Imagion Biosystems Limited
Shareholder Information
31 December 2017
IMAGION BIOSYSTEMS LIMITED
ANNUAL REPORT – 31 DECEMBER 2017
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Imagion Biosystems Limited
Shareholder Information
31 December 2017
TABLE OF CONTENTS
Corporate Directory
Highlights
Chairman’s Letter
Investor Relations
Management Report
Directors’ Report
Auditor’s Independence Declaration
Statement of Profit & Loss and other comprehensive income
Statement of Financial Position
Statement of Changes in Equity
Statement of Cash Flows
Notes to the Financial Statements
Director’s Declaration
Independent Auditor’s Report
Additional Shareholder Information
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Imagion Biosystems Limited
Shareholder Information
31 December 2017
CORPORATE DIRECTORY
DIRECTORS
Mr Robert Romeo Proulx
Mr Peter Di Chiara
Mr Michael John Harsh
Mr David Gerald Ludvigson
Ms Jovanka Naumoska
Mr Mark Gerald Van Asten
Executive Chairman/President
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
COMPANY SECRETARY
Ms Jovanka Naumoska
REGISTERED OFFICE
c/o- Holding Redlich
Level 8, 555 Bourke Street
MELBOURNE VIC 3000 AUSTRALIA
PRINCIPAL PLACE OF BUSINESS
800 Bradbury SE, Suite 213
Albuquerque NM 87106 UNITED STATES OF AMERICA
SHARE REGISTER
Boardroom Pty Limited
Level 12, 225 George Street
SYDNEY NSW 2000 AUSTRALIA
AUDITOR
RSM Australia Partners
Level 21, 55 Collins Street
MELBOURNE VIC 3000 AUSTRALIA
AUSTRALIAN LEGAL ADVISOR
Holding Redlich
Level 8, 555 Bourke Street
MELBOURNE VIC 3000 AUSTRALIA
UNITED STATES LEGAL ADVISOR
The Grafe Law Office, PC
PO BOX 2689
Corrales, NM 87048 UNITED STATES OF AMERICA
STOCK EXCHANGE
Imagion Biosystems Limited shares are list on the Australian Securities Exchange (ASX Code: IBX).
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Imagion Biosystems Limited
Shareholder Information
31 December 2017
HIGHLIGHTS
January 2017
Imagion Biosystems Limited Formed and Financed
Incorporation of Imagion Biosystems Limited (Imagion Biosystems or Company) as the parent owning all assets of
Imagion Biosystems, Inc. and raising A$ 6.0M in private financing to eliminate prior debt and provide working capital
for business operations.
April 2017
Scientific Results Reported at AACR
The Company reported its most recent scientific results of its preclinical work on the detection of HER2 breast cancer at
the annual meeting of the American Association of Cancer Research paving the way to translational development of the
clinical product.
June 2017
Initial Public Offering - IBX
The Company successfully undertook an initial public offering (IPO) on the Australian
Securities Exchange raising A$12M to fund the initial stages of translational
development of our flagship MagSense™ technology in preparation for a first-in-
human test.
August 2017
Clinical Instrument Design and Development Initiated
Medical device developer, Starfish Medical, was engaged to help the Company
design and develop the clinical version of the MagSense instrument. Starfish’s
extensive experience in medical device design and regulatory requirements are
expected to help the Company achieve entering clinical studies earlier.
October 2017
Contract Manufacturer Engaged to Make Clinical Grade Nanoparticles
Dutch drug manufacturer ChemConnections, experienced in drug and nanoparticle manufacturing, was contracted to
make the Company’s first clinical grade product for the detection of HER2 breast cancer.
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Imagion Biosystems Limited
Shareholder Information
31 December 2017
LETTER FROM THE CHAIRMAN
Dear Shareholders,
On behalf of the Board and all Imagion Biosystems employees, I’m pleased to present Imagion Biosystems Limited’s
annual report for the year ending 31 December 2017.
The 2017 fiscal year has been a transformative year for Imagion Biosystems. After having successfully spun the cancer
detection technology assets out from its prior parent, Manhattan Scientifics, Inc. in late 2016, the new parent, Imagion
Biosystems Limited was formed. This restructuring allowed the Company to eliminate prior debt, provide interim
financing and establish an independent path to funding the Company’s operations. We are proud to note that
Manhattan Scientifics, Inc. remains a valued and substantial shareholder in Imagion Biosystems, believing in our vision
and the long-term value we will create.
With the progress being made in our preclinical research programs, it became clear that 2017 was the year we
needed to begin transforming from a purely preclinical research and development (R&D) company, to one focused on
translational development of a clinical product. To that end in the first half of the year we established a strategy and
roadmap that would lead to a first-in-human testing of our first clinical product - a test for the detection of metastatic
HER2 breast cancer.
Our IPO in June was fully subscribed with the A$12m raised intended to provide sufficient funding to get the Company
into a position to undertake its first clinical testing. We have been laser-focused on optimising the use of cash to
achieve that goal and meet the milestones we defined in our offering.
The performance of our stock since the IPO has been disappointing and we believe that we are currently undervalued
by the market. Our IPO prospectus laid out a clear near-term plan for the Company, against which we have faithfully
executed whilst maintaining tight fiscal control to preserve cash. As we continue to execute our plan in 2018 and move
towards our first-in-human test, we expect the market will recognise the inherent value in our progress. We are
committed to redoubling our efforts to communicate with our shareholders, and the markets in general, to ensure there
is clarity of our business plan and the value it will create for our shareholders.
If 2017 was the beginning of our transformation, I expect 2018 to be the year we emerge ready for the clinical stage.
I would personally like to thank our Board of Directors for their efforts and willingness to dedicate their time, and to our
employees and collaborators for working hard to deliver outstanding result. Finally, I would like to express my thanks
to our shareholders, customers and suppliers who have contributed to Imagion Biosystems’ success and for their
continued support.
Robert Proulx
Executive Chairman
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Imagion Biosystems Limited
Shareholder Information
31 December 2017
INVESTOR RELATIONS
Transparent Communication for a Fair Valuation
The Company continues to work on increasing awareness for its shares and its equity story in the financial community
and recognises the value of regular dialogue with its shareholders. Our goal is to ensure we communicate the
Company’s strategy and objectives reliably and transparently to gain investor confidence and achieve a fair valuation
of its shares.
Throughout the second half of the year, management, and certain Directors, travelled throughout Australia and held
periodic investor conference calls to apprise investors and brokers of our business progress. Additionally, in October
2017, management participated in the ASX Spotlight Series held in New York City. This event provided exposure to
the NY investor community with ties to the Australian securities market.
Subsequent to the end of the fiscal year, management attended the JP Morgan Healthcare Conference in January
2018 and in March presented at the AusBiotech Asian Investor meetings in Hong Kong and Shanghai. During those
events management held numerous one-on-one meetings with potential new international investors and strategic
partners.
We expect to continue to undertake periodic “roadshows” throughout Australia to meet with our shareholders and
interested investors and brokers as well as participate in relevant investor conferences globally to raise awareness of
our Company and the investment opportunity it presents.
We make a concerted effort to ensure shareholders have been informed about current developments via regular press
releases and announcements and maintain a Newsletter and use of social media to support communications.
Directors’ Dealings
During the last quarter of 2017, Imagion Biosystems’ Executive Chairman Robert Proulx increased his holdings in
Imagion Biosystems through an on-market acquisition of 235,000 shares, reinforcing his trust in the Company and its
future growth.
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Imagion Biosystems Limited
Shareholder Information
31 December 2017
MANAGEMENT REPORT
Company Overview
Imagion Biosystems has pioneered the field of non-invasive detection of specific solid tumour cancers by use of
magnetic nanoparticles. We have been awarded key patents on the technology in most of the global markets and are
poised to enter the clinical stage of development. Researchers from internationally recognised institutions like MD
Anderson Cancer Center have chosen to work with us because it holds the promise of high sensitivity, which can mean
detection of cancer earlier, and can minimise the need for invasive biopsy procedures. The early and non-invasive
detection of cancers will have a significant impact on the cancer diagnostic markets, saving countless lives and
improving patient care.
Imagion Biosystems, Inc. is a wholly owned subsidiary of Imagion Biosystems and the primary business operations for the
group. In December of 2017 the Board of Directors of Imagion Biosystems, unanimously supported a proposal to move
the U.S. operations from Albuquerque, New Mexico to San Diego, California. Subsequent to the close of the fiscal
year, the Company has announced that it has secured a location in San Diego and expects to be fully operational in
San Diego in the second quarter of 2018. Expenses related to the relocation and on-going expenditures are
expected to be neutral to the approved 2018 budget.
Market and Industry Conditions
In 2017 we saw two of the largest players in the medical imaging space, GE and Siemens, restructure their companies
to provide renewed focus on their medical businesses, specifically medical imaging. The field of non-invasive imaging
and diagnostic methods is a large and highly valued business arena and we believe we have a unique and valuable
technology to bring to bear on these markets.
Additionally, the clinical and medical community continues to stress the need for improved medical imaging and
diagnostic techniques. As recently as March 2018 an article in the New England Journal of Medicine stated that the
current standard of care in prostate cancer diagnosis “is associated with the underdetection of higher-grade (clinically
significant) prostate cancers and the overdetection of low-grade (clinically insignificant) cancers.” And in February 2018
the Journal of the American Medical Association reported that the US Preventative Services Task Force found “screening
for ovarian cancer does not reduce ovarian cancer mortality”.
Clearly, the market opportunity is ripe. With the support of our shareholders we believe we can deliver significant
value both to the markets we serve and our shareholders.
Research & Development
In 2017, after reporting encouraging results at the annual meeting of the American Association of Cancer Research
(AACR) we began to focus the majority of our R&D efforts on the clinical phase of development for our lead product
intended for the detection and staging of metastatic HER2 breast cancer. With the input of our collaborators at the MD
Anderson Cancer Center in Houston Texas, we established a translational development plan that would accelerate our
ability to undertake first-in-human testing and reduce technical risk.
As part of our translational efforts we established relationships with two key contractors, Starfish Medical and
ChemConnection, both ISO 13485 certified vendors, to help us with the development and manufacturing of our
MagSense instrument and nanoparticle test reagent to meet regulatory requirements for human clinical testing.
Future Opportunities
We believe there is long-term value for our shareholders in our nanoparticle technology beyond cancer diagnostics
with the MagSense instrument. We continue to undertake limited R&D efforts and collaborations exploring therapeutic
applications of our nanoparticles in a variety of formats, including magnetic hyperthermia. Additionally, there are
opportunities to generate revenue through the sale of our magnetic relaxometry technology and nanoparticles to the
research market.
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Imagion Biosystems Limited
Annual report
31 December 2017
DIRECTORS’ REPORT
The directors present their report, together with the financial statements, on the consolidated entity (referred to hereafter as
the 'consolidated entity') consisting of Imagion Biosystems Limited (referred to hereafter as the 'Company' or 'parent entity')
and the entities it controlled at the end of, or during, the year ended 31 December 2017.
Directors
The following persons were directors of Imagion Biosystems Limited during the whole of the financial year and up to the date
of this report, unless otherwise stated:
Mr Robert Romeo Proulx
Mr Peter Di Chiara
Mr Michael John Harsh
Mr David Gerald Ludvigson
Ms Jovanka Naumoska
Mr Mark Gerald Van Asten
Executive Chairman President
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Appointed 6 December 2016
Appointed 28 April 2017
Appointed 28 February 2017
Appointed 8 March 2017
Appointed 6 December 2016
Appointed 6 December 2016
Principal activities
During the financial year the principal continuing activities of the consolidated entity consisted of:
• Nanotechnology;
Biotechnology;
•
• Cancer Diagnostics; and
•
Superparamagnetic Relaxometry.
Dividends
There were no dividends paid, recommended or declared during the current or previous financial year.
Review of operations
Revenue and Other Income comprised interest income, sales of nanoparticles, a government grant and adjustments to the
valuation of a derivative financial instrument. The Company markets nanoparticles to customers through its website and
expects to continue to do so, though revenue from this activity is not material and not expected to be material in the future.
The grant from the state of New Mexico of $109,000 is a one-time revenue item, and, the net effect of adjustments to a
derivative financial instrument of $128,000 is non-recurring as the loan associated with this item has been retired.
Total expenses of $7.8 million were slightly less than projections. Legal, accounting and other expenses related to the
Company’s IPO, which were non-recurring exceeded projections, while R&D expenditures were less than projected.
In 2017, the Company raised $2.7 million in a stock offering to retire existing debt, $3.5 million in a separate stock offering
to fund operations and a further $12 million was raised at its IPO to fund operations and to prepare the technology for
human trials.
Significant changes in the state of affairs
Imagion Biosystems was listed on the Australian Stock Exchange (ASX) on 22 June 2017, following a successful capital raising
of $12 million.
Management is executing its plan to bring Imagion Biosystems’ technology to human trials. Recently announced was an
agreement with Starfish Medical as the first step toward designing the Company’s commercial version of the detection
instrument and build prototypes for clinical use. This announcement was followed by an announcement of an agreement with
ChemConnection BV to manufacture clinical-grade nanoparticles for use in Imagion Biosystems’ planned human clinical study.
There were no other significant changes in the state of affairs of the consolidated entity during the financial year.
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Directors’ report
31 December 2017
Matters subsequent to the end of the financial year
No other matters or circumstances have arisen since 31 December 2017 that has significantly affected, or may significantly
affect the consolidated entity's operations, the results of those operations, or the consolidated entity's state of affairs in future
financial years.
Likely developments and expected results of operations
Management expects spending to remain constant in future periods except for contracts and collaborations agreements to
advance our progress toward human trials. These agreements would include, manufacturing for our formulated nanoparticle,
design and prototype production of our instrument, clinical consultants among other things.
Environmental Regulation
The Consolidated Entity is not subject to any significant environment regulation under Australian Commonwealth or State
Law.
device
through
products
development
Mr Robert Romeo Proulx
Executive Chairman/President
- Master of Arts and Bachelor of Arts, The State University of
New York at Albany;
- Executive Master of Business Administration, Penn State
Smeal College of Business.
Robert has over 25 years’ experience bringing life science and
medical
and
commercialisation and joined the predecessor company, Senior
Scientific as President and Chief Operating Officer. Previous
employment experience includes President and General Manager
for Silicon Biosystems developing an imaged-based “liquid biopsy”
diagnostic platform for circulating tumor cells. His career in
marketing and sales management spans the computer, life science
and medical diagnostics industries. Robert holds a Master of Arts
and Bachelor of Arts from The State University of New York at
Albany and an Executive Master of Business Administration from
the Penn State Smeal College of Business.
Nil
PGXL Diagnostics Laboratories, Inc
(2009 – 2017)
235,000 Shares
Nil
8,700,000 performance rights
8,700,000 performance rights which are subject to ASX escrow
restrictions for 24 months from official quotation. The Performance
rights are issued under the company’s loan term incentive plan.
And will each vest into an ordinary share subject to achievement of
prescribed performance conditions.
Information on Directors
Name:
Title:
Qualifications:
Experience & Expertise:
Other Current Directorships:
Former Directorships (last 3 years):
Interest in Shares:
Interest in Options:
Interest in Rights:
Contractual rights to Shares:
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Imagion Biosystems Limited
Directors’ report
31 December 2017
Information on Directors (continued)
Name:
Title:
Qualifications:
Experience & Expertise:
Other Current Directorships:
Former Directorships (last 3 years):
Interest in Shares:
Interest in Options:
Interest in Rights:
Contractual rights to Shares:
Name:
Title:
Qualifications:
Experience & Expertise:
Other Current Directorships:
Former Directorships (last 3 years):
Interest in Shares:
Interest in Options:
Interest in Rights:
Contractual rights to Shares:
Mr Peter Di Chiara
Non-Executive Director
- Bachelor of Business Administration degree, University of
Notre Dame;
- JD degree, Pace University School of Law.
Peter is the founding partner of Carmel, Milazzo & DiChiara, LLP,
a boutique law firm specialising in corporate and securities law.
With over 30 years of experience, his practice is concentrated on
advising public companies, private companies, and investors on
securities issuance, complex business transactions, regulatory
compliance, and corporate governance. Prior to founding Carmel,
Milazzo & DiChiara, Peter served at several professional firms
including Willkie Farr & Gallagher, Cadwalader Wickerham & Taft,
and Ernst & Young. Peter is licensed both as an attorney and as a
certified public accountant in the State of New York. He holds a
Bachelor of Business Administration degree from the University of
Notre Dame and a JD degree from Pace University School of Law.
Nil
Nil
Nil
Nil
150,000 performance rights
150,000 performance rights which are subject to ASX escrow
restrictions for 24 months from official quotation. The Performance
rights are issued under the company’s long term incentive plan and
will each vest into an ordinary share 24 months after official
quotation
in Electrical Engineering, Marquette
Mr Michael John Harsh
Non-Executive Director
- Bachelor’s degree
University
With almost 36 years’ service to GE, mostly with GE Healthcare on
his résumé, Michael Harsh is extraordinarily fluent in the complex
processes of transforming high-potential platform technologies into
successful medical diagnostic products. As the Global Technology
Leader of Imaging Technologies at GE Global Research, he
directed the company’s research in X-ray, CT, MRI, Ultrasound,
Nuclear Medicine, PET, and Optical Imaging, as well as
research associated with computer visualization/image analysis
and superconducting systems. In 2008, Michael was elected to
the America Institute for Medical and Biological Engineering
(AIMBE) College of Fellows for his contributions to medical and
biological engineering. Michael earned his Bachelor’s degree in
Electrical Engineering from Marquette University.
ENDRA Life Sciences (2016 – present);
FloDesign Sonics (2015 – present);
EmOpti, Inc. (2015 – present);
Nil
Nil
Nil
150,000 performance rights
150,000 performance rights which are subject to ASX escrow
restrictions for 24 months from official quotation. The Performance
rights are issued under the company’s long-term incentive plan and
will each vest into an ordinary share 24 months after official
quotation
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Imagion Biosystems Limited
Directors’ report
31 December 2017
Information on Directors (continued)
Name:
Title:
Qualifications:
Experience & Expertise:
Other Current Directorships:
Former Directorships (last 3 years):
Interest in Shares:
Interest in Options:
Interest in Rights:
Contractual rights to Shares:
Name:
Title:
Qualifications:
Experience & Expertise:
Other Current Directorships:
Former Directorships (last 3 years):
Interest in Shares:
Interest in Options:
Interest in Rights:
Contractual rights to Shares:
Mr David Gerald Ludvigson
Non-Executive Director
- Bachelor of Science in Accounting, University of Illinois
- Masters in Accounting Science, University of Illinois.
David is President and CEO of Nanomix, Inc, a mobile diagnostics
company. Previously, David held executive leadership positions
with Nanogen, Matrix Pharmaceutical, IDEC Pharmaceuticals,
MIPS Computer Systems, and other high-tech companies. He
began his career at Price Waterhouse. David holds a Bachelor of
Science in Accountancy degree, and a Masters in Accounting
Science degree, both from the University of Illinois.
China Stem Cells Ltd (2010-present);
Nanōmix Inc. (2014-present).
Nil
Nil
Nil
150,000 performance rights
150,000 performance rights which are subject to ASX escrow
restrictions for 24 months from official quotation. The Performance
rights are issued under the company’s long term incentive plan and
will each vest into an ordinary share 24 months after official
quotation
in business operations,
in Applied Corporate Governance,
Ms Jovanka Naumoska
Non-Executive Director
- Bachelor of Science degree, University of Wollongong;
- Bachelor of Law degree and the Graduate Diploma in Legal
Practice, University of Wollongong;
- Graduate Diploma
Governance Institute of Australia.
Jovanka Naumoska is an Australian-qualified corporate lawyer with
board-level experience in legal issues pertaining to medical
imaging technology. Jovanka has served as Senior Corporate
Lawyer and Policy Advisor for Australian Nuclear Science and
Technology Organisation (ANSTO), and currently holds the
position of Manager, Business Excellence, serving a cross-
functional role
intellectual property
development, and regulatory compliance. Jovanka also serves on
the Board of Directors for PETNET Australia Pty Ltd, a state-of-the-
art PET (Positive Emission Tomography) radiopharmaceutical
production facility. After receiving her Bachelor of Science degree
from the University of Wollongong, Jovanka earned both the
Bachelor of Law degree and the Graduate Diploma in Legal
Practice, also from the University of Wollongong. In addition, she
holds a Graduate Diploma in Applied Corporate Governance from
the Governance Institute of Australia
Nil
Nil
Nil
Nil
150,000 performance rights
150,000 performance rights which are subject to ASX escrow
restrictions for 24 months from official quotation. The Performance
rights are issued under the company’s long term incentive plan and
will each vest into an ordinary share 24 months after official
quotation
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Imagion Biosystems Limited
Directors’ report
31 December 2017
Information on Directors (continued)
Name:
Title:
Qualifications:
Experience & Expertise:
Other Current Directorships:
Former Directorships (last 3 years):
Interest in Shares:
Interest in Options:
Interest in Rights:
Contractual rights to Shares:
Mark Gerald Van Asten
Non-Executive Director
Bachelor of Science, University of New South Wales
As the Managing Director and founder of Diagnostic
Technology Pty Ltd, Mark has been responsible for the
introduction, and mainstream healthcare
development,
adoption of technologies throughout Australia and Asia, such
as HPV DNA testing for cervical cancer screening and
molecular monitoring for both viral infections and cancer
treatments. Concurrent with his founding and leadership of
Diagnostic Technology Pty Ltd, Mark has held several
director-level business development positions with US and
Australian diagnostics corporations.
Nil
Nil
Nil
Nil
150,000 performance rights
150,000 performance rights which are subject to ASX
escrow restrictions for 24 months from official quotation. The
Performance rights are issued under the company’s long
term incentive plan and will each vest into an ordinary share
24 months after official quotation
'Other current directorships' quoted above are current directorships for listed entities only and excludes directorships of all
other types of entities, unless otherwise stated.
'Former directorships (last 3 years)' quoted above are directorships held in the last 3 years for listed entities only and excludes
directorships of all other types of entities, unless otherwise stated.
Company secretary
Ms Jovanka Naumoska has held the role of Company Secretary since 6 December 2016. She holds a Graduate Diploma in
Applied Corporate Governance from the Governance Institute of Australia as well as Bachelor of Science degree from the
University of Wollongong, Bachelor of Law degree and the Graduate Diploma in Legal Practice, also from the University of
Wollongong.
Meetings of directors
The number of meetings of the company's Board of Directors ('the Board') and of each Board committee held during the year
ended 31 December 2017, and the number of meetings attended by each director were:
Mr Robert Romeo Proulx
Mr Peter Di Chiara
Mr Michael John Harsh
Mr David Gerald Ludvigson
Ms Jovanka Naumoska
Mr Mark Gerald Van Asten
Full Board
Audit & Risk Management Committee
Number of meetings
eligible to attend
4
3
4
4
4
4
Attended
4
3
4
4
4
4
Number of meetings
eligible to attend
-
2
2
2
-
2
Attended
-
1
2
2
-
2
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Directors’ report
31 December 2017
Remuneration report (audited)
The remuneration report details the key management personnel remuneration arrangements for the consolidated entity, in
accordance with the requirements of the Corporations Act 2001 and its Regulations.
Key management personnel are those persons having authority and responsibility for planning, directing and controlling the
activities of the entity, directly or indirectly, including all directors.
The remuneration report is set out under the following main headings:
●
●
●
●
●
●
principles used to determine the nature and amount of remuneration
details of remuneration
service agreements
share-based compensation
additional information
additional disclosures relating to key management personnel
Principles used to determine the nature and amount of remuneration
The objective of the consolidated entity's executive reward framework is to ensure reward for performance is competitive and
appropriate for the results delivered. The framework aligns executive reward with the achievement of strategic objectives and
the creation of value for shareholders, and it is considered to conform to the market best practice for the delivery of reward.
The Board of Directors ('the Board') ensures that executive reward satisfies the following key criteria for good reward
governance practices:
●
●
●
●
competitiveness and reasonableness
acceptability to shareholders
performance linkage / alignment of executive compensation
transparency
The Board has determined the remuneration arrangements for the directors and executives with the appointment of the
Nomination and Remuneration Committee they will be responsible for determining and reviewing remuneration arrangements
for its directors and executives. The performance of the consolidated entity depends on the quality of its directors and
executives. The remuneration philosophy is to attract, motivate and retain high performance and high-quality personnel.
The reward framework is designed to align executive reward to shareholders' interests. The Board have considered that it
should seek to enhance shareholders' interests by:
●
●
having economic profit as a core component of plan design
focusing on sustained growth in shareholder wealth, consisting of dividends and growth in share price, and delivering
constant or increasing return on assets as well as focusing the executive on key non-financial drivers of value
attracting and retaining high calibre executives
●
Additionally, the reward framework should seek to enhance executives' interests by:
●
●
●
rewarding capability and experience
reflecting competitive reward for contribution to growth in shareholder wealth
providing a clear structure for earning rewards
In accordance with best practice corporate governance, the structure of non-executive director and executive director
remuneration is separate.
Non-executive director’s remuneration
Fees and payments to non-executive directors reflect the demands and responsibilities of their role. Non-executive directors'
fees and payments are reviewed annually by the Board. The Board may, from time to time, receive advice from independent
remuneration consultants to ensure non-executive directors' fees and payments are appropriate and in line with the market.
Shareholders approve the maximum aggregate remuneration for non-executive directors. The Board recommends the actual
payments to directors and shareholders are responsible for ratifying any recommendations, if appropriate. ASX listing rules
require the aggregate non-executive director’s remuneration be determined periodically by a general meeting. The aggregate
approved remuneration for non-executive directors is $125,000.
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Directors’ report
31 December 2017
Principles used to determine the nature and amount of remuneration (continued)
Executive remuneration
The consolidated entity aims to reward executives based on their position and responsibility, with a level and mix of
remuneration which has both fixed and variable components.
The executive remuneration and reward framework has four components:
●
●
●
●
base pay and non-monetary benefits
short-term performance incentives
share-based payments
health care benefits
The combination of these comprises the executive's total remuneration.
Fixed remuneration, consisting of base salary and non-monetary benefits, are reviewed annually by the Nomination and
Remuneration Committee based on individual and business unit performance, the overall performance of the consolidated
entity and comparable market remunerations.
Executives may receive their fixed remuneration in the form of cash or other fringe benefits (for example motor vehicle benefits)
where it does not create any additional costs to the consolidated entity and provides additional value to the executive.
The short-term incentives ('STI') program is designed to align the targets of the business units with the performance hurdles
of executives. STI payments are granted to executives based on specific annual targets and key performance indicators
('KPI's') being achieved.
The long-term incentives ('LTI') include share-based payments. Shares are awarded to executives over a period of three years
based on long-term incentive measures. These include increase in shareholders’ value relative to the entire market and the
increase compared to the consolidated entity's direct competitors.
Consolidated entity performance and link to remuneration
Remuneration for certain individuals is directly linked to the performance of the consolidated entity. A portion of cash bonus
and incentive payments are dependent on defined earnings per share targets being met. The remaining portion of the cash
bonus and incentive payments are at the discretion of the Nomination and Remuneration Committee.
Details of remuneration
Amounts of remuneration
Details of the remuneration of key management personnel of the consolidated entity are set out in the following tables.
The key management personnel of the consolidated entity consisted of the following directors of Imagion Biosystems Limited:
Executive Directors:
Robert Romeo Proulx – Executive Chairman/President
Other Key Management:
Giulio Paciotti – Vice President – Research & Development
Brian Conn – Chief Financial Officer
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Directors’ report
31 December 2017
Principles used to determine the nature and amount of remuneration (continued)
Details of Remuneration (continued)
Short Term Benefits
Share-Based Payments
Total
2017
Non-Executive Directors
Mr Peter Di Chiara*
Mr Michael John Harsh**
Mr David Gerald Ludvigson***
Ms Jovanka Naumoska
Mr Mark Gerald Van Asten
Executive Directors
Robert Romeo Proulx
Other Key Management
Giulio Paciotti
Brian Conn
Total
Cash
Salary &
Fees
$
5,178
5,178
5,178
5,178
5,178
309,675
238,035
176,458
750,058
Cash
Bonus
Non-
Monetary
Equity-settled
shares
Equity-settled
options
$
-
-
-
-
-
-
-
-
-
$
-
-
-
-
-
-
-
-
-
$
-
-
-
-
-
-
-
-
-
$
5,681
5,681
5,681
5,681
5,681
$
10,859
10,859
10,859
10,859
10,859
329,504
639,179
64,386
64,386
302,421
240,844
486,681
1,236,739
*Represents remuneration from 28 April 2017 to 31 December 2017
**Represents remuneration from 28 February 2017 to 31 December 2017
***Represents remuneration from 8 March 2017 to 31 December 2017
15
For personal use only
Imagion Biosystems Limited
Directors’ report
31 December 2017
Service agreements
Remuneration and other terms of employment for key management personnel are formalised in service agreements. Details
of these agreements are as follows:
Name:
Title:
Agreement Commenced
Term of Agreement
Details
Mr Robert Romeo Proulx
Executive Chairman/President
1 May 2017
3 years, unless extended by mutual agreement
Robert is entitled to a base salary of $US200,000 per
annum, but shall be subject to periodic review and
adjustment as recommended by
the Remuneration
Committee of the Company’s Board of Directors and
approved by the Board of the Company from time to time.
Robert is also entitled to up to 8,700,000 Shares under the
Long Term Incentive Plan (subject to certain milestones
being met) as an initial grant upon Listing;
Imagion US shall own all rights created by Robert during the
term, and all confidential information shall remain the
exclusive property of Imagion US;
if Robert’s employment is terminated:
- without cause or because he has resigned due to a material
reduction in his duties or responsibilities (Good Reason), he
shall be entitled to a termination payment of 12 months’ base
salary,
- as a result of a transaction that results in a change of
control of Imagion US (or the Company), he shall receive a
termination payment of 12 months’ salary, plus the 100%
acceleration of any vesting schedules associated with any
equity compensation programs;
- because of cause, he shall not be entitled to receive any
further compensation other than any salary or expenses
accrued but unpaid.
If Robert’s employment is terminated:
- without cause, because of breach by Imagion US or
because of Good Reason, his non-compete period shall end
when his entitlement to any accrued benefits or expenses
cease;
- because of disability, his non-compete period shall end
upon such termination;
- for cause or for other than Good Reason, the non-compete
period shall otherwise end at the end of the term or the one
year anniversary of termination, whichever is later.
16
For personal use only
Imagion Biosystems Limited
Directors’ report
31 December 2017
Service agreements (continued)
Name:
Title:
Agreement Commenced
Term of Agreement
Details
Giulio Paciotti
Vice President Research & Development
1 May 2017
3 years, unless extended by mutual agreement
Giulio’s base salary is $US165,000 per annum. Giulio is also
eligible to receive up to 1,700,000 rights over Shares as an
initial grant upon Listing under the Long-Term Incentive
Plan.
Each senior manager in the Imagion Group has entered
into an executive employment agreement with Imagion
US.
The key terms of each senior manager’s employment are as
follows:
the term of each agreement is three years from a specified
effective date, unless extended by mutual agreement;
- the senior manager’s base salary shall be determined in
accordance with Imagion US’ customary payroll practices,
but shall be subject to periodic review and adjustment as
recommended by the Remuneration Committee of Imagion
US’ (or the Company’s) Board of Directors and approved by
the Board of Imagion US (or the Company) from time to time;
Imagion US shall own all rights created by the senior
manager during the term, and all confidential information
shall remain the exclusive property of Imagion US;
- if the senior manager’s employment is terminated:
- without cause or because the senior manager has resigned
due to a material reduction in their duties or responsibilities
(Good Reason), the senior manager shall be entitled to a
termination payment of 6 months’ base salary,
- as a result of a transaction that results in a change of
control of Imagion US (or the Company), they shall receive
a termination payment of 6 months’ salary, plus the 100%
acceleration of any vesting schedules associated with any
equity compensation programs;
- because of cause, the senior manager shall not be entitled
to receive any further compensation other that any salary or
expenses accrued but unpaid.
if the senior manager’s employment is terminated:
- without cause, because of breach by Imagion US or
because of Good Reason, their non-competition period shall
end when their entitlement to any accrued benefits or
expenses cease;
- because of disability, their non-competition period shall end
upon such termination;
- for cause or for other than Good Reason, the non-
competition period shall otherwise end at the end of the term
or the one-year anniversary of termination, whichever is
later.
17
For personal use only
Imagion Biosystems Limited
Directors’ report
31 December 2017
Service agreements (continued)
Name:
Title:
Agreement Commenced
Term of Agreement
Details
Brian Conn
Chief Financial Officer
1 May 2017
3 years, unless extended by mutual agreement
Brian’s base salary is $US120,000 per annum. Brian is also
eligible to receive up to 1,700,000 rights over Shares as an
initial grant upon Listing under the Long-Term Incentive
Plan.
Each senior manager in the Imagion Group has entered
into an executive employment agreement with Imagion
US.
The key terms of each senior manager’s employment are as
follows:
- the term of each agreement is three years from a specified
effective date, unless extended by mutual agreement;
- the senior manager’s base salary shall be determined in
accordance with Imagion US’ customary payroll practices,
but shall be subject to periodic review and adjustment as
recommended by the Remuneration Committee of Imagion
US’ (or the Company’s) Board of Directors and approved by
the Board of Imagion US (or the Company) from time to time;
- Imagion US shall own all rights created by the senior
manager during the term, and all confidential information
shall remain the exclusive property of Imagion US;
if the senior manager’s employment is terminated:
- without cause or because the senior manager has resigned
due to a material reduction in their duties or responsibilities
(Good Reason), the senior manager shall be entitled to a
termination payment of 6 months’ base salary,
- as a result of a transaction that results in a change of
control of Imagion US (or the Company), they shall receive
a termination payment of 6 months’ salary, plus the 100%
acceleration of any vesting schedules associated with any
equity compensation programs;
- because of cause, the senior manager shall not be entitled
to receive any further compensation other that any salary or
expenses accrued but unpaid.
if the senior manager’s employment is terminated:
- without cause, because of breach by Imagion US or
because of Good Reason, their non-competition period shall
end when their entitlement to any accrued benefits or
expenses cease;
- because of disability, their non-competition period shall end
upon such termination;
- for cause or for other than Good Reason, the non-
competition period shall otherwise end at the end of the term
or the one year anniversary of termination, whichever is
later.
Key management personnel have no entitlement to termination payments in the event of removal for misconduct.
18
For personal use only
Imagion Biosystems Limited
Directors’ report
31 December 2017
Share-based compensation
Issue of Shares
There were no shares issued to Directors and other key management personnel as part of compensation during the year
ended 31 December 2017.
Options
There were no options issued to Directors and other key management personnel as part of compensation during the year
ended 31 December 2017.
Performance Rights
The terms and conditions of each grant of performance rights over ordinary shares affecting remuneration of Directors and
other key management personnel in this financial year or future reporting are as follows:
Name
Number of rights
granted
Grant date
Expiry date
Exercise
price
Mr Robert Romeo
Proulx
Mr Peter Di Chiara
Mr Michael John
Harsh
Mr David Gerald
Ludvigson
Ms Jovanka
Naumoska
Mr Mark Gerald Van
Asten
Giulio Paciotti
Brian Conn
8,700,000
22 June 2017
22 June 2019
150,000
150,000
22 June 2017
22 June 2017
22 June 2019
22 June 2019
150,000
22 June 2017
22 June 2019
150,000
22 June 2017
22 June 2019
150,000
22 June 2017
22 June 2019
1,700,000
1,700,000
22 June 2017
22 June 2017
22 June 2019
22 June 2019
Performance rights granted carry no dividend or voting rights.
Additional information
-
-
-
-
-
-
-
-
The earnings of the Consolidated Entity for the year ended 31 December 2017 is summarised below:
Revenue
Net loss before tax
Net loss after tax
The factors that are considered to affect total shareholders return (‘TSR’) are summarised below:
Share Price at listing date (22 June 2017) ($)
Share price at financial year end ($)
Basic earnings per share (cents per share)
Diluted earnings per share (cents per share)
Fair value per
right at grant date
$
0.16
0.16
0.16
0.16
0.16
0.16
0.16
0.16
2017
$
339,057
7,794,602
7,794,602
2017
$
0.200
0.110
(0.0507)
(0.0507)
19
For personal use only
Imagion Biosystems Limited
Directors’ report
31 December 2017
Additional disclosures relating to key management personnel
Shareholding
The number of shares in the company held during the financial year by each director and other members of key management
personnel of the consolidated entity, including their personally related parties, is set out below:
Name
Mr Robert Romeo Proulx
Mr Peter Di Chiara
Mr Michael John Harsh
Mr David Gerald Ludvigson
Ms Jovanka Naumoska
Mr Mark Gerald Van Asten
Giulio Paciotti
Brian Conn
Total
Performance Rights Holding
Balance start
of year
-
-
-
-
-
-
-
-
-
Received
Remuneration
-
-
-
-
-
-
-
-
-
Additions
Disposals
235,000
-
-
-
-
-
-
-
235,000
-
-
-
-
-
-
-
-
-
Balance at the
end of the year
235,000
-
-
-
-
-
-
-
235,000
The number of performance shares in the company held during the financial year by each Director and other members of key
management personnel of the Consolidated Entity, including their personally related parties, is set out below:
Name
Mr Robert Romeo Proulx
Mr Peter Di Chiara
Mr Michael John Harsh
Mr David Gerald Ludvigson
Ms Jovanka Naumoska
Mr Mark Gerald Van Asten
Giulio Paciotti
Brian Conn
Total
Balance start of
year
-
-
-
-
-
-
-
-
-
Granted
8,700,000
150,000
150,000
150,000
150,000
150,000
1,700,000
1,700,000
12,850,000
Vested Expired/forfeited
/other
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Balance at end of
year
8,700,000
150,000
150,000
150,000
150,000
150,000
1,700,000
1,700,000
12,850,000
This concludes the remuneration report, which has been audited.
Indemnity and insurance of officers
The company has indemnified the directors and executives of the company for costs incurred, in their capacity as a director
or executive, for which they may be held personally liable, except where there is a lack of good faith.
During the financial year, the company paid a premium in respect of a contract to insure the directors and executives of the
company against a liability to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits disclosure
of the nature of the liability and the amount of the premium.
Indemnity and insurance of auditor
The company has not, during or since the end of the financial year, indemnified or agreed to indemnify the auditor of the
company or any related entity against a liability incurred by the auditor.
During the financial year, the company has not paid a premium in respect of a contract to insure the auditor of the company
or any related entity.
Proceedings on behalf of the company
No person has applied to the Court under Section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf
of the company, or to intervene in any proceedings to which the company is a party for the purpose of taking responsibility
on behalf of the company for all or part of those proceedings.
20
For personal use only
Imagion Biosystems Limited
Directors’ report
31 December 2017
Non-audit services
Details of the amounts paid or payable to the auditor for non-audit services provided during the financial year by the auditor
are outlined in note 15 to the financial statements.
The directors are satisfied that the provision of non-audit services during the financial year, by the auditor (or by another
person or firm on the auditor's behalf), is compatible with the general standard of independence for auditors imposed by the
Corporations Act 2001.
The directors are of the opinion that the services as disclosed in note 15 to the financial statements do not compromise the
external auditor's independence requirements of the Corporations Act 2001 for the following reasons:
●
all non-audit services have been reviewed and approved to ensure that they do not impact the integrity and objectivity
of the auditor; and
none of the services undermine the general principles relating to auditor independence as set out in APES 110 Code
of Ethics for Professional Accountants issued by the Accounting Professional and Ethical Standards Board, including
reviewing or auditing the auditor's own work, acting in a management or decision-making capacity for the company,
acting as advocate for the company or jointly sharing economic risks and rewards.
●
Officers of the company who are former partners of RSM Australia Partners
There are no officers of the company who are former partners of RSM Australia Partners.
Rounding of amounts
The company is of a kind referred to in Corporations Instrument 2016/191, issued by the Australian Securities and Investments
Commission, relating to 'rounding-off'. Amounts in this report have been rounded off in accordance with that Corporations
Instrument to the nearest thousand dollars, or in certain cases, the nearest dollar.
Auditor's independence declaration
A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out
immediately after this directors' report.
Auditor
RSM Australia Partners continues in office in accordance with section 327 of the Corporations Act 2001.
This report is made in accordance with a resolution of directors, pursuant to section 298(2)(a) of the Corporations Act 2001.
On behalf of the directors
___________________________
Robert Proulx
Director
28 February 2018
21
For personal use only
AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of the financial report of Imagion Biosystems Limited for the year ended 31 December
2017, I declare that, to the best of my knowledge and belief, there have been no contraventions of:
(i)
(ii)
the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
any applicable code of professional conduct in relation to the audit.
RSM AUSTRALIA PARTNERS
R B MIANO
Partner
Dated: 28 February 2018
Melbourne, Victoria
For personal use only Imagion Biosystems Limited
Consolidated Statement of Profit and Loss and Other Comprehensive Income
For the year ended 31 December 2017
Revenue and other income
Expenses
Research & development costs
Employee salaries and expenses
Professional fees
General expenses
Interest
Share based payments expense
Depreciation expense
Finance costs
Foreign exchange loss
Fair value movement
Loss after income tax expense
Income tax expense
Consolidated
Note
2017
$
2016
$
4
339,057
1
(2,155,714)
(2,100,536)
(1,084,342)
(1,026,512)
(858,583)
(623,927)
(206,834)
(76,682)
(529)
-
(502,070)
-
-
(42,860)
-
-
(21,642)
(233,219)
(359,253)
124,567
(7,794,602)
(1,034,477)
-
-
(384,289)
Loss after income tax expense for the year
(7,794,602)
(1,034,477)
Other comprehensive income (loss)
Items that may be reclassified subsequently to profit or loss
Foreign translation reserve
Other comprehensive income for the year, net of tax
61,575
453,368
61,575
453,368
Total comprehensive income (loss) for the year
(7,733,027)
(581,109)
Total comprehensive income (loss) for the year is attributable to:
Owners of Imagion Biosystems Limited
(7,733,027)
(581,109)
Basic earnings per share
Diluted earnings per share
Cents
Cents
21
21
(0.0507)
(0.0507)
-
-
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction
with the accompanying notes
23
For personal use only Imagion Biosystems Limited
Consolidated Statement of Financial Position
As at 31 December 2017
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Other current assets
Total current assets
Non-current assets
Property, plant and equipment
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Lease liability
Borrowings
Employee benefits
Total current liabilities
Non-current liabilities
Lease liability
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Accumulated losses
Total equity
Note
Consolidated
2017
$
2016
$
5
6
7
8
9
6,872,829
8,704
387,690
7,269,223
27,641
-
9,224
36,865
372,103
372,103
218,477
218,477
7,641,326
255,342
564,663
30,684
-
44,094
639,441
49,329
49,329
935,233
-
13,927,984
17,175
14,880,392
--
--
688,770
14,880,392
6,952,556
(14,625,050)
11
12
13
28,686,708
1,138,870
(22,873,022)
2
453,368
(15,078,420)
6,952,556
(14,625,050)
The above consolidated statement of financial position should be read in conjunction with the accompanying notes
24
For personal use only Imagion Biosystems Limited
Consolidated Statement of Changes in Equity
As at 31 December 2017
Consolidated
Balance at incorporation
Assumption of liabilities from related party on formation
Loss after income tax expense for the year
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
Transactions with owners in their capacity as owners:
Contributions of equity, net of transaction costs
Costs of contributions of equity
Share-based payments
Balance at 31 December 2016
Consolidated
Balance at 1 January 2017
Loss after income tax expense for the year
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
Transactions with owners in their capacity as owners:
Contributions of equity
Cost of contributions of equity
Share-based payments
Issued
Capital
$
Reserves
$
Accumulated
Losses
$
Total Equity
$
2
-
-
-
-
-
-
2
2
-
-
-
-
-
-
2
(14,043,943)
(14,043,943)
-
453,368
(1,034,477)
-
(1,034,477)
453,368
453,368
(1,034,477)
(581,109)
-
-
-
-
-
-
-
-
-
453,368
(15,078,420)
(14,625,050)
Reserves
$
Accumulated
Losses
$
Total Equity
$
453,368
(15,078,420)
(14,625,050)
-
61,575
(7,794,602)
-
(7,794,602)
61,575
61,575
(7,794,602)
(7,733,027)
Issued
Capital
$
32,610,261
(3,923,553)
-
-
-
623,927
-
-
-
32,610,259
(3,923,553)
623,927
Balance at 31 December 2017
28,686,708
1,138,870
(22,873,022)
6,952,556
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes
25
For personal use only Imagion Biosystems Limited
Consolidated Statement of Cash Flows
For the year ended 31 December 2017
Cash flows from operating activities
Consolidated
Note
2017
$
2016
$
Receipts from customers (inclusive of sales and other taxes)
Payments to suppliers and employees (inclusive of sales and other taxes)
Interest received
Interest and other finance costs paid
125,158
(7,017,667)
51,213
(136,089)
1
(267,257)
-
-
Net cash from operating activities
20
(6,977,385)
(267,256)
Cash flows from investing activities
Payment for property, plant and equipment
Net cash used in investing activities
Cash flows from financing activities
Lease repayments
Proceeds from financing arrangements
Proceeds from the issue of shares
Share issue costs
Proceeds from note issue
Repayment of notes
(369,606)
(369,606)
-
-
(99,294)
213,375
18,208,278
(1,109,420)
-
-
-
-
81,169 231,481
-
(3,108,683)
Net cash used in financing activities
14,185,425
231,481
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Cash and cash equivalents transferred in from merger with Senior Scientific LLC
Effects of exchange rate changes on cash and cash equivalents
6,838,434
27,641
-
6,754
(35,775)
-
80,045
¤ (16,629)
Cash and cash equivalents at the end of the financial year
6,872,829
27,641
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes
26
For personal use only Imagion Biosystems Limited
Notes to the financial statements
31 December 2017
Note 1. Significant accounting policies
The principal accounting policies adopted in the preparation of the financial statements are set out below. These policies
have been consistently applied to all the years presented, unless otherwise stated.
New or amended Accounting Standards and Interpretations adopted
The consolidated entity has adopted all of the new or amended Accounting Standards and Interpretations issued by the
Australian Accounting Standards Board ('AASB') that are mandatory for the current reporting period.
Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.
Going Concern
The financial statements have been prepared on the going concern basis, which contemplates continuity of normal
business activities and the realisation of assets and discharge of liabilities in the normal course of business.
As disclosed in the financial statements, the consolidated entity incurred a loss of $7,794,602, and had net cash outflows
from operating activities of $6,977,385 for the year ended 31 December 2017.
These factors indicate a material uncertainty which may cast significant doubt as to whether the consolidated entity will
continue as a going concern and therefore whether it will realise its assets and extinguish its liabilities in the normal
course of business and at the amounts stated in the financial report. The consolidated entity is dependent on the need
to raise capital for the continuation of product development, given that the consolidated entity has forecasted to incur
continued losses for a minimum of a 12-month period.
The Directors believe that there are reasonable grounds to believe that the consolidated entity will be able to continue
as a going concern, as they are confident that additional funds can be raised through further capital raisings to support
ongoing research and development activities where existing cash held by the company is insufficient to meet these
needs.
Accordingly, the Directors believe that the consolidated entity will be able to continue as a going concern and that it is
appropriate to adopt the going concern basis in the preparation of the financial report.
The financial report does not include any adjustments relating to the amounts or classification of recorded assets or
liabilities that might be necessary if the consolidated entity does not continue as a going concern.
Basis of preparation
These general purpose financial statements have been prepared in accordance with Australian Accounting Standards
and Interpretations issued by the Australian Accounting Standards Board ('AASB') and the Corporations Act 2001, as
appropriate for for-profit oriented entities. These financial statements also comply with International Financial Reporting
Standards as issued by the International Accounting Standards Board ('IASB').
Historical cost convention
The financial statements have been prepared under the historical cost convention, except for, where applicable, the
revaluation of available-for-sale financial assets, financial assets and liabilities at fair value through profit or loss,
investment properties, certain classes of property, plant and equipment and derivative financial instruments.
Critical accounting estimates
The preparation of the financial statements requires the use of certain critical accounting estimates. It also requires
management to exercise its judgement in the process of applying the consolidated entity's accounting policies. The
areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant
to the financial statements, are disclosed in note 2.
27
For personal use only
Imagion Biosystems Limited
Notes to the financial statements
31 December 2017
Note 1. Significant accounting policies (continued)
Parent entity information
In accordance with the Corporations Act 2001, these financial statements present the results of the consolidated entity
only. Supplementary information about the parent entity is disclosed in note 17.
Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Imagion Biosystems
Limited ('company' or 'parent entity') as at 31 December 2017 and the results of all subsidiaries for the year then ended.
Imagion Biosystems Limited and its subsidiaries together are referred to in these financial statements as the
'consolidated entity'.
Subsidiaries are all those entities over which the consolidated entity has control. The consolidated entity controls an
entity when the consolidated entity is exposed to, or has rights to, variable returns from its involvement with the entity
and has the ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully
consolidated from the date on which control is transferred to the consolidated entity. They are de-consolidated from the
date that control ceases.
Intercompany transactions, balances and unrealised gains on transactions between entities in the consolidated entity
are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the
asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with
the policies adopted by the consolidated entity.
The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change in ownership
interest, without the loss of control, is accounted for as an equity transaction, where the difference between the
consideration transferred and the book value of the share of the non-controlling interest acquired is recognised directly
in equity attributable to the parent.
Non-controlling interest in the results and equity of subsidiaries are shown separately in the statement of profit or loss
and other comprehensive income, statement of financial position and statement of changes in equity of the consolidated
entity. Losses incurred by the consolidated entity are attributed to the non-controlling interest in full, even if that results
in a deficit balance.
Where the consolidated entity loses control over a subsidiary, it derecognises the assets including goodwill, liabilities
and non-controlling interest in the subsidiary together with any cumulative translation differences recognised in equity.
The consolidated entity recognises the fair value of the consideration received and the fair value of any investment
retained together with any gain or loss in profit or loss.
Foreign currency translation
The financial statements are presented in Australian dollars, which is Imagion Biosystems Limited's functional and
presentation currency.
Foreign currency transactions
Foreign currency transactions are translated into Australian dollars using the exchange rates prevailing at the dates of
the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the
translation at financial year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are
recognised in profit or loss.
Foreign operations
The assets and liabilities of foreign operations are translated into Australian dollars using the exchange rates at the
reporting date. The revenues and expenses of foreign operations are translated into Australian dollars using the average
exchange rates, which approximate the rates at the dates of the transactions, for the period. All resulting foreign
exchange differences are recognised in other comprehensive income through the foreign currency reserve in equity.
The foreign currency reserve is recognised in profit or loss when the foreign operation or net investment is disposed of.
28
For personal use only
Imagion Biosystems Limited
Notes to the financial statements
31 December 2017
Note 1. Significant accounting policies (continued)
Revenue recognition
Revenue is recognised when it is probable that the economic benefit will flow to the consolidated entity and the revenue
can be reliably measured. Revenue is measured at the fair value of the consideration received or receivable.
Sale of goods
Sale of goods revenue is recognised at the point of sale, which is where the customer has taken delivery of the goods,
the risks and rewards are transferred to the customer and there is a valid sales contract. Amounts disclosed as revenue
are net of sales returns and trade discounts.
Interest
Interest revenue is recognised as interest accrues using the effective interest method. This is a method of calculating
the amortised cost of a financial asset and allocating the interest income over the relevant period using the effective
interest rate, which is the rate that exactly discounts estimated future cash receipts through the expected life of the
financial asset to the net carrying amount of the financial asset.
Other revenue
Other revenue is recognised when it is received or when the right to receive payment is established.
Income tax
The income tax expense or benefit for the period is the tax payable on that period's taxable income based on the
applicable income tax rate for each jurisdiction, adjusted by the changes in deferred tax assets and liabilities attributable
to temporary differences, unused tax losses and the adjustment recognised for prior periods, where applicable.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to be applied when
the assets are recovered, or liabilities are settled, based on those tax rates that are enacted or substantively enacted,
except for:
● When the deferred income tax asset or liability arises from the initial recognition of goodwill or an asset or liability in a
transaction that is not a business combination and that, at the time of the transaction, affects neither the accounting nor
taxable profits; or
● When the taxable temporary difference is associated with interests in subsidiaries, associates or joint ventures, and the
timing of the reversal can be controlled and it is probable that the temporary difference will not reverse in the foreseeable
future.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that
future taxable amounts will be available to utilise those temporary differences and losses.
The carrying amount of recognised and unrecognised deferred tax assets are reviewed at each reporting date. Deferred
tax assets recognised are reduced to the extent that it is no longer probable that future taxable profits will be available
for the carrying amount to be recovered. Previously unrecognised deferred tax assets are recognised to the extent that
it is probable that there are future taxable profits available to recover the asset.
Deferred tax assets and liabilities are offset only where there is a legally enforceable right to offset current tax assets
against current tax liabilities and deferred tax assets against deferred tax liabilities; and they relate to the same taxable
authority on either the same taxable entity or different taxable entities which intend to settle simultaneously.
Current and non-current classification
Assets and liabilities are presented in the statement of financial position based on current and non-current classification.
An asset is classified as current when: it is either expected to be realised or intended to be sold or consumed in the
consolidated entity's normal operating cycle; it is held primarily for the purpose of trading; it is expected to be realised
within 12 months after the reporting period; or the asset is cash or cash equivalent unless restricted from being
exchanged or used to settle a liability for at least 12 months after the reporting period. All other assets are classified as
non-current.
29
For personal use only
Imagion Biosystems Limited
Notes to the financial statements
31 December 2017
Note 1. Significant accounting policies (continued)
Current and non-current classification (continued)
A liability is classified as current when: it is either expected to be settled in the consolidated entity's normal operating
cycle; it is held primarily for the purpose of trading; it is due to be settled within 12 months after the reporting period; or
there is no unconditional right to defer the settlement of the liability for at least 12 months after the reporting period. All
other liabilities are classified as non-current.
Deferred tax assets and liabilities are always classified as non-current
Cash and cash equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term,
highly liquid investments with original maturities of three months or less that are readily convertible to known amounts
of cash and which are subject to an insignificant risk of changes in value. For the statement of cash flows presentation
purposes, cash and cash equivalents also includes bank overdrafts, which are shown within borrowings in current
liabilities on the statement of financial position.
Trade and other receivables
Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective
interest method, less any provision for impairment. Trade receivables are generally due for settlement within 30 days.
Collectability of trade receivables is reviewed on an ongoing basis. Debts which are known to be uncollectable are
written off by reducing the carrying amount directly. A provision for impairment of trade receivables is raised when there
is objective evidence that the consolidated entity will not be able to collect all amounts due according to the original
terms of the receivables. Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or
financial reorganisation and default or delinquency in payments (more than 60 days overdue) are considered indicators
that the trade receivable may be impaired. The amount of the impairment allowance is the difference between the asset's
carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate.
Cash flows relating to short-term receivables are not discounted if the effect of discounting is immaterial.
Other receivables are recognised at amortised cost, less any provision for impairment.
Derivative financial instruments
Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently
remeasured to their fair value at each reporting date. The accounting for subsequent changes in fair value depends on
whether the derivative is designated as a hedging instrument, and if so, the nature of the item being hedged.
Investments and other financial assets
Investments and other financial assets are initially measured at fair value. Transaction costs are included as part of the
initial measurement, except for financial assets at fair value through profit or loss. They are subsequently measured at
either amortised cost or fair value depending on their classification. Classification is determined based on the purpose
of the acquisition and subsequent reclassification to other categories is restricted.
Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have
been transferred and the consolidated entity has transferred substantially all the risks and rewards of ownership.
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss are either: (i) held for trading, where they are acquired for the purpose
of selling in the short-term with an intention of making a profit; or (ii) designated as such upon initial recognition, where
they are managed on a fair value basis or to eliminate or significantly reduce an accounting mismatch. Except for
effective hedging instruments, derivatives are also categorised as fair value through profit or loss. Fair value movements
are recognised in profit or loss
30
For personal use only
Imagion Biosystems Limited
Notes to the financial statements
31 December 2017
Note 1. Significant accounting policies (continued)
Property, plant and equipment
Plant and equipment is stated at historical cost less accumulated depreciation and impairment. Historical cost includes
expenditure that is directly attributable to the acquisition of the items.
Depreciation is calculated on a straight-line basis to write off the net cost of each item of property, plant and equipment
(excluding land) over their expected useful lives as follows:
Plant and equipment
3-10 years
The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each reporting
date.
An item of property, plant and equipment is derecognised upon disposal or when there is no future economic benefit to
the consolidated entity. Gains and losses between the carrying amount and the disposal proceeds are taken to profit or
loss. Any revaluation surplus reserve relating to the item disposed of is transferred directly to retained profits.
Leases
The determination of whether an arrangement is or contains a lease is based on the substance of the arrangement and
requires an assessment of whether the fulfilment of the arrangement is dependent on the use of a specific asset or
assets and the arrangement conveys a right to use the asset.
A distinction is made between finance leases, which effectively transfer from the lessor to the lessee substantially all
the risks and benefits incidental to the ownership of leased assets, and operating leases, under which the lessor
effectively retains substantially all such risks and benefits.
Finance leases are capitalised. A lease asset and liability are established at the fair value of the leased assets, or if
lower, the present value of minimum lease payments. Lease payments are allocated between the principal component
of the lease liability and the finance costs, so as to achieve a constant rate of interest on the remaining balance of the
liability.
Leased assets acquired under a finance lease are depreciated over the asset's useful life or over the shorter of the
asset's useful life and the lease term if there is no reasonable certainty that the consolidated entity will obtain ownership
at the end of the lease term.
Operating lease payments, net of any incentives received from the lessor, are charged to profit or loss on a straight-line
basis over the term of the lease.
Research and development
Research costs for the development of intellectual property are expenses in the period in which they are incurred.
Development costs are capitalised when it is probable that the project will be a success considering its commercial and
technical feasibility; the consolidated entity is able to use or sell the asset; the consolidated entity has sufficient
resources; and intent to complete the development and its costs can be measured reliably. Following the initial
recognition of the development expenditure, the cost model is applied requiring the asset to be carried at cost less any
accumulated amortisation and accumulated impairment losses. Any expenditure is capitalised and is amortised on a
straight-line basis over the period of expected benefits from the related project.
Trade and other payables
These amounts represent liabilities for goods and services provided to the consolidated entity prior to the end of the
financial year and which are unpaid. Due to their short-term nature they are measured at amortised cost and are not
discounted. The amounts are unsecured and are usually paid within 30 days of recognition.
Borrowings
Loans and borrowings are initially recognised at the fair value of the consideration received, net of transaction costs.
They are subsequently measured at amortised cost using the effective interest method.
31
For personal use only
Imagion Biosystems Limited
Notes to the financial statements
31 December 2017
Note 1. Significant accounting policies (continued)
Finance costs
Finance costs attributable to qualifying assets are capitalised as part of the asset. All other finance costs are expensed
in the period in which they are incurred.
Employee Benefits
Short-term employee benefits
Liabilities for wages and salaries, including non-monetary benefits and annual leave expected to be settled wholly within
12 months of the reporting date are measured at the amounts expected to be paid when the liabilities are settled.
Share based payments
The consolidated entity operates an equity-settled share based payment employee incentive scheme. Equity-settled
transactions are awards of shares, or options over shares, that are provided to employees in exchange for the rendering
of services. The fair value of the equity to which employees became entitled is measured at grant date and recognised
as an expense over the vesting period, with a corresponding increase to an equity account.
Fair value measurement
When an asset or liability, financial or non-financial, is measured at fair value for recognition or disclosure purposes, the
fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date; and assumes that the transaction will take place either: in the
principal market; or in the absence of a principal market, in the most advantageous market.
Fair value is measured using the assumptions that market participants would use when pricing the asset or liability,
assuming they act in their economic best interests. For non-financial assets, the fair value measurement is based on its
highest and best use. Valuation techniques that are appropriate in the circumstances and for which sufficient data are
available to measure fair value, are used, maximising the use of relevant observable inputs and minimising the use of
unobservable inputs.
Assets and liabilities measured at fair value are classified, into three levels, using a fair value hierarchy that reflects the
significance of the inputs used in making the measurements. Classifications are reviewed at each reporting date and
transfers between levels are determined based on a reassessment of the lowest level of input that is significant to the
fair value measurement.
For recurring and non-recurring fair value measurements, external valuers may be used when internal expertise is either
not available or when the valuation is deemed to be significant. External valuers are selected based on market
knowledge and reputation. Where there is a significant change in fair value of an asset or liability from one period to
another, an analysis is undertaken, which includes a verification of the major inputs applied in the latest valuation and
a comparison, where applicable, with external sources of data.
Issued Capital
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of
tax, from the proceeds
Dividends
Dividends are recognised when declared during the financial year and no longer at the discretion of the company.
Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to the owners of Imagion Biosystems Limited,
excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares
outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the financial year.
32
For personal use only
Imagion Biosystems Limited
Notes to the financial statements
31 December 2017
Note 1. Significant accounting policies (continued)
Earnings per share (continued)
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account
the after-income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and
the weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential
ordinary shares
Goods and Services Tax (‘GST’) and other similar taxes
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not
recoverable from the tax authority. In this case it is recognised as part of the cost of the acquisition of the asset or as
part of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST
recoverable from, or payable to, the tax authority is included in other receivables or other payables in the statement of
financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing
activities which are recoverable from, or payable to the tax authority, are presented as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the tax
authority.
New Accounting Standards and Interpretations not yet mandatory or early adopted Australian
Accounting Standards and Interpretations that have recently been issued or amended but are not yet mandatory, have
not been early adopted by the Consolidated Entity for the annual reporting period ended 30 June 2017. The
Consolidated Entity's assessment of the impact of these new or amended Accounting Standards and Interpretations,
most relevant to the Consolidated Entity, are set out below.
AASB 9 Financial Instruments
AASB 9 Financial Instruments This standard is applicable to annual reporting periods beginning on or after 1 January
2018. The standard replaces all previous versions of AASB 9 and completes the project to replace IAS 39 'Financial
Instruments: Recognition and Measurement'. AASB 9 introduces new classification and measurement models for
financial assets. A financial asset shall be measured at amortised cost, if it is held within a business model whose
objective is to hold assets in order to collect contractual cash flows, which arise on specified dates and solely principal
and interest. All other financial instrument assets are to be classified and measured at fair value through profit or loss
unless the entity makes an irrevocable election on initial recognition to present gains and losses on equity instruments
(that are not held-for-trading) in other comprehensive income ('OCI'). For financial liabilities, the standard requires the
portion of the change in fair value that relates to the entity's own credit risk to be presented in OCI (unless it would
create an accounting mismatch). New simpler hedge accounting requirements are intended to more closely align the
accounting treatment with the risk management activities of the entity. New impairment requirements will use an
'expected credit loss' ('ECL') model to recognise an allowance. Impairment will be measured under a 12-month ECL
method unless the credit risk on a financial instrument has increased significantly since initial recognition in which case
the lifetime ECL method is adopted. The standard introduces additional new disclosures. The Consolidated Entity will
adopt this standard from 1 July 2018 and it is not expected to have a material impact on the Consolidated Entity’s
financial performance.
33
For personal use only
Imagion Biosystems Limited
Notes to the financial statements
31 December 2017
Note 1. Significant accounting policies (continued)
AASB 15 Revenue from Contracts with Customers
This standard is applicable to annual reporting periods beginning on or after 1 January 2018. The standard provides a
single standard for revenue recognition. The core principle of the standard is that an entity will recognise revenue to
depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the
entity expects to be entitled in exchange for those goods or services. The standard will require: contracts (either written,
verbal or implied) to be identified, together with the separate performance obligations within the contract; determine the
transaction price, adjusted for the time value of money excluding credit risk; allocation of the transaction price to the
separate performance obligations on a basis of relative stand-alone selling price of each distinct good or service, or
estimation approach if no distinct observable prices exist; and recognition of revenue when each performance obligation
is satisfied. Credit risk will be presented separately as an expense rather than adjusted to revenue. For goods, the
performance obligation would be satisfied when the customer obtains control of the goods.
For services, the performance obligation is satisfied when the service has been provided, typically for promises to
transfer services to customers. For performance obligations satisfied over time, an entity would select an appropriate
measure of progress to determine how much revenue should be recognised as the performance obligation is satisfied.
Contracts with customers will be presented in an entity's statement of financial position as a contract liability, a contract
asset, or a receivable, depending on the relationship between the entity's performance and the customer's payment.
Sufficient quantitative and qualitative disclosure is required to enable users to understand the contracts with customers;
the significant judgements made in applying the guidance to those contracts; and any assets recognised from the costs
to obtain or fulfil a contract with a customer. The Consolidated Entity will adopt this standard from 1 July 2018 and it is
not expected to have a material impact on the Consolidated Entity’s financial performance.
AASB 16 Leases
This standard is applicable to annual reporting periods beginning on or after 1 January 2019. The standard replaces
AASB 117 'Leases' and for lessees will eliminate the classifications of operating leases and finance leases. Subject to
exceptions, a 'right-of-use' asset will be capitalised in the statement of financial position, measured at the present value
of the unavoidable future lease payments to be made over the lease term. The exceptions relate to short-term leases
of 12 months or less and leases of low-value assets (such as personal computers and small office furniture) where an
accounting policy choice exists whereby either a 'right-of-use' asset is recognised or lease payments are expensed to
profit or loss as incurred. A liability corresponding to the capitalised lease will also be recognised, adjusted for lease
prepayments, lease incentives received, initial direct costs incurred and an estimate of any future restoration, removal
or dismantling costs. Straight-line operating lease expense recognition will be replaced with a depreciation charge for
the leased asset (included in operating costs) and an interest expense on the recognised lease liability (included in
finance costs). In the earlier periods of the lease, the expenses associated with the lease under AASB 16 will be higher
when compared to lease expenses under AASB 117. However, EBITDA (Earnings Before Interest, Tax, Depreciation
and Amortisation) results will be improved as the operating expense is replaced by interest expense and depreciation
in profit or loss under AASB 16. For classification within the statement of cash flows, the lease payments will be
separated into both a principal (financing activities) and interest (either operating or financing activities) component. For
lessor accounting, the standard does not substantially change how a lessor accounts for leases. The Consolidated
Entity will adopt this standard from 1 July 2019 and it is not expected to have a material impact on the Consolidated
Entity’s financial performance.
Note 2. Critical accounting judgements, estimates and assumptions
The preparation of the financial statements requires management to make judgements, estimates and assumptions that
affect the reported amounts in the financial statements. Management continually evaluates its judgements and estimates
in relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its judgements,
estimates and assumptions on historical experience and on other various factors, including expectations of future
events, management believes to be reasonable under the circumstances. The resulting accounting judgements and
estimates will seldom equal the related actual results. The judgements, estimates and assumptions that have a
significant risk of causing a material adjustment to the carrying amounts of assets and liabilities (refer to the respective
notes) within the next financial year are discussed below.
34
For personal use only
Imagion Biosystems Limited
Notes to the financial statements
31 December 2017
Note 2. Critical accounting judgements, estimates and assumptions (continued)
Fair value measurement hierarchy
The consolidated entity is required to classify all assets and liabilities, measured at fair value, using a three level
hierarchy, based on the lowest level of input that is significant to the entire fair value measurement, being: Level 1:
Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the
measurement date; Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or
liability, either directly or indirectly; and Level 3: Unobservable inputs for the asset or liability. Considerable judgement
is required to determine what is significant to fair value and therefore which category the asset or liability is placed in
can be subjective.
The carrying amounts of cash and cash equivalents, trade receivables and trade payables are assumed to approximate
their fair values due to their short-term nature.
Note 3. Operating Segments
Identification of reporting operating segments
The consolidated entity is organised into one operating segment being Research & Development. This operating
segment is based on internal reports that are reviewed and used by the Board of Directors (who are identified as the
Chief Operating Decision Makers (CODM) in assessing performance and in determine the allocation of resources.
Note 4. Revenue
Sales revenue
Sale of goods
Other revenue
Interest
Other income
Fair value of financial derivative movement
Revenue
Note 5. Current assets - cash and cash equivalents
Cash on hand
Cash at bank
Cash on deposit
Reconciliation to cash and cash equivalents at the end of the financial year
The above figures are reconciled to cash and cash equivalents at the end of the financial
year as shown in the statement of cash flows as follows:
Balances as above
Balance as per statement of cash flows
35
Consolidated
2017
A$
2016
A$
20,102
20,102
81,620
109,459
127,876
318,955
339,057
-
-
1
-
1
1
Consolidated
2017
A$
2016
A$
2
837,320
6,035,507
2
27,639
-
6,872,829
27,641
6,872,829
27,641
6,872,829
27,641
For personal use only
Imagion Biosystems Limited
Notes to the financial statements
31 December 2017
Note 6. Current assets - other
Prepayments
Other assets
Accrued interest income
Note 7. Non-current assets - property, plant and equipment
Plant and equipment - at cost
Less: accumulated depreciation
Consolidated
2017
A$
2016
A$
340,555
16,974
30,161
9,224
-
-
387,690
9,224
Consolidated
2017
A$
2016
A$
1,123,017
(750,914)
783,733
(565,256)
372,103
218,477
Reconciliation
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set
out below:
Consolidated – Plant & Equipment
Opening Balance
Additions
Disposals
Foreign currency revaluation movements
Depreciation expense
Closing Balance
Note 8. Current liabilities - trade and other payables
Trade payables
Other payables
36
Consolidated
2017
$
218,477
369,606
-
(9,460)
(206,520)
2016
$
240,119
-
-
-
(21,642)
372,103
218,477
Consolidated
2017
A$
2016
A$
401,658
163,005
867,129
68,104
564,663
935,233
For personal use only
Imagion Biosystems Limited
Notes to the financial statements
31 December 2017
Note 9. Current liabilities – borrowings
Promissory note
Convertible notes
Non-convertible promissory notes
(a) Promissory notes
Face value of promissory notes issued
Derivative financial liability
Extinguishment of note liability
Other movements recognised through profit and loss
Conversion to ordinary shares
Closing balance
Note
(a)
(b)
(c)
Consolidated
2017
A$
-
-
-
-
2016
A$
9,094,074
4,470,153
363,757
13,927,984
Consolidated
2017
A$
7,666,571
1,427,503
(8,866,667)
105,926
(333,333)
2016
A$
7,666,571
1,427,503
-
-
-
-
9,094,074
The amount of AUD$8,866,667 (US$6,650,000) was converted to shares on 7 February 2017. The remaining amount
of AUD$333,333 (USD$250,000) of the promissory notes were converted to 1,666,667 shares in the company on
completion of the Initial Public Offering. The promissory note did not accrue interest.
(b) Convertible notes
Face value of notes issued
Derivative financial liability
Fair value of convertible note derivative recognised through the profit and loss
Other movements recognised through profit and loss
Interest expense
Redemption of convertible note liability
Payment – interest expense
Conversion to ordinary shares
Closing balance
Consolidated
2017
A$
2016
A$
2,987,617
1,482,536
(861,194)
(275,626)
42,397
(2,666,667)
(42,397)
(666,666)
2,987,617
1,482,536
-
-
-
-
-
-
-
4,470,153
In February 2017, the Company redeemed certain Notes by the payment of AUD$2,666,667 ($US2,000,000) in cash.
The remaining Notes, having a total face value of AUD$666,667 (US$500,000), were converted into 3,333,333 ordinary
shares on completion of the Initial Public Offer on 22 June 2017. Interest accrued on the notes at 8% per annum.
37
For personal use only
Imagion Biosystems Limited
Notes to the financial statements
31 December 2017
Note 9. Current liabilities – borrowings (continued)
(c) Non-Convertible promissory notes
Opening balance
Additional notes issued
Interest expense
Movement in foreign currency
Repayment – principal
Repayment - interest
Closing balance
Consolidated
2017
A$
363,757
81,169
18,671
1,737
(446,663)
(18,671)
2016
A$
-
363,757
-
-
-
-
-
363,757
In January 2017, the company issued an additional note for AUD$81,169 (US$65,000). The entire balance of the interim
notes including interest was repaid on completion of the offer on the 22 June 2017.
Note 10. Contingent liabilities
As of 31 December 2017, the Company was not party to any material litigation, claims or suit whose outcome could
have a material effect on the financial statements (31 December 2016: Nil).
Note 11. Equity - issued capital
2016
Shares
Consolidated
2017
Shares
2016
A$
2017
A$
Ordinary shares - fully paid
20
203,766,163
2
28,686,708
Movements in ordinary share capital
Details
Balance
Issue of shares
Issue of shares
Issue of shares
Issue of shares
Issue of shares
Date
1 January 2017
7 February 2017
7 February 2017
7 February 2017
22 June 2017
22 June 2017
Shares
20
29,629,637
32,553,959
64,099,456
3,333,091
74,150,000
Issue Price
0.10
0.09
0.11
0.15
0.52
0.20
Sub total
31 December 2017
203,766,163
Costs of capital raising
Closing balance
A$
2
2,666,667
3,580,935
9,797,733
1,734,924
14,830,000
32,610,261
(3,923,553)
28,686,708
Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the company in
proportion to the number of and amounts paid on the shares held. The fully paid ordinary shares have no par value and
the company does not have a limited amount of authorised capital.
38
For personal use only
Imagion Biosystems Limited
Notes to the financial statements
31 December 2017
Note 11. Equity - issued capital (continued)
Capital risk management
The consolidated entity's objectives when managing capital is to safeguard its ability to continue as a going concern, so
that it can provide returns for shareholders and benefits for other stakeholders and to maintain an optimum capital
structure to reduce the cost of capital.
Capital is regarded as total equity, as recognised in the statement of financial position, plus net debt. Net debt is
calculated as total borrowings less cash and cash equivalents.
In order to maintain or adjust the capital structure, the consolidated entity may adjust the amount of dividends paid to
shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.
The consolidated entity would look to raise capital when an opportunity to invest in a business or company was seen
as value adding relative to the current consolidated entity's share price at the time of the investment. The consolidated
entity is not actively pursuing additional investments in the short-term as it continues to integrate and grow its existing
businesses in order to maximise synergies.
Note 12. Equity - reserves
Share based payment reserve – options
Foreign currency translation reserve
Total
Consolidated
2017
A$
2016
A$
623,927
514,943
-
453,368
1,138,870
453,368
Foreign currency translation reserve
The reserve is used to recognise exchange differences arising from the translation of the financial statements of foreign
operations to Australian dollars. It is also used to recognise gains and losses on hedges of the net investments in foreign
operations.
Movements in reserves
Movements in each class of reserve during the current and previous financial year are set out below:
Consolidated
Balance at 1 January 2016
Foreign currency translation
Balance at 31 December 2016
Movements in revaluation of foreign currency through translation reserve
Share based payments for key management, non-executive directors and
employees
Share
based
payment
reserve
A$
Foreign
currency
reserve
A$
Total
A$
-
-
-
-
-
453,368
-
453,368
453,368
453,368
61,575
61,575
623,927
-
623,927
Balance at 31 December 2017
623,927
514,943
1,138,870
39
For personal use only
Imagion Biosystems Limited
Notes to the financial statements
31 December 2017
Note 13. Accumulated Losses
Accumulated Losses at the beginning of the financial year
Losses after income tax expense for the year
Dividends paid
Consolidated
2017
A$
2016
A$
(15,078,420) (14,043,943)
(1,034,477)
-
(7,794,602)
-
Accumulated Losses at the end of the financial year
(22,873,022) (15,078,420)
Note 14. Key management personnel disclosures
Compensation
The aggregate compensation made to directors and other members of key management personnel of the consolidated
entity is set out below:
Short-term employee benefits
Share-based payments
Consolidated
2017
A$
2016
A$
750,058
486,681
1,236,739
-
-
-
Note 15. Remuneration of auditors
During the financial year the following fees were paid or payable for services provided by RSM Australia Partners, the
auditor of the company, its network firms and unrelated firms:
Audit services – RSM Australia Partners
Audit or review of the financial statements
Other services – RSM Australia Pty Ltd
Investigating accountants report
Consolidated
2017
A$
2016
A$
60,000
61,720
121,720
-
-
-
40
For personal use only
Imagion Biosystems Limited
Notes to the financial statements
31 December 2017
Note 16. Commitments
Lease commitments - operating
Committed at the reporting date but not recognised as liabilities, payable:
Within one year**
One to five years
Lease commitments - finance
Committed at the reporting date and recognised as liabilities, payable:
Within one year
One to five years
Total commitment
Less: Future finance charges
Net commitment recognised as liabilities
Representing:
Lease liability - current
Lease liability - non-current
Consolidated
2017
A$
2016
A$
1,250,126
158,439
1,096,953
-
1,408,565
1,096,953
34,844
52,009
86,853
(6,840)
80,013
30,684
49,329
80,013
-
-
-
-
-
-
-
-
Finance lease commitments includes contracted amounts for various plant and equipment with a written down value of
$77,257 (2016: Nil) secured under finance leases expiring within one to five years. Under the terms of the leases, the
consolidated entity has the option to acquire the leased assets for predetermined residual values on the expiry of the
leases.
The consolidated entity has no capital expenditure commitments as at 31 December 2017 (2016: Nil)
** Included in operating commitments is a research and collaboration agreement with The University of Texas MD
Anderson Cancer Centre (MD Anderson) commenced in 2016.
The agreement requires Imagion Biosystems Limited to fund the research program for the Magsense technology,
including the costs of personnel, supplier and equipment expenses, estimated at a total of $US2,447,370 over 3
years.
41
For personal use only
Imagion Biosystems Limited
Notes to the financial statements
31 December 2017
Note 17. Parent entity information
Set out below is the supplementary information about the parent entity.
Statement of profit or loss and other comprehensive income
(Loss) after income tax
Total comprehensive income
Statement of financial position
Total current assets
Total assets
Total current liabilities
Total liabilities
Equity
Issued capital
Reserves
Retained earnings
Total equity
Parent
2017
A$
2016
A$
(2,333,573)
(478,291)
(2,333,573)
(478,291)
Parent
2017
A$
2016
A$
6,263,838
2
26,652,192
13,936,838
167,165
13,949,105
167,165
13,949,105
28,686,708
610,182
(2,811,863)
2
466,022
(478,291)
26,485,027
(12,267)
Contingent liabilities
The parent entity had no contingent liabilities as at 31 December 2017 and 31 December 2016.
Capital commitments - Property, plant and equipment
The parent entity had no capital commitments for property, plant and equipment as at 31 December 2017 and 31 December
2016.
Significant accounting policies
The accounting policies of the parent entity are consistent with those of the consolidated entity, as disclosed in note 1, except
for the following:
●
Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity.
Note 18. Interests in subsidiaries
The consolidated financial statements incorporate the assets, liabilities and results of the following wholly-owned
subsidiaries in accordance with the accounting policy described in note 1:
Name
Principal place of business /
Country of incorporation
Ownership interest
2016
2017
%
%
Imagion Biosystems Inc
United States of America
100.00
100.00
42
For personal use only
Imagion Biosystems Limited
Notes to the financial statements
31 December 2017
Note 19. Events after the reporting period
No other matters or circumstances have arisen since the end of the financial period that has significantly affected or
may significantly affect the operations of the consolidated entity, the results of those operations, or the state of affairs
of the consolidated entity in future financial years.
Note 20. Reconciliation of loss after income tax to net cash flows from operating activities
Loss after income tax expense for the year
(7,794,602)
(1,034,476)
Consolidated
2017
$
2016
$
Adjustments for:
Depreciation expense
Fair value adjustment
Foreign exchange loss
Share based payments expense
Interest
Changes in operating assets and liabilities:
Trade and other receivables
Prepayments
Trade and other payables
Monies in trust
206,834
(127,877)
529
623,927
858,582
(6,232,607)
21,642
(124,567)
359,253
-
198,466
(579,682)
(66,046)
(331,332)
(364,374)
16,974
-
(9,223)
321,649
-
Net cash used in operating activities
(6,977,385)
(267,256)
Note 21. Earnings per share
Loss after income tax
Consolidated
2017
A$
2016
A$
(7,794,602)
Loss after income tax attributable to the owners of Imagion Biosystems Limited
(7,794,602)
Number
Number
Weighted average number of ordinary shares used in calculating basic earnings per share 153,835,849
Weighted average number of ordinary shares used in calculating diluted earnings per
share
153,835,849
Basic earnings per share
Diluted earnings per share
Cents
Cents
(0.0507)
(0.0507)
-
-
-
-
-
-
43
For personal use only
Imagion Biosystems Limited
Notes to the financial statements
31 December 2017
Note 22. Share based payments
Upon listing on the Australian Stock Exchange, the consolidated entity established various incentive arrangements to
assist in the attraction, retention and motivation of its employees and management group.
The key management group will receive, in aggregate up to a total of 12,100,000 performance rights under the long-
term incentive (LTI) plan. The performance rights granted to the key management group shall vest on certain
performance milestones being achieved.
For both non-executive directors and employees will receive in aggregate up to a total of 3,450,000 performance rights
under the LTI plan. A total of 2,550,000 rights over shares will be issued to employees of the consolidated entity under
the LTI plan, which will vest quarterly over the two years following the listing and will not be subject to performance
milestones. A total of 900,000 rights over share will be issued to non-executive directors under the LTI plan which will
vest over 2 years.
Employee incentive plan options are unquoted and will vest in accordance with the rules of the LTI plan. Cancellation
of unvested employee incentive options occurs on termination of employment.
Issue Date
Expiry
Date
Issued
Cancelled
Exercised
Balance
Vested
not
exercised
Unvested
22/06/2017
22/06/2017
22/06/2017
22/06/2019
22/06/2019
22/06/2019
12,100,000
2,550,000
900,000
-
(500,000)
-
-
-
-
12,100,000
2,050,000
900,000
-
(122,000)
-
12,100,000
1,928,000
900,000
15,550,000
(500,000)
-
15,050,000
(122,000)
14,928,000
Note 23. Financial Instruments
The consolidated entity’s activities expose it to a variety of financial risks: market risk (including foreign currency risk,
price risk and interest rate risk), credit risk and liquidity risk. The consolidated entity’s overall risk management program
focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on the financial
performance of the consolidated entity. The consolidated entity uses different methods to measure different types of
risk to which it is exposed. These methods include sensitivity analysis in the case of interest rate, foreign exchange and
other price risks, ageing analysis for credit risk and beta analysis in respect of investment portfolios to determine market
risk.
Derivatives are not currently used by the consolidated entity for hedging purposes. The consolidated entity does not
speculate in the trading of derivative instruments.
Market Risk
Foreign currency risk
The consolidated entity undertakes certain transactions denominated in foreign currency and is exposed to foreign
currency risk through foreign exchange rate fluctuations, in particular United States dollars.
Foreign exchange risk arises from future commercial transactions and recognised financial assets and financial liabilities
denominated in a currency that is not the entity’s functional currency. The risk is measured using sensitivity analysis
and cash flow forecasting.
44
For personal use only
Imagion Biosystems Limited
Notes to the financial statements
31 December 2017
Note 23. Financial instruments (continued)
The carrying amount of the consolidated entity’s foreign currency denominated financial assets and financial liabilities
at the reporting date were as follows (holdings are shown in AUD equivalent):
Consolidated
US dollars
Price risk
Assets
Liabilities
2017
2016
2017
2016
1,377,514
1,377,514
-
-
521,605
521,605
-
-
The Consolidated Entity is not exposed to any significant price risk.
Credit risk
Credit risk refers to the risk that the counter party will default on its contractual obligations resulting in financial loss to
the consolidated entity. Credit risk is the risk of financial loss to the consolidated entity if a customer or counterparty to
a financial instrument fails to meet its contractual obligations and arises principally from the consolidated entity’s
receivables from customers and investment securities. The consolidated entity has only minimal sales revenue and
consequently does not have credit exposure to outstanding receivables.
Interest rate risk
Interest rate risk is the risk that the value of a financial instrument or cash flows associated with the instrument will
fluctuate due to changes in market interest rates. Interest rate risk arises from fluctuations in interest bearing financial
assets and liabilities that the consolidated entity uses. Interest bearing assets comprise cash and cash equivalents
which are considered to be short-term liquid assets and investment decisions are governed by the monetary policy.
During the year, the consolidated entity had no variable rate interest bearing liability. It is the consolidated entity's policy
to settle trade payables within the credit terms allowed and therefore not incur interest on overdue balances.
Liquidity risk
Liquidity risk is the risk that the consolidated entity will not be able to meet its financial obligations as they fall due. The
consolidated entity’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 consolidated entity’s reputation. The Consolidated Entity’s objective is to maintain a
balance between continuity of funding and flexibility. The consolidated entity’s exposure to financial obligations relating
to corporate administration and projects expenditure, are subject to budgeting and reporting controls, to ensure that
such obligations do not exceed cash held and known cash inflows for a period of at least 1 year.
Remaining contractual maturities
The following tables detail the consolidated entity’s remaining contractual maturity for its financial instrument liabilities.
The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date
on which the financial liabilities are required to be paid. The tables include both interest and principal cash flows
disclosed as remaining contractual maturities and therefore these totals may differ from their carrying amount in the
statement of financial position.
45
For personal use only
Imagion Biosystems Limited
Notes to the financial statements
31 December 2017
Note 23. Financial instruments (continued)
Weighted
average
interest rate
%
1 year or
less
Between 1
and 2 years
Between 2
and 5 years Over 5 years
Total
-
-
401,658
163,005
-
-
-
-
6.279%
34,844
34,844
17,165
Total non-derivatives
599,507
34,844
17,165
-
-
-
-
-
-
401,658
163,005
86,853
651,516
-
-
-
-
-
-
-
-
-
Weighted
average
interest
rate
%
1 year or
less
Between 1
and 2 years
Between 2
and 5 years Over 5 years
Total
Consolidated - 2017
Non-derivatives
Non-interest bearing
Trade payables
Other payables
Interest-bearing - fixed rate
Lease liability
Derivatives
Promissory and Convertible
Notes
Total derivatives
Consolidated - 2016
Non-derivatives
Non-interest bearing
Trade payables
Other payables
-
-
867,129
68,104
Total non-derivatives
935,233
Derivatives
Promissory and convertible
Notes
Total derivatives
2,910,039
2,910,039
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
867,129
68,104
935,233
2,910,039
2,910,039
The cash flows in the maturity analysis above are not expected to occur significantly earlier than contractually disclosed
above.
Note 24. Fair value measurement
Fair value hierarchy
The following tables detail the consolidated entity’s assets and liabilities, measured or disclosed at fair value, using a
three-level hierarchy, based on the lowest level of input that is significant to the entire fair value measurement, being:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the
measurement date
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly
or indirectly
Level 3: Unobservable inputs for the asset or liability.
46
For personal use only
Imagion Biosystems Limited
Notes to the financial statements
31 December 2017
Note 24. Fair value measurement (continued)
The carrying amounts of trade and other receivables and trade and other payables are assumed to approximate their
fair values due to their short-term nature.
Consolidated - 2017
Liabilities
Derivative financial liability
Total liabilities
Consolidated - 2016
Liabilities
Derivative financial liability
Total liabilities
Level 1
Level 2
Level 3
Total
-
-
-
-
-
-
-
-
Level 1
Level 2
Level 3
Total
-
-
2,910,039
2,910,039
-
-
2,910,039
2,910,039
The fair value of financial liabilities is estimated by discounting the remaining contractual maturities at the current market
interest rate that is available for similar financial liabilities.
Valuation techniques for fair value measurements categorised within level 2.
Unquoted investments have been valued using a discounted cash flow model.
Derivative financial instruments have been valued using quoted market rates. This valuation technique maximises the
use of observable market data where it is available and relies as little as possible on entity specific estimates.
Note 25. Income tax benefit
Tax losses not recognised
Consolidated
2017
$
2016
$
Unused tax losses for which no deferred tax asset has been recognised (Australia)
1,053,419
45,139
Potential tax benefit @ 27.5% for 2017 and 28.5% for 2016
289,690
12,865
Potential unused tax losses for which no deferred tax asset has been recognised (United
States of America)
5,972,199
539,393
The above potential tax benefit for tax losses has not been recognised in the statement of financial position. These tax
losses can only be utilised in the future if the company satisfies the relevant tax loss rules in the relevant jurisdictions
and the Company earns sufficient taxable profit to absorb the losses.
47
For personal use only
Imagion Biosystems Limited
Notes to the financial statements
31 December 2017
Note 26. Related party transactions
Parent Entity
Imagion Biosystems Limited is the parent entity
Subsidiaries
Interest in subsidiaries are set out in note 18
Key management personnel
Disclosures relating to key management personnel are set out in note 14 and the remuneration report included in the
directors' report.
Transactions with related parties
The following transactions occurred with related parties:
Payment for goods and services:
Payment for contracting services – Brian Conn
Consolidated
2017
$
2016
$
-
13,333
Receivable from and payable to related parties
The following balances are outstanding at the reporting date in relation to transactions with related parties:
Trade payables to Giulio Paciotti
Trade payables to Brian Conn
Loans to/from related parties
The following loan movements occurred with related parties:
Consolidated
2017
$
2016
$
14,496
9,421
-
70,903
Consolidated
2017
$
2016
$
Loan from Related Parties – Interim Notes – Brian Conn and Robert Proulx
Repayment of Loan from Related Parties - Interim Notes - Brian Conn and Robert Proulx
Interest paid (8%) on Interim Notes for Brian Conn and Robert Proulx
-
352,564
15,513
352,564
-
-
48
For personal use only
Imagion Biosystems Limited
Director’s Declaration
31 December 2017
In the directors' opinion:
●
●
●
●
the attached financial statements and notes comply with the Corporations Act 2001, the Accounting Standards,
the Corporations Regulations 2001 and other mandatory professional reporting requirements;
the attached financial statements and notes comply with International Financial Reporting Standards as issued
by the International Accounting Standards Board as described in note 1 to the financial statements;
the attached financial statements and notes give a true and fair view of the consolidated entity's financial position
as at 31 December 2017 and of its performance for the financial year ended on that date;
there are reasonable grounds to believe that the company will be able to pay its debts as and when they become
due and payable; and
The directors have been given the declarations required by section 295A of the Corporations Act 2001.
Signed in accordance with a resolution of directors made pursuant to section 295(5)(a) of the Corporations Act 2001.
On behalf of the directors
___________________________
Robert Proulx
Director
28 February 2018
49
For personal use only
INDEPENDENT AUDITOR’S REPORT
To the Members of Imagion Biosystems Limited
Opinion
We have audited the financial report of Imagion Biosystems Limited. (the Company) and its subsidiaries (the
Group), which comprises the consolidated statement of financial position as at 31 December 2017, the
consolidated statement of comprehensive income, the consolidated statement of changes in equity and the
consolidated statement of cash flows for the year then ended, and notes to the financial statements, including a
summary of significant accounting policies, and the directors' declaration.
In our opinion the accompanying financial report of the Group is in accordance with the Corporations Act 2001,
including:
(i) giving a true and fair view of the Group's financial position as at 31 December 2017 and of its financial
performance for the year then ended; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor's Responsibilities for the Audit of the Financial Report section of
our report. We are independent of the Group in accordance with the auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board's
APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the financial
report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been given to
the directors of the Group, would be in the same terms if given to the directors as at the time of this auditor's
report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Material Uncertainty Related to Going Concern
We draw attention to Note 1 in the financial report, which indicates that the Group incurred a net loss of $7,794,602
during the period ended 31 December 2017 and reported negative operating cash flows of $6,977,385 during the
year ended 31 December 2017. As stated in Note 1, these events or conditions, along with other matters as set
forth in Note 1, indicate that a material uncertainty exists that may cast significant doubt on the Group's ability to
continue as a going concern. Our opinion is not modified in respect of this matter.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of
the financial report of the current 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.
For personal use only
In addition to the matter described in the Material Uncertainty Related to Going Concern section, we have
determined the matters described below to be the key audit matters to be communicated in our report.
Key Audit Matter
How our audit addressed this matter
Fair Value of the derivative financial liability
Refer to Note 24 in the financial statements
The Group has a Convertible note and a Promissory
note with face values of $US2.5 million and $US6.9
million respectively. Both agreements have the
option to convert to shares upon IBL listing on the
Australian Stock Exchange (ASX).
The notes are considered compound financial
instruments, with the debt and the conversion being
accounted for separately. Since the notes are
denominated in a foreign currency, the conversion
option does not meet the definition of an equity
instrument under AASB 132 Financial Instruments:
Disclosure and Presentation and AASB 139
Financial
and
Measurement.
They are therefore treated as
derivative financial liability, which is measured at fair
value at each reporting date, with any change in
value being recognised in the income statement.
Instruments:
Recognition
Our audit procedures in relation to the fair value of the
derivative financial liability included:
• Reviewing the Convertible and Promissory
Note terms and conditions and ensuring
that the accounting treatment is in line with
the requirements of AASB 132 and 139.
• Reviewing and reperforming a recalculation
of management’s assumptions considered
in determining fair value of the debt and the
conversion option; and
•
Engaging our internal valuation specialists
to assist in the review of the Convertible
and Promissory Notes valuations and the
assessment of whether the assumptions
and factors used are reasonable and
supportable.
This matter is considered a Key Audit Matter due to
the risk that equity could be materially misstated due
to an
incorrect valuation of Convertible notes
and Promissory notes on conversion to equity.
Other Information
The directors are responsible for the other information. The other information comprises the information included
in the Group's annual report for the year ended 31 December 2017, but does not include the financial report and
the auditor's report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent with the financial report or our knowledge
obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
For personal use only Responsibilities of the Directors for the Financial Report
The directors of the Group are responsible for the preparation of the financial report that gives a true and fair view
in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control
as the directors determine is necessary to enable the preparation of the financial report that gives a true and fair
view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as
a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic
alternative but to do so.
Auditor's Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from
material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably
be expected to influence the economic decisions of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the Auditing and
Assurance Standards Board website at: http://www.auasb.gov.au/auditors_responsibilities/ar2.pdf.
This description forms part of our auditor's report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in the directors' report for the year ended 31 December 2017.
In our opinion, the Remuneration Report of Imagion Biosystems Limited., for the year ended 31 December 2017,
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Group are responsible for the preparation and presentation of the Remuneration Report in
accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.
RSM AUSTRALIA PARTNERS
R B MIANO
Partner
Dated: 28 February 2018
Melbourne, Victoria
For personal use only Imagion Biosystems Limited
Shareholder Information
31 December 2017
CORPORATE GOVERNANCE STATEMENT
The Company’s Directors and management are committed to conducting the business of the Group’s business in an
ethical manner and in accordance with the highest standards of corporate governance. The Company has adopted and
substantially complies with the ASX Corporate Governance Principles and Recommendations
(Third Edition)
(Recommendations) to the extent appropriate to the size and nature of the Group’s operations.
The Company has prepared a statement which sets out the corporate governance practices that were in operation
throughout the financial year for the Company, identifies any Recommendations that have not been followed, and
provides reasons for not following such Recommendations (Corporate Governance Statement).
In accordance with ASX Listing Rules 4.10.3 and 4.7.4, the Corporate Governance Statement will be available for review
on the Company’s website (www.imagionbiosystems.com), and will be lodged together with an Appendix 4G with AS X
at the same time that this Annual Report is lodged with ASX.
The Appendix 4G will particularise each Recommendation that needs to be reported against by the Company, and will
provide shareholders with information as to where relevant governance disclosures can be found.
The Company’s
corporate
www.imagionbiosystems.com.
governance
policies and
charters are
all available
on
its website
ADDITIONAL SECURITIES INFORMATION
In accordance with ASX Listing Rule 4.10, the Company provides
elsewhere disclosed in this Annual Report. The information provided is current as at 5 April 2018 (Reporting Date).
the following information to shareholders not
QUOTED EQUITY SECURITIES – ORDINARY SHARES
As at the Reporting Date, the Company had a total of 203,766,163 fully paid ordinary shares on issue. The Company’s
shares are quoted on the ASX, and form the only class of securities on issue in the Company that is quoted on the
ASX, and that carries voting rights.
At a general meeting of the Company, every holder of ordinary shares is entitled to vote in person or by proxy or
attorney; and on a show of hands every person present who is a member has one vote, and on a poll every person
present in person or by proxy or attorney has one vote for each ordinary share he holds.
Range of holdings
An analysis of number of shareholders in the Company by size of holding is as follows:
Share Range
1-1,000
1001-5001
5001-10,000
10,000-100,001
100,001 and over
Total
Unmarketable Parcels
Number of
Holders
2
15
43
206
206
420
Units
502
56,340
385,707
10,152,674
193,170,940
203,766,163
%
0.000
0.028
0.189
4.983
94.800
100.000
The number of shareholders holding less than a marketable parcel of shares as at the Reporting Date (based on a
closing price of $0.079 per share) was 24.
53
For personal use only
Imagion Biosystems Limited
Shareholder Information
31 December 2017
Top 20 Shareholders
The names of the twenty largest holders of ordinary shares as at the Reporting Date are listed below:
Rank Name
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
MANHATTAN SCIENTIFICS INC
WILLIAM TAYLOR NOMINEES PTY LTD
MR KEMPER SHAW
MR ANTHONY FAILLACE
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
MR TOBY CHANDLER
MR ROBERT REVELEY
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED - A/C 2
ARISION PTY LIMITED
CITICORP NOMINEES PTY LIMITED
MR TODD JOHN HOARE
SUNSET CAPITAL MANAGEMENT PTY LTD
NEW WORLD RESOURCES INVESTMENT PTE LTD
MR TREVOR JOHN HOARE & MRS ROBYN ANN HOARE
CITYSCAPE ASSET PTY LTD
BNP PARIBAS NOMINEES PTY LTD HUB24 CUSTODIAL SERV LTD DRP
MR HAOJIE LI
WEINER PTY LTD
MR JOHN NOLAN
ROBERT DAHL & MERRIL DAHL
Total
Balance of register
Grand total
No. of
shares
64,099,476
11,798,818
11,798,818
10,361,838
8,890,000
7,450,000
7,350,000
5,319,940
4,042,011
3,025,212
2,377,941
2,338,302
2,045,455
1,945,587
1,735,592
1,515,000
1,389,539
1,330,000
1,224,999
1,200,000
151,238,528
52,527,635
203,766,163
%
31.457
5.790
5.790
5.085
4.363
3.656
3.607
2.611
1.984
1.485
1.167
1.148
1.004
0.955
0.852
0.743
0.682
0.653
0.601
0.589
74.22
25.78
100.00
Substantial shareholders
The substantial holders of shares in the Company as at the Reporting Date were:
Substantial holders
Manhattan Scientifics Inc
William Taylor Nominees Pty Ltd
Mr Kemper Shaw
Mr Anthony Faillace
Imagion Biosystems Limited*
Number of shares held
64,099,476
11,798,818
11,798818
10,361,838
81,582,809
% of total issued share capital
31.457%
5.790%
5.790%
5.085%
40.04%
* Imagion Biosystems Limited has a deemed relevant interest in 40.04% of its own shares pursuant to section 608(1)(c) of the
Corporations Act, arising from the restriction on the disposal of shares under ASX restriction agreements as disclosed in the
Company’s sub stantial holding lodged with the ASX on 12 Feb ruary 2018 under the heading “Notice of change of interests of
sub stantial holder – IBX”. Accordingly, the total relevant interest attrib uted to Imagion Biosystems Limited consists of shares which
are held b y other holders and which Imagion Biosystems Limited has no right to acquire or dispose of these shares, or to control
the voting rights attaching to these shares.
Escrowed Securities
Description
Fully Paid Ordinary Shares
Fully Paid Ordinary Shares
Performance Rights
Number of securities
3,483,333
78,099,476
15,550,000
Expiry date of escrow period
15 June 2018
22 June 2019
22 June 2019
54
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Imagion Biosystems Limited
Shareholder Information
31 December 2017
UNQUOTED EQUITY SECURITIES
Performance Rights
The Company has one class of unquoted equity securities on issue, being Performance Rights. The Performance Rights
will vest into ordinary shares (on a 1-for-1 basis), subject to satisfaction of prescribed vesting conditions.
None of the Performance Rights carry any voting rights. However, any underlying shares issued upon the vesting or
conversion of the Performance Rights will carry equal voting rights with the other shares on issue in the Company.
As at the Reporting Date, there were a total of 14,706,250 Performance Rights on issue, held by 16 holders.
An analysis of number of Performance Rights holders by size of holding is as follows:
Range
1-1,000
1001-5001
5001-10,000
10,000-100,001
100,001 and over
Total
Number of
Holders
0
0
0
2
14
16
Units
0
0
0
81,250
14,625,000
14,706,250
%
0
0
0
0.55%
99.45%
100
LISTING RULE 4.10.19 DISCLOSURE
For the purposes of Listing Rule 4.10.19, the Company confirms that it has used the cash and assets in a form readily
convertible to cash in a way consistent with its business objectives at the time of admission.
STOCK EXCHANGE LISTING
The Company’s ordinary shares are quoted on the Australian Securities Exchange (ASX: IBX).
ON-MARKET BUYBACK
The Company is not currently conducting an on-market buy-back.
No securities were purchased on-market during the reporting period under or for the purposes of an employee incentive
scheme or to satisfy the entitlements of the holders of options or other rights to acquire securities granted under an
employee incentive scheme.
ITEM 7 ISSUES OF SECURITIES
There are no issues of securities approved for the purposes of item 7 of section 611 of the Corporations Act which
have not yet been completed.
55
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