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Fate TherapeuticsANNUAL REPORT
2020
Year ended 30 June 2020
Reporting period:
Previous corresponding period: Year ended 30 June 2019
ABN 90 009 237 889
TABLE OF CONTENTS
CORPORATE DIRECTORY ............................................................................................................................ 3
CHAIRMAN’S LETTER ................................................................................................................................... 4
REVIEW OF OPERATIONS AND ACTIVITIES .............................................................................................. 6
DIRECTORS’ REPORT..................................................................................................................................12
AUDITOR’S INDEPENDENCE DECLARATION ........................................................................................... 29
FINANCIAL STATEMENTS ........................................................................................................................... 30
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME ..............................................................31
CONSOLIDATED BALANCE SHEET ........................................................................................................... 32
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY ........................................................................ 33
CONSOLIDATED STATEMENT OF CASH FLOWS ..................................................................................... 34
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS .................................................................. 35
DIRECTORS’ DECLARATION .......................................................................................................................78
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF IMMUTEP LIMITED .................................79
SHAREHOLDER INFORMATION ................................................................................................................. 84
2
CORPORATE DIRECTORY
Directors
Company Secretaries
Registered office &
principal place of business
Share Registry
Auditor
Banker
Dr Russell Howard (Non-Executive Chairman)
Mr Pete Meyers (Non-Executive Director & Deputy Chairman)
Mr Marc Voigt (Executive Director & Chief Executive Officer)
Mr Grant Chamberlain (Non-Executive Director)
Ms Deanne Miller
Mr Tom Bloomfield
Level 12
95 Pitt Street
Sydney NSW 2000
Boardroom Pty Ltd
Grosvenor Place
Level 12, 225 George Street
Sydney, NSW 2000
PricewaterhouseCoopers
One International Towers Sydney, Watermans Quay
Barangaroo, NSW 2000
National Australia Bank Ltd
Kew Branch
Melbourne, Victoria 3000
Stock exchange listings
Immutep Limited shares are listed on the:
Australian Securities Exchange (ASX code: IMM), and
NASDAQ Global Market (NASDAQ code: IMMP)
Website address
www.immutep.com
3
CHAIRMAN’S LETTER
Dear Fellow Shareholder,
It’s my pleasure to present Immutep’s annual report for the financial year 2020.
Dr. Russell Howard
Immutep is focused on improving the lives of patients with cancer and autoimmune disease
by leveraging the body’s immune system. We are leaders in the development of immuno-
therapeutic products stemming from the LAG-3 immune mechanism, which was discovered
by our CMO and CSO Prof Frédéric Triebel.
We have four product candidates that are advancing well, despite the global challenges in protecting our trial patients and our
employees precipitated by the COVID-19 pandemic. These product candidates are being evaluated in 12 active clinical trials
and almost 2,000 patients across the globe. Two of them, IMP731 (from which GSK2831781 is derived) and IMP701 (from
which LAG525 is derived), are already licensed out to global pharmaceutical companies GSK and Novartis, respectively.
During the year we collected $7.7 million in receipts from customers, mainly due to the GSK milestone payment of £4 million.
Our lead product candidate is eftilagimod alpha (efti or IMP321) which is in clinical development for a range of cancer
indications. Our other retained program is IMP761, which is in preparations for GMP manufacturing in autoimmune diseases
after successful preclinical results.
Cancer and autoimmune diseases are large and growing markets where new therapies are urgently needed for patients.
The global oncology drugs market is expected to reach an estimated US$176.5 billion by 20251 and the global autoimmune
treatment market is expected to grow to US$149.4 billion by 20252.
Immutep deepened its knowledge of efti through multiple trial readouts this financial year. Our largest clinical trial of efti,
called AIPAC (Phase IIb) combines it with paclitaxel in breast cancer patients. In this study, efti delivered better progression
free survival (PFS) compared to the placebo group at the 6-month landmark. While a number of specific patient subgroups
showed good results from the combination therapy in AIPAC, we had hoped for stronger overall PFS results. Unfortunately,
this impacted the Company’s share price at a time where the global markets were also reacting with volatility to the uncer-
tainty of the emerging COVID-19 pandemic.
When efti is combined with pembrolizumab in our TACTI-002 study (Phase II), encouraging results have also been achieved
so far in head and neck squamous cell carcinoma and non-small cell lung cancer. These results were presented to the
scientific community at ASCO in June 2020. The same combination therapy with pembrolizumab was tested in patients
with melanoma in TACTI-mel (Phase I), reporting deep and durable responses which were presented in October last year.
The INSIGHT-004 (Phase I) studying the combination of efti with avelumab showed encouraging early efficacy signals in
patients. Importantly, efti continues to be in general comparably safe and well tolerated in all these trials.
Each of these trials tests efti when administered to patients in combination with either an approved chemotherapy agent or an-
other immunotherapeutic. This has been a deliberate strategy that focuses on improving patient outcomes by using efti to ‘push
the gas’ of the immune system by stimulating cancer-fighting T cells, while also combating cancer with an approved therapy.
This strategy also enables us to demonstrate efti’s potential to pharmaceutical companies that are aligned with our mission
to enhance patient outcomes, helping us to form strategic collaborations. Immutep is already partnered with five of the
world’s major pharmaceutical companies: Novartis, GSK, Merck & Co (MSD), Merck (Germany) and Pfizer. In addition, we
continue to collaborate with CYTLIMIC (NEC’s drug discovery business) and our Chinese licensee for efti, EOC Pharma.
During the year, we were very pleased to have the continued support of new and existing institutional and sophisticated
investors as we raised A$12 million via a placement in April 2020 and A$10 million from a placement and fully underwritten
Entitlement Offer in July 2019. The funds are supporting our LAG-3 clinical programs in cancer and autoimmune disease. The
financings extended our cash runway to the end of calendar year 2021, beyond many anticipated clinical trial data read outs.
1 https://www.prnewswire.com/news-releases/oncologycancer-drugs-market-to-reach-176-50-bn-globally-by-2025-at-7-6-cagr-allied-market-research-300937810.html
2 https://www.prnewswire.com/news-releases/the-global-autoimmune-disease-therapeutics-market-size-is-expected-to-reach-149-4-billion-by-2025--rising-at-a-
market-growth-of-4-34-cagr-during-the-forecast-period-300902336.html
4
CHAIRMAN’S LETTER
CONTINUED
Results from multiple trials of efti will be reported throughout the coming financial year, which could further expand the
intrinsic value of this promising asset. AIPAC will report overall survival data by the end of calendar year 2020 and more
mature data will come from TACTI-002 and INSIGHT-004 throughout calendar year 2020.
I am pleased with the progress made by our Company this year and wish to pass on the Board’s thanks to the whole Im-
mutep team for their continued diligence and passion through what have been challenging and unprecedented times. I also
extend our thanks to our loyal shareholders who have continued to support us and share our commitment to bringing new
therapies to market to improve patients’ lives.
Yours sincerely,
Dr. Russell Howard
Chairman
Immutep Limited
25 August 2020
5
REVIEW OF OPERATIONS AND ACTIVITIES
PRINCIPAL ACTIVITIES
Immutep is a globally active biotechnology company that is a leader in the development of
LAG-3 immunotherapeutic products for cancer and autoimmune disease. It is dedicated to
leveraging its technology and expertise to discover and develop novel immunotherapies, and to
partner with leading organisations to bring innovative treatment options to market for patients.
Marc Voigt, Executive Director & CEO
Its lead product candidate is eftilagimod alpha (“efti” or “IMP321”), a soluble LAG-3Ig fusion
protein based on the LAG-3 immune control mechanism, which is in clinical development for the treatment of cancer. Im-
mutep has two other clinical candidates (IMP701 and IMP731) that are fully licensed to major pharmaceutical partners, and
a fourth candidate (IMP761) which is in pre-clinical development for autoimmune disease.
Immutep is listed on the Australian Securities Exchange (IMM), and on the NASDAQ (IMMP) in the United States.
REVIEW OF OPERATIONS
Throughout the financial year 2020, Immutep advanced the development of its lead product candidate, efti and reported
data from its trials. It reported supportive efficacy data from its largest study, AIPAC (Phase IIb), in breast cancer patients.
This included progression-free survival (PFS) data that showed that efti provided an improvement for patients compared to
a placebo group at the 6-month landmark. While we are very pleased by the results from some of the pre-defined patient
subgroups, we had hoped for better overall results in terms of PFS. The results were, unfortunately, reported at a time of
relatively high market uncertainty and volatility related to the COVID-19 pandemic. We look forward to reporting Overall
Survival results by the end of 2020.
Encouraging first and more mature interim results have also been reported for Immutep’s Phase II clinical trial, TACTI-002.
A first group of patients participating in the trial with 1st line non-small cell lung cancer (NSCLC) have reported a median
PFS estimate of more than 9 months, which is a very encouraging interim result for patients with such advanced cancer.
Immutep also reported the first Complete Response (complete disappearance of target lesion) from a patient with 2nd line
head and neck squamous cell carcinoma (HNSCC). Both the AIPAC and TACTI-002 trials are ongoing.
In addition, Immutep reported positive final efficacy data for its Phase I TACTI-mel trial during the financial year. These
results showed deep durable responses to the combination treatment in patients with melanoma. In this trial, half of patients
had a decrease of ≥ 75% in the target lesions when treated with pembrolizumab and efti.
Immutep continued to work with its collaborators, including five major pharmaceutical companies throughout the financial
year: Novartis, GSK, Merck & Co (MSD), Merck (Germany) and Pfizer.
From July to August 2019, the Company completed a capital raise via its ASX listing raising approximately A$10 million, via
a Placement and a fully underwritten Entitlement Offer which included participation from Immutep’s directors and the entire
executive management team. In April 2020, the Company raised a further A$12 million via a Placement supported by high
quality institutional investors.
The financings have extended Immutep’s cash runway to the end of calendar year 2021, beyond several significant data
read-outs. The proceeds are being used to continue the LAG-3 related programs, including the ongoing clinical develop-
ment of efti and the manufacturing of IMP761.
Immutep also rationalised its share capital by completing a share consolidation in November 2019, pursuant to which every
10 shares has been consolidated into 1 share.
Immutep operations experienced minimal disruption as a result of the COVID-19 pandemic. Protecting the health of patients
recruited into the Company’s clinical trials and its employees has been a key priority for Immutep. The Company has been
working closely with its clinical sites and regulators to monitor the situation and make any necessary adjustments to trial
protocols to diminish risks to patients. Importantly, the Company has not seen a significant impact on the pace of trial re-
cruitment for its two actively recruiting trials: TACTI-002 and INSIGHT-004. AIPAC has been fully recruited since June 2019.
6
REVIEW OF OPERATIONS AND ACTIVITIES
CLINICAL TRIALS
AIPAC - Phase IIb
AIPAC (Active Immunotherapy PAClitaxel) evaluates efti in combination with paclitaxel, a standard of care chemotherapy, as
a chemo-immunotherapy combination. The trial is a randomised, double blinded, placebo-controlled clinical study with 226
evaluated HR+ metastatic breast cancer patients and is taking place across in more than 30 clinical trial sites in Germany,
the UK, France, Hungary, Belgium, Poland and the Netherlands. The combination therapy aims to boost the body’s immune
response against tumour cells compared to chemotherapy plus placebo.
In March 2020, Immutep reported the first results from AIPAC, including supportive efficacy data. PFS results showed that
efti provided an improvement for patients compared to the placebo group at the 6-month landmark. In addition, efti demon-
strated an increased Overall Response Rate (ORR) of 48.3% compared to 38.4% in the placebo group. Favourable results
were also reported in multiple predefined patient subgroups and these are being explored in greater detail. Importantly,
Overall Survival results are expected to be reported by the end of calendar year 2020.
TACTI-002 - Phase II
TACTI-002 (Two ACTive Immunotherapies) is Immutep’s Phase II study evaluating the combination of efti with KEYTRU-
DA® (or pembrolizumab, an anti-PD-1 therapy) in up to 109 patients with second line HNSCC or NSCLC in first and second
line. The study is taking place at 12 clinical sites across Australia, Europe, the UK and US and is being conducted in collab-
oration with Merck & Co., Inc., Kenilworth, NJ, USA (known as “MSD” outside the United States and Canada).
In November 2019, Immutep reported the first preliminary safety and efficacy data from the TACTI-002 study. More mature
data has been presented regularly in January, February, April and June 2020 with consistently encouraging findings in
different patient cohorts.
For a first cohort of patients with first line NSCLC (stage 1 of Part A) median PFS is estimated to be more than 9 months, a
remarkable achievement for patients with such advanced cancer. The ORR for this group is an encouraging 53% and 71%
of patients had tumour shrinkage.
Immutep reported the first Complete Response (complete disappearance of target lesion) from a patient with second line
HNSCC (Part C) in its most recent data. In addition, the ORR of stage 1 of Part C is 38.9% and 44% of patients had tumour
shrinkage. Initial efficacy results have not yet been reported from patients with second line NSCLC (stage 1 of Part B) as
recruitment was only completed in August 2020.
Recruitment for both patient cohorts (stages 1 and 2) of Part A and stage 1 of Part B (second line NSCLC) of the study has
recently been completed, while recruitment is ongoing for stage 2 of Part C (second line HNSCC). In total 87 patients out of
up to 109 (80%) are already enrolled and participating in the trial in August 2020.
TACTI-mel - Phase I
TACTI-mel (Two ACTive Immunotherapies in melanoma) is Immutep’s Phase I clinical trial evaluating efti with MSD’s
KEYTRUDA® in 24 patients with unresectable or metastatic melanoma that have had either a suboptimal response or had
disease progression with pembrolizumab monotherapy. TACTI-mel is a multi-centre, open label clinical trial involving four
cohorts of six patients per cohort. It is testing the same combination treatment as TACTI-002, as detailed above.
Immutep reported positive final efficacy data from its TACTI-mel trial which confirmed deep durable responses to the com-
bination treatment, in October 2019. 12 patients (50%) had a decrease of ≥ 75% in the target lesions and 9 patients (38%)
were treated for ≥ 12 months with pembrolizumab and efti. The results also determined that 30 mg of efti was the recom-
mended dosage level for Phase II trials recruiting patients treated with an anti-PD-1 therapy and this is the dosage level
currently being used in the ongoing TACTI-002 Phase II trial.
TACTI-mel confirmed efti’s favourable safety profile in combination with pembrolizumab with no dose-limiting toxicities.
7
CONTINUED REVIEW OF OPERATIONS AND ACTIVITIES
Efti Manufacturing
During the financial year 2020, Immutep commenced some of the steps towards upscaling the manufacturing process of efti
from 200L to 2,000L single-use bioreactors at the WuXi Biologics manufacturing plant (Wuxi, China). This work program
prepares for potential commercial manufacturing and additional registration trials in multiple indications. It is planned to
recommence as Immutep advances its clinical development program for efti.
Separately, Immutep’s partner in China, EOC Pharma, has also started upscaling manufacturing to 2,000L.
IMP761 – preclinical development
IMP761 is an immunosuppressive agonist antibody to LAG-3. It is the first agonist antibody that targets the immune check-
point LAG-3 for the treatment of autoimmune diseases, such as inflammatory bowel diseases, rheumatoid arthritis, and
multiple sclerosis.
Immutep continued cell line development and the manufacturing steps for IMP761 during the financial year. The Company’s
manufacturing partner for IMP761, Batavia Biosciences, made significant progress in the cell line development, delivering
a pharmaceutical-grade, stable CHO cell line that produces sufficient yields for the clinical development of IMP761. The
program is now working on the completion of cell line development.
IMP761 preclinical research results were published in the peer reviewed Journal of Immunology during the financial year.
CLINICAL DEVELOPMENT BY IMMUTEP’S PARTNERS
Novartis - IMP701 – Phase II
Novartis is Immutep’s partner for the development of LAG525, which is a humanised LAG-3 antagonist antibody derived
from its IMP701 antibody.
In total, Novartis has five clinical trials ongoing for LAG525 in multiple cancer indications, including a Phase II clinical trial in
triple negative breast cancer. Across the five trials, LAG525 will be evaluated in a total of more than 1,000 patients, signifi-
cantly enhancing the value of this product candidate.
GlaxoSmithKline (GSK) - IMP731 - Phase I
GSK is Immutep’s partner for GSK2831781, which is derived from the Company’s IMP731 antibody.
GSK is conducting a Phase II clinical study evaluating GSK2831781 in 242 ulcerative colitis patients. The first patient being
dosed September 2019 prompted a milestone payment of GBP4m (AU$7.4m). The study is expected to be fully completed in
August 2022 with clinical proof of concept expected in the first half of calendar year 2021.
GSK also completed a Phase I study in 36 healthy Japanese and Caucasian volunteers in December 2019.
CYTLIMIC – Phase I
Immutep continued to collaborate with CYTLIMIC to prepare for clinical trials evaluating efti as part of a cancer peptide vac-
cine, called CYT001, in patients with advanced or metastatic solid cancer. The cancer vaccine is comprised of the combina-
tion immunotherapy of a HSP70 derived peptide, a GPC3 derived peptide, Immutep’s IMP321 (efti) and Hiltonol.
CYTLIMIC reported positive results from its YNP01 Phase I clinical trial of CYT001 in early 2020, showing that approximate-
ly 70% of patients showed an immune response to each peptide. The results were published in the scientific peer-reviewed
journal, Cancer Immunology, Immunotherapy.
8
CONTINUED REVIEW OF OPERATIONS AND ACTIVITIES
In addition, in June 2020 interim results from a second Phase I study of CYT001, called YCP02, showed that tumour cell
death and infiltration of T cells into tumour regions was observed in 6 out of 9 patients.
CYTLIMIC is also collaborating with Chiba University in Japan to start a new Phase I trial of CYT001, called CRESCENT1.
EOC Pharma – IMP321 - Phase I
In March 2020, Immutep’s partner and Chinese licensee, EOC Pharma, completed patient recruitment for its ongoing Phase
I EOC202A1101 study being conducted in China. The study tests efti (designated as EOC202 in China) in patients with met-
astatic breast cancer. The results from the trial are expected to be reported by EOC Pharma in FY 2021.
EOC Pharma also confirmed its plans to continue advancing efti following its analysis of the PFS data, including subgroup
analysis, from Immutep’s Phase IIb AIPAC study, detailed above. This includes manufacturing scale up work.
EOC Pharma holds the development and commercialisation rights to efti in Greater China.
INSIGHT – Phase I
INSIGHT is a Phase I study is being conducted by Immutep’s partner, and trial sponsor, IKF, in Germany and is evaluating
efti in advanced solid cancers.
The INSIGHT trial includes a 4th arm, called INSIGHT-004.
INSIGHT-004 is a Phase I study being conducted as the 4th arm of the ongoing INSIGHT Phase I clinical trial and is being
conducted as an amendment under the existing protocol of INSIGHT. The Institute of Clinical Cancer Research, Kranken-
haus Nordwest GmbH in Frankfurt, Germany (“IKF”) is the sponsor of the clinical trial which evaluates the combination of
efti with avelumab, a human anti-PD-L1 antibody, in 12 patients with different advanced solid malignancies, primarily with
gastrointestinal indications. It is the first study of an approved and marketed anti-PD-L1 drug in combination with efti.
In April 2020, INSIGHT-004 reached full patient recruitment and first data was reported in May 2020. Encouraging early
efficacy signals have been observed in a variety of cancer indications Importantly, the combination treatment of efti and
avelumab seems to be safe and well tolerated, with no new safety signals or dose limiting toxicities to date. Further data
from the study is expected to be reported by the end of calendar year 2020.
Intellectual Property
Throughout the financial year 2020, Immutep continued to build its intellectual property position. This included receiving four
new patents during the financial year. The Company has a total of 12 patent families relating to its product candidates and
related technologies.
In August 2019, the European Patent Office granted a new patent entitled “LAG-3 dosage regime for use in the treatment of
cancer” providing further intellectual property protection for Immutep’s method of treating cancer by the administration of a
plurality of doses of a recombinant LAG-3 protein or a derivative thereof.
Also protecting efti, the Japanese Patent Office granted Immutep a new patent entitled “Combined Preparations for the
Treatment of Cancer” in May 2020. It relates to the use of efti in combined therapeutic preparations with a chemotherapy
agent and follows the grant of similar European and Australian patents in May 2019 and June 2019, respectively.
In addition, the Company strengthened its intellectual property protection for its therapeutic antibody, LAG525, which is
licensed by Novartis, with two new patents. In September 2019, the Japanese Patent Office granted a patent for LAG525
by, entitled “Antibody molecules to LAG-3 and uses thereof.” Similarly, the European Patent Office granted a patent with the
same title in November 2019. These patents relate to LAG525 and its use in the treatment of cancer and infectious disease.
9
CONTINUED REVIEW OF OPERATIONS AND ACTIVITIES
Financial Performance
Licensing revenue increased significantly from A$140K in FY 2019 to A$7.49 million in FY 2020, mainly attributed to the
GSK milestone payment of GBP 4 million (A$7.49 million) received in this fiscal year related to the first patient being dosed
in GSK’s Phase II clinical trial evaluating GSK2831781 in ulcerative colitis.
The research material sales decreased from A$1.16 million in FY 2019 to A$280k in FY 2020 due to a single bigger pur-
chase by customer in FY 2019.
In June 2020, Immutep received a cash rebate of A$1.44 million from the Australian Federal Government’s R&D tax in-
centive program, which was provided in respect of expenditure incurred on eligible research and development activities con-
ducted in FY 2019 mainly related to the TACTI-mel and TACTI-002 trials being conducted in Australia. In addition, Immutep
has recognised approximately A$1.16 million grant income from the Australian Federal Government’s R&D tax incentive
program for FY 2020.
The Company’s French subsidiary received two cash grants from the French Crédit d’Impôt Recherche (CIR) scheme during
the financial year: 1) In October 2019, it received €1.57 million (approximately A$2.58 million) for the eligible research and
development expenditures incurred in the 2018 calendar year in Europe. 2) In May 2020, it received €2.17 million (approxi-
mately A$3.58 million) for the eligible research and development expenditures incurred in the 2019 calendar year in Europe.
The French subsidiary has also recognised A$1.98 million grant income from the French Crédit d’Impôt Recherche scheme
for the expenditure incurred on eligible research and development activities conducted in first half of calendar year 2020.
Interest income decreased from A$397K in FY 2019 to A$200K in FY 2020. The decrease was mainly due to the decrease
in weighted average interest rates. Total revenue and other income increased from A$7.49 million in FY 2019 to A$16.50
million in FY 2020, which is a 120% increase.
Research and development and intellectual property expenses increased from A$16.59 million in FY 2019 to A$20.40
million in FY 2020. The significant increase was expected and was primarily due to the increased clinical trial activities,
especially in TACTI-002 and AIPAC.
Whilst clinical trial costs related to AIPAC and TACTI-mel are expected to decline further given both of these trials are being
finalised, costs related to TACTI-002 are expected to rise further as the predefined number of patient responses to the com-
bination treatment were observed in the initial patient cohorts, warranting further recruitment of patients into stage 2 of two
of the three patient Parts so far.
Corporate administrative expenses for FY 2020 were A$6.34 million compared to A$6.37 million for FY 2019.
The loss after tax for FY 2020 of A$13,468,232 was significantly lower compared to A$18,343,984 for FY 2019, mainly due
to the significant increase in the license revenue.
On behalf of the Board and management team of Immutep, we thank you for your continued support and look forward to
updating you with more data results in the months ahead.
Outlook
Immutep continues to be the worldwide leader in developing LAG-3 therapeutics. Its LAG-3 technologies have been evalu-
ated in 12 active clinical trials and almost 2,000 patients across the globe. The Company continued to build the value of its
lead product candidate, efti, throughout 2020 by advancing multiple clinical trials and reporting supportive and encouraging
data from these studies, including AIPAC, TACTI-002 and TACTI-mel.
Looking ahead, Immutep will be reporting multiple data read-outs in the coming financial year, including further clinical trial
results from its TACTI-002 and INSIGHT-004, along with Overall Survival results from AIPAC.
10
CONTINUED REVIEW OF OPERATIONS AND ACTIVITIES
In addition, it has committed partnerships in place with five of the world’s largest pharmaceutical companies: Merck, Pfizer,
Merck MSD, Novartis and GSK, plus our partner in China, EOC Pharma building the Company’s network and business
development opportunities.
Sincerely,
Mr Marc Voigt
Executive Director & Chief Executive Officer (CEO)
Immutep Limited
25 August 2020
11
CONTINUED DIRECTORS’ REPORT
The directors present their report on the consolidated entity (referred to hereafter as the ‘consolidated entity’ or ‘Group’)
consisting of Immutep Limited (referred to hereafter as the ‘Company’ or ‘parent entity’) and the entities it controlled at the
end of, or during, the year ended 30 June 2020.
Directors
The following persons were directors of Immutep Limited during the whole of the financial year and up to the date of this report:
Dr Russell Howard (Non- Executive Chairman)
Mr Pete Meyers (Non-Executive Director & Deputy Chairman)
Mr Marc Voigt (Executive Director & Chief Executive Officer)
Mr Grant Chamberlain (Non-Executive Director)
Principal activities
Immutep is a globally active biotechnology company that is a leader in the development of LAG-3 related immunotherapeu-
tic products for cancer and autoimmune disease. It is dedicated to leveraging its technology and expertise to discover and
develop novel immunotherapies, and to partner with leading organisations to bring innovative treatment options to market
for patients.
Its lead product candidate is eftilagimod alpha (“efti” or “IMP321”), a soluble LAG-3Ig fusion protein based on the LAG-3 im-
mune control mechanism, which is in clinical development for the treatment of cancer. Immutep has two other clinical candi-
dates (IMP701 and IMP731) that are fully licensed to major pharmaceutical partners, and a fourth candidate (IMP761) which
is in pre-clinical development for autoimmune disease. Immutep is listed on the Australian Securities Exchange (IMM), and
on the NASDAQ (IMMP) in the United States.
Dividends
There were no dividends paid or declared during the current or previous financial year.
Review of operations
The loss after tax for the consolidated entity amounted to $13,468,232 (30 June 2019: $18,343,984).
The novel coronavirus (COVID-19), was declared a world-wide pandemic by the World Health Organisation in March 2020.
The Group is monitoring the potential impact of COVID-19, if any, on the carrying value of certain assets. The number one
priority for the Group has been and remains the health and safety of our team members and patients. The Group has
worked closely with the hospitals and trial sites, to ensure we implemented all measures to safeguard our employees and
patients. From a clinical perspective, COVID-19 had a limited impact on the operations and financial performance during
the financial year ended 30 June 2020.
Patient recruitment has progressed for our trials of TACTI-002 and INSIGHT-004 however, patient recruitment in the future
could be affected. The Group has managed to address these challenges without a material impact on our clinical program
and financial performance for the year. However, the extent to which these events may influence the Group’s business mov-
ing forward will depend on future developments, which are highly uncertain and cannot be predicted at this time. The Group
will continue to assess the impact on every level.
This is further described in detail in the Review of Operations and Activities on page 6.
Significant changes in the state of affairs
During the year, the Company had successfully completed two capital raisings in Australia, raising a total of $22m. The first
capital raise was completed earlier in the financial year (with $4m from a placement offer and $6m from a fully underwritten,
non-renounceable entitlement offer).
12
DIRECTORS’ REPORT
The capital raising in April 2020 successfully raised $12 million before transaction cost with existing and new institutional
investors. The proceeds from the raise will drive development of Immutep’s immuno-oncology and autoimmune programs
including its lead product candidate, eftilagimod alpha.
The two raisings during the financial year has strengthened the Group’s balance sheet ahead of a number of key clinical
data value inflection points thus extending the Group’s cash reach to end of 2021 calendar year.
There were no other significant changes in the state of affairs of the Group during the financial year.
Matters subsequent to the end of the financial year
On 4 August 2020, Ridgeback Capital Investments’ 37,144,524 warrants lapsed. These warrants were issued with the con-
vertible notes issued to Ridgeback Capital Investments on 4 August 2015.
No other matter or circumstance has arisen since 30 June 2020, that has significantly affected the Group’s operations, re-
sults, or state of affairs, or may do so in future years.
Likely developments and expected results of operations
Information on likely developments in the operations of the consolidated entity are included in the Review of Operations and
Activities on page 6. Information on the expected results of operations have not been included in this report because the
directors believe it would be likely to result in unreasonable prejudice to the consolidated entity.
Environmental regulation
Immutep’s activities in respect of the conduct of preclinical and clinical trials and the manufacturing of drugs are undertaken
in accordance with applicable environment and human safety regulations in each of the jurisdictions in which the company
has operations. The Company is not aware of any matter that requires disclosure with respect to any significant regulations
in respect of its operating activities and believes that there have been no issues of non-compliance during the period.
The consolidated entity is not subject to any significant environmental regulation under Australian Commonwealth or State law.
13
CONTINUED Non-Executive Chairman
PhD
Dr. Russell Howard is an Australian scientist, executive manager,
and entrepreneur. He was a pioneer in molecular parasitology
and commercialisation of “DNA Shuffling”. He is an inventor of 9 patents
and has over 140 scientific publications. After his PhD in biochemistry from the University of
Melbourne, he held positions at several research laboratories, including the National Institutes of
Health in the USA where he gained tenure. In industry, Dr. Howard worked at Schering-Plough’s
DNAX Research Institute in Palo Alto, CA; was the President and Scientific Director of Affymax,
Inc. and co-founder and CEO of Maxygen, Inc. After its spin-out from GlaxoWellcome, as Maxy-
gen’s CEO, Dr. Howard led its IPO on NASDAQ and a secondary offering, raising US$ 260 mil-
lion. Maxygen developed and partnered dozens of technology applications and products over 12
years of his tenure as CEO. After leaving Maxygen in 2008, he started the Cleantech company
NovoNutrients Inc. (formerly Oakbio, Inc.) and remains involved in several innovative companies
in the USA and Australia. He is currently Executive Chairman of NeuClone Pty Ltd.
Appointed as Non-Executive Director on 8 May 2013 and appointed as Non-Executive Chairman
on 17 November 2017
None
None
Chair of Remuneration Committee and Member of Audit and Risk Committee
Non-Executive Director and Deputy Chairman
BS, MBA
Pete Meyers is currently the Chief Financial Officer of Eagle
Pharmaceuticals, Inc. (NASDAQ: EGRX). Prior to joining
Eagle Pharmaceuticals, Mr. Meyers served in Chief Financial Officer
roles at Motif BioSciences Inc. and TetraLogic Pharmaceuticals Corporation. Prior to his role at
TetraLogic, Mr. Meyers spent 18 years in health care investment banking, holding positions of
increasing responsibility at Dillon, Read & Co., Credit Suisse First Boston LLC and, most recent-
ly, as Co-Head of Global Health Care Investment Banking at Deutsche Bank Securities Inc. Mr.
Meyers is the Chairman and President of The Thomas M. Brennan Memorial Foundation, Inc.,
and also serves on the Board of Directors of East End Hospice, Inc. He earned a Bachelor of
Science degree in Finance from Boston College and a Master of Business Administration degree
from Columbia Business School.
Appointed as Non-Executive Director on 12 February 2014 and appointed as Non-Executive
Deputy Chairman on 17 November 2017
None
None
Chairman of the Audit & Risk Committee, Member of the Remuneration Committee
DIRECTORS’ REPORT
Information on directors
Dr Russell Howard
Qualifications
Experience and expertise
Date of appointment
Other current directorships
Former directorships
(in the last 3 years)
Special responsibilities
Mr Pete Meyers
Qualifications
Experience and expertise
Date of appointment
Other current directorships
Former directorships
(in the last 3 years)
Special responsibilities
-
-
-
-
-
-
-
-
-
-
-
-
-
-
14
CONTINUED DIRECTORS’ REPORT
Mr Marc Voigt
Qualifications
Experience and expertise
Date of appointment
Other current directorships
Former directorships
(in the last 3 years)
Special responsibilities
Mr Grant Chamberlain
Qualifications
Experience and expertise
Date of appointment
Other current directorships
Former directorships
(in the last 3 years)
Special responsibilities
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Executive Director & Chief Executive Officer (CEO)
MBA
Marc has more than 20 years of experience in the financial and biotech
industry, having joined the Immutep team in 2011 as the General
Manager, European Operations based in Berlin, Germany. In May 2012,
he became Immutep ’s Chief Business Officer and in November 2012 its Chief Financial Officer,
as well as continuing to focus on its European operations. Having started his career at the Allianz
Group working in pension insurances and funds, he moved to net.IPO AG, a publicly listed bou-
tique investment bank in Frankfurt where he was focused on IPOs and venture capital invest-
ments. Marc then worked for a number of years as an investment manager for a midsize venture
capital fund based in Berlin, specialising in healthcare. He also gained considerable operational
experience while serving in different management roles with Revotar Biopharmaceuticals, Capro-
tec Bioanalytics and Medical Enzymes AG respectfully, where he handled several successful
licensing transactions and financing rounds. Since 2001, Marc has been a judge and coach in
BPW, Germany’s largest regional start-up initiative.
9 July 2014
None
None
None
Non-Executive Director
LLB (Hons), BCom
Mr Chamberlain is a partner of One Ventures, one of Australia’s leading
venture capital firms. Prior to joining OneVentures in 2017
Mr. Chamberlain was Head of Mergers & Acquisitions and Financial
Sponsors Australia at Bank of America Merrill Lynch. Prior to joining Bank of America Merrill
Lynch in 2013, Mr Chamberlain held senior positions at Nomura Australia and Deutsche Bank.
He has over 20 years’ experience in investment banking and advised on many of the largest
mergers and acquisitions transactions in Australia during that time. He began his career as a
corporate lawyer at Freehill Hollingdale & Page. Mr Chamberlain earned a Bachelor of Laws with
Honors and a Bachelor of Commerce from the University of Melbourne.
21 August 2017
None
None
Member of the Audit and Risk Committee and Remuneration Committee
15
CONTINUED DIRECTORS’ REPORT
Meetings of directors
The number of meetings of the Company’s Board of Directors and of each board committee held during the year ended 30
June 2020, and the number of meetings attended by each director were:
Dr Russell Howard
Mr Pete Meyers
Mr Marc Voigt
Mr Grant Chamberlain
Full Board
Remuneration Committee
Audit and Risk Committee
Attended
Held
Attended
Held
Attended
Held
4
3
4
4
4
4
4
4
1
-
-
1
1
1
-
1
2
2
-
2
2
2
-
2
Held: represents the number of meetings held during the time the director held office or was a member of the
relevant committee.
Management directory
Ms Deanne Miller,
Chief Operating Officer, General Counsel & Company Secretary
Ms Miller has broad commercial experience having held legal, investment banking, regulatory com-
pliance and tax advisory positions, including, Legal Counsel at RBC Investor Services, Associate
Director at Westpac Group, Legal & Compliance Manager at Macquarie Group, Regulatory Compli-
ance Analyst at the Australian Securities and Investment Commission, and Tax Advisor at KPMG.
She joined the Company as General Counsel and Company Secretary in October 2012 and was
promoted to the role of Chief Operating Officer in November 2016. She has a Combined Bachelor of Laws (Honours) and
Bachelor of Commerce, Accounting and Finance (double major) from the University of Sydney. She is admitted as a solicitor
in NSW and member of the Law Society of NSW.
Dr Frédéric Triebel,
Chief Scientific Officer & Chief Medical Officer
Frédéric Triebel, MD Ph.D., was the scientific founder of Immutep S.A. (2001) and served as the
Scientific and Medical Director at Immutep from 2004. Before starting Immutep S.A., he was Pro-
fessor in Immunology at Paris University. While working at Institut Gustave Roussy (IGR), a large
cancer centre in Paris, he discovered the LAG-3 gene in 1990 and continued working on this re-
search program since then, identifying the functions and medical usefulness of this molecule. He
headed a research group at IGR while also being involved in the biological follow-up of cancer patients treated in Phase I/II
immunotherapy trials. He was Director of an INSERM Unit from 1991 to 1996.
First trained as a clinical haematologist, Prof. Triebel holds a Ph.D. in immunology (Paris University) and successfully
developed several research programs in immunogenetics and immunotherapy, leading to 144 publications and 16 patents.
16
CONTINUED DIRECTORS’ REPORT
REMUNERATION REPORT (AUDITED)
The Directors are pleased to present the 2020 remuneration report which sets out remuneration information for Immutep
Limited’s Non-Executive Directors, Executive Directors, and key management personnel.
Directors and key management personnel disclosed in this report
Name
Dr Russell Howard
Mr Pete Meyers
Mr Marc Voigt
Mr Grant Chamberlain
Key management personnel
Ms Deanne Miller
Dr Frédéric Triebel
Position
Non-Executive Chairman
Non-Executive Director and Deputy Chairman
Executive Director & Chief Executive Officer
Non-Executive Director
Chief Operating Officer, General Counsel & Company Secretary
Chief Scientific Officer & Chief Medical Officer
The remuneration report is set out under the following main headings:
A Principles used to determine the nature and amount of remuneration
B Details of remuneration
C Service agreements
D Share-based compensation
A. Principles used to determine the nature and amount of remuneration
Remuneration Policy
Remuneration of all Executive and Non-Executive Directors and Officers of the Company is determined by the
Remuneration Committee.
Remuneration Governance
The Remuneration Committee is a committee of the board. It is primarily responsible for making recommendations to
the board on:
• Non-Executive Director fees
•
•
•
remuneration levels of Executive Directors and other key management personnel
the over-arching executive remuneration framework and operation of the incentive plan, and
key performance indicators (KPI) and performance hurdles for the executive team.
Their objective is to ensure that remuneration policies and structures are fair and competitive and aligned with the long-term
interests of the Company.
The Corporate Governance Statement provides further information on the role of this committee.
17
CONTINUED DIRECTORS’ REPORT
Non-Executive Directors’ fees
Non-executive directors’ cash fees are determined within an aggregate directors’ fee pool limit, which is periodically recom-
mended for approval by shareholders. The maximum currently stands at $500,000 per annum and was approved by share-
holders at the annual general meeting on 26 November 2010.
The remuneration paid to each director is inclusive of committee fees. No retirement benefits are payable other than statuto-
ry superannuation, if applicable.
The 4th edition of the Corporate Governance Principles and Recommendations released by the ASX Corporate Governance
Council (Council) specifies that it is generally acceptable for non-executive directors to receive securities as part of their
remuneration to align their interest with the interests of other security holders, however non-executive directors should not
receive performance-based remuneration as it may lead to bias in their decision making and compromise their objectivity.
Accordingly, as a means of attracting and retaining talented individuals, given the fiscal constraints of a development stage
company, the Board has chosen to grant equity in the form of performance rights which vest based only on meeting
continuous service conditions. Non-Executive Directors do not receive performance-based bonuses and prior shareholder
approval is required to participate in any issue of equity.
Executive remuneration policy and framework
In determining executive remuneration, the board aims to ensure that remuneration practices are:
•
•
•
competitive and reasonable, enabling the Company to attract and retain key talent from both the domestic and
international market places,
aligned to the Company’s strategic and business objectives and the creation of shareholder value, transparent, and
acceptable to shareholders.
The executive remuneration framework has three components:
•
•
•
base pay and benefits, including superannuation, social security payments and health insurance
short-term performance incentives, and
long-term incentives through participation in employee option plans and the grant of performance rights.
Executive remuneration mix
In accordance with the Company’s objective to ensure that executive remuneration is aligned to Company performance, a
portion of the executives’ target pay is “at risk”.
Base pay and benefits
Executives receive their base pay and benefits structured as a total employment cost (TEC) package which may be deliv-
ered as a combination of cash and prescribed non-financial benefits at the executives’ discretion. Executives are offered a
competitive base pay that comprises the fixed component of pay and rewards.
Independent remuneration information is obtained from sources such as independent salary surveys to ensure base pay is
set to reflect the market for a comparable role. Base pay for executives is reviewed annually to ensure the executive’s pay is
competitive with the market.
In order to obtain the experience required to achieve the Company’s goals, it has been necessary to recruit management
from the international marketplace. Accordingly, executive pay is also viewed in light of the market from which our execu-
tives are recruited in order to be competitive with the relevant market.
An executive’s pay is also reviewed on promotion. There are no guaranteed base pay increases included in any executives’
contracts. Superannuation benefits are paid on behalf of Australian based executives.
At this stage of the Company’s development, shareholder return is enhanced by the achievement of milestones in the devel-
opment of the Company’s products. The Company’s Remuneration Policy is not directly based on its financial performance,
rather on industry practice, given the Company operates in the biotechnology sector and the Company’s primary focus is
18
CONTINUED DIRECTORS’ REPORT
research activities with a long-term objective of developing and commercialising the research & development results. At se-
nior management level, performance pay is partly determined by achieving successful capital raising milestones to support
its clinical programs and the achievement of clinical milestones and business development activities in a manner that aligns
the executive’s performance pay with value creation for shareholders.
The Company envisages its earnings will remain negative whilst the Company continues in the research and development
phase. Shareholder wealth reflects this speculative and volatile market sector.
Short-term incentives
Executives have the opportunity to earn an annual short-term incentive (STI) depending on their accountabilities and impact
on the organisation. STIs may be awarded at the end of a performance review cycle for meeting group and individual mile-
stone achievements that align to the Company’s strategic and business objectives at the discretion of the board.
The remuneration committee is responsible for determining the amount of STI to be awarded. To assist in this assessment,
the committee receives reports on performance from management. The committee has the discretion to adjust short-term
incentives downwards in light of unexpected or unintended circumstances.
In the current pre-commercialisation stage of the Company’s development, it is the Board’s preference to issue non-cash
STIs except in unusual circumstances.
Non-cash STIs are granted under the Executive Incentive Plan (EIP) which was approved by shareholders at the 2018 An-
nual General Meeting. In light of our global operations the Board adopted the Company’s incentive arrangements to ensure
that it continues to retain and motivate key executives in a manner that is aligned with shareholders’ interests. The Com-
pany’s ‘umbrella’ EIP was adopted to allow eligible executives to apply for the grant of performance rights and/or options.
Equity incentives granted in accordance with the EIP Rules are designed to provide meaningful remuneration opportunities
and will reflect the importance of retaining a world-class management team. The Company endeavours to achieve simplicity
and transparency in remuneration design, whilst also balancing competitive market practices in the United States, France,
Germany, and Australia.
Long-term incentives
Long-term incentives (LTI) are also provided to certain employees via the EIP. The LTI is intended to:
•
•
•
•
reward high performance and to encourage a high-performance culture
align the interest of executives and senior management with those of the company and shareholders
provide the company with the means to compete for talented staff by offering remuneration that includes an
equity-based component, like many of its competitors
assist with the attraction and retention of key personnel.
Executives and senior managers eligible to participate in the LTI are considered by the Board to be in roles that have the
opportunity to significantly influence long-term shareholder value.
The Company may issue eligible participants with performance rights which entitle the holder to subscribe for or be trans-
ferred one fully paid ordinary share of the Company for no consideration. Equity-settled performance rights carry no divi-
dend or voting rights.
The performance rights are issued to executive directors and employees for no consideration and are subject to the con-
tinuing employment and lapse upon resignation, redundancy or termination, or failure to achieve the specified performance
vesting condition. The performance rights will immediately vest and become exercisable if in the Board’s opinion a vesting
event occurs (as defined in the plan rules) such as a takeover bid or winding up of the Company. If the performance rights
vest and are exercised, the employee receives ordinary shares in the Company for no consideration.
Voting and comments made at the Company’s 2019 Annual General Meeting
The Company received 92.96% “yes” votes and 2.27% undirected proxies open to the chair to vote in favor of the resolution
on its remuneration report for the 2019 financial year. The Company addressed specific feedback at the AGM or throughout
the year on its remuneration practices.
19
CONTINUED DIRECTORS’ REPORT
B. Details of remuneration
Amounts of remuneration
Details of the remuneration of the directors and key management personnel (defined as those who have the authority and
responsibility for planning, directing, and controlling the major activities of the consolidated entity) are set out in the follow-
ing tables.
30-Jun-20
Dr R Howard
Mr P Meyers
Mr G Chamberlain
Mr M Voigt
Short-term Benefits
Post
Employ-
ment
Benefits
Long-term
Benefits
Share-based
Payments
Total
Cash
salary
and fees
Cash
bonus
Non
Monetary*
Super-
annuation
Long
service
leave
Executive
Performance
Rights*
Options
Issued
$
$
$
$
$
$
$
$
82,192
-
-
-
-
-
60,7251
187,0462
45,0503
411,418**
45,000
7,808
-
-
-
-
-
-
-
-
-
-
-
-
469,8304,5
325,3134,6
23,750
31,558
6,367
219,5454,6
6,367
1,014,688
-
-
-
-
-
-
-
150,725
187,046
45,050
926,248
604,436
499,662
2,413,167
-
-
-
Other Key Management Personnel
Dr F Triebel
Ms D Miller
279,123**
-
220,000
30,000
992,733
75,000
292,821
All performance rights and share prices have been adjusted for the 10 to 1 share consolidation in November 2019..
* The remuneration recognised for Non-Monetary benefits and Executive performance rights is measured in accordance with AASB 2 Share Based payments at the
historical grant date fair value. If the amounts were measured at the 30 June share price, the amounts disclosed would be $152,269 for Non-Monetary benefits and
$600,009 for Executive Performance Rights.
** The cash salary for both Mr Voigt and Dr Triebel remains the same as FY 2019. The variances are from the foreign currency translation.
1 Dr Russell Howard was issued 1,000,000 performance rights to vest over 4 tranches in accordance with shareholder approval received at the AGM on 16 November
2018. The 1,000,000 performance rights were granted in lieu of additional cash to compensate Dr Howard for his additional responsibilities due to his elevation to the
role of Chairman following the retirement of the previous Chairman from the date of the 2017 AGM. As explained in the Appendix 3Y for Dr Howard released to ASX on
22 December 2017 and the 2018 AGM notice of meeting, the total number of performance rights proposed by the Company was calculated based on 4 years of director’s
fees at $60,000 p.a. divided by $0.24 (being the 5 day VWAP up to and including 15 December 2017). However, the fair value of Dr Howard’s performance rights for the
purposes of this financial report reflects the prevailing share price as at the date of shareholder approval of his performance rights, in accordance with the applicable
accounting standards.
The first tranche of 250,000 performance rights vested on 1 December 2018 (being for continued service from 18 November 2017 to 17 November 2018). The second
tranche of 250,000 performance rights vested on 1 December 2019 (being for continued service from 18 November 2018 to 17 November 2019). The third tranche of
250,000 performance rights is due to vest on 1 December 2020 (being for continued service from 18 November 2019 to 17 November 2020). The final 250,000 rights will
vest on 1 December 2021 (being continued service from 18 November 2020 to 17 November 2021).
2 Mr Pete Meyers was issued 1,002,335 performance rights to vest over 4 tranches in lieu of cash for his services as a non-executive director, in accordance with share-
holder approval received at the AGM on 25 November 2016. As indicated in the 2016 AGM notice of meeting, the number of performance rights was calculated based
on 3.67 years of directors’ fees at $105,000 p.a. divided by $0.384 (being the 5-day VWAP up to and including 9 September 2016). However, the fair value of his perfor-
mance rights reflects the prevailing share price as at the date of shareholder approval. The first tranche of 181,425 performance rights vested on 1 October 2017 (being
for service from 1 February 2017 to 30 September 2017). The second tranche of 273,636 performance rights vested on 1 October 2018 (being for service from 1 October
2017 to 30 September 2018). The third tranche of 273,637 performance rights vested on 1 October 2019 (being for service from 1 October 2018 to 30 September 2019).
The final 273,637 will vest on 1 October 2020 (being for service from 1 October 2019 to 30 September 2020).
On 2 December 2019, Mr Pete Meyers was issued 1,500,000 performance rights to vest over 3 tranches in lieu of cash for his services as a non-executive director, in
accordance with shareholder approval received at the AGM on 1 November 2019. As indicated in the 2016 AGM notice of meeting, the number of performance rights
was calculated based on 3 years of directors’ fees at $105,000 p.a. divided by $0.21 (being the closing share price on 14 August 2019). However, the fair value of his
performance rights reflects the prevailing share price as at the date of shareholder approval.
The first tranche of 500,000 performance rights (Post share consolidation) will vest on 1 October 2021 (being for service from 1 October 2020 to 30 September 2021).
The second tranche of 500,000 performance rights due to vest on 1 October 2022 (being for service from 1 October 2021 to 30 September 2022). The third tranche of
500,000 performance rights due to vest 1 October 2023 (being for service from 1 October 2022 to 30 September 2023).
3 Mr G Chamberlain was issued 1,327,236 performance rights to vest over 3 tranches in lieu of cash for his services as a non-executive director, in accordance with
shareholder approval received at the AGM on 17 November 2017. As indicated in the 2017 AGM notice of meeting, the number of performance rights was calculated
based on 3.12 years of directors’ fees at $90,000 p.a. divided by $0.2111 (being the 5-day VWAP up to and including 21 August 2017). However, the fair value of the
performance rights reflects the prevailing share price as at the date of shareholder approval.
20
CONTINUED DIRECTORS’ REPORT
The first tranche of 473,929 performance rights vested on 1 October 2018 (being for service from 21 August 2017 to 30 September 2018). The second tranche of
426,653 performance rights vested on 1 October 2019 (being for service from 1 October 2018 to 30 September 2019). The third tranche of 426,654 performance rights is
due to vest on 1 October 2020 (being for service from 1 October 2019 to 30 September 2020).
4 Vesting dates for the Performance Rights issued to Mr M Voigt, Ms D Miller, and Dr F Triebel on 4 December 2017 were as follows: One-third vested on 1 December
2017 to Mr M Voigt, Ms D Miller, and Dr F Triebel; One-third vested on 1 December 2018 to Mr M Voigt, Ms D Miller, and Dr F Triebel; One-third vested on 1 December
2019 to Mr M Voigt, Ms D Miller, and Dr F Triebel.
5 On 2 December 2019, Mr Marc Voigt was issued 3,600,000 performance rights to vest over 3 tranches, in accordance with shareholder approval received at the AGM
on 1 November 2019. One-third is due to vest on 1 October 2020; One-third is due to vest on 1 October 2021 and One-third is due to vest on 1 October 2022. Vesting
is contingent upon the employee being continuously employed in good standing through the vesting period. The performance rights are subject to accelerated vesting
according to agreed terms in each person’s employment contract. For vesting details of the other Performance Rights please refer to Section D on Share-based com-
pensation below.
6 On 3 October 2019, Ms Deanne and Dr F Triebel were issued 1,800,000 and 2,700,000 performance rights respectively under the Executive Incentive Plan (EIP).
The vesting date for the Performance Rights issued to Ms D Miller and Dr F Triebel during the year are as follows:
• 1/3 are due to vest on 1 October 2020 to Ms D Miller and Dr F Triebel.
• 1/3 are due to vest on 1 October 2021 to Ms D Miller and Dr F Triebel.
• 1/3 are due to vest on 1 October 2022 to Ms D Miller and Dr F Triebel.
Vesting is contingent upon the employee being continuously employed in good standing through the vesting period. The performance rights are subject to accelerated
vesting according to agreed terms in each person’s employment contract. For vesting details of the other Performance Rights please refer to Section D on Share-based
compensation below.
Short-term Benefits
Post
Employment
Benefits
Long-term
Benefits
Share-based
Payments
Total
30-Jun-19
Cash salary
and fees
Cash
bonus
Non
Monetary
Super-
annuation
$
$
$
$
Long
service
leave
$
Executive
Performance
Rights
Options
Issued
$
$
$
Dr R Howard
Mr P Meyers
Mr G Chamberlain
82,192
-
-
-
-
-
265,6431
60,9282
127,1813
Mr M Voigt
398,724
72,116
Other Key Management Personnel
Dr F Triebel
Ms D Miller
272,243
39,872
220,000
50,000
-
-
-
973,159
161,988
453,752
7,808
-
-
-
-
-
-
-
-
-
25,650
33,458
11,115
11,115
-
-
-
365,9884,5
245,6664
177,9794,5
789,633
All performance rights and share prices have been adjusted for the 10 to 1 share consolidation in November 2019.
-
-
-
-
-
-
-
355,643
60,928
127,181
836,828
557,781
484,744
2,423,105
1 Dr Russell Howard was issued 1,000,000 performance rights to vest over 4 tranches in accordance with shareholder approval received at the AGM on 16 November
2018. The 1,000,000 performance rights were granted in lieu of additional cash to compensate Dr Howard for his additional responsibilities due to his elevation to the
role of Chairman following the retirement of the previous Chairman from the date of the 2017 AGM. As explained in the Appendix 3Y for Dr Howard released to ASX on
22 December 2017 and the 2018 AGM notice of meeting, the total number of performance rights proposed by the Company was calculated based on 4 years of director’s
fees at $60,000 p.a. divided by $0.24 (being the 5 day VWAP up to and including 15 December 2017). However, the fair value of Dr Howard’s performance rights for the
purposes of this financial report reflects the prevailing share price as at the date of shareholder approval of his performance rights, in accordance with the applicable
accounting standards.
The first tranche of his performance rights (250,000 rights) vested on 1 December 2018. (Being for continued service from 18 November 2017 to 17 November 2018).
The second tranche of 250,000 performance rights is due to vest on 1 December 2019. (Being for continued service from 18 November 2018 to 17 November 2019); The
third tranche of 250,000 performance rights is due to vest on 1 December 2020. (Being for continued service from 18 November 2019 to 17 November 2020); The final
250,000 will vest on 1 December 2021. (Being continued service from 18 November 2020 to 17 November 2021).
2 Mr Pete Meyers was issued 1,002,335 performance rights to vest over 4 tranches in lieu of cash for his services as a non-executive director, in accordance with share-
holder approval received at the AGM on 25 November 2016. As indicated in the 2016 AGM notice of meeting, the number of performance rights was calculated based
on 3.67 years of directors’ fees at $105,000 p.a. divided by $0.384 (being the 5-day VWAP up to and including 9 September 2016). However, the fair value of his perfor-
mance rights reflects the prevailing share price as at the date of shareholder approval.
The first tranche of his performance rights (181,425 rights) vested on 1 October 2017. (Being for service from 1 February 2017 to 30 September 2017). The second
tranche of 273,636 performance rights vested on 1 October 2018. (Being for service from 1 October 2017 to 30 September 2018); The third tranche of 273,637 perfor-
mance rights is due to vest on 1 October 2019. (Being for service from 1 October 2018 to 30 September 2019); The final 273,637 will vest on 1 October 2020. (Being for
service from 1 October 2019 to 30 September 2020).
3 Mr G Chamberlain was issued 1,327,236 performance rights to vest over 3 tranches in lieu of cash for his services as a non-executive director, in accordance with
shareholder approval received at the AGM on 17 November 2017. As indicated in the 2017 AGM notice of meeting, the number of performance rights was calculated
based on 3.12 years of directors’ fees at $90,000 p.a. divided by $0.2111 (being the 5-day VWAP up to and including 21 August 2017). However, the fair value of the
performance rights reflects the prevailing share price as at the date of shareholder approval.
21
CONTINUED DIRECTORS’ REPORT
The first tranche of his performance rights (473,929 rights) vested on 1 October 2018. (Being for service from 21 August 2017 to 30 September 2018). The second
tranche of 426,653 performance rights is due to vest on 1 October 2019. (Being for service from 1 October 2018 to 30 September 2019); The third tranche of 426,654
performance rights is due to vest on 1 October 2020. (Being for service from 1 October 2019 to 30 September 2020).
4 The Performance Rights issued to Mr M Voigt, Ms D Miller, and Dr F Triebel on 4 December 2017 vesting dates are as follows:
• 1/3 vested on 1 December 2017 to Mr M Voigt, Ms D Miller, and Dr F Triebel.
• 1/3 vested on 1 December 2018 to Mr M Voigt, Ms D Miller, and Dr F Triebel.
• 1/3 vested on 1 December 2019 to Mr M Voigt, Ms D Miller, and Dr F Triebel.
5 Performance Rights issued in prior years vested as follows:
• On 30 October 2018, 1,225,490 performance rights were forfeited for Mr. M Voigt and 367,647 performance rights were forfeited for Ms. D Miller.
Vesting is contingent upon the employee being continuously employed in good standing through the vesting period. The performance rights are subject to accelerated
vesting according to agreed terms in each person’s employment contract.
For vesting details of the other Performance Rights please refer to Section D on Share-based compensation below.
The relative proportions of remuneration that are linked to performance and those that are fixed are as follows:
Name
Fixed remuneration
At risk – STI
At risk – LTI
2020
2019
2020
2019
2020
2019
Non-Executive Directors
Dr R Howard
Mr Pete Meyers
Mr Grant Chamberlain
Executive Directors
Mr M Voigt
Other Key Management Personnel
Dr F Triebel
Ms D Miller
C. Service agreements
100%
100%
100%
100%
100%
100%
44%
48%
46%
49%
49%
51%
-
-
-
5%
-
6%
-
-
-
-
-
-
8%
51%
7%
11%
54%
45%
-
-
-
44%
44%
38%
Remuneration and other terms of employment for key management personnel are formalised in service agreements. The
service agreements specify the components of remuneration, benefits, and notice periods. Participating in the STI and LTI
plans is subject to the Board’s discretion. Compensation paid to key management personnel is determined by the Remuner-
ation Committee on an annual basis with reference to market salary surveys. Determination of compensation for Non-Exec-
utive Directors is detailed on pages 17, 18, and 19 of the directors’ report. Details of the current terms of these agreements
are below. Unless stated otherwise, all salaries quoted below are as at 30 June 2020.
Mr Marc Voigt
Agreement commenced:
Details
-
-
-
Executive Director & CEO
9 July 2014
The initial term was for a period of 3 years. This term was subsequently
extended for a further 3 years and extended again for an additional term that
will expire on 9 July 2026, unless terminated earlier by either party in accor-
dance with the Agreement. Each party is to provide at least 6 months’ notice
of its intention to extend the term of the contract.
The contract can be terminated by the company giving 12 months’ notice or
by Marc giving 6 months’ notice. Immutep may make payments in lieu of the
period of notice, or for any unexpired part of that notice period.
Base salary including superannuation
-
EUR 250,000
22
CONTINUED DIRECTORS’ REPORT
Ms Deanne Miller
Agreement commenced:
Details
Base salary including superannuation
Dr Frédéric Triebel
Agreement commenced:
Details
-
-
-
-
-
-
-
Chief Operating Officer, General Counsel & Company Secretary
17 October 2012
The agreement can be terminated with 6 months’ notice.
The termination terms are payment of base salary in lieu of notice period.
AUD 240,900
Chief Scientific Officer & Chief Medical Officer
12 December 2014
Each of the parties may terminate the employment contract and the present
Amendment, subject to compliance with the law and the Collective Bargain-
ing Agreement (“CBA”) and notably to a 6-month notice period as set forth
in the CBA.
The party which fails to comply with the notice period provisions shall be
liable to pay the other an indemnity equal to the salary for the remainder of
the notice period.
Base salary including superannuation
-
EUR 170,000
Under the cash bonus scheme approved by the Board of directors in February 2020, Mr Marc Voigt, Dr Frederic Triebel and Ms
Deanne Miller are each entitled to a cash bonus of A$300,000 conditional on meeting predetermined KPIs that are designed to
support our corporate strategy to develop product candidates to sell, license or partner with large pharmaceutical companies at
key value inflection points or on a change of control. As at 30 June 2020, no obligation has arisen for recognition.
Key management personnel have no entitlement to termination payments in the event of removal for misconduct or gross
negligence.
D. Share-based compensation
Issue of shares
There were no shares issued to directors and key management personnel as part of compensation during the year end-
ed 30 June 2020. During the year 4,616,958 performance rights and options were exercised and converted into ordinary
shares on a post consolidation basis.
Options
There are no options which were granted in prior years which affected remuneration in this financial year or future reporting
years.
Options granted under the plan carry no dividend or voting rights. When exercisable, each option is convertible into one
ordinary share.
Shares provided on exercise of remuneration options
No ordinary shares in the Company have been issued as a result of the exercise of remuneration options by a director.
23
CONTINUED DIRECTORS’ REPORT
Performance rights
The terms and conditions of each grant of performance rights affecting remuneration of key management personnel in
this financial year or future reporting years are as follows. All performance rights movement and fair value in the table are
shown on post share consolidation basis.
Grant date*
Type of performance right
granted
Vesting date and
exercisable date
Number of
performance
rights**
Value
per right at
grant date**
%
Vested and
exercised
30 June 2020
$
25 Nov 16(b)
25 Nov 16(b)
17 Nov 17(b)
17 Nov 17(b)
17 Nov 17(b)
29 Nov 17(a)
16 Nov 18(b)
16 Nov 18(b)
16 Nov 18(b)
3 Oct 19(b)
3 Oct 19(b)
3 Oct 19(b)
1 Nov19(b)
1 Nov 19(b)
1 Nov 19(b)
1 Nov 19(b)
1 Nov 19(b)
1 Nov 19(b)
Fixed short-term benefits
Fixed short-term benefits
LTI – Tranche 3
LTI – Tranche 4
LTI – Tranche 7
LTI – Tranche 7
LTI – Tranche 2
LTI – Tranche 3
LTI – Tranche 4
LTI – Tranche 1
LTI – Tranche 2
LTI – Tranche 3
LTI – Tranche 1
LTI – Tranche 2
LTI – Tranche 3
LTI – Tranche 1
LTI – Tranche 2
LTI – Tranche 3
1 Oct 19
1 Oct 20
1 Oct 19
1 Oct 20
1 Dec 19
1 Dec 19
1 Dec 19
1 Dec 20
1 Dec 21
1 Oct 2020
1 Oct 2021
1 Oct 2022
1 Oct 2021
1 Oct 2022
1 Oct 2023
1 Oct 2020
1 Oct 2021
1 Oct 2022
273,637
273,637
426,653
426,654
1,666,667
2,000,001
250,000
250,000
250,000
1,500,000
1,500,000
1,500,000
500,000
500,000
500,000
1,200,000
1,200,000
1,200,000
0.38
0.38
0.24
0.24
0.24
0.23
0.39
0.39
0.39
0.26
0.26
0.26
0.28
0.28
0.28
0.28
0.28
0.28
100
-
100
-
100
100
100
-
-
-
-
-
-
-
-
-
-
-
(a)
(b)
*
Performance hurdles based on individual KPIs have been set for performance rights granted.
No performance hurdles have been set with respect to these performance rights granted.
In addition to the performance hurdles set, the participant must be employed by the company on the vesting date.
Performance rights granted under the plan carry no dividend or voting rights. When exercisable, each performance right is convertible into one ordinary share.
**
On 5 November 2019, there was a 10 to 1 share consolidation. All performance rights and fair value in the table above have therefore been adjusted accordingly.
24
CONTINUED DIRECTORS’ REPORT
Details of bonuses and share-based compensation
Details of performance rights over ordinary shares in the Company provided as remuneration to each director and each of
the key management personnel are set out below. The table further shows the percentages of the options granted under the
Employee Option Plan that vested and/or were forfeited during the year.
For each cash bonus and grant of performance rights included in the tables on pages 20 to 24, the percentage of the avail-
able bonus or grant that was paid, or that vested, in the financial year, and the percentage that was forfeited because the
person did not meet the vesting criteria is set out below.
Name
Cash bonus
Share-based compensation benefits (performance rights)
Paid
For-
feited
Year
granted
No
Granted(A)
Value of
rights
at grant
date
Vested
Number
of rights
vested/
excercised
during the
year
Value of
rights at
exercise
date*******
For-
feit-
ed
Financial years in
which rights may
vest
%
%
$
%
$
%
Mr R Howard
Mr P Meyers
Mr G Chamberlain
-
-
-
Mr M Voigt
100%
Mr F Triebel
-
Ms D Miller
100%
-
-
-
-
-
-
2018*
1,000,000
390,000
50%
250,000
62,500
2017**
2019******
1,002,335
1,500,000
370,864
420,000
73%
273,637
-
71,145
-
2017***
1,327,236
278,719
68%
426,653
110,930
2017*****
2019******
2017****
2019******
2017****
2019******
5,000,000
3,600,000
1,200,000
1,008,000
3,500,000
2,700,000
2,500,000
1,800,000
805,000
702,000
575,000
468,000
100%
-
100%
-
100%
-
1,666,667
-
1,166,667
-
833,334
-
433,333
-
303,333
-
208,334
-
-
-
-
-
-
-
-
-
-
-
2019, 2020, 2021 & 2022
2018, 2019, 2020 & 2021
2022, 2023 & 2024
2019, 2020 & 2021
2018, 2019 & 2020
2021, 2022 & 2023
2018, 2019 & 2020
2021, 2022 & 2023
2018, 2019 & 2020
2021, 2022 & 2023
A
*
**
***
****
*****
******
On 5 November 2019, there was a 10 to 1 share consolidation. All performance rights issued during the year have therefore been adjusted accordingly.
Dr Russell Howard was issued 1,000,000 performance rights in lieu of cash for his services as a non-executive director, in accordance with shareholder approval
received at the AGM on 16 November 2018.
The first tranche of 250,000 performance rights vested on 1 December 2018 (being for continued service from 18 November 2017 to 17 November 2018).
The second tranche of 250,000 performance rights vested on 1 December 2019 (being for continued service from 18 November 2018 to 17 November 2019). The
third tranche of 250,000 performance rights is due to vest on 1 December 2020 (being for continued service from 18 November 2019 to 17 November 2020).
The final 250,000 rights will vest on 1 December 2021 (being continued service from 18 November 2020 to 17 November 2021).
Mr Pete Meyers was issued 1,002,335 performance rights in lieu of cash for his services as a non-executive director, in accordance with shareholder approval
received at the AGM on 25 November 2016.
The first tranche of 181,425 performance rights vested on 1 October 2017 (being for service from 1 February 2017 to 30 September 2017).
The second tranche of 273,636 performance rights vested on 1 October 2018 (being for service from 1 October 2017 to 30 September 2018).
The third tranche of 273,637 performance rights vested 1 October 2019 (being for service from 1 October 2018 to 30 September 2019).
The final 273,637 will vest on 1 October 2020 (being for service from 1 October 2019 to 30 September 2020).
Mr Grant Chamberlain was issued 1,327,236 performance rights in lieu of cash for his services as a non-executive director, in accordance with shareholder
approval received at the AGM on 17 November 2017.
The first tranche of 473,929 performance rights vested on 1 October 2018 (being for service from 21 August 2017 to 30 September 2018).
The second tranche of 426,653 performance rights vested on 1 October 2019 (being for service from 1 October 2018 to 30 September 2019).
The third tranche of 426,654 performance rights is due to vest on 1 October 2020 (being for service from 1 October 2019 to 30 September 2020).
Performance rights were granted under the EIP. Long term incentive performance rights vest in three tranches as follows:
• 1/3 vested on 1 December 2017
• 1/3 vested on 1 December 2018
• 1/3 vested on 1 December 2019
Vesting is contingent upon the employee being continuously employed in good standing through the vesting period and meeting pre-dete rmined
KPIs. The performance rights are subject to accelerated vesting according to agreed terms in each person’s employment contract.
Performance rights were granted under the EIP. Long term incentive performance rights vest in three tranches as follows:
• 1/3 vested on 1 December 2017
• 1/3 vested on 1 December 2018
• 1/3 vested on 1 December 2019
Vesting is contingent upon the employee being continuously employed in good standing through the vesting period. The performance rights are subject to
accelerated vesting according to agreed terms in each person’s employment contract.
Performance rights were granted under the EIP. Short-term incentive performance rights vest in three tranches as follows:
• 1/3 are due to vest on 1 October 2020
• 1/3 are due to vest on 1 October 2021
• 1/3 are due to vest on 1 October 2022
Vesting is contingent upon the employee being continuously employed in good standing through the vesting period. The performance rights are subject to
accelerated vesting according to agreed terms in each person’s employment contract. These rights were issued pre-share consolidation, adjusted, and shown
on a post consolidation basis.
*******
The value at the exercise date of performance rights that were granted as part of remuneration and were exercised during the year has been determined as
the intrinsic value of the performance rights at that date.
25
CONTINUED DIRECTORS’ REPORT
Equity instruments held by key management personnel
The tables on the following page show the number of:
(i)
(ii)
Options over ordinary shares in the company
Performance rights over ordinary shares in the company
Shares in the company that were held during the financial year by key management personnel of the group, including their close
family members and entities related to them. There were no shares granted during the reporting period as compensation.
(i) Options holdings
As at 30 June 2020 and 2019, there were no options holdings outstanding and no movements during the financial year end-
ed 30 June 2020.
(ii) Performance Rights holdings
2020
Performance rights over
ordinary shares*
Balance at start
of the year
Granted
Exercised
Other
Changes
Balance at end
of the year
Vested and
exercisable
Unvested
Dr Russell Howard
750,000
-
(250,000)
Mr Pete Meyers
Mr Marc Voigt
547,274
1,500,000
(273,637)
1,666,667
3,600,000
(1,666,667)
Mr Grant Chamberlain
853,307
-
(426,653)
Ms Deanne Miller
Dr Frédéric Triebel1
833,334
1,800,000
(833,334)
1,166,667
2,700,000
(1,166,667)
5,817,249
9,600,000
(4,616,958)
-
-
-
-
-
-
-
500,000
1,773,637
3,600,000
426,654
1,800,000
2,700,000
10,800,291
-
-
-
-
-
-
-
500,000
1,773,637
3,600,000
426,654
1,800,000
2,700,000
10,800,291
* On 5 November 2019, there was a 10 to 1 share consolidation. The number of performance rights has therefore been adjusted retrospectively.
(iii) Ordinary Share holdings
Balance at start
of the year
Received during the
year on exercise of
performance rights
Received during the
year on the exercise of
options
Other chang-
es during the
year
Balance at
end of the
year
2020
Ordinary shares
Dr Russell Howard
Mr Pete Meyers
Mr Marc Voigt
Mr Grant Chamberlain
Ms Deanne Miller
Dr Frédéric Triebel
250,000
1,227,121
5,827,196
473,931
2,314,421
4,413,106
Total ordinary shares
14,505,775
ADRs
Mr Marc Voigt
Total ADR
45
45
250,000
273,637
1,666,667
426,653
833,334
1,166,667
4,616,958
-
-
-
-
-
-
-
-
-
-
-
-
-
153,582
400,785
(143,863)
373,991
500,000
1,500,758
7,647,445
1,301,369
3,003,892
5,953,764
784,495
19,907,228
-
-
45
45
On 5 November 2019, there was a 10 to 1 share consolidation. The number of shares has therefore been adjusted retrospectively.
This concludes the remuneration report, which has been audited.
26
CONTINUED DIRECTORS’ REPORT
Shares under option
Unissued ordinary shares of Immutep Limited under option at the date of this report are as follows:
Date options granted
Expiration Date
Exercise Price
Number** Listed/Unlisted Options
5 August 2015
4 August 2020
30 October 2015
30 October 2020
7 March 2016
5 August 2015
4 July 2017
7 March 2021
4 August 2025
5 January 2023
21 December 2018
12 February 2022
$0.235
$0.568
$0.398
$0.248
US$0.249*
US$0.249*
37,144,524
79,311
102,628
847,600
15,537,180*
20,800,000*
74,511,243
Unlisted
Unlisted
Unlisted
Unlisted
Unlisted
Unlisted
* 1 American Depository Shares (ADS) listed on NASDAQ equals 10 ordinary shares listed on ASX thus the number of warrants on issue have been grossed up and their
exercise prices adjusted accordingly in the above table to be comparable.
** On 5 November 2019, there was a 10 to 1 share consolidation. All amounts have therefore been adjusted accordingly.
No option holder has any right under the options to participate in any other share issue of the Company or any other entity.
Corporate Governance Statement
The Board is committed to achieving and demonstrating the highest standards of corporate governance. The Board continues to
refine and improve the governance framework and practices in place to ensure they meet the interests of shareholders.
The Company complies with the Australian Securities Exchange (ASX) Corporate Governance Council’s Corporate Gover-
nance Principles and Recommendations – 4th edition (the Principles). A copy of the company’s Corporate Governance State-
ment is available at the company’s website at the following address https://www.immutep.com/about-us/corporate-governance.html
Indemnity and insurance of officers
During the financial year, the Company paid a premium to insure the directors and officers of the Company and its con-trolled
entities.
The liabilities insured are legal costs that may be incurred in defending civil or criminal proceedings that may be brought
against the officers in their capacity as officers of entities in the group, and any other payments arising from liabilities in-
curred by the officers in connection with such proceedings.
This does not include such liabilities that arise from conduct involving a wilful breach of duty by the officers or the improper
use by the officers of their position or of information to gain advantage for themselves or someone else or to cause detri-ment
to the Company.
Indemnity and insurance of auditor
The Company has not during or since the end of this 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.
No proceedings have been brought or intervened in on behalf of the Company with leave of the Court under section 237 of
the Corporations Act 2001.
27
CONTINUED DIRECTORS’ REPORT
Non-audit services
The Company may decide to employ the auditor on assignments additional to their statutory audit duties where the auditor’s
expertise and experience with the Company and/or the group are important.
The board of directors has considered the position and, in accordance with advice received from the Audit and Risk
Committee, is satisfied that the provision of the non-audit services is compatible with the general standard of independence
for auditors imposed by the Corporations Act 2001. The directors are satisfied that the provision of non-audit services by the
auditor, as set out below, did not compromise the auditor independence requirements of the Corporations Act 2001 for the
following reasons:
• all non-audit services have been reviewed by the audit committee to ensure they do not impact the impartiality and
objectivity of the auditor;
• none of the services undermine the general principles relating to auditor independence as set out in APES 110
Code of Ethics for Professional Accountants.
During the year, the following fees were paid or payable for non-audit services provided by the auditor of the parent entity,
its related practices and non-related audit firms:
PricewaterhouseCoopers Australia
Other audit and assurance services in relation to regulatory filings overseas
Other services
Network firm of PricewaterhouseCoopers Australia
Due Diligence services
Total remuneration for non-audit services
Consolidated
30 June 2020
30 June 2019
$
$
-
-
-
22,950
-
22,950
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 on
page 29.
Auditor
PricewaterhouseCoopers continues in office in accordance with section 327 of the Corporations Act 2001.
This report is made in accordance with a resolution of directors.
On behalf of the directors
Dr Russell Howard
Chairman
Sydney
25 August 2020
2828
CONTINUED AUDITOR’S INDEPENDENCE DECLARATION
Auditor’s Independence Declaration
As lead auditor for the audit of Immutep Limited for the year ended 30 June 2020, I declare that to the
best of my knowledge and belief, there have been:
(a)
no contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
(b)
no contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Immutep Limited and the entities it controlled during the period.
Caroline Mara
Partner
PricewaterhouseCoopers
Newcastle
25 August 2020
PricewaterhouseCoopers, ABN 52 780 433 757
Level 3, 45 Watt Street, PO Box 798, NEWCASTLE NSW 2300
T: +61 2 4925 1100, F: +61 2 4925 1199, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
Page | 25
29
FINANCIAL
STATEMENTS
Contents
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME ...................................................................31
CONSOLIDATED BALANCE SHEET .................................................................................................................32
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY ..............................................................................33
CONSOLIDATED STATEMENT OF CASH FLOWS ............................................................................................34
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS .........................................................................35
DIRECTORS’ DECLARATION .............................................................................................................................78
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF IMMUTEP LIMITED. ......................................79
General information
These financial statements are the consolidated financial statements of the consolidated entity consisting of Immutep Limit-
ed and its subsidiaries. The financial statements are presented in the Australian currency.
Immutep Limited is a listed public company limited by shares, incorporated and domiciled in Australia. Its registered office
and principal place of business is:
Level 12
95 Pitt Street
Sydney NSW 2000
The financial statements were authorised for issue by the directors on 25 August 2020. The directors have the power to
amend and reissue the financial statements.
A description of the nature of the consolidated entity’s operations and its principal activities is included in the review of op-
erations and activities on pages 6 to 11 and in the directors’ report on pages 12 to 28, both of which are not part of these
financial statements.
Through the use of the internet, we have ensured that our corporate reporting is timely and complete
All press releases, financial reports and other information are available on our website: www.immutep.com.
30
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2020
Revenue
License revenue
Other income
Research material sales
Grant income
Net gain on foreign exchange
Net gain on fair value movement of warrants
Interest income
Total revenue and other income
Research & development and intellectual property expenses
Corporate administrative expenses
Depreciation and amortisation expense
Finance costs
Net change in fair value of convertible note liability
Loss before income tax expense
Income tax(expense) / benefit
Loss after income tax expense for the year
Other Comprehensive Income/(Loss)
Items that may be reclassified to profit or loss
Exchange differences on the translation of foreign operations
Other comprehensive income/(loss) for the year, net of tax
Total comprehensive loss for the year
Loss for the year is attributable to
Owners of Immutep Limited
Total comprehensive loss for the year is attributable to
Owners of Immutep Limited
Basic loss per share
Diluted loss per share
Note
Consolidated
30 June 2020
30 June 2019
$
$
7,486,444
139,782
279,805
5,973,034
346,331
2,214,813
199,541
1,155,065
4,342,364
493,736
961,176
397,281
16,499,968
7,489,404
(20,395,982)
(16,591,201)
(6,335,679)
(2,079,639)
(10,457)
(1,146,406)
(6,366,161)
(1,879,151)
-
(996,875)
(13,468,195)
(18,343,984)
(37)
-
(13,468,232)
(18,343,984)
99,957
99,957
558,415
558,415
(13,368,275)
(17,785,569)
(13,468,232)
(18,343,984)
(13,368,275)
(17,785,569)
Cents
(3.36)
(3.36)
Cents
(Restated)
(5.48)
(5.48)
14
5
5
5
15
6
30
30
The above consolidated statement of comprehensive income should be read in conjunction with the accompanying notes.
31
CONSOLIDATED BALANCE SHEET
AS AT 30 JUNE 2020
ASSETS
Current assets
Cash and cash equivalents
Current receivables
Other current assets
Total current assets
Non-current assets
Plant and equipment
Intangibles
Right of use assets
Total non-current assets
TOTAL ASSETS
Current liabilities
Trade and other payables
Employee benefits
Lease liability
Total current liabilities
Non-current liabilities
Convertible note liability
Warrant liability
Employee benefits
Lease liability
Deferred tax liability
Total non-current liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Contributed equity
Reserves
Accumulated losses
Equity attributable to the owners of Immutep Limited
TOTAL EQUITY
Note
Consolidated
30 June 2020
30 June 2019
$
$
7
8
9
10
11
18
13
16
18
15
14
17
18
12
19
20
20
26,322,047
3,293,692
1,536,135
31,151,874
49,356
15,194,807
201,215
15,445,378
46,597,252
2,934,367
300,466
129,412
3,364,245
8,789,113
949,600
61,978
132,971
-
9,933,662
13,297,907
33,299,345
16,567,982
5,194,126
1,779,716
23,541,824
52,950
16,946,725
-
16,999,675
40,541,499
5,060,368
238,570
-
5,298,938
7,642,707
3,164,413
47,725
-
-
10,854,845
16,153,783
24,387,716
242,990,507
66,014,899
221,091,591
65,533,954
(275,706,061)
(262,237,829)
33,299,345
33,299,345
24,387,716
24,387,716
The above consolidated balance sheet should be read in conjunction with the accompanying notes.
32
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2020
Consolidated
Contributed
equity
Reserves
Accumulated losses
Total equity
$
$
$
$
Balance at 30 June 2018
213,232,719
64,874,040
(244,584,832)
33,521,927
Other comprehensive income for the year, net of tax
Loss after income tax expense for the year
Total comprehensive income/(loss) for the year
Transactions with owners in their capacity as
owners:
Contributions of equity, net of transaction costs
Exercise of warrants
Employee share-based payment
-
-
-
558,415
-
558,415
-
(18,343,984)
(18,343,984)
558,415
(18,343,984)
(17,785,569)
4,335,025
2,043,359
-
-
-
1,581,987
-
690,987
-
-
4,335,025
2,734,346
1,581,987
-
Exercise of vested performance rights
1,480,488
(1,480,488)
Balance at 30 June 2019
221,091,591
65,533,954
(262,237,829)
24,387,716
Other comprehensive income for the year, net of tax
Loss after income tax expense for the year
Total comprehensive income/(loss) for the year
Transactions with owners in their capacity as
owners:
-
-
-
99,957
-
99,957
-
(13,468,232)
(13,468,232)
99,957
(13,468,232)
(13,368,275)
Contributions of equity, net of transaction costs
20,555,622
-
Employee share-based payment
-
1,724,282
Exercise of vested performance rights
1,343,294
(1,343,294)
-
-
-
20,555,622
1,724,282
-
Balance at 30 June 2020
242,990,507
66,014,899
(275,706,061)
33,299,345
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
33
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2020
Cash flows related to operating activities
Payments to suppliers and employees
(inclusive of goods and services tax)
Cash receipts from grant income and government incentives
Cash receipts from license revenue
Cash receipts from research material sales
Interest received
Income taxes paid
Payment for interest on leases
Payment for security deposit
Note
Consolidated
30 June 2020
30 June 2019
$
$
(26,579,450)
(19,553,135)
7,702,775
7,486,444
327,876
229,348
(37)
(6,295)
-
2,669,806
139,782
1,064,840
410,630
-
-
(18,321)
Net cash outflows from operating activities
29
(10,839,339)
(15,286,398)
Cash flows related to investing activities*
Payments for plant and equipment
Net cash outflows from investing activities
Cash flows related to financing activities*
Proceeds from issue of shares
Proceeds from issue of warrants
Proceeds from exercising of warrants
Share issue transaction costs
Principal elements of lease payments
Transaction costs of warrant issues
Net cash inflows from financing activities
Net increase / (decrease) in cash and cash equivalents
Effect of exchange rate on cash and cash equivalent
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
10
19
14
14
19
5
7
(19,348)
(19,348)
(41,434)
(41,434)
22,030,556
-
-
(1,474,934)
(77,541)
-
20,478,081
9,619,394
134,671
16,567,982
26,322,047
4,871,250
2,457,259
1,457,318
(536,225)
-
(236,887)
8,012,715
(7,315,117)
407,578
23,475,521
16,567,982
*Non-cash investing and financing activities relate mainly to the following:
•
•
•
Fair value movement of convertible notes disclosed in Note 15 to the financial statements
Fair value movement of warrant liability disclosed in Note 14 to the financial statements
Exercise of vested performance rights for no cash consideration disclosed in Note 20 to the financial statements
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
34
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
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 years presented, unless otherwise stated. The financial statements are for the consoli-
dated entity consisting of the Company and its subsidiaries.
During the financial year ended 30 June 2020, the novel coronavirus (COVID-19), was declared a world-wide pandemic by
the World Health Organisation in March 2020. This has spread rapidly throughout the world, including Australia, causing
significant disruption to business and economic activity. The Group has business continuity procedures in place and is
addressing health and safety risks whilst continuing to carry out ongoing clinical trials. The Group’s operations have been
maintained with minimal disruption and have undertaken extensive additional measures to ensure the safety and wellbeing
of its people, patients, suppliers, and stakeholders.
For the Group, the ongoing COVID-19 pandemic has not significantly increased the estimation of uncertainty in the prepara-
tion of the consolidated financial statements. A thorough consideration of potential COVID-19 impacts on carrying values
of assets and liabilities, contracts and potential liabilities have been made, with no material impact to the consolidated
financial statements.
(a) Basis of preparation
These general-purpose financial statements have been prepared in accordance with Australian Accounting Standards and
Interpretations issued by the Australian Accounting Standards Board (‘AASB’) and the Corporations Act 2001. Immutep Lim-
ited is a for-profit entity for the purpose of preparing the financial statements.
(i) Compliance with IFRS
The consolidated financial statements of the Immutep Limited group also comply with International Financial Reporting
Standards (IFRS) as issued by the International Accounting Standards Board (IASB).
(ii) New and amended standards adopted by the group
The Group has applied the following standards and amendments for the first time for their annual reporting period com-
mencing 1 July 2019: AASB 16 – Leases
AASB 16 Leases supersedes AASB 117 Leases, AASB Interpretation 4 Determining whether an Arrangement contains a
lease, AASB Interpretation 115 Operating Leases – Incentives and AASB Interpretation 127 Evaluation the Substance of
Transactions Involving the Legal Form of a Lease. The standard sets out the principles for the recognition, measurement,
presentation and disclosure of leases and requires lessees to account for all leases under a single on-balance sheet model.
Lessor accounting under AASB 16 is substantially unchanged from AASB 117. Lessors will continue to classify leases as
either operating or finance leases using similar principles as in AASB 117.
The Group had to change its accounting policies as a result of adopting AASB 16. The Group has adopted AASB 16 Leases
from 1 July 2019 using the modified retrospective approach but has not restated comparatives for the 2020 reporting period,
as permitted under the specific transition provisions in the standard. The reclassifications and the adjustments arising from
the new leasing rules are therefore recognised in the opening balance sheet on 1 July 2019. The new accounting policies
are disclosed in note 1(u) and changes in accounting policy in note 1(w).
New standards and interpretations not yet adopted
Certain new accounting standards and interpretations have been published that are not mandatory for 30 June 2020 report-
ing periods and have not been early adopted by the Group. The Group’s assessment of the impact of these new standards
and interpretations is set out below:
AASB 101 Presentation of Financial Statements
The AASB issued a narrow-scope amendment to AASB 101 Presentation of Financial Statements to clarify that liabilities
are classified as either current or non-current, depending on the rights that exist at the end of the reporting period. Clas-
sification is unaffected by the expectations of the entity or events after the reporting date (eg. the receipt of a waiver or a
breach of covenant). The amendment also clarifies what AASB 101 means when it refers to the ‘settlement’ of a liability.
35
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Entities should reconsider their existing classification in light of the amendment and determine whether any changes are
required. The Amendment should be applied for annual periods beginning on or after 1 January 2022. Management are still
assessing the impact on adopting the amendment to AASB 101.
There are no other standards that are not yet effective and that would be expected to have a material impact on the Group
in the current or future reporting years and on foreseeable future transactions.
(iii) Historical cost convention
The financial statements have been prepared under the historical cost convention, except for, where applicable, financial as-
sets and liabilities (including derivative financial instruments), which are subsequently remeasured to fair value with changes
in fair value recognized in profit or loss.
(iv) Critical accounting estimates
The preparation of the financial statements requires the use of certain critical accounting estimates. It also requires man-
agement to exercise its judgement in the process of applying the consolidated entity’s accounting policies. The areas involv-
ing a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial
statements are disclosed in note 3.
(b) Principles of consolidation
Subsidiaries are all entities (including structured entities) over which the group has control. The group controls an entity
when the group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to
affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date
on which control is transferred to the group. They are deconsolidated from the date that control ceases.
Intercompany transactions, balances, and unrealised gains on transactions between group companies are eliminated.
Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the transferred asset.
Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by
the group.
(c) Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision
maker. The chief operating decision maker (CODM), who is responsible for allocating resources and assessing performance
of the operating segments, has been identified as the Board of Directors.
(d) Foreign currency translation
(i) Functional and presentation currency
Items included in the financial statements of each of the group’s entities are measured using the currency of the primary
economic environment in which the entity operates (‘the functional currency’). The consolidated financial statements are
presented in Australian dollars, which is the Immutep Limited’s functional and presentation currency.
(ii) Transactions and balances
Foreign currency transactions are translated into the functional currency 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 year end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised
in profit or loss, except when they are deferred in equity as qualifying cash flow hedges and qualifying net investment hedg-
es or are attributable to part of the net investment in a foreign operation. Foreign exchange gains and losses that relate to
borrowings are presented in the statement of comprehensive income, within finance costs. All other foreign exchange gains
and losses are presented separately in the statement of comprehensive income on a net basis.
Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the
date when the fair value was determined. Translation differences on assets and liabilities carried at fair value are reported
as part of the fair value gain or loss. For example, translation differences on non-monetary assets and liabilities such as
equities held at fair value through profit or loss are recognised in profit or loss as part of the fair value gain or loss and trans-
lation differences on non-monetary assets such as equities classified as available-for-sale financial assets are recognised
in other comprehensive income.
36
CONTINUEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(iii) Group companies
The results and financial position of foreign operations (none of which has the currency of a hyperinflationary economy) that
have a functional currency different from the presentation currency are translated into the presentation currency as follows:
•
assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet
income and expenses for each statement of comprehensive income are translated at average exchange rates (unless
•
this is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which
case income and expenses are translated at the dates of the transactions), and
all resulting exchange differences are recognised in other comprehensive income.
•
On consolidation, exchange differences arising from the translation of any net investment in foreign entities, and of borrow-
ings and other financial instruments designated as hedges of such investments, are recognised in other comprehensive
income. When a foreign operation is sold or any borrowings forming part of the net investment are repaid, the associated
exchange differences are reclassified to profit or loss, as part of the gain or loss on sale.
(e) Revenue recognition
The Group has applied AASB 15 from 1 July 2018. The accounting policy change has been applied using the modified ret-
rospective approach and did not have any material effect on the financial position or performance of the Group. Revenue is
recognised when (or as) the Group satisfies a performance obligation by transferring a promised good or service to a cus-
tomer. Revenue is presented net of GST, rebates, and discounts. Performance obligations are completed at a point in time
and over time. Revenue is recognized for the major business activities of the Group as follows:
(i) License revenue
A license may provide another party the right to use the Group’s intellectual property as it exists at the point in time the li-
cense is granted. For these licenses, revenue is recognized at a point in time when control transfers to the licensee and the
license period begins. At present, the Group is in the research and development phase of operations and license revenue
earned is through milestone payments from on-going clinical trials and research.
Milestone payments generally represent a form of variable consideration as the payments are likely to be contingent on the
occurrence of future events. Milestone payments are estimated and included in the transaction price based on either the
expected value (probability weighted estimate) or most likely amount approach. The most likely amount is likely to be most
predictive for milestone payments with a binary outcome (i.e., the company receives all or none of the milestone payment).
The transaction price is allocated to separate performance obligations based on relative standalone selling prices. If the
transaction price includes consideration that varies based on a future event or circumstance (e.g., the completion of a clini-
cal trial phase), the Group would allocate that variable consideration (and any subsequent changes to it) entirely to one per-
formance obligation if both of the following criteria are met:
•
•
The payment terms of the variable consideration relate specifically to the Group’s efforts to satisfy that performance
obligation or transfer the distinct good or service (or to a specific outcome from satisfying that separate performance
obligation).
Allocating the variable amount entirely to the separate performance obligation or the distinct good or service reflects the
amount of consideration to which the Group expects to be entitled in exchange for satisfying that particular performance
obligation when considering all of the performance obligations and payment terms in the contract.
Variable consideration is only recognized as revenue when the related performance obligation is satisfied, and the Group
determines that it is probable that there will not be a significant reversal of cumulative revenue recognised in future periods.
Other income
(i) Grant income
Grants from the governments, including Australian Research and Development Rebates, France’s Crédit d’Impôt Recherche
are recognised at their fair value when there is a reasonable assurance that the grant will be received and the Company
will comply with all attached conditions. Government grants relating to operating costs are recognised in the Statements of
Comprehensive Income as grant income. Government grants were received by the Group under various government stimu-
lus packages (both Australian and overseas) in relation to the impacts of COVID-19.
37
CONTINUEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (ii) Research material sales
Revenue from the sale of materials supplied to other researchers in order to conduct further studies on LAG-3 technologies
is recognised at a point in time when the materials are delivered, the legal title has passed and the other party has accepted
the materials.
(iii) Research collaboration income
Revenue from services provided in relation to undertaking research collaborations with third parties are recognised over
time in the accounting period in which the services are rendered. Revenue is measured based on the consideration speci-
fied in the agreement or contract with a third party.
(f) Income tax
The income tax expense or benefit for the period is the tax payable on the current period’s taxable income based on the
applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to tem-
porary differences and to unused tax losses.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the
reporting period in the countries where the Company’s subsidiaries operate and generate taxable income. Management
periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to
interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases
of assets and liabilities and their carrying amounts in the consolidated financial statements. However, deferred tax liabilities
are not recognised if they arise from the initial recognition of goodwill.
Deferred income tax is also not accounted for if it arises from initial recognition of an asset or liability in a transaction other
than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss.
Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the end
of the reporting period and are expected to apply when the related deferred income tax asset is realised or the deferred
income tax liability is settled.
Deferred tax assets are recognised 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. Deferred tax liabilities and assets
are not recognised for temporary differences between the carrying amount and tax bases of investments in foreign opera-
tions where the Company is able to control the timing of the reversal of the temporary differences and it is probable that the
differences will not reverse in the foreseeable future.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabili-
ties and when the deferred tax balances relate to the same taxation authority.
Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to
settle on a net basis, or to realise the asset and settle the liability simultaneously.
Immutep Limited and its wholly owned Australian controlled entities have implemented the tax consolidation legislation. As
a consequence, these entities are taxed as a single entity and the deferred tax assets and liabilities of these entities are set
off in the consolidated financial statements. Foreign subsidiaries are taxed individually by the respective local jurisdictions.
For the purposes of preparation of the financial statements, the tax position of each entity is calculated individually and con-
solidated as consolidated tax entity.
Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items recognised in other com-
prehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in
equity, respectively.
(g) Business combinations
The acquisition method of accounting is used to account for all business combinations, regardless of whether equity instru-
ments or other assets are acquired. The consideration transferred for the acquisition of a subsidiary comprises the fair value
38
CONTINUEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS of the assets transferred, liabilities incurred to the former owners of the acquired business and the equity interests issued by
the group. The consideration transferred also includes the fair value of any asset or liability resulting from a contingent con-
sideration agreement, and the fair value of any pre-existing equity interest in the subsidiary.
Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are, with limited ex-
ceptions, measured initially at their fair values at the acquisition date. The group recognises any non-controlling interest in
the acquired entity on an acquisition-by-acquisition basis either at fair value or at the non-controlling interest’s proportionate
share of the acquired entity’s net identifiable assets.
Acquisition-related costs are expensed as incurred.
The excess of the consideration transferred and the amount of any non-controlling interests in the acquiree over the fair
value of the Group’s share of the net identifiable assets acquired is recorded as goodwill. If those amounts are less than the
fair value of the net identifiable assets of the subsidiary acquired and the measurement of all amounts has been reviewed,
the difference is recognised directly in profit and loss as a bargain purchase.
Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted to their
present value as at the date of exchange. The discount rate used is the entity’s incremental borrowing rate, being the rate at
which a similar borrowing could be obtained from an independent financier under comparable terms and conditions.
Contingent consideration is classified either as equity or a financial liability. Amounts classified as a financial liability are
subsequently remeasured to fair value with changes in fair value recognised in profit or loss.
If the business combination is achieved in stages, the acquisition date carrying value of the acquirer’s previously held equity
interest in the acquiree is remeasured to fair value at the acquisition date. Any gains or losses arising from such remeasure-
ment are recognised in profit and loss.
(h) Impairment of assets
Goodwill and intangible assets that have an indefinite useful life are not subject to amortisation and are tested annually for
impairment or more frequently if events or changes in circumstances indicate that they might be impaired. Other assets are
tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recover-
able. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds it recoverable amount.
The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing
impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are largely
independent of the cash inflows from other assets or groups of assets (cash-generating units). Non-financial assets other than
goodwill that suffered impairment are reviewed for possible reversal of the impairment at the end of each reporting period.
(i) Cash and cash equivalents
For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on hand, deposits
held at call with financial institutions, other short-term, highly liquid investments with original maturities of three months or
less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value,
and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities in the balance sheet.
(j) Current receivables
Current receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective inter-
est method, less provision for impairment. Amount receivable in relation to Goods and Services Tax (GST) and Value Added
Tax (VAT) are due from the local taxation authorities and recorded based on the amount of GST and VAT paid on purchases.
They are presented as current assets unless collection is not expected for more than 12 months after the reporting date.
Collectability of current receivables is reviewed on an ongoing basis. Receivables which are known to be uncollectible are
written off by reducing the carrying amount. An allowance account is used when there is objective evidence that the group
will not be able to collect all amounts due.
39
CONTINUEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (k) Financial Instruments
Recognition and derecognition
Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual provisions of the
financial instrument and are measured initially at fair value adjusted by transactions costs, except for those carried at fair
value through profit or loss, which are measured initially at fair value. Subsequent measurement of financial assets and fi-
nancial liabilities are described below. Financial assets are derecognised when the contractual rights to the cash flows from
the financial asset expire, or when the financial asset and substantially all the risks and rewards are transferred. A financial
liability is derecognised when it is extinguished, discharged, cancelled, or expires.
Classification and initial measurement of financial assets
All financial assets are initially measured at fair value adjusted for transaction costs (where applicable), except for those
trade receivables that do not contain a significant financing component and are measured at the transaction price in accor-
dance with AASB 15.
Subsequent measurement of financial assets
For the purpose of subsequent measurement, financial assets are classified into the following categories upon
initial recognition:
•
•
•
financial assets at amortised cost
financial assets at fair value through profit or loss
financial assets at fair value through other comprehensive income
Classifications are determined by both:
•
•
The entity’s business model for managing the financial asset
The contractual cash flow characteristics of the financial assets
All income and expenses relating to financial assets that are recognised in profit or loss are presented within finance costs,
finance income or other financial items, except for impairment of trade receivables which is presented within other expenses.
Financial assets at amortised cost
Financial assets are measured at amortised cost if the assets meet the following conditions (and are not designated
as FVPL):
•
•
they are held within a business model whose objective is to hold the financial assets and collect its contractual cash
flows
the contractual terms of the financial assets give rise to cash flows that are solely payments of principal and interest on
the principal amount outstanding
After initial recognition, these are measured at amortised cost using the effective interest method. Discounting is omitted
where the effect of discounting is immaterial. The Group’s cash and cash equivalents, trade and most other receivables fall
into this category of financial instruments.
Financial assets at fair value through profit or loss (FVPL) and financial assets at fair value through other comprehensive
income (FVOCI)
The Group does not hold any financial assets at fair value through profit or loss or fair value through comprehensive income.
Impairment of financial assets
AASB 9 requires more forward-looking information to recognize expected credit losses - the ‘expected credit losses (ECL)
model’. The impairment of financial assets including trade receivables is now assessed using an expected credit loss model;
previously the incurred loss model was used. The accounting policy change has been applied retrospectively and did not
have any material effect on the financial position or performance of the Group.
40
CONTINUEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Classification and measurement of financial liabilities
The Group’s financial liabilities comprise trade and other payables. Financial liabilities are initially measured at fair value,
and, where applicable, adjusted for transaction costs unless the Group designated a financial liability at fair value through
profit or loss. Subsequently, financial liabilities are measured at amortised cost using the effective interest method.
All interest-related charges and, if applicable, changes in an instruments’ fair value that are reported in profit or loss are
included.
(l) Plant and equipment
Plant and equipment are stated at historical cost less depreciation less impairment (if any). Historical cost includes expendi-
ture that is directly attributable to the acquisition of the items.
Depreciation on other assets is calculated using the straight-line method to allocate their cost, net of their residual values,
over their estimated useful lives as follows:
• Computers – 3 years
• Plant and equipment – 3-5 years
•
Furniture – 3-5 years
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater
than its estimated recoverable amount (note 1(h)). Gains and losses on disposals are determined by comparing proceeds
with carrying amount. These are included in profit or loss.
(m) Intangible assets
(i) Intellectual property
Costs incurred in acquiring intellectual property are capitalised and amortised on a straight-line basis over a period not ex-
ceeding the life of the patents, which averages 14 years. Where a patent has not been formally granted, the company esti-
mates the life of the granted patent in accordance with the provisional application.
Costs include only those costs directly attributable to the acquisition of the intellectual property. An asset’s carrying amount
is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recover-
able amount (note 1(h)).
(ii) Research and development
Research expenditure on internal projects is recognised as an expense as incurred. Costs incurred on development proj-
ects (relating to the design and testing of new or improved products) are recognised as intangible assets when it is probable
that the project will, after considering its commercial and technical feasibility, be completed and generate future economic
benefits and its costs can be measured reliably. The expenditure that could be recognised comprises all directly attributable
costs, including costs of materials, services, direct labour and an appropriate proportion of overheads. Other expenditures
that do not meet these criteria are recognised as an expense as incurred.
As the Company has not met the requirement under the standard to recognise costs in relation to development, these
amounts have been expensed.
Development costs previously recognised as an expense are not recognised as an asset in a subsequent period. Capital-
ised development costs are recorded as intangible assets and amortised from the point at which the asset is ready for use
on a straight-line basis over its useful life.
(iii) Goodwill
Goodwill is measured as described in (note 1(g)). Goodwill on acquisitions of subsidiaries is included in intangible assets.
Goodwill is not amortised, but it is tested for impairment annually or more frequently if events or changes in circumstances
indicate that it might be impaired and is carried at cost less accumulated impairment losses. Gains and losses on the dis-
posal of an entity include the carrying amount of goodwill relating to the entity sold.
41
CONTINUEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (n) Trade and other payables
These amounts represent liabilities for goods and services provided to the group prior to the end of financial year which are
unpaid. The amounts are unsecured and are usually paid within 30 days of recognition. Trade and other payables are pre-
sented as current liabilities unless payment is not due within 12 months from the reporting date. They are recognised initially
at their fair value and subsequently measured at amortised cost using the effective interest method.
(o) Compound instruments
Convertible notes, including the attached options and warrants, issued to Ridgeback Capital Investments are accounted for
as share based payments when the fair value of the instruments are higher than the consideration received, representing
intangible benefits received from the strategic investor. The difference between the fair value and consideration received
at issuance of the convertible notes and attached options and warrants is recognised immediately in profit and loss as a
share-based payment charge.
If options or warrants contain a settlement choice between cash or shares, this settlement choice constitutes a compound
feature of the convertible notes, which triggers the separation of debt and equity components to be accounted for sep-
arately. The liability component is measured at fair value at initial recognition and subsequent changes in fair value are
recognised in profit and loss. The difference between the fair value of the convertible notes and the liability component at
inception is accounted as an equity element and not remeasured subsequently.
(p) Finance costs
Finance costs are expensed in the period in which they are incurred.
(q) Employee benefits
(i) Short-term obligations
Liabilities for wages and salaries, including non-monetary benefits and accumulating annual leave that are expected to be
settled wholly within 12 months after the end of the period in which the employees render the related service are recognised
in respect of employees’ services up to the end of the reporting period and are measured at the amounts expected to be
paid when the liabilities are settled. Liabilities for non-accumulating sick leave are recognised when the leave is taken and
measured at the rates paid or payable.
(ii) Other long-term employee benefit obligations
The liabilities for long service leave and annual leave that are not expected to be settled wholly within 12 months after the
end of the period in which the employees render the related service are measured at the present value of expected future
payments to be made in respect of services provided by employees up to the end of the reporting period using the projected
unit credit method. Consideration is given to expected future wage and salary levels, experience of employee departures
and periods of service. Expected future payments are discounted using market yields at the end of the reporting period of
corporate bonds with terms and currencies that match, as closely as possible, the estimated future cash outflows. Remea-
surements as a result of experience adjustments are recognised in profit or loss. The obligations are presented as current
liabilities in the balance sheet if the entity does not have an unconditional right to defer settlement for at least twelve months
after the reporting period, regardless of when the actual settlement is expected to occur.
(iii) Retirement benefit obligations
The group does not maintain a group superannuation plan. The group makes fixed percentage contributions for all Aus-
tralian resident employees to complying third party superannuation funds. The group has no statutory obligation and does
not make contributions on behalf of its resident employees in the USA and Germany. The group’s legal or constructive ob-
ligation is limited to these contributions. Contributions to complying third party superannuation funds are recognised as an
expense as they become payable.
(iv) Share-based payments
Share-based compensation benefits are provided to employees via the Executive Incentive Plan (EIP). Information relating
to these schemes is set out in note 31.
42
CONTINUEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS The fair value of performance rights and options granted under the EIP are recognised as an employee benefits expense
with a corresponding increase in equity. The total amount to be expensed is determined by reference to the fair value of the
options granted, which includes any market performance conditions and the impact of any non-vesting conditions but ex-
cludes the impact of any service and non-market performance vesting conditions.
Non-market vesting conditions are included in assumptions about the number of options that are expected to vest. The total
expense is recognised over the vesting period, which is the period over which all of the specified vesting conditions are to
be satisfied. At the end of each period, the entity revises its estimates of the number of options that are expected to vest
based on the non-marketing vesting conditions. It recognises the impact of the revision to original estimates, if any, in profit
or loss, with a corresponding adjustment to equity.
(v) Termination benefits
Termination benefits are payable when employment is terminated before the normal employment contract expiry date. The
group recognises termination benefits when it is demonstrably committed to terminating the employment of current employees.
(vi) Bonus plan
The group recognises a liability and an expense for bonuses. The group recognises a provision where contractually obliged
or where there is a past practice that has created a constructive obligation.
(r) Contributed equity
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.
(s) Earnings per share
(i) Basic earnings per share
Basic earnings per share is calculated by dividing:
•
•
the profit or loss attributable to owners of the Company
by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in
ordinary shares issued during the year. Bonus elements have been included in the calculation of the weighted average
number of ordinary shares and has been retrospectively applied to the prior financial year.
(ii) 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 additional ordinary shares that would have been outstanding assuming the conversion
of all dilutive potential ordinary shares.
(t) 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 re-
coverable from the taxation authority. In this case it is recognised as part of the cost of 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 recov-
erable from, or payable to, the taxation authority is included with other receivables or payables in the balance sheet.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities
which are recoverable from, or payable to the taxation authority, are presented as operating cash flows. Commitments and
contingencies are disclosed net of the amount of GST recoverable from, or payable to, the tax authority.
43
CONTINUEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (u) Leases
The Group leases various offices and printer equipment. Rental contracts are typically made for fixed periods of 1 to 3 years
and typically have extension options of 3 months to 1 year minimum at the discretion of either the Lessor or the Lessee.
Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease
agreements do not impose any covenants, but leased assets may not be used as security for borrowing purposes.
Contracts may contain both lease and non-lease components. The Group allocates the consideration in the contract to the
lease and non-lease components based on their relative stand-alone prices, wherever practicable. Lease terms are negoti-
ated on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not impose
any covenants other than the security interests in the leased assets that are held by the lessor. Leased assets may not be
used as security for borrowing purposes.
Operating leases with a term of less than 12 months are considered as short-term leases and leases below threshold of
A$12,000 are considered as low value leases. Payments associated with short-term leases and all leases of low-value
assets are recognised on a straight-line basis as an expense in profit or loss. During the financial year ended 30 June
2020, the expense recognised for short term leases was A$95,302 and the expense recognised for low value leases was
A$4,090.
Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net
present value of the following lease payments:
•
•
•
•
•
fixed payments (including in-substance fixed payments), less any lease incentives receivable
variable lease payment that are based on an index or a rate, initially measured using the index or rate as at the com-
mencement date
amounts expected to be payable by the group under residual value guarantees
the exercise price of a purchase option if the group is reasonably certain to exercise that option, and
payments of penalties for terminating the lease, if the lease term reflects the group exercising that option.
Lease payments to be made under reasonably certain extension options are also included in the measurement of the liability.
The lease payments are discounted using an incremental borrowing rate as calculated by management at the commence-
ment date and taking into consideration feedback from surveyed financial institutions on incremental borrowing rates avail-
able for the Group as a lessee and nature of each lease portfolio. Incremental borrowing rates are re-assessed on a half
yearly basis and is deemed equivalent for the Group’s specific circumstances to a rate that an individual lessee would have
to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic envi-
ronment with similar terms, security and conditions. Lease payments are allocated between principal and finance cost. The
finance cost is charged to profit or loss over the lease period.
Right-of-use assets are measured at cost comprising the following:
•
•
•
•
the amount of the initial measurement of lease liability
any lease payments made at or before the commencement date less any lease incentives received
any initial direct costs, and
restoration costs.
Right-of-use assets are generally depreciated over the shorter of the asset’s useful life and the lease term on a straight-line
basis. If the group is reasonably certain to exercise a purchase option, the right-of-use asset is depreciated over the under-
lying asset’s useful life. The group is exposed to potential future increases in variable lease payments based on an index
or rate, which are not included in the lease liability until they take effect. When adjustments to lease payments based on an
index or rate take effect, the lease liability is reassessed and adjusted against the right-of-use asset.
Extension and termination options are included in a number of property and equipment leases across the Group. These are
used to maximise operational flexibility in terms of managing the assets used in the Group’s operations.
The Group does not provide residual value guarantees in relation to leases.
44
CONTINUEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (v) Parent entity financial information
The financial information for the parent entity, Immutep Limited, disclosed in note 32 has been prepared on the same basis
as the consolidated financial statements, except as set out below.
(i) Investments in subsidiaries
Investments in subsidiaries are accounted for at cost in the financial statements of Immutep Limited.
(ii) Tax consolidation legislation
Immutep Limited and its wholly-owned Australian controlled entities have implemented the tax consolidation legislation. The
head entity, Immutep Limited, and the controlled entities in the tax consolidated group account for their own current and
deferred tax amounts. These tax amounts are measured as if each entity in the tax consolidated group continues to be a
standalone taxpayer in its own right.
The entities have also entered into a tax funding agreement under which the wholly-owned entities fully compensate for
any current tax payable assumed and are compensated by the head entity for any current tax receivable and deferred tax
assets relating to unused tax losses or unused tax credits that are transferred to the head entity under the tax consolidation
legislation. The funding amounts are determined by reference to the amounts recognised in the wholly-owned entities’ finan-
cial statements.
The amounts receivable/payable under the tax funding agreement are due upon receipt of the funding advice from the head
entity, which is issued as soon as practicable after the end of each financial year. The head entity may also require payment
of interim funding amounts to assist with its obligations to pay tax instalments. Assets or liabilities arising under tax funding
agreements with the tax consolidated entities are recognised as current amounts receivable from or payable to other enti-
ties in the group. Any difference between the amounts assumed and amounts receivable or payable under the tax funding
agreement are recognised as a contribution to (or distribution from) wholly-owned tax consolidated entities.
(iii) Share-based payments
The grant by the Company of options over its equity instruments to the employees of subsidiary undertakings in the group is
treated as a capital contribution to that subsidiary undertaking. The fair value of employee services received, measured by
reference to the grant date fair value, is recognised over the vesting period as an increase to investment in subsidiary un-
dertakings, with a corresponding credit to equity.
(w) Changes in accounting policy
This note explains the impact of the adoption of AASB 16 Leases on the Group’s consolidated financial statements.
As indicated in note 1(a)(iii) above, the group has adopted AASB 16 Leases retrospectively from 1 July 2019, but has not
restated comparatives for the financial year 2019, as permitted under the specific transition provisions in the standard. The
reclassifications and the adjustments arising from the new leasing rules are therefore recognised in the opening balance
sheet on 1 July 2019. The new accounting policies are disclosed in note 1(u).
On adoption of AASB 16, the group recognised lease liabilities in relation to leases which had previously been classified as
‘operating leases’ under the principles of AASB 117 Leases. These liabilities were measured at the present value of the re-
maining lease payments, discounted using the lessee’s incremental borrowing rate as of 1 July 2019. The weighted average
lessee’s incremental borrowing rate applied to the lease liabilities on 1 July 2019 was 3.75%.
(i) Practical expedients applied
In applying AASB 16 for the first time, the Group has used the following practical expedients permitted by the standard:
• Reliance on previous assessments on whether leases are onerous
•
The accounting for operating leases with a remaining lease term of less than 12 months as at 1 July 2019 as short-
term leases
The exclusion of initial direct costs for the measurement of the ROU asset at the date of initial application, and
The use of hindsight in determining the lease term where the contract contains options to extend or terminate the lease.
•
•
The group has also elected not to reassess whether a contract is or contains a lease at the date of initial application.
45
CONTINUEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Instead, for contracts entered into before the transition date the group relied on its assessment made applying AASB 117
and Interpretation 4 Determining whether an Arrangement contains a Lease.
(ii) Measurement of lease liabilities
Reconciliation of lease commitments as at 30 June 2019 to lease liabilities recognised as at 1 July 2019 is as follows:
Operating lease commitments disclosed as at 30 June 2019
Less: Effect of discounting using the lessee’s incremental borrowing rate at the date of
initial application
Less: Short-term leases recognised on a straight-line basis as expense
Add: New lease agreements agreed with third parties as at 1 July 2019 and discounted under AASB 16
Lease liability recognised under AASB 16 as at 1 July 2019
Of which are:
Current lease liabilities
Non-current lease liabilities
2019 A$
263,565
(10,359)
(43,698)
126,582
336,090
125,408
210,682
336,090
(iii) Measurement of right-of-use assets
Right-of use assets were measured at the amount equal to the lease liability, adjusted by the amount of any prepaid or ac-
crued lease payments relating to that lease recognised in the balance sheet as at 30 June 2019.
Initial value of ROU asset recognised as at 1 July 2019
Less: lease incentives
Net ROU asset recognised under AASB 16 as at 1 July 2019
2019 A$
336,090
(12,215)
323,875
(iv) Lessor accounting
The Group did not act as a lessor as at 30 June 2019 and did not need to make any adjustments to the accounting for as-
sets held as lessor under operating leases.
NOTE 2. FINANCIAL RISK MANAGEMENT
The group’s activities expose it to a variety of financial risks: market risk (including currency risk), credit risk and liquidity
risk. The group’s overall risk management program focuses on the unpredictability of financial markets and seeks to mini-
mise potential adverse effects on the financial performance of the group.
The group hedges its foreign exchange risk exposure arising from future commercial transactions and recognised assets
and liabilities using natural hedging by holding currency that matches forecast expenditure in each of the major foreign cur-
rencies used (AUD, EUR, USD). The group may use derivative financial instruments such as foreign exchange contracts
to hedge certain risk exposures when the group expects a major transaction in the currency other than the major foreign
currencies used by the group. The group uses different methods to measure different types of risk to which it is exposed.
These methods include sensitivity analysis and cash flow forecasting in the case of foreign exchange and aging analysis for
credit risk.
Risk management is carried out by senior management under policies approved by the board of directors. Management
identifies, evaluates, and hedges financial risks in close co-operation with the group’s operating units. The board provides
the principles for overall risk management, as well as policies covering specific areas, such as foreign exchange risk, inter-
est rate risk, credit risk, use of derivative financial instruments and non-derivative financial instruments, and investment of
excess liquidity.
46
CONTINUEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (a) Market risk
Foreign exchange risk
The group operates internationally and is exposed to foreign exchange risk arising from various currency exposures, primar-
ily with respect to the US dollar and Euro.
Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities denominated in a
currency that is not the entity’s functional currency. The risk is measured using sensitivity analysis and cash flow forecast-
ing. Management has set up a policy to manage the Company’s exchange risk within the group companies. The group may
hedge its foreign exchange risk exposure arising from future commercial transactions and recognised assets and liabilities
using forward contracts or natural hedging.
The group considers using forward exchange contracts to cover anticipated cash flows in USD and Euro periodically. This
policy is reviewed regularly by directors from time to time. There were no outstanding foreign exchange contracts as at 30
June 2020 and 30 June 2019.
The group’s exposure to foreign currency risk at the end of the reporting period, expressed in Australian dollars, was as
follows:
Cash in bank
Trade and other receivables
Trade and other payables
30 June 2020
30 June 2019
USD
EUR
USD
EUR
5,109,237
5,648,580
10,023,299
1,556,444
-
1,201,913
85,555
3,740,827
(404,525)
(581,556)
(921,843)
(1,267,647)
Sensitivity
Based on the financial assets and liabilities held at 30 June 2020, had the Australian dollar weakened/ strengthened by 10%
against the US dollar with all other variables held constant, the group’s post-tax loss for the year would have been $685,518
lower/$685,518 higher (2019 – $918,701 lower/$918,701 higher).
Based on the financial instruments held at 30 June 2020, had the Australian dollar weakened/ strengthened by 10% against
the Euro with all other variables held constant, the group’s post-tax loss for the year would have been $1,025,845 low-
er/$1,025,845 higher (2019 – $402,962 lower/$402,962 higher ), mainly as a result of foreign exchange gains/losses on trans-
lation of Euro denominated financial instruments. Any changes in post-tax loss will have an equivalent change to equity.
The US warrants financial liability will be equity-based settled upon exercise of the US warrants. However, as the exercise
will be done with an exercise price in US dollars, there is a foreign exchange risk due to the subsequent translation to Aus-
tralian dollars.
Currently the group’s exposure to other foreign exchange movements is not material.
(b) Credit risk
Credit risk is managed on a group basis. Credit risk arises from cash and cash equivalents, derivative financial instruments,
and deposits with banks. For banks, only independently rated parties with a minimum rating of ‘A’ according to ratings agen-
cies are accepted.
47
CONTINUEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS The credit quality of financial assets that are neither past due nor impaired can be assessed by reference to external credit
ratings:
Cash at bank and short-term bank deposits
Minimum rating of A
(c) Liquidity risk
30 June 2020
30 June 2019
$
$
26,322,047
16,567,982
Prudent liquidity risk management implies maintaining sufficient cash to meet obligations when due. At the end of the re-
porting period the group held deposits at call of $26,322,047 (2019: $16,567,982) that are expected to readily generate cash
inflows for managing liquidity risk.
Management monitors rolling forecasts of the group’s liquidity reserve cash and cash equivalents (Note 7) on the basis of
expected cash flows. In addition, the group’s liquidity management policy involves projecting cash flows in major currencies
and considering the level of liquid assets necessary to meet these.
As outlined in Note 3, the Company’s monitoring of its cash requirements extends to the consideration of potential capital
raising strategies and an active involvement with its institutional and retail investor base.
Maturities of financial liabilities
The tables below analyse the group’s financial liabilities into relevant maturity groupings based on their contractual matur-
ities for:
(a) all non-derivative financial liabilities, and
(b) net and gross settled derivative financial instruments for which the contractual maturities are essential for an under-
standing of the timing of the cash flows.
The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their
carrying balances as the impact of discounting is not significant.
Contractual maturities of financial liabilities
Less than 12
months
Between 1
and 5 Years
> 5 years
Total contractual
cash flows
Carrying
Amount
At 30 June 2020
Non-Derivatives
$
$
$
$
Trade and other payables
Convertible note liability (refer note 15)
2,934,371
-
-
-
-
2,934,371
17,876,076
17,876,076
Lease liability
137,025
136,154
-
273,179
2,934,371
8,789,113
262,383
3,071,396
136,154
17,876,076
21,083,626
11,985,867
Contractual maturities of financial liabilities
Less than 12
months
> 5 years
Total contractual
cash flows
Carrying Amount
At 30 June 2019
Non-Derivatives
Trade and other payables
Convertible note liability (refer note 15)
$
$
$
$
5,060,368
-
-
17,876,076
5,060,368
17,876,076
5,060,368
17,876,076
22,936,444
5,060,368
7,642,707
12,703,075
48
CONTINUEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (d) Fair value measurements
The following table presents the group’s financial assets and financial liabilities measured and recognised at fair value at 30
June 2020 and 30 June 2019 on a recurring basis:
At 30 June 2020
Liabilities
Convertible note liability
Warrant liability
Total liabilities
At 30 June 2019
Liabilities
Convertible note liability
Warrant liability
Total liabilities
Level 1
Level 2
Level 3
$
$
$
Total
$
-
-
-
-
8,789,113
8,789,113
949,600
-
949,600
949,600
8,789,113
9,738,713
Level 1
Level 2
Level 3
$
$
$
Total
$
-
-
-
-
7,642,707
7,642,707
3,164,413
-
3,164,413
3,164,413
7,642,707
10,807,120
(i) Valuation techniques used to determine fair values
Level 1: The fair value of financial instruments trade in active markets (such as publicly traded derivatives, and trading and
available-for-sale securities) is based on quoted (unadjusted) market prices at the end of the reporting period. The quoted
market price used for financial assets held by the group is the current bid price. These instruments are included in level 1.
Level 2: The fair value of financial instruments that are not traded in an active market (for example over-the-counter deriv-
atives) is determined using valuation techniques. These valuation techniques maximise the use of observable market data
where it is available and rely as little as possible on entity specific estimates. If all significant inputs required to fair value an
instrument are observable, the instrument is included in level 2.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.
This is the case for unlisted equity securities.
Specific valuation techniques used to value financial instruments include:
•
•
•
•
The use of quoted market prices or dealer quotes for similar instruments
The fair value of interest rate swaps is calculated as the present value of the estimated future cash flows based
on observable yield curves
The fair value of forward foreign exchange contracts is determined using forward exchange rates at the balance sheet
date
The fair value of the remaining financial instruments is determined using discounted cash flow analysis
(ii) Fair value measurements using value techniques
•
•
•
There are no financial instruments as at 30 June 2020 under Level 1.
Level 2 financial instruments consist of warrant liabilities. Refer to Note 14 for details of fair value measurement.
Level 3 financial instruments consist of convertible notes. Refer to Note 15 for details of fair value measurement.
49
CONTINUEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (iii) Valuation inputs and relationships to fair value
For US warrant valuation inputs under Level 2, please refer to Note 14.
The following table summarises the quantitative information about the significant inputs used in level 3 fair value measure-
ments:
Description
Fair value at 30 June 2020
$
Unobservable inputs
Range of inputs
Convertible note
8,789,113 Face value
Interest rate of note
Risk adjusted interest rate
13,750,828
3%
15%
(iv) Valuation process
The convertible note was valued using a discounted cashflow model.
NOTE 3 CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including
expectations of future events that may have a financial impact on the entity and that are believed to be reasonable under the
circumstances.
The group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition,
seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.
(a) Accounting estimate for R&D tax incentive
R&D tax incentive is estimated based on an assessment of qualifying research and development expenditure in each tax
jurisdiction. There is some judgement required in assessing the quantum of grant income to recognise due to the complexity
of the legislation in each tax jurisdiction.
(b) Development expenditure
The consolidated entity has expensed all internal development expenditure incurred during the year as the costs relate to
the initial expenditure for development of biopharmaceutical products and the generation of future economic benefits is not
considered probable given the current stage of development. It was considered appropriate to expense the development
costs as they did not meet the criteria to be capitalised under AASB 138 Intangible Assets.
(c) Liquidity
The Group has experienced significant recurring operating losses and negative cash flows from operating activities since its
inception. As at 30 June 2020, the Group holds cash and cash equivalents of $26,322,047 (2019: $16,567,982).
In line with the Company’s financial risk management, the directors have carefully assessed the financial and operating
implications of the above matters, including the expected cash outflows of ongoing research and development activities of
the Group over the next 12 months. Based on this consideration, the directors are of the view that the Group will be able to
pay its debts as and when they fall due for at least 12 months following the date of these financial statements and that it is
appropriate for the financial statements to be prepared on a going concern basis.
Monitoring and addressing the ongoing cash requirements of the Group is a key focus of the directors. This involves consid-
eration of future funding initiatives such as potential business development opportunities, for example an out-licensing trans-
action, capital raising initiatives, and the control of variable spending on research and development activities of the Group.
(d) Assessment on the carrying value of intellectual property
Costs incurred in acquiring intellectual property are capitalised and amortised on a straight-line basis over a period not ex-
ceeding the life of the patents. Where a patent has not been formally granted, the company estimates the life of the granted
patent in accordance with the provisional application. Costs include only those costs directly attributable to the acquisition
of the intellectual property.
50
CONTINUEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater
than its estimated recoverable amount. Intellectual property represents the largest asset of the Group as at 30 June 2020
and the most significant asset given the current research and development phase of operations. Accordingly, as commercial
production has not yet commenced there is some judgment required in assessing the continued viability on the use of the
intellectual property. Refer to note 1(h).
In March 2020, the World Health Organization declared the global novel coronavirus (“COVID-19”) outbreak a pandemic. To
date, the Company’s operations have not been materially impacted by the COVID-19 pandemic. However, the ongoing pan-
demic has increased the estimation uncertainty in the preparation of the consolidated financial statements. The estimation
uncertainty associated with the magnitude and duration of COVID-19 is as follows:
•
•
•
The continued pandemic has led to volatility in the global capital markets, which could adversely affect the company’s
ability to access the capital markets.
It is possible that the continued spread of COVID-19 could delay the future recruitment of clinical trials and therefore
could lead to an indication of impairment in the intangible assets.
The continued pandemic could cause the delay of clinical trials conducted by our partners, which could potentially have
an adverse impact on the future license income.
The consolidated entity has applied accounting estimates in the consolidated financial statements based on forecasts
of economic conditions which reflect expectations and assumptions as at 30 June 2020 about future events, including
COVID-19 that management believe are reasonable in the circumstances. While there was not a material impact to our con-
solidated financial statements as of and for the period ended 30 June 2020, resulting from our assessments, our future as-
sessment of our current expectations at that time of the magnitude and duration of COVID-19, as well as other factors, could
result in material impacts to our consolidated financial statements in future reporting periods.
51
CONTINUEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTE 4 SEGMENT REPORTING
Identification of reportable operating segments
Operating segments are reported in a manner consistent with internal reports which are reviewed and used by Management
and the Board of Directors, who is identified as the Chief Operating Decision Maker (‘CODM’). The Group operates in one
operating segment, being Immunotherapy.
Operating segment information
30 June 2020
Immunotherapy
Unallocated
Consolidated
$
$
$
Revenue
License revenue*
Other Income
Research material sales
Grant income
Net gain on fair value movement of warrants
Net gain on foreign exchange
Interest income
Total revenue and other income
Result
Segment result
Profit/(loss) before income tax expense
Income tax expense
Loss after income tax expense
Total segment assets
Total segment liabilities
7,486,444
279,805
5,973,034
-
-
-
-
-
-
2,214,813
346,331
199,541
7,486,444
279,805
5,973,034
2,214,813
346,331
199,541
13,739,283
2,760,685
16,499,968
(16,228,880)
(16,228,880)
2,760,685
(13,468,195)
2,760,685
(13,468,195)
46,597,252
13,297,907
(37)
(13,468,232)
46,597,252
13,297,907
-
-
*Licensing revenue increased significantly from A$140K in FY 2019 to A$7.49 million in FY 2020, mainly attributed to the GSK milestone payment of GBP 4 million
(A$7.49 million) received in this fiscal year related to the first patient being dosed in GSK’s Phase II clinical trial evaluating GSK2831781 in ulcerative colitis.
52
CONTINUEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 30 June 2019
Revenue
License revenue
Other Income
Research material sales
Grant income
Net gain on fair value movement of warrants
Net gain on foreign exchange
Interest income
Total revenue and other income
Result
Segment result
Profit/(loss) before income tax expense
Income tax expense
Loss after income tax expense
Total segment assets
Total segment liabilities
Immunotherapy
Unallocated
Consolidated
$
$
$
139,782
1,155,065
4,342,364
-
-
-
-
-
-
961,176
493,736
397,281
139,782
1,155,065
4,342,364
961,176
493,736
397,281
5,637,211
1,852,193
7,489,404
(20,196,177)
(20,196,177)
1,852,193
(18,343,984)
1,852,193
(18,343,984)
40,541,499
16,153,783
-
(18,343,984)
40,541,499
16,153,783
-
-
53
CONTINUEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTE 5 EXPENSES
Loss before income tax includes the following specific expenses:
Research & development and intellectual property
Research and development
Intellectual property management
Total research & development and intellectual property
Corporate administrative expenses
Auditor’s remuneration
Directors fees and employee expenses
Employee share-based payment expenses
US warrants transaction costs
Other administrative expenses
Total corporate administrative expenses
Depreciation
Plant and equipment
Computer
Furniture and fittings
Right-of-use asset
Total depreciation
Amortisation
Patents
Intellectual property
Total amortisation
Total depreciation and amortisation
Consolidated
30 June 2020
30 June 2019
$
$
17,859,151
2,536,831
20,395,982
282,580
1,465,676
1,724,282
-
2,863,141
6,335,679
7,434
10,318
4,799
126,712
149,263
-
1,930,376
1,930,376
2,079,639
15,756,727
834,474
16,591,201
297,028
1,578,583
1,581,987
236,887
2,671,676
6,366,161
4,024
10,206
1,269
-
15,499
-
1,863,652
1,863,652
1,879,151
Net fair value losses on convertible note
1,146,406
996,875
54
CONTINUEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTE 6 INCOME TAX EXPENSE
Current tax
Current tax on results for the year
Total current tax expense
Deferred income tax
(Decrease)/Increase in deferred tax assets
Increase/(Decrease) in deferred tax liabilities
Total deferred tax benefit
Income tax expense
Consolidated
30 June 2020
30 June 2019
$
$
37
37
567,473
(567,473)
-
37
-
-
342,349
(342,349)
-
-
Consolidated
30 June 2020
30 June 2019
$
$
Numerical reconciliation of income tax expense to prima facie tax expense
Loss before income tax expense
Tax at the Australian tax rate of 27.5% (2019: 27.5%)
(13,468,195)
(3,703,754)
(18,343,984)
(5,044,596)
Tax effect amounts which are not deductible/(taxable) in calculating taxable income:
Non-deductible share based payments
Other non-deductible expenses
Non-assessable income
Capital listing fee
Difference in overseas tax rates*
Tax losses not recognised
Income tax expense**
443,956
436,396
(442,580)
(192,741)
1,817,387
(1,641,336)
1,641,299
(37)
435,046
3,771,771
(1,445,111)
(99,976)
2,040,517
(342,349)
342,349
-
*Difference in overseas tax rate is largely as a result of the corporate income tax of 10% applicable to the Immutep subsidiary in France for financial year 2020.
**Income tax expense relates to tax payable for the Immutep subsidiary in the United States.
Deferred tax assets for tax losses not recognised comprises:
Carried forward tax losses benefit
Total deferred tax asset for tax losses not recognised
Consolidated
30 June 2020
30 June 2019
$
$
36,282,319
36,282,319
35,493,421
35,493,421
The above potential tax benefit for tax losses has not been recognised in the consolidated balance sheet as the recovery
of this benefit is not probable. There is no expiration date for the tax losses carried forward. The estimated amount of cu-
mulative tax losses at 30 June 2020 was $157,314,108 (2019: $142,688,221). Utilisation of these tax losses is dependent
on the parent entity and its subsidiaries satisfying certain tests at the time the losses are recouped and in generating future
taxable profits against which to utilise the losses.
55
CONTINUEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTE 7 CURRENT ASSETS – CASH AND CASH EQUIVALENTS
Cash on hand
Cash at bank
Cash on deposit
Consolidated
30 June 2020
30 June 2019
$
$
420
12,793,272
13,528,355
26,322,047
360
3,735,995
12,831,627
16,567,982
The above cash and cash equivalent are held in AUD, USD, and Euro. The interest rates on these deposits range from 0%
to 1.03% in 2020 (0% to 2.44% in 2019).
NOTE 8 CURRENT RECEIVABLES
GST and VAT receivables
Accounts receivables and receivable for grant income
Consolidated
30 June 2020
30 June 2019
$
$
171,834
3,121,858
3,293,692
267,703
4,926,423
5,194,126
Due to the short-term nature of these receivables, the carrying value is assumed to be their fair value at 30 June 2020. No
receivables were impaired or past due.
NOTE 9 OTHER CURRENT ASSETS
Prepayments
Security deposit
Accrued interest
Consolidated
30 June 2020
30 June 2019
$
$
1,403,277
34,822
98,036
1,536,135
1,685,659
57,164
36,893
1,779,716
Prepayments are largely in relation to prepaid insurance and deposits paid to organisations involved in the clinical trials.
56
CONTINUEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTE 10 NON-CURRENT ASSETS – PLANT AND EQUIPMENT
Plant and
Equipment
Computers
Furniture and
fittings
$
$
$
Total
$
At 30 June 2018
Cost or fair value
Accumulated depreciation
Net book amount
Year ended 30 June 2019
Opening net book amount
Exchange differences
Additions
Disposals
Depreciation charge
Closing net book amount
At 30 June 2019
Cost or fair value
Accumulated depreciation
Net book amount
Year ended 30 June 2020
Opening net book amount
Exchange differences
Additions
Disposals
Depreciation charge
Closing net book amount
At 30 June 2020
Cost or fair value
Accumulated depreciation
Net book amount
524,746
(513,473)
11,273
11,273
353
17,027
-
(4,024)
24,629
548,380
(523,751)
24,629
24,629
(431)
7,705
-
(7,434)
24,469
557,872
(533,403)
24,469
61,585
(46,752)
14,833
14,833
226
11,051
-
(10,206)
15,904
73,966
(58,062)
15,904
15,904
338
11,643
(450)
(10,318)
17,117
85,738
(68,621)
17,117
8,475
(8,132)
343
343
(13)
13,356
-
(1,269)
12,417
22,049
(9,632)
12,417
12,417
152
-
-
(4,799)
7,770
594,806
(568,357)
26,449
26,449
566
41,434
-
(15,499)
52,950
644,395
(591,445)
52,950
52,950
59
19,348
(450)
(22,551)
49,356
22,258
(14,488)
7,770
665,868
(616,512)
49,356
57
CONTINUEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTE 11 NON-CURRENT ASSETS – INTANGIBLES
Patents
Intellectual
Property
Goodwill
$
$
$
Total
$
At 30 June 2018
Cost or fair value
Accumulated amortisation
Net book amount
Year ended 30 June 2019
Opening net book amount
Exchange differences
Amortisation charge
Closing net book amount
At 30 June 2019
Cost or fair value
Accumulated amortisation
Net book amount
Year ended 30 June 2020
Opening net book amount
Exchange differences
Amortisation charge
Closing net book amount
At 30 June 2020
Cost or fair value
Accumulated amortisation
Net book amount
1,915,671
24,786,169
109,962
(1,915,671)
(6,566,976)
-
18,219,193
109,962
26,811,802
(8,482,647)
18,329,155
-
-
-
-
-
18,219,193
109,962
18,329,155
481,222
(1,863,652)
-
-
16,836,763
109,962
481,222
(1,863,652)
16,946,725
1,915,671
25,480,543
109,962
27,506,176
(1,915,671)
(8,643,780)
-
(10,559,451)
-
-
-
-
-
16,836,763
109,962
16,946,725
16,836,763
109,962
16,946,725
178,458
(1,930,376)
-
-
15,084,845
109,962
178,458
(1,930,376)
15,194,807
1,915,671
25,730,602
109,962
27,756,235
(1,915,671)
(10,645,757)
-
(12,561,428)
-
15,084,845
109,962
15,194,807
Amortisation methods and useful lives
The group amortises intangible assets with a limited useful life using the straight-line method over the following periods:
•
•
Patents, trademark and licenses – 13-21 years
Intellectual property assets – 13-14 years
58
CONTINUEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTE 12 DEFERRED TAX BALANCES
(i) Deferred tax assets
The balance comprises temporary differences attributable to:
Tax losses
Total deferred tax assets
Set-off of deferred tax liabilities pursuant to set-off provisions
Net deferred tax assets
Consolidated
30 June 2020
30 June 2019
$
$
1,508,478
1,508,478
(1,508,478)
-
2,075,951
2,075,951
(2,075,951)
-
(ii) Deferred tax liabilities
The amount of deferred tax liability represents the temporary difference that arose on the recognition of Intangibles record-
ed in the subsidiary Company in France. This has been set-off against deferred taxes in the Subsidiary Company accord-
ingly, hence reducing the unrecognized tax losses for both the France subsidiary and the consolidated Group. The balance
comprises temporary differences attributable to:
Consolidated
30 June 2020
30 June 2019
$
$
Intangible assets
Total deferred tax liabilities
Set-off of deferred tax liabilities pursuant to set-off provisions
Net deferred tax liabilities
1,508,478
1,508,478
(1,508,478)
-
2,075,951
2,075,951
(2,075,951)
(iii) Movements in deferred tax balances
Movements
At 30 June 2019
(Charged)/credited to profit or loss
At 30 June 2020
Tax losses
Intangible Assets
$
$
Total
$
2,075,951
(567,473)
1,508,478
(2,075,951)
567,473
(1,508,478)
NOTE 13 CURRENT LIABILITIES – TRADE AND OTHER PAYABLES
-
-
-
-
Trade payables
Other payables and accruals
Consolidated
30 June 2020
30 June 2019
$
$
1,639,661
1,294,706
2,934,367
2,557,273
2,503,095
5,060,368
59
CONTINUEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTE 14 NON-CURRENT LIABILITIES – US WARRANT LIABILITY
Opening balance
Exercising of warrants*
December 2018 warrants fair value at issue date
Fair value movements
Closing balance
30 June 2020
30 June 2019
$
$
3,164,413
-
-
(2,214,813)
949,600
2,945,358
(1,277,028)
2,457,259
(961,176)
3,164,413
*In September and October 2018, US investors exercised 419,733 warrants at an exercise price of US$ 2.50 each. Immutep received US$1.05 million (A$1.46 million)
cash payment in total.
In July 2017, the Group completed its first US capital raise after it entered into a securities purchase agreement with certain
accredited investors for the Group to issue American Depositary Shares (ADSs) and Warrants of the Group for cash con-
sideration totaling $6,561,765. In this private placement, the Group agreed to issue unregistered warrants to purchase up
to 1,973,451 of its ADSs. The warrants have an exercise price of US$2.50 per ADS, are exercisable immediately and will
expire on 5 January 2023. The warrants do not confer any rights to dividends or a right to participate in a new issue without
exercising the warrant.
In December 2018, the Group completed its second US capital raise after it entered into a securities purchase agreement
with certain accredited investors to purchase American Depositary Shares (ADSs) and Warrants of the Group for cash con-
sideration totaling $7,328,509. In this private placement, the Group agreed to issue unregistered warrants to purchase up to
2,080,000 of its ADSs. The warrants have an exercise price of US$2.50 per ADS. The Warrant may be exercised in whole
or in part at any time or times up until the Warrant Expiry Date, being 12 February 2022. The warrants do not confer any
rights to dividends or a right to participate in a new issue without exercising the warrant.
Both US warrant issues represent a written option to exchange a fixed number of the Group’s own equity instruments for a
fixed amount of cash that is denominated in a foreign currency (US dollars) and is thus classified as a derivative financial lia-
bility in accordance with AASB 132. The US warrants liability is initially recorded at fair value at issue date and subsequently
measured at fair value through profit and loss at each reporting date. Capital raising costs have been allocated proportion-
ately between issued capital and the US warrant issues in accordance with their relative fair values.
The 10 to 1 share consolidation in November 2019 did not change the number of US warrants nor the exercise price of
those warrants as the American Depository Receipt (ADR) ratio was also changed from 1 ADS representing 100 shares to 1
ADS representing 10 shares. The effective date of the change was 5 November 2019.
However, under the anti-dilution clause of share purchase agreements, the exercise price was adjusted due to the entitle-
ment offer the Group conducted in August 2019. As a result, the exercise price is now US$2.49.
60
CONTINUEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Fair value of warrants
The warrants granted are not traded in an active market and the fair value has thus been estimated by using the Black-
Scholes pricing model based on the following assumptions. Key terms of the warrants are included above.
The following assumptions were based on observable market conditions that existed at the issue date and at 30 June 2020:
December 2018 warrants
Assumption
At issue date
At 30 June 2020
Rationale
Historic volatility
Exercise price
Share price
Risk-free
interest rate
59.95%
US$2.50
US$2.21
2.68%
72.04%
US$2.49*
US$1.08
0.16%
Based on 12-month historical volatility data for the Company
As per subscription agreement
Closing share price on valuation date from external market source
Based on the US Government securities yields which match
the term of the warrant
Dividend yield
0.0%
0.0%
Based on the Company’s nil dividend history
Fair value
per warrant
Fair value
US$0.8474
A$1.1814
A$2,457,259
US$0.1395
A$0.2033
Determined using Black-Scholes models with the inputs above
A$422,789
Fair value of 2,080,000 warrants as at issue date and 30 June 2020
*Exercising price has been adjusted as per anti-dilution clause in the share purchase agreement.
July 2017 warrants
Assumption
At issue date
At 30 June 2020
Rationale
Historic volatility
Exercise price
Share price
Risk-free
interest rate
Dividend yield
Fair value per
warrant
Fair value
58.0%
US$2.50
US$2.17
1.930%
0.0%
US$1.0716
A$1.3962
A$2,755,375
72.04%
US$2.49*
US$1.08
0.18%
Based on 12-month historical volatility data for the Company
As per subscription agreement
Closing share price on valuation date from external market source
Based on the US Government securities yields which match
the term of the warrant
0.0%
Based on the Company’s nil dividend history
US$0.2327
A$0.3391
A$526,811
Determined using Black-Scholes models with the inputs above
Fair value of 1,973,451 warrants as at issue date and fair value
of 1,553,718 warrants at 30 June 2020
*Exercising price has been adjusted as per anti-dilution clause in the share purchase agreement.
NOTE 15 NON CURRENT LIABILITIES – CONVERTIBLE NOTE
Convertible note at fair value at beginning of reporting period
Net change in fair value
Convertible note at fair value at end of reporting period
Consolidated
30 June 2020
30 June 2019
$
$
7,642,707
1,146,406
8,789,113
6,645,832
996,875
7,642,707
On 11 May 2015, the Company entered into a subscription agreement with Ridgeback Capital Investments (Ridgeback) to
invest in Convertible Notes and Warrants of the Company for cash consideration totaling $13,750,828, which was subject to
shareholder approval at an Extraordinary General Meeting. Shareholder approval was received on 31 July 2015.
The 13,750,828 Convertible Notes issued have a face value of $1.00 per note which are exercisable at a price of approxi-
mately $0.18 per share (adjusted for post share consolidation and anti-dilution clause), mature on 4 August 2025 and accrue
interest at a rate of 3% per annum which may also be converted into shares. Conversions may occur during the period (i) at
61
CONTINUEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS least 3 months after the Issue Date and (ii) at least 15 business days prior to the maturity date into 50 ordinary shares of the
Company per note (subject to customary adjustments for rights or bonus issues, off market buybacks, issues at less than
current market price, share purchase plan, dividend reinvestment plan at a discount, return of capital or dividend or other
adjustment). If a change of control event, delisting event or event of default has occurred, Ridgeback may elect to convert
the notes into shares or repayment of principal and interest. The Convertible Notes rank at least equal with all present and
future unsubordinated and unsecured debt obligations of the Company and contain customary negative pledges regarding
financial indebtedness, dividend payments, related party transaction and others.
Details of the warrants granted together with the convertible note at initial recognition date are as follows:
•
•
8,475,995 warrants were granted which are exercisable at a price of A$0.025 per share on or before 4 August 2025
371,445,231 warrants were granted which are exercisable at a price of A$0.0237 per share on or before 4 August 2020
All warrants may be settled on a gross or net basis and the number of warrants or exercise price may be adjusted for a pro
rata issue of shares, a bonus issue or capital re-organisation. The Warrants do not confer any rights to dividends or a right
to participate in a new issue without exercising the warrant.
As a result of the 10 to 1 share consolidation in November 2019, the above cited warrants have been restated in accordance
with the subscription agreement. The exercise prices have been adjusted for the capital raising during the financial year
under the anti-dilution clause of share purchase agreements.
The warrant expiry dates remain unchanged. The restated terms are as follows:
•
•
847,600 warrants with an exercise price of A$0.248 per share
37,144,524 warrants with an exercise price of A$0.235 per share
As at 30 June 2020, none of the warrants specified above had been exercised since their initial recognition.
Fair value of convertible notes
The following assumptions were used to determine the initial fair value of the debt component of the convertible note which
were based on market conditions that existed at the grant date:
Assumption
Historic volatility
Share price
Risk free interest rate
Risk adjusted interest rate
Dividend yield
Convertible notes
Rationale
85.0%
$0.051
2.734%
15.0%
0.0%
Based on the Company’s historical volatility data
Closing market share price on 31 July 2015
Based on Australian Government securities yields which match the term
of the convertible note
An estimate of the expected interest rate of a similar non-convertible note
issued by the company
Based on the Company’s nil dividend history
The fair value of the convertible note was allocated between a financial liability for the traditional note component of the con-
vertible note and into equity which represents the conversion feature. The traditional note component of the convertible note
was initially recorded at fair value of $4.4m, based on the present value of the contractual cash flows of the note discounted
at 15%. After initial recognition, the liability component of the convertible note has been measured at fair value as required
by AASB 2. The remaining value of the convertible note was allocated to the conversion feature and recognised as equity.
Fair value at issuance
Fair value movements
Balance at 30 June 2020
62
Note – Liability
$
Conversion feature –
Equity $
4,419,531
4,369,582
8,789,113
41,431,774
-
41,431,774
CONTINUEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTE 16 CURRENT LIABILITIES – EMPLOYEE BENEFITS
Consolidated
30 June 2020
30 June 2019
$
$
Annual leave
300,466
238,570
The current provision for employee benefits is in relation to accrued annual leave and covers all unconditional entitlements
where employees have completed the required period of service. The entire amount of the provision is presented as current,
since the group does not have an unconditional right to defer settlement for any of these obligations.
NOTE 17 NON-CURRENT LIABILITIES – EMPLOYEE BENEFITS
Consolidated
30 June 2020
30 June 2019
$
$
Long service leave
61,978
47,725
NOTE 18 LEASES
The consolidated balance sheet shows the following amounts relating to leases:
Right-of-use Assets
Lease Liability
$
$
At 30 June 2020
201,215
262,383
The recognised ROU assets are comprised solely of property leases in Germany and France. Movements during the finan-
cial year ended 30 June 2020 are as follows:
Initial value of ROU asset recognised as at 1 July 2019
Less: lease incentives
Net ROU asset recognised under AASB 16 as at 1 July 2019
Depreciation for the year ended 30 June 2020
Foreign exchange differences
Carrying value of ROU asset as at 30 June 2020
A$
336,090
(12,215)
323,875
(126,712)
4,052
201,215
63
CONTINUEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 30 June 2020, movement of lease liabilities and aging presentation are as follows:
Lease Liabilities Reconciliation
Balance at 1 July 2019
Lease additions and modifications
Interest charged for the year
Disposals
Principle paid for the year
Interest paid for the year
Foreign exchange adjustments
Balance at 30 June 2020
Lease Liabilities aging
Current
Non-current
Balance at 30 June 2020
Maturities of Lease Liabilities
Consolidated
30 June 2020
$
336,090
-
10,457
-
(77,541)
(6,295)
(328)
262,383
Consolidated
30 June 2020
$
129,412
132,971
262,383
The table below shows the Group’s lease liabilities in relevant maturity groupings based on their contractual maturities. The
amounts disclosed in the table are the contractual undiscounted cashflows.
2020
Less than 1
year
Between 1
and 2 years
Between 2
and 5 years
Over 5 years
Total
contractual
cashflows
Carrying
amount
$ $
$
$
$
$
$
Lease Liabilities
137,025
136,154
-
-
273,179
262,383
NOTE 19 EQUITY – CONTRIBUTED
Fully paid ordinary shares
Options over ordinary shares – listed
19(a)
Consolidated
30 June 2020
30 June 2019
$
233,328,553
9,661,954
242,990,507
$
211,429,637
9,661,954
221,091,591
In November 2019, the shareholders approved a 10 to 1 share consolidation during the FY 2019 Annual General Meeting.
Refer to notes 14 and 15 for impact of the 10 to 1 share consolidation to US warrants and convertible notes, respectively.
64
CONTINUEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (a) Ordinary shares
Note
30 June 2020
30 June 2019
No.
$
No.
$
At the beginning of reporting period
3,388,598,296
211,429,637
3,026,082,669
203,570,765
Shares issued during year (pre-share consolidation)
Exercise of performance rights (pre-share consolidation)
Exercise of warrants (Shares issued during the year)
Share consolidation
Exercise of performance rights (post share consolidation)
Shares issued during the year (post share consolidation)
19(b)
19(b)
19(b)
19(b)
19(b)
Transaction costs relating to share issues
At reporting date
477,645,539
10,030,556
260,000,000
4,871,250
10,878,476
385,794
60,542,327
1,480,488
-
(3,489,408,041)
-
-
3,916,668
957,500
96,000,000
12,000,000
-
(1,474,934)
41,973,300
2,043,359
-
-
-
-
-
-
-
(536,225)
487,630,938
233,328,553
3,388,598,296
211,429,637
(b) Shares issued
2020 Details
Share placement July 2019*
Shares issued under Entitlement Offer August 2019*
Performance rights exercised pre share consolidation
(transfer from share-based payment reserve) *
Performance rights exercised post share consolidation
(transfer from share-based payment reserve)
Share placement May 2020 post share consolidation
Exercise of warrants
*All number of shares have been adjusted for the 10 to 1 share consolidation.
Number
Issue Price
$
Total
$
19,047,619
28,716,935
1,087,848
3,916,668
96,000,000
-
148,769,070
0.210
0.210
0.355
0.244
0.125
-
2019 Details**
Number
Issue Price
Shares issued under Securities Purchase Agreement
260,000,000
Performance rights exercised
(transfer from share-based payment reserve)
Exercise of warrants
60,542,327
41,973,300
362,515,627
**All number of shares have been prepared on pre share consolidation basis.
$
0.019
0.024
0.049
Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the Company in propor-
tion 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.
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each
share shall have one vote.
Options
Information relating to the Company’s Global Employee Share Option Plan, including details of options issued, exercised
and lapsed during the financial year and options outstanding at the end of the reporting period, is set out in note 31.
65
4,000,000
6,030,556
385,794
957,500
12,000,000
-
23,373,850
Total
$
4,871,250
1,480,488
2,043,359
8,395,097
CONTINUEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Unlisted options**
Expiration Date
4 August 2020
30 October 2020
7 March 2021
4 August 2025
5 January 2023
12 February 2022
Total
Exercise Price
$0.235
$0.568
$0.398
$0.248
US$0.249*
US$0.249*
Number
37,144,524
79,311
102,628
847,600
15,537,180*
20,800,000*
74,511,243
* 1 American Depository Shares (ADS) listed on NASDAQ equals 10 ordinary shares listed on ASX thus the number of warrants on issue have been grossed up and their
exercise prices have been adjusted accordingly in the above table to be comparable.
** On 5 November 2019, there was a 10 to 1 share consolidation. The unlisted options have therefore been adjusted accordingly.
Share buy-back
There is no current on-market share buy-back.
Capital risk management
The consolidated entity’s objectives when managing capital are to safeguard its ability to continue as a going concern, so
that they can continue to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal
capital structure to reduce the cost of capital.
In order to maintain or adjust the capital structure, the consolidated entity may adjust the amount of dividends paid to share-
holders, 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 parent 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.
66
CONTINUEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTE 20 EQUITY – RESERVES AND RETAINED EARNINGS
(a) Reserves
Options issued reserve
Conversion feature of convertible note reserve
Foreign currency translation reserve
Share-based payments reserve
Movements in options issued reserve were as follows:
Opening balance and closing balance
Movements in conversion feature of convertible note reserve
Consolidated
30 June 2020
30 June 2019
$
$
19,116,205
41,431,774
1,754,740
3,712,180
66,014,899
19,116,205
41,431,774
1,654,783
3,331,192
65,533,954
19,116,205
19,116,205
Opening balance and closing balance
41,431,774
41,431,774
Movements in foreign currency translation reserve were as follows:
Opening balance
Currency translation differences arising during the year
Ending balance
Movements in share-based payments reserve were as follows:
Opening balance
Options and performance rights expensed during the year
Exercise of vested performance rights transferred to contributed equity
Ending balance
(b) Accumulated losses
Movements in accumulated losses were as follows:
Opening balance
Net loss for the year
Exercise of warrants
Ending balance
1,654,783
99,957
1,754,740
3,331,192
1,724,282
(1,343,294)
3,712,180
1,096,368
558,415
1,654,783
3,229,693
1,581,987
(1,480,488)
3,331,192
Consolidated
30 June 2020
30 June 2019
$
$
(262,237,829)
(244,584,832)
(13,468,232)
(18,343,984)
-
690,987
(275,706,061)
(262,237,829)
(i) Conversion feature of convertible note reserve
This amount relates to the conversion feature of the convertible note issued to Ridgeback Capital Investments which has
been measured at fair value at the time of issue as required by AASB 2.
(ii) Foreign currency translation reserve
Exchange differences arising on translation of the foreign controlled entities are recognised in other comprehensive income
as described in note 1(d) and accumulated in a separate reserve within equity. The cumulative amount is reclassified to
profit or loss when the net investment is disposed of.
67
CONTINUEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (iii) Share-based payments reserve
The share-based payments reserve is used to recognise the grant date fair value of options and performance rights issued
to employees and other parties but not exercised. For a reconciliation of movements in the share-based payment reserves
refer to note 31.
NOTE 21 EQUITY - DIVIDENDS
There were no dividends paid or declared during the current or previous financial year.
NOTE 22 KEY MANAGEMENT PERSONNEL DISCLOSURES
(a) Directors and key management personnel compensation
Short-term employee benefits
Long-term employee benefits
Post-employment benefits
Share-based payments
Consolidated
30 June 2020
30 June 2019
$
$
1,360,554
6,367
31,558
1,014,688
2,413,167
1,588,899
11,115
33,458
789,633
2,423,105
Further remuneration disclosures are set out in the audited Remuneration Report within the Directors’ Report on
pages 17 to 26.
(b) Equity instrument disclosures relating to key management personnel
(i) Options provided as remuneration and shares issued on exercise of such options
Details of options provided as remuneration and shares issued on the exercise of such options, together with terms and
conditions of the options, can be found in the remuneration report on pages 17 to 26.
(ii) Shareholding
The numbers of shares in the Company held during the financial year by each director of the Company and other key man-
agement personnel of the group, including their personally related parties, are set out below. There were no shares granted
during the reporting period as compensation.
2020
Ordinary shares
Dr Russell Howard
Mr Pete Meyers
Mr Marc Voigt
Mr Grant Chamberlain
Ms Deanne Miller
Dr Frédéric Triebel
Total ordinary shares
14,505,775
ADRs
Mr Marc Voigt
Total ADR*
45
45
Balance at
start of the
year
Received during the
year on exercise of
performance rights
Received during the
year on the exercise
of options
Other chang-
es during the
year*
Balance at
end of the
year
Number
Number
Number
Number
Number
250,000
1,227,121
5,827,196
473,931
2,314,421
4,413,106
250,000
273,637
1,666,667
426,653
833,334
1,166,667
4,616,958
-
-
-
-
-
-
-
-
-
153,582
400,785
(143,863)
373,991
500,000
1,500,758
7,647,445
1,301,369
3,003,892
5,953,764
784,495
19,907,228
45
45
On 5 November 2019, there was a 10 to 1 share consolidation. The consolidated balance has therefore been adjusted retrospectively.
* Other changes during the year include the shares acquired via the Entitlements Offer, on market acquisition and disposals.
68
CONTINUEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 2020
Performance rights
over ordinary shares
Dr Russell Howard
Mr Pete Meyers
Mr Marc Voigt
(iii) Option holdings
As at 30 June 2020 and 2019, there were no options holdings outstanding and no movements during the financial year end-
ed 30 June 2020.
((iv) Performance right holdings
The number of performance rights over ordinary shares in the parent entity held during the financial year by each director
of the parent entity and other members of key management personnel of the consolidated entity, including their personally
related parties, is set out below:
Balance at
start of the
year
Granted
Exercised
Other
Changes
Balance at
end of the
year
Vested and
exercisable
Unvested
Number
Number
Number
Number
Number
Number
Number
750,000
547,274
-
(250,000)
1,500,000
(273,637)
1,666,667
3,600,000
(1,666,667)
Mr Grant Chamberlain
Ms Deanne Miller
853,307
833,334
-
(426,653)
1,800,000
(833,334)
Dr Frédéric Triebel
1,166,667
2,700,000
(1,166,667)
5,817,249
9,600,000
(4,616,958)
-
-
-
-
-
-
-
500,000
1,773,637
3,600,000
426,654
1,800,000
2,700,000
10,800,291
-
-
-
-
-
-
-
500,000
1,773,637
3,600,000
426,654
1,800,000
2,700,000
10,800,291
On 5 November 2019, there was a 10 to 1 share consolidation. The number of performance rights has therefore been adjusted retrospectively.
NOTE 23 REMUNERATION OF AUDITORS
During the year, the following fees were paid or payable for services provided by the auditor of the
parent entity, its related practices and non-related audit firms.
PricewaterhouseCoopers Australia
Audit or review of the financial report
Other audit and assurance services in relation to regulatory filings overseas
Total remuneration of PricewaterhouseCoopers Australia
Consolidated
30 June 2020
30 June 2019
$
$
282,580
-
282,580
274,078
22,950
297,028
NOTE 24 CONTINGENT LIABILITIES
There were no material contingent liabilities in existence at 30 June 2020 and 30 June 2019.
69
CONTINUEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTE 25 COMMITMENTS FOR EXPENDITURE
Lease commitments - operating
Committed at the reporting date but not recognised as liabilities, payable:
Within one year
One to five years
Consolidated
30 June 2020
30 June 2019
$
$
-
-
-
126,148
137,417
263,565
Operating lease commitments as at 30 June 2019 includes contracted amounts for leases of premises under non-cancel-
lable operating leases expiring within three years. On renewal, the terms of the leases are renegotiated.
From 1 July 2019, the company has recognised right-of-use assets for these leases, except for short term and low-value
leases, see note 1(w) for further information.
NOTE 26 RELATED PARTY TRANSACTIONS
Parent entity
Immutep Limited is the parent entity.
Subsidiaries
Interests in subsidiaries are set out in note 27.
Key management personnel
Disclosures relating to key management personnel are included in the Remuneration Report and note 22.
Transactions with related parties
There is no transaction occurred with related parties for financial year ended 30 June 2020 and financial year ended 30
June 2019.
Receivable from and payable to related parties
There were no trade receivables from or trade payables due to related parties at the reporting date.
Loans to/from related parties
There were no loans to or from related parties at the reporting date.
NOTE 27 SUBSIDIARIES
The consolidated financial statements incorporate the assets, liabilities, and results of the following
subsidiaries in accordance with the accounting policy described in note 1:
Country of
incorporation
Class of
Shares
Equity holding
30 June 2020
30 June 2019
USA
UAE
Germany
Australia
Australia
France
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
%
100
100
100
100
100
100
%
100
100
100
100
100
100
Immutep USA Inc
PRR Middle East FZLLC
Immutep GmbH
Immutep Australia Pty Ltd
Immutep IP Pty Ltd
Immutep S.A.S.
70
CONTINUEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTE 28 EVENTS OCCURRING AFTER THE REPORTING DATE
On 4 August 2020, Ridgeback 37,144,524 unquoted warrants lapsed. These warrants were attached with the convertible
notes issued to Capital Investments on 4 August 2015.
No other matter or circumstance has arisen since 30 June 2020, that has significantly affected the Group’s operations, re-
sults, or state of affairs, or may do so in future years.
NOTE 29 RECONCILIATION OF LOSS AFTER INCOME TAX TO NET CASH USED IN
OPERATING ACTIVITIES
Loss after income tax expense for the year
Adjustments for:
Depreciation and amortisation
Share based payments
Changes in fair value of US investor warrants
US warrants transaction costs
Unrealised gain on exchange through the profit and loss
Net change in fair value of convertible note liability
Change in operating assets and liabilities:
Decrease/(Increase) in current receivables
Decrease/(Increase) in other operating assets
(Decrease)/Increase in trade and other payables
Increase in employee benefits
Net cash used in operating activities
NOTE 30 EARNINGS PER SHARE
Consolidated
30 June 2020
30 June 2019
$
$
(13,468,232)
(18,343,984)
2,079,639
1,724,282
(2,214,813)
-
(200,784)
1,146,406
1,900,434
243,581
(2,126,001)
76,149
1,879,151
1,581,987
(961,176)
236,887
(330,951)
996,875
(1,762,132)
(44,052)
1,396,519
64,478
(10,839,339)
(15,286,398)
Consolidated
30 June 2020
30 June 2019
$
$
Loss after income tax attributable to the owners of Immutep Limited
(13,468,232)
(18,343,984)
Weighted average number of ordinary shares used in calculating basic earnings per
share (EPS)
Weighted average number of ordinary shares used in calculating diluted earnings
per share (EPS)
Basic earnings per share
Diluted earnings per share
Number
(Restated)*
Number
400,980,184
334,930,046
400,980,184
334,930,046
Cents
(3.36)
(3.36)
(Restated)*
Cents
(5.48)
(5.48)
*The Group updated the 2019 EPS figure to reflect the impact of both the share consolidation of 10 to 1 on 5 November 2019 and the bonus shares issue arising from the
capital raising in the financial year ended 30 June 2020.
71
CONTINUEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Information concerning other notes and options issued:
The following table summarises the convertible notes, performance rights, listed options and unlisted options that were not
included in the calculation of weighted average number of ordinary shares because they are anti-dilutive for the periods
presented.
Unlisted options
Convertible notes
Performance rights
Non-Executive Director performance rights
US warrants*
30 June 2020
30 June 2019
Number
38,174,063
90,109,406
11,837,560
2,700,291
36,337,180
Number
38,174,063
82,626,981
4,941,786
2,150,581
36,337,180
* 1 American Depository Shares (ADS) listed on NASDAQ equals 10 ordinary shares listed on ASX thus the number of warrants on issue have been grossed up.
On 5 November 2019, there was a 10 to 1 share consolidation. The consolidated comparative balance has therefore been adjusted accordingly.
NOTE 31 SHARE-BASED PAYMENTS
(a) Executive Incentive Plan (EIP)
Equity incentives are granted under the Executive Incentive Plan (EIP) which was approved by shareholders at the 2018
Annual General Meeting. In light of our increasing operations globally the Board reviewed the Company’s incentive arrange-
ments to ensure that it continued to retain and motivate key executives in a manner that is aligned with members’ interests.
As a result of that review, an ‘umbrella’ EIP was adopted to which eligible executives are invited to apply for the grant of
performance rights and/or options. Equity incentives granted in accordance with the EIP Rules are designed to provide
meaningful remuneration opportunities and will reflect the importance of retaining a world-class management team. The
Company endeavours to achieve simplicity and transparency in remuneration design, whilst also balancing competitive
market practices in France, Germany, and Australia. The company grants Short Term Incentives (STIs) and Long-Term In-
centives (LTIs) under the EIP. The weighted average remaining contractual life of performance rights outstanding at the end
of the period was less than 2.1 years.
7272
CONTINUEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Set out below are summarises of all STI and LTI performance rights granted under the EIP excluding the performance rights
issued to non-executive directors:
Financial year ended 30 June 2020
Grant date
Fair value
Balance at start of
the year
Granted
during the
year
Exercised
during the
year
Lapsed
during the
year
Balance at
end of the
year
Vested and
exercisable
at end of the
year
Number
Number
Number
Number
Number
Number
17 November 2017
28 November 2017
29 November 2017
2 October 2018
3 October 2019
1 November 2019
2 January 2020
0.240
0.230
0.230
0.470
0.260
0.280
0.260
1,666,667
500,000
2,000,001
775,118
-
-
-
-
(1,666,667)
-
(2,000,001)
(387,558)
-
-
-
4,500,000
3,600,000
2,850,000
-
-
-
4,941,786
10,950,000
(4,054,226)
-
-
-
-
-
-
-
-
-
500,000
-
387,560
4,500,000
3,600,000
2,850,000
11,837,560
-
-
-
-
-
-
-
-
On 5 November 2019, there was a 10 to 1 share consolidation. The number of performance rights and fair value have therefore been adjusted retrospectively for the
share consolidation.
Financial year ended 30 June 2019
Grant date
Fair value
Balance at
start of the
year
Granted
during the
year
Exercised
during the
year
Lapsed
during the
year
Balance at end
of the year
Vested and
exercisable
at end of the
year
Number
Number
Number
Number
Number
Number
19 September 2014
19 September 2014
14 November 2014
14 November 2014
1 October 2015
1 October 2015
2 August 2017
17 November 2017
28 November 2017
29 November 2017
2 October 2018
0.044
0.044
0.038
0.040
0.060
0.061
0.020
0.024
0.023
0.023
0.047
2,757,353
919,118
9,191,177
3,063,725
600,000
200,000
3,900,000
33,333,333
15,000,000
40,000,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(2,757,353)
(919,118)
(9,191,177)
(3,063,725)
(600,000)
(200,000)
-
-
-
-
-
-
-
-
-
-
-
-
16,666,666
5,000,000
20,000,000
7,751,152
(3,900,000)
(16,666,667)
(10,000,000)
(20,000,000)
-
7,751,152
-
108,964,706
7,751,152
(50,566,667)
(16,731,373)
49,417,818
-
-
-
-
-
-
-
-
-
-
-
-
The fair value at grant date for short term incentive (STI) and long term incentives (LTI) performance rights are determined
using a Black-Scholes option pricing model that takes into account the exercise price, the impact of dilution, the share price
at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate
for the term of the option.
73
73
CONTINUEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS The model inputs for STI performance rights granted during the year ended 30 June 2020 included:
Grant date
Share price at grant date
Expected price volatility of the Company’s shares
Expected dividend yield
Risk-free interest rate
3 October 2019
1 November 2019
2 January 2020
$0.260
61%
Nil
0.61%
$0.280
63%
Nil
0.78%
$0.260
59%
Nil
0.88%
On 5 November 2019, there was a 10 to 1 share consolidation. The number of performance rights and exercise price have therefore been adjusted retrospectively.
The model inputs for STI performance rights granted during the year ended 30 June 2019 included:
Grant date
Share price at grant date
Expected price volatility of the Company’s shares
Expected dividend yield
Risk-free interest rate
28 September 2018
$0.047
78%
Nil
2.02%
There are no outstanding options under EIP at the beginning of the financial year 2020 and no option was granted during
the year ended 30 June 2020.
There are no outstanding options under EIP at the beginning of the financial year 2019 and no option was granted during
the year ended 30 June 2019.
Fair value of options granted
No options were granted during the year ended 30 June 2020 (2019 – Nil).
(b) Performance rights issued to non-executive directors with shareholders’ approval
At the 2019 annual general meeting, shareholders approved the issue of 1,500,000 performance rights on a post consolida-
tion basis to Peter Meyers in lieu of cash for his services as a non-executive director. When exercisable, each performance
right is convertible into one ordinary share. The weighted average remaining contractual life of performance rights outstan-
ding at the end of the period was less than 2.5 years.
Set out below are summaries of performance rights granted with shareholders’ approval.
2020
Grant date
Type of
performance
right granted
Fair
value*
Balance at
start of the
year
Granted
during the
year
Exercised
during the
year
Lapsed
during
the year
Balance at end
of the year
Vested and
exercisable
at end of
the year
Number*
Number
Number
Number
Number
Number
25 November 2016 Director rights
0.380
17 November 2017 Director rights
0.210
16 November 2018 Director rights
0.390
547,274
853,307
750,000
-
-
-
(273,637)
(426,653)
(250,000)
1 November 2019
Director rights
0.280
-
1,500,000
-
Total
2,150,581
1,500,000
(950,290)
-
-
-
-
-
273,637
426,654
500,000
1,500,000
2,700,291
-
-
-
-
-
On 5 November 2019, there was a 10 to 1 share consolidation. The number of performance rights and fair value have therefore been adjusted retrospectively for the
share consolidation.
74
CONTINUEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 2019
Grant date
Type of
performance
right granted
Fair
value
Balance
at start of
the year
Granted
during the
year
Exercised
during the
year
Lapsed
during the
year
Balance at end
of the year
Vested and
exercis-
able at end
of the year
Number
Number
Number
Number
Number
Number
25 November 2016 Director rights
0.038
8,209,101
17 November 2017 Director rights
0.021 13,272,356
-
-
(2,736,367)
(4,739,293)
16 November 2018 Director rights
0.039
-
10,000,000 (2,500,000)
Total
21,481,457
10,000,000 (9,975,660)
-
-
-
-
5,472,734
8,533,063
7,500,000
21,505,797
-
-
-
-
Fair value of performance rights granted
The fair value at grant date for the performance rights issued to non-executive directors with shareholders’ approval are
determined using a Black-Scholes option pricing model that takes into account the exercise price, the impact of dilution, the
share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free
interest rate for the term of the option.
The model inputs for STI performance rights granted during the year ended 30 June 2020 included:
Grant date
Share price at grant date
Expected price volatility of the Company’s shares
Expected dividend yield
Risk-free interest rate
The model inputs for STI performance rights granted during the year ended 30 June 2019 included:
Grant date
Share price at grant date
Expected price volatility of the Company’s shares
Expected dividend yield
Risk-free interest rate
(c) Options issued to other parties
1 November 2019
$0.280
63%
Nil
0.78%
16 November 2018
$0.039
76%
Nil
1.96%
During the financial year ended 30 June 2016, options were issued to Ridgeback Capital Investments and Trout Group LLC
and these are eligible to be exercised. The weighted average remaining contractual life of performance rights outstanding at
the end of the period was less than 0.1 year.
Set out below is a summary of the options granted to both parties:
2020
Grant date
31 July 2015
31 July 2015
Expiry date
Exer-
cise
price
Balance at
start of the
year
Granted
during the
year
Exercised
during the
year
Forfeited
during the
year
Balance at
end of the
year
Vested and
exercisable
at end of
the year
Number
Number
Number
Number
Number
Number
5 August 2020
0.235
37,144,524
5 August 2021
30 October 2015
30 October 2020
7 March 2016
7 March 2021
Total
0.248
0.568
0.398
847,600
79,311
102,628
38,174,063
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
37,144,524
37,144,524
847,600
847,600
79,311
79,311
102,628
102,628
38,174,063
38,174,063
On 5 November 2019, there was a 10 to 1 share consolidation. The number of option and fair value have therefore been adjusted retrospectively for the share consolidation.
75
CONTINUEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Fair value of options granted
No options were granted during the year ended 30 June 2020 (2019 – nil). The fair value at grant date is determined using a
Black-Scholes option pricing model that takes into account the exercise price, the term of the option, the impact of dilution,
the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk
free interest rate for the term of the option.
(d) Expenses arising from share-based payment transactions
Total expenses arising from share-based payment transactions recognised during the period were as follows:
Employee share-based payment expense
Consolidated
30 June 2020
30 June 2019
$
$
1,724,282
1,724,282
1,581,987
1,581,987
Share-based payment transactions with employees are recognised during the period as a part of corporate and administra-
tive expenses.
76
CONTINUEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTE 32 PARENT ENTITY INFORMATION
Set out below is the supplementary information about the parent entity.
Statement of comprehensive income
Loss after income tax
Total comprehensive income
Statement of financial position
Total current assets
Total non current assets
Total assets
Total current liabilities
Total non current liabilities
Total liabilities
Equity
-
-
-
Contributed equity
Reserves
Accumulated losses
Total equity
Parent
30 June 2020
30 June 2019
$
$
(13,482,664)
(13,482,664)
(17,872,089)
(17,872,089)
Parent
30 June 2020
30 June 2019
$
$
21,659,619
20,539,720
42,199,339
634,177
10,970,720
11,604,897
16,552,243
17,596,298
34,148,541
514,516
11,813,178
12,327,694
242,990,507
65,765,139
221,091,591
65,407,796
(278,161,204)
(264,678,540)
30,594,442
21,820,847
Guarantees of financial support
There are no guarantees entered into by the parent entity.
Contingent liabilities of the parent entity
Refer to note 24 for details in relation to contingent liabilities as at 30 June 2020 and 30 June 2019.
Capital commitments - Property, plant and equipment
The parent entity did not have any capital commitments for property, plant, and equipment at as 30 June 2020 and 30 June 2019.
77
CONTINUEDNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DIRECTORS’ DECLARATION
In the directors’ opinion:
(a)
the financial statements and notes set out on pages 30 to 77 are in accordance with the Corporations Act 2001, including:
(i) complying with Australian Accounting Standards, the Corporations Regulations 2001 and other mandatory profes-
sional reporting requirements; and
(ii) giving a true and fair view of the consolidated entity’s financial position as at 30 June 2020 and of its performance
for the financial year ended on that date; and
(b)
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due
and payable.
Note 1(a) confirms that the financial statements also comply with International Financial Reporting Standards as issued by
the International Accounting Standards Board.
The directors have been given the declarations by the chief executive officer and chief financial officer required by section
295A of the Corporations Act 2001.
This declaration is made in accordance with a resolution of the directors.
On behalf of the directors
Dr Russell Howard
Chairman,
Immutep Limited
Sydney
25 August 2020
78
INDEPENDENT AUDITOR’S REPORT TO
THE MEMBERS OF IMMUTEP LIMITED
Independent auditor’s report
To the members of Immutep Limited
Report on the audit of the financial report
Our opinion
In our opinion:
The accompanying financial report of Immutep Limited (the Company) and its controlled entities
(together the Group) is in accordance with the Corporations Act 2001, including:
(a) giving a true and fair view of the Group's financial position as at 30 June 2020 and of its financial
performance for the year then ended
(b) complying with Australian Accounting Standards and the Corporations Regulations 2001.
What we have audited
The Group financial report comprises:
●
●
●
●
●
●
the consolidated balance sheet as at 30 June 2020
the consolidated statement of comprehensive income for the year then ended
the consolidated statement of changes in equity for the year then ended
the consolidated statement of cash flows for the year then ended
the notes to the consolidated financial statements, which include a summary of significant
accounting policies
the directors’ declaration.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the financial report
section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Independence
We are independent of the Group in accordance with the auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical
Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence
Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also
fulfilled our other ethical responsibilities in accordance with the Code.
PricewaterhouseCoopers, ABN 52 780 433 757
Level 3, 45 Watt Street, PO Box 798, NEWCASTLE NSW 2300
T: +61 2 4925 1100, F: +61 2 4925 1199, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
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INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF IMMUTEP LIMITEDCONTINUED Page | 76 Our audit approach An audit is designed to provide reasonable assurance about whether the financial report is free from material misstatement. Misstatements may arise due to fraud or error. They are considered material if individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial report. We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial report as a whole, taking into account the geographic and management structure of the Group, its accounting processes and controls and the industry in which it operates. The Group is in the biotechnology industry and is involved in research and development activities focused on cancer immunotherapies. The Group’s corporate head office is located in Australia with research activities undertaken predominantly in Australia, France and Germany. Materiality Audit scope Key audit matters ● For the purpose of our audit we used overall Group materiality of $662,000, which represents approximately 5% of the Group’s loss before tax. ● We applied this threshold, together with qualitative considerations, to determine the scope of our audit and the nature, timing and extent of our audit procedures and to evaluate the effect of misstatements on the financial report as a whole. ● We chose Group loss before tax because, in our view, it is the benchmark against which the performance of the Group is most commonly measured. ● We utilised a 5% threshold based on our professional judgement, noting it is within the range of commonly acceptable quantitative loss related thresholds. ● Our audit focused on where the Group made subjective judgements; for example, significant accounting estimates involving assumptions and inherently uncertain future events. ● The accounting processes are predominately performed by a Group finance function at the corporate head office in Sydney. ● Amongst other relevant topics, we communicated the following key audit matters to the Audit and Risk Committee: − Assessment of impairment indicators on the carrying value of intellectual property intangible assets − Estimate of grant income ● These are further described in the Key audit matters section of our report. Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our
audit of the financial report for the current period. The key audit matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide a
separate opinion on these matters. Further, any commentary on the outcomes of a particular audit
procedure is made in that context.
Key audit matter
How our audit addressed the key audit matter
Assessment of impairment indicators on the
carrying value of intellectual property
intangible assets
(refer to Note 3(d) and Note 11 to the financial report)
[A$15.08m]
The Group continues to recognise intellectual property
intangible assets that were acquired in previous years.
The Group considers annually if there are any
impairment indicators that the intellectual property
intangible assets are impaired. The main two
impairment indicators that the Group considered were:
● market capitalisation
●
the ongoing viability of the capitalised
intellectual property through continuance of
research activities and the status of
collaboration agreements with third parties.
The Group’s assessment of impairment indicators on
the carrying value of intellectual property intangible
assets was a key audit matter because the intellectual
property asset is the largest asset on the Group’s
consolidated balance sheet and because of the inherent
judgements involved in assessing the relevant
indicators of impairment given the current COVID-19
environment and the research and development phase
of operations of the Group.
Estimate of grant income
(refer to the consolidated statement of comprehensive
income and to notes 3(a) and 4 to the financial report)
[A$5.97m]
A key stream income earned by the Group is grant
income from governments in Australia and overseas,
including Australian Research and Development
Rebates and France’s Credit d'Impôt Recherche grants.
This income is recognised based on operating costs that
qualify for grant income.
This was a key audit matter because of the judgement
required by the Group in assessing the appropriate
grant income to recognise due to the complexity of the
rules and regulations governing what operating costs
qualify for grant income.
We performed the following audit procedures, amongst
others:
● Developed an understanding of the key controls
associated with the identification of impairment
indicators.
● Developed an understanding on the latest status of
research activities and collaboration agreements
with third parties utilising the intellectual property
assets. We read through publicly available
information and made inquiries with management
and the board of directors, including the current
impact of the COVID-19 global pandemic to
ongoing research activities, to assess the adequacy
of the Group’s review of impairment indicators for
intellectual property assets.
●
Compared the market capitalisation of the Group
as at 24 August 2020 to the net assets of the Group
at 30 June 2020 and considered movement trends
in the Group’s market capitalisation throughout
the financial year.
● Evaluated the adequacy of disclosures made by the
Group in the financial report in view of the
requirements of Australian Accounting Standards.
We performed the following audit procedures, amongst
others:
● Developed an understanding of each government
body’s compliance requirements for approving
grant income and the basis used by the Group to
recognise this income.
●
●
Examined a sample of grant income transactions
during the year to assess if they were appropriately
recognised in accordance with the compliance
requirements and supported by adequate
documentation. Our examination also included
comparing the amounts recognised to supporting
evidence.
Compared the nature and classification of the
research and development expenditure
categorisations included in the current year to the
prior year.
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INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF IMMUTEP LIMITEDCONTINUED ●
Examined a sample of the eligible operating costs
used to calculate the grant income to the
expenditure recorded in the general ledger. Our
examination also included comparing the amounts
recognised to supporting evidence.
● Recomputed the Group’s supporting calculations
of accrued receivables for grant income. This
included comparing the accrued receivables to
previously approved grant income and to
subsequent collections as applicable.
Other information
The directors are responsible for the other information. The other information comprises the information
included in the annual report for the year ended 30 June 2020, but does not include the financial report
and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
If, based on the work we have performed on the other information that we obtained prior to the date of
this auditor’s report, we conclude that there is a material misstatement of this other information, we are
required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the financial report
The directors of the Company are responsible for the preparation of the financial report that gives a true
and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for
such internal control as the directors determine is necessary to enable the preparation of the financial
report that gives a true and fair view and is free from material misstatement, whether due to fraud or
error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes
our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be expected to influence the economic decisions of
users taken on the basis of the financial report.
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82
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF IMMUTEP LIMITEDCONTINUED INDEPENDENT AUDITOR’S REPORT TO
THE MEMBERS OF IMMUTEP LIMITED
CONTINUED
A further description of our responsibilities for the audit of the financial report is located at the Auditing
and Assurance Standards Board website at:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf. This description forms part of our
auditor's report.
Report on the remuneration report
Our opinion on the remuneration report
We have audited the remuneration report included in pages 17 to 26 of the directors’ report for the year
ended 30 June 2020.
In our opinion, the remuneration report of Immutep Limited for the year ended 30 June 2020 complies
with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the remuneration
report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an
opinion on the remuneration report, based on our audit conducted in accordance with Australian
Auditing Standards.
Matters relating to the electronic presentation of the audited financial report
This auditor’s report relates to the financial report of Immutep for the year ended 30 June 2020 included
on Immutep's web site. The directors of the Company are responsible for the integrity of Immutep's web
site. We have not been engaged to report on the integrity of this web site. The auditor’s report refers
only to the financial report named above. It does not provide an opinion on any other information which
may have been hyperlinked to/from the financial report. If users of this report are concerned with the
inherent risks arising from electronic data communications, they are advised to refer to the hard copy of
the audited financial report to confirm the information included in the audited financial report presented
on this web site.
PricewaterhouseCoopers
Caroline Mara
Partner
Newcastle
25 August 2020
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83
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF IMMUTEP LIMITEDCONTINUED SHAREHOLDER INFORMATION
The shareholder information set out below was applicable as at 14 August 2020.
There is a total of 487,630,938 ordinary fully paid shares on issue held by 12,038 holders.
Distribution of equitable securities
Analysis of number of equitable security holders by size of holding:
Number of holders of ordinary shares
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 – and over
Total
Holding less than a marketable parcel
2,889
3,867
1,716
3,064
502
12,038
5,017
84
SHAREHOLDER INFORMATION
CONTINUED
Equity security holders
Twenty largest quoted equity security holders
The names of the twenty largest security holders of quoted equity securities are listed below:
Top 20 holders of ordinary shares
Ordinary shares held
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
NATIONAL NOMINEES LIMITED
MARC VOIGT
CITICORP NOMINEES PTY LIMITED
FREDERIC TRIEBEL
BNP PARIBAS NOMINEES PTY LTD
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