Exopharm Limited (previously Exsome Pty Ltd)
ACN 163 765 991
Annual Financial Report
30 June 2018
Exopharm Limited
Annual Report 2018
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Contents
Corporate Information
Director’s Report
Auditor’s Independence Declaration
Statement of Comprehensive Income
Statement of Financial Position
Statement of Changes in Equity
Statement of Cash Flows
Notes to the Financial Statements
Directors’ Declaration
Independent Auditor’s Report
Page
3
4
8
9
10
11
12
13
25
26
Exopharm Limited
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CORPORATE INFORMATION
ACN 163 765 991
Directors
Mr Jason Watson
Dr Ian E Dixon
Mr David R Parker
Company Secretary
Mr David R Parker
Registered Office
C/o Haines Muir Hill Pty Ltd
888 Doncaster Road
Doncaster East Vic 3109
Principal Place of Business
13 Fuchsia Street
Blackburn, VIC 3130
Telephone:
Email:
(03) 9894 4555
ian.dixon@exopharm.com
Auditors
William Buck
Level 20, 181 William Street
Melbourne VIC 3000
Solicitors
Jackson MacDonald
Level 17, 225 St Georges Terrace
Perth, Western Australia 6000
Share Register
Automic Registry Services Pty Ltd
Suite 310, Level 3, 50 Holt St
Surry Hills NSW 2010
Telephone: 1300 288 664
Email: hello@automic.com.au
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DIRECTOR’S REPORT
Your directors submit the annual financial report of Exopharm Limited (previously Exsome Pty Ltd) 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:
Directors
The names of directors who held office during or since the end of the year and until the date of this report are as follows.
Directors were in office for this entire period unless otherwise stated.
Jason M Watson
Non-Executive Chairman
Appointed 10 August 2018
Ian E Dixon
Director
Appointed on registration
Company Secretary
Appointed on registration, resigned 26
June 2018
David R Parker
Director and Company Secretary
Appointed 26 June 2018
Names, qualifications, experience and special responsibilities
Mr Jason Watson
Non-Executive Chairman
LL.B, B. Comm
Mr Watson graduated from the University of Adelaide in 1998 with a Bachelor of Laws (Honours) and a Bachelor of Commerce,
majoring in marketing and accounting. In 2008 Jason completed a Graduate Certificate in Biotechnology Industry at RMIT.
Jason commenced his legal career in 2000 as the sole in-house counsel for the University of South Australia and its
commercialisation company.
Jason has extensive experience in corporate and commercial law, intellectual property, licensing, innovation and
commercialisation and manages his own firm, Elementary Law.
Jason's clients include research institutes, listed and unlisted companies, with a particular focus on life sciences.
Dr Ian Dixon
Managing Director
PhD, MBA, MAICD
Dr Ian Dixon has a PhD in biomedical engineering from Monash University, an MBA from Swinburne University and professional
engineering qualifications.
In 2011 Ian co-founded Cynata Inc, a company that is progressing the commercialisation of what has become the Cymerus
technology of ASX-listed Cynata Therapeutics Ltd (ASX-CYP).
Ian is also a non-executive director of Noxopharm Ltd (ASX-NOX), a founder of Nyrada Inc. and a co-inventor of Nyrada drug
NYX-330.
Ian is a co-inventor of the LEAP Manufacturing Process licensed to Exopharm by Altnia Operations.
Previously, Ian has worked for Vision Systems Ltd as head of the Product Group and was involved in a range of complex
product/technology developments. Ian is also founder of Genscreen Pty Ltd (2003-2018) and was a director of Cell Therapies
Pty Ltd (2005-2015).
Ian brings to the Board an extensive entrepreneurial background in founding, building and running public companies, in
recognising the potential commercial value of early-stage drug development, and in understanding the challenges involved in
drug development.
Ian currently also serves as a part-time executive director of Medigard Ltd (ASX:MGZ).
During the last three years, Dr Dixon has served as a director of the following listed companies: Medigard Ltd (ASX:MGZ);
Noxopharm Ltd: ASX:NOX)
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DIRECTOR’S REPORT (continued)
Names, qualifications, experience and special responsibilities (continued)
Mr David R Parker
Non-Executive Director and Company Secretary
B.Comm, SAFin
Mr David Parker has over sixteen years’ experience as a corporate advisor and investment manager. He has served as a
director or company secretary of a number of ASX-listed companies, having taken several companies from private companies
to listed entities. David is an employee of Alto Capital, a stockbroking and corporate advisory firm which is licensed to provide
financial advice to retail and wholesale investors.
Mr Parker is a Senior Associate (and member since 2001) of the Financial Services Industry of Australian (FINSIA).
Mr Parker has a Bachelor of Commerce from Curtin University and has completed a Graduate Diploma of Applied Corporate
Governance from the Governance Institute.
During the last three years, Mr Parker was a non-executive director and company secretary of Aurora Labs Ltd (ASX:A3D).
Interests in the shares and options of the Company and related bodies corporate
The following relevant interests in shares and options of the Company or a related body corporate were held by the directors
as at the date of this report:
Directors
Jason Watson
Ian Dixon
David Parker1
Totals
Number of options
over ordinary shares
Number of fully paid
ordinary shares
-
-
-
-
-
27,935,294
822,200
28,757,494
1 David Parker holds 810,000 shares either directly or through wholly controlled entities and 12,200 shares held indirectly, given
David Parker holds a 2% interest in 610,000 shares held by ACNS Capital Markets Pty Ltd.
As at the date of this report, the Company had 45,500,000 fully paid ordinary shares and no options on issue.
Dividends
No dividends have been paid or declared since the start of the financial period and the Board does not recommend the payment
of a dividend in respect of the financial period.
Review of Operations
Principal Activities
The principal activity of the Company during the year was regenerative medicine, primarily monitoring the development and de-
risking of exosome technologies, namely the LEAP manufacturing process, which was being developed by Altnia Operations
Pty Ltd, pursuant to a Research Agreement that the Company has entered into with Altnia Operations Pty Ltd.
Significant events during the year
On 20 April 2018, 29,900,000 fully paid ordinary shares amounting to $2,990 were issued at $0.0001 per share.
On 21 May 2018, 2,500,000 fully paid ordinary shares amounting to $25,000 were issued at $0.01 per share.
On 8 June 2018, 3,000,000 fully paid ordinary shares amounting to $150,000 were issued at $0.05 per share.
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DIRECTOR’S REPORT (continued)
Significant events during the year (continued)
On 26 June 2018, the Company held a shareholder meeting, which approved, among other items, the change of business type,
from a private limited company to a public company limited by shares.
On 26 June 2018, Mr Parker was appointed Director and Company Secretary of the Company, while Dr Dixon resigned as
Company Secretary.
Significant events after balance date
On 23 July 2018, 6,934,167 fully paid ordinary shares at $0.12 per share and on 10 August 2018, 3,065,833 fully paid ordinary
shares at $0.12 per share to raise $1,200,000 in total.
On 10 August 2018 the company type was changed to a public limited company, and the name of the Company was amended
to Exopharm Limited.
On 10 August 2018, the Company appointed Jason Watson as a director or the Company in the position of Non-Executive
Chairman.
Operating results for the year
The comprehensive loss of the Company for the financial year, after providing for income tax amounted to 174,597..
Review of financial conditions
The Company has cash in bank of $52,401 as at 30 June 2018 and raised $1,200,000 (pre-costs) following the balance date.
The Directors are of the opinion that the Company is a going concern.
Likely developments and expected results
Disclosure of information regarding likely developments in the operations of the Company in future financial years and the
expected results of those operations is likely to result in unreasonable prejudice to the Company. Therefore, this information
has not been presented in this report.
Options
No options over issued shares or interests in the company were granted during or since the end of the financial year.
Environmental legislation
The Company is not subject to any environmental legislation requirements.
Indemnification and insurance of Directors and officers:
The company has agreed to indemnify all the directors of the company for any liabilities (other than the company or related
body corporate) that may arise from their position as directors of the company, except where the liability arises out of conduct
involving a lack of good faith.
The company has not paid any premium for contract of insuring the directors and officers of the company against any liability
incurred in the course of their duties to the extent permitted by the Corporations Act 2001.
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Exopharm Limited
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STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2018
Notes
2018
$
2017
$
Revenue
Other Income (Research and development
refund claim)
Interest income
Expenses
Research and development
Corporate expenses
Employee costs
Depreciation
Other administrative expenses
Loss before income tax expense
Income tax expense
Loss for the year
Other comprehensive income, net of
income tax
Total comprehensive loss for the year
2
3
4
43,919
70
(79,164)
(66,908)
(56,165)
(518)
(15,831)
(174,597)
-
(174,597)
-
(174,597)
-
-
(565)
-
-
-
(565)
-
(565)
-
(565)
The accompanying notes form part of these financial statements.
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STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2018
Note
2018
$
2017
$
Assets
Current Assets
Cash and cash equivalents
Other current assets
Total Current Assets
Non-current Assets
Fixed assets
Intangible assets
Total Non-current Assets
Total Assets
Liabilities
Current Liabilities
6
7
8
9
52,401
60,380
112,781
20,478
175,000
195,478
308,259
Accounts payable and other current liabilities
10 & 12
(215,527)
Loan from shareholders
Total Current Liabilities
Non-current Liabilities
Other non-current liabilities
Total Non-current Liabilities
Total Liabilities
Net Assets / (Liabilities)
Equity
Issued capital
Accumulated losses
Total Equity
11
12
5(a)
-
(215,527)
(100,000)
(100,000)
(315,527)
(7,268)
169,090
(176,358)
(7,268)
The accompanying notes form part of these financial statements.
-
-
-
-
-
-
-
-
(761)
(761)
-
-
(761)
(761)
1,000
(1,761)
(761)
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STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2018
Issued Capital
Accumulated
Losses
Total Equity
$
$
$
Balance as at 1 July 2016
1,000
Loss for the year
Other comprehensive income, net of
income tax
Total comprehensive loss for
the year
-
-
-
(1,196)
(565)
-
(565)
Balance as at 30 June 2017
1,000
(1,761)
(196)
(565)
-
(565)
(761)
Issued Capital
Accumulated
Losses
Total Equity
$
$
$
Balance as at 1 July 2017
1,000
(1,761)
(761)
Loss for the year
Other comprehensive income, net of
income tax
Total comprehensive loss for the year
Shares issued during the year (net of
share issue costs)
-
-
-
(174,597)
(174,597)
-
-
(174,597)
(174,597)
168,090
-
168,090
Balance as at 30 June 2018
169,090
(176,358)
(7,268)
The accompanying notes form part of these financial statements.
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STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2018
Note
2018
$
2017
$
Cash flows from operating activities
Payments to suppliers and employees
Interest received
Net cash (used in) operating activities
5
Cash flows from investing activities
Purchase of fixed assets
Net cash (used in) investing activities
Cash flows from financing activities
Proceeds from issue of shares – net of issue
costs
Proceeds from loan from shareholders
Repayment of funds loaned by a shareholder
Net cash provided by financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of
the year
Cash and cash equivalents at the end of the
year
5
Non-cash investing activities
Addition to intangible assets
(94,002)
70
(93,932)
(20,996)
(20,996)
168,090
-
(761)
167,329
52,401
-
52,401
175,000
(565)
-
(565)
-
-
-
565
-
565
-
-
-
-
The accompanying notes form part of these financial statements.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
(a)
Basis of Preparation
The financial report is a special purpose financial report, which has been prepared in accordance with the requirements
of the Corporations Act 2001, Accounting Standards and Interpretations and complies with other requirements of the
law.
The financial report has also been prepared on a historical cost basis. Cost is based on the fair values of the
consideration given in exchange for assets.
The financial report is presented in Australian dollars.
The Company is an unlisted private company, incorporated in Australia and operating in Australia. The principal activity
of the Company during the year was investment in Biotechnology.
(b)
Adoption of new and revised standards
Changes in accounting policies on initial application of Accounting Standards
In the year ended 30 June 2018, the Board has reviewed all new and revised standards and interpretations issued by
the AASB that are relevant to the Company and effective for the current annual reporting period.
As a result of this review, the Board has determined that there is no material impact of the new and revised standards
and interpretations on the Company and, therefore, no material change is necessary to the Company accounting
policies.
The Board has also reviewed all new Standards and Interpretations that have been issued but are not yet effective for
the period ended 30 June 2018. As a result of this review the Board has determined that there is no impact, material
or otherwise, of the new and revised Standards and Interpretations on its business and, therefore, no change
necessary to Company accounting policies.
(c)
(d)
Statement of compliance
The financial report was authorised for issue on the date of the signed Directors Declaration. The financial report
complies with Australian Accounting Standards, which include Australian equivalents to International Financial
Reporting Standards (AIFRS). Compliance with AIFRS ensures that the financial report, comprising the financial
statements and notes thereto, complies with International Financial Reporting Standards (IFRS).
Critical accounting judgements and key sources of estimation uncertainty
The application of accounting policies requires the use of judgements, estimates and assumptions about carrying
values 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.
Useful lives of depreciable assets
Management reviews its estimate of the useful lives of depreciable assets at each reporting date, based on the
expected utility of the assets.
Impairment
In assessing impairment, management estimates the recoverable amount of each asset or cash-generating unit based
on expected future cash flows and uses an interest rate to discount them. Estimation uncertainty relates to assumptions
about future operating results and the determination of a suitable discount rate.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions are recognised in the period
in which the estimate is revised if it affects only that period or in the period of the revision and future periods if the
revision affects both current and future periods.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(e)
(f)
(g)
Revenue recognition
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the
revenue can be reliably measured.
Cash and cash equivalents
Cash comprises cash at bank and on hand. Cash equivalents are short term, highly liquid investments that are readily
convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
Trade and other receivables
Trade receivables are measured on initial recognition at fair value. Trade receivables are generally due for settlement
within periods ranging from 15 days to 30 days.
Impairment of trade receivables is continually reviewed and those that are considered to be uncollectible are written
off by reducing the carrying amount directly. An allowance account is used when there is objective evidence that the
Company will not be able to collect all amounts due according to the original contractual terms. Factors considered by
the Company in making this determination include known significant financial difficulties of the debtor, review of
financial information and significant delinquency in making contractual payments to the Company.
The amount of the impairment loss is recognised in the statement of comprehensive income within other expenses.
When a trade receivable for which an impairment allowance had been recognised becomes uncollectible in a
subsequent period, it is written off against the allowance account. Subsequent recoveries of amounts previously written
off are credited against other expenses in the statement of comprehensive income.
(h)
Income tax
The income tax expense or benefit for the period is the tax payable on the current period’s taxable income based on
the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable
to temporary difference and to unused tax losses.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end
of the reporting period. Management periodically evaluates positions taken in tax returns with respect to situations in
which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of
amounts expected to be paid to the tax authorities.
Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered
from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are
enacted or substantively enacted by the balance date.
Deferred income tax is provided on all temporary differences at the balance date between the tax bases of assets and
liabilities and their carrying amounts for financial reporting purposes.
Deferred income tax liabilities are recognised for all taxable temporary differences except:
(cid:120) when the deferred income tax liability arises from the initial recognition of goodwill or of an asset or liability in a
transaction that is not a business combination and that, at the time of the transaction, affects neither the
accounting profit nor taxable profit or loss; or
(cid:120) when the taxable temporary difference is associated with investments in subsidiaries, associates or interests in
joint ventures, and the timing of the reversal of the temporary difference can be controlled and it is probable that
the temporary difference will not reverse in the foreseeable future.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(h)
Income tax (continued)
Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax
assets and unused tax losses, to the extent that it is probable that taxable profit will be available against which the
deductible temporary differences and the carry-forward of unused tax credits and unused tax losses can be utilised,
except:
(cid:120) when the deferred income tax asset relating to the deductible temporary difference arises from the initial
recognition of an asset or liability in a transaction that is not a business combination and, at the time of the
transaction, affects neither the accounting profit nor taxable profit or loss; or
(cid:120) when the deductible temporary difference is associated with investments in subsidiaries, associates or interests
in joint ventures, in which case a deferred tax asset is only recognised to the extent that it is probable that the
temporary difference will reverse in the foreseeable future and taxable profit will be available against which the
temporary difference can be utilised.
The carrying amount of deferred income tax assets is reviewed at each balance date and reduced to the extent that it
is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset
to be utilised.
Unrecognised deferred income tax assets are reassessed at each balance date and are recognised to the extent that
it has become probable that future taxable profit will allow the deferred tax asset to be recovered.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when
the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively
enacted at the balance date.
Income taxes relating to items recognised directly in equity are recognised in equity and not in profit or loss.
Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off current tax
assets against current tax liabilities and the deferred tax assets and liabilities relate to the same taxable entity and
the same taxation authority.
(i)
Other taxes
Revenues, expenses and assets are recognised net of the amount of GST except:
(cid:120) when the GST incurred on a purchase of goods and services is not recoverable from the taxation authority, in which
case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable;
and
(cid:120) receivables and payables, which are stated with the amount of GST included.
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or
payables in the statement of financial position.
Cash flows are included in the statement of cash flows on a gross basis and the GST component of cash flows arising
from investing and financing activities, which is recoverable from, or payable to, the taxation authority are classified as
operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the
taxation authority.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(j)
Impairment of tangible nad intangible assets other than goodwill
The Company assesses at each balance date whether there is an indication that an asset may be impaired. If any
such indication exists, or when annual impairment testing for an asset is required, the Company makes an estimate of
the asset’s recoverable amount. An asset’s recoverable amount is the higher of its fair value less costs to sell and its
value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely
independent of those from other assets or groups of assets and the asset's value in use cannot be estimated to be
close to its fair value. In such cases the asset is tested for impairment as part of the cash-generating unit to which it
belongs. When the carrying amount of an asset or cash-generating unit exceeds its recoverable amount, the asset or
cash-generating unit is considered impaired and is written down to its recoverable amount.
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. Impairment
losses relating to continuing operations are recognised in those expense categories consistent with the function of the
impaired asset unless the asset is carried at revalued amount (in which case the impairment loss is treated as a
revaluation decrease).
An assessment is also made at each balance date as to whether there is any indication that previously recognised
impairment losses may no longer exist or may have decreased. If such indication exists, the recoverable amount is
estimated. A previously recognised impairment loss is reversed only if there has been a change in the estimates used
to determine the asset’s recoverable amount since the last impairment loss was recognised. If that is the case the
carrying amount of the asset is increased to its recoverable amount. That increased amount cannot exceed the carrying
amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset
in prior years. Such reversal is recognised in profit or loss unless the asset is carried at revalued amount, in which
case the reversal is treated as a revaluation increase. After such a reversal the depreciation charge is adjusted in
future periods to allocate the asset’s revised carrying amount, less any residual value, on a systematic basis over its
remaining useful life.
(k)
Intangible assets
Intangible assets acquired separately
Intangible assets acquired separately are recorded at cost less accumulated amortisation and impairment.
Amortisation is charged on a straight-line basis over their estimated useful lives. The estimated useful life and
amortisation method is reviewed at the end of each annual reporting period, with any changes in these accounting
estimates being accounted for on a prospective basis.
Internally generated intangible assets – research and development expenditure
Expenditure on research activities is recognised as an expense in the period in which it is incurred. Where no
internally-generated intangible asset can be recognised, development expenditure is recognised as an expense in
the period as incurred.
An intangible asset arising from development (or from the development phase of an internal project) is recognised if,
and only if, all of the following have been demonstrated:
(cid:120)
(cid:120)
(cid:120)
(cid:120)
(cid:120)
(cid:120)
The technical feasibility of completing the intangible asset so that it will be available for use or sale;
The intention to complete the intangible asset and use or sell it;
The ability to use or sell the intangible asset;
How the intangible asset will generate probable future economic benefits;
The availability of adequate technical, financial and other resources to complete development and to use or
sell the intangible asset; and
The ability to measure reliably the expenditure attributable to the intangible asset during its development.
The amount initially recognised for internally-generated intangible assets is the sum of the expenditure incurred from
the date when the intangible asset first meets the recognition criteria listed above. Subsequent to initial recognition,
internally-generated intangible assets are reported at cost less accumulated amortisation and accumulated impairment
losses, on the same basis as intangible assets acquired separately.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(l)
Intangible assets
The following useful lives are used in the calculation of amortisation:
(m)
(n)
License asset
8 years following grant of patent
Trade and other payables
Trade payables and other payables are carried at amortised costs and represent liabilities for goods and services
provided to the Company prior to the end of the financial year that are unpaid and arise when the Company becomes
obliged to make future payments in respect of the purchase of these goods and services. Trade and other payables
are presented as current liabilities unless payment is not due within 12 months.
Provisions
Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past
event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation
and a reliable estimate can be made of the amount of the obligation.
When the Company expects some or all of a provision to be reimbursed, for example under an insurance contract, the
reimbursement is recognised as a separate assets but only when the reimbursement is virtually certain. The expense
relating to any provision is presented in the statement of comprehensive income net of any reimbursement.
If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects
the risks specific to the liability.
When discounting is used, the increase in the provision due to the passage of time is recognised as a borrowing cost.
(o)
Issued capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options
are shown in equity as a deduction, net of tax, from the proceeds.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
NOTE 2: REVENUE
Research and Development grant
Interest Income
NOTE 3: EXPENSES
Research and development
Consumables
Consulting
Other
NOTE 4: INCOME TAX
(a) Income tax expense
2018
$
43,919
70
43,983
2017
$
-
-
-
2018
$
2017
$
45,343
4,095
29,726
79,164
-
-
-
-
2018
$
2017
$
-
-
(b) Numerical reconciliation between tax-expense and pre-tax net loss
(Loss) from ordinary activities
(174,597)
Income tax (benefit) using the Company’s domestic tax rate of 27.5% (2017: 30%)
(48,014)
Temporary differences not recognised
Current period (loss) for which no deferred tax asset was recognised
Income tax benefit attributable to entity
-
48,014
-
(565)
(170)
-
170
-
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
NOTE 5: ISSUED CAPITAL
(a) Ordinary shares
Balance at beginning of year
Shares issued
Less share issue costs
Balance at end of year
Movements in ordinary shares on issue
Balance at beginning of year
Shares issued
Balance at end of year
2018
$
2017
$
1,000
177,990
(9,900)
169,090
1,000
-
-
1,000
No.
No.
100,000
100,000
35,400,000
-
35,500,000
100,000
Ordinary shareholders entitle the holder to participate in dividends and the proceeds on winding up of the Company in
proportion to the number of and amounts paid on the shares held.
On a show of hands every holder of ordinary shares present at a meeting in person or proxy, is entitled to one vote, and upon
a poll each share is entitled to one vote.
Ordinary shares have no par value and the Company does not have a limited amount of authorised capital.
NOTE 6: CASH AND CASH EQUIVALENTS
Reconciliation to the Statement of Cash Flows:
For the purposes of the statement of cash flows, cash and cash equivalents comprise cash at bank. Cash and cash equivalents
as shown in the statement of cash flows is reconciled to the related items in the statement of financial position as follows:
Cash in bank
Cash in bank – subscription account
2018
$
52,267
134
52,401
2017
$
-
-
-
Exopharm Limited
Annual Report 2018
P a g e | 20
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
NOTE 6: CASH AND CASH EQUIVALENTS (continued)
Reconciliation of loss after tax to net cash outflow from operating activities:
Loss for the year
Adjustment for non-cash income and expense items
Depreciation and amortisation
Research and development refund claim
Changes in assets and liabilities
Other current assets
Accounts payable and accruals
Loan from shareholders
Net cash outflow from operating activities
NOTE 7: OTHER CURRENT ASSETS
GST receivable
Research and development refund claim receivable
NOTE 8: FIXED ASSETS
Balance at 1 July 2017
Additions
Depreciation charge for the year
Balance at 30 June 2018
NOTE 9: INTANGIBLE ASSETS
Balance at 1 July 2017
Additions
Balance at 30 June 2018
2018
$
(174,597)
518
(43,919)
(16,461)
140,527
-
(93,932)
2018
$
16,461
43,919
60,380
2017
$
(565)
-
-
-
-
565
-
2017
$
-
-
-
Plant and equipment
$
-
20,996
(518)
20,478
License asset
$
-
175,000
175,000
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
NOTE 10: ACCOUNTS PAYABLE AND OTHER CURRENT LIABILITIES
Accounts payable
Accruals
Superannuation payable
PAYG payable
Other current liabilities
NOTE 11: LOAN FROM SHAREHOLDERS
Loan from shareholders
Balance at end of year
The loan from sharehoders is unsecured and non-interest bearing.
NOTE 12: NON-CURRENT LIABILITIES
Liability for license asset
Less classified as current liabilities
Classified as non-current liabilities
NOTE 13: FINANCIAL INSTRUMENTS
Financial liabilities
Accounts payable and other current liabilities
Loan from shareholders
Other non-current liabilities
2018
$
63,452
66,945
2,704
7,426
75,000
215,527
2018
$
-
-
2018
$
175,000
(75,000)
100,000
2018
$
215,527
-
100,000
315,527
2017
$
-
-
-
-
-
-
2017
$
761
761
2017
$
-
-
-
2017
$
-
761
-
761
Exopharm Limited
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
NOTE 13: FINANCIAL INSTRUMENTS (continued)
The following tables detail the Company’s remaining contractual maturities for its non-derivative financial liabilities. These are
based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company can be required
to pay. The table includes both interest and principal cash flows.
Weighted
average effective
interest rate
%
Less than 1
month
$
1 – 3
Months
$
3 months – 1
year
$
1 – 5
years
$
5+
years
$
2018
Non-interest bearing
Variable interest rate instruments
Fixed interest rate instruments
2017
Non-interest bearing
Variable interest rate instruments
Fixed interest rate instruments
-
-
-
-
-
-
-
-
-
-
761
-
-
761
140,527
-
-
140,527
75,000
-
-
100,000
-
-
75,000
100,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Financial risk management objectives and policies:
The Company has exposure to the following risks from their use of financial instruments:
Liquidity risk
Interest rate risk
(cid:120) Credit risk
(cid:120)
(cid:120)
(cid:120) Market risk
(cid:120) Capital risk
This note presents information about the Company’s exposure to each of the above risks, their objectives, policies and
processes for measuring and managing risk, and the management of capital. The Board has overall responsibility for the
establishment and oversight of the risk management framework. The Board reviews and agrees policies for managing each of
these risks and they are summarised below.
The Company’s principal financial instruments comprise loan from shareholders and other current/non-current liabilities. The
main purpose of the financial instruments is to provide working capital for the operations of the business. The Company also
has other financial instruments such as trade creditors which arise directly from its operations. For the period under review, it
has been the Company’s policy not to trade in financial instruments.
(a)
Credit risk management
Credit risk refers to the risk that a counter-party will default on its contractual obligations resulting in financial loss to
the Company. The Company has adopted a policy of only dealing with creditworthy counterparties and obtaining
sufficient collateral where appropriate, as a means of mitigating the risk of financial loss from defaults. The Company
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 Company uses publicly available financial
information and its own trading record to rate its major customers and suppliers.
The Company’s exposure and the credit ratings of its counter-parties are continuously monitored. Credit exposure is
controlled by counterparty limits that are reviewed and approved by the Board annually.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
NOTE 13: FINANCIAL INSTRUMENTS (continued)
(a)
Credit risk management (continued)
The Company does not have any significant credit risk exposure. The carrying amount of financial assets recorded in
the financial statements, net of any allowance for losses, represents the Company’s maximum exposure to credit risk
without taking account of the value of any collateral obtained.
(b)
Liquidity risk management
Ultimate responsibility for liquidity risk management rests with the Board, who have built an appropriate liquidity risk
management framework for the management of the Company’s short, medium and long-term funding and liquidity
management requirements. The Company manages liquidity risk by maintaining adequate reserves and banking
facilities and by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial
assets and liabilities. The Company did not have any undrawn facilities at its disposal as at balance date.
(c)
Interest rate risk management
The Company is not exposed to significant interest rate risk.
(d)
Market risk
Market risk is the risk that changes in market prices such as foreign exchange rates, interest rates and equity prices
will affect the Company’s income or the value of its holdings of financial instruments. The Company is not exposed to
market risk as at reporting date.
(e)
Capital Risk Management
The Company’s objectives when managing capital are to safeguard its ability to continue as a going concern, so that
it may continue to provide returns for shareholders and benefits for other stakeholders. The primary source of Company
funding is equity raisings. Accordingly, the objective of the Company’s capital risk management is to balance the
current working capital position against the requirements to meet exploration programmes and corporate overheads.
This is achieved by maintaining appropriate liquidity to meet anticipated operating requirements, with a view to initiating
appropriate capital raisings as required.
NOTE 14: DIRECTORS AND EXECUTIVES DISCLOSURES
(a) Key Management Personnel (KMP)
The following persons were key management personnel of the Company during the financial year:
(cid:131)
Ian E Dixon – Director.
(b) KMP Compensation
There were no KMP compensation paid in 30 June 2018 and 30 June 2017.
(c) Outstanding balances
The Company owed a KMP shareholder $Nil as at the balance date (2017: $761). The Company accrued $25,000 which
relates to amounts that is owed to Ian Dixon which was payable following the completion of the $1,200,000 capital raise which
occurred in August 2018.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
NOTE 15: EVENTS AFTER THE BALANCE DATE
On 23 July 2018, 6,934,167 fully paid ordinary shares at $0.12 per share and on 10 August 2018, 3,065,833 fully paid ordinary
shares at $0.12 per share to raise $1,200,000 in total (pre-costs).
On 10 August 2018 the company type was changed to a public limited company, and the name of the Company was amended
to Exopharm Limited.
On 10 August 2018, the Company appointed Jason Watson as a director or the Company in the position of Non-Executive
Chairman.
NOTE 16: DIVIDENDS
The directors of the Company have not declared any dividend for the year ended 30 June 2018.
NOTE 17: COMMITTEMENTS AND CONTINGENCIES
As at 30 June 2018, the Company has no other commitments except as disclosed below:
The Company is a party to a Patent & Know-How License Agreement (the “Agreement”) with Altnia Operations Pty Ltd (the
“Licensor”) (a company owned by a KMP). The Licensor has rights to certain patents (the “Technology”). The Licensor has
agreed to license the Technology to the Company. As at 30 June 2018, the Company has the following financial commitments:
1. Reimbursement of fees - $175,000 representing a portion of development fees incurred by the Licensor. This amount
is recorded as current liability of $75,000 and non-current liability of $100,000 in the balance sheet;
Initial Annual fee - $50,000 due on the third anniversary of the Commencement Date;
2.
3. Annual fee - $100,000 annually commencing on the fourth year from the Commencement Date;
4. Milestone payments - $100,000 each upon achievement of Milestone 1 and Milestone 2;
5. Royalties on net sales – 2.5% of net sales;
6. Sublicense revenue – 8% of sublicense revenue.
As at 30 June 2018, the Company has no contingent liabilities.
NOTE 18: AUDITORS REMUNERATION
Fees paid to the Company Auditor – William Buck
Audit Services
No non- audit services were provided during the financial year.
2018
$
2017
$
6,500
6,500
3,500
3,500
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