth WA 6872
Australia
Level 2, 1 Walker Avenue
West Perth WA 6005
Australia
Tel: +61 8 9481 3188
Fax: +61 8 9321 1204
ABN: 84 144 581 519
www.stantons.com.au
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF
DIMERIX LIMITED
Report on the Audit of the Financial Report
Our Opinion
We have audited the financial report of Dimerix Limited (the Company) and its subsidiaries (the Consolidated
Entity), which comprises the consolidated statement of financial position as at 30 June 2018, the consolidated
statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity
and the consolidated statement of cash flows for the year then ended, and notes to the financial statements,
including a summary of significant accounting policies, and the directors' declaration.
In our opinion:
(a)
the accompanying financial report of the Consolidated Entity is in accordance with the Corporations Act
2001, including:
(i)
giving a true and fair view of the Consolidated Entity's financial position as at 30 June 2018 and of
its financial performance for the year then ended; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001.
(b)
the financial report also complies with International Financial Reporting Standards as disclosed in note
3.1
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 Consolidated Entity in accordance with the auditor independence
requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and
Ethical Standards Board's APES 110 Code of Ethics for Professional Accountants (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 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 year. 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.
Liability limited by a scheme approved
under Professional Standards Legislation
Key Audit Matters
How the matter was addressed in the audit
Share based payments – share options
The Group awarded share-based payments in the
form of share options. The awards vest subject to the
achievement of certain vesting conditions.
The Group used the Black-Scholes model in valuing
the share-based awards, based on the conditions
attached to each tranche.
The Group has performed calculations to record the
related share based payment expense of $300,854 in
the consolidated statement of profit or loss and other
comprehensive income.
to
the complex and estimates used
Due
in
determining the valuation of the share based payment
arrangement and vesting expense, we consider the
Group’s calculation of the share based payment
expense to be a key audit matter.
For the share options, awards granted, our audit
procedures included the following:
i. Assessing the assumptions used in the
Group’s calculation being the share price of
the underlying equity, interest rate, volatility,
dividend yield, time to maturity (expected
life) and grant date;
ii. Assessing the fair value of the calculation
through re-performance using the Black
Scholes model; and
iii. Assessing the accuracy of the share based
payments expense and the adequacy of
disclosures made by the Group in the
financial report.
In determining the fair value of the awards and related
expense, the Group used assumptions in respect of
future market and economic conditions.
Refer to Note 19 to the financial report for the share
based payment expense recognised for the year
ended 30 June 2018 and related disclosures.
Other Information
The directors are responsible for the other information. The other information comprises the information included
in the Group's annual report for the year ended 30 June 2018, but does not include the financial report and our
auditor's report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent with the financial report or our knowledge
obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed,
we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true and fair
view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal
control as the directors determine is necessary to enable the preparation of the financial report that gives a true
and fair view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Consolidated Entity
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 Consolidated Entity or to cease
operations, or has no realistic alternative but to do so.
Auditor's Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from
material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with the Australian Auditing Standards will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they
could reasonably be expected to influence the economic decisions of users taken on the basis of this financial
report.
As part of an audit in accordance with Australian Auditing Standards, we exercise professional judgement and
maintain professional scepticism throughout the audit. An audit involves performing procedures to obtain audit
evidence about the amounts and disclosures in the financial report.
The procedures selected depend on the auditor's judgement, including the assessment of the risks of material
misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the entity's preparation of the financial report that gives a true and fair view
in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the entity's internal control.
The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error,
as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal
control.
An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of
accounting estimates made by the Directors, as well as evaluating the overall presentation of the financial
report.
We conclude on the appropriateness of the Directors' use of the going concern basis of accounting and, based
on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may
cast significant doubt on the Consolidated Entity's ability to continue as a going concern. If we conclude that a
material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in
the financial report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on
the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may
cause the Consolidated Entity to cease to continue as a going concern.
We evaluate the overall presentation, structure and content of the financial report, including the disclosures, and
whether the financial report represents the underlying transactions and events in a manner that achieves fair
presentation.
We obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the Consolidated Entity to express an opinion on the financial report. We are responsible for the
direction, supervision and performance of the Consolidated Entity audit. We remain solely responsible for our
audit opinion.
We communicate with the Directors regarding, among other matters, the planned scope and timing of the audit
and significant audit findings, including any significant deficiencies in Internal control that we identify during our
audit.
The Auditing Standards require that we comply with relevant ethical requirements relating to audit engagements.
We also provide the Directors with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may reasonably
be thought to bear on our independence, and where applicable, related safeguards.
Report on the Remuneration Report
We have audited the Remuneration Report included in pages 16 to 23 of the directors’ report for the year ended
30 June 2018. 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.
Opinion on the Remuneration Report
In our opinion, the Remuneration Report of Dimerix Limited for the year ended 30 June 2018 complies with
section 300A of the Corporations Act 2001.
STANTONS INTERNATIONAL AUDIT AND CONSULTING PTY LTD
(Trading as Stantons International)
(An Authorised Audit Company)
Martin Michalik
Director
West Perth, Western Australia
30 August 2018
Dimerix Limited
Directors’ declaration
The directors declare that:
(a)
in the directors’ opinion, there are reasonable grounds to believe that the Company will be able to
pay its debts as and when they become due and payable;
(b) in the directors’ opinion, the attached financial statements are in compliance with International
Financial Reporting Standards, as stated in note 3 to the financial statements;
(c)
in the directors’ opinion, the attached financial statements and notes thereto are in accordance
with the Corporations Act 2001, including compliance with accounting standards and giving a true
and fair view of the financial position and performance of the Consolidated entity; and
(d) the directors have been given the declarations required by s.295A of the Corporations Act 2001.
Signed in accordance with a resolution of the directors made pursuant to s.295(5) of the Corporations
Act 2001.
On behalf of the directors
Dr James Williams
Chairman
Date: 30 August 2018
29 |
Dimerix Limited
Consolidated statement of profit or loss and other
comprehensive income for the year ended 30 June 2018
Continuing operations
Revenue
Other income
Research and development expenses
Share based payments
Corporate administration expenses
Loss before income tax
Note
30 June 2018
$
30 June 2017
$
6
7
16 & 17
8
20,184
825,104
(2,051,282)
(300,854)
(1,812,878)
(3,319,726)
18,282
536,335
(878,118)
(52,860)
(1,382,171)
(1,758,532)
Income tax expense
Loss for the year from continuing operations
9
-
(3,319,726)
-
(1,758,532)
Other comprehensive income, net of income tax
Items that will not be reclassified subsequently to profit or
loss
Items that may be reclassified subsequently to profit or
loss
Other comprehensive income for the year, net of income
tax
Total comprehensive loss for the year
Loss attributable to:
Owners of Dimerix Limited
Total comprehensive loss attributable to:
Owners of Dimerix Limited
Loss per share:
Basic and diluted (cents per share)
-
-
-
-
-
(3,319,726)
-
(1,758,532)
(3,319,726)
(1,758,532)
(3,319,726)
(1,758,532)
10
(2.88)
(2.15)
Notes to the financial statements are included on pages 33 to 59.
30 |
Dimerix Limited
Consolidated statement of financial position as at 30 June 2018
Current assets
Cash and cash equivalents
Trade and other receivables
Total current assets
Non-current assets
Property, plant and equipment
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Provisions
Total current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Accumulated losses
Total equity
Note
30 June 2018
$
30 June 2017
$
22
11
12
13
14
16
17
6,284,322
979,986
7,264,308
2,244,500
624,023
2,868,523
391
391
7,264,699
3,270
3,270
2,871,793
364,443
42,301
406,744
406,744
210,457
31,661
242,118
242,118
6,857,955
2,629,675
20,287,429
625,985
(14,055,459)
6,857,955
13,012,842
352,566
(10,735,733)
2,629,675
Notes to the financial statements are included on pages 33 to 59.
31 |
Dimerix Limited
Consolidated statement of changes in equity for the year ended
30 June 2018
Balance at 1 July 2016
Loss for the year
Other comprehensive income
Total comprehensive loss for the year
Issue of ordinary shares
Conversion of options to shares
Share issue costs
Recognition of share based payments
Balance at 30 June 2017
Balance at 1 July 2017
Loss for the year
Other comprehensive income
Total comprehensive loss for the year
Issue of ordinary shares
Conversion of options to shares
Share issue costs
Issued
Capital
$
10,920,070
-
-
-
2,000,000
220,835
(128,063)
Reserves
$
299,706
-
-
-
Accumulated
losses
$
(8,977,201)
(1,758,532)
-
(1,758,532)
Total
$
2,242,575
(1,758,532)
-
(1,758,532)
-
-
-
-
-
-
2,000,000
220,835
(128,063)
-
13,012,842
52,860
352,566
-
(10,735,733)
52,860
2,629,675
13,012,842
-
-
-
7,556,116
62,500
(371,464)
352,566
-
-
-
-
(10,735,733)
(3,319,726)
-
(3,319,726)
-
2,629,675
(3,319,726)
-
(3,319,726)
7,556,116
-
-
-
-
62,500
(371,464)
Recognition of share based payments
Balance at 30 June 2018
27,435
20,287,429
273,419
625,985
-
(14,055,459)
300,854
6,857,955
Notes to the financial statements are included on pages 33 to 59.
32 |
Dimerix Limited
Consolidated statement of cash flows for the year ended 30 June 2018
Cash flows from operating activities
Research and development tax incentive received
Payments to suppliers and employees
Interest received
Net cash used in operating activities
Cash flows from investing activities
Payments for property, plant and equipment
Net cash used in from investing activities
Cash flows from financing activities
Proceeds from issue of shares
Proceeds from options exercised
Payment for share issue costs
Net cash provided by financing activities
30 June 2018
$
30 June 2017
$
Note
545,771
(3,791,385)
20,182
(3,225,432)
420,900
(2,303,589)
18,282
(1,864,407)
(3,543)
(3,543)
(2,581)
(2,581)
22.1
12
7,556,116
62,500
(371,464)
7,247,152
2,220,835
-
(128,063)
2,092,772
Net increase in cash and cash equivalents
4,018,177
225,784
Cash and cash equivalents at the beginning of the year
Effects of exchange rate changes on cash and cash equivalents
Cash and cash equivalents at the end of the year
2,244,500
21,645
6,284,322
2,018,716
-
2,244,500
22
Notes to the financial statements are included on pages 33 to 59.
33 |
Dimerix Limited
Notes to the financial statements for the year ended
30 June 2018
1.
General information
Dimerix Limited (“Dimerix or the Company”) and its subsidiary (the “Group or Consolidated
Entity”) is a listed public company incorporated in Australia. The address of its registered
office and principal place of business is disclosed in the corporate directory to the annual
report.
The principal activities of the Group are described in the directors’ report.
2.
2.1
Application of new and revised Accounting Standards
The Group has considered the implications of new and amended Accounting Standards
applicable for annual reporting periods beginning after 1 July 2017 but determined that their
application to the financial statements is either not relevant or not material.
2.2
New standards and interpretations not yet adopted
A number of new standards, amendments to standards and interpretations issued by the AASB
which are not yet mandatorily applicable to the Group have not been applied in preparing
these consolidated financial statements. Those which may be relevant to the Group are set out
below. The Group does not plan to adopt these standards early.
▪ AASB 9 Financial Instruments and associated Amending Standards (applicable for
annual reporting period commencing 1 January 2018)
The Standard will be applicable retrospectively (subject to the comment on hedge
accounting below) and includes revised requirements for the classification and
measurement of financial instruments, revised recognition and derecognition
requirements for financial instruments and simplified requirements for hedge
accounting.
Key changes made to this standard that may affect the Group on initial application
include certain simplifications
financial assets,
simplifications to the accounting of embedded derivatives, and the irrevocable
election to recognise gains and losses on investments in equity instruments that
are not held for trading in other comprehensive income.
the classification of
to
The directors anticipate that the adoption of AASB 9 will not have a material
impact on the Group’s financial instruments.
▪ AASB 15: Revenue from Contracts with Customers (applicable to annual reporting
periods commencing on or after 1 January 2018).
When effective, this Standard will replace the current accounting requirements
applicable to revenue with a single, principles-based model. Except for a limited
number of exceptions, including leases, the new revenue model in AASB 15 will
apply to all contracts with customers as well as non-monetary exchanges between
entities in the same line of business to facilitate sales to customers and potential
customers.
34
Dimerix Limited
The core principle of the Standard is that an entity will recognise revenue to depict
the transfer of promised goods or services to customers in an amount that reflects
the consideration to which the entity expects to be entitled in exchange for the
goods or services. To achieve this objective, AASB 15 provides the following five-
step process:
- identify the contract(s) with a customer;
- identify the performance obligations in the contract(s);
- determine the transaction price;
- allocate the transaction price to the performance obligations in the
contract(s); and
- recognise revenue when (or as) the performance obligations are satisfied.
This Standard will require retrospective restatement, as well as enhanced
disclosures regarding revenue.
The directors anticipate that the adoption of AASB 15 will not have a material
impact on the Group’s revenue recognition and disclosures.
▪ AASB 16: Leases (applicable to annual reporting periods commencing on or after 1
January 2019).
AASB 16 removes the classification of leases as either operating leases or finance
leases for the lessee effectively treating all leases as finance leases. Short term
leases (less than 12 months) and leases of a low value are exempt from the lease
accounting requirements. Lessor accounting remains similar to current practice.
Although the directors anticipate that the adoption of AASB 16 may have an
impact on the Group's financial statements, it is impracticable at this stage to
provide a reasonable estimate of such impact.
▪ Other standards not yet applicable
There are no other standards that are not yet effective and that would be
expected to have a material impact on the entity in the current or future reporting
periods and on foreseeable future transactions.
3.
3.1
Significant accounting policies
Statement of compliance
These financial statements are general purpose financial statements which have been
prepared
in accordance with the Corporations Act 2001, Accounting Standards and
Interpretations and comply with other requirements of the law.
The financial statements comprise the financial statements of the Group. For the purposes of
preparing the financial statements, the Group is a for-profit entity.
Accounting Standards include Australian Accounting Standards. Compliance with Australian
Accounting Standards ensures that the financial statements and notes of the Group comply
with International Financial Reporting Standards (“IFRS”).
The financial statements were authorised for issue by the directors on 30 August 2018.
35
Dimerix Limited
3.2
Basis of preparation
The financial statements have been prepared on the basis of historical cost, except for certain
financial instruments that are measured at revalued amounts or fair values at the end of each
reporting period, as explained in the accounting policies below.
Historical cost is generally based on the fair values of the consideration given in exchange for
goods and services. The financial statements have been prepared on a going concern basis.
All amounts are presented in Australian dollars, unless otherwise noted.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an
orderly transaction between market participants at the measurement date, regardless of
whether that price is directly observable or estimated using another valuation technique. In
estimating the fair value of an asset or liability, the Group takes into account the
characteristics of the asset or liability at the measurement date. Fair value for measurement
and/or disclosure purposes in these financial statements is determined on such a basis, except
for share-based payment transactions that are within the scope of AASB 2, leasing transactions
that are within the scope of AASB 117 and measurements that have some similarities to fair
value but are not fair value, such as net realisable value in AASB 2 or value in use in AASB 136.
In addition, for financial reporting purposes, fair value measurements are categorised into
Level 1, 2 or 3 based on the degree to which inputs to the fair value measurements are
observable and the significance of the inputs to the fair value measurement in its entirety,
which are described as follows:
•
•
•
Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or
liabilities that the entity can access at the measurement date;
Level 2 inputs are inputs, other than quoted prices included in Level 1, that are
observable for the asset or liability, either directly or indirectly; and
Level 3 inputs are unobservable inputs for the asset or liability.
3.3
Business combinations
Acquisitions of business are accounted for using the acquisition method. The consideration
transferred in a business combination is measured at fair value which is calculated as the sum
of the acquisition-date fair values of assets transferred by the Company, liabilities incurred by
the Company to the former owners of the acquiree and the equity instruments issued by the
Company in exchange for control of the acquiree. Acquisition-related costs are recognised in
profit or loss as incurred.
At the acquisition date, the identifiable assets acquired and the liabilities assumed are
recognised at their fair value, except that:
• deferred tax assets or liabilities and assets or liabilities related to employee benefit
arrangements are recognised and measured in accordance with AASB 112 ‘Income Taxes’
and AASB 119 ‘Employee Benefits’ respectively.
• liabilities or equity instruments related to share-based payment arrangements of the
acquiree or share-based payment arrangements of the Company entered into to replace
share-based payment arrangements of the acquiree are measured in accordance with
AASB 2 ‘Share-based Payment’ at the acquisition date; and
• assets (or disposal groups) that are classified as held for sale in accordance with AASB 5
‘Non-current Assets Held for Sale and Discontinued Operations’ are measured in
accordance with that Standard.
36
Dimerix Limited
Goodwill is measured as the excess of the sum of the consideration transferred, the amount of
any non-controlling interests in the acquiree, and the fair value of the acquirer's previously
held equity interest in the acquiree (if any) over the net of the acquisition-date amounts of the
identifiable assets acquired and the liabilities assumed. If, after reassessment, the net of the
acquisition-date amounts of the identifiable assets acquired and liabilities assumed exceeds
the sum of the consideration transferred, the amount of any non-controlling interests in the
acquiree and the fair value of the acquirer's previously held interest in the acquiree (if any),
the excess is recognised immediately in profit or loss as a bargain purchase gain.
Where the consideration transferred by the Company in a business combination includes
assets or liabilities resulting from a contingent consideration arrangement, the contingent
consideration is measured at its acquisition-date fair value. Changes in the fair value of the
contingent consideration that qualify as measurement period adjustments are adjusted
retrospectively, with corresponding adjustments against goodwill. Measurement period
adjustments are adjustments that arise from additional information obtained during the
‘measurement period’ (which cannot exceed one year from the acquisition date) about facts
and circumstances that existed at the acquisition date. The subsequent accounting for
changes in the fair value of contingent consideration that do not qualify as measurement
period adjustments depends on how the contingent consideration is classified. Contingent
consideration that is classified as equity is not remeasured at subsequent reporting dates and
its subsequent settlement is accounted for within equity.
Contingent consideration that is classified as an asset or liability is remeasured at subsequent
reporting dates in accordance with AASB 139, or AASB 137 ‘Provisions, Contingent Liabilities
and Contingent Assets’, as appropriate, with the corresponding gain or loss being recognised in
profit or loss.
If the initial accounting for a business combination is incomplete by the end of the reporting
period in which the combination occurs, the Company reports provisional amounts for the
items for which the accounting is incomplete. Those provisional amounts are adjusted during
the measurement period (see above), or additional assets or liabilities are recognised, to
reflect new information obtained about facts and circumstances that existed as of the
acquisition date that, if known, would have affected the amounts recognised as of that date.
3.4
Going concern basis
The financial statements have been prepared on the going concern basis which contemplates
the continuity of normal business activity and the realisation of assets and the settlement of
liabilities in the normal course of business.
For the year ended 30 June 2018 the Group incurred a loss after tax of $3,319,726 (2017:
$1,758,532) and a net cash outflow from operations of $3,225,432 (2017: 1,864,407). At
30 June 2018, the Group had current assets of $7,264,308 (2017: $2,868,523), current
liabilities of $406,744 (2017: $242,118) and current cash holding was $6,284,322 (2017:
$2,244,500). The Group does not have any forthcoming material expenditure commitments in
the relevant period.
The directors have reviewed the business outlook and cash flow forecasts and are of the
opinion that the use of the going concern basis of accounting is appropriate as they believe the
Group will continue to raise further funds and meet its expenditure commitments as required.
Should the Group be unable to continue as a going concern, it may be required to realise its
assets and extinguish its liabilities other than in the normal course of business and at amounts
different to those stated in the financial statements. The financial statements do not include
any adjustments relating to the recoverability and classification of liabilities that may be
necessary should the Group be unable to continue as a going concern.
37
Dimerix Limited
3.5
Goodwill
Goodwill arising on an acquisition of a business is carried at cost as established at the date of
the acquisition of the business (see 3.3 above) less accumulated impairment losses, if any. For
the purposes of impairment testing, goodwill is allocated to each of the Group’s cash-
generating units (or groups of cash-generating units) that is expected to benefit from the
synergies of the combination.
A cash-generating unit to which goodwill has been allocated is tested for impairment annually,
or more frequently when there is an indication that the unit may be impaired. If the
recoverable amount of the cash-generating unit is less than its carrying amount, the
impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to
the unit and then to the other assets of the unit pro rata based on the carrying amount of each
asset in the unit. Any impairment loss for goodwill is recognised directly in profit or loss. An
impairment loss recognised for goodwill is not reversed in subsequent periods.
On disposal of the relevant cash-generating unit, the attributable amount of goodwill is
included in the determination of the profit or loss on disposal.
3.6
Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable. Revenue is
reduced for estimated customer returns, rebates and other similar allowances.
Interest income
Interest income from a financial asset is recognised when it is probable that the economic
benefits will flow to the Group and the amount of revenue can be measured reliably.
Research and Development Incentive
These are accounted on an accrual basis once it is probable that it will be received.
3.7
Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of
qualifying assets, which are assets that necessarily take a substantial period to get ready for
their intended use or sale, are added to the cost of those assets, until such time as the assets
are substantially ready for their intended use or sale.
Investment income earned on the temporary investment of specific borrowings pending their
expenditure on qualifying assets
is deducted from the borrowing costs eligible for
capitalisation.
All other borrowing costs are recognised in profit or loss in the period in which they are
incurred.
3.8
Government grants
Government grants are not recognised until there is reasonable assurance that the Group will
comply with the conditions attaching to them and that the grants will be received.
Government grants are recognised in profit or loss on a systematic basis over the periods in
which the Group recognises as expenses the related costs for which the grants are intended to
compensate. Specifically, government grants whose primary condition is that the Group
should purchase, construct or otherwise acquire non-current assets are recognised as deferred
revenue in the statement of financial position and transferred to profit or loss on a systematic
and rational basis over the useful lives of the related assets.
38
Dimerix Limited
Government grants that are receivable as compensation for expenses or losses already
incurred or for the purpose of giving immediate financial support to the Group with no future
related costs are recognised in profit or loss in the period in which they become receivable.
3.9
Employee benefits
Short-term and long-term employee benefits
A liability is recognised for benefits accrued to employees in respect of wages and salaries and
annual leave when it is probable that settlement will be required and they are capable of being
measured reliably.
Liabilities recognised in respect of short-term employee benefits are measured at their
nominal values using the remuneration rate expected to apply at the time of settlement.
Liabilities recognised in respect of long term employee benefits are measured as the present
value of the estimated future cash outflows to be made by the Group in respect of services
provided by employees up to reporting date.
3.10
Share-based payments arrangements
Equity-settled share-based payments to employees and others providing similar services are
measured at the fair value of the equity instruments at the grant date. Details regarding the
determination of the fair value of equity-settled share-based transactions are set out in note
19.
The fair value determined at the grant date of the equity-settled share-based payments is
expensed on a straight-line basis over the vesting period, based on the Group’s estimate of
equity instruments that will eventually vest, with a corresponding increase in equity. At the
end of each reporting period, the Group revises its estimate of the number of equity
instruments expected to vest. The impact of the revision of the original estimates, if any, is
recognised in profit or loss such that the cumulative expense reflects the revised estimate,
with a corresponding adjustment to the equity-settled employee benefits reserve.
Equity-settled share-based payment transactions with parties other than employees are
measured at the fair value of the goods or services received, except where that fair value
cannot be estimated reliably, in which case they are measured at the fair value of the equity
instruments granted, measured at the date the entity obtains the goods or the counterparty
renders the service.
For cash-settled share-based payments, a liability is recognised for the goods or services
acquired, measured initially at the fair value of the liability. At the end of each reporting
period until the liability is settled, and at the date of settlement, the fair value of the liability is
remeasured, with any changes in fair value recognised in profit or loss for the year.
39
Dimerix Limited
3.11
Taxation
Income tax expense represents the sum of the tax currently payable and deferred tax.
3.11.1
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from
profit before tax as reported in the statement of profit or loss and other comprehensive
income because of items of income or expense that are taxable or deductible in other years
and items that are never taxable or deductible. The Group’s current tax is calculated using the
tax rates that have been enacted or substantively enacted by the end of the reporting period.
3.11.2
Deferred tax
Deferred tax is recognised on temporary differences between the carrying amounts of assets
and liabilities in the consolidated financial statements and the corresponding tax bases used in
the computation of taxable profit. Deferred tax liabilities are generally recognised for all
taxable temporary differences. Deferred tax assets are generally recognised for all deductible
temporary differences to the extent that it is probable that taxable profits will be available
against which those deductible temporary differences can be utilised. Such deferred tax assets
and liabilities are not recognised if the temporary difference arises from the initial recognition
(other than in a business combination) of assets and liabilities in a transaction that affects
neither the taxable profit nor the accounting profit. In addition, deferred tax liabilities are not
recognised if the temporary difference arises from the initial recognition of goodwill.
Deferred tax liabilities are recognised for taxable temporary differences associated with
investments in subsidiaries and associates, and interests in joint ventures, except where the
Group is able to control the reversal of the temporary difference and it is probable that the
temporary difference will not reverse in the foreseeable future. Deferred tax assets arising
from deductible temporary differences associated with such investments and interests are
only recognised to the extent that it is probable that there will be sufficient taxable profits
against which to utilise the benefits of the temporary differences and they are expected to
reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and
reduced to the extent that it is no longer probable that sufficient taxable profits will be
available to allow all or part of the asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in
the period in which the liability is settled or the asset realised, based on tax rates (and tax
laws) that have been enacted or substantively enacted by the end of the reporting period. The
measurement of deferred tax liabilities and assets reflects the tax consequences that would
follow from the manner in which the Group expects, at the end of the reporting period, to
recover or settle the carrying amount of its assets and liabilities.
Deferred tax liabilities and assets are offset when there is a legally enforceable right to set off
current tax assets against current tax liabilities and when they relate to income taxes levied by
the same authority and the Group intends to settle its current tax assets and liabilities on a net
basis.
40
Dimerix Limited
3.11.3
Current and deferred tax for the year
Current and deferred tax are recognised in profit or loss, except when they relate to items that
are recognised in other comprehensive income or directly in equity, in which case the current
and deferred tax are also recognised in other comprehensive income or directly in equity,
respectively.
Where current tax or deferred tax arises from the initial accounting for a business
combination, the tax effect is included in the accounting for the business combination.
3.12
Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation and
accumulated impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets (other than
freehold land and properties under construction) less their residual values over their useful
lives, using the straight-line method. The estimated useful lives, residual values and
depreciation method are reviewed at the end of each reporting period, with the effect of any
changes in estimate accounted for on a prospective basis.
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 the disposal or retirement of an item of property, plant and equipment is
determined as the difference between the sales proceeds and the carrying amount of the
asset and is recognised in profit and loss.
3.13
Intangible assets
3.13.1
Intangible assets acquired in a business combination
Intangible assets acquired in a business combination and recognised separately from goodwill
are initially recognised at their fair value at the acquisition date (which is regarded as their
cost).
Subsequent to initial recognition, intangible assets acquired in a business combination are
reported at cost less accumulated amortisation and accumulated impairment losses, on the
same basis as intangible assets that are acquired separately.
3.13.2
Derecognition of intangible assets
An intangible asset is derecognised on disposal, or when no future economic benefits are
expected from use or disposal. Gains or losses arising from derecognition of an intangible
asset, measured as the difference between the net disposal proceeds and the carrying amount
of the asset are recognised in profit or loss when the asset is derecognised.
41
Dimerix Limited
3.14
Impairment of tangible and intangible assets other than goodwill
At the end of each reporting period, the Group reviews the carrying amounts of its tangible
and intangible assets to determine whether there is any indication that those assets have
suffered an impairment loss. If any such indication exists, the recoverable amount of the asset
is estimated in order to determine the extent of the impairment loss (if any). When it is not
possible to estimate the recoverable amount of an individual asset, the Group estimates the
recoverable amount of the cash-generating unit to which the asset belongs. When a
reasonable and consistent basis of allocation can be identified, corporate assets are also
allocated to individual cash-generating units, or otherwise they are allocated to the smallest
group of cash-generating units for which a reasonable and consistent allocation basis can be
identified.
Intangible assets with indefinite useful lives and intangible assets not yet available for use are
tested for impairment at least annually, and whenever there is an indication that the asset
may be impaired.
Recoverable amount is the higher of fair value less cost of disposal and value in use. In
assessing value in use, the estimated future cash flows are discounted to their present value
using a pre-tax discount rate that reflects current market assessments of the time value of
money and the risks specific to the asset for which the estimates of future cash flows have not
been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its
carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its
recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the
relevant asset is carried at a revalued amount, in which case the impairment loss is treated as
a revaluation decrease
3.15
Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a
result of a past event, it is probable that the Group will be required to settle the obligation,
and a reliable estimate can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to
settle the present obligation at the end of the reporting period, taking into account the risks
and uncertainties surrounding the obligation. When a provision is measured using the cash
flows estimated to settle the present obligation, its carrying amount is the present value of
those cash flows (where the effect of the time value of money is material).
When some or all of the economic benefits required to settle a provision are expected to be
recovered from a third party, a receivable is recognised as an asset if it is virtually certain that
reimbursement will be received and the amount of the receivable can be measured reliably.
3.16
Financial instruments
Financial assets and financial liabilities are recognised when a group entity becomes a party to
the contractual provisions of the instrument.
Financial assets and financial liabilities are initially measured at fair value. Transaction costs
that are directly attributable to the acquisition or issue of financial assets and financial
liabilities (other than financial assets and financial liabilities at fair value through profit or loss)
are added to or deducted from the fair value of the financial assets or financial liabilities, as
appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of
financial assets or financial liabilities at fair value through profit or loss are recognised
immediately in profit or loss.
42
Dimerix Limited
3.16.1
Financial assets
Financial assets are classified into the following specified categories: financial assets ‘at fair
value through profit or loss’ (FVTPL), ‘held-to maturity’ investments, ‘available-for-sale’ (AFS)
financial assets and ‘loans and receivables’. The classification depends on the nature and
purpose of the financial assets and is determined at the time of initial recognition. All regular
way purchases or sales of financial assets are recognised and derecognised on a trade date
basis.
Regular way purchases or sales are purchases or sales of financial assets that require delivery
of assets within the time frame established by regulation or convention in the marketplace.
3.16.1.1 Financial assets at FVTPL
Financial assets are classified as at FVTPL when the financial asset is either held for trading or it
is designated as at FVTPL.
A financial asset is classified as held for trading if:
it has been acquired principally for the purpose of selling it in the near term; or
•
• on initial recognition it is part of a portfolio of identified financial instruments that the
Group manages together and has a recent actual pattern of short-term profit-taking; or
it is a derivative that is not designated and effective as a hedging instrument.
•
A financial asset other than a financial asset held for trading may be designated as at FVTPL
upon initial recognition if:
•
•
•
such designation eliminates or significantly reduces a measurement or recognition
inconsistency that would otherwise arise; or
the financial asset forms part of a group of financial assets or financial liabilities or both,
which is managed and its performance is evaluated on a fair value basis, in accordance
with the Group’s documented risk management or investment strategy and information
about the grouping is provided internally on that basis; or
it forms part of a contract containing one or more embedded derivatives, and AASB 139
‘Financial Instruments: Recognition and Measurement’ permits the entire combined
contract to be designated as at FVTPL.
Financial assets at FVTPL are stated at fair value, with any gains or losses arising on re-
measurement recognised in profit or loss. The net gain or loss recognised in profit or loss
incorporates any dividend or interest earned on the financial asset and is included in the ‘other
gains and losses’ line item.
3.16.1.2 Loans and receivables
Trade receivables, loans and other receivables that have fixed or determinable payments that
are not quoted in an active market are classified as ‘loans and receivables’. Loans and
receivables are measured at amortised cost using the effective interest method, less any
impairment. Interest income is recognised by applying the effective interest rate, except for
short-term receivables when the effect of discounting is immaterial.
3.16.1.3
Impairment of financial assets
Financial assets, other than those at FVTPL, are assessed for indicators of impairment at the
end of each reporting period. Financial assets are considered to be impaired when there is
objective evidence that, as a result of one or more events that occurred after the initial
recognition of the financial asset, the estimated future cash flows of the investment have been
affected.
43
Dimerix Limited
For financial assets that are carried at amortised cost, the amount of the impairment loss
recognised is the difference between the asset’s carrying amount and the present value of
estimated future cash flows, discounted at the financial asset’s original effective interest rate.
For financial asset that are carried at cost, the amount of the impairment loss is measured as
the difference between the asset’s carrying amount and the present value of the estimated
future cash flows discounted at the current market rate of return for a similar financial asset.
Such impairment loss will not be reversed in subsequent periods.
The carrying amount of the financial asset is reduced by the impairment loss directly for all
financial assets with the exception of trade receivables, where the carrying amount is reduced
through the use of an allowance account. When a trade receivable is considered uncollectible,
it is written off against the allowance account. Subsequent recoveries of amounts previously
written off are credited against the allowance account. Changes in the carrying amount of the
allowance account are recognised in profit or loss.
When an AFS financial asset is considered to be impaired, cumulative gains or losses previously
recognised in other comprehensive income are reclassified to profit or loss in the period.
For financial assets measured at amortised cost, if, in a subsequent period, the amount of the
impairment loss decreases and the decrease can be related objectively to an event occurring
after the impairment was recognised, the previously recognised impairment loss is reversed
through profit or loss to the extent that the carrying amount of the investment at the date the
impairment is reversed does not exceed what the amortised cost would have been had the
impairment not been recognised.
In respect of AFS securities, impairment losses previously recognised in profit or loss are not
reversed through profit or loss. Any increase in fair value subsequent to an impairment loss is
income and accumulated under the heading of
recognised
investments revaluation reserve.
in other comprehensive
3.16.1.4 Derecognition of financial assets
The Group derecognises a financial asset when the contractual rights to the cash flows from
the asset expire, or when it transfers the financial asset and substantially all the risks and
rewards of ownership of the asset to another party. If the Group neither transfers nor retains
substantially all the risks and rewards of ownership and continues to control the transferred
asset, the Group recognises its retained interest in the asset and an associated liability for
amounts it may have to pay. If the Group retains substantially all the risks and rewards of
ownership of a transferred financial asset, the Group continues to recognise the financial asset
and also recognises a collateralised borrowing for the proceeds received.
On derecognition of a financial asset in its entirety, the difference between the asset’s carrying
amount and the sum of the consideration received and receivable and the cumulative gain or
loss that had been recognised in other comprehensive income and accumulated in equity is
recognised in profit or loss.
44
Dimerix Limited
On derecognition of a financial asset other than in its entirety (e.g. when the Group retains an
option to repurchase part of a transferred asset), the Group allocates the previous carrying
amount of the financial asset between the part it continues to recognise under continuing
involvement, and the part it no longer recognises on the basis of the relative fair values of
those parts on the date of the transfer. The difference between the carrying amount allocated
to the part that is no longer recognised and the sum of the consideration received for the part
no longer recognised and any cumulative gain or loss allocated to it that had been recognised
in other comprehensive income is recognised in profit or loss. A cumulative gain or loss that
had been recognised in other comprehensive income is allocated between the part that
continues to be recognised and the part that is no longer recognised on the basis of the
relative fair values of those parts.
3.16.2
Financial liabilities and equity instruments
3.16.2.1 Classification as debt or equity
Debt and equity instruments are classified as either financial liabilities or as equity in
accordance with the substance of the contractual arrangement.
3.16.2.2 Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of an
entity after deducting all of its liabilities. Equity instruments issued by a group of entity are
recognised at the proceeds received, net of direct issue costs.
3.16.2.3 Financial liabilities
Financial liabilities are classified as either financial liabilities ‘at FVTPL’ or ‘other financial
liabilities’.
3.16.2.4 Financial liabilities at FVTPL
Financial liabilities are classified as at FVTPL when the financial liability is either held for
trading or it is designated as at FVTPL.
A financial liability is classified as held for trading if:
•
it has been incurred principally for the purpose of repurchasing it in the near term; or
• on initial recognition it is part of a portfolio of identified financial instruments that the
Group manages together and has a recent actual pattern of short-term profit-taking; or
it is a derivative that is not designated and effective as a hedging instrument
•
A financial liability other than a financial liability held for trading may be designated as at
FVTPL upon initial recognition if:
•
•
•
such designation eliminates or significantly reduces a measurement or recognition
inconsistency that would otherwise arise; or
the financial liability forms part of a group of financial assets or financial liabilities or both,
which is managed and its performance is evaluated on a fair value basis, in accordance
with the Group’s documented risk management or investment strategy, and information
about the grouping is provided internally on that basis; or
it forms part of a contract containing one or more embedded derivatives, and AASB 139
‘Financial Instruments: Recognition and Measurement’ permits the entire combined
contract to be designated as at FVTPL.
45
Dimerix Limited
Financial liabilities at FVTPL are stated at fair value, with any gains or losses arising on re-
measurement recognised in profit or loss. The net gain or loss recognised in profit or loss
incorporates any interest paid on the financial liability and is included in the ‘other gains and
losses’ line item.
3.16.2.5 Other financial liabilities
Other financial liabilities, including borrowings and trade and other payables, are initially
measured at fair value, net of transaction costs.
Other financial liabilities are subsequently measured at amortised cost using the effective
interest method, with interest expense recognised on an effective yield basis.
The effective interest method is a method of calculating the amortised cost of a financial
liability and of allocating interest expense over the relevant period. The effective interest rate
is the rate that exactly discounts estimated future cash payments through the expected life of
the financial liability, or (where appropriate) a shorter period, to the net carrying amount on
initial recognition.
3.16.2.6 Derecognition of financial liabilities
The Group derecognises financial liabilities when, and only when, the Group’s obligations are
discharged, cancelled or they expire. The difference between the carrying amount of the
financial liability derecognised and the consideration paid and payable is recognised in profit
or loss.
3.17
Goods and services tax
Revenues, expenses and assets are recognised net of the amount of goods and services tax
(GST), except:
i. where the amount of GST incurred is not recoverable from the taxation authority, it is
recognised as part of the cost of acquisition of an asset or as part of an item of expense;
or
ii.
for receivables and payables which are recognised inclusive of GST.
The net amount of GST recoverable from, or payable to, the taxation authority is included as
part of receivables or payables.
Cash flows are included in the cash flow statement on a gross basis. The GST component of
cash flows arising from investing and financing activities which is recoverable from, or payable
to, the taxation authority is classified within operating cash flows.
3.18
Comparative amounts
When current period balances have been classified differently within current period
disclosures when compared to prior periods, comparative disclosures have been restated to
ensure consistency of presentation between periods.
46
Dimerix Limited
4.
Critical accounting judgements and key sources of estimation uncertainty
In the application of the Group’s accounting policies, which are described in note 3, the
directors of the Group are required to make judgements, estimates and assumptions about
the carrying amounts of assets and liabilities that are not readily apparent from other sources.
The estimates and associated assumptions are based on historical experience and other
factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to
accounting estimates are recognised in the period on which the estimate is revised if the
revision affects only that period, or in the period in the revision and future periods if the
revision affects both current and future periods.
In preparing these financial statements, the significant
judgements were made by
management in applying the Group’s accounting policies and the key sources of estimation
uncertainty have been applied to the Business combination.
4.1
Other Key sources of estimation uncertainty
• Valuation of Performance Shares issued on acquisition of subsidiary which impact on the
corporate restructure expense
• Valuation of share options issued to management, staff and consultants
• Determination of expenses eligible for research and development tax incentive
5.
Segment information
From the period beginning 1 July 2016 the Board considers that the Company has only
operated in one Segment. The financial information presented in the statement of financial
performance and statement of financial position represents the information for the business
segment.
6.
Revenue
Interest received
7.
Other income
Research and development tax incentive*
2018
$
20,184
2017
$
18,282
2018
$
825,104
825,104
2017
$
536,335
536,335
*Note this amount is based on the criteria of eligible expenditure set out by AusIndustry. The
Group has submitted an Overseas Finding application with AusIndustry. Should the application
be successful this amount may increase.
47
8.
Loss for the year
Loss for the year has been arrived at after charging the
following items of expenses:
Corporate administration expenses
Company secretary fees
Directors remuneration
Legal and professional fees
Share registry fees
Insurance expenses
Other administration expenses
Dimerix Limited
2018
$
44,600
244,500
8,793
28,686
68,443
1,417,856
1,812,878
2017
$
48,900
232,125
5,301
13,095
42,187
1,040,563
1,382,171
9.
Income taxes relating to continuing operations
9.1
Income tax recognised in profit or loss
Current tax benefit
Deferred tax expense
Tax losses not recognised
Total Tax expense/(benefit)
2018
$
(612,531)
71,544
540,987
-
2017
$
(301,759)
30,922
270,837
-
The income tax expense for the year can be reconciled to the accounting loss as follows:
Loss before tax from continuing operations
Income tax expense/(revenue) calculated at 27.5% (2017: 27.5%)
Effect of items that are not assessable/deductible in determining
taxable loss:
Non-deductible expenses
Non-assessable income
Effect of unused tax losses not recognised as deferred tax assets
2018
$
(3,319,726)
2017
$
(1,758,532)
912,925
483,596
(598,841)
(360,251)
226,903
147,492
(540,987) (270,837)
-
-
The tax rate used for the reconciliation above is the corporate tax rate of 27.5% (2017:27.50%) payable
by Australian corporate entities on taxable profits under Australian tax law.
The Group has no franking credits available for recovery in future years.
48
9.2
Income tax recognised directly in equity
Current tax
Share issue costs
Deferred tax
Share issue costs deductible over 5 years
9.3
Unrecognised deferred tax assets
Unused tax losses (revenue) for which no deferred tax assets
have been recognised
Temporary differences
All unused tax losses were incurred by Australian entities.
Dimerix Limited
2018
$
2017
$
70,697
65,254
81,722
152,419
28,174
93,428
2018
$
2017
$
2,829,521
185,689
2,249,280
174,689
This benefit for tax losses will only be obtained if the specific entity carrying forward the tax losses
derives future assessable income of a nature and of an amount sufficient to enable the benefit from the
deductions for the losses to be realised, and the Group complies with the conditions for deductibility
imposed by tax legislation.
10.
Loss per share
Basic and diluted loss per share (cents per share)
2018
(2.88)
2017
(2.15)*
*The prior period loss per share has been restated for comparative purposes to reflect the loss
per share post consolidation
10.1 Basic and diluted loss per share
The loss and weighted average number of ordinary shares used in the calculation of basic earnings per
share are as follows:
Loss for the year attributable to owners of the Company
Weighted average number of ordinary shares for the purposes
of basic and diluted loss per share
2018
$
(3,319,726)
2017
$
(1,758,532)
2018
No.
115,416,006
2017
No.
81,730,092*
*The prior period weighted average number of ordinary shares has been restated for comparative
purposes to reflect the number of shares post consolidation.
49
11.
Trade and other receivables
Dimerix Limited
Other receivables
Prepayments
2017
$
577,188
46,835
624,023
The other receivables at the reporting date include Research and Development tax incentive of
$825,104. Note this amount is based on criteria of eligible expenditure set out by AusIndustry.
The Group has submitted an Overseas Finding application with AusIndustry. Should the
application be successful this amount may increase.
2018
$
903,495
76,491
979,986
At the reporting date, none of the receivables are past due or impaired.
12.
Property, plant and equipment
Carrying amounts of
Computer Equipment
Cost or valuation
Balance at 1 July
Additions
Disposals
Balance at 30 June
Accumulated depreciation
2018
$
2018
$
7,264
3,543
-
10,807
2017
$
391
3,270
2017
$
4,683
2,581
-
7,264
Balance at 1 July
Accumulated depreciation acquired through the Acquisition
Depreciation expense
Disposals
Balance at 30 June
Net book value
13.
Trade and other payables
Trade creditors
Accruals and other payables
Trade creditor payment terms are 30 days from end of month.
14.
Provisions
Provision for employee entitlements
2018
$
2017
$
3,994
-
6,422
-
10,416
391
2,474
-
1,520
-
3,994
3,270
2018
$
269,262
95,181
364,443
2017
$
83,399
127,058
210,457
2018
$
42,301
2017
$
31,661
50
Dimerix Limited
15.
Subsidiaries
Dimerix Bioscience Pty Ltd
Australia
2018
100%
2017
100%
16.
Issued capital
155,049,393 fully paid ordinary shares (2017: 1,829,949,652)
2018
$
20,287,429
2017
$
13,012,842*
Balance at beginning of
the balance year
Consolidation (1:20)
Issue of ordinary shares
Conversion of options to
shares
Shares issued in lieu of
cash for services
Capital raising
costs/(refund)
Balance at end of the end
of the year
30 June 2018
30 June 2017
No.
$
No.
$
1,829,949,652
(1,738,451,496)
62,967,633
13,012,842
-
7,556,116
1,473,640,129*
-
333,333,333*
10,920,070
-
2,000,000
446,429
62,500
22,976,190*
220,835
137,175
27,435
-
(371,464)
-
(128,063)
155,049,393
20,287,429
1,829,949,652*
13,012,842
*The amounts shown in the 2017 table are pre-consolidation of 1:20 which occurred on 13
September 2017.
Fully paid ordinary shares carry one vote per share and carry a right to dividends.
Shares issued for services
137,175 shares were issued in lieu of medical advisory board fees.
Item
Number of Shares
Share price at date of issue (11 November 2017)
Total amount recognised as share based payments
Inputs
137,175
$0.20
$27,435
17.
Reserves
Performance shares reserve
Share based payment reserve
Total reserves at end of year
2018
$
187,501
438,484
625,985
2017
$
187,501
165,065
352,566
51
Dimerix Limited
17.
Reserves (continued)
Performance share reserve
On acquisition of Dimerix Bioscience Pty Ltd, performance shares were issued to the Vendors or
their nominee. Each performance share is convertible into 1 ordinary share. The Directors
determined the value of the performance shares based on the ASX market price on the date of
issue and adjusted the value for the probability of achieving the performance milestones as
follows:
Class
Class A Performance shares
Class B Performance shares
Class C Performance shares
* Post consolidation
# Pre consolidation
No.
Probability
75,000,040 #
75,000,040 #
3,750,044*
85%
25%
25%
On 19 February 2016, the Group announced that it had received a Notice of Allowance from the
United States Patent and Trade Mark Office (USPTO) for its patent covering the use of DMX-200 in
the treatment of kidney disease. The allowance of the US patent triggers Milestone A of the Class
A performance shares which were issued to the Dimerix Bioscience vendors on 3 July 2015. As
such, 75,000,040 Class A Performance Shares converted to 75,000,040 ordinary shares (pre
consolidation).
On 28 April 2016, the Group announced that it filed a request to the US Food and Drug
Administration (FDA) for a pre-Investigational New Drug (IND) application meeting in relation to
the Development Plan for DMX-200 in Focal Segmental Glomerularsclerosis (FSGS). This event
triggered Milestone B of the Class B performance shares which were issued to the Dimerix
Bioscience vendors on 3 July 2015. As such, 75,000,040 Class B Performance Shares converted to
75,000,040 ordinary shares (pre consolidation).
There were no changes to the performance share reserve in the financial year ended 30 June
2018.
Performance share reserve movement
Balance at beginning of the balance year
Issue of performance shares on acquisition of Dimerix
Bioscience Pty Ltd
Conversion to ordinary shares
Balance at end of the end of the balance year
Share-based payments Reserve
Balance at beginning of year
Arising on share-based payments
Balance at end of year
2018
$
187,501
-
-
187,501
2018
$
165,065
273,419
438,484
2017
$
187,501
-
-
187,501
2017
$
112,205
52,860
165,065
Further information about share-based payments is set out in note 19.
52
Dimerix Limited
18.
Financial instruments
18.1 Capital management
The Group manages its capital to ensure entities in the Group will be able to continue as going
concern while maximising the return to stakeholders through the optimisation of the debt and
equity balance.
The Group’s overall strategy remains unchanged from 2017.
The Group is not subject to any externally imposed capital requirements.
Given the nature of the business, the Group monitors capital on the basis of current business
operations and cash flow requirements.
18.2. Categories of financial instruments
Financial assets
Cash and cash equivalents
Trade and other receivables
Financial liabilities
Trade and other payables
2018
$
6,284,322
903,495
7,187,817
2017
$
2,244,500
577,188
2,821,688
364,443
364,443
210,457
210,457
The fair value of the above financial instruments approximates their carrying values.
18.3 Financial risk management objectives
In common with all other businesses, the Group is exposed to risks that arise from its use of
financial instruments. This note describes the Group’s objectives, policies and processes for
managing those risks and the methods used to measure them. Further quantitative information in
respect of those risks is presented throughout these financial statements.
There have been no substantive changes in the Group’s exposure to financial instrument risks, its
objectives, policies and processes for managing those risks or the methods used to measure them
from previous periods unless otherwise stated in this note.
The board has overall responsibility for the determination of the Group’s risk management
objectives and policies and, whilst retaining ultimate responsibility for them, it has delegated the
authority for designing and operating processes that ensure the effective implementation of the
objectives and policies to the Group’s finance function.
The Group’s risk management policies and objectives are therefore designed to minimise the
potential impacts of these risks on the Group where such impacts may be material. The board
receives monthly financial reports through which it reviews the effectiveness of the processes put
in place and the appropriateness of the objectives and policies it sets. The overall objective of the
board is to set policies that seek to reduce risk as far as possible without unduly affecting the
Group’s competitiveness and flexibility.
18.4 Market risk
Market risk for the Group arises from the use of interest bearing financial instruments. It is the
risk that the fair value or future cash flows of a financial instrument will fluctuate because of
changes in interest rate (see 18.5 below).
53
Dimerix Limited
18.5
Interest rate risk management
The sensitivity analyses below have been determined based on the exposure to interest rates for
both derivatives and non-derivative instruments at the end on the reporting period.
Interest rate sensitivity analysis
The sensitivity analyses below have been determined based on the exposure to interest rates for
both derivatives and non-derivative instruments at the end on the reporting period.
If interest rates had been 100 basis points higher/lower and all other variables were held constant,
the Group’s loss for the year ended 30 June 2018 would increase/decrease by $202 (2017:
$22,445).
18.6 Credit risk management
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting
in financial loss to the Group. The Group has adopted a policy of dealing with creditworthy
counterparties and obtaining sufficient collateral, where appropriate, as a means of mitigating the
risk of financial loss from defaults. The Group only transacts with entities that are rated the
equivalent of investment grade and above. This information is supplied by independent rating
agencies where available and, if not available, the Group uses other publicly available financial
information and its own trading records to rate its major customers. The Group’s exposure and
the credit ratings of its counterparties are continuously monitored and the aggregate value of
transactions concluded is spread amongst approved counterparties.
The credit risk on liquid funds is limited because the counterparties are banks with high credit-
ratings assigned by international credit-rating agencies.
18.7 Liquidity risk management
Ultimate responsibility for liquidity risk management rests with the board of directors, which has
established an appropriate liquidity risk management framework for the management of the
Group’s short-, medium- and long-term funding and liquidity management requirements. The
Group manages liquidity by maintaining adequate banking facilities, by continuously monitoring
forecast and actual cash flows, and by matching the maturity profiles of financial assets and
liabilities.
Contractual cash flows
Carrying
Amount
Less than 1
month
1-3
months
3-12
months
1 year to
5 years
$
$
$
$
$
Total
contractual
cash flows
$
2018
Trade and other payables
2017
Trade and other payables
364,443
364,443
210,457
210,457
364,443
210,457
54
19.
Share-based payments
Share-based payments
Arising on issuance of shares for no consideration
Arising on issuance of options
19.1 Employee share option plan
Dimerix Limited
2018
$
27,435
273,419
300,854
2017
$
-
52,860
52,860
Options may be issued to external consultants or non-related parties without shareholders’ approval,
where the annual 15% capacity pursuant to ASX Listing Rule 7.1 has not been exceeded. Options cannot
be offered to a director or an associate except where approval is given by shareholders at a general
meeting.
2,470,463 were issued during the financial year (2017: 1,000,000 post-consolidation).
Each option issued converts into one ordinary share of Dimerix Limited on exercise. The options carry
neither rights to dividends nor voting rights. Options may be exercised at any time from the date of
vesting to the date of their expiry.
1,829,948 options (post consolidation) were granted to the Chief Executive officer in accordance
with the Company’s ESOP during the period. The options vest in 30 equal monthly instalments
commencing 1 February 2018. The fair value of the options at grant date are determined using a
Black Scholes pricing method that takes into account the exercise price, the term of the option,
the share price at grant date and expected volatility of the underlying share, the expected
dividend yield and the risk free interest rate for the term of the option. The following table lists
the inputs to the model used for valuation of the unlisted options (post consolidation):
Item
Volatility (%)
Risk free interest rate (%)
Expected life of option (years)
Exercise price per terms and conditions
Underlying security price at grant date
Expiry date
Value per option
Inputs
122.4%
1.50%
4.47
$0.40
$0.21
1 February 2022
$0.156
55
Dimerix Limited
19.
Share-based payments (continued)
550,000 options (post consolidation) were granted to the Directors in accordance with the
Company’s ESOP during the period, the options vest on 20 February 2018. The fair value of the
options at grant date are determined using a Black Scholes pricing method that takes into account
the exercise price, the term of the option, the share price at grant date and expected volatility of
the underlying share, the expected dividend yield and the risk free interest rate for the term of the
option. The following table lists the inputs to the model used for valuation of the unlisted options
(post consolidation):
Item
Volatility (%)
Risk free interest rate (%)
Expected life of option (years)
Exercise price per terms and conditions
Underlying security price at grant date
Expiry date
Value per option
Inputs
123.4%
1.50%
3.50
$0.40
$0.19
20 April 2021
$0.125
90,515 options (post consolidation) were granted on 17 November 2017 to a Scientific Advisory
Board member in accordance with the Company’s ESOP during the period. The fair value of the
options at grant date are determined using a Black Scholes pricing method that takes into account
the exercise price, the term of the option, the share price at grant date and expected volatility of
the underlying share, the expected dividend yield and the risk free interest rate for the term of the
option. The following table lists the inputs to the model used for valuation of the unlisted options
(post consolidation):
Item
Volatility (%)
Risk free interest rate (%)
Expected life of option (years)
Exercise price per terms and conditions
Underlying security price at grant date
Expiry date
Value per option
Inputs
122.5%
1.50%
2.99
$0.286
$0.17
13 November 2020
$0.108
56
Dimerix Limited
19.2 Options on Issue
The following share-based payment arrangements were in existence during the current
reporting period:
Number
Grant date
Grant
date
fair
value
Exercise
price
Expiry date
Vesting date
500,000
06/09/2016
0.12
0.40
30/06/2019
500,000
27/03/2017
0.038
0.40
31/03/2020
1,829,948 16/08/2017
0.156
0.40
01/02/2022
1/3rd Vest on date of grant
1/3rd vest on 30 June 2017
1/3rd vest on 30 June 2018
½ vest on 31 March 2018
½ vest on 31 March 2019
Vesting in 30 equal
monthly instalments
commencing 1 February
2018 and expiring 1
February 2022
90,515
17/11/2017
0.108
0.286
13/11/2020
17/11/2017
550,000
19/10/2017
0.125
0.40
20/04/2021
20/02/2018
There has been no alteration of the terms and conditions of the above share-based payment
arrangements since the grant date.
19.2
Fair value of share options granted in the year
The deemed fair value of options granted during the year is $363,922 (2017: $79,227).
19.3 Performance shares on issue
Class
Number
Grant date
Grant date
fair value
C 3,750,044*
3/07/2015
0.05*
*Post consolidation.
Expiry date
Vesting condition
30/06/2019 Each share converts to one
ordinary share on receipt to
ethics approval allowing
commencement of a second
clinical trial derived from the
Dimerix platform.
57
Dimerix Limited
19.3 Movements in share options during the year
The following reconciles the share options outstanding at the beginning and end of the year:
2018
2017
Weighted
average
exercise
price
Weighted
average
exercise
price
Number of
options
Number of
options
No.
$
No.
$
Balance at beginning of the year
37,880,953
0.0139
111,708,737
0.0123
Consolidation (1:20)
(35,986,904)
-
Granted during the year
2,470,463
0.3958
20,000,000
0.020
Forfeited during the year
Exercised during the year
Expired during the year
Balance at end of year
-
-
-
(446,429)
(447,620)
3,470,463
0.14
(22,976,190)
0.14
(70,851,594)
0.397
37,880,953
Exercisable at end of year
1,695,506
0.3939
24,547,620
-
0.0096
0.0144
0.0139
0.011
19.4 Share options exercised during the year
446,429 share options were exercised during the year (2017: 22,976,190).
19.5 Share options outstanding at the end of the year
The share options outstanding at the end of the year had a weighted average exercise price of
$0.3970 and a weighted average remaining contractual life of 1,022 days (2017: 545 days).
20. Key management personnel
The aggregate compensation made to directors and other members of key management
personnel of the Group is set out below:
Short-term employee benefits
Post-employment benefits
Share-based payments
Short term employee benefits
2018
$
486,885
38,683
251,850
777,418
2017
$
465,505
35,547
49,193
550,245
These amounts include director and consulting fees paid to non-executive directors as well as
salary and paid leave benefits awarded to executive directors.
Post-employment benefits
These amounts are superannuation contributions made during the year.
Further information in relation to key management personnel remuneration can be found in the
remuneration report contained in the directors’ report.
58
Dimerix Limited
21. Related party transactions
21.1 Key management personnel
Any person(s) having authority and responsibility for planning, directing and controlling the
activities of the entity, directly or indirectly, including any director (whether executive or
otherwise) of that entity, are considered key management personnel.
For details of disclosures relating to key management personnel, refer to the remuneration report
contained in the directors’ report and note 20.
21.2 Other related party transactions
All transactions between the Group and related parties are on an arms-length basis.
22. Cash and cash equivalents
For the purposes of the statement of cash flows, cash and cash equivalents include cash on hand
and in banks, net of outstanding bank overdrafts. Cash and cash equivalents at the end of the
reporting period as shown in the statement of cash flows can be reconciled to the related items in
the statement of financial position as follows:
Cash and bank balances
2018
$
2017
$
6,284,322
2,244,500
22.1 Reconciliation of loss for the year to net cash flows from operating activities
2018
$
2017
$
Cash flow from operating activities
Loss for the year
Adjustments for:
Depreciation
Share based payments
Effects of exchange rate changes on cash and cash equivalents
Movements in working capital
(Increase)/decrease in other receivables
(Increase)/decrease in prepayments
Increase/(decrease) in trade and other payables
Increase/(decrease) in provisions
Net cash outflows from operating activities
(3,319,726)
(1,758,532)
6,422
300,854
(21,645)
(326,307)
(29,656)
153,986
10,640
(3,225,432)
1,520
52,860
-
(117,721)
(1,927)
(54,096)
13,489
(1,864,407)
23. Commitments and contingencies
There are no significant commitments and contingencies at balance date in the current or prior
reporting periods.
59
24. Remuneration of auditors
Auditor of the parent entity
Audit or review of the financial statements
Other non-audit services
The auditors of Dimerix Limited are Stantons International
Audit and Consulting Pty Ltd.
Dimerix Limited
2018
$
34,420
-
34,420
2017
$
38,069
-
38,069
25. Events after the reporting period
Conversion of Class C Performance shares to ordinary shares
On 18 July 2018 The Company considered the C Milestone under the Implementation Agreement
to be achieved by the announcement of ethics approval for both FSGS and DKD, allowing these
studies to commence recruitment. The event triggered the conversion of 3,750,044 Class C
Performance Shares to ordinary shares which were issued to the Dimerix Bioscience vendors on 3
July 2015.
26. Parent entity information
The accounting policies of the parent entity, which have been applied in determining the 2018
and 2017 financial information shown below, are the same as those applied in the financial
statements. Refer to note 3 for a summary of significant accounting policies relating to the Group.
Financial position of Dimerix Limited (Legal Parent)
Assets
Current assets
Non-current assets
Total assets
Liabilities
Current liabilities
Provisions
Non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Accumulated losses
Total equity
Financial performance
Loss for the year
2018
$
2017
$
5,557,078
-
5,557,078
1,658,156
-
1,658,156
110,815
35,313
-
146,128
5,410,950
132,917
30,620
-
163,537
1,494,619
50,230,340
789,964
(45,609,354)
5,410,950
42,955,753
516,545
(41,977,679)
1,494,619
(3,631,675)
(11,464,603)
There are no significant commitments and contingencies at balance date in the current or prior
reporting periods.
60
Dimerix Limited
ASX Additional Information as at 28 August 2018
Corporate Governance Statement
The Company’s corporate governance
www.dimerix.com/company/corporate-governance.
statement
is
located at
the Company’s website:
Ordinary share capital
Holding Ranges
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 - 9,999,999,999
Totals
Holders
98
175
207
680
264
1,424
Total Units
17,540
699,945
1,564,822
29,679,254
126,837,876
158,799,437
% Issued Share Capital
0.01%
0.44%
0.99%
18.69%
79.87%
100.00%
Each ordinary share is entitled to vote when a poll is called, otherwise each member present at a
meeting or by proxy has one vote on a show of hands.
Options
•
•
•
•
•
500,000 unlisted $0.4 expiring 30 June 2019 are held by one individual ESOP holder
500,000 unlisted $0.4 expiring 31 March 2020 are held by one individual ESOP holder
1,829,948 unlisted $0.4 expiring 1 February 2020 are held by one individual ESOP holder
90,515 unlisted $0.286 expiring 13 November 202 are held by one individual ESOP holder
550,000 unlisted $0.4 expiring 20 April 2021 are held by four individual option holders. Unlisted
option holders holding more than 20% of the above options are:
125,000
Hugh Alsop
125,000
David Franklyn
175,000
Jampaso Pty Ltd
125,000
Sonia Poli
Options do not carry a right to vote.
Unmarketable parcels
There are 220 shareholdings held with less than a marketable parcel.
Substantial shareholders
Mr Peter Meurs
24,819,309
15.63%
Number of shares
% holding
Restricted securities
Nil
On-Market buy-back
There is no current on-market buy-back.
Twenty (20) largest shareholders of quoted equity securities
Position
1
2
3
4
5
6
7
7
8
9
10
11
12
13
14
15
16
17
18
19
20
20
20
20
Holder Name
MR PETER FLETCHER MEURS
YODAMBAO PTY LTD
MR PAUL ANDREW WHITE &
MS ELIZABETH ANN MCCALL
MRS GWEN MURRAY PFLEGER
JAMPASO PTY LTD
BOND STREET CUSTODIANS LIMITED
DJEE PTY LIMITED
MR BRENDAN PAUL COOPER
TT NICHOLLS PTY LTD
TOLTEC HOLDINGS PTY LTD
TROCA ENTERPRISES PTY LTD
SLADE TECHNOLOGIES PTY LTD
MR MATTHEW COOPER
MRS FIONNUALA CATHERINE EDMONDSON
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
JGC SUPER PTY LTD
DR DAVID KENNETH PACKHAM
NULLAKI SERVICES PTY LTD
NOOKAMKA HOLDINGS PTY LTD
BLAKE NOMINEES PTY LTD
OSIRIS CAPITAL INVESTMENTS PTY LTD
OCEAN VIEW W A PTY LTD
ENERVIEW PTY LTD
SOLEQUEST PTY LTD
Total
Dimerix Limited
Holding
24,819,309
6,312,603
% IC
15.63%
3.98%
2,187,789
1.38%
2,105,988
1,778,742
1,750,000
1,500,000
1,500,000
1,450,000
1,339,372
1,327,331
1,225,001
1,162,500
1,108,334
1,088,955
1,072,000
1,054,391
1,049,881
1,024,832
1,000,001
1,000,000
1,000,000
1,000,000
1,000,000
59,857,029
1.33%
1.12%
1.10%
0.94%
0.94%
0.91%
0.84%
0.84%
0.77%
0.73%
0.70%
0.69%
0.68%
0.66%
0.66%
0.65%
0.63%
0.63%
0.63%
0.63%
0.63%
37.69%
Total issued capital - selected security class(es)
158,799,437
100.00%