ANNUAL REPORT
For the year ended 30 June 2020
Genetic Technologies Limited
ABN 17 009 212 328
For personal use only Genetic Technologies Limited (ASX:GTG)
Annual Report
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Contents
Corporate directory
Chairman and Interim Chief Executive Officer's letter
Directors' report
Auditor’s independence declaration
Corporate governance statement
Financial statements
Independent auditor's report to the members
Shareholder information
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Corporate directory
Directors
Mr Peter Rubinstein
Independent Non-Executive Director and Chairman
Dr Jerzy Muchnicki
Executive Director and Interim Chief Executive Officer
Dr Lindsay Wakefield
Independent Non-Executive Director
Mr Nicholas Burrows (appointed September 2, 2019)
Independent Non-Executive Director
Dr Paul Kasian (resigned on September 24, 2019)
Former Executive Chairman and
Former Chief Executive Officer
Mr Xue Lee (resigned on July 9, 2019)
Former Non-Executive Director
Company Secretary
Mr Justyn Stedwell
Registered office and principal place
of business
60-66 Hanover Street
(PO Box 115)
Fitzroy VIC 3065 Australia
Telephone: +61 (0)3 8412 7000
Facsimile: +61 (0)3 8412 7040
Share register
Computershare Investor Services Pty Limited
Auditor
Bankers
452 Johnston Street
Abbotsford VIC 3067 Australia
Telephone: +61 0(3) 9415 5000
Facsimile: +61 0(3) 9473 2500
PricewaterhouseCoopers
2 Riverside Quay
Southbank VIC 3066 Australia
Telephone: +61 (0)3 8603 1000
Facsimile: +61 (0)3 8603 1999
National Australia Bank
Level 2, 151 Rathdowne Street
Carlton VIC 3053 Australia
Stock exchange listing
Genetic Technologies Limited shares are listed
on the Australian Securities Exchange (ASX: GTG)
and NASDAQ (GENE)
Website
www.gtglabs.com
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Chairman and Interim Chief Executive
Officer's letter
Dear Shareholder,
On behalf of the Board of Genetic Technologies Limited (GTG or the Company), the Company is pleased to
present this year’s Annual Report.
A new beginning
In September 2019, the Company saw a significant change in Board and Management which enabled GTG to
refocus. The Company remains committed to its mission of being a global leader in the development and
sales of a comprehensive range of genomic risk assessment tests.
To meet the Company's dual NASDAQ and ASX Listing requirements of a minimum US$2.5m shareholder
equity, the Board actively participated in the first of a series of capital raises both in Australia and then
supported our USA Bankers H.C. Wainwright & Co. As a result of the strong interest in the Company from local
and USA institutional investors, the Company now has approximately $21.7m of funds to allow the Company
to deliver on what has always been a promising technology platform.
The Company's COVID-19 risk severity test is in its final stages of development and, in combination with its
existing tests and pipeline to be incorporated on the Company's online Consumer Initiated Testing (CIT)
platform, will provide the opportunity to generate significant sales and associated revenues in the future.
The Company has made significant investments in new staff, branding initiatives, equipment and product
development and in-licencing which provides an exciting opportunity for the future of the Company, the
benefits of which will start to be seen over FY21.
Product, COVID-19 and the Company's vision from its interim CEO, Dr Muchnicki
The Company's proprietary technologies allow for better management of the most serious medical
challenges that are responsible for more than 60% of mortality in Western society. However the COVID-19
pandemic has created a unique “one in a hundred” year dilemma which has changed our lives and our
medical priorities.
The pandemic has had the following impact on the Company's operations:
•
•
•
The Company's sales team has not had direct access to doctors;
The medical system is overwhelmed with pandemic related challenges; and
The public is not focused on chronic disease management, due to the uncertainty associated with
the pandemic.
Genetic Technologies has had to review its operations in light of the pandemic.
The Company has decided to take advantage of the shutdown to transform its product range, as well as the
Company's approach to sales and marketing through:
• Establishing consumer initiated testing platforms to target the consumer directly;
• Seeking to market products to both consumers and the medical profession;
• Commencing the creation of multi-test kits which will allow for risk testing five or more diseases in
one kit; and
• Planning for the establishment of new divisions within the Company to better manage new products.
The new divisions will include Oncology, Cardiovascular, Metabolic, Mental health and Wellness.
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Chairman and Interim Chief Executive Officer's letter (continued)
The Company, importantly, has acquired new equipment which will allow for the establishment of
comprehensive genetic risk tests which will combine monogenic and polygenic testing under a single banner
of genetic risk stratification, covering 100% of a person’s genetic risk. This new equipment will also allow multi-
testing for multiple disease risks with the Company's new arrays capable of studying up to 650,000 individual
SNP at any one time. The new equipment will also allow the Company to enter the medical rebate testing
space with tests for monogenic mutations and cancer sequencing attracting a rebate both in the US and
Australia.
With the increased interest in genetic testing, there are a large number of small companies entering the risk
stratification space. The Company is committed to outcomes, rather than just products - thus the Company
is now actively looking to incorporate quality market ready genetic tests developed by credentialed groups
to include on its CIT platforms.
The introduction of a wellness division is an important service that increases the Company's involvement with
its patients and introduces a service that will focus on day-to-day issues, rather than longevity alone, hence
the Company's new position statement .........
“live longer feel better”
Yours sincerely,
____________________
Dr Jerzy Muchnicki
Executive Director and Interim Chief Executive Officer
_____________________
Mr Peter Rubinstein
Chairman and Non-Executive Director
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Annual Report
Directors’ report
Your directors present their report on the consolidated entity consisting of Genetic Technologies Limited and
the entities it controlled at the end of, or during, the year ended June 30, 2020. Throughout the report, the
consolidated entity is referred to as the group.
The attached annual report for the year ended June 30, 2020 contains an independent auditor's report.
Review of operations
Genetic Technologies Limited (ASX: GTG; NASDAQ: GENE, “Company”, “GTG”), a diversified molecular
diagnostics company is pleased to provide an Operational Update for the year ended June 30, 2020 and
including events up until the date of the report.
Highlights
• Successful capital raisings of US$11.24m before costs (in the 3 months to June 30, 2020) also restores
NASDAQ compliance
• Update on COVID-19 opportunities and initiatives
• Corporate update and presentation at Biotech Showcase, San Francisco
• US Patent Office grants key breast cancer risk test patent
• Renewal of NATA and CLIA-accredited laboratory status for Australian and US markets
•
Launch of breast cancer and colorectal cancer polygenic test kits
• Further generic risk assessment tests under development
• Collaboration agreement signed with Translational Genomics Research Institute (TGen)
• PRS on Type 2 diabetes test completed
• Key Management Personnel update
• Financial position
Successful capital raising of US$11.24m also restores NASDAQ compliance
Despite the uncertain economic climate around COVID-19, the Company successfully raised US$11.24m
before costs during the June quarter through bankers H.C. Wainwright & Co in the USA. The fund-raising
allowed the Company to meet all requirements to maintain its NASDAQ listing.
Net proceeds will support the introduction and distribution of the Company’s new products in the USA, and
general product research, development, and reimbursement studies for polygenic risk tests with
Translational Genomics Research Institute (TGen) in the USA. They will also fund implementation of the
Company’s consumer-initiated testing platforms and preparation for the Company’s COVID-19 severity risk
test.
Temporary transition to high-throughput COVID-19 testing
The Company developed a detailed implementation plan to allow a temporary transition of the Company’s
genetic testing laboratory to a high-throughput COVID-19 test centre, should government agencies need it
to assist with demand. The Company has begun the initial work to identify laboratory workflows, instrument
modification, and laboratory compliance for biologics and contaminated materials handling. The Company
has also confirmed a secure supply chain of test reagents.
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Directors’ report (continued)
Disease severity test prototype development
The Company is developing a polygenic risk score (PRS) test for COVID-19, which may enable an assessment
of the risk of people developing a serious disease should they contract the virus. The test aims to predict
disease severity using a combination of genetic and clinical information.
• Working prototype developed based on about 1,500 patients
• Options for clinical risk model currently under evaluation
• Discussions continue with several international biobanks and clinical laboratories to source an
independent cross-validation dataset.
The Company has built strong relationships with international biobanks and health studies, including UK
Biobank. They allow the Company to secure additional, current COVID-19 patient data to continuously
develop, refine, and validate the COVID-19 risk test.
Implementation
The Company has ordered its first single nucleotide polymorphism (SNP) array panel from US-based Thermo
Fisher Scientific Inc., a world leader in genetic testing and the Company’s manufacturing partner for
GeneType products.
The SNP array panel is a key reagent the Company needs to process the polygenic risk test portion of the
COVID-19 risk test. The test aims to categorise subjects as being at high, average, or low risk of developing life-
threatening conditions due to COVID-19.
The Company has also confirmed capacity to scale up production for a global rollout of the COVID-19 risk test
(reagent and SNP array panel) with major manufacturers, including Thermo Fisher Scientific. The product
uses technical components that healthcare manufacturers already produce for other genetic-based tests.
This will support the Company’s plans to accelerate production to meet expected global demand.
The Company’s Australian facilities can produce up to 250,000 tests a year. The scale-up of manufacturing will
require global distribution partnerships if the COVID-19 risk test is widely adopted. In anticipation of high
demand, the Company expects to make its data pack for the test available to global laboratories. Direct and
indirect costs to date are approximately A$375,000.
Regulatory approval
Discussions have taken place with Centres for Medicare and Medicaid Services (CMS) and National
Association of Testing Authorities, Australia (NATA) for regulatory approval for the Company’s COVID-19 risk
severity test in the US and Australia.
•
The Company will submit a complete technical package to the Centres for Medicare and Medicaid
Services (CMS) for review and approval. Clinical Laboratory Improvement Amendments (CLIA) turn-
around time for approval is expected in about 45 days from submission.
• Submission of the technical file to include scientific literature, algorithm validation, laboratory
wetwork validation, and laboratory procedural documentation.
• NATA to provide an assessment after an internal review of the final independent data set for test
validation.
Intended use
The test should give risk stratification information which may help personal and population management in
two ways, to:
• Guide quarantine measures on a personal, local, and national scale
• Prioritise vaccination if and when a vaccine becomes available.
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Directors’ report (continued)
Intellectual property
The Company has filed a provisional patent application for its COVID-19 risk test with IP Australia (2020901739
- Methods of assessing risk of developing a severe response to Coronavirus infection). The provisional patent
covers the specific single nucleotide polymorphism (SNP) algorithm the Company designed to calculate a
PRS and the testing model that combines PRS and the clinical risk factors that together constitute the
COVID-19 risk test.
Consumer-initiated sales for existing pipeline
With COVID-19 social distancing impacting on the Company’s ability to fully engage with physicians, the
Company has brought forward its plans to introduce a consumer-initiated testing (CIT) platform. This sales
pipeline deviates from a traditional sales approach that targets clinicians. Instead it allows patients to request
a test directly, with clinician oversight of the testing process through an independent provider network and
telemedicine. The Company has started negotiations with its preferred independent provider network which
will oversee patient ordering of the CIT pipeline. The Company has entered into binding agreements and will
launch its CIT platforms in Q3, 2020.
Corporate update and presentation at Biotech Showcase, San Francisco
The Company presented its latest technology and world-leading tests at the 2020 JP Morgan Healthcare
Conference in January. The presentation coincided with the successful launch of the Company’s new tests
and the introduction of the Company’s new management to the US market.
US Patent Office grants key breast cancer risk test patent
In June, the Company received US Patent No: US 10,683,549, Methods for assessing risk of developing breast
cancer. The Company is the first company in the world to successfully commercialise a polygenic risk test for
breast cancer.
The granted patent covers the Company’s proprietary panels of single nucleotide polymorphisms (SNPs) and
the combination of clinical and phenotypic risk models to create the most comprehensive risk assessment
tool on the market: GeneType for Breast Cancer.
Renewal of NATA and CLIA-accredited laboratory status for Australian and
USA markets
Following a successful Q3 Clinical Laboratory Improvement Amendments (CLIA) audit, the Company
renewed its status as a fully NATA and CLIA-accredited laboratory. It places the Company in a unique position
to service both the Australian and US markets subject to regulatory approvals. The Company has applied to
Medicare to secure a rebate for tests carried out.
Launch of breast cancer and colorectal cancer polygenic test kits
The Company hired and trained new internal sales employees to educate doctors on the Company’s
polygenic risk score (PRS) tests and introduce them to preventive health strategies.
The Company had a very positive response from doctors. Initial test results showed 10 per cent of subjects
were high risk and 41 per cent were moderate risk. These results will help create personalised strategies
specifically designed for the patient risk profile. Early indications show the tests lead to better screening
compliance and to the development of personalized screening solutions. This confirms the Company’s
objective of focusing on preventative health rather than ‘after the fact’ medicine.
Further generic risk assessment tests under development
At the same time, the Company continued to develop other risk assessment tests across a range of diseases,
including:
• Cardiovascular disease
•
Type 2 diabetes
• Prostate cancer
• Melanoma.
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Directors’ report (continued)
Collaboration agreement signed with the Phoenix, Arizona-based Translational
Genomics Research Institute (TGen)
Last September, the Company signed a three-year collaboration agreement with TGen. The agreement
includes cooperation in the design feasibility analysis of clinical research studies. The analysis will support the
clinical application of the Company’s polygenic risk tests and identification of appropriate clinical partners to
participate in the studies.
TGen is a non-profit biomedical research institute dedicated to ground-breaking research with life-changing
results. TGen works to unravel the genetic components of common and complex diseases, including cancer,
neurological disorders, infectious diseases, and rare childhood disorders. TGen is affiliated with Duarte,
California-based City of Hope, a world-renowned independent research and treatment centre for cancer,
diabetes, and other life-threatening diseases.
The collaboration will focus on a clinical utility study as the first stage, working with TGen’s extensive network
of cancer centre clinicians.
The wide-ranging collaboration will cover:
• Distribution channels
• Reimbursement strategy
• Further research
• Potential for the establishment of a new laboratory facility.
GTG and TGen will develop a commercialisation strategy and infrastructure for a suite of polygenic risk tests
for the USA market, and set up the necessary fund-raising.
PRS on Type 2 diabetes test launch planned
The Company is finalising verification of the diabetes test in its Australian laboratory. The Company has
completed its marketing collateral, and plan to launch once more normal conditions return post COVID-19.
Key Management Personnel Update
Directors
The following persons held office as Directors of Genetic Technologies during and since the end of the
financial year:
• Mr Peter Rubinstein - Independent Non-Executive Director and Chairman (appointed on January 31,
2018)
• Dr Jerzy Muchnicki - Executive Director and Interim Chief Executive Officer (appointed January 31,
2018)
• Dr Lindsay Wakefield - Independent Non-Executive Director (appointed September 24, 2014)
• Mr Nicholas Burrows - Independent Non-Executive Director (appointed September 2, 2019)
• Dr Paul A. Kasian - (Former Chairman & Chief Executive Officer) (resigned September 24, 2019)
• Mr Xue Lee (Former Non-Executive) (resigned July 9, 2019)
The Company provides the following update regarding the composition of the Executive Management Team.
Chief Financial Officer
The Company announced that Mr Phillip Hains was appointed CFO of GTG on July 15, 2019. Mr Hains has an
extensive background working in ASX and NASDAQ finance positions.
Company Secretary
The Company announced that Mr Justyn Stedwell was appointed Company Secretary on July 15, 2019. Mr
Stedwell is a professional Company Secretary consultant with over 12 years’ experience acting as a Company
Secretary of ASX listed companies across a wide range of industries.
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Directors’ report (continued)
Key Management Personnel Update (continued)
Chief Operating Officer
On May 18, 2020, the Company appointed Mr Stanley Sack who provides consulting in the capacity of Chief
Operating Officer. Mr Sack has spent 15 years in large listed entities in executive positions managing large
business divisions. He has worked with a high net worth family managing all their operating businesses and
private equity activities. Mr Sack built an Allied Health Business in the aged care and community care space
which became the biggest Mobile Allied Health Business in Australia, and was recently sold to a large medical
insurance company.
Financial Snapshot
The additional capital raised during and since the end of the financial year puts the Company in its best
financial position for approximately 2 years. The Company can expand and bring its comprehensive suite of
risk assessment tests to market across both Australia and the US. The Company can also expand and upgrade
the laboratory to incorporate next generation sequencing and high density SNP arrays. These will allow-for
the first time-risk assessments for 100 per cent of a person’s genomic risk, including monogenic, polygenic,
clinical risk factors, and family history.
The cash and cash equivalents balance as at June 30, 2020 was A$14.2M (2019: A$2.1M) and the Company
incurred a loss of A$6.1M (2019: A$6.4M).
Significant changes in the state of affairs
Significant changes in the state of affairs of the group during the financial year were as follows.
• On May 3, 2019, the Company received a letter from The NASDAQ Stock Market LLC advising that the
reported stockholders’ equity was less than the minimum specified amount of United States Dollars
(US$) US$2,500,000 as at December 31, 2018. In 2019, the Company was subject to NASDAQ delisting
proceedings as a result of the Company's failure to maintain the bid price of the American Depositary
Shares (“ADSs”) above the minimum US$1.00 per share requirement and because the Company's
reported stockholders’ equity was less than the minimum specified amount of US$2,500,000 as of
December 31, 2018. The Company regained compliance with NASDAQ’s Listing Rules with respect to
its bid price as a result of the adjustment to the ratio of the American Depositary Shares (“ADSs”) that
took effect on August 15, 2019, and the Company regained compliance with the minimum
stockholders’ equity requirement by raising gross proceeds of approximately US$3,043,000 in a rights
offering completed on October 29, 2019. On November 6, 2019, the Company received a letter from
NASDAQ to notify that the Company had regained compliance with the equity rule (the “Compliance
Letter”).
• On July 16, 2019, the Company issued 166,066,050 warrants at no cash consideration and exercisable
at United States Dollars (US$) 0.00533 that were issued to underwriters along with the capital raised
in May 2019. These warrants are subject to a cashless exercise arrangement under the terms of their
issue. These warrants were issued as part of capital raising costs and were subsequently exercised in
July 2020.
• On October 11, 2019, at an issue price of A$0.004 (0.4 cents) per new ordinary share, the Company
successfully raised A$4.5m from existing shareholders, together with participation from domestic
institutional and family office investors. The funds raised allowed the Company to commence sales of
its latest breast cancer and colorectal cancer risk assessment tests in both the United States and
Australia. The Company’s strategy is to utilise its CLIA and NATA accredited laboratory to enable full
vertical integration from development to the market.
• On October 30, 2019, the Company issued 250,000,000 unlisted options with exercise price of $0.008
per option, expiring on October 29, 2022 to various underwriters. Additionally, on December 20, 2020,
the Company issued 125,000,000 unlisted options to Dr Jerzy Muchnicki and Mr Peter Rubinstein
respectively, with exercise price of $0.008 per option, expiring on December 20, 2022. All these options
issued were part of costs of raising capital in October 2019.
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Directors’ report (continued)
Significant changes in the state of affairs (continued)
• On March 13, 2020, the Company received a determination letter (the “Letter”) from NASDAQ
indicating that the Company did not comply with the stockholders’ equity rule. The Letter indicates
that Listing Rule 5815(d)(4)(B) does not permit an issuer that is deficient in stockholders’ equity to
present a plan of compliance to the NASDAQ Staff if such issuer has failed to comply with that
provision within one year of a Hearing Panel (the “Panel”) determination of compliance. The Letter
states that since the Company is out of compliance with the equity rule within one year of the
Compliance Letter, the Staff cannot allow the Company to submit a plan of compliance. The
Company requested an appeal hearing with the Panel to review the delisting determination. Upon
NASDAQ’s receipt of the hearing request by the Company, NASDAQ stayed the suspension of the
Company's securities and the filing of the Form 25-NSE pending the Panel’s decision. An oral hearing
took place on April 30, 2020 and in a letter dated May 12, 2020, the Panel granted the Company the
full 180 day extension until September 9, 2020, to publicly disclose full compliance with the minimum
shareholder equity requirement under NASDAQ rules. As of August 25, 2020, the Company has
regained compliance with the equity requirement of NASDAQ Listing Rule 5550(b)(1), as required by
the Hearings Panel decision dated May 12, 2020.
• On April 2, 2020, the Company closed a registered direct offering of 1,028,574 American Depositary
Shares (“ADSs”), each representing six hundred (600) of the Company’s ordinary shares, at a purchase
price of United States Dollars (US$) US$1.75 per ADS - or in Australian dollars $0.0048 per ordinary
shares. H.C Wainwright & Co acted as the placement agent for this offering. Against the offering, the
Company issued 40,114,200 warrants exercisable at US$0.00365 each, expiring in 5 years from issue
date, to H.C. Wainwright & Co, which formed part of cost of raising capital.
• On April 22, 2020, the Company closed a registered direct offering of 722,502 American Depositary
Shares (“ADSs”), each representing six hundred (600) of the Company’s ordinary shares, at a purchase
price of United States Dollars (US$) US$2.00 per ADS - or in Australian dollars $0.0053 per ordinary
share. H.C Wainwright & Co acted as the placement agent for this offering. Against the offering, the
Company issued 28,177,578 warrants exercisable at US$0.00417 each, expiring in 5 years from issue
date, to H.C. Wainwright & Co, which formed part of cost of raising capital.
• On May 26, 2020, the Company completed a capital raise by offering of:
(i)
3,500,000 American Depositary Shares (“ADSs”), for a purchase price of United States Dollars
(US$) US$2.00 per ADS and
(ii) 500,000 pre-funded warrants to purchase one ADS (the “Pre-Funded Warrants”) for a purchase
price of US$1.9999 per Pre-Funded Warrant.
H.C. Wainwright & Co acted as the placement agent for this offering each representing six hundred
(600) of the Company’s ordinary shares, at a purchase price of United States Dollars (US$) US$2.00 per
ADS - or in Australian dollars $0.005 per ordinary share.
Against the offering, the Company agreed to issue 156,000,000 warrants exercisable at US$0.004166
each, expiring in 5 years from issue date, to H.C. Wainwright & Co. The said warrants have not yet been
issued as of the date of report as they are subject to shareholder approval.
Impact of COVID-19
On January 30, 2020, the International Health Regulations Emergency Committee of the World Health
Organization (WHO) declared the novel coronavirus disease 2019 (“COVID-19”) outbreak a public health
emergency of international concern and on March 12, 2020 the WHO announced the outbreak was a
pandemic. The COVID-19 pandemic is having a negative impact on global markets and business activity,
which has had an effect on the operations of the Company, including but not limited to, that sales of the
Company's products have been impacted not only by the inability for consumers to visit their practitioners
but also the difficulty the Company's sales team is having in arranging face to face meetings with
practitioners. The Company's sales team has found it very difficult to reach practitioners to build on the sales
momentum created prior to the pandemic, thus, sales have effectively ceased for the short term.
Additionally, in response to the COVID-19 pandemic, the Company has done the following:
Moved forward with the Company's Consumer Initiated Testing platform (CIT), as previously announced on
April 1, 2020, which allows for consumers to directly request any of the Company’s tests online with a
practitioner involved in the process via telemedicine. Once the CIT platform goes live, which is anticipated to
be within the next sixty days, the Company believe it will ensure that sales will be able to recommence in the
event a lockdown is maintained and it opens up another significant sales channel.
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Directors’ report (continued)
Impact of COVID-19 (continued)
Began the process of attempting to make available the Company's existing lab facilities for the conducting
of COVID-19 testing via existing Polymerase Chain Reaction (or PCR) (a method of amplifying DNA prior to
analysis) equipment and personnel.
Completed the development of the Company's COVID-19 risk test and have ordered the first shipment of kits
which are due for delivery in the first quarter of FY2021 and would allow the Company to optimize and validate
the assay as a precursor to commercial release. The Company’s objective is to produce a test that can predict
“disease severity” using either genetic information alone (PRS) or a combination of genetic and clinical
information. A provisional patent has been filed covering the invention. Reagents for laboratory testing have
been ordered in preparation for commercial availability. Documentation for various regulatory approvals are
being prepared.
Completed the design and request for initial production of the SNP (Single Nucleotide Polymorphism) panel
required to process the polygenic risk test portion of the COVID-19 Severity Risk Test from US-based Thermo
Fisher Scientific;
Confirmed with major manufacturers that the COVID-19 Severity Risk Test, including a reagent and SNP
panel, is capable of being rolled out on a large scale;
Held discussions with Centres for Medicare and Medicaid Services (CMS) and National Association of Testing
Authorities, Australia (“NATA”) for regulatory Approval for the COVID-19 Severity Risk Test in the United States
and Australia; and
These new COVID-19 related activities may provide some revenue opportunities for the Company in the short
term and will assist in the development of additional tests the company is currently working on. The Company
has not made significant progress to date that would lead to orders or requests to increase capacity and there
is no guarantee the Company will ever receive orders or requests.
The timing and extent of the impact of the COVID-19 pandemic and the associated recovery process is
unknown. The Company continues to monitor the situation and an accurate estimate of its financial effect on
the Company cannot be made at this stage.
Events since the end of the financial year
On July 20, 2020, 166,066,050 warrants issued during the capital raise in May 2019 exercisable at United States
Dollars (US$) US$0.00533, each expiring May 23, 2024 were exercised and converted to 114,447,000 Ordinary
Shares. These warrants have no cash consideration upon conversion and is consistent with the cashless
exercise arrangement under the terms of their issue.
Furthermore, 18,500,000 options issued to an underwriter exercisable at $0.008, each expiring October 29,
2022 were exercised and converted to 18,500,000 Ordinary Shares. These options were issued for a cash
consideration of $148,000.
On July 21, 2020, the Company closed a registered direct offering of 1,025,000 American Depository Shares
(ADS's), each representing six hundred (600) of the Company's ordinary shares, at a purchase price of United
States Dollars (US$) US$5.00 per ADS - or in Australian dollars $0.012 per ordinary share. The gross proceeds
for this offering was approximately US$5.1 million. Against the offering, the Company agreed to issue
39,975,000 warrants exercisable at US$0.0104 each, expiring in 5 years from issue date, to H.C. Wainwright &
Co which would form part of cost of raising capital. The said warrants have not been issued as of the date of
report as they are subject to shareholder approval.
As of August 25, 2020, the Company has regained compliance with the equity requirement of NASDAQ Listing
Rule 5550(b)(1), as required by the Hearings Panel decision dated May 12, 2020.
Likely developments and expected results of operations
The likely developments in the Group's operations, to the extent that such matters can be commented upon,
are covered in the Review of operations and activities on pages 7 to 10 of this report.
Environmental regulation
The group is not affected by any significant environmental regulation in respect of its operations.
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Information on directors
Dr Lindsay Wakefield, MBBS (Independent Non-Executive)
Experience and expertise
Dr Wakefield was appointed to the Board on September 24,
2014. He started Safetech in 1985 and over the next 25 years
Safetech became a force in the Australian material handling
and lifting equipment market, designing and manufacturing a
wide range of industrial products. In 1993, he left Medicine to
become the fulltime CEO of the Company. In 2006 Safetech
was awarded the Telstra Australian National Business of the
Year. In 2013 Safetech merged and ultimately acquired Tieman
Materials Handling. Dr. Wakefield continues as the CEO of the
Company. It is Australia’s largest manufacturer and supplier of
dock equipment, freight hoists and custom lifting solutions.
Safetech employs approximately 120 people. Dr. Wakefield has
been a Biotech investor for more than 20 years.
Other current public listed directorships None
Former directorships in last 3 years
None
Special responsibilities
Chairman of the Remuneration Committee and Member of the
Audit and Risk Committee
Interests in shares and options
(direct and indirect)
Shares: 9,418,104
Unlisted Performance Rights: 3,750,000
Unlisted Options: Nil
Dr Jerzy (George) Muchnicki (Executive Director and Interim Chief Executive Officer)
Experience and expertise
Dr Muchnicki was appointed to the Board on January 31, 2018
and has also been appointed to the role of part time Business
Development Director. George graduated from Monash
University having held positions in private practice for some 25
years to head of student health at Melbourne University. For the
past 14 years he has been mostly involved in commercialisation
and funding R&D in the biotechnology sector from gene
silencing to regenerative medicine.
Dr Muchnicki brings with him strong commercial and medical
skills, including broad interests in software development,
blockchain and sustainable building materials. He is a co-
founder and Non-Executive Director of Speed Panel Holdings a
world leader in fire rated and acoustic wall solutions. He is also
the co-founder of Candlebets, a software development
company that is creating blockchain enabled platforms for the
gaming industry.
Other current public listed directorships None
Former directorships in last 3 years
Special responsibilities
Interests in shares and options
(direct and indirect)
None
None
Shares: 263,085,885
Unlisted Options: 125,000,000
Unlisted Performance Rights: 6,250,000
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Mr Peter Rubinstein (Independent Non-Executive and Chairman)
Experience and expertise
Mr Peter Rubinstein was appointed to the Board on January 31,
2018. He has over 20 years’ experience in early stage technology
commercialisation through to public listings on the ASX. He is a
lawyer, having worked at one of the large national firms prior to
moving in house at Montech, the commercial arm of Monash
University.
Mr Rubinstein has had significant exposure to the creation,
launch and management of a diverse range of technology
companies including in biotech, digital payments and
renewable energy. Peter is also a Director of DigitalX Limited
(DCC).
Other current public listed directorships DigitalX Ltd (ASX:DCC)
Former directorships in last 3 years
None
Special responsibilities
Member of the Audit Committee and Member of
Remuneration Committee Chairman of the board of directors
Interests in shares and options
(direct and indirect)
Shares: 308,132,009
Unlisted Options: 125,000,000
Unlisted Performance Rights: 5,000,000
Nicholas Burrows (Independent Non-Executive)
Experience and expertise
Mr. Burrows was appointed to the Board on September 2, 2019.
He is a contemporary independent Non-Executive Director
across the listed, government and private sectors with
significant expertise in corporate governance, and strategic,
commercial, financial and risk management oversight.
His current diverse multi-sector portfolio includes Non-
Executive Directorships of Clean Seas Seafood Limited,
TasWater, and a number of private companies. Mr. Burrows also
provides board, governance, audit and risk advisory services to
entities within the IT, tourism and hospitality, debt recovery,
agribusiness, forestry, and Local/State Government sectors.
Mr. Burrows was Chief Financial Officer and Company Secretary
of Tassal Group Limited for 21 years from 1988 to 2009 and
accordingly brings to the Board strong independent c-suite
commercial experience and the benefits of an extensive and
contemporary senior executive ASX200 listed entity
background.
Mr. Burrows is a respective Fellow of the Australian Institute of
Company Directors, Taxation Institute of Australia, Institute of
Chartered Accountants Australia, Governance Institute of
Australia Ltd and the Financial Services Institute of Australasia
and is also a Chartered Accountant and Registered Company
Auditor. Mr. Burrows also served as National President of the
Governance Institute of Australia in 2002 and served on their
National Board for 6 years.
Other current public listed directorships
Clean Seas Seafood Ltd (ASX:CSS)
Former directorships in last 3 years
None
Special responsibilities
Chairman of the Audit Committee and Member of
Remuneration Committee
Interests in shares and options
(direct and indirect)
Shares: 1,670,000
Unlisted Options: Nil
Unlisted Performance Rights: Nil
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Annual Report
Dr Paul A. Kasian, PhD, MBA, GAICD (Former Chairman & Former Chief Executive Officer)
(resigned on September 24, 2019)
Experience and expertise
Dr Kasian was appointed to the Board on 12 December 2013 and
became Chairman of the Company on 31 January 2018 and
interim, part time CEO on 6 February 2018. He brings to the
Board a combination of expertise in strategic business
leadership and biotech investment giving him a deep
understanding on key value drivers for companies in
generating shareholder value. He is an experienced executive
director with demonstrated domestic and international success
in funds management, encompassing senior leadership,
investment and risk roles.
Dr Kasian has held senior leadership positions in a number of
investment groups, and has significant funds management
experience in Australia leading investment in the healthcare
and life sciences sector. He holds a PhD in Microbiology and a
Master of Business Administration, both from the University of
Melbourne, and is a Graduate Member of the Australian
Institute of Company Directors. Dr Kasian is also a non-
executive director and the Chairman of IODM Limited (ASX:
IOD), and former Non-Executive Director of ELK OrthoBiologics
and Blockchain Global Limited.
Other current public listed directorships
IODM Limited (ASX:IOD)
Former directorships in last 3 years
ELK OrthoBiologics
Blockchain Global Limited
Special responsibilities
Former Chairman of the board of directors
Former Chief Executive Officer
Interests in shares and options*
Shares: Nil
Unlisted Options: Nil
Unlisted Performance Rights: Nil
* For former Directors, the interest in shares and options are as of the date they cease being the Directors of the Company.
Mr Xue Lee (Former Non-Executive Director) (resigned on July 9, 2019)
Experience and expertise
Mr Xue Lee was appointed to the Board on January 31, 2018. He
is the founder and CEO of Blockchain Global Limited, which
offers one of Australia’s largest cryptocurrency exchanges,
blockchain consulting and blockchain incubation services,
assisting with over $200m in blockchain related investments
with offices in Melbourne, New York, Kobe, Shanghai and
Dalian. Mr Lee is a frequent speaker at Blockchain Summits,
DLT Conferences and has been a panellist at the World
Economic Forum.
Other current public listed directorships None
Former directorships in last 3 years
None
Special responsibilities
Former Non-Executive Director
Interests in shares and options*
Unlisted Performance Rights: Nil
* For former Directors, the interest in shares and options are as of the date they cease being the Directors of the Company.
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Meetings of directors
The numbers of meetings of the company's board of directors and of each board committee held during the
year ended June 30, 2020, and the numbers of meetings attended by each director were:
Full Meetings of
Directors
Meetings of Committees
Audit
Remuneration
Director
Attended
Eligible
Attended
Eligible
Attended
Eligible
Dr Lindsay Wakefield
Dr Paul Kasian1
Dr Jerzy Muchnicki
Mr Peter Rubinstein
Mr Nicholas Burrows2
Mr Xue Lee³
12
2
12
12
9
-
12
2
12
12
9
-
7
2
7
7
4
-
7
-
-
7
4
-
1
1
1
1
1
-
1
-
-
1
1
-
1. Dr Paul Kasian - resigned September 24, 2019
2 Mr Nicholas Burrows - appointed on September 2, 2019
3 Mr Xue Lee - resigned on July 9, 2019
Remuneration report
The directors present the Genetic Technologies Limited 2020 remuneration report, outlining key aspects of
our remuneration policy and framework, and remuneration awarded this year.
The report is structured as follows:
(i) Key management personnel (KMP) covered in this report
(ii) Remuneration policy and link to performance
(iii) Elements of remuneration
(iv) Link between remuneration and performance
(v) Remuneration expenses for executive KMP
(vi) Contractual arrangements for executive KMP
(vii) Additional statutory information
(a)
Key management personnel covered in this report
• Mr Peter Rubinstein (Independent Non-Executive and Chairman)
• Dr Jerzy Muchnicki (Executive Director and Interim CEO)
• Dr Lindsay Wakefield (Independent Non-Executive)
• Mr Nicholas Burrows (Independent Non-Executive) (appointed on September 2, 2019)
• Dr Paul Kasian (Former Chairman and Former Interim CEO) (resigned on September 24, 2019)
• Mr Xue Lee (Non-Executive) (resigned on July 9, 2019)
Other key management personnel
• Dr Richard Allman (Chief Scientific Officer)
• Mr Phillip Hains (Chief Financial Officer) (appointed July 15, 2019)
• Mr Stanley Sack (Chief Operating Officer) (appointed May 18, 2020)
• Mr Paul Viney (Former Chief Financial Officer, Former Chief Operating Officer and Former Company
Secretary) (appointed on December 15, 2018 and resigned on July 15, 2019)
• Mr Kevin Fischer (Former Chief Financial Officer) (resigned on December 31, 2018)
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(b)
Remuneration policy and link to performance
Our remuneration and nomination committee is made up of independent non-executive directors. The
committee reviews and determines our remuneration policy and structure annually to ensure it remains
aligned to business needs, and meets our remuneration principles. In particular, the board aims to ensure
that remuneration practices are:
•
•
•
•
competitive and reasonable, enabling the company to attract and retain key talent
aligned to the company's strategic and business objectives and the creation of shareholder value
transparent and easily understood, and
acceptable to shareholders.
Element
Purpose
Performance metrics
Potential value
Fixed remuneration
(FR)
Provide competitive
market salary
including super-
annuation and non-
monetary benefits
Nil
Positioned at the market rate
Short Term
Incentive (STI)
Long Term
Incentive (LTI)
Reward for in-year
performance and
retention
Company and
individual performance
goals
Nil
Alignment to long-
term shareholder
value
Share price, capital
raised, company and
individual performance
goals
Interim CEO
Unlisted Performance Rights:
• 6,250,000 Class A (issue date:
December 12, 2018, expiry date:
December 11, 2021, vesting terms:
100% to vest on achievement of
the performance hurdles)
Chairman & Other Non-Executive
Directors:
Unlisted Performance Rights:
• 3,750,000 Class A (issue date:
December 12, 2018, expiry date:
December 11, 2021, vesting terms:
100% to vest on achievement of
the performance hurdles)
• 5,000,000 Class A (issue date:
December 12, 2018, expiry date:
December 11, 2021, vesting terms:
100% to vest on achievement of
the performance hurdles)
Performance hurdles
The Class A Performance Rights vest and are exercisable upon the Share price reaching $0.02 or greater for
more than 10 day consecutive ASX trading days.
The Directors, being the recipients of the Performance Rights, must remained engaged by the Company at
the time of satisfaction of the performance hurdle in order for the relevant Performance Right to vest.
Assessing performance
The remuneration and nomination committee is responsible for assessing performance against KPIs and
determining the STI and LTI to be paid. To assist in this assessment, the committee receives data from
independently run surveys.
Performance is monitored on an informal basis throughout the year and a formal evaluation is performed
annually.
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(c)
(i)
Elements of remuneration
Fixed annual remuneration (FR)
Objective
The Remuneration Committee oversees the setting of fixed remuneration on an annual basis. The process
consists of a review of Company, divisional and individual performance, relevant comparative remuneration
in the market and internally and, where appropriate, external advice on policies and practices. The members
of the Committee have access to external advice independent of Management.
Structure
Fixed remuneration consists of some or all of the following components:
• base salary;
• non-monetary benefits which can include a motor vehicle allowance, health insurance etc.; and
•
superannuation benefits, which includes employer contributions,
With the exception of the employer contributions to superannuation, Executives are given some flexibility to
decide the composition of their total fixed remuneration and the allocation between cash and other benefits.
It is intended that the manner of payment chosen will be optimal for the recipient without creating any
additional cost for the Group.
Fixed remuneration is reviewed annually with reference to individual performance, market benchmarks for
individual roles and the overall financial performance of the Group. Any changes to the fixed remuneration of
Executives are first approved by the Remuneration Committee.
All employee remuneration is evaluated on a regular basis using a set of variables and taking into account the
addition of the statutory superannuation contribution. An assessment of existing base salaries is made
annually using comparisons against independent market data which provides information on salaries and
other benefits paid for comparable roles within the biotech and pharmaceutical industries, using third party
salary survey data. Annual performance reviews with each employee are based on a rating system which is
used to assess his or her eligibility for salary increases. Other qualitative factors, including the specialised
knowledge and experience of the individual and the difficulty of replacing that person, are also taken into
account when considering salary adjustments.
Remuneration Committee membership
As at the date of this Report, the composition of the committee is as follows:
• Dr Lindsay Wakefield - Chairman of the Committee
• Mr Nicholas Burrows (Member)
• Mr Peter Rubinstein (Member)
(ii)
Short-term incentives
Short Term Incentive (STI) is an annual plan that applies to Executives and other senior employees that is
based on the performance of both the Company and the individual during a given financial year. STI ranges
vary depending on the role, responsibilities and deliverables achieved by each individual. Actual STI payments
granted to the relevant employee will depend on the extent to which the pre-agreed specific targets are met
within a financial year. Specific targets are quantifiable with the agreed method of measurement defined at
the beginning of the financial year. The ongoing performance of the Executive or senior employee is
evaluated regularly during the performance cycle.
Group objectives, and their relative weighting, vary depending on the position and responsibility of the
respective individual, but in respect of the year ended June 30, 2020 include, amongst other things, the
achievement of:
•
•
achieving targets for cost reduction or efficiency gains;
contributing to business growth and expansion; and
• performance or the delivery of results which exceed agreed targets.
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Annual Report
These measures are chosen as they represent the key drivers for the short term success of the business and
provide a framework for delivering long term value. Personal and operating objectives vary according to the
role and responsibility of the Executive and include objectives such as service delivery to customers, project
delivery, compliance outcomes, intellectual property management and various staff management and
leadership objectives.
Achievement of an individual’s targets or objectives is documented and assessed by both the individual and
his or her direct manager. The individual will participate in an annual performance review and must provide
evidence of the objectives that he or she has delivered during the period under review. Each objective is then
rated on an achievement scale. Depending on the aggregate of the ratings, the individual may be eligible to
receive an STI payment.
STI payments, if any, are generally paid in August or September of each year subject to the completion of the
performance review process and the receipt of a satisfactory rating. The Board conducts this process in the
case of the CEO. During the financial year ended June 30, 2020, no Short Term Incentive payments were made
to either Executives or other senior employees.
(iii)
Long-term incentives
The objective of the Group’s LTI arrangements is to reward Executives and senior employees in a manner that
aligns their remuneration with the creation of shareholder wealth. As such, significant LTI grants are generally
only made to Executives who are able to influence the generation of shareholder wealth and have an impact
on the Group’s long term profitability. There are no specific performance hurdles, apart from certain vesting
provisions, in respect of the LTI grants made to Executives. Options with a vesting period also serve as a
retention tool and may reduce the likelihood of high performing Executives and senior employees being
targeted by other companies.
Long Term Incentive (LTI) grants to Executives and senior employees are delivered in the form of options over
unissued ordinary shares in the Company which are granted under the terms and conditions of the
Company’s Employee Option Plan. Selected Executives who contribute significantly to the long term
profitability of the Company are invited to participate in the Employee Option Plan. The remuneration value
of these grants varies and is determined with reference to the nature of the individual’s role, as well as his or
her individual potential and specific performance.
During the year ended June 30, 2020, a net share-based payments expense of $14,442 (2019: $335,102) was
incurred by the Company in respect of all options and Performance Rights which had previously been
granted to Executives and other senior employees.
In cases where an Executive ceases employment prior to the vesting of his or her options, the options are
forfeited after a prescribed period if they have not been exercised. The prescribed period ranges from two to
six months, depending on the circumstances under which they left the Company, e.g. resignation, retirement,
termination or death. In the event of a change of control of the Company, the performance period end date
will be brought forward to the date of the change of control and awards will vest over this shortened period.
(d)
Link between remuneration and performance Statutory performance indicators
The Company aims to align executive remuneration to the Company's strategic and business objectives and
the creation of shareholder wealth. The table below shows measures of the group's financial performance
over the last five years as required by the Corporations Act 2001. However, these are not necessarily consistent
with the measures used in determining the variable amounts of remuneration to be awarded to KMPs. As a
consequence, there may not always be a direct correlation between the statutory key performance measures
and the variable remuneration awarded.
2020
2019
2018
2017
2016
Loss for the year
attributable to owners ($)
Basic earnings per
share (cents)
6,098,930
6,425,604
5,463,872
8,403,826
8,458,965
Share price at year end ($)
0.005
0.006
(0.1)
(0.2)
(0.2)
0.010
(0.4)
0.007
(0.5)
0.019
The Company's earnings have remained negative since inception due to the nature of the business.
Shareholder wealth reflects this speculative and volatile market sector. No dividends have ever been declared
by the Company. The Company continues to focus on the research and development of its intellectual
property portfolio with the objective of achieving key development and commercial milestones in order to
add further shareholder value.
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(e)
Remuneration expenses
The following table shows details of the remuneration expense recognised for the group's executive key
management personnel for the current and previous financial year measured in accordance with the
requirements of the accounting standards.
2020
Short-term
benefits
Post-
employment
benefits
Long-
term
benefits
Share-based
payments
Cash
salary
and fees
Cash
bonus Other*
Super-
annuation
Long
service
leave
Termination
benefits
Equity
Total
$
$
$
$
$
$
$
$
Non-executive
directors
Dr Lindsay Wakefield
66,295
Mr Peter Rubinstein
106,946
Mr Xue Lee (resigned
on July 9, 2019)
1,570
Mr Nicholas Burrows
(appointed on
September 2, 2019)
Executive directors
Dr Paul Kasian
(resigned on
September 24, 2019)
53,775
62,789
Dr Jerzy Muchnicki
139,824
Other KMP
Dr Richard Allman
168,600
Mr Stanley Sack
(appointed May 18, 2020)
38,500
-
-
-
-
-
-
-
-
-
-
-
-
6,298
6,835
149
5,109
-
-
5,923
13,283
-
-
-
-
-
-
360
16,017
3,231
-
-
-
Total
638,299
-
360
53,614
3,231
* Comprises of annual leave components.
-
-
-
-
-
-
-
-
-
9,625
82,218
12,833
126,614
(5,616)
(3,897)
-
58,884
(76,368)
(7,656)
16,042
169,149
10,986
199,194
-
38,500
(32,498)
663,006
Mr Phillip Hains was appointed on July 15, 2019 as the group's Chief Financial Officer. During the year ended
June 30, 2020, he does not earn any remuneration apart from the provision of advice on the capacity as the
CFO, accounting and other finance related activities through his firm, The CFO Solution. During the reporting
period, the total service fees of $527,724 (2019: $45,459) were paid.
During the financial year ended June 30, 2020, the board approved to obtain consulting services in relation
to capital raises, compliance, NASDAQ hearings and investor relations from its Non-executive director and
current Chairman, Mr Peter Rubinstein. The services procured were through Mr Peter Rubinstein's associate
entity, ValueAdmin.com Pty Ltd, and amounted to $35,000 which remains payable and is included as part of
the cash salary and fees above as at June 30, 2020.
During the financial year ended June 30, 2020, the board members sacrificed 20% of their fees for a certain
period in order to support the staff costs during the COVID-19 cutback on working hours. Due to this there is
a variance between the above disclosed and the contractual arrangement disclosures.
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Genetic Technologies Limited (ASX:GTG)
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The following table shows details of remuneration expenses of each director or other key management
personnel recognised for the year ended June 30, 2019.
2019
Short-term
benefits
Post-
employment
benefits
Long-term
benefits
Share-based
payments
Cash
salary
and fees
Cash
bonus
Other*
Super-
annuation
Long
service
leave
Equity
Total
$
$
$
$
$
$
$
Non-executive directors
Dr Lindsay Wakefield
Mr Peter Rubinstein
Mr Xue Lee (resigned on
July 9, 2019)5
Executive directors
Dr Paul Kasian (resigned
on September 24, 2019)4
Dr Jerzy Muchnicki1
Other KMP
67,462
67,462
58,330
192,410
82,995
-
-
-
-
-
-
-
-
8,745
(1,200)
6,409
6,409
5,541
18,279
7,884
-
-
-
-
-
5,615
79,486
7,486
81,357
28,849
92,720
76,368
295,802
9,358
99,037
Dr Richard Allman
168,600
70,576
2,289
20,319
4,124
36,486
302,394
Kevin Fischer2
101,644
47,032
1,332
12,785
(3,390)
(6,276)
153,127
Paul Viney3
Total
89,519
-
6,965
8,504
-
-
104,988
828,422
117,608
18,131
86,130
734
157,886
1,208,911
1 Dr Muchnicki was appointed to the Board on January 31, 2018 and has also been appointed to the role of part time Business Development
Director.
2 Mr Kevin Fischer resigned on December 31, 2018.
3 Mr Paul Viney was appointed as the Chief Financial Officer, Chief Operating Officer and Company Secretary on December 15, 2018 and
subsequently resigned from the positions on July 15, 2019.
4 Dr Kasian resigned on September 24, 2019.
5 Mr Xue Lee resigned on July 9, 2019.
*Comprises of annual leave components.
(f)
Contractual arrangements with the directors and other key management personnel
Name:
Position:
Dr Jerzy Muchnicki
Executive Director and Interim Chief Executive Officer
Fixed remuneration:
$167,543 (inclusive of superannuation)
Name:
Position:
Mr Peter Rubinstein
Independent Non-Executive Director and Chairman
Fixed remuneration:
$103,772 (inclusive of superannuation)
Consulting fee:
$35,000 (excluding GST)
Name:
Position:
Dr Lindsay Wakefield
Independent Non-Executive Director
Fixed remuneration:
$73,871 (inclusive of superannuation)
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(f)
Contractual arrangements with the directors and other key management personnel (continued)
Name:
Position:
Mr Nicholas Burrows (appointed September 2, 2019)
Independent Non-Executive Director
Fixed remuneration:
$73,871 (inclusive of superannuation)
Name:
Position:
Dr Richard Allman
Chief Scientific Officer
Fixed remuneration:
$168,600 (exclusive of superannuation)
Name:
Position:
Mr. Phillip Hains
Chief Financial Officer
Fixed remuneration:
$11,715 (excluding GST) per month
Name:
Position:
Mr. Stanley Sack
Chief Operating Officer
Fixed remuneration:
$8,750 (excluding GST) per month
Key Terms and Conditions:
The key provisions contained in the agreements of the directors' of the Company include the following:
•
The Company does not have a set tenure for directors, and under the Corporations Act and the
Constitution, the directorship can cease under prescribed circumstances (example, bankruptcy,
conviction of an offence). In addition, the director may resign by providing notice in writing at any
time.
• No form of remuneration linked to short term incentives has been issued to any of the directors.
•
The following are the key provisions contained in the agreements of the other Key Management
Personnel:
Mr Stanley Sack (appointed May 18, 2020)
• Stanley Sack, under his consulting agreement with the Company has an agreed fixed remuneration
of $8,750 (plus GST) per month work consisting of four half days per week.
•
Towards termination, the agreement states that the Company or Consultant may terminate the
agreement at any time upon the giving of 30 days prior written notice to the other party. The
Company and/or the Consultant can propose an adjusted level of ongoing consulting services and
parties would agree to consider such an adjustment in good faith and replace the agreement with a
replacement agreement on the newly agreed terms.
• Due to the agreement being consulting in nature the Company shall not be required to make
contributions for employment insurance, superannuation, workers’ compensation or similar
premiums, employer health tax and other similar levies on behalf of any of the Consultant’s personnel.
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Mr Phillip Hains (appointed July 15, 2019)
Mr Phillip Hains, the Company’s current Chief Financial Officer, has a service agreement with the Company
through his accounting practice entity The CFO Solution. Under the agreement the following are the terms
and conditions:
•
•
The agreement relates to provision of accounting, financial reporting and ad hoc support to the
internal finance team with a fixed fee of $11,715 (excluding GST) per month.
The Company may, in its absolute discretion, by notice in writing to the The CFO Solution, seek to
extend the agreement for a period of 12 months. Upon extension of the contract, the agreement may
only be terminated by the Company prior to the expiry of the 12 month minimum period upon the
payment of the standard monthly fees payable for the balance of the 12 month minimum period.
Thereafter this agreement shall remain in force from the expiry of the minimum 12 month until
terminated by the Company or the The CFO Solution by giving the other party a 3 months of notice
in writing.
Dr Richard Allman
•
Towards termination, the agreement states that the Company or the employee may terminate at any
time by providing a 30 day notice to the other party or the agreement will be terminated on the
expiration of that notice.
• On termination of this agreement the Company will pay the employee the salary package due up to
and including the date of termination.
(g)
Additional statutory information
(i)
Relative proportions of fixed vs variable remuneration expense
The following table shows the relative proportions of remuneration that are linked to performance and those
that are fixed, based on the amounts disclosed as statutory remuneration expense on page 21 above:
Fixed remuneration
At risk - STI
At risk - LTI
2020
2019
2020
2019
2020
2019
%
%
%
%
Non-executive director
Dr Lindsay Wakefield
Mr Peter Rubinstein
Mr Xue Lee (resigned on
July 9, 2019)
Mr Nicholas Burrows (appointed
on September 2, 2019)
Executive directors
Dr Jerzy Muchnicki
Dr Paul Kasian (resigned on
September 24, 2019)
Other KMP
88
90
100
100
91
100
93
91
69
-
91
74
Mr Richard Allman
94
65
Mr Stanley Sack (appointed
May 18, 2020)
Mr Phillip Hains (appointed
July 15, 2019)
100
100
-
-
24
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
23
-
-
%
12
10
-
-
9
-
6
-
-
%
7
9
31
-
9
26
12
-
-
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Genetic Technologies Limited (ASX:GTG)
Annual Report
(ii)
Terms and conditions of the share-based payment arrangements
Options
The terms and conditions of each grant of options affecting remuneration in the current or a future reporting
period are as follows:
Grant date
Vesting and
exercise date
Expiry date
Exercise
price
Value per option
at grant date
% Vested
December 12, 2018
June 30, 2019
December 11, 2021
$0.01
$0.01
100%
The following options lapsed during financial year 2019:
Name
Options lapsed
Exercise price
Fair value per
option
Final vesting date
Dr Jerzy Muchnicki
6,666,667
0.015
0.017
December 2, 2014
Total
6,666,667
The options mentioned above lapsed during financial year 2019, however they were not shown as lapsed in
the prior year's remuneration report. Hence, in the current year, the movement in options held by Dr. Jerzy
Muchnicki has been reflected by taking into account these lapsed options.
Performance Rights
After receiving requisite shareholder approval on November 29, 2018, the Company has issued 76,250,000
Performance Rights to Directors of the Company as follows:
•
•
7,500,000 Class A Performance Rights, 25,000,000 Class B Performance Rights and 25,000,000 Class
C Performance Rights to Dr Paul Kasian
3,750,000 Class A Performance Rights to Dr Lindsay Wakefield
• 6,250,000 Class A Performance Rights to Dr Jerzy Muchnicki
•
•
5,000,000 Class A Performance Rights to Mr Peter Rubinstein
3,750,000 Class A Performance Rights to Mr Xue Lee
Subsequently, the Performance Rights issued to Dr Paul Kasian and Mr Xue Lee were forfeited since they
resigned from their position in the current financial year. Due to the forfeiture of Performance Rights, a
reversal amounting to $81,984 relating to previously expensed amounts was accounted for during the current
reporting period.
Name
Options forfeited
Exercise price
Fair value of each
Performance Rights (cents)
Dr Paul Kasian
Dr Paul Kasian
Dr Paul Kasian
Mr Xue Lee
Total
7,500,000
25,000,000
25,000,000
3,750,000
61,250,000
0.0
0.0
0.0
0.0
0.77
0.77
0.57
0.77
The Company has accounted for above Performance Rights in accordance with its accounting policy for
share-based payment transactions and has recorded net reversal of $43,484 of associated expense in the
current year end (2019: $104,441).
25
For personal use only
Genetic Technologies Limited (ASX:GTG)
Annual Report
Valuation of Performance Rights
The Performance Rights are not currently quoted on the ASX and as such have no ready market value. The
Performance Rights each grant the holder a right of grant of one ordinary Share in the Company upon vesting
of the Performance Rights for nil consideration. Accordingly, the Performance Rights may have a present
value at the date of their grant. Various factors impact upon the value of Performance Rights including:
•
•
•
•
the period outstanding before the expiry date of the Performance Rights;
the underlying price or value of the securities into which they may be converted;
the proportion of the issued capital as expanded consequent upon conversion of the Performance
Rights into Shares (i.e. whether or not the shares that might be acquired upon exercise of the options
represent a controlling or other significant interest); and
the value of the shares into which the Performance Rights may be converted.
There are various formulae which can be applied to determining the theoretical value of options (including
the formula known as the Black-Scholes Model valuation formula and the Monte Carlo simulation).
The Company has commissioned an independent valuation of the Performance Rights. The independent
valuer has applied the Monte Carlo simulation in providing the valuation of the Performance Rights.
Inherent in the application of the Monte Carlo simulation are a number of inputs, some of which must be
assumed. The data relied upon in applying the Monte Carlo simulation was:
a) exercise price being 0.0 cents per Performance Right for all classes;
b) VWAP hurdle (10 days consecutive share price hurdle) equaling $0.02 for Class A and Class B and 3.3
cents for Class C Performance Rights;
c) the continuously compounded risk free rate being 2.02% for all classes of Performance Rights
(calculated with reference to the RBA quoted Commonwealth Government bonds as at October 8,
2018 of similar duration to that of the expected life of each class of Performance Rights);
d) the expected option life of 2.8 years for all classes of Performance Rights; and
e) a volatility measure of 80%.
Based on the independent valuation of the Performance Rights, the Company agrees that the total value of
the Performance Rights to be issued to each director (excluding those that have been forfeited) is as follows:
Valuation of Class A Performance Rights:
Number of Performance
Rights issued
Valuation per
Class A (cents)
Total fair value of Class
A Performance Rights
Dr Lindsay Wakefield
Dr George Muchnicki
3,750,000
6,250,000
Mr Peter Rubinstein
5,000,000
0.77
0.77
0.77
$28,875
$48,125
$38,500
26
For personal use only
Genetic Technologies Limited (ASX:GTG)
Annual Report
Balance at
the start
of the
year
Granted as
remuneration
Granted as
part of cost
of capital Exercised
Other
changes1
Balance at
the end of
the year
Vested and
exercisable
Option holdings
2020
Dr Lindsay Wakefield
Mr Peter Rubinstein3
Mr Xue Lee (resigned
on July 9, 2019)
Mr Nicholas Burrows
(appointed on
September 2, 2019)
Dr Paul Kasian
(resigned on
September 24, 2019)
-
-
-
-
-
Dr Jerzy Muchnicki2
6,666,667
Dr Richard Allman
15,000,000
Mr Stanley Sack
(appointed on
May 18, 2020)
Mr Phillip Hains
(appointed on
July 15, 2019)
-
-
Total
21,666,667
-
-
-
-
-
-
-
-
-
-
-
125,000,000
-
-
-
125,000,000
-
-
-
250,000,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
125,000,000 125,000,000
-
-
-
-
-
-
(6,666,667) 125,000,000 125,000,000
-
-
-
15,000,000
15,000,000
-
-
-
-
(6,666,667) 265,000,000 265,000,000
1. Other changes incorporates changes resulting from the expiration/forfeiture of options.
2. Dr Jerzy Muchnicki currently holds 125,000,000 unlisted options issued as the sub-underwriter during the capital raise process in October
2019. Hence, the unlisted options have been accounted for as part of transactions costs to equity and are not issued as a part of his
remuneration.
3. Mr Peter Rubinstein currently holds 125,000,000 unlisted options issued as the sub-underwriter during the capital raise process in October
2019. Hence, the unlisted options have been accounted for as part of transactions costs to equity and are not issued as a part of his
remuneration.
Performance Rights
2020
Balance at
the start of
the year
Granted as
remuneration
Exercised Other changes1
Balance at the
end of the year
Dr Lindsay Wakefield
3,750,000
Mr Peter Rubinstein
5,000,000
Mr Xue Lee (resigned
on July 9, 2019)
Mr Nicholas Burrows
(appointed on
September 2, 2019)
3,750,000
-
Dr Paul Kasian (resigned
on September 24, 2019)
57,500,000
Dr Jerzy Muchnicki
6,250,000
Dr Richard Allman
Mr Stanley Sack (appointed
on May 18, 2020)
Mr Phillip Hains (appointed
on July 15, 2019)
-
-
-
Total
76,250,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3,750,000
5,000,000
(3,750,000)
-
(57,500,000)
-
-
-
-
-
-
-
6,250,000
-
-
-
(61,250,000)
15,000,000
1. Performance Rights issued to Dr Paul Kasian and Mr Xue Lee have forfeited since they resigned from the posts in the current financial year.
27
For personal use only Genetic Technologies Limited (ASX:GTG)
Annual Report
Share holdings
2020
Balance at
the start of
the year1
Granted as
remuneration
Received on
exercise of
options
Other
changes2
Balance at the
end of the
year3
Dr Lindsay Wakefield
8,325,263
Mr Peter Rubinstein
47,282,700
Mr Xue Lee (resigned
on July 9, 2019)
Mr Nicholas Burrows
(appointed on
September 2, 2019)
59,594,850
-
Dr Paul Kasian (resigned
on September 24, 2019)
256,410
Dr Jerzy Muchnicki
20,903,244
Dr Richard Allman
Mr Stanley Sack (appointed
on May 18, 2020)
Mr Phillip Hains (appointed
on July 15, 2019)
-
-
-
Total
136,362,467
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,092,841
9,418,104
260,849,309
308,132,009
(59,594,850)
-
1,670,000
1,670,000
(256,410)
-
242,182,641
263,085,885
-
-
-
-
-
-
445,943,531
582,305,998
1. Balance may include shares held prior to individuals becoming KMP. For individuals who became KMP during the period, the balance is as
at the date they became KMP.
2. Other changes incorporates changes resulting from the acquisition or disposal of shares or in relation to rights issues.
3. For former KMP, the balance is as at the date they cease being KMP.
Indemnifying directors and officers
During the financial year, the Group maintained an insurance policy to indemnify all current Directors and
Officers against certain liabilities incurred as a Director or Officer, including costs and expenses associated in
successfully defending legal proceedings. The contract of insurance prohibits disclosure of the nature of the
liability and the amount of the premium. The Group has not otherwise, during or since the financial year,
indemnified or agreed to indemnify an Officer or Auditor of the Group or any related body corporate against
a liability incurred as such an Officer or Auditor.
Proceedings on behalf of the company
No proceedings have been brought or intervened in on behalf of the Group with leave of the Court under
section 237 of the Corporations Act 2001.
Non-audit services
The company may decide to employ the auditor on assignments additional to their statutory audit duties
where the auditor's expertise and experience with the company and/or the group are important.
During the year ended June 30, 2020, the Group engaged the external auditor to provide audit and other
assurance services. Please refer to note 20 for further information.
Auditor
A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001
is set out on page 29.
This report is made in accordance with a resolution of directors.
____________________
Dr Jerzy Muchnicki
Director
Melbourne
September 18, 2020
28
For personal use only Auditor’s Independence Declaration
As lead auditor for the audit of Genetic Technologies Ltd for the year ended 30 June 2020, I declare
that to the best of my knowledge and belief, there have been:
(a)
no contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
(b)
no contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Genetic Technologies Ltd and the entities it controlled during the
period.
Jon Roberts
Partner
PricewaterhouseCoopers
Melbourne
18 September 2020
PricewaterhouseCoopers, ABN 52 780 433 757
2 Riverside Quay, SOUTHBANK VIC 3006, GPO Box 1331, MELBOURNE VIC 3001
T: 61 3 8603 1000, F: 61 3 8603 1999, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
For personal use only
Genetic Technologies Limited (ASX:GTG)
Annual Report
Corporate governance statement
Genetic Technologies Limited and the board are committed to achieving and demonstrating the highest
standards of corporate governance. Genetic Technologies Limited has reviewed its corporate governance
practices against the Corporate Governance Principles and Recommendations (3rd edition) published by the
ASX Corporate Governance Council.
The 2020 corporate governance statement is dated as at June 30, 2020 and reflects the corporate governance
practices in place throughout the 2020 financial year. The 2020 corporate governance statement was
approved by the board on September 16, 2020. A description of the group's current corporate governance
practices is set out in the group's corporate governance statement which can be viewed at:
www.gtglabs.com/corporate-governance.
30
For personal use only Genetic Technologies Limited (ASX:GTG)
Annual Report
Financial report – June 30, 2020
Financial statements
Consolidated statement of profit or loss and other comprehensive income
Consolidated balance sheet
Consolidated statement of changes in equity
Consolidated statement of cash flows (direct method)
Notes to the financial statements
Directors' declaration
32
33
34
35
36
81
These reports are consolidated financial statements for the group consisting of Genetic Technologies Limited
and its subsidiaries. A list of major subsidiaries is included in note 14.
The report is presented in Australian dollars.
Genetic Technologies Limited is a company limited by shares, incorporated and domiciled in Australia. Its
registered office and principal place of business is:
60-66 Hanover Street
Fitzroy VIC 3065
31
For personal use only Genetic Technologies Limited (ASX:GTG)
Annual Report
Consolidated statement of profit or loss and
other comprehensive income
For the year ended 30 June 2020
Revenue from contracts with customers
Cost of sales of goods
Gross loss
Other income
Fair value gains on financial liabilities
Other gains/(losses)
Notes
3(a)
4(a)
4(b)
4(b)
2020
$
9,864
2019
$
25,444
(251,511)
(276,267)
(241,647)
(250,823)
1,140,647
1,019,769
195,845
(5,522)
-
(407,482)
General and administrative expenses
(4,058,557)
(3,830,198)
Laboratory and Research and Development
(2,477,578)
(2,360,762)
Selling and Marketing
Operating loss
Finance expenses
Loss before income tax
Income tax expense
Loss for the year
(637,295)
(576,077)
(6,084,107)
(6,405,573)
(14,823)
(20,031)
(6,098,930)
(6,425,604)
5
-
-
(6,098,930)
(6,425,604)
Other comprehensive income
Items that may be reclassified to profit or loss:
Exchange differences on translation of foreign
operations
9(b)
(33,175)
23,668
Total comprehensive loss for the year
(6,132,105)
(6,401,936)
Total comprehensive income for the year is
attributable to:
Owners of Genetic Technologies Limited
(6,132,105)
(6,401,936)
Loss per share for loss attributable to the ordinary
equity holders of the company:
Basic and diluted loss per share
21
(0.15)
(0.24)
Cents
Cents
The above consolidated statement of profit or loss and other comprehensive income should be read in
conjunction with the accompanying notes.
32
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Genetic Technologies Limited (ASX:GTG)
Annual Report
Consolidated balance sheet
As at 30 June 2020
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Other current assets
Total current assets
Non-current assets
Right-of-use asset
Property, plant and equipment
Total non-current assets
Total assets
LIABILITIES
Current liabilities
Trade and other payables
Employee benefit obligations
Lease liabilities
Total current liabilities
Non-current liabilities
Borrowing
Employee benefit obligations
Other financial liabilities
Lease liabilities
Total non-current liabilities
Total liabilities
Net assets
EQUITY
Share capital
Other reserves
Retained earnings
Total equity
Notes
6(a)
6(b)
8(a)
7(a)
6(c)
7(b)
8(a)
6(d)
7(b)
6(e)
8(a)
2020
$
2019
$
14,214,160
789,354
91,390
97,845
2,131,741
818,766
31,865
213,300
15,192,749
3,195,672
397,945
42,285
440,230
-
69,333
69,333
15,632,979
3,265,005
723,724
432,933
240,915
1,005,308
487,682
-
1,397,572
1,492,990
52,252
1,927
977,237
188,621
1,220,037
-
809
-
-
809
2,617,609
1,493,799
13,015,370
1,771,206
9(a)
9(b)
140,111,073
125,498,824
8,755,489
6,009,932
(135,851,192)
(129,737,550)
13,015,370
1,771,206
The above consolidated balance sheet should be read in conjunction with the accompanying notes.
33
For personal use only
Genetic Technologies Limited (ASX:GTG)
Annual Report
Consolidated statement of changes in equity
For the year ended 30 June 2020
Attributable to the owners of
Genetic Technologies Limited
Share
Capital
Reserve
Accumulated
losses
Total
equity
Notes
$
$
$
$
Balance at July 1, 2018
122,372,662
5,651,162
(123,311,946)
4,711,878
Loss for the year
Other comprehensive loss
Total comprehensive income for the year
-
-
-
-
(6,425,604)
(6,425,604)
23,668
-
23,668
23,668
(6,425,604)
(6,401,936)
Transactions with owners in their
capacity as owners:
Contributions of equity net of transaction
costs
9(a)
3,126,162
-
Share-based payments
Issue of options/warrants to underwriters
9(b)
9(b)
-
-
341,201
(6,099)
3,126,162
335,102
-
-
-
-
3,126,162
341,201
(6,099)
3,461,264
Balance at June 30, 2019
125,498,824 6,009,932 (129,737,550)
1,771,206
Initial adoption of AASB 16
23(a)
-
-
(14,712)
(14,712)
Restated total equity at July 1, 2019
125,498,824 6,009,932 (129,752,262)
1,756,494
Loss for the year
Other comprehensive loss
Total comprehensive income for the year
Transactions with owners in their
capacity as owners
Contributions of equity, net of transaction
costs and tax
Reversal of forfeited Performance Rights
Share-based payments
Issue of options/warrants to underwriters
-
-
-
-
(6,098,930)
(6,098,930)
(33,175)
-
(33,175)
(33,175)
(6,098,930)
(6,132,105)
9(a)
14,612,249
-
-
14,612,249
9(b)
9(b)
9(b)
-
-
-
(81,984)
67,542
2,793,174
14,612,249
2,778,732
-
-
-
-
(81,984)
67,542
2,793,174
17,390,981
Balance at June 30, 2020
140,111,073 8,755,489
(135,851,192)
13,015,370
The above consolidated statement of changes in equity should be read in conjunction with the
accompanying notes.
34
For personal use only
Genetic Technologies Limited (ASX:GTG)
Annual Report
Consolidated statement of cash flows for
the period
For the year ended 30 June 2020
Cash flows from operating activities
Receipts from customers
Notes
2020
$
2019
$
9,864
204,768
Payments to suppliers and employees
(6,758,484)
(6,575,163)
R&D tax incentive and other grants received
1,036,522
297,213
Net cash outflow from operating activities
10(a)
(5,712,098)
(6,073,182)
Cash flows from investing activities
Payments for property, plant and equipment
7(a)
Proceeds from sale of financial assets at fair value
through other comprehensive income
Interest received
Proceeds from sale of property, plant and equipment
(38,100)
43,380
22,507
37,000
(50,309)
-
25,849
-
Repayment of loans by related parties
-
(500,000)
Net cash inflow (outflow) from investing activities
64,787
(524,460)
Cash flows from financing activities
Proceeds from issues of shares and other equity
securities
Proceeds from borrowings
Principal elements of finance lease payments
Share issue cost
Interest paid
21,793,678
3,557,509
52,252
(183,907)
(3,215,174)
(86,503)
-
-
(431,347)
-
Net cash inflow from financing activities
18,360,346
3,126,162
Net increase (decrease) in cash and cash
equivalents
Cash and cash equivalents at the beginning of the
financial year
Effects of exchange rate changes on cash and cash
equivalents
12,713,035
(3,471,480)
2,131,741
5,487,035
(630,616)
116,186
Cash and cash equivalents at end of year
6(a)
14,214,160
2,131,741
The above consolidated statement of cash flows should be read in conjunction with the accompanying
notes.
35
For personal use only
Genetic Technologies Limited (ASX:GTG)
Annual Report
Notes to the financial statements
Contents of the the notes to the financial statements
37
38
40
40
41
42
46
47
49
55
55
56
58
59
59
59
60
61
64
71
72
73
73
80
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
Going Concern
Segment information
Revenue from contract with customers
Other income and other gain/(losses)
Income tax expense
Financial assets and financial liabilities
Non-financial assets and liabilities
Leased Liabilities
Equity
Cash flow information
Critical estimates, judgements and errors
Financial risk management
Capital management
Interests in other entities
Contingent liabilities and contingent assets
Commitments
Events occurring after the reporting period
Related party transactions
Share-based payments
Remuneration of auditors
Loss per share
Parent entity financial information
Summary of significant accounting policies
Impact of COVID-19
36
For personal use only
Genetic Technologies Limited (ASX:GTG)
Annual Report
1
Going Concern
For the year ending June 30, 2020, the Group incurred a total comprehensive loss of $6,132,105 (2019:
$6,401,936) and net cash outflow from operations of $5,712,098 (2019: $6,073,182). As at June 30, 2020 the Group
held total cash and cash equivalents of $14,214,160 and total net current assets of $13,795,177.
The Company expects to continue to incur losses and cash outflows for the foreseeable future as it continues
to invest resources in expanding the research and development activities in support of the distribution of
existing and new products. Following successful capital raises in the last three months of the financial year,
the Company has $14.2 million cash and cash equivalents as at June 30, 2020. In the Director’s opinion this,
together with a further gross proceeds of US$5.1 million before transaction costs raised in July 2020, will
underpin the Company’s funding requirements for approximately two years. As a result the financial
statements have been prepared on a going concern basis.
2
(a)
Segment information
Description of segments and principal activities
The Company has identified two reportable segments as reported that is consistent with the internal
reporting provided to the chief operating decision maker.
Management considers the business from a geographic perspective and has identified two reportable
segments:
• Australia: is the home country of the parent entity and the location of the company's genetic testing
and licensing operations.
• USA: is the home of Phenogen Sciences Inc. and GeneType Corporation
37
For personal use only
Genetic Technologies Limited (ASX:GTG)
Annual Report
2
Segment information (continued)
(b)
Geographical segments
The segment information for the reportable segments is as follows:
2020
Consolidated entity
Segment revenue & other income
Revenue from contracts with customers
Other income
Net other gains
Cost of goods sold
Total segment revenue & other income
Segment expenses
Depreciation and amortisation
Finance costs
Share-based payments
Australia
$
3,160
1,130,881
190,323
(243,506)
1,080,858
(65,148)
(1,221)
14,442
USA
$
6,704
9,766
-
(8,005)
8,465
-
(13,602)
-
Total
$
9,864
1,140,647
190,323
(251,511)
1,089,323
(65,148)
(14,823)
14,442
Laboratory and research and development
(2,310,815)
(166,763)
(2,477,578)
General and administrative expenses
(4,046,264)
(12,295)
(4,058,559)
Other operating expenses
Depreciation for right-of-use assets
(159,009)
(200,785)
(226,793)
-
(385,802)
(200,785)
Total segment expenses
(6,768,800)
(419,453)
(7,188,253)
Income tax expenses
Loss for the period
-
-
-
(5,687,942)
(410,988)
(6,098,930)
Total Segment Assets
15,329,955
303,024
15,632,979
Total Segment Liabilities
(2,404,288)
(213,321)
(2,617,609)
38
For personal use only
Genetic Technologies Limited (ASX:GTG)
Annual Report
2
Segment information (continued)
(b)
Geographical segments (continued)
2019
Consolidated entity
Segment revenue & other income
Revenue from contracts with customers
Other income
Net other gains/(losses)
Cost of goods sold
Total segment revenue & other income
Segment expenses
Depreciation and amortisation
Finance costs
Share-based payments
Australia
$
10,579
1,019,711
(407,482)
(265,492)
357,316
(156,250)
(3,884)
(326,952)
USA
$
14,865
58
-
(10,775)
4,148
-
(16,147)
-
Total
$
25,444
1,019,769
(407,482)
(276,267)
361,464
(156,250)
(20,031)
(326,952)
Laboratory and research and development
(2,181,469)
(179,293)
(2,360,762)
General and administrative expenses
(3,816,607)
(13,591)
(3,830,198)
Other operating expenses
335,896
(428,771)
(92,875)
Total segment expenses
(6,149,266)
(637,802)
(6,787,068)
Income tax expenses
Loss for the period
-
-
-
(5,791,950)
(633,654)
(6,425,604)
Total Segment Assets
3,190,004
75,001
3,265,005
Total Segment Liabilities
(1,370,508)
(123,291)
(1,493,799)
39
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Revenue from contract with customers
(a)
Disaggregation of revenue from contracts with customers
The group derives revenue from the transfer of services at a point in time:
BREVAGenplus
(b)
(i)
Accounting policies
Services
2020
$
9,864
9,864
2019
$
25,444
25,444
Revenue from the provision molecular risk testing for cancer (BREVAGenplus) is recognised at a point time
when the group has provided the customer with their test results, the single performance obligation.
4
Other income and other gain/(losses)
(a)
Other income
R&D tax incentive income (i)
Government grant income - COVID-19 relief (ii)
Interest received
Net gain on sale of non-current assets
Sundry Income
2020
$
750,000
253,139
22,507
37,000
78,001
2019
$
856,707
-
25,794
-
137,268
1,140,647
1,019,769
(i)
Fair value of R&D tax incentive
The group's research and development activities are eligible under an Australian government tax incentive
for eligible expenditure. Management has assessed these activities and expenditure to determine which are
likely to be eligible under the incentive scheme. Amounts are recognised when it has been established that
the conditions of the tax incentive have been met and that the expected amount can be reliably measured.
For the year ended June 30, 2020, the group has included an item in other income of $750,000 (2019: $856,707)
to recognise income over the period necessary to match the grant on a systematic basis with the costs that
they are intended to compensate.
On December 5, 2019, the Treasury Laws Amendment (R&D Tax Incentive Bill 2019) was introduced into
Parliament. The draft bill contains proposed amendments to the R&D tax incentive regulations. Under the
proposed amendments, the refundable tax offset rate for companies with an aggregated turnover of less
than $20 million would become 41%. As at June 30, 2020, the bill remains under review by the Senate
Committee.
In accordance with AASB 120, government grants, including non-monetary grants at fair value, should not be
recognised until there is reasonable assurance that the entity will comply with the conditions attaching to
them and the grants will be received.
Management does not consider the rate reduction to be substantially enacted as at June 30, 2020 due to the
continued legislative debate in Parliament. The Group has therefore calculated the R&D tax incentive by
applying the currently legislated R&D rate to eligible expenditure.
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Other income and other gain/(losses) (continued)
(a)
Other income (continued)
(ii)
Government Grant income – COVID-19 Relief
The COVID-19 relief relate to government assistance received during the year, from the Australian
Government (at both federal and state level), in response to the economic and financial challenges in the
current economy.
(b)
Other gains/(losses)
Fair value gains on financial liabilities through profit or loss
6(e)
Notes
Net foreign exchange (losses)/gains
Net Impairment gain/(loss)
2020
$
195,845
(5,522)
2019
$
-
92,518
-
(500,000)
190,323
(407,482)
5
Income tax expense
(a)
Numerical reconciliation of income tax expense to prima facie tax payable
Loss from continuing operations before income tax
expense
(6,098,930)
(6,425,604)
Tax at the Australian tax rate of 27.5% (2019: 27.5%)
(1,677,206)
(1,767,040)
2020
$
2019
$
Tax effect of amounts which are not deductible
(taxable) in calculating taxable income:
Share-based payments expense
Other non-deductible items
Research and development expenditure
Other non-assessable items
(3,971)
888
446,717
(26,764)
92,153
590
541,596
-
Subtotal
(1,260,336)
(1,132,701)
Difference in overseas tax rates
Under/(over) provision
Research and development tax credit
Temporary differences not recognised
Tax losses not recognised
Income tax expense
26,526
553,190
(206,250)
(353,628)
1,240,498
-
41,009
1,126,722
(238,084)
(121,965)
325,019
-
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5
Income tax expense (continued)
(b)
Tax losses
Unused tax losses for which no deferred tax asset has
been recognised
Potential tax benefit @ 27.5% (Australia)
Potential tax benefit @ 21% (USA)
6
(a)
Financial assets and financial liabilities
Cash and cash equivalents
2020
$
97,259,045
18,727,578
6,123,340
2019
$
90,254,547
17,563,730
5,541,152
24,850,918
23,104,882
2020
$
2019
$
Current assets
Cash at bank and in hand
14,214,160
2,131,741
(i)
Classification as cash equivalents
Term deposits are presented as cash equivalents if they have a maturity of three months or less from the date
of acquisition and are repayable with 24 hours notice with no loss of interest. See note 23(j) for the group’s
other accounting policies on cash and cash equivalents.
(b)
Trade and other receivables
Current
Non-
current
Notes
$
Trade receivables
38,871
Loss allowance
12(b)
-
Other receivables
38,871
750,483
Total trade and other receivables
789,354
$
-
-
-
-
-
2020
Total Current
$
$
38,871
15,762
-
-
38,871
15,762
Non-
current
$
-
-
-
2019
Total
$
15,762
-
15,762
750,483 803,004
- 803,004
789,354
818,766
-
818,766
(i)
Classification as trade receivables
Trade receivables are amounts due from customers for goods sold or services performed in the ordinary
course of business. They are generally due for settlement within 30 days and therefore are all classified as
current.
Trade receivables are recognised initially at the amount of consideration that is unconditional unless they
contain significant financing components, when they are recognised at fair value. The group holds the trade
receivables with the objective to collect the contractual cash flows and therefore measures them
subsequently at amortised cost using the effective interest method.
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(b)
(ii)
Financial assets and financial liabilities (continued)
Trade and other receivables (continued)
Other receivables
These amounts primarily comprise amounts receivable from the Australian Taxation Office in relation to the
R&D tax incentive.
(iii)
Fair value of trade and other receivables
Due to the short-term nature of the current receivables, their carrying amount is considered to be the same
as their fair value.
(c)
Trade and other payables
Trade payables
Accrued expenses
Other payables
Current
$
350,151
330,845
42,728
723,724
Non-
current
$
-
-
-
-
2020
Total
Current
$
$
350,151
590,231
330,845
346,654
42,728
68,423
723,724
1,005,308
2019
Total
$
590,231
346,654
68,423
1,005,308
Non-
current
$
-
-
-
-
Trade payables are unsecured and are usually paid within 30 days of recognition.
The carrying amounts of trade and other payables are considered to be the same as their fair values, due to
their short-term nature.
Accruals include R&D incentive claim costs, review of internal financial control costs and income tax return
costs.
(d)
Borrowing
2020
Current
Non-
current
Total
Current
Non-
current
$
-
-
$
$
52,252
52,252
52,252
52,252
$
-
-
$
-
-
2019
Total
$
-
-
Unsecured
Other loan
Total unsecured borrowing
As of June 30, 2020, borrowing relates to loan received on May 4, 2020, from the U.S. Small Business
Administration as a part of the Paycheck Protection Program (PPP) which ensures the Company can
continue to pay its employees and cover certain costs for up to 8 weeks after the loan is made available to the
Company.
The following are the terms of the loan availed:
• PPP loan has fixed interest rate of 1%.
•
•
Loans issued prior to June 5 have a maturity of 2 years. Loans issued after June 5 have a maturity of 5 years.
Loan payments can be deferred for another six months.
• No collateral or personal guarantees are required.
• Neither the government nor lenders will charge small businesses any fees.
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(d)
(iii)
Financial assets and financial liabilities (continued)
Borrowing (continued)
Fair value of trade and other receivables (continued)
The loan availed has the following conditions for the Company to seek its forgiveness:
• Forgiveness is based on the Company maintaining or quickly rehiring employees and maintaining
salary levels.
• Forgiveness will be reduced if full-time headcount declines, or if salaries and wages decrease.
(e)
Other financial liabilities
2020
Current
Non-
current
Total
Current
Non-
current
$
-
-
$
$
977,237
977,237
977,237
977,237
$
-
-
$
-
-
2019
Total
$
-
-
Other financial liabilities
Total unsecured borrowing
Other financial liabilities relates to warrants issued and to be issued to H.C. Wainwright & Co during capital
raises in April and May 2020. The US warrants represent a written option to exchange a fixed number of the
Group's own equity instruments for a fixed amount of cash that is denominated in a foreign currency (US
dollars) and is classified as a derivative financial liability in accordance with AASB 9. The initial recognition of
the warrants amounted to $1,173,082. As of June 30, 2020, the warrants have been revalued to $977,237, and
resulted in $195,845 recognised in profit and loss. Since the Company is expected to be in a loss making
position, the expectation of the Company is that the warrants are unlikely to be exercised in the next 12
months and hence have been classified under non-current liabilities.
All US warrants represent a written option to exchange a fixed number of the Group's own equity instruments
for a fixed amount of cash that is denominated in a foreign currency (US dollars) and is classified as a derivative
financial liability in accordance with AASB 9. The US warrants liability is initially recorded at fair value at issue
date and subsequently measured at fair value through profit and loss at each reporting date. The warrants
granted are not traded in an active market and fall under the level 2 hierarchy of the requirements for
disclosure of the fair value measurements. The fair value has thus been estimated by using the Binomial
pricing model based on the following assumptions based on observable market conditions that existed at
the issue date and at June 30, 2020.
Valuation date
Grant Date
Warrants issued
Underlying asset price
Risk free rate
Volatility
2020
2020
June 30, 2020
April 3, 2020
April 3, 2020
April 3, 2020
40,114,200
40,114,200
A$0.0050
A$0.0050
0.398%
134%
0.411%
140.54%
Exercise price presented in United States Dollar
US$0.00365
US$0.00365
Exchange rate at valuation date
A$1 to US$0.689
A$1 to US$0.712
Exercise price presented in Australian Dollar
A$0.0053
A$0.0061
Time to maturity of underlying warrants (years)
5
5
Value per warrant in Australian Dollar
Model used
Valuation amount
A$0.0043
A$0.0044
Binomial
A$172,491
Binomial
A$175,137
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6
(e)
Financial assets and financial liabilities (continued)
Other financial liabilities (continued)
Valuation date
Grant Date
Warrants issued
Underlying asset price
Risk free rate
Volatility
2020
2020
June 30, 2020
April 23, 2020
April 23, 2020
April 23, 2020
28,177,578
28,177,578
A$0.0050
A$0.0060
0.398%
134%
0.444%
142.70%
Exercise price presented in United States Dollar
US$0.00417
US$0.00417
Exchange rate at valuation date
A$1 to US$0.689
A$1 to US$0.712
Exercise price presented in Australian Dollar
A$0.0060
A$0.0065
Time to maturity of underlying warrants (years)
5
5
Value per warrant in Australian Dollar
Model used
Valuation amount
Valuation date
Grant Date
Warrants issued
Underlying asset price
Risk free rate
Volatility
A$0.0042
A$0.0053
Binomial
Binomial
A$118,346
A$149,693
2020
2020
June 30, 2020
June 1, 2020
June 1, 2020
June 1, 2020
156,000,000
156,000,000
A$0.0050
A$0.0060
0.398%
134.00%
0.397%
142.94%
Exercise price presented in United States Dollar
US$0.00417
US$0.00417
Exchange rate at valuation date
A$1 to US$0.689
A$1 to US$0.712
Exercise price presented in Australian Dollar
A$0.0060
A$0.0061
Time to maturity of underlying warrants (years)
5
5
Value per warrant in Australian Dollar
Model used
Valuation amount
(f)
(i)
Recognised fair value measurements
Fair value hierarchy
A$0.0044
A$0.0054
Binomial
Binomial
A$686,400
A$848,252
Level 1: The fair value of financial instruments traded in active markets (such as publicly traded derivatives
and equity securities) is based on quoted market prices at the end of the reporting period. The quoted market
price used for financial assets held by the group is the current bid price. These instruments are included in
level 1.
Level 2: The fair value of financial instruments that are not traded in an active market (for example, over-the-
counter derivatives) is determined using valuation techniques which maximise the use of observable market
data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an
instrument are observable, the instrument is included in level 2.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is
included in level 3. This is the case for unlisted equity securities.
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7
Non-financial assets and liabilities
(a)
Property, plant and equipment
2020
At July 1, 2018
Cost or fair value
Plant and
equipment
Furniture,
fittings and
equipment
Leasehold
Improvements
Leased
plant and
equipment
$
$
$
$
Total
$
2,046,015
757,063
456,286
6,512
3,265,876
Accumulated depreciation
(1,950,023)
(709,964)
(424,093)
(6,512)
(3,090,592)
Net book amount
95,992
47,099
32,193
-
175,284
Year ended June 30, 2019
Opening net book amount
95,992
47,099
Additions
-
47,714
32,193
2,583
Depreciation charge
(55,480)
(66,416)
(34,352)
Closing net book amount
40,512
28,397
424
At June 30, 2019
Cost or fair value
2,046,015
824,829
465,380
Accumulated depreciation
(2,005,503)
(796,432)
(464,956)
Net book amount
40,512
28,397
424
Year ended June 30, 2020
Opening net book amount
Additions
40,512
22,827
28,397
15,273
Depreciation charge
(42,488)
(22,236)
Closing net book amount
20,851
21,434
At June 30, 2020
Cost or fair value
426,701
669,788
Accumulated depreciation and
impairment
(405,850)
(648,354)
Net book amount
20,851
21,434
424
-
(424)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
175,284
50,297
(156,248)
69,333
3,336,224
(3,266,891)
69,333
69,333
38,100
(65,148)
42,285
1,096,489
(1,054,204)
42,285
During the year ended June 30, 2020, the Company has written off its fully depreciated assets in plant and
equipment of $1,596,487; furniture, fittings and equipment of $139,768; and leasehold improvements of
$464,956, from their respective costs and accumulated depreciation. The Company has received proceeds
from sale of property, plant and equipment amounted to $37,000 in current year.
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7
Non-financial assets and liabilities (continued)
(a)
Property, plant and equipment (continued)
(i)
Depreciation methods and useful lives
Property, plant and equipment is recognised at historical cost less depreciation.
Depreciation is calculated using the straight-line method to allocate their cost or revalued amounts, net of
their residual values, over their estimated useful lives or, in the case of leasehold improvements and certain
leased plant and equipment, the shorter lease term as follows:
• Plant and equipment
3 - 5 years
• Furniture, fittings and equipment
3 - 5 years
•
•
Leasehold improvements
1 - 3 years (lease term)
Leased plant and equipment
3 years (lease term)
(b)
Employee benefit obligations
2020
Current
Non-
current
Total
Current
Non-
current
2019
Total
$
$
$
$
$
$
Leave obligations
432,933
1,927
434,860
487,682
809
488,491
(ii)
Leave obligations
The leave obligations cover the group’s liabilities for long service leave and annual leave which are classified
as either other long-term benefits or short-term benefits, as explained in note 23(p).
The current portion of this liability includes all of the accrued annual leave, the unconditional entitlements to
long service leave where employees have completed the required period of service and also for those
employees that are entitled to pro-rata payments in certain circumstances. The entire amount of the
provision of $432,933 (2019: $487,682) is presented as current, since the group does not have an unconditional
right to defer settlement for any of these obligations. However, based on past experience, the group does not
expect all employees to take the full amount of accrued leave or require payment within the next 12 months.
8
(a)
Leased Liabilities
Amounts recognised in the statement of financial position
The statement of financial position shows the following amounts relating to leases:
Right-of-use assets
Right-of-use assets
Lease liabilities
Lease liabilities – Current
Lease liabilities – Non-current
2020
$
397,945
240,915
188,621
429,536
2019
$
-
-
-
-
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8
(b)
Leased Liabilities (continued)
Amounts recognised in the statement of profit or loss
The statement of profit or loss under general and administrative expenses includes the following amounts
relating to leases:
Depreciation charge of right-of-use assets
Depreciation Expense (for Leased Assets)
Interest expense (included in general and
administrative expenses)
2020
$
200,785
37,375
2019
$
-
-
During the financial year ended June 30, 2020, the total cash outflow was $221,282.
(c)
The group's leasing activities and how these leases are accounted for
The group has adopted AASB 16 Leases during the year ended June 30, 2020 using the modified retrospective
approach. The modified approach does not require restatement of comparative periods. Instead the
cumulative impact of applying AASB 16 is accounted for as an adjustment to equity at the start of the current
accounting period in which it is first applied, known as the 'date of initial application'. Refer to Note 23(a) for
the impact on adoption.
For any new contracts entered into on or after July 1, 2019, the group considers whether a contract is, or
contains a lease. A lease is defined as ‘a contract, or part of a contract, that conveys the right to use an asset
(the underlying asset) for a period of time in exchange for consideration’. To apply this definition the group
assesses whether the contract meets three key evaluations which are whether:
•
•
•
the contract contains an identified asset, which is either explicitly identified in the contract or
implicitly specified by being identified at the time the asset is made available to the Company,
the Company has the right to obtain substantially all of the economic benefits from use of the identified
asset throughout the period of use, considering its rights within the defined scope of the contract,
the Company has the right to direct the use of the identified asset throughout the period of use. The
Company assess whether it has the right to direct ‘how and for what purpose’ the asset is used
throughout the period of use.
Leases are recognised as a right-of-use asset and a corresponding liability at the date at which the leased
asset is available for use by the group. Each lease payment is allocated between the liability and finance cost.
The finance cost is charged to profit or loss over the lease period so as to produce a constant periodic rate of
interest on the remaining balance of the liability for each period. The right-of-use asset is depreciated over
the shorter of the asset's useful life and the lease term on a straight-line basis.
Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include
the net present value of the following lease payments:
•
•
•
fixed payments (including in-substance fixed payments), less any lease incentives receivable,
amounts expected to be payable by the lessee under residual value guarantees,
the exercise price of a purchase option if the lessee is reasonably certain to exercise that option, and
• payments of penalties for terminating the lease, if the lease term reflects the lessee exercising that option.
The lease payments are discounted using the interest rate implicit in the lease, if that rate can be determined,
or the group’s incremental borrowing rate.
Right-of-use assets are measured at cost comprising the following:
•
•
•
•
the amount of the initial measurement of lease liability,
any lease payments made at or before the commencement date, less any lease incentives received,
any initial direct costs, and
restoration costs.
Payments associated with short-term leases and leases of low-value assets are recognised on a straight-line
basis as an expense in profit or loss. Short-term leases are leases with a lease term of 12 months or less.
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(d)
Leased Liabilities (continued)
COVID-19 Impact on Leases
On June 25, 2020, the Company obtained a rent concession for its leased premises. The terms of the
concession are as follows:
•
•
•
15% waiver for the period April 1 through to September 30, 2020.
15% deferral for the period April 1 through to September 30, 2020.
70% due and payable on the first of each month in line with the lease.
• No interest on deferred payment.
• No increase of rent during the period April 1 through to September 30, 2020.
•
The lease has been extended by 6 months from September 1, 2021 to February 28, 2022.
The above were treated as lease modification and adjustments were made to the right-of-use assets and
corresponding current and non-current liabilities for the year ended 30 June 2020 in accordance with the
AASB 16 accounting framework. The net impact of the variation resulted in an increase on the Right -of-use
assets balance amounted to $88,103 and Non-current Liabilities increased by 94,626.
9
(a)
Equity
Share capital
2020
2019
2020
Notes
Shares
Shares
$
2019
$
Ordinary shares – fully paid
9(a)(i)
7,513,779,743 2,938,134,143
140,111,073
125,498,824
Total share capital
7,513,779,743 2,938,134,143
140,111,073
125,498,824
(i)
Movements in ordinary shares:
Details
Balance at July 1, 2018
Number of
shares
Total
$
2,435,282,724
122,372,662
Issue of 108,833,100 Ordinary Shares (Shares issued as collateral and in
payment of establishment fee of Kentgrove)
108,833,100
-
Issue of 100,000,000 Ordinary Shares at $0.0135 (October 25, 2018)
100,000,000
1,350,000
Less: transaction costs arising on share issue
-
(431,347)
Issue of 72,596,869 Ordinary Shares at $0.00676 (May 6, 2019)
72,596,869
490,589
Issue of 221,421,450 Shares (1,476,143 ADS at US$0.80/ADS (May 23, 2019)
221,421,450
1,716,920
Balance June 30, 2019
2,938,134,143
125,498,824
Less: transaction costs arising on share issue
-
(7,181,429)
Issue of 1,125,000,000 Ordinary Shares at $0.004 (October 25, 2019)
1,125,000,000
4,499,965
Issue of 617,144,400 Ordinary Shares (1,028,574 ADS at US$1.75/ADS)
(April 2, 2020)
617,144,400
3,000,988
Issue of 433,501,200 Ordinary Shares (722,502 ADS at US$2.00/ADS)
(April 22, 2020)
433,501,200
2,285,115
Issue of 2,400,000,000 Ordinary Shares (3,500,000 ADS at
US$2.00/ADS and 500,000 Pre funded warrants at US$1.9999/Warrant)
(May 28, 2020)
Balance June 30, 2020
49
2,400,000,000
12,007,610
7,513,779,743
140,111,073
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Genetic Technologies Limited (ASX:GTG)
Annual Report
9
(a)
(ii)
Equity (continued)
Share capital (continued)
Ordinary shares
Ordinary shares entitle the holder to participate in dividends, and to share in the proceeds of winding up 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 by 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.
The capital raising costs include the following valued options and warrants accounted for:
•
•
•
•
•
250,000,000 unlisted options issued on October 30, 2019, exercisable at $0.008 each and expiring on
October 29, 2022, amounting to $817,666. Each option is exercisable for one fully paid ordinary share.
125,000,000 unlisted options issued on December 20, 2019, exercisable at $0.008 each and expiring
on December 20,2022, amounting to $528,027. Each option is exercisable for one fully paid ordinary
share.
125,000,000 unlisted options issued on December 20, 2019, exercisable at $0.008 each and expiring
on December 20,2022, amounting to $528,027. Each option is exercisable for one fully paid ordinary
share.
5,000,000 unlisted options issued on March 6, 2020, exercisable at $0.008 each and expiring on March
6, 2023, amounting to $29,340. Each option is exercisable for one fully paid ordinary share.
166,066,050 warrants issued at no cash consideration on July 16, 2019, exercisable at US$0.00533 each
and expiring on July 16, 2024, amounting to $890,113. The warrants are exercisable for fully paid
ordinary shares.
• 40,114,200 warrants issued on April 3, 2020, exercisable at US$0.00365 each and expiring on April 1,
2025, amounting to $175,137. The warrants are exercisable for fully paid ordinary shares.
•
•
28,177,578 warrants issued on April 22, 2020, exercisable at US$0.00417 each and expiring on April 19,
2025, amounting to $149,693. The warrants are exercisable for fully paid ordinary shares.
156,000,000 warrants to be issued at, subject to shareholder approval, exercisable at US$0.004166
expiring on 5 years after date of issue, amounting to $848,252. The warrants are exercisable for fully
paid ordinary shares.
Apart from the above, the Company also incurred expenses paid in cash towards capital raising costs through
legal, accounting and broker related fees amounting to $3,215,174 during the year for various capital raises.
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(b)
Equity (continued)
Other reserves
The following table shows a breakdown of the consolidated balance sheet line item ‘other reserves’ and the
movements in these reserves during the year. A description of the nature and purpose of each reserve is
provided below the table.
Share- based
payments
Foreign
currency
translation
$
$
Total
$
Balance at July 1, 2018
4,885,232
765,930
5,651,162
Currency translation differences
Other comprehensive income for the year
Transactions with owners in their capacity as owners
-
-
23,668
23,668
23,668
23,668
Share-based payment expenses
Reversal of forfeited options
341,201
(6,099)
-
-
341,201
(6,099)
Balance at June 30, 2019
5,220,334
789,598
6,009,932
Currency translation differences
Other comprehensive income for the year
Transactions with owners in their capacity as owners
-
-
(33,175)
(33,175)
(33,175)
(33,175)
Share-based payment expenses
Issue of options/warrants to underwriters
67,542
2,793,174
Reversal of Performance Rights expenses in prior year*
(81,984)
-
-
-
67,542
2,793,174
(81,984)
At June 30, 2020
7,999,066
756,423
8,755,489
*During the year, 3,750,000 Performance Rights previously issued to Mr. Xue Lee in the year ended June 30, 2019 were cancelled during the
year ended June 30, 2020. Additionally, 57,500,000 Performance Rights previously issued to Dr. Paul Kasian in the year ended June 30,
2019 were forfeited in the year ended June 30, 2020. Due to the forfeiture of Performance Rights, a reversal amounting to $81,984 relating to
previously expensed amounts was accounted for during the current reporting period.
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(b)
Equity (continued)
Other reserves (continued)
During the financial year ended 30 June 2020, the following warrants were issued to as a part of capital raising costs:
Warrants issued to
Grant date of warrants issued
Number of warrants issued
Aegis Corp
2020
Grant Date
Warrants issued
Dividend yield
Historic volatility and expected volatility
Option exercise price
Fair value of warrants at grant date
Weighted average exercise price
Risk free interest rate
Model used
Expected life of an warrant
Valuation amount
July 16, 2019
166,066,050
July 16, 2019
166,066,050
-
152%
$0.008
$0.006
$0.008
1.05%
Black-Scholes
5 years
$890,113
The following information relates to options granted and issued against the capital raising costs year ended
June 30, 2020;
Options issued to
Grant date for options issued
Number of options issued
Mr Peter Rubinstein
Dr Jerzy Muchnicki
Various underwriters
Lodge Corporate Pty Ltd
Total
2020
Grant Date
Options issued
Dividend yield
Historic volatility and expected volatility
Option exercise price
Fair value of options at grant date
Weighted average exercise price
Risk-free interest rate
Expected life of an option
Model used
Valuation amount
November 28, 2019
November 28, 2019
October 30, 2019
March 6, 2020
52
125,000,000
125,000,000
250,000,000
5,000,000
505,000,000
November 28, 2019
250,000,000
-
136%
$0.008
$0.003
$0.008
0.85%
3 years
Black-Scholes
$1,056,054
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October 30, 2019
250,000,000
-
136%
$0.008
$0.003
$0.008
0.78%
3 years
Black-Scholes
$817,666
March 6, 2020
5,000,000
-
141%
$0.008
$0.007
$0.008
0.36%
3 years
Black-Scholes
$29,340
9
(b)
Equity (continued)
Other reserves (continued)
2020
Grant Date
Options issued
Dividend yield
Historic volatility and expected volatility
Option exercise price
Fair value of options at grant date
Weighted average exercise price
Risk-free interest rate
Expected life of an option
Model used
Valuation amount
2020
Grant Date
Options issued
Dividend yield
Historic volatility and expected volatility
Option exercise price
Fair value of options at grant date
Weighted average exercise price
Risk-free interest rate
Expected life of an option
Model used
Valuation amount
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(b)
(i)
Equity (continued)
Other reserves (continued)
Nature and purpose of other reserves
Share-based payments
The share-based payment reserve records items recognised as expenses on valuation of share options issued
to key management personnel, other employees and eligible contractors.
Foreign currency translation
Exchange differences arising on translation of the foreign controlled entities are recognised in other
comprehensive income as described in note 23(d) and accumulated in a separate reserve within equity. The
cumulative amount is reclassified to profit or loss when the net investment is disposed of.
(ii)
Movement in Performance Rights and options:
Balance as at July 1, 2018
Share based payment expense
Reversal of forfeited/lapse options
Number of
Performance
Rights
Number of
options
Total
$
-
-
-
55,102,778
4,885,232
-
341,201
(45,102,778)
(6,099)
Issue of Performance Rights
76,250,000
-
Issue of options during rights placement
-
28,000,000
-
-
Balance June 30, 2019
76,250,000
38,000,000
5,220,334
Share based payment expense
Issue of options to underwriters
Issue of warrants to underwriters
Reversal of forfeited/lapse options
-
-
-
-
-
67,542
505,000,000
1,903,061
-
890,113
(5,000,000)
-
Reversal of forfeited Performance Rights
(61,250,000)
-
(81,984)
Balance June 30, 2020
15,000,000
538,000,000
7,999,066
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(a)
Cash flow information
Reconciliation of profit after income tax to net cash inflow from operating activities
Loss for the period
Adjustments for
Depreciation and amortisation
Impairment expense
Other expenses
Non-cash employee benefits expense - share-
based payments
Notes
2020
$
2019
$
(6,098,930)
(6,425,604)
65,148
-
2,885
156,260
500,000
-
(14,442)
335,102
Net gain on sale of non-current assets
(37,000)
-
Dividend income and interest classified as
investing cash flows
Net exchange differences
Depreciation for right-of-use assets
Inventory written-off
Gain on investment previously written-off
Finance costs
Interest received
Change in operating assets and liabilities, net of
effects from purchase of
controlled entity and sale of engineering division:
Decrease/(increase) in trade receivables
(Increase)/ decrease in inventories
Decrease/(Increase) in other operating assets
Increase in trade creditors
Decrease in other operating liabilities
Increase in other provisions
-
(25,850)
(597,441)
200,785
18,917
(43,380)
86,503
(22,507)
29,412
(59,525)
115,455
695,653
-
(53,631)
(92,518)
-
-
-
-
-
(517,383)
27,142
(70,027)
60,178
(20,482)
-
Net cash (outflow) from operating activities
(5,712,098)
(6,073,182)
11
Critical estimates, judgements and errors
Estimates and judgements are evaluated and based on historical experience and other factors, including
expectations of future events that may have a financial impact on the Company and that are believed to be
reasonable under the circumstances.
Share-based payments transactions
The Group measures the cost of equity-settled transactions with employees and service providers by
reference to the value of the equity instruments at the date on which they are granted. Management has
determined the fair value by engaging an independent valuer for more complex equity instruments, such as
warrants and Performance Rights, by using Black-Scholes, Monte-Carlo Simulation and Binomial model, and
utilised internal resources to perform fair value by straight forward equity instruments by using Black-Scholes
model.
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Financial risk management
This note explains the group's exposure to financial risks and how these risks could affect the group’s future
financial performance.
The group’s risk management is predominantly controlled by the board. The board monitors the group's
financial risk management policies and exposures and approves substantial financial transactions. It also
reviews the effectiveness of internal controls relating to market risk, credit risk and liquidity risk.
(a)
(i)
Market risk
Foreign exchange risk
The group undertakes certain transactions denominated in foreign currency and is exposed to foreign
currency risk through foreign exchange rate fluctuations.
Foreign exchange rate risk arises from financial assets and financial liabilities denominated in a currency that
is not the group's functional currency. Exposure to foreign currency risk may result in the fair value of future
cash flows of a financial instrument fluctuating due to the movement in foreign exchange rates of currencies
in which the group holds financial instruments which are other than the Australian dollar (AUD) functional
currency of the group. This risk is measured using sensitivity analysis and cash flow forecasting. The cost of
hedging at this time outweighs any benefits that may be obtained.
The consolidated financial statements are presented in Australian Dollar ($), which is Genetic Technologies
Limited's functional and presentational currency.
Exposure
The group's exposure to foreign currency risk at the end of the reporting period, expressed in Australian dollar,
was as follows:
June 30, 2020
June 30, 2019
USD
$
EUR
$
USD
$
EUR
$
Cash at Bank / on hand
2,512,767
38,020
201,737
27,052
Trade and other payables
99,637
-
117,992
1,900
Sensitivity
As shown in the table above, the group is primarily exposed to changes in USD/AUD exchange rates. The
sensitivity of profit or loss to changes in the exchange rates arises mainly from USD denominated financial
instruments.
The group has conducted a sensitivity analysis of its exposure to foreign currency risk. Based on the financial
instruments held as at June 30, 2020, had the Australian dollar weakened/strengthened by 6.03% (2019: 5.13%)
against the USD with all other variables held constant, the Group's post-tax loss for the year would have been
$145,520 lower/higher (2019: $6,466 lower/higher).
• USD: 6.03% (2019: 5.13%)
The group is more sensitive to movements in the AUD/USD exchange rates in 2020 than 2019 because of the
increased amount of USD denominated cash and cash equivalents. The US warrants financial liability will be
equity-based settled upon exercise of the US warrants. However, as the exercise will be done with an exercise
price in US dollars, there is a foreign exchange risk due to the subsequent translation to Australian dollars. The
group's exposure to other foreign exchange movements is not material.
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(b)
Financial risk management (continued)
Credit risk
Exposure to credit risk relating to financial assets arises from the potential non-performance by
counterparties of contract obligations that could lead to a financial loss to the group.
(i)
Risk management
Credit risk is managed through the maintenance of procedures (such as the utilisation of systems for the
approval, granting and renewal of credit limits, regular monitoring of exposures against such limits and
monitoring the financial stability of significant customers and counterparties), ensuring to the extent possible
that customers and counterparties to transactions are of sound credit worthiness. Such monitoring is used in
assessing receivables for impairment. Credit terms are normally 30 days from the invoice date.
Risk is also minimised through investing surplus funds in financial institutions that maintain a high credit
rating.
(ii)
Security
For some trade receivables the group may obtain security in the form of guarantees, deeds of undertaking or
letters of credit which can be called upon if the counterparty is in default under the terms of the agreement.
(iii)
Impairment of financial assets
The group has one type of financial asset subject to the expected credit loss model:
•
trade receivables for sales of inventory
While cash and cash equivalents are also subject to the impairment requirements of AASB 9, the identified
impairment loss was immaterial.
Trade receivables
The group applies the AASB 9 simplified approach to measuring expected credit losses which uses a lifetime
expected loss allowance for all trade receivables.
To measure the expected credit losses, trade receivables assets have been grouped based on shared credit
risk characteristics and the days past due.
(c)
Liquidity risk
Liquidity risk arises from the possibility that the group might encounter difficulty in settling its debts or
otherwise meeting its obligations related to financial liabilities. The group manages this risk through the
following mechanisms:
• preparing forward looking cash flow analyses in relation to its operating, investing and financing
activities;
• obtaining funding from a variety of sources;
• maintaining a reputable credit profile;
• managing credit risk related to financial assets;
•
•
investing cash and cash equivalents and deposits at call with major financial institutions; and
comparing the maturity profile of financial liabilities with the realisation profile of financial assets.
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(c)
(i)
Financial risk management (continued)
Liquidity risk (continued)
Maturities of financial liabilities
The tables below analyse the group's financial liabilities into relevant maturity groupings based on their
contractual maturities. The amounts disclosed in the table are the contractual undiscounted cash flows.
Contractual maturities of financial liabilities
Less than
6 months
6 – 12
months
Between
1 and 2
years
Between
2 and 5
years
Over 5
years
Total
contractual
cash flows
Carrying
amount
(assets)
/liabilities
At June 30, 2020
$
Trade and other payables
723,724
$
-
$
-
Lease liabilities
108,924
131,991
188,621
Borrowings
Total
At June 30, 2019
-
-
52,252
832,648
131,991 240,873
Trade and other payables
1,005,308
Total
1,005,308
-
-
-
-
$
-
-
-
-
-
-
$
-
-
-
$
$
723,724
723,724
429,536
429,536
52,252
52,252
-
1,205,512
1,205,512
-
-
1,005,308
1,005,308
1,005,308
1,005,308
13
(a)
Capital management
Risk management
The group's objectives when managing capital are to
•
safeguard their ability to continue as a going concern, so that they can continue to provide returns
for shareholders and benefits for other stakeholders, and
• maintain an optimal capital structure to reduce the cost of capital.
In order to maintain or adjust the capital structure, the group may issue new shares or reduce its capital,
subject to the provisions of the group's constitution. The capital structure of the group consists of equity
attributed to equity holders of the group, comprising contributed equity, reserves and accumulated losses.
By monitoring undiscounted cash flow forecasts and actual cash flows provided to the board by the group's
management, the board monitors the need to raise additional equity from the equity markets.
(b)
Dividends
No dividends were declared or paid to members for the year ended June 30, 2020 (2019: nil). The group’s
franking account balance was nil at June 30, 2020 (2019: nil).
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(a)
Interests in other entities
Material subsidiaries
The group’s principal subsidiaries at June 30, 2020 are set out below. Unless otherwise stated, they have share
capital consisting solely of ordinary shares that are held directly by the group, and the proportion of ownership
interests held equals the voting rights held by the group. The country of incorporation or registration is also
their principal place of business.
Name of entity
GeneType Corporation
Gene Ventures Pty Ltd
GeneType Pty Ltd
Genetic Technologies
Corporation Pty Ltd
Place of business /
country of
incorporation
USA
Australia
Australia
Australia
Phenogen Sciences Inc
USA
Hong Kong
Genetic Technologies HK
Limited
Hainan Aocheng Genetic
Technologies Co. Limited
Ownership interest
held by the group
Ownership interest
held by non-
controlling interests
2020
2019
2020
2019
%
100
100
100
100
100
100
%
100
100
100
100
100
100
%
%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Hong Kong
100
100
In December 2018, Genetic Technologies Limited entered and invested $250,000 into a Joint Venture
agreement with Blockshine Health Pty Ltd. with an ownership of 49%. In the year ended 30 June 2019, the
Joint Venture agreement was cancelled and hence the investment of $250,000 was treated as impaired in
the year ended June 30, 2019.
In August 2018, the Company invested $250,000 into Swisstec towards the proposed joint venture to enable
the Company and Swisstec to collaborate to develop a medical and health service platform using blockchain
technology. The Joint Venture agreement was subsequently cancelled and the investment of $250,000 was
impaired in the year ended June 30, 2019.
At the end of the year ended June 30, 2020, Genetic Technologies HK Limited has 100% ownership of Hainan
Aocheng Genetic Technologies Co. Limited.
15
Contingent liabilities and contingent assets
The group had no contingent liabilities at June 30, 2020 (2019: nil).
16
(a)
Commitments
Capital commitments
Significant capital expenditure contracted for at the end of the reporting period but not recognised as
liabilities is as follows:
Property, plant and equipment
2020
$
466,560
2019
$
The above commitment relates to the purchase of laboratory equipment which will assist the Company to
conduct more tests in the future.
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(b)
Commitments (continued)
Non-cancellable operating leases
Due to the adoption of AASB 16 effective July 1, 2019, the Group no longer has any non-cancellable operating
lease to be recognised under commitments for the year ended June 30, 2020. Refer to Note 23(a) on impact
of adoption and also refer to Note 8 for the right-of-use assets and lease liabilities as of June 30, 2020.
As of June 30, 2019, the non-cancellable operating leases were made up of operating lease for office located
in Australia amounted to $487,837 and month on month operating lease for office located in United States
amounted to $28,791.
Commitments for minimum lease payments in
relation to non-cancellable operating leases are
payable as follows:
Within one year
Later than one year but not later than five years
2020
$
-
-
-
2019
$
250,068
266,560
516,628
17
Events occurring after the reporting period
On July 20, 2020, 166,066,050 warrants issued during the capital raise in May 2019 exercisable at United States
Dollars (US$) US$0.00533, each expiring May 23, 2024 were exercised and converted to 114,447,000 Ordinary
Shares. These warrants have no cash consideration upon conversion and were consistent with the cashless
exercise arrangement under the terms of their issue
Furthermore, 18,500,000 options issued to an underwriter exercisable at $0.008, each expiring October 29,
2022 were exercised and converted to 18,500,000 Ordinary Shares. These options were issued for a cash
consideration of $148,000.
On July 21, 2020, the Company closed a registered direct offering of 1,025,000 American Depository Shares
(ADS's), each representing six hundred (600) of the Company's ordinary shares, at a purchase price of United
States Dollars (US$) US$5.00 per ADS - or in Australian dollars $0.012 per ordinary share. The gross proceeds
for this offering was approximately US$5.1 million. Against the offering, the Company agreed to issue
39,975,000 warrants exercisable at US$0.0104 each, expiring in 5 years from issue date, to H.C. Wainwright &
Co which would form part of cost of raising capital. The said warrants have not been issued as of the date of
report as they are subject to shareholder approval.
As of August 25, 2020, the Company has regained compliance with the equity requirement of NASDAQ Listing
Rule 5550(b)(1), as required by the Hearings Panel decision dated May 12, 2020.
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(a)
Related party transactions
Parent entities
Ultimate parent
Genetic Technologies Limited is the ultimate Australian parent company. As at the date of this Report, no
shareholder controls more than 50% of the issued capital of the Company.
(b)
Transactions with other related parties
During the year ended June 30, 2020, the only transactions between entities within the Group and other
related parties occurred, are as listed below. Except where noted, all amounts were charged on similar to
market terms and at commercial rates.
Performance Rights Issuance
After receiving requisite shareholder approval on November 29, 2018, the Company has issued 76,250,000
Performance Rights to Directors of the Company as follows:
•
•
7,500,000 Class A Performance Rights, 25,000,000 Class B Performance Rights and 25,000,000 Class
C Performance Rights to Dr Paul Kasian
3,750,000 Class A Performance Rights to Dr Lindsay Wakefield
• 6,250,000 Class A Performance Rights to Dr Jerzy Muchnicki
•
•
5,000,000 Class A Performance Rights to Mr Peter Rubinstein
3,750,000 Class A Performance Rights to Mr Xue Lee
During the year, 3,750,000 Performance Rights previously issued to Mr Xue Lee in the year ended June 30,
2019 were cancelled during the year ended June 30, 2020. Additionally, 57,500,000 Performance Rights
previously issued to Dr Paul Kasian in the year ended June 30, 2019 were forfeited in the year ended June 30,
2020. Due to the forfeiture of Performance Rights, a reversal amounting to $81,984 relating to previously
expensed amounts was accounted for during the current reporting period.
The Company has accounted for these Performance Rights in accordance with its accounting policy for share-
based payment transactions and has recorded net reversal of $43,484 of associated expense in the current
year end. Information on the valuation of Performance Rights is included within Note 19(b).
Blockchain Global Limited
As announced by the Company on February 15, 2018, a non-binding terms sheet with Blockchain Global
Limited(BCG) was entered to provide a framework for continuing discussions between the two companies,
with the proposed transaction being subject to shareholder approval (by non-associated Shareholders); and
as announced by the Company on August 2, 2018, a framework agreement with BCG was entered formalizing
the non-binding terms sheet and providing a framework for a strategic alliance between the Company and
BCG, with the agreement became binding on November 29, 2018 upon receiving the requisite shareholder
approval. The agreement proposed the issue of 486 million shares to BCG in 3 tranches subject to the
achievement of certain milestones. No shares have been issued under the framework agreements and no
milestones have been achieved. Any rights to the 486 million milestone shares lapsed between December 27,
2019 and June 27, 2020.
The company has accounted for these share issuances in accordance with its accounting policy for share-
based payment transactions and has not recorded any associated expense in the current year given
performance conditions have not been met and are not currently considering any Blockchain related
projects.
A number of Directors of the Company presently or previously have had involvement with BCG. Mr Xue Lee
has a direct and indirect share interest and was a CEO and managing director of BCG. Mr Peter Rubinstein
held a minority shareholding in the entity and was also a director in BCG. Dr Jerzy Muchnicki has a direct and
indirect interest in BCG. Dr Paul Kasian was previously a director of BCG until July 2018.
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(b)
Related party transactions (continued)
Transactions with other related parties (continued)
Blockshine Health Joint Venture
The Company, via its subsidiary Gene Ventures Pty Ltd, entered into a joint venture with Blockshine
Technology Corporation (BTC). The joint venture company, called Blockshine Health, was to pursue and
develop blockchain opportunities in the biomedical sector. Blockshine Health was to have full access to BTC’s
technology (royalty free) as well as all of its opportunities in the biomedical sector. The Company invested
$250,000 into the joint venture in the year ended June 30, 2019 and held 49% equity stake. The Joint Venture
agreement was subsequently cancelled and the investment of $250,000 was impaired in the year ended June
30, 2019.
During the year ended June 30, 2020, the Company managed to recover $43,380 from this investment
previously written-off.
Genetic Technologies HK Limited and Aocheng Genetic Technologies Co. Ltd - Joint Venture
In August 2018, the Company announced a Heads of Agreement had been reached with Representatives of
the Hainan Government - Hainan Ecological Smart City Group (“HESCG”), a Chinese industrial park
development & operations company have formally invited Genetic Technologies Limited (“GTG”) to visit the
Hainan Medical Pilot Zone to conduct a formal review and discuss opportunities for market entry into China
via the Hainan Free Trade Zone initiative. The invitation was extended to GTG via Beijing Zishan Health
Consultancy Limited (“Zishan”), demonstrating the potential for growth presented by the proposed Joint
Venture between the parties (as announced to the market on August 14, 2018).
Subsequently, the Company announced the official formation of Genetic Technologies HK Limited and
Aocheng Genetic Technologies Co. Ltd in Hong Kong to the market on March 27, 2019,
The Company's previous Chairman, Dr Paul Kasian was named in the formation Heads of Agreement
document to be the Chairman of the Joint Venture entity. At June 30, 2020, Genetic Technologies HK Limited
has 100% ownership of Hainan Aocheng Genetic Technologies Co. Limited. At this time, no Directors fees or
emoluments have been paid to Dr Kasian, nor have agreements regarding fees been reached.
Issuance of options to directors towards sub-underwriting the capital raise
As announced on October 4, 2019, the Company undertook an underwritten non-renounceable pro-rata
entitlement offer at an Issue Price of 0.4 cents per new share.
On October 11, 2019, the Company updated the market to advise that the offer was from that time agreed to
be underwritten by Lodge Corporate Pty Ltd and that two of the Company’s directors (Peter Rubinstein and
Dr Jerzy Muchnicki), had agreed to sub-underwrite the offer. Both directors, in conjunction with the
underwriter Lodge Corporate Pty Ltd, subsequently agreed amongst themselves to alter the respective sub-
underwritten amounts, but the total to be sub-written between them ($2 million) remained same, as did the
total underwritten amount (of $4 million).
Accordingly, the underwritten offer subsequently was sub-underwritten by Peter Rubinstein and Dr Jerzy
Muchnicki (each as up to $1 million) in conjunction with a consortium of non-associated wholesale investors
(also as sub-underwriters) who in aggregate equate to the underwritten amount of $4 million, each in
accordance with the terms of their separate sub-underwriting agreements with Lodge Corporate Pty Ltd
(each a Sub-Underwriting Agreement).
Dr Muchnicki and Mr Rubinstein reflecting the amount of their sub-writing commitment were to be granted
on the same terms as all options to be granted to the relevant sub-underwriters. The number of options issued
to both directors was calculated as 1 Option for every 2 Shares being sub-underwritten and were issued a total
of 125,000,000 unlisted options to each of the directors.
As announced on October 11, 2019, within the rights issue offer document, upon exercise each such option
converts into 1 fully paid share on terms consistent with the ASX Listing Rules; with a 3-year expiry date from
grant and with an exercise price per underwriter and sub-underwriter option equal to the lower of:
• $0.008 ; and
•
The implicit price per share at which any raise done by Aegis capital within 3 months from the
company’s shareholder meeting.
but in any event with a floor exercise price equal to $0.004.
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(b)
Related party transactions (continued)
Transactions with other related parties (continued)
Mr. Phillip Hains (Chief Financial Officer)
On July 15, 2019, the Company announced that it had appointed Mr. Phillip Hains (MBA, CA) as the Chief
Financial Officer who has over 30 years of extensive experience in roles with a portfolio of ASX and NASDAQ
listed companies and provides CFO services through his firm The CFO Solution. Prior to this point the
Company had a similar arrangement with The CFO Solution, where it would engage and provided services of
overall CFO, accounting and other finance related activities.
During the reporting period, the company had transactions valued at $527,724 (2019: $45,459) with The CFO
Solution towards provision of overall CFO, accounting and other finance related activities.
Mr. Stanley Sack (Chief Operating Officer)
On May 18, 2020, the Company appointed Mr Stanley Sack who provides consulting in the capacity of Chief
Operating Officer. Mr Sack has spent 15 years in large listed entities in executive positions managing large
business divisions. He has worked with a high net worth family managing all their operating businesses and
private equity activities. Mr Sack built an Allied Health Business in the aged care and community care space
which became the biggest Mobile Allied Health Business in Australia, and was recently sold to a large medical
insurance company.
During the reporting period, the company had transactions valued at $38,500 (2019: Nil) with Mr Stanley Sack's
entity Cobben Investments towards provision of consulting services in relation to provision of duties related
to Chief Operating Officer of the Company.
Mr Peter Rubinstein (Non-Executive Director and Chairman)
During the financial year ended June 30, 2020, the board approved to obtain consulting services in relation
to capital raises, compliance, Nasdaq hearings and investor relations from its Non-executive director and
current Chairman, Mr Peter Rubinstein. The services procured were through Mr. Peter Rubinstein's associate
entity ValueAdmin.com Pty Ltd and amounted to $35,000 which remains payable and is included as part of
the cash salary and fees in the remuneration report as at June 30, 2020.
Lodge Corporate
Dr. Kasian was a director of corporate finance and corporate advisor from December 2017 to February 2019
with Lodge Corporate. During the year ended, the company engaged in corporate advisory services with
Lodge Corporate and had transactions worth $154,224 which also included $88,000 that related to 2% of the
underwriting of the capital raise during the year ended June 30, 2020. Additionally, during the year, On March
6, 2020 the Company issued 5,000,000 options to Lodge Corporate Pty Ltd valued at $29,340 which were in
relation to capital raising costs.
There were no transactions with parties related to Key Management Personnel during the year other than
that disclosed above.
Details of Directors and Key Management Personnel as at balance date
Directors
• Mr Peter Rubinstein (Independent Non-Executive & Chairman)
• Dr Jerzy Muchnicki (Executive Director & Interim Chief Executive Officer)
• Dr Lindsay Wakefield (Independent Non-Executive)
• Mr Nicholas Burrows (Independent Non-Executive) (appointed September 2, 2019)
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(b)
Related party transactions (continued)
Transactions with other related parties (continued)
Details of Directors and Key Management Personnel as at balance date (continued)
Key Management Personnel (KMPs)
• Dr Richard Allman (Chief Scientific Officer)
• Mr Phillip Hains (Chief Financial Officer) (appointed July 15, 2019)
• Mr Stanley Sack (Chief Operating Officer) (appointed May 18, 2020)
Short-term employee benefits
Post-employment benefits
Long-term benefits
Share-based payments
19
(a)
Share-based payments
Employee Option Plan
2020
$
638,659
53,614
3,231
(32,498)
663,006
2019
$
964,161
86,130
734
157,886
1,208,911
The fair value of options granted under an Employee Option Plan is recognised as an employee benefit
expense with a corresponding increase in equity. The fair value is measured at grant date and recognized
over the vesting period over which all of the specified vesting conditions are to be satisfied. The fair value at
grant date is determined by management with the assistance of an independent valuer, using a Black-
Scholes option pricing model or a Monte Carlo simulation analysis. The total amount to be expensed is
determined by reference to the fair value of the options granted;
•
including any market performance conditions (e.g. the entities share price)
• excluding the impact of any service and non-market performance vesting conditions (e.g. remaining
an employee over a specified time period)
The cumulative employee benefits expense recognised at each reporting date until vesting date reflects (i)
the extent to which the vesting period has expired; and (ii) the number of awards that, in the opinion of the
Directors of the Group, will ultimately vest. This opinion is formed based on the best information available at
balance date.
Where the terms of an equity-settled award are modified, as a minimum an expense is recognised as if the
terms had not been modified. In addition, an expense is recognised for any increase in the value of the
transaction as a result of the modification, as at the date of modification. Where appropriate, the dilutive effect
of outstanding options is reflected as additional share dilution in the computation of diluted earnings per
share. The Company’s policy is to treat the options of terminated employees as forfeitures.
On November 30, 2001, the Directors of the Company established a Staff Share Plan. On November 19, 2008,
the shareholders of the Company approved the introduction of a new Employee Option Plan. Under the
terms of the respective Plans, the Directors may, at their discretion, grant options over the ordinary shares in
the Genetic Technologies Limited to executives, consultants, employees, and former Non-Executive Directors,
of the Company. The options, which are granted at nil cost, are not transferable and are not quoted on the
ASX. As at June 30, 2020, there was 1 executive and 12 employees who held options that had been granted
under the Plans. Options granted under the Plans carry no rights to dividends and no voting rights.
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(a)
(i)
Share-based payments (continued)
Employee Option Plan (continued)
Fair value of options granted
During the year ended June 30, 2020, there were no options issued under Employee Option Plan (2019:
16,000,000 unlisted options were granted at no cost). The Company, however issued various unlisted options
to underwriters and sub-underwriters as a part of capital raising costs. For valuations on the unlisted options
issued please refer to Note 9(b).
Set out below are summaries of all unlisted options, including ESOP which were issued in prior periods:
As at June 30, 2020, the following unlisted options over Ordinary Shares in the Company were outstanding:
2020
2019
Average
exercise
price per
share option
Average
exercise
price per
share option
Number of
options
Number of
options
Opening balance
$0.015
38,000,000
$0.017
55,102,778
Granted to Kentgrove Capital
Granted to employees during the year
-
-
-
-
$0.015
12,500,000
$0.010
16,000,000
Granted to directors in their capacity as sub-
underwriters
$0.008
250,000,000
Options granted to various underwriters
$0.008
250,000,000
Granted to Lodge Corporate Pty Ltd
$0.008
5,000,000
-
-
-
-
-
-
Lapsed during the year
$0.010
(5,000,000)
$0.015
(19,236,111)
Forfeited during the year
Lapse of unlisted options attached to
convertible notes
-
-
-
-
$0.020
(6,000,000)
-
(20,366,667)
Closing balance
$0.008
538,000,000
$0.015
38,000,000
The movements in the number of options granted under the Employee share plans are as follows:
2020
2019
Average
exercise
price per
share option
Average
exercise
price per
share option
Number of
options
Number of
options
Balance at the beginning of the financial year
$0.015
25,500,000
$0.017
34,736,111
Add: options granted during the year
-
-
$0.010
16,000,000
Less: options lapsed during the year
$0.010
(5,000,000)
$0.020
(19,236,111)
Less: options forfeited during the year
-
-
$0.010
(6,000,000)
Balance at the end of the financial year
$0.015
20,500,000
$0.015
25,500,000
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(a)
(i)
Share-based payments (continued)
Employee Option Plan (continued)
Fair value of options granted (continued)
The number of options outstanding as at June 30, 2020 by ASX code, including the respective dates of expiry
and exercise prices, are tabled below. The options tabled below are not listed on ASX.
Unlisted options
2020
2019
Options to Kentgrove Capital (expiring
August 8, 2021)
Average
exercise
price per
share option
Average
exercise
price per
share option
Number of
options
Number of
options
$0.015
12,500,000
$0.015
12,500,000
GTGAD (expiring March 31, 2021)
$0.020
5,000,000
$0.020
5,000,000
GTGAD (expiring February 16, 2022)
$0.010
5,500,000
$0.010
5,500,000
Options to various underwriters (expiring
October 30, 2022)
$0.008
250,000,000
Options to directors (expiring December 20,
2022)
$0.008
250,000,000
Options issued Lodge Corporate Pty Ltd
(expiring March 6, 2023)
$0.008
5,000,000
-
-
-
-
-
-
ESOP options (expiring December 11, 2021)
$0.010
10,000,000
$0.010
15,000,000
Total
$0.008
538,000,000
$0.015
38,000,000
Exercisable at the end of the financial year
$0.008
538,000,000
$0.015
38,000,000
The weighted average remaining contractual life of options outstanding as at June 30, 2020 was 2.39 years
(2019: 2.16 years).
(b)
Performance Rights Issuance
After receiving requisite shareholder approval on November 29, 2018, the Company has issued 76,250,000
Performance Rights to Directors of the Company as follows:
•
•
7,500,000 Class A Performance Rights, 25,000,000 Class B Performance Rights and 25,000,000 Class
C Performance Rights to Dr Paul Kasian
3,750,000 Class A Performance Rights to Dr Lindsay Wakefield
• 6,250,000 Class A Performance Rights to Dr Jerzy Muchnicki
•
•
5,000,000 Class A Performance Rights to Mr Peter Rubinstein
3,750,000 Class A Performance Rights to Mr Xue Lee
The Company has accounted for these Performance Rights in accordance with its accounting policy for share-
based payment transactions and has recorded net reversal of $43,484 of associated expense in the current
year end (2019: $104,441).
During the year, 3,750,000 Performance Rights previously issued to Mr. Xue Lee in the year ended June 30,
2019 were cancelled during the year ended June 30, 2020. Additionally, 57,500,000 Performance Rights
previously issued to Dr. Paul Kasian in the year ended June 30, 2019 were forfeited in the year ended June 30,
2020. Due to the forfeiture of Performance Rights, a reversal amounting to $81,984 relating to previously
expensed amounts was accounted for during the current reporting period.
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(b)
Share-based payments (continued)
Performance Rights Issuance (continued)
Valuation of Performance Rights
The Performance Rights are not currently quoted on the ASX and as such have no ready market value. The
Performance Rights each grant the holder a right of grant of one ordinary Share in the Company upon vesting
of the Performance Rights for nil consideration. Accordingly, the Performance Rights may have a present
value at the date of their grant. Various factors impact upon the value of Performance Rights including:
•
•
•
•
the period outstanding before the expiry date of the Performance Rights;
the underlying price or value of the securities into which they may be converted;
the proportion of the issued capital as expanded consequent upon conversion of the Performance
Rights into Shares (i.e. whether or not the shares that might be acquired upon exercise of the options
represent a controlling or other significant interest); and
the value of the shares into which the Performance Rights may be converted.
There are various formulae which can be applied to determining the theoretical value of options (including
the formula known as the Black-Scholes Model valuation formula and the Monte Carlo simulation).
The Company has commissioned an independent valuation of the Performance Rights. The independent
valuer has applied the Monte Carlo simulation in providing the valuation of the Performance Rights.
Inherent in the application of the Monte Carlo simulation are a number of inputs, some of which must be
assumed. The data relied upon in applying the Monte Carlo simulation was:
a) exercise price being 0.0 cents per Performance Right for all classes;
b) VWAP hurdle (10 days consecutive share price hurdle) equaling $0.02 for Class A and Class B and 3.3
cents for Class C Performance Rights;
c) the continuously compounded risk free rate being 2.02% for all classes of Performance Rights
(calculated with reference to the RBA quoted Commonwealth Government bonds as at October 8,
2018 of similar duration to that of the expected life of each class of Performance Right);
d) the expected option life of 2.8 years for all classes of Performance Rights; and
e) a volatility measure of 80%.
Performance hurdles
The Class A Performance Rights vest and are exercisable upon the Share price reaching $0.02 or greater for
more than 10 day consecutive ASX trading days.
The Directors, being the recipients of the Performance Rights, must remained engaged by the Company at
the time of satisfaction of the performance hurdle in order for the relevant Performance Right to vest.
Based on the independent valuation of the Performance Rights, the company agrees that the total value of
the Performance Rights to be issued to each director (depending on the share price at issue) is as follows:
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(b)
Share-based payments (continued)
Performance Rights Issuance (continued)
Valuation of Class A Performance Rights:
Performance rights vested during the year
Number of
Performance
Rights Issued
Valuation per
Class A
(cents)
Total fair
value of
Class A
Performance
Rights
Expense
accounted
for the year
Dr Lindsay Wakefield
3,750,000
$0.77
$28,875
$9,625
Dr Jerzy Muchnicki
Dr Peter Rubinstein
Total
6,250,000
$0.77
$48,125
$16,042
5,000,000
$0.77
$38,500
$12,833
15,000,000
$115,500
$38,500
Performance rights forfeited during the year
Number of
Performance
Rights Issued
Valuation per
Class A
(cents)
Total fair
value of
Class A
Performance
Rights
Reversal
accounted
for the year
Mr Xue Lee (resigned on July 9, 2019)
3,750,000
$0.77
$28,875
($5,616)
Dr Paul Kasian (resigned on September 24,
2019)
7,500,000
$0.77
$57,750
($11,229)
Total
11,250,000
$86,625
($16,845)
Valuation of Class B Performance Rights:
Number of
Performance
Rights Issued
Valuation per
Class A
(cents)
Total fair
value of
Class A
Performance
Rights
Reversal
accounted
for the year
Dr Paul Kasian
25,000,000
$0.77
$192,500
($37,431)
Valuation of Class C Performance Rights:
Number of
Performance
Rights Issued
Valuation per
Class A
(cents)
Total fair
value of
Class A
Performance
Rights
Reversal
accounted
for the year
Dr Paul Kasian
25,000,000
$0.57
$142,500
($27,708)
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(c)
Share-based payments (continued)
Expenses arising from share-based payment transactions
Total expenses arising from share-based payment transactions recognised during the period were as follows:
Kentgrove Capital options issued
Performance Rights issued
Reversal of forfeited Performance Rights
Options issued under employee option plan in prior year
2020
$
16,667
38,500
(81,984)
12,375
(14,442)
2019
$
15,278
104,441
-
215,383
335,102
(d)
Securities issued during capital raise
The following information relates to options granted and issued against the capital raising costs year ended
June 30, 2020;
Director
Grant date of issued options
Number of options issued
Mr Peter Rubinstein
Dr Jerzy Muchnicki
November 28, 2019
November 28, 2019
Total
2020
Grant Date
Options issued
Dividend yield
Historic volatility and expected volatility
Option exercise price
Fair value of options at grant date
Weighted average exercise price
Risk-free interest rate
Expected life of an option
Model used
Valuation amount
125,000,000
125,000,000
250,000,000
November 28, 2019
250,000,000
-
136%
$0.008
$0.003
$0.008
0.85%
3 years
Black-Scholes
$1,056,054
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(d)
Share-based payments (continued)
Securities issued during capital raise (continued)
Options issued to
Grant date of issued options
Number of options issued
Various underwriters
October 30, 2019
Total
2020
Grant Date
Options issued
Dividend yield
Historic volatility and expected volatility
Option exercise price
Fair value of options at grant date
Weighted average exercise price
Risk-free interest rate
Expected life of an option
Model used
Valuation amount
250,000,000
250,000,000
October 30, 2019
250,000,000
-
136%
$0.008
$0.003
$0.008
0.78%
3 years
Black-Scholes
$817,666
Options issued to
Grant date of issued options
Number of options issued
Lodge Corporate Pty Ltd
March 6, 2020
Total
2020
Grant Date
Options issued
Dividend yield
Historic volatility and expected volatility
Option exercise price
Fair value of options at grant date
Weighted average exercise price
Risk-free interest rate
Expected life of an option
Model used
Valuation amount
70
5,000,000
5,000,000
March 6, 2020
5,000,000
-
141%
$0.008
$0.007
$0.008
0.36%
3 years
Black-Scholes
$29,340
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Remuneration of auditors
During the year the following fees were paid or payable for services provided by the auditor of the parent
entity, its related practices and non-related audit firms:
(a)
PricewaterhouseCoopers Australia
(i)
Audit and other assurance services
2020
$
2019
$
Audit and review of financial statements
274,000
288,000
Other assurance services
Other assurance services
Total remuneration for audit and other assurance services
200,000
474,000
-
288,000
Other assurance services consist of fees billed for assurance and related services that generally only the
statutory auditor could reasonably provide to a client. Included in the balance are amounts related to
additional regulatory filings during the 2020 financial year. All services provided are considered audit services
for the purpose of SEC classification.
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(a)
Loss per share
Basic loss per share
Basic loss per share attributable to the ordinary equity
holders of the Company
(b)
Diluted loss per share
Diluted loss per share attributable to the ordinary equity
holders of the Company
(c)
Reconciliations of loss used in calculating loss per share
2020
Cents
2019
Cents
(0.15)
(0.24)
2020
Cents
2019
Cents
(0.15)
(0.24)
2020
$
2019
$
Basic and diluted loss per share
Loss attributable to the ordinary equity holders of the
company used in calculating loss per share:
From continuing operations
6,098,930
6,425,604
(d)
Weighted average number of shares used as the denominator
2020
2019
Number
Number
Weighted average number of ordinary shares used as the
denominator in calculating basic and diluted loss per share
4,155,017,525
2,635,454,870
On the basis of the group's losses, the outstanding options as at June 30, 2020 are considered to be anti-
dilutive and therefore were excluded from the diluted weighted average number of ordinary shares
calculation.
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(a)
Parent entity financial information
Summary financial information
The individual financial statements for the parent entity show the following aggregate amounts:
Balance sheet
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Shareholders' equity
Share Capital Reserves
Other reserves
Share-based payments
Retained earnings
Total Equity
Loss for the year
2020
$
2019
$
11,646,391
3,003,871
345,236
25,126
11,991,627
3,028,997
10,095,549
10,795,245
1,117,947
809
11,213,496
10,796,054
140,111,073
125,498,824
(117,131)
(117,131)
6,184,391
3,405,659
(145,400,202)
(136,554,409)
778,131
(7,767,057)
(8,816,667)
(5,949,827)
As of June 30, 2020, there were $3,782,537 (2019: $18,456,661) impairment loss recognised for intercompany
loan balances between the parent and its subsidiaries.
23
(a)
Summary of significant accounting policies
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 and the Corporations
Act 2001. Genetic Technologies Limited is a for-profit entity for the purpose of preparing the financial
statements.
(i)
Compliance with IFRS
The consolidated financial statements of the Genetic Technologies Limited group also comply with
International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards
Board (IASB).
(ii)
Historical cost convention
The financial statements have been prepared on a historical cost basis.
(iii)
Going concern
Please refer to Note 1 for detailed note on going concern matters.
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(a)
(iv)
Summary of significant accounting policies (continued)
Basis of preparation (continued)
New and amended standards adopted by the group
The group has applied the following standards and amendments for the first time for their annual reporting
period commencing July 1, 2019:
• AASB 16 Leases.
The impact of the adoption of this standard and the new accounting policy is disclosed below.
AASB 16 will result in almost all leases being recognised on the balance sheet, as the distinction between
operating and finance leases is removed. Under the new standard, an asset (the right to use the leased item)
and a financial liability to pay rentals are recognised. The only exceptions are short-term and low-value leases.
On adoption of AASB 16, the group recognised lease liabilities in relation to leases which had previously been
classified as ‘operating leases’ under the principles of AASB117 Leases. These liabilities were measured at the
present value of the remaining lease payments, discounted using the lessee’s incremental borrowing rate as
of July 1, 2019. The weighted average lessee’s incremental borrowing rate applied to the lease liabilities on July
1, 2019 was 5.37%.
The associated 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 in the balance sheet as
at July 1, 2019. There were no onerous lease contracts that would have required an adjustment to the right-of-
use assets at the date of initial application.
In applying AASB 16 for the first time, the group has used the following practical expedients permitted by the
standard:
•
•
the use of a single discount rate to a portfolio of leases with reasonably similar characteristics.
the accounting for operating leases with a lease term of less than 12 months as short-term leases.
The group has also elected not to reassess whether a contract is, or contains a lease at the date of initial
application. Instead, for contracts entered into before the transition date the group relied on its assessment
made applying AASB 117 and interpretation 4 determining whether an arrangement contains a Lease.
Operating lease commitments disclosed as at June 30, 2019
Discounted using the lessee's incremental borrowing rate of at the date
of initial application
Lease liability recognised as at July 1, 2019
Of which are:
Current lease liabilities
Non-current lease liabilities
Right of use of assets increased by
Lease liabilities increased by
The net impact on retained earnings on July 1, 2019 was a decrease of
$
487,837
461,358
461,358
209,887
251,471
446,645
461,358
14,712
(v)
New standards and interpretations not yet adopted
There are no other standards that are not yet effective and that would be expected to have a material impact
on the entity in the current or future reporting years and on foreseeable future transactions.
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(b)
(i)
Summary of significant accounting policies (continued)
Principles of consolidation and equity accounting
Subsidiaries
Subsidiaries are all entities (including structured entities) over which the group has control. The group
controls an entity when the group is exposed to, or has rights to, variable returns from its involvement with
the entity and has the ability to affect those returns through its power to direct the activities of the entity.
Subsidiaries are fully consolidated from the date on which control is transferred to the group. They are
deconsolidated from the date that control ceases.
The acquisition method of accounting is used to account for business combinations by the group.
Intercompany transactions, balances and unrealised gains on transactions between group companies are
eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment
of the transferred asset. Accounting policies of subsidiaries have been changed where necessary to ensure
consistency with the policies adopted by the group.
(c)
Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief
operating decision maker.
(d)
(i)
Foreign currency translation
Functional and presentation currency
Items included in the financial statements of each of the group's entities are measured using the currency of
the primary economic environment in which the entity operates ('the functional currency'). The consolidated
financial statements are presented in Australian dollar ($), which is Genetic Technologies Limited's functional
and presentation currency.
(ii)
Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates at the
dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such
transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at
year end exchange rates are generally recognised in profit or loss.
Foreign exchange gains and losses that relate to borrowings are presented in the consolidated statement of
profit or loss, within finance costs. All other foreign exchange gains and losses are presented in the
consolidated statement of profit or loss on a net basis within other gains/(losses).
Non-monetary items that are 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. For example, translation differences on non-monetary
assets and liabilities such as equities held at fair value through profit or loss are recognised in profit or loss as
part of the fair value gain or loss and translation differences on non-monetary assets such as equities classified
as at fair value through other comprehensive income are recognised in other comprehensive income.
(iii)
Group companies
The results and financial position of foreign operations (none of which has the currency of a hyperinflationary
economy) that have a functional currency different from the presentation currency are translated into the
presentation currency as follows:
•
•
•
assets and liabilities for each consolidated balance sheet presented are translated at the closing rate
at the date of that consolidated balance sheet
income and expenses for each consolidated statement of profit or loss and consolidated statement of
profit or loss and other comprehensive income are translated at average exchange rates (unless this is
not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates,
in which case income and expenses are translated at the dates of the transactions), and
all resulting exchange differences are recognised in other comprehensive income.
On consolidation, exchange differences arising from the translation of any net investment in foreign entities,
and of borrowings and other financial instruments designated as hedges of such investments, are recognised
in other comprehensive income. When a foreign operation is sold or any borrowings forming part of the net
investment are repaid, the associated exchange differences are reclassified to profit or loss, as part of the gain
or loss on sale.
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23
(e)
Summary of significant accounting policies (continued)
Revenue recognition
Under AASB 15, revenue is recognised based on contract with customers when performance obligations were
satisfied.The following recognition criteria must also be met before revenue is recognised:
(i)
Genetic testing revenues
The Company operates facilities which provide genetic testing services. Revenue from the provision
molecular risk testing for cancer (BREVAGenplus) is recognised at a point time when the group has provided
the customer with their test results, the single performance obligation.
(ii)
Interest income
Revenue is recognised as the interest accrues using the effective interest method.
(iii)
Government Grants
The Australian government replaced the research and development tax concession with research and
development (R&D) tax incentive from July 1, 2011. The R&D tax incentive applies to expenditure incurred and
the use of depreciating assets in an income year commencing on or after July 1, 2011. A refundable tax offset
is available to eligible companies with an annual aggregate turnover of less than $20 million. Management
has assessed the Group’s activities and expenditure to determine which are likely to be eligible under the
incentive scheme. The Group accounts for the R&D tax incentive as a government grant. The grant is
recognised as other income over the period in which the R&D expense is recognised.
(f)
Government grants
Revenue from government grants is recognised in the consolidated income statement on a systematic basis
over the periods in which the entity recognises as expense the related costs for which the grants are intended
to compensate in accordance with IAS 20 Accounting for Government Grants and Disclosure of Government
Assistance.
The receivable for reimbursable amounts that have not been collected is reflected in trade and other
receivables on our consolidated balance sheets.
Note 4 provides further information on how the group accounts for government grant.
(g)
Income tax
The income tax expense or credit 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 differences 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 in the countries where the company and its subsidiaries and associates
operate and generate taxable income. 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.
Deferred income tax is provided in full, using the liability method, on temporary differences arising between
the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements.
However, deferred tax liabilities are not recognised if they arise from the initial recognition of goodwill.
Deferred income tax is also not accounted for if it arises from initial recognition of an asset or liability in a
transaction other than a business combination that at the time of the transaction affects neither accounting
nor taxable profit or loss.
Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted
by the end of the reporting period and are expected to apply when the related deferred income tax asset is
realised or the deferred income tax liability is settled.
Deferred tax assets are recognised only if it is probable that future taxable amounts will be available to utilise
those temporary differences and losses.
(h)
Leases
Please refer to note 8 for further information.
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23
(i)
Summary of significant accounting policies (continued)
Impairment of assets
The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If
any such indication exists, the Group makes an estimate of the asset’s recoverable amount. An asset’s
recoverable amount is the higher of its fair value less costs of disposal or its value in use and is determined for
an individual asset, unless the asset does not generate cash inflows that are largely independent of those from
other assets or groups of assets and the asset’s value-in-use cannot be estimated to be close to its fair value.
In such cases, the asset is tested for impairment as part of the cash-generating unit to which it belongs. When
the carrying amount of an asset or cash-generating unit exceeds its recoverable amount, the asset or cash-
generating unit is considered impaired and is written down to its recoverable amount.
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-
tax discount rate that reflects current market assessments of the time value of money and the risks specific
to the asset. Impairment losses relating to operations are recognised in those expense categories consistent
with the function of the impaired asset unless the asset is carried at its revalued amount, in which case the
impairment loss is treated as a revaluation decrease.
An assessment is made at each reporting 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 so, the carrying amount of the asset is increased to its recoverable amount. The 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
it reverses a decrement previously charged to equity, 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.
(j)
Cash and cash equivalents
For the purpose of presentation in the consolidated statement of cash flows, cash and cash equivalents
includes cash on hand, deposits held at call with financial institutions, other short-term, highly liquid
investments with original maturities of three months or less that are readily convertible to known amounts
of cash and which are subject to an insignificant risk of changes in value, and bank overdrafts. Bank overdrafts
are shown within borrowings in current liabilities in the consolidated balance sheet.
(k)
Trade receivables
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the
effective interest method, less loss allowance. See note 6(b) for further information about the group’s
accounting for trade receivables and note 12(b) for a description of the group's impairment policies.
(l)
(i)
Inventories
Raw materials and stores, work in progress and finished goods
Raw materials and stores, work in progress and finished goods are stated at the lower of cost and net
realisable value. Cost comprises direct materials, direct labour and an appropriate proportion of variable and
fixed overhead expenditure, the latter being allocated on the basis of normal operating capacity. Costs are
assigned to individual items of inventory on the basis of weighted average costs. Costs of purchased inventory
are determined after deducting rebates and discounts. Net realisable value is the estimated selling price in
the ordinary course of business less the estimated costs of completion and the estimated costs necessary to
make the sale.
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23
Summary of significant accounting policies (continued)
(m)
Property, plant and equipment
Property, plant and equipment is stated at historical cost less depreciation. Historical cost includes
expenditure that is directly attributable to the acquisition of the items.
Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as
appropriate, only when it is probable that future economic benefits associated with the item will flow to the
group and the cost of the item can be measured reliably. The carrying amount of any component accounted
for as a separate asset is derecognised when replaced. All other repairs and maintenance are charged to profit
or loss during the reporting period in which they are incurred.
The depreciation methods and periods used by the group are disclosed in note 7(a).
The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each
reporting period.
An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying
amount is greater than its estimated recoverable amount (note 23(i)).
Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are
included in profit or loss. When revalued assets are sold, it is group policy to transfer any amounts included in
other reserves in respect of those assets to retained earnings.
(n)
Trade and other payables
Trade payables and other payables are carried at amortised cost and represent liabilities for goods and
services provided to the Group prior to the end of the financial year that are unpaid and arise when the Group
becomes obliged to make future payments in respect of the purchase of these goods and services. Trade
payables and other payables generally have terms of between 30 and 60 days.
(o)
Provisions
Provisions for legal claims, service warranties and make good obligations are recognised when the group has
a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources
will be required to settle the obligation and the amount can be reliably estimated. Provisions are not
recognised for future operating losses.
Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement
is determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood
of an outflow with respect to any one item included in the same class of obligations may be small.
Provisions are measured at the present value of management's best estimate of the expenditure required to
settle the present obligation at the end of the reporting period. The discount rate used to determine the
present value is a pre-tax rate that reflects current market assessments of the time value of money and the
risks specific to the liability. The increase in the provision due to the passage of time is recognised as interest
expense.
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23
(p)
(i)
Summary of significant accounting policies (continued)
Employee benefits
Short-term obligations
Liabilities for wages and salaries, including non-monetary benefits, annual leave and accumulating sick leave
that are expected to be settled wholly within 12 months after the end of the period in which the employees
render the related service are recognised in respect of employees’ services up to the end of the reporting
period and are measured at the amounts expected to be paid when the liabilities are settled. The liabilities
are presented as current employee benefit obligations in the balance sheet.
(ii)
Other long-term employee benefit obligations
In some countries, the group also has liabilities for long service leave and annual leave that are not expected
to be settled wholly within 12 months after the end of the period in which the employees render the related
service. These obligations are therefore measured as the present value of expected future payments to be
made in respect of services provided by employees up to the end of the reporting period using the projected
unit credit method. Consideration is given to expected future wage and salary levels, experience of employee
departures and periods of service. Expected future payments are discounted using market yields at the end
of the reporting period of high-quality corporate bonds with terms and currencies that match, as closely as
possible, the estimated future cash outflows. Remeasurements as a result of experience adjustments and
changes in actuarial assumptions are recognised in profit or loss.
The obligations are presented as current liabilities in the balance sheet if the entity does not have an
unconditional right to defer settlement for at least twelve months after the reporting period, regardless of
when the actual settlement is expected to occur.
(q)
Contributed equity
Issued and paid up capital is recognised at the fair value of the consideration received by the Company.
Transaction costs arising on the issue of ordinary shares are recognised directly in equity as a deduction, net
of tax, of the proceeds received. The Company has a share-based payment option plan under which options
to subscribe for the Company’s shares have been granted to certain executives and other employees.
(r)
(i)
Loss per share
Basic loss per share
Basic loss per share is calculated by dividing:
•
the loss attributable to owners of the company, excluding any costs of servicing equity other than
ordinary shares
• by the weighted average number of ordinary shares outstanding during the financial year, adjusted
for bonus elements in ordinary shares issued during the year and excluding treasury shares.
(ii)
Diluted loss per share
Diluted loss per share adjusts the figures used in the determination of basic loss per share to take into account:
•
•
the after income tax effect of interest and other financing costs associated with dilutive potential
ordinary shares, and
the weighted average number of additional ordinary shares that would have been outstanding
assuming the conversion of all dilutive potential ordinary shares.
On the basis of the group's losses, the outstanding options as at June 30, 2020 are considered to be anti-
dilutive and therefore were excluded from the diluted weighted average number of ordinary shares
calculation.
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23
(s)
Summary of significant accounting policies (continued)
Goods and services tax (GST)
Revenues are recognised to the extent that it is probable that the economic benefits will flow to the entity
and the revenues can be reliably measured. Revenues are recognised at the fair value of the consideration
received or receivable net of the amounts of Goods and Services Tax. The following recognition criteria must
also be met before revenue is recognised:
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of
GST recoverable from, or payable to, the taxation authority is included with other receivables or payables in
the consolidated balance sheet.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or
financing activities which are recoverable from, or payable to the taxation authority, are presented as
operating cash flows.
(t)
Parent entity financial information
The financial information for the parent entity, Genetic Technologies Limited, disclosed in note 22 has been
prepared on the same basis as the consolidated financial statements, except that accounted for at cost in the
financial statements of Genetic Technologies Limited. Loans to subsidiaries are written down to their
recoverable value as at balance date.
24
Impact of COVID-19
On January 30, 2020, the International Health Regulations Emergency Committee of the World Health
Organization (WHO) declared the novel coronavirus disease 2019 (“COVID-19”) outbreak a public health
emergency of international concern and on March 12, 2020 the WHO announced the outbreak was a
pandemic.
Continuing concerns over economic and business prospects in the United States and other countries have
contributed to increased volatility and diminished expectations for the global economy. These factors,
coupled with the prospect of decreased business and consumer confidence and increased unemployment
resulting from the recent COVID-19 outbreak, may precipitate an economic slowdown and recession. If the
economic climate deteriorates, the Company's business, including its access to patient samples and the
addressable market for diagnostic tests that it may successfully develop, as well as the financial condition of
its suppliers and its
third-party payors, could be adversely affected, resulting in a negative impact on the Company's business,
financial condition, results of operations and cash flows.
On a micro level, the COVID-19 pandemic is having a negative impact on global markets and business activity,
which has had an effect on the operations of the Company, including but not limited to that sales of the
Company's products have been impacted not only by the inability for consumers to visit their practitioners
but also the difficulty its sales team is having in arranging face to face meetings with practitioners. The
Company's sales team has found it very difficult to reach practitioners to build on the sales momentum
created prior to the pandemic, with the launch into the Australian market being halted after less than 60 days
of operations thus, sales have effectively ceased for the short term.
During the period of the pandemic commencing March 2020, the Company undertook a number of capital
raises both public and private placements managed by H.C. Wainwright & Co. in the United States of America.
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Annual Report
Directors' declaration
In the directors' opinion:
(a)
the financial statements and notes are in accordance with the Corporations Act 2001, including:
(i) complying with Accounting Standards, the Corporations Regulations 2001 and other
mandatory professional reporting requirements, and
(ii) giving a true and fair view of the consolidated entity's financial position as at June 30, 2020
and of its performance for the financial year ended on that date, and
(b)
there are reasonable grounds to believe that the company will be able to pay its debts as and
when they become due and payable.
Note 23(a) confirms that the financial statements also comply with International Financial Reporting
Standards as issued by the International Accounting Standards Board.
The directors have been given the declarations by the chief executive officer and chief financial officer
required by section 295A of the Corporations Act 2001.
This declaration is made in accordance with a resolution of directors.
Dr Jerzy Muchnicki
Executive Director and Interim Chief Executive Officer
Melbourne
September 18, 2020
81
For personal use only Independent auditor’s report
To the members of Genetic Technologies Limited
Report on the audit of the financial report
Our opinion
In our opinion:
The accompanying financial report of Genetic Technologies Limited (the Company) and its controlled
entities (together the Group) is in accordance with the Corporations Act 2001, including:
(a)
giving a true and fair view of the Group's financial position as at 30 June 2020 and of its
financial performance for the year then ended
(b)
complying with Australian Accounting Standards and the Corporations Regulations 2001.
What we have audited
The Group financial report comprises:
•
•
•
•
•
•
the consolidated balance sheet as at 30 June 2020
the consolidated statement of changes in equity for the year then ended
the consolidated statement of cash flows for the year then ended
the consolidated statement of profit or loss and other comprehensive income for the year then
ended
the notes to the financial statements, which include a summary of significant accounting policies
the directors’ declaration.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the financial
report section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Independence
We are independent of the Group in accordance with the auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical
Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence
Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also
fulfilled our other ethical responsibilities in accordance with the Code.
PricewaterhouseCoopers, ABN 52 780 433 757
2 Riverside Quay, SOUTHBANK VIC 3006, GPO Box 1331, MELBOURNE VIC 3001
T: 61 3 8603 1000, F: 61 3 8603 1999, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
For personal use only
Our audit approach
An audit is designed to provide reasonable assurance about whether the financial report is free from
material misstatement. Misstatements may arise due to fraud or error. They are considered material if
individually or in aggregate, they could reasonably be expected to influence the economic decisions of
users taken on the basis of the financial report.
We tailored the scope of our audit to ensure that we performed enough work to be able to give an
opinion on the financial report as a whole, taking into account the geographic and management
structure of the Group, its accounting processes and controls and the industry in which it operates.
Materiality
•
For the purpose of our audit we used overall Group materiality of $304,000, which represents approximately
5% of the Group’s loss from operations before income tax expense.
• We applied this threshold, together with qualitative considerations, to determine the scope of our audit and
the nature, timing and extent of our audit procedures and to evaluate the effect of misstatements on the
financial report as a whole.
• We chose Group loss from operations before income tax expense, which is a commonly accepted benchmark.
• We utilised a 5% threshold based on our professional judgement, noting it is within the range of commonly
acceptable thresholds.
Audit Scope
• Our audit focused on where the Group made subjective judgements; for example, significant accounting
estimates involving assumptions and inherently uncertain future events.
•
The accounting processes are structured around a Group-wide finance function at the head office in
Melbourne.
• Our approach had regard for the quality of the control environment and deficiencies identified, which include
lack of segregation of duties.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report for the current period. The key audit matters were addressed in the
context of our audit of the financial report as a whole, and in forming our opinion thereon, and we do
not provide a separate opinion on these matters. Further, any commentary on the outcomes of a
particular audit procedure is made in that context. We communicated the key audit matters to the
Audit and Risk Committee.
For personal use only
Key audit matter
Transactions with Related Parties
(Refer to note 18)
Historically the Group has entered into a number of
transactions with related parties which have resulted in the
issue of performance rights to Directors and milestone shares
to Director related entities on the achievement of certain
performance conditions which relate to the current financial
year.
In October 2019, the Company announced a non-
renounceable pro rata entitlement offer to the market. The
offer was underwritten by Lodge Corporate Pty Ltd with two
of the Company’s directors agreeing to sub-underwrite the
offer. Each director was subsequently issued a total of
125,000,000 unlisted options as consideration of the sub-
underwriting. Further detail regarding the share options is
included in Note 9 “Equity”.
The Group’s accounting policy for these share based
issuances is disclosed under Note 19 “Share-based
payments”. The Group has recognised $1,056,054 as part of
Director transaction costs of the rights issues within equity in
the year ended 30 June 2020; whilst $32,498 was recognised
in relation to the Share Based Payments.
This is a key audit matter due to:
•
•
the nature of related party transactions and the
requirement for their disclosure within the financial
statements; and
complexity in valuing performance rights and
options.
Valuation of the R&D tax incentive receivable
(Refer to note 4)
The Group assessed R&D activities and related expenditure
for the year to determine eligibility for a refundable tax offset
under an Australian Government tax incentive scheme. The
R&D tax incentive receivable recognised was $750,000 as at
30 June 2020 and the income recognised in the consolidated
statement of profit or loss and other comprehensive income
was $750,000 for the year then ended.
The Group makes several judgements in determining the
eligibility of claimable expenses, including the eligibility of
employee costs. The Group was assisted by an expert with the
review of the eligibility of expenses underlying the Group’s
claim and with the lodgement of the R&D tax incentive claim.
How our audit addressed the key audit
matter
Our audit procedures over transactions between the
Group and related parties included, amongst
others:
•
•
•
•
•
•
evaluating the completeness of Group’s
assessment of its related parties and
associated transactions
evaluating the Group’s valuation
techniques used to determine the fair value
of options issued
obtaining an understanding of the formal
agreement between the Directors and the
Group and related performance conditions
associated with the performance rights
reading minutes of meetings held amongst
the board of directors where such matters
were discussed and holding discussions
with management to understand the status
of any performance conditions
assessing the Group’s accounting of share
option issuances and performance rights
compared to the relevant accounting policy
assessing the associated disclosures made
in the financial report for compliance with
AASB 124, Related Party Disclosures.
Our audit procedures to assess the Group’s estimate
of the R&D tax incentive receivable as at 30 June
2020 and income for the year then ended included,
among others:
•
•
assessing the nature of the expenses and
the Group’s assumptions of the eligibility
of employee costs against the eligibility
criteria of the R&D tax incentive scheme
program;
comparing the prior year receivable
recorded in the financial statements as at
30 June 2019 to the amount of cash
received from the Australian Tax Office
after lodgement of the 2019 R&D tax
For personal use only
Key audit matter
How our audit addressed the key audit
matter
This is a key audit matter due to:
•
•
the financial significance the R&D tax incentive
receivable as at 30 June 2020 and the amount
recognised as income for the year then ended; and
the degree of judgement and interpretation of the
R&D tax legislation required by the Group to assess
the eligibility of the incurred R&D expenditures
under the scheme.
•
•
•
incentive claim to assess the historical
accuracy of the Group’s estimate;
testing on a sample basis eligible
expenditure in the Group’s calculation of
the R&D tax incentive receivable to the
general ledger or other accounting records;
obtaining correspondence between the
Group and their expert and agreeing the
advice to the R&D tax incentive
calculation; and
assessing the classification of the R&D tax
incentive in the financial statements in
light of the requirements of Australian
Accounting Standards.
Other information
The directors are responsible for the other information. The other information comprises the
information included in the annual report for the year ended 30 June 2020 but does not include the
financial report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
If, based on the work we have performed on the other information that we obtained prior to the date of
this auditor’s report, we conclude that there is a material misstatement of this other information, we
are required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the financial report4
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
For personal use only
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of the financial report.
A further description of our responsibilities for the audit of the financial report is located at the
Auditing and Assurance Standards Board website at:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf. This description forms part of our
auditor's report.
Report on the remuneration report
Our opinion on the remuneration report
We have audited the remuneration report included in pages 17 to 28 of the directors’ report for the
year ended 30 June 2020.
In our opinion, the remuneration report of Genetic Technologies Limited for the year ended 30 June
2020 complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
remuneration report in accordance with section 300A of the Corporations Act 2001. Our responsibility
is to express an opinion on the remuneration report, based on our audit conducted in accordance with
Australian Auditing Standards.
PricewaterhouseCoopers
Jon Roberts
Partner
Melbourne
18 September 2020
For personal use only Genetic Technologies Limited (ASX:GTG)
Annual Report
Shareholder Information
The shareholder information set out below was applicable as at 16 September 2020.
A.
Distribution of equity securities
Analysis of numbers of equity security holders by size of holding:
Holding
1 - 1000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 and over
There were 2,063 holders of less than a marketable parcel of ordinary shares.
Holding
1 - 1000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 and over
Holding
1 - 1000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 and over
Ordinary Shares
155,860
1,935,421
2,946,039
90,980,637
8,165,708,786
8,261,726,743
Options
-
-
-
-
519,500,000
519,500,000
Performance Rights
-
-
-
-
15,000,000
15,000,000
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B.
Equity security holders
Twenty largest quoted equity security holders
The names of the twenty largest holders of quoted equity securities are listed below:
Security holder
Number held
Percentage of
issued shares
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
6,002,676,033
72.66
MJGD NOMINEES PTY LTD
DOMA 193 PTY LTD
RIP OPPORTUNITIES PTY LTD
IRWIN BIOTECH NOMINEES PTY LTD
HILCOR TRADING PTY LTD
MISS SUSAN SPITERI
MONUMENT HILL PTY LTD
MR BILL GIANOULAS
MR WARWICK WRIGHT
SAYCA PTY LTD
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
BLR CRANES PTY LTD
DANCHU PTY LTD
BFG FARMS PTY LTD
DR JACK GURMAN
200,849,309
144,551,379
124,999,999
75,849,310
75,000,000
43,365,000
42,000,001
26,000,000
26,000,000
22,500,000
20,653,414
18,397,239
16,400,000
15,000,000
15,000,000
MRS HELEN KAMER + MR BENJAMIN KAMER
15,000,000
LKA GROUP SUPER FUND PTY LTD
15,000,000
BNP PARIBAS NOMINEES PTY LTD
14,429,472
DAVSAM PTY LTD
14,250,036
2.43
1.75
1.51
0.92
0.91
0.52
0.51
0.31
0.31
0.27
0.25
0.22
0.20
0.18
0.18
0.18
0.18
0.17
0.17
Unquoted equity securities
Options issued under the employee share option plan to take up
ordinary shares
Options
Performance Rights
Warrants
6,927,921,192
83.86
Number on
issue
Number of
holders
33,000,000
486,500,000
15,000,000
68,291,778
13
24
3
1
The following holders have unquoted options each representing more than 20% of these securities:
• Mr Richard Allman: 15,000,000 Options issued under the employee share option plan to take up
ordinary shares
• Kentgrove Capital Pty Ltd < Kentgrove Capital Growth A/C>: 12,500,000 Options issued under the
employee share option plan to take up ordinary shares
•
JGM INVESTMENT GROUP PTY LTD - 125,000,000 options
• RIP OPPORTUNITIES PTY LTD - 125,000,000 options
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C.
Substantial holders
Substantial holders in the company are set out below:
THE BANK OF NEW YORK MELLON CORPORATION
AND ASSOCIATES
6,039,567,511
73.10%
Number held
Percentage
D. Voting rights
The voting rights attaching to each class of equity securities are set out below:
(a)
Ordinary shares: On a show of hands every member present at a meeting in person or by proxy
shall have one vote and upon a poll each share shall have one vote.
(b)
Options: No voting rights.
E. Share buy-back
There is no current on-market share buy-back.
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Genetic Technologies Limited (ASX:GTG)
Annual Report
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Annual Report
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Annual Report
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