More annual reports from Exopharm Limited:
2023 ReportPeers and competitors of Exopharm Limited:
KalVista Pharmaceuticals, Inc. Exopharm is a
global leader in
development of
exosome-based
medicines.
CONTENTS
Exopharm Snapshot
2-3
Notes to the Financial Statements
Letter from Board Chair & CEO
4-5
Director’s Declaration
29
49
Director’s Report
6-7
Independent Auditor’s Report
50-53
Review of Operations
8-16
Additional Securities Information
54-56
Remuneration Report (Audited)
17-23
Auditor’s Independence Declaration
24
Statement of Comprehensive Income 25
Statement of Financial Position
Statement of Changes in Equity
Statement of Cash Flows
26
27
28
1
EXOPHARM ANNUAL REPORT 2020 EXOPHARM SNAPSHOT
Exopharm is a global leader in the
development of exosome-based medicines.
•
•
•
•
•
•
•
•
Exopharm is the first company able to mass
produce proprietary exosomes/extracellular vesicles
(EVs) at quality standards sufficient for human
clinical trials.
Interest in exosome technology is accelerating
globally, with researchers and stem cell companies
pivoting to re-purpose their assets toward EV
production. Large deals are being announced for
EV development projects.
Exopharm’s proprietary purification process for
EVs (LEAP™) remains unique, with no apparent
comparable technology for delivering clinical-grade
EVs economically at scale.
Newly in-licensed IP for engineering EVs (LOAD™ and
EVPS™) position Exopharm as one of the select few
worldwide.
Exopharm has clinical trials underway with Naïve EVs
from platelets and eventually adult stem
cells (MSCs).
Exopharm’s investment proposition: early and
leading position in the promising new field of EV
medicine with clear pathways to revenue and
non-dilutive funding of clinical asset creation.
Listed on ASX Dec ‘18. Employee numbers now
exceed 25.
Exopharm’s business plan: prove EV
manufacturing leadership, develop prototype
products for licensing partners and create
high-value clinical NEV assets.
Exopharm’s technology enables EVs
to solve a range of medical problems
in regenerative medicine and
precision medicine fields.
2
2
EXOPHARM ANNUAL REPORT 2020
NAIVE EVs (NEVs)
Well-established safety profile from millions
of transfusions and adult stem cells.
Potential to treat age-related
degeneration.
ENGINEERED EVs (EEVs)
EVs that deliver drugs, proteins and/or
nucleic acids into specific cells.
Nearly unlimited potential to treat
untreatable diseases.
Clear pathway to partnership
deals.
PRODUCTION,
PURIFICATION, &
FORMULATION
LEAP technology provides unique,
high volume process for propriety EVs.
Access to abundant EVs creates a virtuous
circle of innovation within manufacturing
and EV drug development.
EXOPHARM ANNUAL REPORT 2020 EV
medicines
will
transform
healthcare
Exopharm
leads world
in the clinical
development
of Naïve EV.
Engineered
EV program
offers high-
value, near
term pathway
to revenue.
Exopharm’s
team has the
experience
and capability
to capture its
opportunities.
EVs are replacing MSCs, with research in EVs set to eclipse MSC
research in 2021.
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50
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MSC Publications
EV Publications
2000
2005
2010
2015
2020
EX1
IPO
Exopharm’s Fortrexo EEVs serve as a platform for potential anti-viral
applications from SARS-Cov-2 to Dengue or RSV.
Attached surface proteins
target Fortrexo to cells that
virus infects.
Delivery of anti-viral
cargo to tissues targeted
by virus.
ANTI-VIRAL PLATFORM
virus X
Fortrexo X
virus Y
Fortrexo Y
virus Z
Fortrexo Z
EXOPHARM ANNUAL REPORT 2020
33
EXOPHARM ANNUAL REPORT 2020
LETTER FROM
BOARD CHAIR
AND CEO
Mr Jason Watson
Board Chair
Dr Ian Dixon
CEO
Dear Shareholder,
Exopharm was formed in late 2013 and listed on the ASX in December 2018
with a ‘big idea’ – that exosomes could replace stem cells and become a
new class of medicine.
That forward thinking has been validated over the
past 24 months.
The field of extracellular vesicles (EVs), including
exosomes, has seen multiple large (>$1b) overseas
partnership deals – highlighting the growing
interest in using EVs as a new form of medicine.
With our LEAP manufacturing technology at its core,
Exopharm is still the only pure-play EV company
listed on the ASX, and we have been working hard
to build value across the business. Our team has
grown to 26 people with strategic additions being
made, including key management, within the past
year. Importantly, we have also consolidated our
research and manufacturing facility at our new
laboratory in the Alfred precinct in Melbourne.
Exopharm’s operational activities are managed
under two main interactive groupings – Commercial
(Business Development and Licensing) and
Development (Manufacturing and Products).
Our activities are all directed at attracting
partnerships with larger biopharmaceutical
companies and associated financial transactions
to benefit shareholders. We are investing time and
resources selectively; there are many things we
could do that we chose not to in order to maintain
focus. At the core, our team is doing three things:
making EVs, testing EVs and communicating our
results.
Over the past 12 months our story and
communications have changed in a number
of ways, reflecting the important and valuable
opportunities in front of us and what we know
potential partners are interested in.
Firstly, we mostly refer to the products as ‘EVs’
rather than ‘exosomes.’ This aligns with the way we
seek to communicate with industry.
Secondly, we now have programs in the naïve EV
(NEV) and engineered EV (EEV) fields. This fits with
the commercial activity in the EV field, which has
been in the EEV area, and also the power of our
proprietary LEAP manufacturing process for both
NEV and EEV products. (NEVs are EVs naturally
produced by cells while EEVs are EVs ‘engineered’ in
one or more ways to have well-defined actions)
Over the past 12 months we have made
announcements about some of our developments
and innovations in the EEV field, including our
Plexodox and Fortrexo CoV-2 products. We also
now have two additional and exclusive technologies
for engineering EVs – LOAD and EVPS. With LOAD
we can load precision medicines into EVs, and with
EVPS we can direct EVs to selected cell types.
Whether it is NEVs or EEVs, we and others see EVs
as a new form of medicines that will transform
healthcare. In simple terms, NEVs are likely to
have large potential as replacements to stem cell
medicines as regenerative medicines, whereas
EEVs are being developed as better ways to deliver
precision medicines to patients in areas such as
genetic disease, neurodegeneration and cancer.
4
EXOPHARM ANNUAL REPORT 2020 The field of extracellular
vesicles (EVs), including exosomes,
has seen multiple large (>$1b)
overseas partnership deals –
highlighting the growing interest
in using EVs as a new form of
medicine.
Over the past 12 months we have achieved a lot:
Building of our commercial and business
development team headed by Dr Chris
Baldwin, who joined us in November 2019 as
Chief Commercial Officer.
First dosing with autologous Plexaris product
in the PLEXOVAL study (further dosing now
on hold due to COVID-19 restrictions).
Initiation of coverage by MST Access and the
first report released to the investment
community in July 2020.
Submission of application to start
allogeneic study PLEXOVAL II (using Plexaris) in
H2 CY ‘20.
Establishment of our laboratory in the Baker
Institute, and full operations maintained
during COVID-19 restrictions under Chief
Operating Officer Dr Gregor Lichtfuss.
In-licensing of LOAD and EVPS technologies,
headed up by Dr Lieven Huang our Head of
Business Development & Licensing.
Participation in BIO 2020 and other business
partnering meetings.
Further advancements in our manufacturing,
analytics and innovation areas.
In the months to come, you can expect to see more
newsflow and milestones being achieved.
Over the past 24 months we have built a strong
international network that surrounds Exopharm
and adds to our capabilities. We are indeed
fortunate to have supportive shareholders, clinical
partners, research collaborators, consultants and
service providers.
Success in biotechnology is a team endeavour and
an endurance event. Our special thanks to each
and every one of our dedicated and valued team
members – they are helping us build an important
Australian-based business with medicines that can
transform healthcare internationally and values
that we can be proud of.
Mr Jason Watson
Board Chair
Patent application lodged for Fortexo
CoV-2 product.
Dr Ian Dixon
CEO
5
EXOPHARM ANNUAL REPORT 2020 DIRECTORS’ REPORT
Your directors submit the annual financial report of Exopharm Limited
for the financial year ended 30 June 2020. In order to comply with the
provisions of the Corporations Act 2001, the directors’ report as follows:
Directors
The names of directors and officers 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.
Mr Jason M Watson Non-Executive Chairman
Dr Ian E Dixon
Managing Director
Mr David R Parker Non-Executive Director
Mr David R Parker was also the Company Secretary during the year until 15 June 2020, with Ms Sinead Teague appointed as
Company Secretary on 15 June 2020.
MR JASON WATSON
Non-Executive Chairman LLB, B. Comm
Mr Watson has board and advisory experience acting with small and medium-sized enterprises,
research institutes and listed companies in the life sciences and other sectors.
In particular, Mr Watson has assisted companies in developing, commercialising and transacting
technologies through significant biotechnology licensing deals.
Mr Watson is principal of Elementary Law, a legal practice based in Melbourne, Australia. His
practice focuses on assisting clients achieve the best outcomes for their patents and innovations,
including through corporate fund raising, protection strategies, licensing and commercialisation.
In this capacity, Mr Watson has been recognised in the Intellectual Asset Magazine Patent 1000
independent list of The World’s 1000 Leading Patent Professionals.
Mr Watson has expertise in relation to complex transactions, including establishing multi-party
engagements, research and consultancy contracts and negotiating and implementing clinical trial,
licensing, assignment, manufacturing, shareholding and other commercial arrangements.
Mr Watson has a Bachelor of Laws with Honours and a Bachelor of Commerce.
DR IAN DIXON
Founder and Managing Director PhD, MBA, MAICD
Dr Dixon has a PhD in biomedical engineering from Monash University, an MBA from Swinburne
University and professional engineering qualifications.
In 2011, Dr Dixon 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).
Dr Dixon is a co-inventor of the LEAP Technology owned by Exopharm.
Dr Dixon brings to the Board an extensive technical and entrepreneurial background in founding,
building and running technology-based companies, in recognising the potential commercial value of
early-stage drug development, and in understanding the challenges involved in drug development.
Dr Dixon 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.
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).
6
6
EXOPHARM ANNUAL REPORT 2020
EXOPHARM ANNUAL REPORT 2020 MR DAVID R PARKER
Non-Executive Director B.Comm, SAFin
Mr 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. Mr Parker 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 the Sole Director of Cobblestones Corporate Pty Ltd that
provides company secretarial services.
Mr Parker is a Senior Associate (and member since 2001) of the Financial Services Institute of
Australasia (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).
MS SINEAD TEAGUE
Company Secretary LLB, MSc
Ms Teague is an associate member of the Governance Institute of Australia
Ms Teague is a Chartered Company Secretary with over ten years’ experience in Australia, Ireland
and the UK, having qualified through the Institute of Chartered Secretaries and Administrators.
Ms Teague holds a MSc in Management and Corporate Governance and an LLB Hons in Law with
Government from the University of Ulster.
Ms Teague is currently Company Secretary for a number of ASX listed and unlisted public and
private companies covering a broad range of industries including mining and exploration,
technology, financial services, biotech and food services.
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
Mr Jason Watson
Dr Ian Dixon
Mr David Parker
Totals
Number of options
over ordinary shares
Number of fully paid
ordinary shares
-
-
-
-
290,000
27,975,294
1,092,200
29,337,494
As at the date of this report, the Company had 95,472,000 fully paid ordinary shares and no options on issue.
EXOPHARM ANNUAL REPORT 2020
77
EXOPHARM ANNUAL REPORT 2020 REVIEW OF
OPERATIONS
OVERVIEW
The Company is advancing EV-based medicines through activity in
three main areas (a) proprietary scalable EV product manufacture with
our LEAP technology (b) testing naïve EV products for regenerative
medicine applications and (c) developing and testing a pipeline of
proprietary engineered EV products as precision medicine products.
Investment is aimed at deriving revenue from partnership and
commercialisation deals.
Exopharm’s LEAP Technology places it at the forefront in the EV Medicine field.
Commercial scale manufacturing of proprietary EV products has eluded the field
and delayed the testing of EV products despite their potential.
Converting research into a commercial product relies upon commercial
manufacturing scale, and LEAP places Exopharm in leadership on both reduced
cost and increased scale.
State of the Art Ev Purification as of June 2020*
UC
AF4
Nano-FCM
Immunoaffinity
Commercial Reagents
Microfluidics
SEC
Density Gradient
t
s
o
C
Scalability
Filtration
Research Scale
Diagnostic Scale
Proof-of-Concept Scale
Commercial
Manufacturing
Scale**
* Adapted from https://doi.org/10.1016/j.tibtech.2020.05.012
Technologies and Standardisation in Research on Extracellular Vesicles
Srujan Gandham1.4 Xianyi Su2.4 Jacqueline Wood2.4 Angela L Nocera1 Sarath Chandra Alli2.3 Lara Milane1
Alan Zimmerman2 Mansoor Amiji1 and Alexander R. Ivanov2
** LEAP assessment from Exopharm based on industrial use to date.
8
8
EXOPHARM ANNUAL REPORT 2020
EXOPHARM ANNUAL REPORT 2020 REVIEW OF
OPERATIONS
(CONTINUED)
1
2
1
2
3
Naive
Cells
Addition of nucleic
acids to payloads
Custom
Cells
Cultured
Media
Prurification of EVs
at scale
EVs
Medicine
Clinical Grade
Cell Line
Addition of proteins
to surfaces
EV Engineering
Cell Growth
Purification
Fill & Finish
OUTBOUND INTERESTS
INBOUND INTERESTS
Exopharm’s EV Technologies
Exopharm now has exclusive international rights on
three important EV Technologies, as a foundation for
future developments and deals.
EVs reproducibly from a variety of biological sources.
This has powered a virtuous circle of innovation
across the entire EV manufacturing process and
into a range of EV products presently under
development.
This IP now includes:
•
•
•
LEAP™, wholly-owned IP covering the proprietary
isolation and purification of all EVs;
LOAD™, IP for the insertion of custom-designed
nucleic acids - such as messenger RNA (mRNA),
interfering RNA (RNAi), microRNA (miRNA) and
silencing RNA (siRNA) – into EVs
EVPS™, IP for the attachment of custom proteins
to the surface of EVs to enable targeting of EVs to
selected cell types
Together, these technologies enable Exopharm to
do things that others cannot. Exopharm now holds a
portfolio of exclusive worldwide intellectual property
(IP) rights for the design and manufacture of a
pipeline of EEV products – the area where sizable
transactions are happening.
LEAP
LEAP is a patent applied for technology to purify
EVs using affinity chromatography. Over the past 24
months, Exopharm has invested into further know-
how and techniques using LEAP. LEAP is seen as a
solution to the manufacturing bottleneck that has
held back the EV Medicine field till now.
LEAP was developed in-house by the Exopharm
team and the first patent application was lodged in
December 2016.
LOAD
The LOAD IP has been in-licensed from State
University of New York USA as an exclusive
worldwide all uses license. The LOAD technology is
ideally suited to the design and manufacture of EEVs
as precision medicines and improves the insertion of
custom-designed nucleic acids - such as messenger
RNA (mRNA), interfering RNA (RNAi), microRNA
(miRNA) and silencing RNA (siRNA) – into EVs.
EVPS
The EVPS IP has been in-licensed from Santa Clara
University, USA as an exclusive worldwide all uses
license. The EVPS technology allows us to design
and manufacture EEVs as precision medicines – by
attaching molecules on the outside of the EVs and
to target the EVs to certain cell types (i.e. tropism).
These technologies place Exopharm at the forefront
in EEV precision medicines and support potential
future partnership deals and revenue building
opportunities.
With the foundational invention of LEAP, Exopharm
has been capable of producing high quantities of
Exopharm is active in in-licensing and out-licensing
activities.
EXOPHARM ANNUAL REPORT 2020
9
9
EXOPHARM ANNUAL REPORT 2020 REVIEW OF
OPERATIONS
(CONTINUED)
EV Medicine Industry
Presently, there are a limited number of
biotechnology companies seeking to advance EV
Medicines.
In December 2019 a Nature Biotechnology paper
reviewed the field of exosome companies. Of the 14
companies surveyed, only five were preparing for
clinical trials. In January 2020, Exopharm became
the first company to produce and administer
an exosome medicine to a human subject. This
success highlights the maturity of Exopharm’s
manufacturing, analytical, and regulatory capabilities.
As illustrated below, Exopharm is seen as a leader in
bringing exosomes/EVs into clinical trials.
to the interest of Pharmaceutical companies
(e.g. Takeda, Eli Lilly) in potential of EV Medicines.
Exopharm’s Products
Exopharm is progressing the development of
two main types of EVs: Naïve EVs as regenerative
medicines (Plexaris and Cevaris) and Engineered
EVs as precision medicines.
Naïve EVs
NEVs are EVs that are naturally produced by sources
such as adult stem cells and platelets. Substantial
research points to NEVs as a safe and effective form
of regenerative medicine, with important economic
and logistical advantages over stem cell therapies.
Exosome Redux
Adult stem cell companies are pivoting their businesses to commercialise exosomes as therapeutics.
NATURE BIOTECHNOLOGY I VOL 37 I DECEMBER 2019 I 1395-1400 I wwww.nature.com/nature biotechnology
news feature
Companies Reviewed
Planning Clinical Trials
Clinical Trials Running
Aegle Therapeutics
Alxerion Biotech
Anjarium Biosciences
Aruna Biomedical
Capricor Therapeutics
Codiak Biosciences
Evox Therapeutics
ExoCoBio
Exopharm Limited
NeuroExo Sciences
PureTech Health
ReNueuron
Tavec Pharma
Versatope Therapeutics
Aegle Therapeutics
Codiak Biosciences
Capricor Therapeutics
Evox Therapeutics
Exopharm Limited
First dosing Jan 2020
*Adapted from the original publication
A number of stem cell companies (e.g. Capricor
and ReNeuron) are moving across to exosomes
as therapeutics, spurred on by the mounting
evidence that EVs are capable of producing the
regenerative effects as stem cells but have a
simpler development pathway.
Partnership deals over the past 24 months point
NEVs could be applied to conditions such as acute
respiratory distress syndrome (ARDS), graft versus
host disease (GvHD), osteoarthritis (OA), critical limb
ischemia (CLI) and cardiac repair.
Exopharm is leading the world in human clinical
trials for naïve EVs.
10
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EXOPHARM ANNUAL REPORT 2020
EXOPHARM ANNUAL REPORT 2020 REVIEW OF
OPERATIONS
(CONTINUED)
Exopharm is testing its NEV products in a number of
test regimes – aimed at selecting medical conditions
for future clinical trials.
and tissue remodelling activities. Cevaris was not
cytotoxic and did not cause antiproliferative effects
at the concentrations tested.
Plexaris
Plexaris is our name for platelet derived EVs as a
regenerative medicine. Plexaris can be autologous
(from the person’s own platelets) or allogeneic (from
unmatched donor platelets).
In 2019 Exopharm received approval to run its
Plexaris study called PLEXOVAL I, an autologous
safety study for wound healing. In January 2020, the
first trial dosing was announced but recruitment was
affected by COVID-19-related access to healthcare
facilities.
Exopharm’s commercial objective is to develop
off-the-shelf exosome medicines, so a Phase 1
allogeneic Plexaris safety study (PLEXOVAL II) is
planned for H2 CY 2020.
Cevaris
Cevaris™ is our name for EVs derived from adult
stem cells (MSCs). Cevaris is only allogeneic (i.e.
unmatched and off-the-shelf)
In testing announced during the past 12 months,
Cevaris was compared with 4,500 experimental
and sold medicines across a panel of 12 human
primary cell-based systems using Eurofins
DisCoVery’s BioMAP Phenotypic Profiling and
Screening Service. The testing provides an
unbiased, target-agnostic and data-driven
approach to understanding a medicine’s impact
on human disease models and translational
biomarkers.
Cevaris was found to be safe (by comparison and
absolute measures) and had notable biological
activity in (i) tissue remodelling (ii) inflammatory and
(iii) immunomodulatory-related activities. Cevaris
was active in modulating multiple types of protein
biomarkers including cytokines, chemokines,
cell adhesion molecules, MHC class II receptors,
extracellular proteins, proteases and inhibitors
associated with inflammatory, immunomodulatory
Clinical testing of Cevaris is planned to start in the
next 12 months.
Engineered EVs
Engineered EVs (EEVs) have been the subject of
5 high-value partnership deals, so Exopharm is
responding to partner interest by launching its EEV
programs.
EEVs have particular merit, as they utilize the natural
characteristics of EVs (ability to cross the blood brain
barrier, tolerance and durability) as ‘vehicles’ to
deliver either known or new drugs as a new form
of precision medicine.
EEVs are finding support in areas such as oncology,
neurological, antiviral and cardiac disease.
Exopharm is well placed to meet partner interest
and we are testing variants of EEVs to answer
questions and satisfy the need for proof of concept
data. The in-licensing of the LOAD and EVPS
technologies provide a broad base of scientific
capability to produce specialised EVs by adding
cargo or cell targeting to NEVs.
There are two key projects that serve as proof-
of-concept work and highlight the power of EEVs:
Fortrexo CoV and Plexodox.
Fortrexo CoV
Fortrexo CoV is our name for an EEV product that
would potentially reduce the duration and severity of
SARS-CoV-2 infection in the early phase of a patient’s
exposure to COVID-19.
Fortrexo CoV uses all three of Exopharm’s EV
Technologies :
•
Using EVPS, a copy of the SARS-CoV-2 spike
protein is attached to EVs. This targets the
Fortrexo CoV EVs to cells that are at risk of
infection by the virus (i.e. have the ACE2
receptor that the spike protein targets).
EXOPHARM ANNUAL REPORT 2020
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EXOPHARM ANNUAL REPORT 2020 REVIEW OF
OPERATIONS
(CONTINUED)
The SARS-CoV-2 virus has spike proteins on the outside
and a nucleic acid payload on the inside. The spike protein
targets cells with ACE2 receptor on the outside and delivers
th particle into the ACE2+ cell. The payload enables viral
particle replication inside an infected cell.
EV with spike protein
attached using EVPS
Naive
Cells
Engineered
Cells
Bioreactor
Commercial
Scale EV
Purification
Naive EVs
CoV Spike on EV Surface
targets ACE2+ cells
RNAi packed into EVs to
stop CoV replication
•
•
Using LOAD, the Fortrexo CoV is loaded up
with RNAi that disrupt the replication of SARS-
CoV-2 within a cell. This is designed to stop viral
replication and thereby reduce the duration and
severity of SARS-CoV-2 infection.
Using LEAP, Exopharm can manufacture
Fortrexo CoV EVs as a clinical grade product in
scale.
The Fortrexo design technique can be generalised
to other RNA viruses such as those causing Dengue,
Hepatitis C, Ebola and rabies.
The Fortrexo product can also be designed for use in
other applications e.g. targeting siRNA or other drugs
to specific cell types such as neurons or cancer cells.
Plexodox
Plexodox is our name for platelet derived EVs loaded
with the approved anti-cancer drug doxorubicin,
as a novel and improved anticancer drug.
An in vitro study using Plexodox killed
considerably more cancer cells than a similar
dosage of the drug by itself, pointing to a potential
treatment with improved anticancer effects whilst
minimising adverse reactions (i.e. extending the
therapeutic window).
Doxorubicin is widely used in chemotherapy,
with sales worldwide exceeding $1 billion,
annually. However, treating patients with
doxorubicin causes adverse events (including
myelosuppression, cardiotoxicity, alopecia,
nausea, and vomiting) and dose levels are often
limited by the adverse patient response.
Doxorubicin is often sold in a liposomal
formulation, which extends the drug’s post-
administration half-life in circulation and reduces
its cardiotoxicity. However, liposome drug delivery
nanoparticles are synthetic constructs and can
be targeted by the immune system, triggering an
adverse immune response, immunotoxicity and
liposome clearance.
Plexodox has the potential to both increase the
doxorubicin anti-cancer cell killing while reducing
12
12
EXOPHARM ANNUAL REPORT 2020
EXOPHARM ANNUAL REPORT 2020 REVIEW OF
OPERATIONS
(CONTINUED)
the unwanted side-effects, thereby increasing the therapeutic window. Plexodox testing suggests that rapid
uptake by cancer cells was key to the statistically significant enhancement of potency observed compared to
the drug alone.
The Plexodox evidence is the first to show that existing, off-patent drug can have greater efficacy when
carried as EV cargo. This approach should be extensible to other off-patent drugs and is particularly relevant
to drugs with small therapeutic windows that are limited by their access to protected spaces (such as the
central nervous system) or by their toxicity.
)
%
(
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r
h
t
a
e
d
l
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e
c
r
e
c
n
a
c
g
n
u
L
Plexodox (average loading 0.7µM)
Doxorubicin 0.625µM
100
80
60
40
20
0
Time post treatment (in h)
48h
72h
Our Values and People
Exopharm is a company with big ideas and large ambitions. The Exopharm team has deep technical and
business expertise together with a strong sense of purpose, energy and appetite for change. In 2020,
Exopharm has four values that capture these expectations and spirit.
We are not going to fit in, we
are willing to rock the boat, we
are willing to move quickly and
be noticed, and stand up for
what we believe.
We take responsibility for
getting things done. When we hit
roadblocks or delays, we get help.
We deliver answers.
We are in this together, we
are on a mission and we need
teamwork and loyalty to make
it through.
We are in a special place at
a special time on an amazing
journey, and we celebrate
that.
The Company had 26 employees as of 30 June 2020 (2019: 18 employees).
EXOPHARM ANNUAL REPORT 2020
13
13
EXOPHARM ANNUAL REPORT 2020
SIGNIFICANT EVENTS
DURING THE YEAR
1 AUGUST 2019
The Company issued
11,900,000
fully paid ordinary shares
at $0.37each
pursuant to the Share Placement as
announced on 24 July 2019
to raise $4,403,000
before costs.
28 OCTOBER 2019
The Company appoints
its first Chief Commercial Officer,
Chris Baldwin PhD.
14
14
EXOPHARM ANNUAL REPORT 2020
19 AUGUST 2019
The Company issued
2,972,000
fully paid ordinary shares
at $0.37each
through a Share Purchase
Plan to raise $1,099,640
before costs.
28 JANUARY 2019
First human
dosing of Plexaris
announced
as part of PLEXOVAL I
safety study.
EXOPHARM ANNUAL REPORT 2020 18 MARCH 2020
Exopharm opens
its centralised laboratory
at the Baker Institute
in the Alfred Hospital
Precinct.
25 MAY 2020
The off-patent anti-cancer drug
Doxorubicin
is demonstrated to be more
lethal to lung cancer cells
when delivered
within Plexaris.
1 APRIL 2020
PLEXOVAL I
is suspended due
to COVID-19 events
unrelated to
the study.
12 JUNE 2020
LOAD and EVPS
technologies are added to
Exopharm’s IP position, along
with the announcement of the
Fortrexo COV project.
EXOPHARM ANNUAL REPORT 2020
1515
EXOPHARM ANNUAL REPORT 2020 REVIEW OF
OPERATIONS
(CONTINUED)
Finance and Accounting
The comprehensive loss of the
Company for the financial year, after
providing for income tax amounted
to $5,278,803 (2019: $2,282,874).
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.
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.
Options
No options over issued shares or interests in the
company were granted during or since the end of
the financial year.
Review of financial conditions
The Company has cash in bank of $1,742,920 as at
30 June 2020 (2019: $4,418,955). The Directors are of
the opinion that the Company is a going concern.
Significant events during the year
On 1 August 2019, the Company issued 11,900,000
fully paid ordinary shares at $0.37 each pursuant to
the Placement to raise $4,403,000 (before costs).
On 19 August 2019, the Company issued
2,972,000 fully paid ordinary shares at $0.37 each
to its employees as part of a share purchase plan
amounting to $1,099,640 (before costs).
On 13 September 2019, the Company issued
100,000 fully paid ordinary shares at $0.37 each to
an entity related to a director amounting to $37,000
(before costs).
On 15 June 2020, Ms Sinead Teague was appointed
Company Secretary and Mr David R Parker resigned
from the role of Company Secretary.
Significant events after balance date
There have been no significant events after the
balance date.
Environmental legislation
The Company is not subject to any environmental
legislation requirements other than statutory
legislation.
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 insurance premium paid for FY 2020 was
$140,470 (2019:$108,755).
The Company has paid a 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.
Company Secretary
Ms Sinead Teague is the registered Company
Secretary and has been in office since 15 June 2020.
Proceedings on behalf of the Company
There are no proceedings on behalf of the Company.
Auditor Independence
Section 307C of the Corporations Act 2001 requires
our auditors, William Buck Audit (Vic) Pty Ltd, to
provide the directors of the Company with an
Independence Declaration in relation to the audit of
the annual report. This Independence Declaration
is set out on page 25/insert and forms part of this
directors’ report for the year ended 30 June 2020.
16
16
EXOPHARM ANNUAL REPORT 2020
EXOPHARM ANNUAL REPORT 2020 REMUNERATION
REPORT
(AUDITED)
INTRODUCTION
This report, which form part of the Directors’ report, outlines the remuneration
arrangements in place for the key management personnel (‘KMP’) of Exopharm Limited
for the financial year ended 30 June 2020. The information provided in this remuneration
report has been audited as required by Section 308(3C) of the Corporations Act of 2001.
The remuneration report details the remuneration arrangements for KMP who are defined as those
persons having authority and responsibility for planning, directing and controlling the major activities
of the Company, directly or indirectly, including any Director (whether executive or otherwise) of the
Company.
EXOPHARM ANNUAL REPORT 2020
17
17
EXOPHARM ANNUAL REPORT 2020 REMUNERATION
REPORT (CONTINUED)
Key Management Personnel (KMP)
The KMP of the Company during or since the end of the financial year were as follows:
DIRECTORS
Dr Ian Dixon
Mr David Parker
POSITION
PERIOD OF EMPLOYMENT
(TO PRESENT)
Managing Director & CEO
1 May 2018
Non-Executive Director
& Company Secretary
26 June 2018 – ongoing
26 June 2018 – 15 June 2020
Mr Jason Watson
Non-Executive Chairman
10 August 2018
EXECUTIVES
POSITION
PERIOD OF EMPLOYMENT
(TO PRESENT)
Dr Gregory Lichtfuss
Chief Operating Officer
1 May 2018
Dr Christopher Baldwin
Chief Commercial Officer
25 November 2019
Comments on Remuneration Report at Exopharm’s most recent AGM
There were no comments or questions on the Remuneration Report for Exopharm arising from the 2019 Annual General Meeting.
Remuneration Policy
The Board of Directors is committed to transparent disclosure of its remuneration strategy and this report details the
Company’s remuneration objectives, practices and outcomes for KMP, which includes Directors and senior executives, for the
year ended 30 June 2020. Any reference to ‘Executives’ in this report refers to KMPs who are
not Non-Executive Directors.
Remuneration Policy Framework
The Company’s remuneration policy is to assist the Company to attract and retain key people to assist the development of its
products and entering into partnership transactions. It has been designed to reward key management and employees fairly and
responsibly in accordance with the market in which the Company operates, and to ensure that Exopharm:
•
•
•
•
•
Provides competitive remuneration that attracts, retains and motivates executives and employees;
Benchmarks remuneration against appropriate peer groups;
Provides a level of remuneration structure to reflect each executive’s respective duties and responsibilities;
Aligns executive incentive rewards with the creation of value for shareholders; and
Complies with legal requirements and appropriate standards of governance.
Remuneration Committee
The Board has not implemented a separate Remuneration Committee during the year. Due to the size of
the Company and the fact there are only three directors on the board, this has been the responsibility of the
whole Board.
Remuneration Structure
In accordance with best practice corporate governance, the structure of non-executive Director and executive remuneration is
separate and distinct.
18
EXOPHARM ANNUAL REPORT 2020 REMUNERATION
REPORT (CONTINUED)
Policy for Executive Remuneration
The Company maintains its existing performance management procedures for key management personnel by having each key
manager undertake an annual performance appraisal with the Managing Director based on individual and business performance
expectations and other circumstances. The Chief Executive Officer’s performance is in turn reviewed by the Board of Directors.
The Company’s remuneration policy is to provide a fixed remuneration component and a short-term and
long-term performance-based component. The Board believes that this remuneration policy is appropriate in
aligning executives’ objectives with shareholder and business objectives.
Executive Remuneration consisted of only Fixed and Variable Remuneration during the year.
Remuneration Components
Fixed Remuneration
Fixed remuneration consists of based salaries, as well as employer contributions to superannuation funds and other non-cash
benefits. Fixed remuneration was reviewed by Board of Directors having regard to remuneration paid to executives of relevant
comparable peer group of companies taking into account company and individual performance. The Company sought to position
its fixed remuneration in line with comparably sized ASX listed companies within the same sector. Size is determined by market
capitalisation at the time of comparison.
Executives receive an employer superannuation contribution made into a complying superannuation fund at the required
Superannuation Guarantee rate (Currently 9.5%) of base salary. Executives may receive other benefits including vehicle benefits
and provision of a mobile telephone. During the year no vehicle benefits were provided.
Variable Remuneration
There was variable remuneration for the Executives during the year.
Variable remuneration includes cash bonus’ which are linked to Key Performance Indicators. As at 30 June 2020, only the COO,
CCO and CEO had a cash bonus structure incorporated into their employment contracts.
Policy for and Components of Non-Executive Remuneration
During the Reporting Period
Remuneration Policy
Non-Executive Director Fees
The overall level of annual Non-Executive Director fees was approved by shareholders in accordance with the requirements of the
Company’s Constitution and the Corporations Act. The maximum aggregate pool of Directors’ fees payable to all of the Company’s
Non-Executive Directors is $350,000 per annum. This aggregate amount was approved by shareholders at a General Meeting of
Shareholders 26 June 2018.
Equity Compensation
In accordance with Australian Practice and shareholder preference, the Company’s current policy is not to grant any further
equity-based compensation to Non-Executive Directors. Accordingly, no equity incentives were offered to Non-Executive Directors
in the reporting period to 30 June 2020.
Remuneration Structure
Non-Executive Directors receive a fixed remuneration of base fees plus statutory superannuation.
The Chairman receives $96,000 per annum and the only non-executive Director receives $30,000 per annum, which includes
statutory superannuation. These fees cover main board activities only. Non-Executive Directors may receive additional
remuneration for other services provided to the Company. In addition to these fees, Non-Executive Directors are entitled
to reimbursement of reasonable travel, accommodation and other expenses incurred in attending meetings of the Board,
committee or shareholder meetings whilst engaged by Exopharm. Non-Executive Directors do not earn retirement benefits other
than superannuation and are not entitled to any compensation on termination of their directorships.
19
EXOPHARM ANNUAL REPORT 2020 REMUNERATION
REPORT (CONTINUED)
C.3 Policy for and Components of Non-Executive Remuneration
During the Reporting Period (continued)
The annual Board and committee fees were reviewed during the reporting period to 30 June 2020 and have remained unchanged
since this review. A further review will be conducted in the next financial period in accordance with the annual review of salaries
performed by the Board of Directors.
The current Board and additional committee fee structure for Non-Executive Directors is as per the table below:
BOARD
REMUNERATION COMMITTEE
Chair
96,000
Member
30,000
Chair
-
Member
-
Fees for Non-Executive Directors are not linked to the performance of the Company, however, to align directors’ interests with
shareholder interests, the directors may hold shares in the Company as governed by the Company’s Securities Trading Policy.
Remuneration Governance Including Use of Remuneration Consultants
The Board is responsible for ensuring Exopharm’s remuneration strategy is aligned with Company’s performance and shareholder
interests and is equitable for participants. The Board is responsible for reviewing and making decisions on remunerations matters.
20
EXOPHARM ANNUAL REPORT 2020 REMUNERATION
REPORT (CONTINUED)
Employment Contracts
As of the date of this report, remuneration and other terms of employment of Directors and Other Key Management
Personnel are formalised in employment contracts and service agreements. The major provisions of the agreements related to
remuneration are set out below (amounts below include statutory superannuation):
EXECUTIVE
DIRECTORS
Dr Ian Dixon
BASE SALARY/FEE
TERMS OF AGREEMENT NOTICE PERIOD
Base Remuneration:
$280,000 per annum
(including Super) from 1st December 2019
Bonus Remuneration:
• Annual Bonus 1:
At-risk annual Cash bonus for first 12 months of
up to $80,000 (inclusive of Superannuation) based
on achievement of key performance indicators
(KPIs) monitored by the board; and
• Annual Bonus 2:
At-risk annual Share bonus for first 12 months of
up to 200,000 shares (FPO) (issued to employee
with no further tax or other charges owing
[i.e. after tax]) based on achievement of KPIs to
be monitored by the board.
$220,000 per annum (including Super) from
30 November 2018
Commencement date:
1 December 2019
6 months in writing
by either party.
Other Clauses:
Other clauses as
per Exopharm’s
standard employment
agreement.
Employment type:
Ongoing standard
employment agreement
based on 0.8 full time
equivalent
Role Title:
Managing Director and
Chief Executive Officer
Prior agreement
Commencement date:
1 May 2018 for a
maximum term of 2 years
unless extended by mutual
agreement
NON-EXECUTIVE
DIRECTORS
BASE SALARY/FEE
Mr David Parker
$30,000 per annum (inc Super)
TERMS OF AGREEMENT NOTICE PERIOD
Commencement date:
26 June 2018
Mr Jason
Watson
$96,000 per annum (inc Super)
Commencement date:
10 August 2018
OTHER KMP
BASE SALARY/FEE
TERMS OF AGREEMENT NOTICE PERIOD
Dr Gregor
Lichtfuss
$159,432 per annum (including Super) from
1 July 2019 plus a cash bonus of $10,000 on
certain performance criteria;
$219,788.40 per annuum (including Super)
from 1 December 2019
Commencement date:
1 May 2018
3 months in writing by
either party
Dr Christopher
Baldwin
Bonus Remuneration:
$330,000 per annum (including Super), from
25 November 2019
Commencement date:
25 November 2019
Bonus Remuneration:
• Annual Bonus 1: At-risk annual Cash bonus of
up to $33,000 (inclusive of Superannuation) based
on KPIs to be set; and
• Annual Bonus 2:
At-risk annual Share bonus for first 12 months
for the smaller of 75,000 shares (FPO) or $75,000
(inclusive of Superannuation) based on KPIs to be
set.
Upon written advice
of intention or in
accordance with
the Constitution of
the Company or the
Corporations Act 2001
Upon written advice
of intention or in
accordance with
the Constitution of
the Company or the
Corporations Act 2001
Other Clauses:
Other clauses as
per Exopharm’s
standard employment
agreement.
3 Months in writing by
either party
Other Clauses:
Other clauses as
per Exopharm’s
standard employment
agreement.
21
EXOPHARM ANNUAL REPORT 2020 REMUNERATION
REPORT (CONTINUED)
Remuneration of KMP
Details of the nature and amount of each element of the emoluments received by or payable to each of the KMP of Exopharm
Limited for the financial years specified are as follows:
2020
Directors
Mr Jason Watson
Dr Ian Dixon
Mr David Parker
Other KMP
Dr Gregor Lichtfuss
Dr Christopher Baldwin
SHORT-TERM BENEFITS
SALARY
& FEES
$
BONUS
PAYMENTS
$
SUPER-
ANNUATION
$
SHARE-BASED
PAYMENTS
$
87,671
232,877
27,397
177,795
182,137
731,327
-
-
-
32,583
-
9,133
8,329
22,123
2,603
19,986
17,303
70,344
-
-
-
-
-
-
TOTAL
$
96,000
255,000
30,000
230,364
199,440
810,804
Mr Jason Watson & Mr David Parker: No Bonus component to remuneration, i.e. Nil Bonus forfeited (0%) and Nil bonus paid (0%).
Dr Ian Dixon and Dr Christopher Baldwin: Both have Bonus component as part of their remuneration, however nil bonus was
paid during the year (0%) and Nil bonus forfeited (0%). Bonus component for both employees are due to be reviewed annually,
i.e. before November 2020.
Dr Gregor Lichtfuss: Bonus paid during the year was 100% of potential Bonus with Nil bonus was forfeited (0%).
2019
Directors
Mr Jason Watson
Dr Ian Dixon
Mr David Parker
Other KMP
Dr Gregor Lichtfuss
SHORT-TERM BENEFITS
SALARY
& FEES
$
BONUS
PAYMENTS
$
SUPER-
ANNUATION
$
SHARE-BASED
PAYMENTS
$
78,244
180,764
27,397
135,164
421,570
-
-
-
-
-
7,433
17,173
2,603
12,841
40,049
-
-
-
-
-
TOTAL
$
85,677
197,937
30,000
148,005
461,619
Bonus Paid or forfeited: Nil bonus was paid (0%) and Nil bonus were forfeited (0%) by any KMP for the 2019 year.
No member of key management personnel appointed during the period received a payment as part of his or her consideration
for agreeing to hold the position.
Other disclosure:
The Company is a pre-revenue biotechnology company and expects to generate negative earnings until such time as the company
can either outlicense its technologies/products or take the products to registration (either on it’s own or with a partner) and to
the point of sales. Negative earnings for pre-revenue biotechnology companies is common and we don’t expect this to affect
shareholder wealth.
22
EXOPHARM ANNUAL REPORT 2020 REMUNERATION
REPORT (CONTINUED)
KEY MANAGEMENT PERSONNEL EQUITY HOLDINGS
FULLY PAID ORDINARY SHARES
BALANCE
AT
BEGINNING
OF YEAR
NUMBER
GRANTED
AS
COMPEN-
SATION
NUMBER
RECEIVED
ON
EXERCISE
OF OPTIONS
NUMBER
NET
CHANGE –
OTHER
NUMBER
BALANCE
AT END OF
YEAR
NUMBER
BALANCE
HELD
NOMINALLY
NUMBER
27,935,294
1,072,200
150,000
588,235
-
-
-
-
-
-
-
-
-
-
-
40,000
20,000
140,000
27,975,294
1,092,200
290,000
27,975,294
1,092,200
290,000
40,000
628,235
628,235
-
-
-
KEY MANAGEMENT PERSONNEL EQUITY HOLDINGS
FULLY PAID ORDINARY SHARES
BALANCE
AT
BEGINNING
OF YEAR
NUMBER
GRANTED
AS
COMPEN-
SATION
NUMBER
RECEIVED
ON
EXERCISE
OF OPTIONS
NUMBER
NET
CHANGE –
OTHER
NUMBER
BALANCE
AT END OF
YEAR
NUMBER
BALANCE
HELD
NOMINALLY
NUMBER
96,000
-
-
-
-
-
-
-
-
-
-
-
27,839,294
390,000
-
27,935,294
390,000
-
27,935,294
390,000
-
588,235
588,235
588,235
30 JUNE 2020
Directors
Dr Ian Dixon
Mr David Parker
Mr Jason Watson
Other KMP
Dr Gregor Lichtfuss
Dr Christopher Baldwin
30 JUNE 2019
Directors
Dr Ian Dixon
Mr David Parker
Mr Jason Watson
Other KMP
Dr Gregor Lichtfuss
Directors’ Meetings
The number of resolutions passed by the Directors during the year as shown by the number of meetings attended was as follows:
Director
Mr Jason Watson
Dr Ian Dixon
Mr David Parker
DIRECTOR / BOARD MEETINGS
Attended
Eligible to Attend
9
9
9
9
9
9
In addition to the above board meetings, 11 circular resolutions of the Board of Directors were passed.
Signed in accordance with a resolution of the directors.
Dr Ian Dixon
Managing Director
Exopharm Limited
23
EXOPHARM ANNUAL REPORT 2020
INDEPENDENT AUDITOR’S
DECLARATION
AUDITOR’S INDEPENDENCE DECLARATION UNDER SECTION 307C
OF THE CORPORATIONS ACT 2001 TO THE DIRECTORS OF
AUDITOR’S INDEPENDENCE DECLARATION UNDER SECTION 307C
EXOPHARM LIMITED
OF THE CORPORATIONS ACT 2001 TO THE DIRECTORS OF
EXOPHARM LIMITED
AUDITOR’S INDEPENDENCE DECLARATION UNDER SECTION 307C
OF THE CORPORATIONS ACT 2001 TO THE DIRECTORS OF
EXOPHARM LIMITED
I declare that, to the best of my knowledge and belief during the year ended 30 June 2020
there have been:
I declare that, to the best of my knowledge and belief during the year ended 30 June 2020
there have been:
— no contraventions of the auditor independence requirements as set out in the
— no contraventions of the auditor independence requirements as set out in the
I declare that, to the best of my knowledge and belief during the year ended 30 June 2020
there have been:
Corporations Act 2001 in relation to the audit; and
— no contraventions of the auditor independence requirements as set out in the
Corporations Act 2001 in relation to the audit; and
— no contraventions of any applicable code of professional conduct in relation to the
— no contraventions of any applicable code of professional conduct in relation to the
Corporations Act 2001 in relation to the audit; and
audit.
— no contraventions of any applicable code of professional conduct in relation to the
audit.
audit.
William Buck Audit (Vic) Pty Ltd
ABN 59 116 151 136
William Buck Audit (Vic) Pty Ltd
ABN 59 116 151 136
William Buck Audit (Vic) Pty Ltd
ABN 59 116 151 136
J.C. Luckins
Director
J.C. Luckins
Director
Dated 26th August 2020
Dated 26th August 2020
J.C. Luckins
Director
Dated 26th August 2020
24
EXOPHARM ANNUAL REPORT 2020
STATEMENT OF
COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2020
Note
2020
$
Other Income
ATO income
Interest income
Expenses
Employee costs
Research and development
Corporate & Administration 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
Loss attributable to members of the Company
Basic and diluted loss per share (cents per share)
The accompanying notes form part of these financial statements.
3
4
4
5
7
2019
$
-
28,789
(1,048,672)
(606,732)
(656,261)
(2,282,874)
-
2,665,473
60,580
(3,134,273)
(2,980,449)
(1,890,134)
(5,278,803)
-
(5,278,803)
(2,282,874)
-
-
(5,278,803)
(2,282,874)
(5,278,803)
(2,282,874)
(5.62)
(4.03)
25
EXOPHARM ANNUAL REPORT 2020 STATEMENT OF
FINANCIAL POSITION
AS AT 30 JUNE 2020
Assets
Current Assets
Cash and cash equivalents
Other current assets
Total Current Assets
Non-current Assets
Plant and equipment
Right-of-use assets
Security deposits
Intangible assets
Other non-current assets
Total Non-current Assets
Total Assets
Liabilities
Current Liabilities
Accounts payable and other current liabilities
Lease liability
Total Current Liabilities
Non-current Liabilities
Lease liability
Total Non-current Liabilities
Total Liabilities
Net Assets
Equity
Issued capital
Accumulated losses
Total Equity
The accompanying notes form part of these financial statements.
26
Note
2020
$
2019
$
8
9
10
11
11
12
13
14
14
1,742,920
2,315,776
4,058,696
911,689
929,267
277,791
325,000
40,000-
2,483,747
6,542,443
612,252
309,132
921,384
603,741
603,741
1,525,125
5,017,318
6
12,755,619
(7,738,301)
5,017,318
4,418,955
162,508
4,581,463
494,122
-
-
325,000
-
819,122
5,400,585
281,002
-
281,002
-
-
281,002
5,119,583
7,578,815
(2,459,232)
5,119,583
EXOPHARM ANNUAL REPORT 2020 STATEMENT OF
CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2020
Balance as at 1 July 2018
Loss for the year, as reported
Other comprehensive income, net of income tax
Total comprehensive loss for the year, as restated
Shares issued during the year (net of share issue costs)
Balance as at 30 June 2019
Balance as at 1 July 2019, as reported
Adjustment on initial application of new accounting
standards (Note 1)
Balance as at 1 July 2019, as restated
Loss for the year
Other comprehensive income, net of income tax
Total comprehensive loss for the year
ISSUED CAPITAL
$
169,090
-
-
-
7,409,725
7,578,815
ISSUED CAPITAL
$
7,578,815
-
7,578,815
-
-
-
Shares issued during the year (net of share issue costs)
5,176,804
Balance as at 30 June 2020
12,755,619
(7,738,301)
The accompanying notes form part of these financial statements.
ACCUMULATED
LOSSES
$
(176,358)
(2,282,874)
-
TOTAL EQUITY
$
(7,268)
(2,282,874)
-
(2,282,874)
(2,282,874)
-
(2,459,232)
7,409,725
5,119,583
ACCUMULATED
LOSSES
$
(2,459,232)
(266)
(2,459,498)
(5,278,803)
-
(5,278,803)
-
TOTAL EQUITY
$
5,119,583
(266)
5,119,317
(5,278,803)
-
(5,278,803)
5,176,804
5,017,318
27
EXOPHARM ANNUAL REPORT 2020 Note
2020
$
2019
$
(7,311,818)
(2,213,308)
504,582
60,580
50,000
-
28,789
-
7
(6,696,656)
(2,184,519)
(631,802)
(277,791)
(40,000)
-
(949,593)
5,176,804
(184,846)
(21,744)
4,970,214
(2,676,035)
4,418,955
1,742,920
(533,652)
-
-
(325,000)
(858,652)
7,409,725
-
-
7,409,725
4,366,554
52,401
4,418,955
STATEMENT OF
CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2020
Cash flows from operating activities
Payments to suppliers and employees
Research and development refund received
Interest received
Proceeds from ATO cashflow boost
Net cash (used in) operating activities
Cash flows from investing activities
Purchase of plant and equipment
Security deposits paid
Advances to employee
Additions to intangible asset
Net cash (used in) investing activities
Cash flows from financing activities
Proceeds from issue of shares – net of issue costs
Repayment of lease liability
Finance costs paid
Net cash provided by financing activities
Net (decrease)/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
7
The accompanying notes form part of these financial statements.
28
EXOPHARM ANNUAL REPORT 2020 INDEX TO THE NOTES
TO THE FINANCIAL STATEMENTS
1.
STATEMENT OF SIGNIFICANT
ACCOUNTING POLICIES
2. SEGMENT REPORTING
3. ATO INCOME
4. EXPENSES
5.
INCOME TAX
6.
ISSUED CAPITAL
7. LOSS PER SHARE
8. CASH AND CASH EQUIVALENTS
9. OTHER CURRENT ASSETS
10. PLANT AND EQUIPMENT
11. RIGHT-OF-USE ASSETS
12. INTANGIBLE ASSETS
13. ACCOUNTS PAYABLE AND
OTHER CURRENT LIABILITIES
14. LEASE LIABILITIES
15. FINANCIAL INSTRUMENTS
16. RELATED PARTY DISCLOSURES
17. AUDITORS’ REMUNERATION
18. EVENTS AFTER THE BALANCE DATE
19. DIVIDENDS
20. COMMITMENTS AND CONTINGENCIES
DIRECTORS’ DECLARATION
ADDITIONAL SECURITIES INFORMATION
30
37
37
37
38
39
39
40
41
41
42
42
44
44
45
47
48
48
48
48
49
54
EXOPHARM ANNUAL REPORT 2020
29
29
EXOPHARM ANNUAL REPORT 2020 NOTES TO THE
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 1: STATEMENT OF
SIGNIFICANT ACCOUNTING POLICIES
(a) Basis of Preparation
These general purpose financial statements have been prepared in accordance with Australian Accounting Standards and
Interpretations issued by the Australian Accounting Standards Board (‘AASB’) and the Corporations Act 2001, as appropriate for
for-profit oriented entities. These financial statements also comply with International Financial Reporting Standards as issued by
the International Accounting Standards Board (‘IASB’).
The financial statements comprise the financial statements of the Company. For the purposes of preparing the financial
statements, the Company is a for-profit entity.
The accounting policies detailed below have been consistently applied to all of the years presented unless otherwise stated.
The financial statements are for Exopharm Limited. Exopharm Limited does not have any subsidiaries.
The financial report has also been prepared on a historical cost basis. Historical cost is based on the fair values of the
consideration given in exchange for goods and services.
The financial report is presented in Australian dollars.
The Company is a listed public company, incorporated in and operating in Australia. The principal activity of the Company during
the year was investment in biopharmaceutical drug development.
(b) Adoption of new and revised standards
Changes in accounting policies on initial application of Accounting Standards
In the year ended 30 June 2020, the Board has reviewed all new and revised standards and interpretations issued by the AASB.
The Company has applied AASB 16 from 1 July 2019 using the modified retrospective approach with no restatement of
comparative information. The impact on the accounting policies, financial performance and financial position of the Company
from the adoption of AASB 16 are detailed in Note 1, (s) New Standard Adopted.
The Board has also reviewed all new Standards and Interpretations that have been issued but are not yet effective for the year
ended 30 June 2020. 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) Statement of compliance
The financial report was authorised for issue on INSERT August 2020. The financial report complies with Australian Accounting
Standards, (AAS). Compliance with AAS ensures that the financial report, comprising the financial statements and notes thereto,
complies with International Financial Reporting Standards (IFRS).
(d) 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 of plant and equipment of intangible assets
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.
Revenue recognition for R&D income
Revenue for R&D income has been recognised in the year that the income relates to, however actual receipt of the R&D Grant
funds do not occur until after the Balance Date. While the R&D income is based on lodged submissions and expected revenue,
there is however some uncertainty relating to the final receipt and R&D income, as final income is subject to ATO finalisation and
30
EXOPHARM ANNUAL REPORT 2020 NOTES TO THE
FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2020
Revenue recognition for R&D income (continued)
payment between three to nine months following the balance date and as at the date of this report the FY2020 R&D income has
not yet been receipted.
(e) Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision
maker. The chief operating decision maker, who is responsible for allocating resources and assessing performance of the
operating segments, has been identified as the board of Directors of Exopharm.
(f) Foreign currency translation
Both the functional and presentation currency of Exopharm is Australian dollars.
Transactions in foreign currencies are initially recorded in the functional currency by applying the exchange rates ruling at
the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the rate of
exchange ruling at the balance date. All exchange differences in the financial report are taken to profit or loss with the exception
of differences on foreign currency borrowings that provide a hedge against a net investment in a foreign entity. These are taken
directly to equity until the disposal of the net investment, at which time they are recognised in profit or loss.
Tax charges and credits attributable to exchange differences on those borrowings are also recognised in equity.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate as
at the date of the initial transaction.
Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair
value was determined. Translation differences on assets and liabilities carried at fair value are reported as part of the fair value
gain or loss.
(g) Other Income
Interest income
Interest income is recognised as interest accrues using the effective interest method. This is a method of calculating the amortised
cost of a financial asset and allocating the interest income over the relevant period using the effective interest rate, which is
the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the net carrying
amount of the financial asset.
Research and Development Refund
Income from a research and development refund as a financial asset is recognised when it is probable that the grant will be
received, which is determined in reference to when a refund has been verified by a suitably qualified third party and lodged with
the Australian Taxation Office. No estimates of any potential research and development refunds or grants are recognised until
such time as they are probable.
ATO Cash Boost Income
Income received from the Australian Taxation Office as a cash boost has been recognised as revenue in the
relevant year.
(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 tax assets and deferred tax liabilities are 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.
31
EXOPHARM ANNUAL REPORT 2020 NOTES TO THE
FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2020
(h) Income tax (continued)
Deferred tax liabilities are recognised for all taxable temporary differences except:
•
•
when the deferred 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
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.
Deferred 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:
•
•
when the deferred 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
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 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 tax asset to be utilised.
Unrecognised deferred 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 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:
•
•
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
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.
(j) Impairment of tangible and 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.
32
EXOPHARM ANNUAL REPORT 2020 NOTES TO THE
FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2020
(j) Impairment of tangible and intangible assets other than goodwill (continued)
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) 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.
(l) Trade and other receivables
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest
method, less provisions for impairment, doubtful debts and rebates. Trade receivables are generally due for settlement within
30 – 90 days.
In relation to the financial assets carried at amortised cost, AASB 9 requires an expected credit loss model to be applied. The
expected credit loss model requires the Company to account for expected credit losses and changes in those expected credit
losses at each reporting date to reflect changes in credit risk since initial recognition of the financial asset. AASB 9 requires
the Company to measure the loss allowance at an amount equal to lifetime expected credit loss (‘ECL’) if the credit risk on the
instrument has increased significantly since initial recognition. If the credit risk on the financial instrument has not increased
significantly since initial recognition the Company is required to measure the loss allowance for that financial instrument at an
amount equal to the ECL within the next 12 months.
The amount of the impairment loss is recognised in the Statement of Profit or Loss and Other 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 Profit or Loss and Other Comprehensive Income.
(m) Plant and equipment
Plant and equipment is stated at cost less accumulated depreciation and any accumulated impairment losses.
Such cost includes the cost of replacing parts that are eligible for capitalisation when the cost of replacing the parts is incurred.
Similarly, when each major inspection is performed, its cost is recognised in the carrying amount of the plant and equipment as a
replacement only if it is eligible for capitalisation.
Depreciation is calculated on diminishing value basis using the following useful lives:
Plant equipment
Office equipment
Computer equipment
3 to 10 years
3 years
3 years
The assets’ residual values, useful lives and amortisation methods are reviewed, and adjusted if appropriate, at each financial
year end.
Impairment
The carrying values of plant and equipment are reviewed for impairment at each reporting date, with recoverable amount being
estimated when events or changes in circumstances indicate that the carrying value may be impaired. The recoverable amount of
plant and equipment is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future
33
EXOPHARM ANNUAL REPORT 2020 NOTES TO THE
FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2020
Impairment (continued)
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 an asset that does not generate largely independent cash inflows,
recoverable amount is determined for the cash-generating unit to which the asset belongs, unless the asset’s value in use can be
estimated to approximate fair value. An impairment exists when the carrying value of an asset or cash-generating unit exceeds its
estimated recoverable amount. The asset or cash-generating unit is then written down to its recoverable amount. For plant and
equipment, impairment losses are recognised in the statement of comprehensive income in the cost of sales line item.
Derecognition and disposal
An item of plant and equipment is derecognised upon disposal or when no further future economic benefits are expected from
its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal
proceeds and the carrying amount of the asset) is included in profit or loss in the year the asset is derecognised.
(n) Intangible assets
Intangible assets acquired separately
Intangible assets acquired separately are recorded at cost and less accumulated amortisation once the IP asset
is ready for use and/or impairment as required. Amortisation is charged on a straight-line basis over their
estimated useful lives, amortisation starts following the grant of a patent and assets are held at cost until such time as the patent
has been granted or impaired. At this point in time no IP assets or patents have been granted.
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:
•
•
•
•
•
•
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.
The following useful lives are used in the calculation of amortisation:
IP asset
8 years following grant of patent
(o) 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.
(p) 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
34
EXOPHARM ANNUAL REPORT 2020
NOTES TO THE
FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2020
(p) Provisions (continued)
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.
(q) 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.
(r) Loss per share
Basic loss per share is calculated as net loss attributable to members of the Company, adjusted to exclude any costs of servicing
equity (other than dividends) and preference share dividends, divided by the weighted average number of ordinary shares,
adjusted for any bonus element.
Diluted loss per share is calculated as net loss attributable to members of the Company, adjusted for:
•
•
•
costs of servicing equity (other than dividends) and preference share dividends;
the after-tax effect of dividends and interest associated with dilutive potential ordinary shares that have been recognised as
expenses; and
other non-discretionary changes in revenues or expenses during the period that would result from the dilution of potential
ordinary shares; divided by the weighted average number of ordinary shares and dilutive potential ordinary shares, adjusted
for any bonus element.
(s) New Standard adopted
AASB 16 Leases
Change in accounting policy
AASB 16 Leases supersedes AASB 117 Leases. The Company has adopted AASB 16 from 1 July 2019 which has resulted in
changes in the classification, measurement and recognition of leases. The changes result in almost all leases where the Company
is the lessee being recognised on the Statement of Financial Position and removes the former distinction between ‘operating
and ‘finance’ leases. The new standard requires recognition of a right-of-use asset (the leased item) and a financial liability (to pay
rentals). The exceptions are short-term leases and leases of low value assets.
The Company has adopted AASB 16 using the modified retrospective approach under which the reclassifications and the
adjustments arising from the new leasing rules are recognised in the opening Statement of Financial Position on 1 July 2019.
Under this approach, there is an initial impact of $266 on accumulated losses under this approach, and comparatives have not
been restated.
The Company leases various premises. Prior to 1 July 2019, leases were classified as operating leases. Payments made under
operating leases were charged to profit or loss on a straight-line basis over the period of the lease.
From 1 July 2019, where the Company is a lessee, the Company recognises a right-of-use asset and a corresponding liability at
the date which the lease asset is available for use by the Company (i.e. commencement date). Each lease payment is allocated
between the liability and the finance cost. The finance cost is charged to profit or loss over the lease period so as to produce a
consistent period rate of interest on the remaining balance of the liability for each period.
The lease liability is initially measured at the present value of the lease payments that are not paid at commencement date,
discounted using the rate implied in the lease. If this rate is not readily determinable, the Company uses its incremental
borrowing rate.
Lease payments included in the initial measurement if the lease liability consist of:
•
•
Fixed lease payments less any lease incentives receivable;
Variable lease payments that depend on an index or rate, initially measured using the index or rate at commencement date;
35
EXOPHARM ANNUAL REPORT 2020 NOTES TO THE
FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2020
(s) New Standard adopted (continued)
• Any amounts expected to be payable by the Company under residual value guarantees;
•
•
The exercise price pf purchase options, if the Company is reasonably certain to exercise the options; and
Termination penalties of the lease term reflects the exercise of an option to terminate the lease.
Extension options are included in a number of property leases across the Company. In determining the lease term, management
considers all facts and circumstances that create an economic incentive to exercise an extension option. Extension options are
only included in the lease term if, at commencement date, it is reasonably certain that the options will be exercised.
Subsequent to initial recognition, the lease liability is measured by increasing the carrying amount to reflect
interest on the lease liability (using the effective interest method) and by reducing the carrying amount to
reflect the lease payments made. The lease liability is remeasured (with a corresponding adjustment to the right-of-use asset)
whenever there us a change in the lease term (including assessments relating to extension and termination options), lease
payments due to changes in an index or rate, or expected payments under guaranteed residual values
Right-of-use assets comprise the initial measurement of the corresponding lease liability, lease payments made at or before
commencement date, less any lease incentives received and any initial direct costs. These right-of-use assets are subsequently
measured at cost less accumulated depreciation and impairment losses.
Where the terms of a lease require the Company to restore the underlying asset, or the Company has an obligation to dismantle
and remove a leased asset, a provision is recognised and measured in accordance with AASB 137.
To the extent that the costs relate to a right-of-use asset, the costs are included in the related right-of-use asset.
Right-of-use assets are depreciated on a straight-line basis over the term of the lease (or the useful life of the leased asset if this is
shorter). Depreciation starts on commencement date of the lease.
Where leases have a term of less than 12 months or relate to low value assets, the Company has applied the optional exemptions
to not capitalise these leases and instead account for the lease expense on a straight-line basis over the lease term. The expense
and commitments to these leases are disclosed in Note 20 to the
financial statements.
Impact on adoption of AASB 16
On adoption of AASB 16, the Company recognised lease liabilities in relation to leases which had previously been classified as
operating leases under the principles of AASB 117. These liabilities were measured at the present
value of the remaining lease payments, discounted using the lessee’s incremental borrowing rate as of 1 July 2019. The weighted
average lessee’s incremental borrowing rate applied to lease liabilities on 1 July 2019 was 5%.
On initial application right-of-use assets were measured at the amount equal to the lease liability, adjusted by the amount of any
prepaid or accrued lease payments relating to that lease recognised ln the Statement of Financial Position as at 30 June 2019.
In the Statement of Cash Flows, the Company has recognised cash payments for the principal portion of the
lease liability within financing activities, cash payments for the interest portion of the lease liability as interest paid within operating
activities and short-term lease payments and payments for lease of low-value assets within operating activities.
The adoption of AASB 16 resulted in the recognition of right-of-use assets of $18,305 and lease liabilities of
$18,571 in respect of all operating leases, other than short-term leases and leases of low-value assets. The net impact on retained
earnings on 1 July 2019 was $266.
Practical expedients applied
In applying AASB 16 for the first time, the Company has used the following practical expedients permitted by
the standard:
For existing contracts as at 1 July 2019, the Company has elected to apply the definition of lease contained in AASB 117 and
Interpretation 4 and has not applied AASB 16 to contracts that were previously not identified as leases under AASB 117 and
Interpretation 4;
Accounting for operating leases ending within 12 months of application date as at 1 July 2019 as short-term leases, with no
right-of-use asset nor lease liability recognised;
Relying on historic assessments of whether leases were onerous instead of performing impairment reviews of right-of-use
assets immediately prior to the date of initial application of AASB 16;
Using hindsight in determining the lease term where the contract contains options to extend or terminate
the lease.
•
•
•
•
36
EXOPHARM ANNUAL REPORT 2020 NOTES TO THE
FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2020
Short term leases
The Company also has a number of short-term leases and has applied the optional exemption to not capitalise these leases
and instead accounted for the lease expense on a straight-line basis over the lease term. These short-term leases are seen as a
contingent liability and disclosed in the Commitments and Contingency note.
NOTE 2: SEGMENT REPORTING
The Company only operated in one segment, being investment in research and development of
biopharmaceutical drugs.
NOTE 3: ATO INCOME
Research and development refund receivable
Research and development refund received
Cash flow boost
NOTE 4: EXPENSES
4.1 Research and development
Research costs and expenses
Depreciation of plant and equipment
Depreciation of right-of-use assets
Intellectual property expenses
4.2 Administrative expenses
Corporate expenses
Professional and consulting fees
Insurance
Business development and marketing
Subscriptions
Depreciation of plant and equipment
Other administrative expenses
2020
$
2,110,891
504,582
50,000
2,665,473
2020
$
2,349,601
193,043
168,187
269,618
2,980,449
919,204
211,135
137,153
137,905
104,943
21,192
358,602
1,890,134
2019
$
-
-
-
-
2019
$
501,165
52,089
-
53,478
606,732
179,110
135,912
66,684
-
24,969
7,919
241,667
656,261
37
EXOPHARM ANNUAL REPORT 2020 NOTES TO THE
FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 5: INCOME TAX
(a) Income tax benefit
(b) Numerical reconciliation between tax-expense and pre-tax net loss
(Loss) from ordinary activities
Income tax (benefit) using the Company’s domestic tax rate of 30%
(2019: 27.5%)
Temporary differences not recognised
Current period (loss) for which no deferred tax asset was recognised
Income tax benefit attributable to entity
(c) Unrecognised deferred tax
Tax losses for which no deferred tax asset has
been recognised
Losses available for offset against future taxable income
Total
Potential tax benefits at 27.5% (2019: 27.5%)
2020
$
-
(5,268,223)
(1,580,467)
-
(1,580,467)
-
2020
$
3,693,748
3,693,748
1,108,124
2019
$
-
(2,282,874)
(627,790)
-
627,790
-
2019
$
2,457,471
2,457,471
675,804
The benefit of deferred tax assets not brought to account will only be brought to account if:
•
•
•
future assessable income is derived of a nature and of an amount sufficient to enable the benefit to
be realised;
the conditions for deductibility imposed by tax legislation continue to be complied with; and
no changes in tax legislation adversely affect the Company in realising the benefit.
38
EXOPHARM ANNUAL REPORT 2020 NOTES TO THE
FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 6: ISSUED CAPITAL
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 through Placement
Balance at end of year
2020
$
2019
$
7,578,815
5,539,640
(362,836)
12,755,619
No
80,500,000
14,972,000
95,472,000
169,090
8,200,000
(790,275)
7,578,815
No
35,500,000
45,000,000
80,500,000
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 7: LOSS PER SHARE
Basic and diluted loss per share (cents per share)
(5.62)
(4.03)
Loss
Losses used in the calculation of basic and diluted loss per share is as follows:
30 JUNE 2020
CENTS PER SHARE
30 JUNE 2019
CENTS PER SHARE
Losses
30 JUNE 2020
$
30 JUNE 2019
$
(5,278,803)
(2,282,874)
Weighted average number of ordinary shares
The weighted average number of ordinary shares used in the calculation of basic and diluted loss per share is
as follows:
Weighted average number of ordinary shares for the purpose of basic
and diluted loss per share
30 JUNE 2020
NUMBER
30 JUNE 2019
NUMBER
94,005,060
56,710,951
39
EXOPHARM ANNUAL REPORT 2020 NOTES TO THE
FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 8: 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
Short term deposit
2020
$
1,242,920
500,000
1,742,920
2019
$
1,918,955
2,500,000
4,418,955
Term deposits are taken for periods between one and three months, depending on the immediate cash requirements of the
Company, and earn interest at the respective short-term deposit rates.
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
Finance costs paid classified in financing activities
Changes in assets and liabilities
Other current assets
Accounts payable and accruals
2020
$
2019
$
(5,278,803)
(2,282,874)
382,421
(2,110,891)
21,744
(42,377)
331,249
60,008
-
-
(27,128)
65,475
Net cash outflow from operating activities
(6,696,656)
(2,184,519)
40
EXOPHARM ANNUAL REPORT 2020 NOTES TO THE
FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 9: OTHER CURRENT ASSETS
Research and development refund claim
GST receivable
Advances to suppliers
Other receivables
Prepayments
2020
$
2,110,891
57,324
20,032
14,197
113,332
2,315,776
NOTE 10: PLANT AND EQUIPMENT
PLANT
EQUIPMENT
$
COMPUTER
EQUIPMENT
$
OFFICE
EQUIPMENT
$
Balance at 1 July 2019
Additions
Depreciation charge for the
year
438,467
631,802
(193,044)
Balance at 30 June 2020
877,225
Balance at 1 July 2018
Additions
Depreciation charge for the
year
20,478
470,078
(52,089)
Balance at 30 June 2019
438,467
43,873
-
(16,654)
27,219
-
49,962
(6,089)
43,873
11,782
-
(4,537)
7,245
-
13,612
(1,830)
11,782
2019
$
-
36,209
-
14,925
111,374
162,508
TOTAL
$
494,122
631,802
(214,235)
911,689
20,478
533,652
(60,008)
494,122
41
EXOPHARM ANNUAL REPORT 2020 NOTES TO THE
FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 11: RIGHT-OF-USE ASSETS
Carrying value
Cost
Accumulated depreciation
Carrying value as at 30 June 2020
Reconciliation
Recognised on 1 July 2019 on adoption of AASB 16
Lease inception
Depreciation
Carrying value as at 30 June 2020
2020
$
1,097,454
(168,187)
929,267
18,305
1,079,149
(168,187)
929,267
2019
$
-
-
-
-
-
-
-
AASB 16 has been adopted during the period, refer note s for details. There are no indicators of impairment of Right-of-use assets
as at 30 June 2020.
Right-of-use assets relates to laboratory and corporate offices facilities leased by the Company. A Security deposit amounting to
$277,791 was paid as security for the facilities during the year ended 30 June 2020. This security deposit relates to the Companies
major lease commitments at The Baker, Melbourne. This lease is disclosed in the accounts as a Lease Liability. The Lease runs
for an initial three year period and has annual rent of circa $277,000 and associated outgoings of less than $100,000 per annum.
The facility is used by the Company’s research and development team and has extensive laboratory facilities that are used to run
experiments, maintain cultures and execute the development program.
NOTE 12: INTANGIBLE ASSETS
IP ASSET
325,000
325,000
-
-
325,000
325,000
LICENSE ASSET
$
-
-
175,000
(175,000)
-
-
Balance at 1 July 2019
Balance at 30 June 2020
Balance at 1 July 2018
Terminated/Cancelled
Additions
Balance at 30 June 2019
42
EXOPHARM ANNUAL REPORT 2020 NOTES TO THE
FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 12: INTANGIBLE ASSETS (continued)
On 5 October 2018, the Company and Altnia (Licensor) signed an Intellectual Property Assignment and License Termination Deed
(the ‘Deed’). Altnia has agreed to assign and the Company agreed to accept the assignment of, all of Altnia’s rights, titles, estate and
interest in the Assignment Rights. Assignment rights includes patents, documentation, confidential material, know-how, inventions
and for avoidance of doubt, all Intellectual Property Rights in the LEAP Technology, including:
a.
LEAP Ligand know-how and rights of use;
b. All current and future applications of the LEAP Ligand; and
c. Other technologies and discoveries made that are associated with the LEAP process.
In addition, Altnia and the Company agreed to terminate the License Agreement above subject to and in accordance with the
terms and conditions of the Deed.
As consideration for the assignment of the Assignment Rights, Exopharm must:
a.
b.
grant royalties to Altnia; and
provide the Reimbursement Payments to Altnia in accordance with Clause 7 of the Deed.
Clause 7 of the Deed, mandates that Exopharm must pay to Altnia the Reimbursement Payments, as partial reimbursement of the
costs incurred by Altnia in developing and protecting the Assignment Rights, as follows:
a.
b.
c.
d.
$75,000 on or before 1 September 2018 (Initial Reimbursement Payment); and
$250,000 within 7 business days on which each of the following have been satisfied:
ASX notifies Exopharm that it has decided to admit Exopharm to the official list of ASX and to quote its securities, subject
to the satisfaction of certain conditions precedent (Decision Letter); and
The Exopharm Board resolves to do all things necessary to satisfy the conditions precedent in the Decision Letter,
including issuing securities under its initial public offering.
The parties also acknowledged and agree that, prior to the commencement date of the Deed, Exopharm has made full payment
of the Initial Reimbursement Payment amounting to $75,000.
The Company has fully paid the $325,000 cost of the IP asset as at 30 June 2019.
This IP asset has not been amortised as per note (s), given that the IP asset it not considered ready for use, given that the
underlying patents have not yet been granted. Useful life is considered 8 years following grant, as such, amortisation will
commence on grant of the underlying patents.
Other IP: Other intellectual property, new in-licensing costs and patent costs have been expensed.
43
EXOPHARM ANNUAL REPORT 2020
NOTES TO THE
FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 13: ACCOUNTS PAYABLE AND
OTHER CURRENT LIABILITIES
Accounts payable
Accruals
Accrued payroll costs
Superannuation payable
PAYG payable
NOTE 14: LEASE LIABILITIES
Current liabilities
Non-current liabilities
Reconciliation:
Recognised on 1 July 2019 on adoption of AASB 16
Lease inception
Principal repayments
Balance at 30 June
2020
$
137,615
32,474
204,066
-
238,097
612,252
2020
$
309,132
603,741
912,873
2020
$
18,571
1,079,148
(184,846)
912,873
2019
$
36,527
53,115
71,075
12,628
107,657
281,002
2019
$
2019
$
-
-
-
-
-
-
-
AASB 16 has been adopted during the year, refer to note 1(s) for details. The Company leases premises with an average lease term
of 3 years
The Company has provided a Security Deposit equivalent to one years rent, to be provided as security for the lease, for the main
lease at The Baker. Other leases have no security provided.
44
EXOPHARM ANNUAL REPORT 2020
NOTES TO THE
FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 15: FINANCIAL INSTRUMENTS
Financial assets
Cash in bank
Other receivables
Other non-current assets (Security deposits)
Financial liabilities
Accounts payable and other current liabilities
Lease liabilities
2020
$
1,742,920
71,521
40,000
2019
$
4,418,955
51,134
-
1,854,441
4,470,089
612,252
912,873
1,525,125
281,002
-
281,002
The Company’s principal financial instruments comprise of cash and cash equivalents, other receivables, security deposits,
payables 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 year ended 30 June 2020, it has been the Company’s policy not to trade in financial instruments.
Financial risk management objectives and policies:
The Company has exposure to the following risks from their use of financial instruments:
•
•
•
Credit risk
Liquidity risk
Interest rate risk
• Market risk
•
•
Foreign exchange risk
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.
(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.
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.
45
EXOPHARM ANNUAL REPORT 2020
NOTES TO THE
FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2020
(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.
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
$
-
-
-
-
-
-
-
-
612,252
-
-
-
-
-
78,764
230,368
603,741
691,016
230,368
603,741
281,002
-
-
281,002
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2020
Non-interest bearing
Variable interest rate
instruments
Fixed interest rate
instruments
2019
Non-interest bearing
Variable interest rate
instruments
Fixed interest rate
instruments
(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) Foreign Exchange Risk
The Company has an exposure to foreign exchange rates fluctuations given that the Company purchases plant equipment,
consumables and services from overseas suppliers as part of the research and development activities of the Company.
As at 30 June 2020, the Company has no material foreign currency denominated monetary liabilities.
(f) 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.
46
EXOPHARM ANNUAL REPORT 2020 NOTES TO THE
FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 16: RELATED PARTY DISCLOSURES
The Company’s related parties include Key Management and others as described below:
Transactions with Key Management Personnel (KMP)
The aggregate compensation made to Directors and other Key Management Personnel of the Company is set
out below:
Short-term employee benefits
Total
2020
$
810,804
810,804
Transactions with Key Management Personnel (KMP)
The aggregate compensation made to Directors and other Key Management Personnel of the Company is set
out below:
Corporate and other expenses
Research and development
Licensed asset terminated/cancelled
New IP asset
Total
2020
$
232,883
-
-
-
232,883
2019
$
461,619
461,619
2019
$
101,702
59,035
(175,000)
325,000
310,737
In addition to the above, ACNS Capital Markets Pty Ltd T/A Alto Capital was also paid $390,263 for services as
Lead Manager and Corporate Advisor to the Company during the year. Mr Parker is an employee of Alto Capital.
47
EXOPHARM ANNUAL REPORT 2020 NOTES TO THE
FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 17: AUDITORS’ REMUNERATION
The auditor of Exopharm Limited is William Buck
Audit or review of the financial statements
Total
2020
$
41,196
41,196
2019
$
30,030
30,030
NOTE 18: EVENTS AFTER THE BALANCE DATE
There were no significant events after the balance date.
NOTE 19: DIVIDENDS
The directors of the Company have not declared any dividend for the year ended 30 June 2020.
NOTE 20: COMMITTMENTS AND CONTINGENCIES
As at 30 June 2020, the Company has no other material commitments except as disclosed below:
Altnia Royalty Deed Commitments
On 5 October 2018, the Company and Altnia Operations Pty Ltd (Altnia or Licensor) signed an Intellectual Property Assignment
and License Termination Deed (the ‘Deed’). As consideration for the assignment of the Assignment Rights, Exopharm must:
a.
b.
grant royalties to Altnia; and
provide the Reimbursement Payments to Altnia in accordance with Clause 7 of the Deed.
The Reimbursement Payments were fully paid during the 2019 year.
As at 30 June 2020, the Company is a party to a Royalty Deed with Altnia Operations Pty Ltd (a company owned by a KMP).
As at 30 June 2020, the Company has the following financial commitments pursuant to the Royalty Deed:
1.
2.
Royalties on net sales – 3% of net sales;
License Royalty – 10% of license revenue.
Lease Commitments
As at 30 June 2020, the Company has one major lease commitments at The Baker, Melbourne. This lease is disclosed in the
accounts as a Lease Liability. The Lease runs for an initial three-year period and has annual rent of circa $277,000 and associated
outgoings of less than $100,000 per annum.
As at 30 June 2020, the Company has a number of short-term leases and has applied the optional exemption to not capitalise
these leases and instead accounted for the lease expense on a straight-line basis over the lease term. Total expense for these
short term leases amounted to $ 136,634 as at 30 June 2020 (2019:$47,637). There were no commitments to these short-term
leases as at 30 June 2020 and 30 June 2019.
Employee Commitments
The Company currently has 27 employees and a current annualised total annual remuneration of $3,571,019 including statutory
superannuation. The Company pays statutory superannuation on a monthly basis.
IP & Trademark Commitments
Patent Costs – Total Patent/patent legal costs for the next 12 months are approximately AU$140,000.
Trademark Costs – Total known trademark costs for the next 12 months are approximately AU$10,000.
48
EXOPHARM ANNUAL REPORT 2020
DIRECTORS’
DECLARATION
FOR THE YEAR ENDED 30 JUNE 2020
In the opinion of the Board of Exopharm Limited (‘the Company’):
1.
The financial statements and notes thereto, as set out on pages 17 to 56 are in accordance with the Corporations Act 2001
including:
•
•
giving a true and fair view of the Company’s financial position as at 30 June 2020 and its performance for the year then
ended; and
complying with Australian Accounting Standards, the Corporations Regulations 2001, and International Standards (IFRS)
as disclosed in Note 1 of the Financial Statements; and
2.
There are reasonable grounds to believe that the company will be able to pay its debts as and when they become due
and payable.
This declaration is signed in accordance with a resolution of the Board of Directors made pursuant to
S.295(5) of the Corporations Act 2001. On behalf of the Directors:
Dr Ian E Dixon
Managing Director
Exopharm Limited
Dated this 26 August 2020
Mr Jason Watson
Chairman
Exopharm Limited
49
EXOPHARM ANNUAL REPORT 2020
INDEPENDENT AUDITOR’S
REPORT
FOR THE YEAR ENDED 30 JUNE 2020
AUDITOR’S INDEPENDENCE DECLARATION UNDER SECTION 307C
OF THE CORPORATIONS ACT 2001 TO THE DIRECTORS OF
EXOPHARM LIMITED
I declare that, to the best of my knowledge and belief during the year ended 30 June 2020
there have been:
— no contraventions of the auditor independence requirements as set out in the
Corporations Act 2001 in relation to the audit; and
AUDITOR’S INDEPENDENCE DECLARATION UNDER SECTION 307C
— no contraventions of any applicable code of professional conduct in relation to the
OF THE CORPORATIONS ACT 2001 TO THE DIRECTORS OF
EXOPHARM LIMITED
audit.
I declare that, to the best of my knowledge and belief during the year ended 30 June 2020
there have been:
— no contraventions of the auditor independence requirements as set out in the
William Buck Audit (Vic) Pty Ltd
ABN 59 116 151 136
Corporations Act 2001 in relation to the audit; and
— no contraventions of any applicable code of professional conduct in relation to the
audit.
J.C. Luckins
Director
Dated 26th August 2020
William Buck Audit (Vic) Pty Ltd
ABN 59 116 151 136
J.C. Luckins
Director
Dated 26th August 2020
50
EXOPHARM ANNUAL REPORT 2020
INDEPENDENT AUDITOR’S
REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2020
AUDITOR’S INDEPENDENCE DECLARATION UNDER SECTION 307C
OF THE CORPORATIONS ACT 2001 TO THE DIRECTORS OF
EXOPHARM LIMITED
I declare that, to the best of my knowledge and belief during the year ended 30 June 2020
there have been:
— no contraventions of the auditor independence requirements as set out in the
Corporations Act 2001 in relation to the audit; and
— no contraventions of any applicable code of professional conduct in relation to the
audit.
William Buck Audit (Vic) Pty Ltd
ABN 59 116 151 136
J.C. Luckins
Director
Dated 26th August 2020
51
EXOPHARM ANNUAL REPORT 2020
INDEPENDENT AUDITOR’S
REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2020
AUDITOR’S INDEPENDENCE DECLARATION UNDER SECTION 307C
OF THE CORPORATIONS ACT 2001 TO THE DIRECTORS OF
EXOPHARM LIMITED
I declare that, to the best of my knowledge and belief during the year ended 30 June 2020
there have been:
— no contraventions of the auditor independence requirements as set out in the
Corporations Act 2001 in relation to the audit; and
— no contraventions of any applicable code of professional conduct in relation to the
audit.
William Buck Audit (Vic) Pty Ltd
ABN 59 116 151 136
J.C. Luckins
Director
Dated 26th August 2020
52
EXOPHARM ANNUAL REPORT 2020
INDEPENDENT AUDITOR’S
REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2020
AUDITOR’S INDEPENDENCE DECLARATION UNDER SECTION 307C
OF THE CORPORATIONS ACT 2001 TO THE DIRECTORS OF
EXOPHARM LIMITED
I declare that, to the best of my knowledge and belief during the year ended 30 June 2020
there have been:
— no contraventions of the auditor independence requirements as set out in the
Corporations Act 2001 in relation to the audit; and
— no contraventions of any applicable code of professional conduct in relation to the
audit.
William Buck Audit (Vic) Pty Ltd
ABN 59 116 151 136
J.C. Luckins
Director
Dated 26th August 2020
53
EXOPHARM ANNUAL REPORT 2020
ADDITIONAL SECURITIES
INFORMATION
FOR THE YEAR ENDED 30 JUNE 2020
SHAREHOLDER INFORMATION
The security holder information set out below was applicable as at 24 August 2020 unless stated.
There is one class of quoted securities, fully paid ordinary shares.
1.) Quoted Securities – Fully Paid Ordinary Shares
a) Distribution of Security Number
CATEGORY
ORDINARY SHARES
(Size of holding)
Shareholders
1 - 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Total
31
184
173
561
156
1,105
Shares
12,952
567,804
1,520,299
22,715,798
70,655,147
95,472,000
There are 1,105 holders of ordinary shares. Each shareholder is entitled to one vote per share held.
b) Marketable Parcel
There are 54 shareholders with less than a marketable parcel (basis price $0.295) as at 244 August 2020.
c) Voting Rights
On a show of hands every person present who is a member or proxy, attorney or representative of a member has one vote and
upon a poll every person present who is a member or proxy, attorney or representative of a member shall have one vote for
each share held.
d) Substantial Shareholders
There was one substantial shareholder listed on the Companies register as at 30 June 2020, being:
Altnia Holdings Pty Ltd
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