Hexima Limited Annual Report
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ABN 64 079 319 314
Hexima Limited
FINANCIAL REPORT
For the year ended 30 June 2022
Hexima Limited Annual Report
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ABN 64 079 319 314
TABLE OF CONTENTS
Corporate Directory
3
Corporate Governance Statement
4
Directors’ Report
5
ASX Additional Information
25
Consolidated Statement of Profit or Loss and other Comprehensive Income
28
Consolidated Statement of Financial Position
29
Consolidated Statement of Changes in Equity
30
Consolidated Statement of Cash Flows
31
Notes to the Consolidated Financial Statements
32
Directors’ Declaration
66
Independent Auditor’s Report
67
Lead Auditor’s Independence Declaration
72
CORPORATE DIRECTORY
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Directors
Dr Nicole van der Weerden
Acting Chief Executive Officer and Executive Director
Prof Jonathan West
Non-Executive Chairman
Mr Michael Aldridge
Non-Executive Director
Mr Justin Yap
Non-Executive Director
Mr Scott Robertson
Non-Executive Director
Mr Jason (Jake) Nunn
Non-Executive Director
Mr Steven Skala AO
Alternate Non-Executive Director
Company Secretary
Ms Leanne Ralph
Registered Office
Hexima Limited
Corporate One, 84 Hotham Street
Preston Victoria 3072 Australia
Share Registry
Link Market Services
Tower 4, Collins Square
727 Collins Street
Melbourne Victoria 3008, Australia
Auditor
KPMG
Tower Two, Collins Square
727 Collins Street
Melbourne Victoria 3008, Australia
Stock Exchange
Australian Securities Exchange Ltd
ASX code
HXL
CORPORATE DIRECTORY
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The Corporate Governance Statement is current at 30 June 2022 and can be found on the Company’s website:
https://hexima.com.au/investor-centre/corporate-governance/
The Corporate Governance statement was approved by the Board of Directors 21st September 2022.
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The Directors present their report together with the financial report of Hexima Limited (“the Company” or “Hexima”)
and of the Group, being the Company and its subsidiaries for the financial year ended 30 June 2022 and the auditor’s
report thereon.
DIRECTORS
The Directors of Hexima at any time during or since the end of the financial year are:
Professor Jonathan West BA (University of Sydney), PhD (Harvard University)
Non-Executive Chairman
Professor Jonathan West was the founding Director of the Australian Innovation Research Centre. Prior to assuming
that appointment, he taught for 18 years at the Harvard University Graduate School of Business Administration, where
he was Associate Professor, founding Director of the Harvard University Life Sciences Initiative, and from 1998-1999
the Novartis Faculty Research Fellow. He has been Visiting Professor at Hitotsubashi University and the Nomura School
of Advanced Management in Tokyo, Japan and Visiting Professor at the University de Paris IX-Dauphine, Sorbonne.
Professor West was Chairman of the Asia Advisory Council of Bunge Ltd, one of the world’s largest agribusiness
processing and trading companies, and has served as an advisor to other major corporations and several Governments
around the world, including in the life sciences field, DuPont, Roche, Novartis, Syngenta and the J.R. Simplot Company,
along with the Governments of Singapore, Japan, Hong Kong and France. He was a member of the Scientific Advisory
Board of the Novartis Agricultural Discovery Institute in La Jolla, California. In Australia, he has served on the Prime
Minister’s Science, Engineering, Innovation Council’s Working Group on Science and Technology in China and India and
in 2006 was ‘Eminent Thinker in Residence’ with the Premier of NSW. Professor West is Non-Executive Chairman of
Gowing Bros Limited and Non-Executive Director of Cobram Estate Olives Limited and the Tasmanian Artisans
Collection.
Professor West has been a Director of the Company since 7 November 2005 and was appointed Non-Executive
Chairman on 18 November 2014. He is a member of the Remuneration and Nomination Committee and Chairman of
the Audit and Risk Management Committee.
Michael Aldridge BSc (Hons) (University of Canterbury), M.A. Applied Finance (Macquarie University)
Managing Director and Chief Executive Officer
Mr Aldridge most recently served as Senior Vice President, Corporate & Strategic Development, Codexis from October
2016 until August 2018. Prior to that, from January 2012 to September 2014, Mr. Aldridge served as Senior Vice
President, Corporate Strategic Development Questcor Pharmaceuticals, Inc., a publicly-traded biopharmaceutical
company acquired by Mallinckrodt Pharmaceuticals in 2014. From May 2010 to September 2012, Mr. Aldridge served
as Chief Executive Officer and a member of the board of directors Xenome Limited, a privately-held biopharmaceutical
company headquartered in Australia.
Between 2003 and 2009, Mr. Aldridge served as Chief Executive Officer and a member of the board of directors and a
strategic consultant at Peplin, Inc., a publicly-traded drug development company acquired by LEO Pharma A/S in 2009.
Prior to that, Mr. Aldridge held investment banking positions at various financial firms, including Wilson HTM
Investment Group, Bear, Stearns & Co., Volpe, Brown, Whelan & Company and S.G. Warburg Group. Mr. Aldridge
received a B.S. with honours in Chemistry from the University of Canterbury in Christchurch, New Zealand and an M.A.
in Applied Finance from Macquarie University in Sydney, Australia.
Mr Aldridge was Chief Business Officer between May 2019 and September 2020 and was appointed Chief Executive
Officer in September 2020. Mr Aldridge has been a Director of the Company since 21 May 2019. Mr Aldridge stepped
down from his role as Chief Executive Officer and Managing Director on 1 August 2022 but remains a Non-Executive
Director.
Dr. Nicole van der Weerden BSc, PhD (La Trobe University)
Executive Director, Chief Operating Officer
Dr. Nicole van der Weerden completed her PhD in Biochemistry at La Trobe University in 2007. Her PhD research on
the antifungal properties and mechanism of action of plant defensins led to the award of a prestigious Victoria
Fellowship in 2006. Since completing her PhD, Dr. van der Weerden has worked for Hexima and has led the gene
discovery program for the Pioneer partnership on control of fungal diseases in corn. She led the Hexima team that
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identified the clinical opportunities for plant antifungal molecules and discovered and developed pezadeftide (formerly
HXP124) for treatment of onychomycosis. Dr. van der Weerden is an inventor on nine patent applications.
Dr. van der Weerden completed a Master of Business Administration in 2013 at Melbourne Business School and is a
graduate of the Australian Institute of Company Directors. She was Hexima’s Chief Executive Officer from December
2015 until September 2020, taking on the Chief Operating Officer role from September 2020.
Dr. van der Weerden has been a Director of the Company since 16 December 2014. As of 1 August 2022, Dr. van der
Weerden assumed the role of Acting Chief Executive Officer.
Professor Marilyn Anderson AO BSc (Hons) (The University of Melbourne), PhD (La Trobe University)
Executive Director, Chief Science Officer
Professor Marilyn Anderson AO is a founding scientist of Hexima. She has over 40 years' experience in scientific
research in the area of biochemistry and genetics. After completing a BSc Honours at The University of Melbourne and
a PhD in Biochemistry at La Trobe University, Professor Anderson spent seven years in the United States working on
diabetes at the University of Miami Florida, and molecular biology at Cold Spring Harbor Laboratory NY. She is an
expert on antifungal and insecticidal molecules produced by plants. She is a fellow of the Australian Academy of
Science, the Australian Academy of Technology and Engineering and the Australian Institute of Company Directors.
She is a Professor of Biochemistry at La Trobe University, and a member of the Australian Academy of Science Council.
She was appointed an Officer of the Order of Australia in 2016 for distinguished service to science and higher
education. She was a member of the La Trobe Council until 2017. Professor Anderson was appointed Hexima’s Chief
Science Officer in July 2009.
Professor Anderson had been a Director of the Company since 23 November 2010. Professor Anderson retired from
the Board on 2 December 2021.
Justin Yap BCom (University of New South Wales)
Non-Executive Director
Mr Yap is a Non-Executive Director of CathRx Limited, an Australian medical device company commercialising cardiac
electrophysiology catheters for the treatment of heart rhythm disorders. He is a Non-Executive Director of Wilhelm
Integrated Solutions Pty Ltd, a leading supplier of integrated OR solutions to hospitals around Australia. Prior to this,
he began his career in investment banking for Mosaic Risk Management Pty Ltd, a wholly owned subsidiary of Wilson
HTM Limited specialising in derivatives risk management. He is a member of the Remuneration and Nomination
Committee and the Audit and Risk Management Committee.
Mr Yap has been a Director since 17 July 2018.
Scott Robertson BSBA (University of Southern California), MBA (University of California)
Non-Executive Director
Mr. Robertson is currently Chief Financial Officer at DiCE Molecules. Prior to DiCE Molecules, Mr. Robertson served at
DuPont where he was Business Development Director for DuPont Pioneer with responsibility for the business unit’s
crop genetics and precision agriculture M&A activity. He also held the position of portfolio manager with DuPont
Ventures where he focused on strategic investment opportunities in production agriculture and the intersection of
agriculture and downstream renewable technologies. Prior to joining DuPont, Mr. Robertson was an investment
professional at MPM Capital, a life sciences-dedicated venture capital fund, and previous to that a member of the
Healthcare Investment Banking groups at Merrill Lynch & Co. and Thomas Weisel Partners. He received a Bachelor of
Science in Business Administration from the University of Southern California and an M.B.A. from the Haas School of
Business at the University of California, Berkeley.
Mr Robertson has been a Director since 21 November 2018, and is a member of the Audit and Risk Management
Committee and Chairman of the Remuneration and Nomination Committee.
Jason (Jake) Nunn AB (Economics, Dartmouth College), MBA (Stanford Graduate School)
Non-Executive Director
Mr. Nunn has more than 25 years’ experience in the life science industry as an investor, independent director,
research analyst and investment banker. He is currently an independent advisor to several life science companies and
a venture advisor at New Enterprise Associates (NEA), where he was an investing partner from 2006 to 2018 focused
on the biopharmaceutical and medical technology sectors. Based in Menlo Park, California, Mr Nunn founded NEA’s
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public market healthcare investing practice in 2006 and led NEA to become one of the most active anchor investors in
small-cap public biopharma special situations/PIPE investing over the last decade, investing over US$600 million. Prior
to NEA, Mr Nunn was Partner at MPM Capital, South San Francisco, California. Mr. Nunn is a director of public
companies Regulus Therapeutics Inc, Oventus Medical Ltd, Trevena Inc, and Addex Therapeutics Ltd. He was previously
a director of several companies in the pharmaceutical sector including Dermira Inc. (acquired by Eli Lilly) and Hyperion
Therapeutics (acquired by Horizon Pharma plc).
Mr Nunn was appointed Director 1 September 2021.
Dr John Bedbrook BSc, PhD (Auckland University)
Non-Executive Director
Dr. John Bedbrook received his PhD in Molecular biology at Auckland University in 1974, was a Fulbright Fellow to
Harvard Medical School, a Cabot Fellow to Harvard University and an EMBO fellow to The Plant Breeding Institute
Cambridge England. Between 1979 and 2000, Dr. Bedbrook founded and or ran several agricultural biotechnology
companies including Advanced Genetic Sciences, DNA Plant Technologies, Verdia Inc and was President of Maxygen
Agriculture. He was CEO of Plant Science Ventures a venture firm investing in Biotechnology startups. After the
acquisition of Verdia Inc. by DuPont in 2004 Dr. Bedbrook became Vice President of Research and Development for
DuPont Agriculture and Nutrition, and subsequently Vice President of DuPont Agricultural Biotechnology. He retired
from full time employment in 2013 and retained a part time role as Director Strategic Growth. Dr Bedbrook recently
secured a highly valuable partnership for Dice Molecules Inc., where he is Executive Chairman, with global pharma
company Sanofi targeting potential new small molecule therapeutics across a range of diseases.
Dr. Bedbrook has authored over 100 scientific papers and multiple patents. Dr. Bedbrook is Director of Plant
Biosciences LTD., Executive Chairman of DiCE Molecules Inc. and a Member of the Advisory Board of the College of
Natural Resources at University of California Berkeley.
Dr. Bedbrook has been a Director of the Company since 3 June 2014.
Dr John Bedbrook resigned as a Director on 22 September 2020.
G. F. Dan O’Brien BSC, BVMS (Murdoch University), MBA (Harvard University)
Non-Executive Director
Mr O'Brien is the founder and Chairman of The Hydration Pharmaceuticals Trust (HPT) which established the Hydralyte
range of OTC pharmaceutical products. HPT sold the Hydralyte business in Australia and New Zealand to NYSE listed
Prestige Brands Inc during 2014. HPT retains ownership of Hydralyte outside Australia and New Zealand.
Mr O'Brien has extensive experience including executive and non-executive roles with King Island Dairy Limited,
Tasman Agriculture Limited, Colly Farms Cotton Limited, SPC Ardmona Limited, Coates Hire Limited, Mattel Asia Pacific
and BIL Limited.
Mr O'Brien was a Director of Hexima between 17 May 2002 and 2 October 2009 and was reappointed to the Board on
18 November 2015.
Mr O’Brien resigned as a Director on 22 September 2020.
Steven M Skala AO BA, LL.B (Hons) (University of Qld), BCL (University of Oxford)
Non-Executive Alternate Director
Steven Skala is Vice Chairman, Australia of Deutsche Bank AG, a position he has held since 2004 and is Chairman of the
Commonwealth Government’s Clean Energy Finance Corporation. Among public companies, he is a former Chairman
of Wilson Group Limited and The Island Food Company Limited, and is a former Director of the Channel TEN Group of
companies and Max Capital Group Limited. Between 1982 and 2004, he was a Partner of Australian law firms, Morris
Fletcher & Cross (now Minter Ellison) and Arnold Bloch Leibler.
Active beyond banking and commerce, Mr Skala is Chairman of the Heide Museum of Modern Art, Deputy Chairman of
the General Sir John Monash Foundation, a Director of the Centre for Independent Studies and a Member of the
International Council of the Museum of Modern Art (MoMA) in New York. He was previously Chairman of Film
Australia Limited, Chairman of the Australian Centre for Contemporary Art, Vice President (Deputy Chairman) of The
Walter & Eliza Hall Institute of Medical Research, a Director of the Australian Broadcasting Corporation and a Director
of the Australian Ballet. He was appointed an Officer of the Order of Australia in January 2010 for service to the arts,
education, business and commerce.
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Mr Skala was appointed Alternate Director for Mr Scott Robertson on 10 March 2020. He had been a Director of the
Company previously from 17 May 2002 until 31 December 2015, and had been Chairman of the Company for 7 years
during this time.
Key Management
Ms Leanne Ralph – Company Secretary
Ms Ralph was appointed as Company Secretary 6 October 2021. She is an experienced Company Secretary with over
15 years in this field, and holds this position for a number of ASX-listed entities. Ms Ralph is a fellow of the
Governance Institute of Australia and a Graduate Member of the Australian Institute of Directors.
Dr Nancy Sacco – Chief Development Officer
Dr Sacco was appointed Chief Development Officer 2 December 2021. Prior to this appointment, Dr Sacco held Vice
President and Head of Clinical Development roles at Xentria, Inc. and AnaptysBio, Inc., overseeing programs with
monoclonal antibodies for rare and dermatologic diseases. In addition, Dr Sacco held executive leadership positions at
Revance Therapeutics, Inc. and Avexis, Inc (now Novartis), overseeing clinical operations including the initiation and
completion of pivotal studies evaluating safety and efficacy of innovative products (proprietary neurotoxin
Daxibotulinum and AVV9 gene therapy ZolgenSMA, respectively). Dr Sacco has also held roles of increasing
responsibilities at P&G Healthcare (Actonel), Pfizer (Lyrica), Astellas (Myrbetriq and Xtandi) and Takeda (Rozerem and
ACTOS).
Phillip Rose – Chief Commercial Officer
Mr. Rose has over 30 years of leadership experience in the pharmaceutical industry, including President and CEO of the
dermatology focused Obagi Medical Products, Vice President and General Manager of North America for Valeant (now
Bausch Healthcare Companies) as well as Vice President Hospital Sales at Glaxo, Inc. (now GSK). In addition, Mr Rose is
a licenced and practicing Pharmacist. Mr. Rose has served as a commercial consultant to the pharmaceutical industry
and prior clients include Alza Corporation (now J&J), Reliant Pharmaceuticals (now GSK), Peplin, Inc. the developer of
Picato (now LEO).
Mr Rose was a consultant for the company from September 2020 until his appointment as Chief Commercial Officer 4
January 2022. Mr Rose ceased to be an employee of Hexima from 1 July 2022.
Ms Helen Molloy – Financial Controller - Helen Molloy holds a Bachelor of Business from Federation University and is
a member of the Australian Society of Certified Practising Accountants. Helen has previously worked as a financial
accountant within the treasury department of the Mayne Group, as well as with Orica Chemicals and Incitec Pivot
Limited. Helen has been the Financial Controller for Hexima for 12 years and was company secretary for the Group
between November 2019 and October 2021.
Dr Peter Welburn – Chief Development Officer Dr Welburn is the Managing Director of Eiger Health Consulting Group,
which he established In July 2014. From 2011 to 2014 Dr Welburn served as the General Manager of LEO Pharma
Australia & New Zealand following the acquisition of Peplin Inc. by LEO Pharma AS, a global dermatology company.
Prior to that, from 2001 to 2011 Dr Welburn held a number of positions at Peplin Inc where he led the R&D team that
conducted the development of Picato, a novel topical therapy, globally approved for the treatment of pre-cancerous
skin lesions. Dr Welburn has also held both R&D and Strategic Marketing positions at a number of global
pharmaceutical companies, SmithKline Beecham International (1991 – 2001), Janssen-Cilag (1984 – 1990) and Ethnor
Pty Ltd (a division of J & J) from 1979 – 1984.
Dr Welburn was educated in the UK and received a BSc (Hons) degree in Pharmacology from the University of
Edinburgh, a master’s degree in Pharmacology from the University of Sydney and a PhD from the University of Cardiff.
Dr Welburn is an author on numerous scientific publications and most recently was invited to contribute a chapter on
Picato for the book “To Heal the Skin”. Dr Welburn is also an invited lecturer for the Bioscience Enterprise programme
at the University of Auckland.
Dr Welburn had been a consultant for the company since 30 April 2019 until his appointment as Chief Development
Officer on 1 October 2020. On 2 December 2021, Mr Welburn stepped down from his role as Chief Development
Officer but remained a consultant for the company until 15 August 2022.
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Directors’ Meetings
The number of Directors’ meetings (including meetings of committees of Directors) and the number of meetings
attended by each of the Directors of the Company during the financial year are:
BOARD
MEETINGS
AUDIT AND RISK
MANAGEMENT COMMITTEE
REMUNERATION AND
NOMINATION
COMMITTEE
HELD
ATTENDED
HELD
ATTENDED
HELD
ATTENDED
Jonathan West
8
8
2
2
1
1
Marilyn Anderson (2)(3)
5
5
1
1
-
-
Nicole van der Weerden
(2)
8
8
2
2
-
-
Scott Robertson
8
7
2
2
1
1
Justin Yap
8
8
2
2
1
1
Michael Aldridge (2)
8
8
2
2
1
1
Jason (Jake) Nunn (4)
6
6
1
1
-
-
Steven Skala (1)
8
5
1
1
-
-
(1) Attended as Alternate Director but did not vote. Attends to remain informed.
(2) Attended Committee meetings by invitation
(3) Retired from Board December 2021
(4) Appointed to Board September 2021
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PRINCIPAL ACTIVITIES
The principal activity of the Group during the financial year was the research and development of plant-derived
proteins and peptides for applications as human therapeutics. Hexima’s lead drug candidate is the plant defensin,
pezadeftide (formerly HXP124), which was being developed for treatment of fungal nail infections (onychomycosis).
Hexima’s principal activities in 2021-2022 included the conduct of Hexima’s phase IIb clinical trial at sites in Australia
and New Zealand.
There were no significant changes in the nature of the activities of the Group during the year.
OPERATING AND FINANCIAL REVIEW OF THE GROUP
Financial performance
2022
2021
$
$
Revenue and other income
5,810,708
4,163,529
Results from operating activities
(9,904,715)
(6,825,639)
Net financing expense
(113,765)
(48,007)
Loss on disposal of asset
(2,281)
-
Net loss after tax attributable to members
(10,020,761)
(6,873,646)
Dividends
NIL
NIL
Review of operations
During the period under review, Hexima continued development of its lead program, pezadeftide, as a topical
treatment for nail fungus (onychomycosis).
Phase IIb clinical trial
In June 2022, Hexima reported results from its phase II clinical trial for pezadeftide as a treatment for onychomycosis
(HXP124-ONY-002). HXP124-ONY-002 was designed and conducted as a multi-centre, randomized, double-blind,
vehicle-controlled study to investigate the efficacy, safety and tolerability of pezadeftide (HXP124) in three dosing
cohorts in patients with mild to moderate onychomycosis.
Pezadeftide was well-tolerated and safe in all three dosing cohorts. The summary of efficacy as at week 40 is shown in
the table below. These endpoints are the pre-defined efficacy parameters in the phase II study and are as defined by
FDA. There was no consistent effect observed in pezadeftide-treated patients at week 40 compared to vehicle-treated,
with the best efficacy results observed in Cohort 2.
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Efficacy Endpoint
Cohort 1
Cohort 2
Cohort 3
Vehicle
(N=9)
HXP124
(N=26)
Vehicle
(N=7)
HXP124
(N=26)
Vehicle
(N=9)
HXP124
(N=27)
Mycological cure (%)
0
3 (11.5%)
0
5 (19.2%)
1 (11.1%)
2 (7.4%)
Complete or almost complete
cure (%)
0
0
0
1 (4.0%)
1 (11.1%)
0
Clinical efficacy (%)
0
0
1 (14.3%)
4 (15.4%)
1 (11.1%)
1 (3.7%)
Complete cure (%)
0
0
0
0
0
0
-
Mycological cure : Negative fungal culture and negative fungal microscopy
-
Complete or almost complete cure: <5% toenail still affected and Mycological cure
-
Clinical efficacy : <10% toenail still affected
-
Complete cure : 100% clear toenail and Mycological cure
These data provide evidence of modest activity of pezadeftide in the treatment of onychomycosis, an observation
generally supported by a post hoc and blinded review of the clinical appearance of the treated nails conducted by an
independent clinician, a member of Hexima’s Scientific Advisory Board. However, after careful consideration Hexima
does not believe the data support the Company’s goal of developing a safe, more effective and convenient topical
therapy with a shorter course of treatment.
Investigational New Drug Application with FDA
In June 2022, Hexima filed an Investigational New Drug Application (IND #142947) with FDA to initiate a Phase I clinical
trial in the US to evaluate the safety of pezadeftide in a maximal use setting. This IND is now open.
Review of financial condition
The Group had net cash outflows from operating activities of $9,757,819 for the year ended 30 June 2022, compared
with $5,793,762 for the prior year. The variance in the most part resulted from the increased expenditure relating to
the manufacturing development of pezadeftide and preparations for a phase III clinical trial. Revenue has increased in
line with the increased expenses, as the Research and Development tax rebate correlates directly with increased
qualifying research and development expenditure. The Group recorded a loss after tax of $10,020,761 for the year
ended 30 June 2022. A loss after tax of $6,873,646 was recorded for the previous financial year.
Financial position
Hexima has cash and short-term receivables of $10,170,860 at 30 June 2022 (2021: $7,445,019).
Change in capital structure
During the reporting period, Hexima completed a two-tranche placement and Share Purchase Plan (SPP) to raise a
total of $11 million at $0.32 per share. A total of 34,375,317 new shares were issued. In January 2022, 1,394,088 new
shares were issued to settle an outstanding debt of $571,576.
Significant changes in the state of affairs
During the reporting period, Hexima completed a two-tranche placement and Share Purchase Plan (SPP) to raise a
total of $11 million at $0.32 per share. A total of 34,375,317 new shares were issued.
In June, Hexima received the results of its phase II clinical trial (HXP124-ONY-002) assessing pezadeftide as a topical
treatment for onychomycosis. The results seen in this study did not correlate with results observed in its prior phase I
study (HXP124-ONY-001) and did not support moving into a phase III program with pezadeftide. Accordingly, Hexima
intends to wind down its development program of pezadeftide for the treatment of onychomycosis in an orderly
fashion, and will make no further significant investment.
There were no other significant changes in the state of affairs of the Group that occurred during the financial year
ended 30 June 2022.
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DIVIDENDS
The Company has not paid or declared any dividends during or since the end of the financial year ended 30 June 2022.
EVENTS SUBSEQUENT TO REPORTING DATE
As a consequence of the clinical trial results for pezadeftide, Hexima has commenced a process of winding down its
research and development activities for pezadeftide. Hexima’s contracts with its major research service providers have
been, or are being, terminated and all non-essential employees have been made redundant.
In line with the Company’s decision to wind-down its pezadeftide program and manage expenses, Hexima’s Chief
Executive Officer, Mr Michael Aldridge, resigned from his executive role on 2 August 2022. Hexima’s Chief Operating
Officer, Dr Nicole van der Weerden, assumed the role of Acting Chief Executive Officer. Mr Aldridge continues as a
Non-Executive Director of the Company.
Hexima has reached in principle agreement with La Trobe University to sell the Hexima glasshouse facility and various
laboratory plant and equipment in exchange for a reduction in Hexima’s outstanding liabilities to La Trobe University
totalling $980,000. Hexima also retains the rights to the quarterly lease payments until March 2023 valued at a further
$205,023.
Following the steps that have been taken to date, Hexima expects to have cash and receivables of between $2.0 and
$2.6M, and no other material tangible assets or liabilities, once current operations are finalised in Q4 2022. This
includes Hexima’s FY2023 R&D Tax Incentive rebate receivable of approximately $0.5M.
Other than the matters noted above, there have been no events subsequent to the balance date which would have a
material effect on the Group’s financial statements as at 30 June 2022.
ENVIRONMENTAL REGULATION
The Group’s operations are not subject to any significant environmental regulations under either Commonwealth or
State legislation. However, the Board believes that the Group has adequate systems in place for the management of
its environmental requirements and is not aware of any breach of those environmental requirements as they apply to
the Group.
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DIRECTOR’S INTERESTS
Set out below are details of the interests of the Directors at the date of this report in the shares of the Company, rights
or options over such instruments. Interests include those held directly and indirectly.
Director
Total shares
Options over shares
Jonathan West
3,000,000
1,393,000
Nicole van der Weerden
394,700
1,394,000
Justin Yap (1)
-
536,500
Scott Robertson
-
536,500
Michael Aldridge (2)
-
-
Jason (Jake) Nunn
93,750
536,500
Steven Skala
5,792,529
125,000
Total
9,280,979
4,521,500
1. A related party of Justin Yap holds 17,684,540 shares in the Company.
2. Michael Aldridge previously held 3,272,000 options over shares, which lapsed as of 1 September due to him
no longer being an employee of the Company.
SHARE OPTIONS
Unissued shares under option
At the date of this report, unissued ordinary shares of the Company under option are:
Expiry Date
Exercise Price
Number
31 December 2022
$0.40
50,000
1 January 2023
$0.40
367,500
15 December 2023
$0.30
1,000,000
15 December 2023
$0.40
1,000,000
15 December 2023
$0.60
1,000,000
1 January 2024
$1.00
250,000
15 November 2024
$1.00
32,500
28 January 2025
$1.00
250,000
14 October 2030
$0.20
3,430,000
27 July 2031
$0.205
1,178,000
1 September 2031
$0.27
536,500
2 December 2031
$0.345
600,000
9,694,500
Shares issued on exercise of options
The Group’s policies prohibit those that are granted share-based payments as part of their remuneration from
entering into other arrangements that limit their exposure to losses that would result from share price decreases. The
Group requires all Executives and Directors to sign annual declarations of compliance with this policy throughout the
period.
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INDEMNIFICATION AND INSURANCE OF OFFICERS AND DIRECTORS
The Company has entered into deeds of access, insurance and indemnity with each Director, alternate director and the
Company Secretary of Hexima.
Under the Constitution, the Company is required to indemnify all Directors and officers, past and present, against
certain liabilities. The indemnity provided for under the deed of access, insurance and indemnity, operates from the
date of appointment as a Director or officer of the Company until the seventh anniversary of that Director or officer’s
retirement date. To the extent permitted by law and subject to the scope of and limitations on indemnities found in
the deed of access, insurance and indemnity and the prohibitions in section 199A of the Corporations Act, the
Company indemnifies the Director against any and all liabilities incurred by the Director as an officer of a Group
Member, including any and all legal costs incurred by the Director in connection with a claim. If the Director becomes
liable to pay any amount for which the Director is or is entitled to be indemnified under the deed of access, insurance
and indemnity, the Company must pay that amount to the person to whom the amount is due within 10 Business Days
after the date on which the Director provides evidence satisfactory to the Company that the Director is liable to pay
that amount and is entitled to be indemnified under this deed.
Under the Constitution, the Company must arrange and maintain Directors’ and officers’ insurance for its Directors and
officers to the extent permitted by law. Under the deed of access, insurance and indemnity, the Company must, for
each Director or officer, maintain or procure the maintenance of insurance for the Director or officer’s period of office
and for a period of seven years after the Director or officer ceases to hold office.
The deed of access, insurance and indemnity allows for the Company in certain cases to make advance payments to an
indemnified party for an amount owing in respect of a loss covered by the deed.
No indemnities were given or insurance premiums paid during the financial year for any person who was an auditor of
the Company.
During the financial year ended 30 June 2022, the Company paid insurance premiums totalling $156,274 in respect of
Directors’ and Officers’ liability and legal expenses insurance contracts (2021: $288,850). This covered both current
and former Directors and Officers of the Company. The insurance premiums relate to:
•
costs and expenses incurred by the relevant officers in defending proceedings, whether civil or criminal and
whatever their outcome; and
•
other liabilities that may arise from their position, with the exception of conduct involving a willful breach of
duty or improper use of information or position to gain personal advantage.
DIRECTORS’ REPORT
Hexima Limited Annual Report
15
ABN 64 079 319 314
AUDITED REMUNERATION REPORT
Principles of Remuneration
The remuneration report details the Key management personnel (KMP) remuneration practices of the Group. Key
management personnel are those persons having authority and responsibility for planning, directing and controlling
the activities of the entity, directly or indirectly, including any director (whether executive or otherwise) of that entity.
For the financial year ended 30 June 2022, key management personnel comprised all Directors, Executives and the
Company Secretary
Key Management Personnel
Directors
Professor Jonathan West
Non-Executive Chairman
Mr Scott Robertson
Non-Executive Director
Mr Justin Yap
Non-Executive Director
Mr Michael Aldridge
Managing Director and Chief Executive Officer
Dr Nicole van der Weerden
Executive Director and Chief Operating Officer
Professor Marilyn Anderson AO (resigned as Director 2
December 2021)
Executive Director and Chief Science Officer
Mr Jason (Jake) Nunn (appointed 1 September 2021)
Non-Executive Director
Mr Steven Skala AO
Alternate Non-Executive Director (for Mr Scott
Robertson)
Other Management Personnel
Dr Peter Welburn
Chief Development Officer (resigned 2 December 2021
remaining as consultant)
Ms Leanne Ralph
Company Secretary
Ms Helen Molloy
Financial Controller
Mr Philip Rose (appointed 4 January 2022)
Chief Commercial Officer
Dr Nancy Sacco
Chief Development Officer (appointed 2 December
2021)
Remuneration levels for key management personnel are set to attract and retain appropriately qualified and
experienced Directors and Executives. The Remuneration and Nomination Committee obtains independent advice on
remuneration packages and reviews remuneration at least on an annual basis.
Remuneration structures take into account the capability and experience of key management personnel.
Remuneration includes a mix of fixed and variable remuneration as well as short and long term incentives.
Fixed Remuneration
Fixed remuneration consists of base salary, which is calculated on a total cost basis and includes any FBT charges
related to employee benefits, as well as employer contributions to superannuation funds.
DIRECTORS’ REPORT
Hexima Limited Annual Report
16
ABN 64 079 319 314
AUDITED REMUNERATION REPORT – (Continued)
Performance Linked Remuneration
Performance linked remuneration may include short and long term incentives.
Short Term Incentives (STI): The objective of STI is to link the achievement of the Company’s operational targets with
the remuneration received by the executives responsible for meeting those targets. The total potential STI available is
set at a level that provides appropriate incentive to the executive to achieve the operational targets at a cost to the
Company that is reasonable in the circumstances. Actual STI payments in the form of cash bonuses to key
management personnel depend on the extent to which specific corporate goals set at the beginning of the financial
year (or shortly thereafter) are met. These corporate goals are linked to the Company’s development plans. On an
annual basis, after consideration of actual performance against KPIs, the Remuneration and Nomination Committee
determines the amount, if any, of the STI to be paid to KMP. Payments of the STI are made in the following reporting
period. The Remuneration and Nomination Committee considered the STI payment for the 2021 financial year in July
2021 and based on the achievement of operational objectives in the financial year, the Remuneration and Nomination
Committee determined that $319,457 STI would be paid to KMP for the 2021 financial year.
There will be no STI payment for the 2022 financial year.
Long term incentives may be provided as options over the Company’s ordinary shares and other securities. Details are
provided on pages 18 to 20 of the Directors’ Report.
Consequences of Performance on Shareholder Wealth
Hexima is a development stage company and the performance linked remuneration of key management personnel is
not determined by the level of revenue, profit or dividends. Instead, consideration is given to the progress of product
development programs, the achievement of the Company’s strategic goals, the development of the Company’s
intellectual property and asset base and long-term share price performance.
Service Contracts
The Group has entered into service contracts with key management personnel, which outline the components of
remuneration paid to key management personnel, but do not prescribe how remuneration levels are modified from
year to year. Base salary levels are reviewed each year to take into account cost-of-living changes, any change in scope
of the role performed by the senior Executive, and any changes required to meet the principles of the remuneration
policy.
All employment contracts have no fixed term and may be terminated immediately for cause or for material
underperformance.
Mr Michael Aldridge
Mr Aldridge is an employee of the Group and was appointed Chief Business Officer on 1 June 2019. Mr Aldridge
accepted the role of Chief Executive Officer in September 2020. The Group or Mr Aldridge can terminate the
employment contract at any time.
Mr Aldridge’s position was terminated on 1 August 2022. Mr Aldridge received a severance payment equivalent to 6
months salary as required by his contract.
Dr. Nicole van der Weerden
Executive Director Dr. van der Weerden has been a member of the Executive since 2012 and was Chief Executive
Officer from December 2015 to September 2020. Dr. van der Weerden is an employee of La Trobe University and
Hexima contracts her services through a Research Agreement with the University. In addition to her employment by
the University, Dr. van der Weerden also has an employment contract with the Group. The Group or Dr van der
Weerden can terminate this employment contract at any time provided that either party gives 3 months written
notice, other than for summary dismissal.
DIRECTORS’ REPORT
Hexima Limited Annual Report
17
ABN 64 079 319 314
AUDITED REMUNERATION REPORT – (Continued)
Professor Marilyn A Anderson AO
Executive Director Professor Anderson was appointed Chief Science Officer from 1 July 2009. She was formerly Senior
Vice President Research and Discovery. Professor Anderson is an employee of La Trobe University and Hexima
contracts her services through a Research Agreement with the University. In addition to her employment by the
University, Professor Anderson also has an employment contract with the Group. The Group or Professor Anderson
can terminate this employment contract at any time provided that either party gives 3 months written notice, other
than for summary dismissal.
Helen Molloy
Ms Molloy has an employment contract with the Group as Financial Controller. The Group or Ms Molloy can terminate
this employment contract at any time provided that either party gives 1 months written notice, other than for
summary dismissal.
Ms Leanne Ralph
Ms Ralph was appointed Company Secretary 6 October 2021, and is contracted to the Group via a monthly retainer.
Either party may terminate the contract at any time, with written notice of one month required.
Mr Philip Rose
Mr Rose is an employee of the Group and was appointed Chief Commercial Officer on a part time basis on 4 January
2022. The Group or Mr Rose can terminate the employment contract at any time.
Dr Nancy Sacco
Dr Sacco is an employee of the Group and was appointed Chief Development Officer on a part time basis on 2
December 2021. The Group or Dr Sacco can terminate the employment contract at any time.
Dr Peter Welburn
Dr Welburn resigned as an employee of the Group 1 December 2021 and was contracted as a consultant immediately
thereafter. Either party can terminate this contract at any time, with written notice of one month required.
Non-Executive Directors
The Constitution provides that Non-Executive Directors may be paid or provided fees or other remuneration for their
services as a Director of Hexima (including as a member of any Directors’ committee). The total amount or value of this
remuneration must not exceed $500,000 (including mandatory superannuation) per annum or such other maximum
amount determined by the Company in a general meeting.
A Non-Executive Director may be paid remuneration for services outside the scope of ordinary duties of the Director.
Non-Executive Directors may also be paid expenses properly incurred in attending meetings or otherwise in
connection with the Company’s business. Additional “per diem” fees may be paid where services rendered are above
normal requirements.
Other than is noted below, Non-Executive directors have not received any cash payments since 1 January 2015, and
have instead received equity compensation;
•
During October 2020 both Steven Skala and Jonathan West received $100,000 as they performed duties over
and above that expected from a non-executive director in the lead up to the $5.7million placement that
occurred in September 2020.
DIRECTORS’ REPORT
Hexima Limited Annual Report
18
ABN 64 079 319 314
AUDITED REMUNERATION REPORT – (Continued)
Directors’ and Executive Officers’ Remuneration
Details of the nature and amount of each major element of remuneration of each Director of the Company and each key management personnel are:
Short Term
Share based
payments
Post
employment
Fixed
Remuneration
(Salary & Fees)
Leave
Benefits
Health Cover
Bonus
Share Options
Issued (1)
Superannuation
/ 401(k)
Total
Remuneration
Value of Bonus
as proportion of
remuneration
Value of options
as proportion of
remuneration
Non-executive
Directors
Jonathan West
2022
-
-
-
-
139,045
-
139,045
-
100%
2021
100,000
-
-
-
86,813
-
186,813
-
46%
John Bedbrook (2)
2022
-
-
-
-
-
-
-
-
-
2021
-
-
-
-
4,992
-
4,992
-
100%
GF Dan O’Brien (2)
2022
-
-
-
-
-
-
-
-
-
2021
-
-
-
-
4,992
-
4,992
-
100%
Scott Robertson
2022
-
-
-
-
65,370
-
65,370
-
100%
2021
-
-
-
-
11,980
-
11,980
-
100%
Justin Yap
2022
-
-
-
-
70,602
-
70,602
-
100%
2021
-
-
-
-
27,646
-
27,646
-
100%
Jason (Jake) Nunn
2022
-
-
-
-
73,831
-
73,831
-
100%
2021
-
-
-
-
-
-
-
-
-
Steven Skala AO (3)
2022
-
-
-
-
6,469
-
6,469
-
100%
2021
100,000
-
-
-
15,806
-
115,806
-
14%
Executive Directors
Marilyn Anderson AO (4)
2022
80,433
1,200
-
-
7,741
3,736
93,110
-
8%
2021
82,788
1,377
-
12,867
7,203
3,901
108,136
12%
7%
DIRECTORS’ REPORT
Hexima Limited Annual Report
19
ABN 64 079 319 314
AUDITED REMUNERATION REPORT – (Continued)
Directors’ and Executive Officers’ Remuneration – (Continued)
Nicole van der Weerden (5)
2022
359,695
12,448
-
-
79,982
19,266
471,391
-
17%
2021
317,076
50,582
-
86,800
72,731
15,951
543,140
16%
13%
Michael Aldridge
2022
627,154
33,965
72,832
-
62,273
3,161
799,385
-
8%
2021
525,166
16,560
63,121
186,000
85,425
-
876,272
21%
10%
Executives
Leanne Ralph (6)
2022
2021
Dr Nancy Sacco (7)
2022
103,951
8,386
-
-
-
823
113,160
-
-
2021
-
-
-
-
-
-
-
-
-
Phillip Rose (8)
2022
103,088
8,248
-
-
3,946
950
116,232
-
3%
2021
-
-
-
-
-
-
-
-
-
Helen Molloy (9)
2022
157,173
9,892
-
-
7,639
15,717
190,421
-
4%
2021
153,689
14,025
-
10,540
12,614
14,600
205,468
5%
6%
Peter Welburn (10)
2022
57,784
6,049
-
-
25,647
5,778
95,258
-
27%
2021
102,740
5,192
-
23,250
32,632
9,760
173,574
13%
20%
Total
2022
1,489,278
80,188
72,832
-
542,545
49,431
2,234,274
-
24%
2021
1,381,459
87,736
63,121
319,457
362,834
44,212
2,258,819
14%
16%
Notes in relation to the table of Directors’ and Executive officers’ remuneration
1.
The fair value of options is calculated at grant date using the Black-Scholes Pricing model, and expensed over the period from grant date to vesting date. The value disclosed
is the portion of the fair value of the options recognised in this reporting period.
2.
John Bedbrook and GF Dan O’Brien retired as Directors 22 September 2020
3.
Steven Skala AO is an alternate director for Scott Robertson
DIRECTORS’ REPORT
Hexima Limited Annual Report
20
ABN 64 079 319 314
AUDITED REMUNERATION REPORT – (Continued)
Directors’ and Executive Officers’ Remuneration – (Continued)
4.
Professor Anderson is employed by both the Company and La Trobe University. The Company engages her services through a Research Agreement with the University and
through a separate direct employment agreement. Professor Anderson’s total remuneration from the Company and La Trobe University (in relation to services performed
for Hexima) was $93,110 (2021: $108,136), comprising $50,036 (2021: $66,408) paid and payable directly by the Company and $43,074 (2021: $41,728) paid by La Trobe
University (for services performed for Hexima). La Trobe payments have been included in the Remuneration table above. Professor Anderson is the Chief Science Officer for
Hexima Limited and was an Executive Director of the Company until resigning from the Board 2 December 2021.
5.
Dr. Nicole van der Weerden is employed by both the Company and La Trobe University. The Company engages Dr. van der Weerden’s services through a Research
Agreement with the University, and through a separate direct employment agreement. Dr van der Weerden’s total remuneration from the Company and La Trobe University
(in relation to services performed for Hexima) was $471,391 (2021: $543,140), comprising $304,358 (2021: $393,969) paid and payable directly by the Company, and
$167,033 (2021: $149,171) paid by La Trobe University (for the services performed for Hexima). Dr van der Weerden is the Chief Operating Officer for Hexima Limited as well
as an Executive Director of the Company
6.
Leanne Ralph was appointed Company Secretary 6 October 2021
7.
Dr Nancy Sacco was appointed Chief Development Officer 2 December 2021
8.
Phillip Rose was appointed Chief Commercial Officer 4 January 2022and ceased to be an employee on 30 June 2022.
9.
Helen Molloy was replaced in the Company Secretary role 6 October 2021 and continues as the Group Financial Controller
10. Dr Peter Welburn was replaced in the Chief Development Officer role 2 December 2021, and continued as a consultant to the Group until 15 August 2022.
Equity instruments
All options refer to options over ordinary shares of Hexima Limited, which are exercisable on a one-for-one basis.
Options over equity instruments granted as compensation
Details on options over ordinary shares in the Company granted to key management personnel and Executives during the reporting period. Options were issued as an incentive to
KMP to align with business objectives and have a service criteria only. The number of options granted during the year are based on term of service and are consistent with equity-
based compensation for similar stage life science companies.
DIRECTORS’ REPORT
Hexima Limited Annual Report
21
ABN 64 079 319 314
AUDITED REMUNERATION REPORT – (Continued)
30 June 2022:
Granted
Exercised
Lapsed
Exercise Price
Grant Date
Vesting period
FV per option at
grant date
Jonathan West
393,000
$0.205
2/12/2021
1 year
$0.309
Michael Aldridge
522,000
$0.205
2/12/2021
4 years
$0.309
Nicole van der Weerden
244,000
250,000
250,000
$0.205
$0.16
$0.16
2/12/2021
12/02/2017
12/02/2017
4 years
5 years
5 years
$0.309
$0.048
$0.048
Marilyn Anderson
36,000
125,000
$0.205
$0.16
2/12/2021
12/12/2017
4 years
5 years
$0.309
$0.048
Justin Yap
224,000
$0.205
2/12/2021
1 year
$0.309
Scott Robertson
224,000
$0.205
2/12/2021
1 year
$0.309
Jason (Jake) Nunn
312,500
224,000
$0.27
$0.27
2/12/2021
2/12/2021
3 years
1 year
$0.304
$0.304
Steven Skala
-
-
-
-
-
Peter Welburn
65,000
$0.205
14/09/21
4 years
$0.333
Helen Molloy
30,000
$0.205
14/09/21
4 years
$0.333
Nancy Sacco
600,000
$0.345
2/12/2021
4 years
$0.298
Phillip Rose
600,000
$0.37
31/1/2022
4 years
$0.3224
Total
3,474,500
375,000
250,000
DIRECTORS’ REPORT
Hexima Limited Annual Report
22
ABN 64 079 319 314
AUDITED REMUNERATION REPORT – (Continued)
30 June 2021:
Cancelled Options
Granted and Vested Options
Number
Expiry Date
Exercise
Price
FV at
Cancellation
Date
Number
Exercise
Price
Grant Date
Vesting
period
FV per
option grant
date
Expiry Date
Options vested
2021
Jonathan West
500,000
250,000
250,000
250,000
250,000
11/12/2020
12/02/2022
01/01/2023
01/01/2024
28/01/2025
$1.00
$0.40
$0.40
$1.00
$1.00
$1
$12,714
$19,386
$16,134
$21,695
1,000,000
$0.20
14/10/2020
1 year
$0.1782
14/10/2030
-
Michael Aldridge
2,500,000
18/06/2029
$1.00
$361,164
2,750,000
$0.20
14/10/2020
4 years
$0.1782
14/10/2030
-
Nicole van der Weerden
250,000
11/12/2020
$1.00
-
1,150,000
$0.20
14/10/2020
4 years
$0.1782
14/10/2030
-
Marilyn Anderson
-
-
-
-
125,000
$0.20
14/10/2020
4 years
$0.1782
14/10/2030
-
John Bedbrook
-
-
-
-
-
$1.00
28/01/2020
$0.0734
28/01/2025
125,000
GF Dan O’Brien
-
-
-
-
-
$1.00
28/01/2020
$0.0734
28/01/2025
125,000
Justin Yap
62,500
125,000
125,000
01/01/2023
01/01/2024
28/01/2025
$0.40
$1.00
$1.00
$4,847
$8,067
$10,848
312,500
$0.20
14/10/2020
1 year
$0.1782
14/10/2030
-
Scott Robertson
50,000
500,000
125,000
31/12/2022
22/02/2024
28/01/2025
$0.40
$1.00
$1.00
$3,874
$33,856
$10,848
312,500
$0.20
14/10/2020
1 year
$0.1782
14/10/2030
-
Steven Skala
125,000
11/12/2020
$1.00
-
125,000
$0.20
14/10/2020
1 year
$0.1782
14/10/2030
-
Peter Welburn
-
-
-
-
650,000
$0.20
14/10/2020
4 years
$0.1782
14/10/2030
-
Helen Molloy
30,000
15/07/2024
$1.00
$2,284
217,500
$0.20
14/10/2020
4 years
$0.1782
14/10/2030
-
Total
5,392,500
6,642,500
250,000
The options in the June 2021 table are post consolidation
End of Audited Remuneration Report
DIRECTORS’ REPORT
Hexima Limited Annual Report
23
ABN 64 079 319 314
NON-AUDIT SERVICES
During the year KPMG, the Group’s auditor, has performed certain other services in addition to the audit and review of
the financial statements.
The Board has considered the non-audit services provided during the year by the auditor and in accordance with
advice provided by the Audit and Risk Management Committee, is satisfied that the provision of those non-audit
services during the year by the auditor is compatible with, and did not compromise, the auditor independence
requirements of the Corporations Act 2001 for the following reasons:
•
all non-audit services were subject to the corporate governance procedures adopted by the Group and have
been reviewed by the Audit and Risk Management Committee to ensure they do not impact the integrity and
objectivity of the auditor; and
•
The non-audit services provided do not undermine the general principles relating to auditor independence as
set out in APES 110 Code of Ethics for Professional Accountants, as they did not involve reviewing or auditing
the auditor’s own work, acting in a management or decision making capacity for the Group, acting as an
advocate for the Group or jointly sharing risks and rewards.
Details of the amounts paid to the auditor of the Group, KPMG, for audit and non-audit services are set out below:
2022
2021
$
$
Services other than audit and review of financial statements:
Other assurance services
Investigating Accountant for public offer of shares
-
108,675
Audit and review of the financial statements
94,813
85,679
94,813
194,354
DIRECTORS’ REPORT
Hexima Limited Annual Report
24
ABN 64 079 319 314
LEAD AUDITORS’ INDEPENDENCE DECLARATION UNDER SECTION
370C OF THE CORPORATIONS ACT 2001
The Lead Auditor’s Independence Declaration is set out on page 72 and forms part of the Directors’ Report for the year
ended 30 June 2022.
This report is made pursuant to a resolution of the Directors.
Professor Jonathan West
Dr Nicole van der Weerden
Non-Executive Chairman
Acting Chief Executive Officer
Dated this 30th day of September 2022
HEXIMA LIMITED
Hexima Limited Annual Report
25
ABN 64 079 319 314
ASX ADDITIONAL INFORMATION
Additional information required under ASX Listing Rule 4.10 and not shown elsewhere in the Annual Report is as
follows. This information is current as at 15 September 2022.
Use of funds since listing
Hexima’s use of funds during FY 2022 was consistent with achieving the business objectives as outlined in the
prospectus dated 15 October 2020 and filed with ASIC. This included expenditure on the Company’s ongoing phase IIb
clinical trial, scale up of pezadeftide manufacturing, formulation, stability and toxicology studies.
Substantial shareholders
The names of the Substantial Shareholders listed as disclosed by notices submitted to the ASX as at 15 September
2022 are as follows:
Shareholder
Shares
Relevant interest
Dato Lim Sen Yap1
17,684,540
10.59%
Woobinda Nominees Pty Ltd and its associates2
15,126,853
9.06%
Merchant Group Australia Pty Ltd
9,000,000
5.39%
Total
41,811,393
25.03%
Note 1: Related party of Justin Yap, a Director of Hexima.
Note 2: Associated entities of G.F.O’Brien, a previous Director of Hexima.
Voting rights
Ordinary shares
In accordance with the Constitution each member present at a meeting whether in person, or by proxy, or by power of
attorney, or in a duly authorised representative in the case of a corporate member, shall have one vote on a show of
hands, and one vote for each fully paid ordinary share, on a poll.
Options
There are no voting rights attached to options
Securities exchange
The Company is listed on the ASX. The home exchange is Sydney.
Distribution of shareholders
The distribution of issued capital is as follows:
Size of Holding
Number of
Shareholders
Ordinary Shares
% of Issued Capital
100,001 and over
171
150,766,258
90.26
10,001 – 100,000
359
14,461,717
8.66
5,001 – 10,000
125
999,845
0.60
1,001 – 5,000
251
765,811
0.46
1 to 1,000
92
45,998
0.03
Total
998
167,039,629
100.00
HEXIMA LIMITED
Hexima Limited Annual Report
26
ABN 64 079 319 314
Distribution of option holders
The distribution of unquoted options on issue are:
Size of Holding
Number of Option
holders
Ordinary Options
% of Options on
Issue
100,001 and over
13
9,539,500
98.40%
10,001 – 100,000
4
150,000
1.55%
5,001 – 10,000
-
-
-
1,001 – 5,000
2
5,000
0.05%
1 to 1,000
-
-
-
Total
19
9,694,500
100.00%
Twenty largest shareholders of quoted securities
The twenty largest shareholders of quoted equity securities are as follows:
Name
Number of Ordinary
Shares Held
Percentage of Quoted
Shares
1
Dato Lim Sen Yap
12,245,883
7.65
2
Merchant Group Australia Pty Ltd
9,000,000
5.62
3
Caroline House Superannuation Fund Pty Ltd
6,266,029
3.91
4
Beta Gamma Pty Ltd
5,736,586
3.58
5
Woobinda Nominees Pty Ltd
5,717,286
3.57
6
CS Fourth Nominees Pty Ltd
5,483,629
3.42
7
HSBC Custody Nominees (Australia) Ltd
4,774,653
2.98
8
Paul Orlin
3,750,000
2.34
9
Hugh Morgan
2,977,252
1.86
10
Mr Lim Sen Yap
2,968,750
1.85
11
Huysmans Pty Ltd
2,906,260
1.82
12
Balmoral Financial Investments Pty Ltd
2,551,090
1.59
13
Adrienne Clarke
2,381,935
1.49
14
Marilyn Anderson
2,262,632
1.41
15
Mr Surinder Singh and Mrs Satwinder Kaur
2,220,000
1.39
16
Clianth Investments Pty Ltd
2,106,755
1.32
17
Cranley Nominees
2,007,674
1.25
18
Xanthi Pty Ltd
2,000,000
1.25
19
Ierace Pty Ltd
2,000,000
1.25
20
Pioneer Hi-Bred International Inc
2,000,000
1.25
Top 20 Quoted Shareholders
86,988,035
54.33
Balance of Register
73,125,716
45.67
Total Quoted Equity Securities
160,113,751
100.0
HEXIMA LIMITED
Hexima Limited Annual Report
27
ABN 64 079 319 314
Unquoted equity securities
The Company had 9,694,500 unquoted options on issue as at 15 September 2022, broken up as follows:
6,964,500 Issued under employee incentive schemes
3,000,000 Issued to Canaccord Genuity (Australia) Limited
Restricted securities
Security under restriction
Number
of
securities
Date on
which
restriction
ends
Fully Paid Ordinary Shares
7,300,878
1
December
2022
Options
5,419,792
1
December
2022
Less than marketable parcels of ordinary shares
There are 666 shareholders with unmarketable parcels totaling 5,868,388 shares.
On-market Buy-backs
There is currently no on-market buy-back in relation to the Company’s securities.
HEXIMA LIMITED
Hexima Limited Annual Report
28
ABN 64 079 319 314
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2022
Consolidated
Notes
2022
2021
Revenue
Lease income
4(a)
399,647
392,948
Government grants
4(b)
5,411,061
3,770,581
5,810,708
4,163,529
Expense
Research and development
5
(11,480,860)
(7,679,743)
Patent and legal
(361,873)
(208,582)
Marketing and business development
(350,781)
(109,339)
Employee benefits
(2,747,097)
(2,293,087)
Depreciation
12(a)/(b)
(141,288)
(147,979)
Other
6
(633,524)
(550,438)
(15,715,423)
(10,989,168)
Results from operating activities
(9,904,715)
(6,825,639)
Finance income
7
1,544
99,423
Finance expense
7
(115,309)
(147,430)
Loss on disposal of asset
(2,281)
-
Net other expense
(116,046)
(48,007)
Loss before income tax
(10,020,761)
(6,873,646)
Income tax expense
8
-
-
Loss for the period
(10,020,761)
(6,873,646)
Other comprehensive income for the
period, net of income tax
-
-
Total comprehensive loss for the period
(10,020,761)
(6,873,646)
Loss attributable to:
Owners of the Company
(10,020,761)
(6,873,646)
Loss for the period
(10,020,761)
(6,873,646)
Total comprehensive loss attributable to:
Owners of the Company
(10,020,761)
(6,873,646)
Total comprehensive loss for the period
(10,020,761)
(6,873,646)
Basic EPS (cents per share)
16
(6.56)
(6.14)
Diluted EPS (cents per share)
16
(6.56)
(6.14)
The accompanying notes form part of these financial statements
HEXIMA LIMITED
Hexima Limited Annual Report
29
ABN 64 079 319 314
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2022
Consolidated
Notes
2022
2021
$
$
CURRENT ASSETS
Cash and cash equivalents
10
3,957,263
3,421,881
Receivables
11
5,806,961
4,023,138
Assets held for sale
12(c)
883,288
-
TOTAL CURRENT ASSETS
10,647,512
7,445,019
NON-CURRENT ASSETS
Plant and equipment
12(a)
106,117
131,998
Investment property
12(b)
-
998,032
TOTAL NON-CURRENT ASSETS
106,117
1,130,030
TOTAL ASSETS
10,753,629
8,575,049
CURRENT LIABILITIES
Trade and other payables
13
5,843,310
3,293,844
Loans and borrowings
14
-
31,996
Employee benefits
15
344,421
586,871
TOTAL CURRENT LIABILITIES
6,187,731
3,912,711
NON-CURRENT LIABILITIES
Trade and other payables
13
-
1,616,758
TOTAL NON-CURRENT LIABILITIES
-
1,616,758
TOTAL LIABILITIES
6,187,731
5,529,469
NET ASSETS
4,565,898
3,045,580
EQUITY
Share capital
16
82,884,622
71,905,180
Reserves
16
2,842,861
2,281,224
Accumulated losses
(81,161,585)
(71,140,824)
TOTAL EQUITY
4,565,898
3,045,580
The accompanying notes form part of these financial statements
HEXIMA LIMITED
Hexima Limited Annual Report
30
ABN 64 079 319 314
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2022
Note
Ordinary
Shares
Equity
Option
reserve
Equity
Compensation
reserve
Accumulated
Losses
Total equity
2022
$
$
$
$
$
Opening balance at
1 July 2021
71,905,180
450,216
1,831,008
(71,140,824)
3,045,580
Total comprehensive loss for the period
Net (loss) for the period
-
-
-
(10,020,761)
(10,020,761)
Other comprehensive income
-
-
-
-
-
Total comprehensive loss for the year
-
-
-
(10,020,761)
(10,020,761)
Transactions with owners recorded
directly in equity
Issue Ordinary shares
11,571,678
-
-
-
11,571,678
Capital Raising Costs
(658,236)
-
-
-
(658,236)
Share based payment expenses
9
-
-
561,637
-
561,637
Issue of shares on exercise of options
66,000
-
-
-
66,000
Total contributions by and distributions
to owners
10,979,442
-
561,637
-
11,541,079
Closing balance at 30 June 2022
82,884,622
450,216
2,392,645
(81,161,585)
4,565,898
Note
Ordinary
Shares
Equity
Option
reserve
Equity
compensation
reserve
Accumulated
Losses
Total equity
2021
$
$
$
$
$
Opening balance at
1 July 2020
61,006,378
200,000
1,440,525
(64,267,178)
(1,620,275)
Total comprehensive loss for the period
Net (loss) for the period
-
-
-
(6,873,646)
(6,873,646)
Other comprehensive income
-
-
-
-
-
Total comprehensive loss for the year
-
-
-
(6,873,646)
(6,873,646)
Transactions with owners recorded
directly in equity
Issue Ordinary shares
8,700,000
-
-
-
8,700,000
Issue Convertible Notes
3,246,791
-
-
-
3,246,791
Capital Raising Costs
(1,047,989)
-
-
-
(1,047,989)
Share based payment expenses
9
-
250,216
390,483
-
640,699
Amount received on issue of options
-
-
-
-
-
Issue of shares on exercise of options
-
-
-
-
-
Total contributions by and distributions
to owners
10,898,802
250,216
390,483
-
11,539,501
Closing balance at 30 June 2021
71,905,180
450,216
1,831,008
(71,140,824)
3,045,580
The accompanying notes form part of these financial statements
HEXIMA LIMITED
Hexima Limited Annual Report
31
ABN 64 079 319 314
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2022
The accompanying notes form part of these financial statements
Consolidated
2022
2021
Notes
$
$
CASH FLOWS USED IN OPERATING ACTIVITIES
Cash receipts from government grants &
collaboration agreements
3,680,774
2,017,046
Cash receipts from lease agreement
440,796
538,820
Cash paid to suppliers and employees
(13,879,389)
(8,349,628)
Net cash used in operating activities
17(b)
(9,757,819)
(5,793,762)
CASH FLOWS FROM INVESTING ACTIVITIES
Interest received
1,544
1,520
Payments for plant and equipment
(3,346)
(2,423)
Net cash used in investing activities
(1,802)
(903)
CASH FLOWS FROM FINANCING ACTIVITIES
Payments received on issue of options
66,000
-
Repayment of Paycheck Protection Program to the
US Government
(31,996)
-
Proceeds from the issue of ordinary shares
11,000,102
8,700,000
Payments to raise capital
(698,984)
(797,347)
Proceeds from Convertible note issue
-
-
Net cash from financing activities
10,335,122
7,902,653
Net increase in cash and cash equivalents
575,501
2,107,988
Effect on movements in exchange rates on foreign
currency denominated cash at bank
(40,119)
(43,754)
Cash and cash equivalents at 1 July
3,421,881
1,357,647
Cash and cash equivalents at 30 June
17(a)
3,957,263
3,421,881
HEXIMA LIMITED NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022
Hexima Limited Annual Report
32
ABN 64 079 319 314
1.
REPORTING ENTITY
Hexima Limited (the “Company”) is a Company domiciled in Australia and is a for-profit entity. The address of the
Company’s registered office is Corporate One, 84 Hotham Street, Preston, Victoria, 3072. The consolidated financial
statements of the Company as at and for the year ended 30 June 2022 comprises the Company and its subsidiaries
(together referred to as the “Group” and individually as “Group entities”). The Group is actively engaged in the
research and development of plant-derived proteins for applications as human therapeutics. Hexima’s lead product
candidate, pezadeftide (previously referred to as HXP124) applied in a topical formulation, has been considered a
potential new prescription treatment for toenail fungal infections (or onychomycosis).
2.
BASIS OF PREPARATION
(a) Basis of accounting
The financial report is a general purpose financial report which has been prepared in accordance with Australian
Accounting Standards (AASBs) adopted by the Australian Accounting Standards Board (AASB) and the
Corporations Act 2001. The consolidated financial report of the Group complies with International Financial
Reporting Standards (IFRSs) and interpretations adopted by the International Accounting Standards Board (IASB).
The financial statements were approved by the Board of Directors on 30 September 2022.
Changes to significant accounting policies are described in Note 2(e).
(b) Basis of measurement
The financial report has been prepared on the basis of historical cost, except for share options and the embedded
derivative in respect of convertible debt which has been measured at fair value.
(c)
Functional and presentation currency
The financial statements are presented in Australian dollars, which is the Group’s functional currency.
(d) Use of estimates and judgements
The preparation of financial statements requires management to make judgements, estimates and assumptions
that affect the application of policies and reported amounts of assets, liabilities, income and expenses. The
estimates and associated assumptions are based on historical experience and various other factors that are
believed to be reasonable under the circumstances, the results of which form the basis of making the judgements
about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may
differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future
periods affected.
Measurement of fair values
A number of the Group’s accounting policies and disclosures require the determination of fair value for both
financial and non-financial assets and liabilities. The Group engages a third party to perform fair value
calculations for share options issues which is reviewed by the finance team. Significant valuation issues are
reported to the Group Audit Committee.
Fair values have been determined for measurement and/or disclosure purposes based on the following methods.
Where applicable, further information about the assumptions made in determining fair values is disclosed in the
notes specific to that asset or liability.
When measuring the fair value of an asset or a liability, the Group uses market observable data as far as possible.
Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation
techniques as follows.
•
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
•
Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either
directly (i.e. as prices) or indirectly (i.e. derived from prices).
•
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
If the inputs used to measure the fair value of an asset or a liability might be categorised in different levels of the
HEXIMA LIMITED NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022
Hexima Limited Annual Report
33
ABN 64 079 319 314
2.
BASIS OF PREPARATION (continued)
(d)
Use of estimates and judgements (continued)
Measurement of fair values (continued)
fair value hierarchy, then the fair value measurement is categorised in its entirety in the same level of the fair
value hierarchy as the lowest level input that is significant to the entire measurement.
The Group recognises transfers between levels of the fair value hierarchy at the end of the reporting period
during which the change has occurred.
The Group measure the following assets/liabilities at fair value: Share-based payment transactions and
convertible notes.
Share-based payment transactions
The fair value of employee share options at grant date is measured using the Binomial Approximation Option
Pricing method. Measurement inputs include share price on measurement date, exercise price of the instrument,
expected volatility (based on weighted average historic volatility adjusted for changes expected due to publicly
available information), weighted average expected life of the instruments (based on historical experience and
general option holder behaviour), expected dividends, and the risk-free interest rate (based on government
bonds). Service and non-market performance conditions attached to the transactions are not taken into account
in determining fair value.
Further information about the assumptions made in measuring fair values is included in the following notes:
•
Note 9 – measurement of share-based payments
(e)
Going concern basis of accounting
The financial report is prepared on a going concern basis, which contemplates continuity of normal operations
and the realisation of assets and settlement of liabilities in the ordinary course of operations. In making this
assessment, the directors have considered future events and conditions for a period of at least 12 months
following the approval of these financial statements.
The Group has a history of losses and incurred a loss after tax for the year ended 30 June 2022 of $10,020,761
(2021: loss after tax of $6,873,646) and as at 30 June 2022 has a surplus in net current assets of $4,459,781
(2021: surplus of net current assets of $3,532,308) and an overall net asset surplus of $4,565,898 (2021: net
surplus of $3,045,580).
As announced on the ASX on 11 July 2022, the results of the Phase II study of pezadeftide for the treatment of
onychomycosis, currently the Group’s sole research, does not warrant continuation in its current form. The
company commenced the orderly cessation of this project subsequent to year end and reduced expenses for
non-essential activities as a consequence to conserve cash.
Notwithstanding these results, the Directors consider that it is appropriate to prepare the financial statements on
a going concern basis based on the following mitigating factors:
•
The Directors have prepared a cash flow forecast for the period from 1 July 2022 through to 30 September
2023. This forecast indicates the Group has sufficient capital to meet its expected liabilities through this
period, and enable time to explore strategic options for the Group;
•
Subsequent to year end, the Group is actively exploring opportunities for transactions with third parties which
could enable the value of the Group’s assets, including its intellectual property and other intangible assets, to
be realised. These may include acquisitions or mergers. As opportunities are identified, the Group is entering
into preliminary discussions with relevant parties. However, given the early stage of development of these
opportunities, there can be no certainty that a transaction will proceed, or an agreement will be reached on
terms acceptable to the directors and the Company’s shareholders.
If the Group does not raise capital to redirect current research activities or identify and complete an acceptable
transaction, the directors may commence a planned wind-down. However, until that decision is made it is
appropriate to prepare these financial statements on going concern basis.
HEXIMA LIMITED NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022
34
ABN 64 079 319 314
3.
SEGMENT REPORTING
The Group primarily operates in one sector being the biotechnology industry developing and/or commercialising
biotechnology research and therefore the Group’s financial information is the same as the operating segment
information. The majority of operations are in Australia. The Group employed a US based CEO until 2 August
when he stepped down from the position. Approximately 8% of the Group’s expenses are incurred in the USA.
4.
LEASING INCOME AND GOVERNMENT GRANTS
Consolidated
2022
2021
$
$
(a) Lease income
Income from rental of glasshouse
399,647
392,948
(b) Government grants
R&D tax incentive
5,391,061
3,657,085
COVID-19
-
81,500
Other
20,000
31,996
5,411,061
3,770,581
5,810,708
4,163,529
5.
RESEARCH AND DEVELOPMENT EXPENDITURE
Consolidated
2022
2021
$
$
Research and development expenditure
11,480,860
7,679,743
11,480,860
7,679,743
6.
OTHER EXPENSES
Consolidated
2022
2021
$
$
Administration and compliance costs
391,720
427,733
Other expenses
241,804
122,705
633,524
550,438
Hexima Limited Annual Report
HEXIMA LIMITED NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022
Hexima Limited Annual Report
35
ABN 64 079 319 314
Consolidated
2022
2021
$
$
Interest income on term deposit and cash at bank
1,544
1,453
Interest income on discounted long term debt
-
97,970
Finance Income
1,544
99,423
Interest expense on convertible note issue
-
(44,935)
Interest expense on discounted long term debt
(64,670)
-
Foreign exchange gain/(loss)
(50,639)
(56,887)
Derivative instrument gain
-
(45,608)
Finance expense
(115,309)
(147,430)
7. FINANCE INCOME AND
EXPENSE
Hexima Limited Annual Report
36
ABN 64 079 319 314
HEXIMA LIMITED NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022
8. INCOME TAX
(a) Income tax expense
Consolidated
2022
2021
$
$
Loss before tax
(10,020,761)
(6,873,646)
Income tax benefit using the domestic
corporation tax rate of 25% (2021: 26%)
(2,505,190)
(1,787,148)
Increase/(decrease) in income tax expense
due to:
R & D adjustment
3,098,500
2,188,245
Non-assessable R&D tax incentive
(1,347,848)
(951,887)
Non-deductible share based payment
140,409
101,526
Other
(118,268)
(351)
Temporary differences and tax losses not
brought to account
688,458
135,964
Adjustment to deferred tax asset due to
change in tax rate
43,937
47,919
Adjustment to prior year tax
-
265,732
Income tax expense/(benefit) on pre-tax net
profit
-
-
Income tax expense can arise due to the add-back of R&D expenses which is claimed under the R&D Tax Incentive
Scheme. Tax losses are not fully available to offset against all taxable income arising as a result of the available
fraction rules.
(b)
Unrecognised deferred tax assets
Deferred tax assets have not been recognised in respect of the following items
Temporary differences
1,030,760
1,142,374
Tax losses
9,288,460
8,805,345
Total
10,319,220
9,947,719
The deductible temporary differences and tax losses do not expire under current tax legislation. Deferred tax
assets have not been recognized in respect of these items because it is not yet probable that future taxable profit
will be available against which the group could utilize the benefits subject to passing the continuity of ownership
and/or same business test.
(c)
Income tax expense
Current tax benefit
(819,294)
(137,841)
Deferred tax asset not recognised
819,294
137,841
Total
-
-
HEXIMA LIMITED NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022
Hexima Limited Annual Report
37
ABN 64 079 319 314
9.
SHARE-BASED PAYMENTS
At 30 June 2022, the Group had the following share-based payment arrangements. All options are to be settled by
physical delivery of shares. The terms and conditions of the share options granted as at 30 June 2022 are as follows;
Grant date / parties entitled
Number of
instruments
Vesting conditions
Contractual life
of options
Options granted 1 January 2018
to key management
312,500
Vesting upon continuous service until 31
December 2018
5 years
Options granted 1 January 2018
to other personnel
143,000
Vesting immediately
5 years
Options granted 1 January 2018
to other personal
45,000
Vested upon completion of various performance
related milestones – all vested
5 years
Options granted 1 January 2018
to other personnel
50,000
Vested upon delivery of certain licensing and
technology advice – all vested
5 years
Options granted 1 January 2019
to key management
250,000
Vesting upon continuous service until 31
December 2019
5 years
Options granted 15 November
2019 to other personnel
143,000
Vesting immediately
5 years
Options granted 28 January 2020
to key management
250,000
Vesting upon retirement 22 September 2020
5 years
Options granted 14 October 2020
to key management
1,750,000
Vesting upon continuous service until 14 October
2021
10 years
Options granted 14 October 2020
to key management
4,892,500
Tranche 1 25% vesting 14 October 2021, and
monthly thereafter until 14 October 2024
10 years
Options granted 14 October 2020
to other personnel
475,000
Tranche 1 25% vesting 14 October 2021, and
monthly thereafter until 14 October 2024
10 years
Options granted 15 December 2020
to other party
3,000,000
Vesting immediately
3 years
Options granted 14 September
2021 to key management
149,000
25% vesting 27 July 2022, and in equal monthly
instalments thereafter until 27 July 2025
10 years
Options granted 2 December
2021 to non-executive directors
841,000
Vesting upon continuous service until 27 July
2022
10 years
Options granted 2 December
2021 to executive directors
802,000
25% vesting 27 July 2022, and in equal monthly
instalments thereafter until 27 July 2025
10 years
Options granted 2 December
2021 to non-executive director
224,000
Vesting upon continuous service until 1
September 2022
10 years
Options granted 2 December
2021 to non-executive director
312,500
Vesting in 36 equal monthly tranches from 1
October 2021 until fully vested 1 September
2024
10 years
Options granted 2 December
2021 to key management
600,000
25% vesting 2 December 2022, and in equal
monthly instalments thereafter until 2 December
2025
10 years
Options granted 31 January 2022
to key management
600,000
25% vesting 31 January 2022, and in equal
monthly instalments thereafter until 31 January
2026
10 years
Options granted 19 April 2022 to
other personnel
600,000
25% vesting 19 April 2023, and in equal monthly
instalments thereafter until 19 April 2026
10 years
Total share options
15,439,500
HEXIMA LIMITED NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022
Hexima Limited Annual Report
38
ABN 64 079 319 314
9. SHARE-BASED PAYMENTS (continued)
The number and weighted average exercise prices of share options are as follows:
Weighted
average
exercise price
Number of
options
Weighted
average
exercise price
Number of
options
2022
2022
2021
2021
Outstanding at 1 July
$0.31
12,373,500
$0.78
8,802,500
Exercised during the period
$0.16
(412,500)
-
-
Cancelled during the period
-
-
$0.94
(5,452,500)
Lapsed during period
$0.32
(625,000)
$0.59
(1,094,000)
Granted during the period
$0.28
4,128,500
$0.27
10,117,500
Outstanding at 30 June
$0.31
15,439,500
$0.31
12,373,500
The options outstanding at 30 June 2022 have various exercise prices ($0.20, $0.205, $0.27, $0.30, $0.33, $0.345,
$0.37, $0.40, $0.60 and $1.00) and a weighted average remaining contractual life of 6.7 years.
Measurement of fair values
The fair value of services received in return for share options granted is based on the fair value of share options
granted, measured using the Black Scholes Model. This model is generally used to calculate a theoretical price of
an option on a stock that does not pay dividends using the five key variables of an option's price being the current
spot price, future exercise price, volatility, time to expiration, and the risk-free interest rate.
The inputs used in the measurement of the fair values at grant date of the equity-settled share-based payment
plans issued to directors, key management personnel and other in FY22 were:
•
Non executive Directors; 841,000 options with Risk-free rate 1.68%, exercise price of $0.205, fair value at
grant date $0.309, expected volatility (annualised) 93.00%, expected life of 10 years, and an annualised
dividend rate of 0%.
•
Non executive Directors; 536,500 options with Risk-free rate 1.68%, exercise price of $0.27, fair value at grant
date $0.304, expected volatility (annualised) 93.00%, expected life of 10 years, and an annualised dividend
rate of 0%.
•
Executive Directors; 802,000 options with Risk-free rate 1.68%, exercise price of $0.205, fair value at grant
date $0.309, expected volatility (annualised) 93.00%, expected life of 10 years, and an annualised dividend
rate of 0%.
•
Management Personnel; 149,000 options with Risk-free rate 1.22%, exercise price of $0.205, fair value at
grant date $0.333, expected volatility (annualised) 93.00%, expected life of 10 years, and an annualised
dividend rate of 0%.
•
Management Personnel; 600,000 options with Risk-free rate 1.68%, exercise price of $0.345, fair value at
grant date $0.298, expected volatility (annualised) 93.00%, expected life of 10 years, and an annualised
dividend rate of 0%.
•
Management Personnel; 600,000 options with Risk-free rate 1.88%, exercise price of $0.37, fair value at grant
date $0.3224, expected volatility (annualised) 93.00%, expected life of 10 years, and an annualised dividend
rate of 0%.
•
Management Personnel; 600,000 options with Risk-free rate 3.07%, exercise price of $0.33, fair value at grant
date $0.2901, expected volatility (annualised) 93.00%, expected life of 10 years, and an annualised dividend
rate of 0%.
Employee expenses
Consolidated
2022
2021
Current
$
$
Share options expense
561,637
390,483
Total expense recognised as employee costs
561,637
390,483
HEXIMA LIMITED NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022
Hexima Limited Annual Report
39
ABN 64 079 319 314
10. CASH AND CASH EQUIVALENTS
11. RECEIVABLES
Consolidated
2022
2021
$
$
Current
Trade receivables
112,763
110,135
R&D Tax Incentive Receivable – ATO
5,391,390
3,661,103
Prepayments and other receivables
302,808
251,900
5,806,961
4,023,138
The Group’s exposure to credit and currency risks and impairment losses related to trade receivables is disclosed
in Note 19.
Consolidated
2022
2021
$
$
Cash on hand
952
952
Cash at bank
3,956,311
3,420,929
3,957,263
3,421,881
HEXIMA LIMITED NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022
Hexima Limited Annual Report
40
ABN 64 079 319 314
12(a) PLANT AND EQUIPMENT
Consolidated
Plant and Equipment
Office
Equipment
Total
Cost
$
$
$
Balance at 1 July 2021
1,059,225
22,093
1,081,318
Additions
-
3,045
3,045
Disposals
(12,003)
-
(12,003)
Balance at 30 June 2022
1,047,222
25,138
1,072,360
Balance at 1 July 2020
3,424,934
19,670
3,444,604
Additions
-
2,423
2,423
Transfer to investment property
(2,365,709)
-
(2,365,709)
Balance at 30 June 2021
1,059,225
22,093
1,081,318
Accumulated depreciation
Balance at 1 July 2021
929,970
19,350
949,320
Depreciation for the year
24,324
2,220
26,544
Disposals
(9,622)
-
(9,621)
Balance at 30 June 2022
944,673
21,570
966,243
Balance at 1 July 2020
2,152,057
16,961
2,169,018
Depreciation for the year
145,590
2,389
147,979
Transfer to investment property
(1,367,677)
-
(1,367,677)
Balance at 30 June 2021
929,970
19,350
949,320
Carrying amounts
At 30 June 2021
129,255
2,743
131,998
At 30 June 2022
102,549
3,533
106,117
HEXIMA LIMITED NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022
Hexima Limited Annual Report
41
ABN 64 079 319 314
12(b) INVESTMENT PROPERTY
The Group held one investment property, a glasshouse facility measured at cost. This was reclassified as an
asset held for sale during the year.
Glasshouse
Cost
$
Balance at 1 July 2021
2,365,709
Transfer from property, plant and equipment
-
Transferred to Assets held for sale
(2,365,709)
Balance at 30 June 2022
-
Balance at 1 July 2020
-
Additions
2,365,709
Disposals
-
Balance at 30 June 2021
2,365,709
Accumulated depreciation
Balance at 1 July 2021
1,367,677
Transfer from property, plant and equipment
-
Transferred to Assets held for sale
(1,367,677)
Balance at 30 June 2022
-
Balance at 1 July 2020
-
Depreciation for the year
1,367,677
Disposals
-
Balance at 30 June 2021
1,367,677
Carrying amounts
At 30 June 2021
998,032
At 30 June 2022
-
HEXIMA LIMITED NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022
Hexima Limited Annual Report
42
ABN 64 079 319 314
12.(c) ASSETS HELD FOR SALE
The Group holds one asset for sale, a glasshouse facility. The Group has reached in principle agreement to sell the
glasshouse facility. Hexima considers the fair value of the glasshouse to be $1.1m based on the sale agreement. The
glasshouse has been wholly leased to a third party and Hexima will retain the rights to collect the lease payments
until March 2023. Refer to Note 22.
Glasshouse
Cost
$
Balance at 1 July 2021
-
Transfer from Investment property
2,365,709
Disposals
-
Balance at 30 June 2022
2,365,709
Balance at 1 July 2020
-
Transfer from property, plant and equipment
-
Disposals
-
Balance at 30 June 2021
-
Accumulated depreciation
Balance at 1 July 2021
-
Transfer from Investment property
1,367,677
Depreciation for the year
114,744
Disposals
-
Balance at 30 June 2022
1,482,421
Balance at 1 July 2020
-
Transfer from property, plant and equipment
-
Disposals
-
Balance at 30 June 2021
-
Carrying amounts
At 30 June 2021
-
At 30 June 2022
883,288
HEXIMA LIMITED NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022
Hexima Limited Annual Report
43
ABN 64 079 319 314
13. TRADE AND OTHER PAYABLES
Consolidated
2022
2021
Current
$
$
Trade payables and other
4,774,025
2,678,680
Other payables & accrued expenses
966,774
516,119
Rental income received in advance
102,511
99,045
5,843,310
3,293,844
13. TRADE AND OTHER PAYABLES (continued)
Consolidated
2022
2021
Non-Current
$
$
Trade payable
-
1,616,758
-
1,616,758
Exposure to currency and liquidity risk related to trade and other payables is disclosed in Note 19.
14. LOANS AND BORROWINGS
Consolidated
2022
2021
Current
$
$
US Government Loan - Paycheck Protection Program
-
31,996
-
31,996
15.
EMPLOYEE BENEFITS
Consolidated
2022
2021
Current
$
$
Accrued bonus
-
338,730
Superannuation
18,577
12,876
Liability for annual leave
161,187
82,787
Liability for long service leave
164,657
152,478
344,421
586,871
HEXIMA LIMITED NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022
Hexima Limited Annual Report
44
ABN 64 079 319 314
16. CAPITAL AND RESERVES
Reconciliation of movement in capital and reserves
Consolidated and the Parent Entity
Ordinary Shares
Number of Shares
Amount
$
2022
2021
2022
2021
On Issue at 1 July
130,857,724
130,238,789
71,905,180
61,006,378
Issued via Placement
-
57,000,000
-
5,700,000
Issued via convertible note
conversion
-
44,476,598
-
3,246,791
Total ordinary shares pre share
consolidation
-
231,715,387
-
69,953,169
Total ordinary shares post 1:2
consolidation
-
115,857,724
-
69,953,169
Issued via Public Offer
-
15,000,000
-
3,000,000
Issue via Placement
31,250,000
-
10,000,000
-
Issue via Share purchase plan
3,125,317
-
1,000,102
-
Issue via reduction in debt
1,394,088
-
571,576
-
Issue via exercise of options
412,500
-
66,000
-
Capital raising costs
-
-
(658,236)
(1,047,989)
On issue at 30 June – fully paid
167,039,629
130,857,724
82,884,622
71,905,180
Shares in the Company were consolidated on a one for two basis in October 2020. The total shares post consolidation
is not exactly half of the pre consolidation total due to rounding of uneven share holdings.
The Company does not have authorised capital or par value in respect of its issued shares. The holders of ordinary
shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at general
meetings of the Company.
HEXIMA LIMITED NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022
Hexima Limited Annual Report
45
ABN 64 079 319 314
16. CAPITAL AND RESERVES (continued)
Equity Option Reserve
The equity option reserve comprises the accumulated amount of share options issued to other parties not under
compensation schemes.
Number of options
Amount
On issue at 1 July
2022
3,000,000
2021
-
2022
$
450,216
2021
$
200,000
Issued to lead manager of Public Offer
-
3,000,000
-
250,216
On issue at 30 June
3,000,000
3,000,000
450,216
450,216
Equity compensation Reserve
The equity compensation reserve represents the accumulated amount of share options vested and to be vested to
director’s, key management personnel and other personnel under compensation schemes.
Number of options
Amount
2022
2021
2022
$
2021
$
On issue at period beginning
9,373,500
17,605,000
1,831,008
1,440,525
Options on issue post consolidation
9,373,500
8,802,500
1,831,008
1,440,525
Issued as compensation
4,128,500
7,117,500
561,637
390,483
Exercise of share options
(412,500)
-
-
-
Cancelled options
-
(5,452,500)
-
-
Lapsed options
(650,000)
(1,094,000)
-
-
On issue at period end
12,439,500
9,373,500
2,392,645
1,831,008
Total Reserve at period end
15,439,500
12,373,500
2,842,861
2,281,224
Shares in the Company were consolidated on a one for two basis in October 2020, options were consolidated on an
equivalent basis.
Options issued during the period
1,349,000 options were granted throughout the year to members of the management team, and 2,779,500 options
were granted on 2 December 2021 to the chairman, executive directors and non-executive directors.
The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one
vote per share at meetings of the Company.
HEXIMA LIMITED NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022
Hexima Limited Annual Report
46
ABN 64 079 319 314
16. CAPITAL AND RESERVES (continued)
Earnings per Share
The Group’s basic and diluted EPS are shown below:
2022
2021
Net loss
$(10,020,761)
$(6,873,646)
Weighted average number of ordinary shares
152,688,237
111,923,137
Basic EPS (cents per share)
(6.56)c
(6.14)c
Diluted EPS (cents per share)
(6.56)c
(6.14)c
Dilutive earnings per share is the same as Basic earnings per share as potential ordinary shares shall be treated as
dilutive when, and only when, their conversion to ordinary shares would decrease earnings per share or increase loss
per share from continuing operations.
17. NOTES TO THE STATEMENT OF CASHFLOW
17a. RECONCILIATION OF CASH
Note
Consolidated
Reconciliation of cash at the end of the period (as
shown in the statement of cash flows) to the related
items in the accounts is as follows:
2022
2021
$
$
Cash on hand and at bank
10
3,957,263
3,421,881
17b. RECONCILIATION OF CASH FLOWS FROM OPERATING ACTIVITIES
Consolidated
2022
2021
Cash flows from operating activities
$
$
Loss for the year
(10,020,761)
(6,873,646)
Adjustments for:
Interest received and foreign exchange differences –
classified as investing activity and movement in cash
113,765
2,399
Derivative instrument loss
-
45,608
Depreciation
141,288
147,979
Equity settled share based payment expense
561,637
640,699
Operating loss before changes to working capital
(9,204,071)
(6,036,961)
Increase in trade and other receivables and prepayments
(1,783,823)
(1,731,058)
Increase in payables and employee benefits
1,230,075
1,974,257
Net cash used in operating activities
(9,757,819)
(5,793,762)
HEXIMA LIMITED NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022
Hexima Limited Annual Report
47
ABN 64 079 319 314
18. AUDITOR’S REMUNERATION
Consolidated
a.
Audit Services
2022
2021
Auditors of the Company
$
$
KPMG Australia
- Audit of the annual financial report
62,083
53,583
- Review of half year financial statements
32,730
32,096
94,813
85,679
b.
Non-Audit Services
2022
2021
$
$
KPMG Australia
- Investigating Accountant for public offer of shares
-
108,675
-
108,675
19. FINANCIAL INSTRUMENTS
Credit Risk
The carrying amount of the Group’s financial assets represents the maximum credit exposure.
The Group’s maximum exposure to credit risk at 30 June was:
Consolidated
Note
2022
2021
$
$
Trade and other receivables
11
112,763
110,135
R&D Tax Incentive – ATO
11
5,391,390
3,661,103
Cash on hand and at bank
10
3,957,263
3,421,881
9,461,416
7,193,119
Cash on hand and at bank include deposits with the National Australia Bank and the Bank of America. The Group
has no significant exposure to long aged receivables as at 30 June 2022. Both the trade and other receivables and
R&D Tax incentive are current and have been received year on year and are considered to have a low credit risk
given the counter party.
Impairment Losses
The Group has receivables past due of $NIL (2021: $NIL) and no impairment losses have been recognised (2021:
$NIL).
HEXIMA LIMITED NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022
Hexima Limited Annual Report
48
ABN 64 079 319 314
19. FINANCIAL INSTRUMENTS (continued)
Liquidity Risk
The Group has trade and other payables and employee provisions with a carrying value of $6,594,367 (2021:
$3,880,715) (notes 13 and 15), which are payable in cash and have a maturity of less than 6 months. Long Service
leave current liability (also included in Note 15) totals $164,657 (2020: $152,478).
The Group had a non-current liability owing to La Trobe University of $1,616,758 in FY 2021, which has been
classified a current liability in the current year. The Group also had a US Government, Small Business
Administration Payroll Protection Program loan totalling AUD $31,996 in FY 2021 that has been repaid during the
year.
There are currently NIL term deposits.
Currency risk
At 30 June 2022, there were no receivables of another currency, and payables of EUR 509,154 (2021: EUR
119,713), USD $360,331 (2021: USD $28,959), GBP 129,330 (2021: GBP 82,597) and NZD $1,800 (2021: NZD
$151,803).
Of the cash on hand at 30 June 2022, the Group held;
USD $41,941 within a NAB and Bank of America USD denominated account (AUD $60,424) (2021: USD $383,763;
AUD equivalent of $505,816),
GBP 344,961; AUD equivalent of $601,995 (2021: GBP 465,491; AUD equivalent of $849,684); and
EUR 156,111; AUD equivalent of $234,574 (2021: EUR 335,630; AUD equivalent of $526,075).
Interest Risk
Exposure to interest rate risks arises in the normal course of the Group’s business in respect of interest income
on cash at bank (note 11). The weighted average interest rate in respect of interest income in 2022 was 0.04%
(2021: 0.05%).
Fixed rate instruments
There were no term deposits during the year ended June 2022, or the year prior.
Variable rate instruments
In respect of cash at bank a 100 basis points increase in interest rates would have decreased the loss by $35,909
(2021: $31,841). A 100 basis points decrease in interest rates would have increased the loss by $35,909 (2021:
$31,841).
Estimation of fair values
The fair value of a financial asset or a financial liability is the amount at which the asset could be exchanged, or
liability settled in a current transaction between willing parties after allowing for transaction costs. The carrying
value of financial assets and liabilities approximates their fair value at 30 June 2022.
Fair value hierarchy
No financial instruments are carried at fair value at 30 June 2022, however, as noted above the carrying amounts
approximate fair value in respect of financial assets and liabilities.
20. CONTINGENCIES
The Directors are of the opinion that provisions are not required in respect of these matters, as it is not probable
that a future sacrifice of economic benefits will be required or the amount is not capable of reliable measure.
Guarantee and Indemnification
The Company has an Institutional Biosafety Committee (IBC) to advise on certain aspects of the Group’s field trial
applications. The Group has agreed to indemnify, release and forever discharge the members of the IBC from and
against any claim or liability, incurred by the members, arising in connection with the conduct of field trials and
related applications being undertaken by the Group. The financial exposure from this arrangement is expected to
be nil.
HEXIMA LIMITED NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022
Hexima Limited Annual Report
49
ABN 64 079 319 314
21. RELATED PARTIES
Directors
The following were key management personnel of the Group and the Company at any time during the reporting
period and unless otherwise indicated were Directors for the entire period:
Non-Executive Chairman
Professor Jonathan West
Executive Directors
Mr Michael Aldridge – Chief Executive Officer (stepped down from this position 2 August 2022, remains a non-
executive director)
Dr. Nicole van der Weerden, Chief Operating Officer (appointed acting Chief Executive Officer 2 August 2022)
Professor Marilyn Anderson, Chief Science Officer (retired from the Board 2 December 2021)
Non-Executive Directors
Mr Justin Yap
Mr Scott Robertson
Mr Jason (Jake) Nunn (appointed 1 September 2021)
Mr Steven Skala AO (alternate director appointed 10 March 2020)
Executives
Ms Helen Molloy, Financial Controller (Company Secretary from 21 November 2020 to 6 October 2021)
Dr Peter Welburn (appointed Chief Development Officer 1 October 2020 and resigned 1 December 2021)
Ms Leanne Ralph, Company Secretary (appointed 6 October 2021)
Dr Nancy Sacco, Chief Development Officer (appointed 2 December 2021)
Mr Phillip Rose, Chief Commercial Officer (appointed 4 January 2022)
The key management personnel compensation included in ‘employee benefits expense’ is as follows:
Consolidated
2022
2021
$
$
Short term employee benefits
1,642,298
1,851,773
Post employment benefits
49,431
44,212
Share based payments
542,545
362,834
2,234,274
2,258,819
The Company engages Marilyn Anderson and Nicole van der Weerden services through a Research Agreement
with La Trobe University and through a separate direct employment agreement. The La Trobe University
payments have been included in the compensation amounts above and the comparative numbers have been
adjusted for consistency.
Individual Directors and Executive compensation disclosures
No Director has entered into a material contract with the Group and the Company since the end of the previous
financial year and there were no material contracts involving Directors’ interests existing at year end.
HEXIMA LIMITED NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022
Hexima Limited Annual Report
50
ABN 64 079 319 314
21. RELATED PARTIES (continued)
Options and rights over equity instruments
The movement during the reporting period in the number of options over ordinary shares in the Company held
directly, indirectly or beneficially, by each key management person including their related parties, is as follows:
2022
Held at
1 July 2021
Granted as
compensatio
n
Exercised
Expired/
Lapsed
Held at
30 June 2022
Vested
during the
period
Vested and
exercisable at
30 June 2022
Directors
Jonathan West
1,000,000
393,000
-
-
1,393,000
1,000,000
1,000,000
Nicole van der Weerden
1,650,000
244,000
(250,000)
(250,000)
1,394,000
479,167
479,167
Marilyn Anderson AO
250,000
36,000
(125,000)
-
161,000
52,083
52,083
Justin Yap (1)
312,500
224,000
-
-
536,500
312,500
312,500
Scott Robertson
312,500
224,000
-
-
536,500
312,500
312,500
Michael Aldridge
2,750,000
522,000
-
-
3,272,000
1,145,833
1,145,833
Jason (Jake) Nunn
-
536,500
-
-
536,500
78,125
78,125
Steven Skala AO (2)
125,000
-
-
-
125,000
125,000
125,000
Key Management
Peter Welburn (3)
650,000
65,000
-
-
715,000
270,833
270,833
Dr Nancy Sacco (4)
-
600,000
-
-
600,000
-
-
Mr Phillip Rose (5)
100,000
600,000
-
-
700,000
41,667
41,667
Ms Leanne Ralph (6)
-
-
-
-
-
-
-
Helen Molloy
225,000
30,000
-
-
255,000
90,625
98,125
7,375,000
3,474,500
(375,000)
(250,000)
10,224,500
3,908,333
3,915,833
1.
A related party of Justin Yap holds 17,684,540 shares.
2.
Steven Skala is an alternate director for Scott Robertson, appointed 10 March 2020
3.
Peter Welburn was Chief Development Officer until 1 December 2021
4.
Dr Nancy Sacco was appointed Chief Development Officer 2 December 2021
5.
Mr Phillip Rose was appointed Chief Commercial Officer 4 January 2022
6.
Ms Leanne Ralph was appointed Company Secretary 6 October 2021
HEXIMA LIMITED NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022
Hexima Limited Annual Report
51
ABN 64 079 319 314
21. RELATED PARTIES (continued)
Options and rights over equity instruments (continued)
2021
Held at
1 July 2020
Options
post share
consolidati
on
Cancelled
Granted as
compensat
ion
Expired/
Lapsed
Held at
30 June
2021
Vested
during the
period
Vested and
exercisable
at
30 June
2021
Directors
Jonathan West
3,000,000
1,500,000
(1,500,000)
1,000,000
-
1,000,000
-
-
Nicole van der Weerden
1,500,000
750,000
(250,000)
1,150,000
-
1,650,000
125,000
500,000
Marilyn Anderson AO
250,000
125,000
-
125,000
-
250,000
62,500
125,000
John Bedbrook (4)
2,500,000
1,250,000
-
-
(750,000)
500,000
125,000
500,000
G F Dan O’Brien (4)
1,250,000
625,000
-
-
(125,000)
500,000
125,000
500,000
Justin Yap (1)
625,000
312,500
(312,500)
312,500
-
312,500
-
-
Scott Robertson
1,350,000
675,000
(675,000)
312,500
-
312,500
-
-
Michael Aldridge
5,000,000
2,500,000
(2,500,000)
2,750,000
-
2,750,000
-
-
Steven Skala AO (2)
250,000
125,000
(125,000)
125,000
-
125,000
-
-
Key Management
Peter Welburn (3)
-
-
-
650,000
-
650,000
-
-
Helen Molloy
75,000
37,500
(30,000)
217,500
-
225,000
-
7,500
15,800,000
7,900,000
(5,392,500)
6,642,500
(875,000)
8,275,000
437,500
1,632,500
1.
A related party of Justin Yap holds 14,715,790 shares.
2.
Steven Skala is an alternate director for Scott Robertson, appointed 10 March 2020
3.
Peter Welburn was appointed Chief Development Officer 1 October 2020
4.
John Bedbrook and G F Dan O’Brien retired as directors on 22 September 2020
HEXIMA LIMITED NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022
Hexima Limited Annual Report
52
ABN 64 079 319 314
21. RELATED PARTIES (continued)
Movement in shares
The movement during the reporting period in the number of ordinary shares in the Company held directly,
indirectly, or beneficially by each key management personnel, including their related parties, is as follows:
2022
Held at
1 July 2021
Purchases
Purchased
through exercise
of options
Sales
Held at
30 June 2022
Directors
Jonathan West
3,000,000
-
-
-
3,000,000
Marilyn Anderson AO
2,280,548
-
125,000
-
2,405,548
Nicole van der Weerden
144,700
-
250,000
-
394,700
Justin Yap (1)
-
-
-
-
-
Scott Robertson
-
-
-
-
-
Michael Aldridge
-
-
-
-
-
Jason (Jake) Nunn
-
93,750
-
-
93,750
Steven Skala AO (2)
5,480,029
312,500
-
-
5,792,529
Key Management
Peter Welburn (3)
-
-
-
-
-
Dr Nancy Sacco (4)
-
-
-
-
-
Mr Phillip Rose (5)
-
-
-
-
-
Ms Leanne Ralph (6)
-
-
-
-
-
Helen Molloy
78,500
-
-
-
78,500
10,983,777
406,250
375,000
-
11,765,027
1.
A related party of Justin Yap holds 17,684,540 shares.
2.
Steven Skala is an alternate director for Scott Robertson, appointed 10 March 2020
3.
Peter Welburn was Chief Development Officer until 1 December 2021
4.
Dr Nancy Sacco was appointed Chief Development Officer 2 December 2021
5.
Mr Phillip Rose was appointed Chief Commercial Officer 4 January 2022
6.
Ms Leanne Ralph was appointed Company Secretary 6 October 2021
HEXIMA LIMITED NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022
Hexima Limited Annual Report
53
ABN 64 079 319 314
21. RELATED PARTIES (continued)
Movement in shares (continued)
2021
Held at
1 July 2020
Pre consolidation
CN conversion,
Placement and
Purchases
Pre
consolidation
Transfer
Shares
held post
Consolidat
ion
Post
Consolidatio
n Purchases
Held at
30 June 2021
Directors
Jonathan West
4,000,000
2,000,000
-
3,000,000
-
3,000,000
Marilyn Anderson AO
4,061,096
500,000
-
2,280,548
-
2,280,548
Nicole van der Weerden
214,400
75,000
-
144,700
-
144,700
John Bedbrook (3)
500,000
-
-
250,000
-
250,000
G F Dan O’Brien (3)
15,035,894
15,282,811
(1,000,000)
14,659,353
280,000
14,939,353
Justin Yap (1)
-
-
-
-
-
-
Scott Robertson
-
-
-
-
-
-
Michael Aldridge
-
-
-
-
-
-
Steven Skala AO (2)
6,667,947
4,292,109
-
5,480,029
-
5,480,029
Key Management
Peter Welburn (4)
-
-
-
-
-
-
Helen Molloy
32,000
125,000
-
78,500
-
78,500
30,511,337
22,274,920
(1,000,000)
25,893,130
280,000
26,173,130
(1) A related party of Justin Yap holds 14,715,790 shares.
(2) Steven Skala is the Alternate Director for Scott Robertson, appointed 10 March 2020.
(3) G F Dan O’Brien and John Bedbrook retired from the Board on 22 September 2020.
(4) Peter Welburn was appointed Chief Development Officer 1 October 2020.
HEXIMA LIMITED NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022
Hexima Limited Annual Report
54
ABN 64 079 319 314
21. RELATED PARTIES (continued)
Key management personnel and directors’ transactions
Professor Anderson and Dr van der Weerden are employees of La Trobe University. During the financial year
ended 30 June 2022, amounts (including GST) totalling $5,249,466 (2021: $4,227,350) were paid or payable by
Hexima to La Trobe University for research work carried out on behalf of the Group; these amounts include
payments for compensation as set-out in the key management compensation table above. These transactions
were conducted on normal commercial terms. Trade accounts and/or accruals payable to La Trobe University at
30 June 2022 were $3,772,378 (exclusive of GST) (2021: $3,621,075).
22. OPERATING LEASES
Leases as lessor
Lease rentals are receivable as follows:
2022
2021
$
$
Less than one year
307,535
396,180
Between one and five years
-
297,135
307,535
693,315
23. GROUP ENTITIES
Country of
incorporation
Ownership Interest
Parent Entity
2022
2021
Hexima Limited
Australia
Significant subsidiaries
Hexima Holdings Limited
Australia
100%
100%
Pharmagra Pty Ltd
Australia
100%
100%
Hexima Operations USA, Inc
USA
100%
100%
Pharmagra Pty Ltd is incorporated in Australia and is a 100% owned subsidiary of the Company. Pharmagra Pty
Ltd has total assets and net assets of $2.00 at 30 June 2022.
Hexima Holdings Pty Ltd is incorporated in Australia and is a 100% owned subsidiary of the Company. Hexima
Holdings Pty Ltd has net assets totalling $883,288 at 30 June 2022, which comprises the Hexima glasshouse
located at La Trobe University.
Hexima Operation USA, Inc was incorporated in the USA on 23 May 2019 and has net assets totalling $98,870 as
at 30 June 2022.
HEXIMA LIMITED NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022
Hexima Limited Annual Report
55
ABN 64 079 319 314
24.
PARENT ENTITY DISCLOSURES
Company
2022
2020
$
$
Result of the Parent Entity
Loss for the period
(10,035,605)
(6,895,787)
Other Comprehensive income
-
-
Total Comprehensive loss for the period
(10,035,605)
(6,895,787)
Financial Position of the Parent entity at year end
Current assets
10,056,188
7,331,676
Total assets
11,045,593
8,461,705
Current liabilities
6,578,552
3,883,380
Non-current liabilities
-
1,616,758
Total liabilities
6,578,552
5,500,138
Total equity of the Parent entity comprising of:
Share capital
82,884,622
71,905,180
Reserves
2,842,861
2,281,224
(Accumulated losses)
(81,260,442)
(71,224,837)
Total Equity
4,467,041
2,961,567
25. SUBSEQUENT EVENTS
As a consequence of the clinical trial results for pezadeftide, Hexima has commenced a process of winding down its
research and development activities for pezadeftide. Hexima’s contracts with its major research service providers have
been, or are being, terminated and all non-essential employees have been made redundant.
In line with the Company’s decision to wind-down its pezadeftide program and manage expenses, Hexima’s Chief
Executive Officer, Mr Michael Aldridge, resigned from his executive role on 2 August 2022. Hexima’s Chief Operating
Officer, Dr Nicole van der Weerden, assumed the role of Acting Chief Executive Officer. Mr Aldridge continues as a
Non-Executive Director of the Company.
Hexima has reached in principle agreement with La Trobe University to sell the Hexima glasshouse facility and various
laboratory plant and equipment in exchange for a reduction in Hexima’s outstanding liabilities to La Trobe University
totalling $980,000. Hexima also retains the rights to the quarterly lease payments until March 2023 valued at a further
$205,023.
Following the steps that have been taken to date, Hexima expects to have cash and receivables of between $2.0 and
$2.6M, and no other material tangible assets or liabilities, once current operations are finalised in Q4 2022. This
includes Hexima’s FY2023 R&D Tax Incentive rebate receivable of approximately $0.5M.
Other than the matters noted above, there have been no events subsequent to the balance date which would have a
material effect on the Group’s financial statements as at 30 June 2022.
HEXIMA LIMITED NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022
Hexima Limited Annual Report
56
ABN 64 079 319 314
26. SIGNIFICANT ACCOUNTING POLICIES
The accounting policies set out below have been applied consistently to all periods by Group entities.
Certain comparative amounts have been reclassified to conform to the current year’s presentation.
(a) Basis of Consolidation
Subsidiaries
Subsidiaries are entities controlled by the Group. The Group controls an entity when it 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 over the entity. The financial statements of subsidiaries are included in the consolidated financial
statements from the date on which control commences until the date on which control ceases.
Transactions eliminated on consolidation
Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group
transactions, are eliminated in preparing the consolidated financial statements.
(b) Financial Instruments
(i)
Recognition and initial measurement
Trade receivables and debt securities issued are initially recognised when they are originated. All other financial
assets and financial liabilities are initially recognised when the Group becomes a party to the contractual
provisions of the instrument.
A financial asset (unless it is a trade receivable without a significant financing component) or financial liability is
initially measured at fair value plus, for an item not at FVTPL, transaction costs that are directly attributable to its
acquisition or issue. A trade receivable without a significant financing component is initially measured at the
transaction price.
(ii)
Classification and subsequent measurement
Financial assets
On initial recognition, a financial asset is classified as measured at: amortised cost; FVOCI – debt investment;
FVOCI – equity investment; or FVTPL.
Financial assets are not reclassified subsequent to their initial recognition unless the Group changes its business
model for managing financial assets, in which case all affected financial assets are reclassified on the first day of
the first reporting period following the change in the business model.
A financial asset is measured at amortised cost if it meets both of the following conditions and is not designated
as at FVTPL:
•
it is held within a business model whose objective is to hold assets to collect contractual cash flows; and
•
its contractual terms give rise on specified dates to cash flows that are solely payments of principal and
interest on the principal amount outstanding.
A debt investment is measured at FVOCI if it meets both of the following conditions and is not designated as at
FVTPL:
•
it is held within a business model whose objective is achieved by both collecting contractual cash flows and
selling financial assets; and
•
its contractual terms give rise on specified dates to cash flows that are solely payments of principal and
interest on the principal amount outstanding.
On initial recognition of an equity investment that is not held for trading, the Group may irrevocably elect to
present subsequent changes in the investment’s fair value in OCI. This election is made on an investment-by-
investment basis.
All financial assets not classified as measured at amortised cost or FVOCI as described above are measured at
FVTPL. This includes all derivative financial assets. On initial recognition, the Group may irrevocably designate a
financial asset that otherwise meets the requirements to be measured at amortised cost or at FVOCI as at FVTPL
if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.
HEXIMA LIMITED NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022
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57
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26. SIGNIFICANT ACCOUNTING POLICIES (continued)
(b) Financial Instruments (continued)
(ii)
Classification and subsequent measurement (continued)
Financial assets (continued)
Debt investments at FVOCI
These assets are subsequently measured at fair value. Interest income calculated using the effective interest
method, foreign exchange gains and losses and impairment are recognized in profit or loss. Other net gains and
losses are recognized in OCI. On derecognition, gains and losses accumulated in OCI are reclassified to profit or
loss. There were no debt investment at FVOCI during or at year end.
Financial Liabilities:
The group issued convertible notes denominated in AUD which are contingently convertible to ordinary shares in
the event of a qualifying financing occurring. As the notes are repayable in cash on the event of a qualifying sale
taking place, or on an insolvency event, and also contain a contingent conversion feature they represent a hybrid
instrument. The notes were categorised as a financial liability and are recognised on initial recognition as the
difference between the carrying amount of the hybrid instrument and the fair value of the embedded derivative
and subsequently the financial liability component is measured at amortised cost. The conversion feature
represents an embedded derivative which is not closely related to the host notes and therefore are separated on
initial recognition at their fair value and are subsequently recognised at fair value through profit or loss. The
value and number of shares to be issued is dependent on the event triggering the conversion.
The carrying amount of the host contract (financial liability) on initial recognition is the difference between the
carrying amount of the hybrid instrument and the fair value of the embedded derivative. The embedded
derivative is measured at fair value through profit or loss. Subsequent to initial recognition the derivative is
measured at fair value through profit or loss. The valuation methodology used for the derivative component was
the Black Scholes Model. The assumptions used in the valuation are 1) Risk Free Rate is equal to 0.203% 2) The
volatility is unchanged at 100% 3) The principal of the note is $3,000,000 and 4) Conversion date equals 31
December 2020.
The conversion occurred on a qualified financing occurring in the current financial year.
Financial liabilities are classified as measured at amortised cost or FVTPL. A financial liability is classified as at
FVTPL if it is classified as held-for-trading, it is a derivative or it is designated as such on initial recognition.
Financial liabilities at
FVTPL are measured at fair value and net gains and losses, including any Interest expense, are recognised in profit
or loss. Other financial liabilities are subsequently measured at amortised cost using the effective interest
method. Interest expense and foreign exchange gains and losses are recognised in profit or loss. Any gain or loss
on derecognition is also recognised in profit or loss.
Equity investments at FVOCI
These assets are subsequently measured at fair value. Dividends are recognized as income in profit or loss unless
the dividend clearly represents a recovery of part of the cost of the investment. Other net gains and losses are
recognized in OCI and are never reclassified to profit or loss. There were no equity investment at FVOCI during or
at year end.
(iii)
Derecognition
Financial assets
The Group derecognises a financial asset when the contractual rights to the cash flows from the financial asset
expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of
the risks and rewards of ownership of the financial asset are transferred or in which the Group neither transfers
nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial
asset.
The Group enters into transactions whereby it transfers assets recognised in its statement of financial position,
but retains either all or substantially all of the risks and rewards of the transferred assets. In these cases, the
transferred assets are not derecognised.
HEXIMA LIMITED NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022
Hexima Limited Annual Report
58
ABN 64 079 319 314
26. SIGNIFICANT ACCOUNTING POLICIES (continued)
(b) Financial Instruments (continued)
(iii)
Derecognition (continued)
Financial liabilities
The Group derecognises a financial liability when its contractual obligations are discharged, cancelled or expire.
The Group also derecognises a financial liability when its terms are modified and the cash flows of the modified
liability are substantially different, in which case a new financial liability based on the modified terms is
recognised at fair value.
Convertible notes are derecognised and converted to equity when a triggering event occurs as detailed in Note
15.
On derecognition of a financial liability, the difference between the carrying amount extinguished and the
consideration paid (including any non-cash assets transferred or liabilities assumed) is recognised in profit or loss.
(iv)
Offsetting
Financial assets and financial liabilities are offset and the net amount presented in the statement of financial
position when, and only when, the Group currently has a legally enforceable right to set off the amounts and it
intends either to settle them on a net basis or to realise the asset and settle the liability simultaneously.
(v)
Share capital
Ordinary shares
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares and
share options are recognised as a deduction from equity, net of any related income tax benefit.
Dividends
Dividends are recognised as a liability in the period in which they are declared.
(c) Plant and equipment
(i)
Recognition and measurement
Items of plant and equipment are measured at cost less accumulated depreciation and accumulated impairment
losses. Where parts of an item of plant and equipment have different useful lives, they are accounted for as
separate items of plant and equipment. Cost includes expenditures that are directly attributable to the
acquisition of the asset.
(ii)
Subsequent costs
The Company recognises in the carrying amount of an item of plant and equipment the cost of replacing part of
such an item when that cost is incurred if it is probable that the future economic benefits embodied within the
item will flow to the Group and the cost of the item can be measured reliably. All other costs are recognised in
the income statement as an expense as incurred. The carrying amount of the replaced part is derecognised. The
costs of the day-to-day servicing of property, plant and equipment are recognised in profit or loss as incurred.
(iii)
Depreciation
Depreciation is calculated over the depreciable amount, which is the cost of an asset. Depreciation is recognised
in profit or loss on a straight-line or diminishing value basis over the estimated useful lives of each part of an item
of property, plant and equipment. The estimated useful lives for the current and comparative periods are as
follows:
2022
2021
Plant and equipment
15% - 37.5%
15% - 37.5%
Office equipment
33% - 66.7%
33% - 66.7%
Plant and equipment - Building
5%
5%
Depreciation methods, useful lives and residual values are reassessed at the reporting date.
HEXIMA LIMITED NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022
Hexima Limited Annual Report
59
ABN 64 079 319 314
26. SIGNIFICANT ACCOUNTING POLICIES (continued)
(d) Foreign Currency
Transactions in foreign currencies are translated to the functional currency of Group entities at exchange rates at
the dates of the transactions.
(e) Impairment
(i)
Non-derivative financial assets
Financial instruments and contract assets
The Group recognises loss allowances for ECLs on:
•
financial assets measured at amortised cost;
•
debt investments measured at FVOCI. The Group did not have any debt investment of FVOCI during and as at
30 June 2022; and
•
contract assets.
The Group measures loss allowances at an amount equal to lifetime ECLs, except for the following, which are
measured at 12-month ECLs:
•
debt securities that are determined to have low credit risk at the reporting date; and
•
other debt securities and bank balances for which credit risk (i.e. the risk of default occurring over the
expected life of the financial instrument) has not increased significantly since initial recognition.
Loss allowances for trade receivables and contract assets are always measured at an amount equal to lifetime
ECLs.
When determining whether the credit risk of a financial asset has increased significantly since initial recognition
and when estimating ECLs, the Group considers reasonable and supportable information that is relevant and
available without undue cost or effort. This includes both quantitative and qualitative information and analysis,
based on the Group’s historical experience and informed credit assessment and including forward-looking
information.
The Group assumes that the credit risk on a financial asset has increased significantly if it is more than 90 days
past due.
The Group considers a financial asset to be in default when:
•
the borrower is unlikely to pay its credit obligations to the Group in full, without recourse by the Group to
actions such as realising security (if any is held); or
•
the financial asset is more than 180 days past due.
Lifetime ECLs are the ECLs that result from all possible default events over the expected life of a financial
instrument.
12-month ECLs are the portion of ECLs that result from default events that are possible within the 12 months
after the reporting date (or a shorter period if the expected life of the instrument is less than 12 months).
The maximum period considered when estimating ECLs is the maximum contractual period over which the Group
is exposed to credit risk.
Measurement of ECLs
ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all
cash shortfalls (i.e. the difference between the cash flows due to the entity in accordance with the contract and
the cash flows that the Group expects to receive).
ECLs are discounted at the effective interest rate of the financial asset.
HEXIMA LIMITED NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022
Hexima Limited Annual Report
60
ABN 64 079 319 314
26. SIGNIFICANT ACCOUNTING POLICIES (continued)
(e) Impairment (continued)
Credit-impaired financial assets
At each reporting date, the Group assesses whether financial assets carried at amortised cost and debt securities
at FVOCI are credit-impaired. A financial asset is ‘credit-impaired’ when one or more events that have a
detrimental impact on the estimated future cash flows of the financial asset have occurred.
Evidence that a financial asset is credit-impaired includes the following observable data:
•
significant financial difficulty of the borrower or issuer;
•
a breach of contract such as a default or being more than 90 days past due;
•
the restructuring of a loan or advance by the Group on terms that the Group would not consider otherwise;
•
it is probable that the borrower will enter bankruptcy or other financial reorganisation; or
•
the disappearance of an active market for a security because of financial difficulties.
Presentation of allowance for ECL in the statement of financial position
Loss allowances for financial assets measured at amortised cost are deducted from the gross carrying amount of
the assets.
For debt securities at FVOCI, the loss allowance is charged to profit or loss and is recognised in OCI.
Write-off
The gross carrying amount of a financial asset is written off when the Group has no reasonable expectations of
recovering a financial asset in its entirety or a portion thereof. For individual customers, the Group has a policy of
writing off the gross carrying amount when the financial asset is 180 days past due based on historical experience
of recoveries of similar assets. For corporate customers, the Group individually makes an assessment with respect
to the timing and amount of write-off based on whether there is a reasonable expectation of recovery. The Group
expects no significant recovery from the amount written off. However, financial assets that are written off could
still be subject to enforcement activities in order to comply with the Group’s procedures for recovery of amounts
due.
HEXIMA LIMITED NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022
Hexima Limited Annual Report
61
ABN 64 079 319 314
26. SIGNIFICANT ACCOUNTING POLICIES (continued)
(f) Revenue, income and government grants
Revenue
Performance obligations and revenue recognition polices:
Type of product/service
Nature and timing of satisfaction of
performance obligations, including
significant payment terms
Revenue recognition under AASB
15
Research and collaboration
fees – recognised over time
Customer obtains control as the
underlying research services are
performed. This usually occurs when
the underlying activities are undertaken
by the Group over time.
Where an agreement contains a right to
access the Group’s IP this is also
recognised over time.
Revenue is recognised when the
underlying expenses underpinning
the delivery of services are
incurred.
Lease income
Refer accounting policy note 26(n)
Government grants
The Group recognises an unconditional government grant as other income when the grant becomes receivable.
Grants that compensate the Group for expenses incurred are recognised in profit or loss as other income on a
systematic basis in the periods in which the expense are recognised, unless conditions for receiving the grant are
met after the related expenses have been recognised. In this case, the grant is recognised when it becomes
receivable.
(g) Research and development expenditure
Expenditure on research activities undertaken with the prospect of gaining new scientific or technical knowledge
and understanding is recognised in the income statement as an expense as incurred. Patent costs relating to
research activities are expensed as incurred. Plant and equipment acquired to perform research activities are
capitalised where the plant and equipment are not specific in nature to the Group’s research activities and can be
sold or leased to third parties. Plant and equipment specific to the research activities of the Group are expensed
on acquisition.
Development expenditure is capitalised only if development costs can be measured reliably, the product or
process is technically and commercially feasible, future economic benefits are probable, and the Group intends to
and has sufficient resources to complete development and to use or sell the asset. The expenditure capitalised
includes the cost of materials, direct labour and overhead costs that are directly attributable to preparing the
asset for its intended use. No costs were capitalised during the period. Other development expenditure is
recognized in the profit and loss as incurred.
HEXIMA LIMITED NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022
Hexima Limited Annual Report
62
ABN 64 079 319 314
26. SIGNIFICANT ACCOUNTING POLICIES (continued)
(h) Finance income and expenses
Finance income comprises interest income on term deposits. Interest income is recognised as it accrues in profit
or loss, using the effective interest method.
(i)
Income tax
Income tax expense comprises current and deferred tax. Income tax expense is recognised in the profit or loss
except to the extent that it relates to items recognised directly in equity, in which case it is recognised directly in
equity.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or
substantively enacted at the balance sheet date, and any adjustment to tax payable in respect of previous years.
Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and
liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not
recognised for temporary differences where the initial recognition of assets and liabilities in a transaction that is
not a business combination and that affects neither accounting nor taxable profit. Deferred tax is measured at
the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws
that have been enacted or substantively enacted by the reporting date. Deferred tax assets and liabilities are
offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income
taxes levied by the same tax authority on the same taxable entity.
The Company and its Australian subsidiaries are part of a Tax Consolidated Group and subject to tax as a single
entity. The US subsidiary is tax a single entity in the US.
A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available
against which the asset can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced
to the extent that it is no longer probable that the related tax benefit will be realised.
The Group receives refundable R&D tax incentives administered through the taxation system. These incentives,
as refundable, have been accounted for as a government grant within the scope of AASB 120 – refer to the
accounting policy disclosed in note 26(f).
(j)
Goods and services tax
Revenue, expenses and assets are recognised net of the amount of goods and services tax (GST), except where
the amount of GST incurred is not recoverable from the taxation authority. In these circumstances, the GST is
recognised as part of the cost of acquisition of the asset or as part of the expense.
Receivables and payables are stated with the amount of GST included. The net amount of GST recoverable from,
or payable to, the ATO is included as a current asset or liability in the statement of financial position. Cash flows
are included in the statements of cash flows on a gross basis. The GST components of cash flows arising from
investing and financing activities which are recoverable from, or payable to, the ATO are classified as operating
cash flows.
(k) Segment Reporting
The Group determines and presents operating segments based on the information that internally is provided to
the Group’s chief operating decision maker. An operating segment is a component of the Group that engages in
business activities from which it may earn revenues and incur expenses, including revenues and expenses that
relate to transactions with any of the Group’s other components.
The Group primarily operates in one sector, being the biotechnology industry, developing and/or commercialising
biotechnology research. The majority of operations are in Australia. All assets are located in Australia. The Group
employs a US based CEO and approximately 10% of the Groups expenses are incurred in the USA.
(l) Employee benefits
Defined contribution plans
A defined contribution plan is a post-employment benefit under which the entity pays fixed contributions into a
separate entity and will have no legal or constructive obligation to pay further amounts. Obligations for
contributions to defined contribution plans are recognised as a personnel expense in profit or loss when they are
due. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in future
payments is available.
HEXIMA LIMITED NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022
Hexima Limited Annual Report
63
ABN 64 079 319 314
26. SIGNIFICANT ACCOUNTING POLICIES (continued)
(l)
Employee benefits (continued)
Short term benefits
Short-term employee benefit obligations are expensed as the related service is provided.
A liability is recognised for the amount expected to be paid under short-term cash bonus or profit-sharing plans if
the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by
the employee and the obligation can be estimated reliably.
(m) Share based payment transactions
The grant date fair value of share-based payment awards granted to employees is recognised as an employee
expense, with a corresponding increase in equity, over the period that the employees unconditionally become
entitled to the awards. The amount recognised as an expense is adjusted to reflect the number of awards for
which the related service and non-market vesting conditions are expected to be met, such that the amount
ultimately recognised as an expense is based on the number of awards that do not meet the related service and
non-market performance conditions at the vesting date. For share-based payment awards with non-vesting
conditions, the grant date fair value of the share-based payment is measured to reflect such conditions and there
is no true-up for differences between expected and actual outcomes.
(n) Leases
At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or
contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in
exchange for consideration. To assess whether a contract conveys the right to control the use of an identified
asset, the Group uses the definition of a lease in AASB 16.
(i) As a lessor
At inception or on modification of a contract that contains a lease component, the Group allocates the
consideration in the contract to each lease component on the basis of their relative standalone prices.
When the Group acts as a lessor, it determines at lease inception whether each lease is a finance lease or an
operating lease.
To classify each lease, the Group makes an overall assessment of whether the lease transfers substantially all of
the risks and rewards incidental to ownership of the underlying asset. If this is the case, then the lease is a finance
lease; if not, then it is an operating lease. As part of this assessment, the Group considers certain indicators such
as whether the lease is for the major part of the economic life of the asset.
When the Group is an intermediate lessor, it accounts for its interests in the head lease and the sub-lease
separately. It assesses the lease classification of a sub-lease with reference to the right-of-use asset arising from
the head lease, not with reference to the underlying asset. If a head lease is a short-term lease to which the
Group applies the exemption described above, then it classifies the sub-lease as an operating lease.
The Group recognises lease payments received under operating leases as income on a straight-line basis over the
lease term as part of ‘rental income’.
The Group owns a glasshouse located at La Trobe university which it leases to a third party.
(o) Assets held for sale
Non-current assets, or disposal groups comprising assets and liabilities, are classified as held-for-sale if it is highly
probable that they will be recovered primarily through sale rather than through continuing use.
Such assets, or disposal groups, are generally measured at the lower of their carrying amount and fair value less
costs to sell. Any impairment loss on a disposal group is allocated first to goodwill, and then to the remaining
assets and liabilities on a pro rata basis, except that no loss is allocated to inventories, financial assets, deferred
HEXIMA LIMITED NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022
Hexima Limited Annual Report
64
ABN 64 079 319 314
26. SIGNIFICANT ACCOUNTING POLICIES (continued)
(o) Assets held for sale (continued)
tax assets, employee benefit assets, investment property or biological assets, which continue to be measured in
accordance with the Group’s other accounting policies. Impairment losses on initial classification as held-for-sale
or held-for-distribution and subsequent gains and losses on remeasurement are recognised in profit or loss.
Once classified as held-for-sale, intangible assets and property, plant and equipment are no longer amortised or
depreciated, and any equity-accounted investee is no longer equity accounted.
(p) New standards and interpretations not yet adopted
Other Standards
The following new and amended standards are not expected to have a significant impact on the Group’s
consolidated financial statements.
-
COVID 19 Related rent concessions (Amendment to IFRS 16)
-
Property, Plant and Equipment: Proceeds before intended use (Amendments to IAS 16)
-
Reference to conceptual framework (Amendments to IFRS 3)
-
Classification of liabilities as current or non-current (Amendments to IAS 1)
-
IFRS 17 Insurance contracts and amendments to IFRS 17 Insurance contracts
-
Onerous contracts – Cost of Fulfilling a Contract (Amendments to IAS 37)
-
Interest Rate Benchmark Reform – Phase 2 (Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16)
The Group determines that there is no impact of adopting the above standards.
27. FINANCIAL RISK MANAGEMENT
Overview
The Group has exposure to the following risks from their use of financial instruments:
•
credit risk
•
liquidity risk
•
market risk
•
operational risk.
This note presents information about the Group’s exposure to each of the above risks, their objectives, policies
and processes for measuring and managing risk, and the management of capital. Further quantitative disclosures
are included throughout this financial report.
The Board of Directors has overall responsibility for the oversight of risks. The Group maintains a control
environment in which all employees understand their roles and obligations.
Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to
meet its contractual obligations, and arises principally from the Group’s receivables from the Government and
University in respect of research grants and accrued interest receivable from banks.
Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The
Group’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity
to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable
losses or risking damage to the Group’s reputation.
The Group prepares and monitors budgets to manage its liquidity for the short and long term.
HEXIMA LIMITED NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022
Hexima Limited Annual Report
65
ABN 64 079 319 314
27. FINANCIAL RISK MANAGEMENT (continued)
Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity
prices will affect the Group’s income or the value of its holdings of financial instruments. The Board of Directors
oversee market risk exposures to optimise returns.
Currency risk
The Group’s currency risk is limited to trade and other receivables, payables and cash and cash equivalents that
are denominated in a currency other than the functional currency of the Group entities, primarily US dollar, Euro
and GBP. The Group has bank accounts in all 3 currencies with the National Australia Bank and a US dollar bank
account with the Bank of America. At 30 June 2022, there were receivables of $NIL and payables of $1,528,736
denominated in foreign currencies (2021 receivable: $NIL, payable: $521,591). At 30 June 22 the Group had US
$41,941 in the two group US dollar denominated bank accounts, GBP 344,961 and EUR 156,111.
Interest rate risk
Interest income is earned on term deposits and cash at bank, which are based on prevailing market rates.
Operational risk
Operational risk is the risk of direct or indirect loss arising from a wide variety of causes associated with the
Group’s processes, personnel, technology and infrastructure, and from external factors other than credit, market
and liquidity risks such as those arising from legal and regulatory requirements and generally accepted standards
of corporate behaviour. Operational risks arise from all of the Group’s operations.
The Group’s objective is to manage operational risk so as to balance the avoidance of financial losses and damage
to the Group’s reputation with overall cost effectiveness and to avoid control procedures that restrict initiative
and creativity.
The primary responsibility for the development and implementation of controls to address operational risk is
assigned to senior management of the Group. This responsibility is supported by the development of overall
Group standards for the management of operational risk in the following areas:
•
requirements for appropriate segregation of duties, including the independent authorisation of transactions
•
requirements for the reconciliation and monitoring of transactions
•
compliance with regulatory and other legal requirements
•
documentation of controls and procedures
•
requirements for the periodic assessment of operational risks faced, and the adequacy of controls and
procedures to address the risks identified
•
requirements for the reporting of operational losses and proposed remedial action
•
development of contingency plans
•
training and professional development
•
ethical and business standards
•
risk mitigation, including insurance where this is effective.
Capital management
The Board’s policy is to maintain a strong capital base to maintain investor, creditor and market confidence and
to sustain future development of the business. As the Group is a development stage business, the Board of
Directors monitors the Group’s performance with particular regard to the progress of scientific programs, the
commercialisation of those programs, the development of the Group’s intellectual property and asset base and
long-term share price performance. There were no changes in the Group’s approach to capital management
during the year. The Group is not subject to externally imposed capital requirements.
Hexima Limited Annual Report
66
ABN 64 079 319 314
DIRECTORS' DECLARATION
1) In the opinion of the Directors of Hexima Limited (“the Company”):
a) The consolidated financial statements and notes that are set out on pages 28 to 65, are in accordance with
the Corporations Act 2001, including:
i)
giving a true and fair view of the Group’s financial position as at 30 June 2022 and of its performance for
the financial year ended on that date;
ii) complying with Australian Accounting Standards and the Corporations Regulations 2001; and
b) There are reasonable grounds to believe that the Company will be able pay its debts as and when they
become due and payable.
2) The Directors draw attention to Note 2(a) to the financial statements, which includes a statement of compliance
with International Financial Reporting Standards.
Signed in accordance with a resolution of the Directors:
Dated at Melbourne this 30th day of September 2022
Professor Jonathan West
Dr Nicole van der Weerden
Non-Executive Chairman
Acting Chief Executive Officer and Executive Director
67
KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms
affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The
KPMG name and logos are trademarks used under license by the independent member firms of the KPMG global
organisation. Liability limited by a scheme approved under Professional Standards Legislation.
Independent Auditor’s Report
To the shareholders of Hexima Limited
Report on the audit of the Financial Report
Opinion
We have audited the Financial Report of
Hexima Limited (the Company).
In our opinion, the accompanying Financial
Report of the Company is in accordance with
the Corporations Act 2001, including:
• giving a true and fair view of the Group's
financial position as at
30 June 2022 and of its financial
performance for the year ended on that
date; and
• complying with Australian Accounting
Standards and the Corporations
Regulations 2001.
The Financial Report comprises:
•
Consolidated statement of financial position as at
30 June 2022
•
Consolidated statement of profit or loss and other
comprehensive income, Consolidated statement of changes in
equity, and Consolidated statement of cash flows for the year
then ended
•
Notes including a summary of significant accounting policies
•
Directors' Declaration.
The Group consists of Hexima Limited (the Company) and the
entities it controlled at the year end or from time to time during
the financial year.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. We believe that the audit evidence we
have obtained is sufficient and appropriate to provide a basis for our opinion.
Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the
Financial Report section of our report.
We are independent of the Group in accordance with the Corporations Act 2001 and the ethical requirements of the
Accounting Professional 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 fulfilled our other ethical responsibilities in accordance with these requirements.
Key Audit Matters
68
Key Audit Matters are those matters that, in our professional judgement, were of most significance in our audit of
the Financial Report of the current period.
These matters were addressed in the context of our audit of the Financial Report as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion on these matters.
We have determined the following matters described below to be the Key Audit Matters.
Government grants – R&D tax incentive $5,391,061
Refer to Note 4(b) of the Financial Report
The key audit matter
How the matter was addressed in our audit
The Group assesses their research and development
(R&D) activities and related expenditures for
eligibility for a refundable tax offset under an
Australian Government tax incentive.
Amounts recorded as income are a key audit matter
due to:
•
the significant size of the R&D tax incentive
recognised in the profit or loss and the
corresponding amount receivable to the
Group’s financial position as at
30 June 2022; and
•
the significant judgement required by the
Group in determining the eligibility of their
R&D expenditure under the incentive scheme.
The Group was assisted by an expert with their
assessment of the eligibility of expenses underlying
their claim.
We focused on the assessment performed by the
Group and their expert in determining the incentive
scheme eligibility of the R&D expenditure
underlying the Group’s claim, as their basis of
measuring the amount of the R&D tax incentive
income and corresponding receivable.
We involved tax specialists to supplement our
senior audit team members in assessing this key
audit matter.
Our procedures included:
• Checking the R&D tax incentive income recognised by
the Group to the R&D tax incentive calculation prepared
by management’s expert;
• Checking a sample of expenditure upon which the claim
is based, to underlying documentation, such as invoices
and payroll records;
• Involving our tax specialists, we assessed the eligibility
of a sample of the expenditure underlying the Group’s
R&D tax incentive claim and the accuracy of the tax
incentive calculation against current R&D tax legislation
and guidance material issued by the legislators; and
• Assessing the classification of the R&D tax incentive
income and associated disclosures in the financial
statements using our understanding obtained from our
testing and against the requirements of accounting
standards.
69
Going concern basis of accounting
Refer to Note 2(e) to the Financial Report
The key audit matter
How the matter was addressed in our audit
The Group’s use of the going concern basis of
accounting and the associated extent of uncertainty
is a key audit matter due to the high level of
judgement required by us in evaluating the Group’s
assessment of going concern and the events or
conditions that may cast significant doubt on their
ability to continue as a going concern. These are
outlined in Note 2(e).
The Directors have determined that the use of the
going concern basis of accounting is appropriate in
preparing the financial report. Their assessment of
going concern was based on cash flow projections.
The preparation of these projections incorporated a
number of assumptions and significant judgements.
We critically assessed the level of uncertainty, as it
related to the Group’s ability to continue as a going
concern, within these assumptions and judgements,
focusing on the following:
•
the Group’s significant cash inflow
assumptions, particularly the Group’s eligibility
to receive the R&D tax incentive;
•
the Group’s planned levels of operational
expenditures and the ability of the Group to
manage cash outflows within available funding;
•
the Group’s plan to divest the glasshouse
facility and associated plant and equipment to
raise additional funds. This included the
feasibility, projected timing, quantum of
potential proceeds, and status of the proposed
sale; and
•
the Group’s alternatives for future operations.
In assessing this key audit matter, we involved
senior audit team members who understand the
Group’s business, industry and the economic
environment it operates in.
Our procedures included:
•
We analysed the cash flow projections by:
•
Evaluating the underlying data used to generate the
cash flow projections. We reviewed those used by
the Directors, and tested by us, for their consistency
with the Group’s intentions and their comparability
to past practices. We specifically assessed this
against our understanding of management and
Directors’ plan, obtained from our inquiries with
them;
•
Assessing the Group’s significant cash inflow
assumptions and judgements for feasibility and
timing, including the eligibility for and history of
obtaining the R&D incentives and obtaining a direct
confirmation from a third party for the offer to buy
the glasshouse facility and associated plant and
equipment subsequent to year end for consistency
with the cashflow forecasts;
•
We independently developed an alternative cash
flow projection, which adjusted the proceeds from
the planned divesture of the glasshouse facility and
associated plant and equipment, to assess the
projected level of cash available to the Group;
•
Assessing the planned level of operating expenditure
for consistency to the Group’s actual results and the
decision and ability to curtail expenditure;
•
We read Directors’ minutes and discussed with both
management and Directors the strategic options
available to the Group to redirect operations to
understand the strategic options available; and
•
We evaluated the Group’s going concern disclosures in
the financial report by comparing them to our
understanding of the matter, the events or conditions
incorporated into the cash flow projection assessment,
the Group’s plans to address those events or conditions,
and accounting standard requirements.
70
Other Information
Other Information is financial and non-financial information in Hexima Limited’s annual reporting which is provided
in addition to the Financial Report and the Auditor’s Report. The Directors are responsible for the Other Information.
Our opinion on the Financial Report does not cover the Other Information and, accordingly, we do not express an
audit opinion or any form of assurance conclusion thereon, with the exception of the Remuneration Report and our
related assurance opinion.
In connection with our audit of the Financial Report, our responsibility is to read the Other Information. In doing so,
we 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.
We are required to report if we conclude that there is a material misstatement of this Other Information, and based
on the work we have performed on the Other Information that we obtained prior to the date of this Auditor’s
Report we have nothing to report.
Responsibilities of the Directors for the Financial Report
The Directors are responsible for:
•
preparing the Financial Report that gives a true and fair view in accordance with Australian Accounting
Standards and the Corporations Act 2001
•
implementing necessary internal control to enable the preparation of a Financial Report that gives a true
and fair view and is free from material misstatement, whether due to fraud or error
•
assessing the Group and Company's ability to continue as a going concern and whether the use of the going
concern basis of accounting is appropriate. This includes disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless they either intend to liquidate the Group
and Company or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the Financial Report
Our objective is:
•
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
Australian Auditing Standards will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error. They 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.
71
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
Opinion
In our opinion, the Remuneration Report
of Hexima Limited for the year ended 30
June 2022, complies with Section 300A of
the Corporations Act 2001.
Directors’ 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 responsibilities
We have audited the Remuneration Report included in pages 15 to
22 of the Directors’ report for the year ended
30 June 2022.
Our responsibility is to express an opinion on the Remuneration
Report, based on our audit conducted in accordance with Australian
Auditing Standards.
KPMG
Adrian Nathanielsz
Partner
Melbourne
30 September 2022
72
KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms
affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The
KPMG name and logos are trademarks used under license by the independent member firms of the KPMG global
organisation. Liability limited by a scheme approved under Professional Standards Legislation.
Lead Auditor’s Independence Declaration under
Section 307C of the Corporations Act 2001
To the Directors of Hexima Limited
I declare that, to the best of my knowledge and belief, in relation to the audit of Hexima Limited for the financial
year ended 30 June 2022 there have been:
i.
no contraventions of the auditor independence requirements as set out in the Corporations Act
2001 in relation to the audit; and
ii.
no contraventions of any applicable code of professional conduct in relation to the audit.
KPMG
Adrian Nathanielsz
Partner
Melbourne
30 September 2022