ACN 632 145 334
INVEX THERAPEUTICS LTD (FORMERLY INVEX THERAPEUTICS PTY LTD)
FINANCIAL REPORT
FOR THE PERIOD FROM INCORPORATION
ON 8 MARCH 2019 TO 30 JUNE 2019
Invex Therapeutics Ltd (formerly Invex Therapeutics Pty Ltd) - Financial Report for the period from incorporation on 8 March 2019 to 30
June 2019
Contents
Corporate Directory ......................................................................................................................................... 3
Directors’ Report .............................................................................................................................................. 4
Auditor's Independence Declaration……………………………………………………………………………… .…………………………14
Statement of Profit or Loss and Other Comprehensive Income…………………………………………………………………….15
Statement of Financial Position……………………………………………………………………………………………………………….....16
Statement of Changes in Equity ..................................................................................................................... 17
Statement of Cash Flows ................................................................................................................................ 18
Notes to the Financial Statements ................................................................................................................ 19
Directors’ Declaration .................................................................................................................................... 35
Independent Auditor’s Report........................................................................................................................ 36
Corporate Governance Statement ................................................................................................................. 40
ASX Additional Information ............................................................................................................................ 41
2
Invex Therapeutics Ltd (formerly Invex Therapeutics Pty Ltd) - Financial Report for the period from incorporation on 8 March 2019 to 30
June 2019
Corporate Directory
This financial report includes the financial statements and notes of the Company consisting of Invex
Therapeutics Ltd (formerly Invex Therapeutics Pty Ltd) (Invex or Company).
The Company’s functional and presentation currency is Australian Dollars ($).
A description of the Company’s operations and principal activity is included in the review of operations and
activities in the Directors’ report on pages 4 to 13. The Directors’ Report is not part of the Financial Report.
Directors:
Dr Jason Loveridge
Professor Alexandra Sinclair
Mr David McAuliffe
Ms Narelle Warren
Company Secretary:
Ms Narelle Warren
Registered Office & Principal Place of Business:
Level 1, 38 Rowland St
SUBIACO WA 6008
Tel: +61 8 6382 0137
Website: www.invextherapeutics.com
Auditors:
BDO Audit (WA) Pty Ltd
38 Station St
SUBIACO WA 6008
Bankers:
Westpac Banking Corporation
Solicitors:
Steinepreis Paganin
Level 4, The Read Buildings
16 Milligan St
PERTH WA 6000
Share Registry:
Automic Registry Services
Telephone: 1300 288 664
International: +61 2 9698 5414
Website: www.automicgroup.com.au
ASX code: IXC
3
Invex Therapeutics Ltd (formerly Invex Therapeutics Pty Ltd) - Financial Report for the period from incorporation on 8 March 2019 to 30
June 2019
Directors’ Report
Your Directors present their report together with the financial statements of the Company, being Invex
Therapeutics Ltd (formerly Invex Therapeutics Pty Ltd) (Invex or Company) for the financial period
commencing from the date of incorporation being 8 March 2019 to 30 June 2019.
Director
The name of the Directors in office for the period from incorporation on 8 March 2019 until the date of this
report are as follows. All Directors were in office for the entire period unless otherwise stated.
Dr Jason Loveridge
Non-executive Chairman
Appointed 8 March 2019
Dr. Loveridge is a founder of Invex and also CEO of 4SC AG, a German publicly listed oncology company. He
has more than 25 years of international experience across Europe, Asia and the US in senior management
positions in life sciences companies and as an investment professional dealing in both privately held and
publicly traded companies. Additionally, he has substantial transactional experience in the sale and
partnering of biotechnology assets.
Dr. Loveridge graduated in Biochemistry and Microbiology from the University of New South Wales,
Australia, and holds a Ph.D. in Biochemistry from the University of Adelaide, Australia. He is also a fellow of
the Royal Society of Medicine. Dr Loveridge is not considered an independent Director.
Current Directorships – Member of the Management Board of 4SC AG.
Former Directorships in last three years - Director of Actinogen Medical Ltd.
Interests in shares and options - 5,106,000 shares.
Professor Alexandra Sinclair
Executive Director – Chief Scientific Officer
Appointed 28 June 2019
Prof. Sinclair is a Clinician Scientist and Neurology Consultant in the Metabolic Neurology Group at the
Institute of Metabolism and Systems Research, College of Medical and Dental Sciences, The University of
Birmingham, UK.
Prof. Sinclair is a fellow of the British Medical Association, UK, the Association of British Neurologists, UK, the
Royal College of Physicians, London, the Society for Endocrinology, the International Headache Society, the
British Association of the Study of Headache, UK, the North American Neuro-ophthalmology Society and the
European Headache Federation. Prof. Sinclair is not considered an independent Director.
Current directorships – None.
Former directorships held in last three years – None.
Interests in shares and options - 2,500,000 shares.
4
Invex Therapeutics Ltd (formerly Invex Therapeutics Pty Ltd) - Financial Report for the period from incorporation on 8 March 2019 to 30
June 2019
Directors’ Report (continued)
Mr David McAuliffe
Non-executive Director
Appointed 8 March 2019
Mr McAuliffe is an experienced company director and entrepreneur who has had over twenty years’
experience, mostly in the international biotechnology field. During that time, he was involved in numerous
capital raisings and in-licensing of technologies. He is a founder of several companies in Australia, France and
the United Kingdom, many of which have become public companies. Mr McAuliffe has an Honours degree
in Law, a Bachelor of Pharmacy degree and is the President of the Dyslexia – Speld Foundation WA (Inc). Mr
McAuliffe is not considered an independent Director.
Current directorships - 4DS Memory Ltd.
Former directorships held in last three years - None
Interests in shares and options - 3,350,001 shares.
Ms Narelle Warren
Director/Company Secretary
Appointed 25 March 2019
Ms Warren is a Chartered Accountant with over 18 years of corporate advisory, financial management and
company secretarial experience. Ms Warren has co-ordinated and assisted in a number of corporate
transactions, including acquisitions, divestments and raising funds via private and public equity markets. She
holds both a Bachelor of Laws and Bachelor of Commerce. Ms Warren is considered an independent Director.
Current directorships - None.
Former directorships held in last three years - None
Interests in shares and options - 200,000 shares.
Principal Activity
The principal activity of the Company during the period was the establishment of a biopharmaceutical
company focused on the repurposing an already approved drug, Exenatide, for the efficacious treatment of
neurological conditions derived from or involving raised intracranial pressure, such as idiopathic intracranial
hypertension (IIH), acute stroke and traumatic brain injury.
No significant change in the nature of this activity occurred during the period.
Operating Results
The result of the Company for the period ended 30 June 2019 was a loss of $232,122. The net loss of the
Company predominantly relates to establishment costs of a public company, ASX listing and commencing the
repurposing of Exenatide for neurological indications.
5
Invex Therapeutics Ltd (formerly Invex Therapeutics Pty Ltd) - Financial Report for the period from incorporation on 8 March 2019 to 30
June 2019
Directors’ Report (continued)
Review of Operations
During the period the Company raised initial seed capital of $500,000, in order to proceed to an Initial Public
Offering (IPO) that was completed in June 2019 raising an additional $12 million. Upon successful completion
of the IPO the Company was assigned the Intellectual Property from the University of Birmingham and
continued to fund its research and development programme.
Invex plans to use the funds raised to support the expansion of its intellectual property portfolio, complete
the repurposing of Exenatide for the treatment of neurological conditions derived from or involving raised
intracranial pressure, complete an on-going Phase II clinical study in IIH and initiate a second proof of concept
clinical study in another indication. Results from the IIH Phase II clinical study are expected in the first half
of 2020.
Dividends
No dividends were paid or recommended by the Directors since the commencement of the period.
Significant Changes in State of Affairs
Other than as outlined above, there were no significant changes in the Company’s state of affairs during the
period.
Events Arising Since the End of the Reporting Period
Since period end:
The Company was admitted to the Official List of the ASX on 3 July 2019 and commenced trading on the 5
July 2019.
No other significant events occurred after balance date which may affect either the Company’s operations
or results of those operations or the Company’s state of affairs.
Likely Developments
The Directors are hopeful the 2019/2020 year will see the Company make significant progress with its
proposed research and development programme.
Meetings of Directors
During the period the following Director meetings were held.
Director
Dr Jason Loveridge
Prof Alexandra Sinclair
Mr David McAuliffe
Ms Narelle Warren
Board Meetings
Number Eligible to
Attend
Number Attended
3
-
3
2
3
-
3
2
6
Invex Therapeutics Ltd (formerly Invex Therapeutics Pty Ltd) - Financial Report for the period from incorporation on 8 March 2019 to 30
June 2019
Directors’ Report (continued)
Unissued Shares under Option
There are no unissued ordinary shares of Invex (formerly Invex Therapeutics Pty Ltd) under option at the date
of this report.
Insurance of Officers and Indemnities
Subsequent to year end Invex paid a premium to insure the directors and secretaries of the Company.
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 Company, and any other
payments arising from liabilities incurred 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 them or someone else or to cause
detriment to the Company. It is not possible to apportion the premium between amounts relating to the
insurance against legal costs and those relating to other liabilities.
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.
Non-audit services
The Company may decide to employ its auditor on assignments additional to their statutory audit duties
where the auditor’s expertise and experience with the Company is important.
During the period, other services were performed in addition to their statutory duties. The details of the
amount paid are disclosed in Note 18 of the financial report.
Environmental Regulations
The Company is not subject to significant environmental regulation in respect of its research and
development activities.
Auditor’s Independence Declaration
A copy of the auditors’ independence declaration as required under section 307C of the Corporations Act
2001 is set out on the page following this Directors’ Report.
7
Invex Therapeutics Ltd (formerly Invex Therapeutics Pty Ltd) - Financial Report for the period from incorporation on 8 March 2019 to 30
June 2019
Directors’ Report (continued)
Remuneration Report - Audited
The remuneration report outlines the remuneration arrangements which were in place during the period,
and remain in place as at the date of this report, for the Directors and key management personnel of Invex.
The information provided in this remuneration has been audited as required by section 308(3C) of the
Corporations Act 2001.
The remuneration report is set out under the following main headings:
A
B
C
D
E
F
G
Principles used to determine the nature and amount of remuneration
Details of remuneration
Service agreements
Share-based compensation
Equity instruments held by key management personnel
Loans to key management personnel
Other transactions with key management personnel
A
Principles used to determine the nature and amount of remuneration
The Board has elected to establish a remuneration committee. However given the size of the current Board
remuneration matters will be considered and approved by the full Board.
The following items will be considered and discussed as deemed necessary at the Board meetings:
-
recommend the terms and conditions of employment for the Executive Directors and senior officers;
- undertake a review of the Executive Directors performance, at least annually, including setting with
the Executive Directors goals for the coming year and reviewing progress in achieving those goals;
consider and report on the recommendations of the Executive Directors on the remuneration of all
direct reports; and
-
- develop and facilitate a process for Board and Director evaluation.
Non-Executive Directors
Fees and payments to non-executive directors reflect the demands which are made on, and the
responsibilities of the directors. Non-executive directors’ fees and payments are reviewed annually by the
board. The Chair’s fees are determined independently to the fees of non-executive directors based on
comparative roles in the external market.
Non-executive directors do not receive performance-based pay.
Directors’ fees
The current base fees were last reviewed at the most recent remuneration committee meeting. Non-
executive directors’ fees are determined within an aggregate directors’ fee pool limit, which is periodically
recommended for approval by shareholders.
The maximum currently stands at $250,000 per annum and will be approved by shareholders at its first
annual general meeting of shareholders in November 2019.
Remuneration of executives consists of an un-risked element (base pay).
No dividends have been paid since incorporation to 30 June 2019.
8
Invex Therapeutics Ltd (formerly Invex Therapeutics Pty Ltd) - Financial Report for the period from incorporation on 8 March 2019 to 30
June 2019
Directors’ Report (continued)
Remuneration Report - Audited (continued)
A
Principles used to determine the nature and amount of remuneration (continued)
Additional fees
A Director may also be paid fees or other amounts as the Directors determine if a Director performs special
duties or otherwise performs services outside the scope of the ordinary duties of a Director.
A Director may also be reimbursed for out of pocket expenses incurred as a result of their directorship or any
special duties.
Retirement allowances for directors
Superannuation contributions required under the Australian Superannuation Guarantee Legislation continue
to be made and are deducted from the directors’ overall fee entitlements where applicable.
Executive pay
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;
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;
-
-
short-term performance incentives; and
long-term incentives through participation in the Invex Employee Share Option Plan.
Base pay
Executives receive their base pay and benefits structured as a total employment cost (TEC) package which
may be delivered 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 consultants provide analysis and advice 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.
An executive’s pay is also reviewed on promotion.
There are no guaranteed base pay increases included in any executives’ contracts.
There are no short-term incentives outstanding.
Benefits
No benefits other than noted above are paid to Directors or management except as incurred in normal
operations of the business.
Short term incentives
No benefits other than remuneration disclosed in the remuneration report are paid to Directors or
management except as incurred in normal operations of the business.
9
Invex Therapeutics Ltd (formerly Invex Therapeutics Pty Ltd) - Financial Report for the period from incorporation on 8 March 2019 to 30
June 2019
Directors’ Report (continued)
Remuneration Report - Audited (continued)
Long term incentives
Options are issued at the Board’s discretion. There have been no options issued to employees at the date of
this financial report.
Remuneration consultants
The Company did not engage any remuneration consultants during the period.
The Company will engage independent remuneration consultants should it look to make any changes to
director fee levels to ensure they are in line with market conditions and any decisions are made free from
undue influence from members of the Company’s Key Management Personnel (KMP’s).
B Details of remuneration
Amounts of remuneration
Details of the remuneration of the directors and the key management personnel of the Company are found
below:
DIRECTOR
ROLE
Dr Jason Loveridge
Appointed 8 March 2019
Non-executive Chair
Prof. Alexandra Sinclair
Appointed 28 June 2019
Executive Director
David McAuliffe
Appointed 8 March 2019
Non-executive Director
Narelle Warren
Appointed 25 March 2019
Non-executive Director/Company Secretary
Key management personnel of the Company
Short-term employee benefits
Long-
term
employee
benefits
Post-employment
benefits
Share-
based
payments
Total
Total
remuneration
represented
by Options
Cash
salary &
fees
Non
monetary
benefits
Annual
Leave
Super-
annuation
Pensions
Retire-
ment
benefits
Other
Options
30 June 2019
Directors
Non-executive directors
Dr Jason Loveridge
David McAuliffe
Narelle Warren
Sub-total
Non-executive directors
Executive directors
$
-
-
$
-
-
30,000 25,0001
30,000
25,000
Prof. Alexandra Sinclair
-
Total key
management personnel
compensation
30,000
25,000
$
$
-
-
-
-
-
-
-
-
-
-
-
-
$
-
-
-
-
-
$
-
-
-
-
-
-
$
-
-
$
-
-
- 55,000
- 55,000
-
- 55,000
%
-
-
-
-
-
-
1.
This amount is in relation to Ms Warren’s Company Secretary, Finance and role and success fee of $25,000 with the Company and invoiced to the Company
by Concept Biotech Pty Ltd was accrued and remained payable as at 30 June 2019.
10
Invex Therapeutics Ltd (formerly Invex Therapeutics Pty Ltd) - Financial Report for the period from incorporation on 8 March 2019 to 30
June 2019
Directors’ Report (continued)
Remuneration Report - Audited (continued)
C
Service agreements
Executive directors
Name
Term of
agreement
Base salary
including
superannuation
Termination benefit
Executive
Prof. Alexandra Sinclair Open
$70,0001
Relevant notice periods
apply, being
1 months’ notice with reason or 3 months
without reason.
1 Remuneration of $70,000 per annum payable post admission to the Official List of the ASX commencing 3 July 2019
Non-executive directors
On appointment to the Board, all non-executive directors enter into a service agreement with the Company
in the form of a letter of appointment. The letter summarises the Board’s policies and terms, including
compensation, relevant to the director, and among other things:
-
-
-
the terms of the directors appointment, including governance, compliance with the Company’s
Constitution, committee appointments, and re-election;
the directors duties, including disclosure obligations, exercising powers, use of office, attendance at
meetings and commitment levels;
the fees payable, in line with shareholder approval, any other terms, timing of payments and
entitlements to reimbursements;
-
insurance and indemnity;
- disclosure obligations; and
-
confidentiality.
The Non-executive Director fees were not paid fees during the period.
Name
Non-Executive
Dr
Jason
Consultancy
Loveridge
Term of
agreement
Base salary
including
superannuation
Termination benefit
-
Open
$35,0001
Relevant notice periods apply, being
1 months’ notice with reason.
Dr Jason Loveridge – Non-
executive fee
David McAuliffe-
executive fee
Non-
Shareholder
Approval
rotation
Shareholder
Approval
rotation
by
by
$35,0001
Nil
$35,0001
Nil
1 Remuneration entitlements to Directors commenced post admission to the Official List of the ASX on 3 July 2019
D
Share-based compensation
Options
Options over shares in the Company are granted at the Directors’ discretion.
No options were granted during the financial period.
11
Invex Therapeutics Ltd (formerly Invex Therapeutics Pty Ltd) - Financial Report for the period from incorporation on 8 March 2019 to 30
June 2019
Directors’ Report (continued)
Remuneration Report - Audited (continued)
E
Equity instruments held by key management personnel
Shareholdings
The numbers of shares in the Company held during the period by each director of Invex and other key
management personnel of the Company, including their personally related parties are set out below. There
were no shares granted during the reporting period as compensation.
2019
Name
Directors
Dr Jason Loveridge
Prof. Alexandra Sinclair
David McAuliffe
Narelle Warren
Total
Balance at
the start
of the
period
Capital Raising
shares
subscribed for
On Market
Purchases
Balance at
appointment
date
Balance at the
end of the year
-
-
1
-
1
5,106,000
-
3,350,000
-
8,456,000
-
-
-
-
-
2,500,000
-
200,000
5,106,000
2,500,000
3,350,001
200,000
2,700,000
11,156,001
9,337,041 shares were subject to escrow at 30 June 2019.
Option holdings
There were no options over ordinary shares in the Company issued during the period to directors of Invex
and other key management personnel of the Company, including their personally related parties, are set
out below.
F
Loans with key management personnel
Key management personnel loans
There were no loans to or from key management personnel during the year ended 30 June 2019.
12
Invex Therapeutics Ltd (formerly Invex Therapeutics Pty Ltd) - Financial Report for the period from incorporation on 8 March 2019 to 30
June 2019
Directors’ Report (continued)
Remuneration Report - Audited (continued)
G Other transactions with key management personnel
The following payments were made to Concept Biotech Pty Ltd, of which David McAuliffe and Narelle Warren
are shareholders and directors, during the period for company secretarial work, financial and due diligence
services. These services are provided on normal commercial terms and at arm’s length.
Payments to Concept Biotech Pty Ltd
Amounts payable to Concept Biotech Pty Ltd
This is the end of the Remuneration Report.
Signed in accordance with a resolution of the Board of Directors.
2019
$
30,000
25,000
55,000
David McAuliffe
Non- Executive Director
Perth, Western Australia, 27 August 2019
13
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
38 Station Street
Subiaco, WA 6008
PO Box 700 West Perth WA 6872
Australia
DECLARATION OF INDEPENDENCE BY JARRAD PRUE TO THE DIRECTORS OF INVEX THERAPEUTICS LTD
As lead auditor of Invex Therapeutics Ltd for the period ended 30 June 2019, I declare that, to the
best of my knowledge and belief, there have been:
1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
2. No contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Invex Therapeutics Ltd during the period.
Jarrad Prue
Director
BDO Audit (WA) Pty Ltd
Perth, 27 August 2019
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275,
an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and
form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation.
Invex Therapeutics Ltd (formerly Invex Therapeutics Pty Ltd) - Financial Report for the period from incorporation on 8 March 2019 to 30
June 2019
Statement of Profit or Loss and Other Comprehensive Income
For the period from incorporation on 8 March 2019 to 30 June 2019
Note
4
5
5
5
6
Revenue from continuing operations
Research and development expenditure
ASX listing expenses
Administration expenses
Loss before income tax from continuing operations
Income tax expense
Loss for the period from continuing operations
Other comprehensive income for the period, net of tax
Items that may be reclassified subsequently to profit or
loss
Total other comprehensive income for the period, net
of tax attributable to members of the company
Loss for the period is attributable to:
Owners of Invex Therapeutics Limited (formerly Invex
Therapeutics Pty Ltd)
income
Total comprehensive
attributable to:
Owners of Invex Therapeutics Limited (formerly Invex
Therapeutics Pty Ltd)
for the period
is
Period from
incorporation on 8
March 2019 to 30 June
2019
$
132
(59,876)
(105,102)
(67,276)
(232,122)
-
(232,122)
-
(232,122)
(232,122)
(232,122)
Loss per share (cents)
12
(0.98)
The above Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with
the accompanying notes.
15
Invex Therapeutics Ltd (formerly Invex Therapeutics Pty Ltd) - Financial Report for the period from incorporation on 8 March 2019 to 30
June 2019
Statement of Financial Position
As at 30 June 2019
ASSETS
Current Assets
Cash and cash equivalents
Other receivables
Total Current Assets
Non-current Assets
Intangible assets
Total Non-current Assets
TOTAL ASSETS
LIABILITIES
Current Liabilities
Trade and other payables
Total Current Liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Contributed equity
Accumulated losses
TOTAL EQUITY
Note
2019
$
7
8
9
10
11
13
12,170,247
85,620
12,255,867
117,946
117,946
12,373,813
935,491
935,491
935,491
11,438,322
11,670,444
(232,122)
11,438,322
The above Statement of Financial Position should be read in conjunction with the accompanying notes.
16
Invex Therapeutics Ltd (formerly Invex Therapeutics Pty Ltd) - Financial Report for the period from incorporation on 8 March 2019 to 30
June 2019
Statement of Changes in Equity
For the period from incorporation on 8 March 2019 to 30 June 2019
Contributed
Equity
$
Accumulated
Losses
$
Total
Equity
$
1
-
-
-
-
1
(232,122)
(232,122)
-
-
(232,122)
(232,122)
11,670,443
11,670,444
-
(232,122)
11,670,443
11,438,322
Balance as at 8 March 2019
(Loss) for the period
Other comprehensive income for
the period
Total comprehensive (loss) for the
period
Transactions with owners in their
capacity as owners:
Issue of share capital, net of
transaction costs
Balance at 30 June 2019
The above Statement of Changes in Equity should be read in conjunction with the accompanying notes.
17
Invex Therapeutics Ltd (formerly Invex Therapeutics Pty Ltd) - Financial Report for the period from incorporation on 8 March 2019 to 30
June 2019
Statement of Cash Flows
For the period from incorporation on 8 March 2019 to 30 June 2019
Note
2019
$
CASH FLOWS FROM OPERATING ACTIVITIES
Payments to suppliers and employees
Interest received
Net cash outflow from operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for acquisition
Net cash outflows from investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Subscription proceeds received for ordinary shares
Capital raising costs
Net cash inflow from financing activities
14
Net increase in cash and cash equivalents held
Cash and cash equivalents at the beginning of the period
Cash and cash equivalents at end of financial period
7
(230,264)
132
(230,132)
(8,191)
(8,191)
12,500,001
(91,431)
12,408,570
12,170,247
-
12,170,247
The above Statement of Cash Flows should be read in conjunction with accompanying the notes.
18
Invex Therapeutics Ltd (formerly Invex Therapeutics Pty Ltd) - Financial Report for the period from incorporation on 8 March 2019 to 30
June 2019
Notes to the Financial Statements
1. Basis of Preparation
The financial report is a general purpose financial report that has been prepared in accordance with
Australian Accounting Standards, Australian Accounting
Interpretations, other authoritative
pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001.
Invex Therapeutics Limited is a listed public company, incorporated and domiciled in Australia. Invex
Therapeutics Limited is a for-profit entity for the purpose of preparing the financial statements.
Australian Accounting Standards set out accounting policies that the AASB has concluded would result
in a financial report containing relevant and reliable information about transactions, events and
conditions. Compliance with Australian Accounting Standards ensures that the financial statements and
notes also comply with International Financial Reporting Standards as issued by the IASB. Material
accounting policies adopted in the preparation of this financial report are presented below and have
been consistently applied unless otherwise stated.
The financial report has been prepared on an accruals basis and is based on historical costs, modified,
where applicable, by the measurement at fair value of selected non-current assets, financial assets and
financial liabilities.
The Company was incorporated on 8 March 2019 and this represents the first reporting period for the
Company. The financial report therefore does not include comparative information.
2. New and amended Accounting Standards and Interpretations issued but not yet effective
The following new and amended Accounting Standards and Interpretations have been identified as
those which may impact the entity in the period of initial application. Based on current operations, the
standards are not expected to have a material impact on the Company but will be reassessed as the
business develops. They are available for early adoption at 1 July 2019, but have not been adopted by
the Company:
•
AASB 16 will affect primarily the accounting by lessess and will result in the recognition of almost
all leases on balance sheet. The standard removes the current distinction between operating and
finance leases and requires recognition of an asset (the right to use the leased item) and a financial
liability to pay rentals for virtually all lease contracts. An optional exemption exists for short-term
and low-value leases.
The statement of profit and loss will also be affected because the total expense is typically higher
in the earlier years of a lease and lower in later years. Additionally operating expense will be
replaced with interest and depreciation so key metrics like EBITDA will change.
Operating cashflows will be higher as cash payments for the principal portion of the lease liability
are classified within financing activities. Only the part of the payments that reflects interest can
continue to be presented as operating cashflows.
The accounting by lessors will not significantly change. Some differences may arise as a result of
the new guidance on the definition of a lease. Under AASB 16, a contract is, or contains, a lease if
the contract conveys the right to control the use of the an identified asset for a period of time in
exchange for consideration.
19
Invex Therapeutics Ltd (formerly Invex Therapeutics Pty Ltd) - Financial Report for the period from incorporation on 8 March 2019 to 30
June 2019
Notes to the Financial Statements (continued)
2. New and amended Accounting Standards and Interpretations issued but not yet effective (continued)
•
IFRIC 23 Uncertainty over Income Tax Treatments which clarifies the application of the recognition
and measurement criteria in IAS 12 Income Taxes when there is uncertainty over income tax
treatments. This standard will be effective from 1 July 2019. The Interpretation specifically
addresses the following:
o Whether an entity considers uncertain tax treatments separately
o The assumptions an entity makes about the examination of tax treatments by taxation
authorities
o How an entity determines taxable profit (tax loss), tax bases, unused tax losses, unused
tax credits and tax rates
o How an entity considers changes in facts and circumstances.
3. Summary of Accounting Policies
The following material accounting policies adopted by the Company in the preparation of the financial
report, have been consistently applied unless otherwise stated.
(a) Revenue recognition
Revenue is recognised when or as the Company transfers control of goods or services to a customer at
the amount at which the Company expects to be entitled. The following specific recognition criteria must
also be met before revenue is recognised:
Interest income
Revenue is recognised as the interest accrues (using the effective interest method), which is the rate
that exactly discounts estimated future cash receipts through the expected life of the financial
instrument to the net carrying amount of the financial asset.
(b) Loans and Receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are
not quoted in an active market and are stated at amortised cost using the effective interest rate method.
At each reporting date, the Company assesses whether there is objective evidence that a financial
instrument has been impaired.
(c)
Income Tax
Tax expense recognised in profit or loss comprises the sum of deferred tax and current tax not
recognised in other comprehensive income or directly in equity.
Current income tax assets and/or liabilities comprise those obligations to, or claims from, the Australian
Taxation Office (ATO) and other fiscal authorities relating to the current or prior reporting periods that
are unpaid at the reporting date. Current tax is payable on taxable profit, which differs from profit or
loss in the financial statements. Calculation of current tax is based on tax rates and tax laws that have
been enacted or substantively enacted by the end of the reporting period.
20
Invex Therapeutics Ltd (formerly Invex Therapeutics Pty Ltd) - Financial Report for the period from incorporation on 8 March 2019 to 30
June 2019
Notes to the Financial Statements (continued)
3.
Summary of Accounting Policies (continued)
(c) Income Tax (continued)
Deferred income taxes are calculated using the full liability method on temporary differences between
the carrying amounts of assets and liabilities and their tax bases. However, deferred tax is not provided
on the initial recognition of goodwill or on the initial recognition of an asset or liability unless the related
transaction is a business combination or affects tax or accounting profit. Deferred tax on temporary
differences associated with investments in subsidiaries and joint ventures is not provided if reversal of
these temporary differences can be controlled by the Company and it is probable that reversal will not
occur in the foreseeable future.
Deferred tax assets and liabilities are calculated, without discounting, at tax rates that are expected to
apply to their respective period of realisation, provided they are enacted or substantively enacted by
the end of the reporting period.
Deferred tax assets are recognised to the extent that it is probable that they will be able to be utilised
against future taxable income, based on the Company’s forecast of future operating results which is
adjusted for significant non-taxable income and expenses and specific limits to the use of any unused
tax loss or credit. Deferred tax liabilities are always provided for in full.
Deferred tax assets and liabilities are offset only when the Company has a right and intention to set off
current tax assets and liabilities from the same taxation authority.
Changes in deferred tax assets or liabilities are recognised as a component of tax income or expense in
profit or loss, except where they relate to items that are recognised in other comprehensive income
(such as the revaluation of land) or directly in equity, in which case the related deferred tax is also
recognised in other comprehensive income or equity, respectively.
(d) Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of
GST incurred is not recoverable from the Tax Office. In these circumstances the GST is recognised as part
of the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables in
the statement of financial position are shown inclusive of GST.
Cash flows are presented in the statement of cash flows on a gross basis, except for the GST components
of investing and financing activities, which are disclosed as operating cash flows.
(e) Cash and Cash Equivalents
Cash and short-term deposits in the Statement of Financial Position comprise cash at bank and on hand
and short-term deposits.
(f) Trade and Other Receivables
Trade receivables, which generally have 30-90 day terms, are recognised and initially at fair value and
subsequently measured at amortised cost using the effective interest rate method, less loss allowance.
The Company applies the AASB 9 simplified approach to measure expected credit losses which uses
lifetime expected loss allowance for trade receivables. Bad debts are written off when identified.
21
Invex Therapeutics Ltd (formerly Invex Therapeutics Pty Ltd) - Financial Report for the period from incorporation on 8 March 2019 to 30
June 2019
Notes to the Financial Statements (continued)
3.
Summary of Accounting Policies (continued)
(g) Asset acquisition
When an asset acquisition does not constitute a business combination, the assets and the liabilities
carrying amount based on their relative fair values in an asset purchase transaction and no deferred tax
will arise in relation to the acquired assets and assumed liabilities as the initial recognition exemption for
deferred tax under AASB 112 applies. No goodwill will arise on the acquisition and transaction costs of
the acquisition will be included in the capitalized cost of the asset.
(h) Equity, reserves and dividend payments
Share capital represents the fair value of shares that have been issued. Any transaction costs associated
with the issuing of shares are deducted from share capital, net of any related income tax benefits.
Dividend distributions payable to equity shareholders are included in other liabilities when the dividends
have been approved in a General Meeting prior to the reporting date.
All transactions with owners of the parent are recorded separately within equity.
(i) Provisions, contingent liabilities and contingent assets
Provisions for legal disputes, onerous contracts or other claims are recognised when the Company has
a present legal or constructive obligation as a result of a past event, it is probable that an outflow of
economic resources will be required from the Company and amounts can be estimated reliably. Timing
or amount of the outflow may still be uncertain.
Provisions are measured at the estimated expenditure required to settle the present obligation, based
on the most reliable evidence available at the reporting date, including the risks and uncertainties
associated with the present obligation. Where there are a number of similar obligations, the likelihood
that an outflow will be required in settlement is determined by considering the class of obligations as a
whole. Provisions are discounted to their present values, where the time value of money is material.
No liability is recognised if an outflow of economic resources as a result of present obligation is not
probable. Such situations are disclosed as contingent liabilities, unless the outflow of resources is
remote in which case no liability is recognised.
(j) Trade and other Payables
Trade and other payables represent liabilities for goods and services provided to the Company prior to
the period end and which are unpaid. These amounts are unsecured, have 30-60 day payment terms
and are measured at amortised cost.
22
Invex Therapeutics Ltd (formerly Invex Therapeutics Pty Ltd) - Financial Report for the period from incorporation on 8 March 2019 to 30
June 2019
Notes to the Financial Statements (continued)
3.
Summary of Accounting Policies (continued)
(k) Research and Development
Research expenditure is recognised as an expense is incurred.
Costs incurred on developments projects (relating to the development 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 capitalized comprises all directly attributable costs,
including costs of materials, services, direct labour and an appropriate proportion of overheads. Other
development expenditures that do not meet these criteria are recognized as an expense as incurred.
Development costs previously recognised as an expense are not recognized as an asset in a subsequent
period. Capitalised development costs are recorded as intangible assets and amortised from the point
at which the asset is ready for use.
(l)
Intellectual Property
Intellectual property represents an intangible asset which underpins the business of the Company; this
was acquired at the Company’s inception and represents a capital contribution. Intellectual property is
measured initially at fair value when it is probable that the future economic benefits arising as a result
of the costs incurred will flow to the Company. This is subsequently measured on the cost model.
The Company assesses identifiable intangible assets as having either finite or indefinite useful lives.
Intangible assets with finite lives are amortised over the useful life and assessed for impairment at least
annually or whenever there is an indication that the intangible asset may be impaired. The amortisation
period and amortisation method are reviewed at least each financial year end.
(m) Impairment of assets
Non-financial assets
At the end of each reporting period, non-financial assets are reviewed for impairment whenever events
or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment
loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount.
Recoverable amount is the higher of an asset’s fair value less costs of disposal and value-in-use. The
value-in-use is the present value of the estimated future cash flows relating to the asset using a pre-tax
discount rate specific to the asset or cash-generating unit to which the asset belongs. Assets that do not
have independent cash flows are grouped together to form a cash-generating unit.
Financial assets
At the end of each reporting period, the Company assesses whether there is objective evidence that a
financial asset has been impaired. For financial assets measured at fair value, gains or losses will be
recorded in profit or loss, or through Other Comprehensive Income (FVTOCI) if the Company has made
an irrevocable election at the time of initial recognition to account for equity instruments through OCI.
23
Invex Therapeutics Ltd (formerly Invex Therapeutics Pty Ltd) - Financial Report for the period from incorporation on 8 March 2019 to 30
June 2019
Notes to the Financial Statements (continued)
3.
Summary of Accounting Policies (continued)
(n) Critical Accounting Estimates and Judgments Required
The directors evaluate estimates and judgments incorporated into the financial report based on
historical knowledge and best available current information. Estimates assume a reasonable
expectation of future events and are based on current trends and economic data, obtained both
externally and within the Company.
Research and development expenditure
Distinguishing the research and development phases of a new customized project and determining
whether the recognition requirements for the capitalization of development costs are met requires
judgement. The Company has expensed all costs relating to research and development expenditure to
date on the basis that the capitalisation requirements have not been met.
The Company’s consideration of whether its internal projects to develop drugs are in a research phase
or development phase involves significant judgement.
The Company considers a project to be in a development phase when the following can be
demonstrated:
• The technical feasibility of completing the intangible asset so that it will be available for use or
sale;
• There is intention to complete the project;
• The existence of a market to be able to sell output resulting from the project;
• How the intangible asset will generate probable future economic benefits;
• There is adequate technical, financial and other resources available to complete the
development and to use or sell the intangible asset; and
• Expenditure attributable to the project can be reliably measured.
Recoverability of the intangible assets
The entity tests annually, or more frequently if events or changes in circumstances indicate impairment,
whether indefinite life intangible assets have suffered any impairment, in accordance with the
accounting policy stated in note 3(m). The recoverable amounts of cash-generating units have been
determined based on the higher of value-in-use calculations and fair values. These calculations require
the use of assumptions, including estimated discount rates based on the current cost of capital and
growth rates of the estimated future cash flows.
24
Invex Therapeutics Ltd (formerly Invex Therapeutics Pty Ltd) - Financial Report for the period from incorporation on 8 March 2019 to 30
June 2019
Notes to the Financial Statements (continued)
4.
Revenue from continuing operations
Interest income
5.
Loss for the Period
The loss for the period before income tax includes the following specific expenses:
(a) Research and development expenses
Reformulation
Consumables
Patent expenses
Total
(b) ASX listing expenses
ASX listing fee
Directors’ criminal and bankruptcy checks
Consultants & Advisers
Total
(c) Administration expenses
Accounting and company secretarial fees
Rent and office expenses
Audit fees
Travel and entertainment
Website and IT expenses
Logo, design and PR expenses
Total
2019
$
132
2019
$
55,633
642
3,601
59,876
88,988
1,691
14,423
105,102
20,136
4,885
20,263
10,320
4,832
6,840
67,276
25
Invex Therapeutics Ltd (formerly Invex Therapeutics Pty Ltd) - Financial Report for the period from incorporation on 8 March 2019 to 30
June 2019
Notes to the Financial Statements (continued)
6. Income Tax
(a) Income tax expense
Current tax expense
Deferred tax expense
Total income tax expense/(revenue) from continuing operations
(b)
Reconciliation of income tax expense to prima facie tax payable:
Loss before income tax
Prima facie tax benefit on loss from ordinary activities before income tax at
27.5%
Tax effect of:
- entertainment
Tax losses not recognised
Income tax expense/(benefit)
The applicable weighted average effective tax rate are as follows:
(c) Unrecognised deferred tax assets arising on timing difference and losses
Accruals
Business related costs
Revenue tax losses
Capital raising costs in equity
2019
$
-
-
-
(232,122)
(63,834)
76
63,758
-
27.5%
4,125
19,416
91,844
206,506
321,891
The tax benefits of the above deferred tax assets will only be obtained if:
(a)
The company derives future assessable income of a nature and of an amount sufficient to enable
the benefits to be utilised;
(b)
The company continues to comply with the conditions for deductibility imposed by law; and
(c) No changes in income tax legislation adversely affect the company in utilising the benefits.
26
Invex Therapeutics Ltd (formerly Invex Therapeutics Pty Ltd) - Financial Report for the period from incorporation on 8 March 2019 to 30
June 2019
Notes to the Financial Statements (continued)
7. Cash and Cash Equivalents
Cash at bank and in hand
8. Other Receivables
GST receivable
2019
$
12,170,274
12,170,274
2019
$
85,620
85,620
There are no other receivables that are past due or impaired at 30 June 2019.
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of
receivables or payables in the statement of financial position. At 30 June 2019, this is included as part of
GST receivable above.
Intangible assets
9.
Asset Acquisition
On 29 March 2019, the Company obtained the rights to the core intellectual property rights including orphan
drug designations assigned to the Company by issuing fully paid ordinary shares in the capital of the Company
equivalent to 18% of the total shares in the Company.
These assets have been accounted for as an intangible assets in accordance with AASB 138 Intangible Assets.
Given the payment was made by way of issuing shares, the consideration transferred is fair value in
accordance with AASB 2 Share based payments for a total purchase consideration of $109,755.
Shares issue to vendor
Acquisition costs
2019
$
109,755
8,191
117,946
27
Invex Therapeutics Ltd (formerly Invex Therapeutics Pty Ltd) - Financial Report for the period from incorporation on 8 March 2019 to 30
June 2019
Notes to the Financial Statements (continued)
10. Trade and Other Payables
Trade payables
2019
$
935,491
935,491
Trade payables are non-interest bearing and are normally settled on 30-day terms.
11. Contributed Equity
Ordinary shares on issue – fully paid
Total
2019
$
11,670,444
11,670,444
2019
Number of
shares
55,000,001
55,000,001
Holders of ordinary shares are entitled to receive dividends as declared from time to time and are
entitled to one vote per share at shareholders meetings. In the event of winding up of the Company
ordinary shareholders rank after creditors and are fully entitled to any proceeds of liquidation in
proportion to the number and amount paid on the shares held.
Movement in fully paid ordinary shares on issue
Ordinary shares issued on 8-03-19 on incorporation
Ordinary shares issued pursuant to Acquisition (Mar 19)
(Refer Note 9)
Ordinary shares issued pursuant to Placement (Mar 19)
Initial Public Offering1
Cost of capital raising
Balance at end of financial period
2019
$
1
109,755
500,000
12,000,000
(939,312)
11,670,444
2019
Number of shares
1
4,500,000
20,500,000
30,000,000
-
55,000,001
1 Shares for the Initial Public Offering were allotted on 28 June 2019. The Company was officially listed on the ASX on 3 July 2019 and commenced trading on the 5 July
2019.
28
Invex Therapeutics Ltd (formerly Invex Therapeutics Pty Ltd) - Financial Report for the period from incorporation on 8 March 2019 to 30
June 2019
Notes to the Financial Statements (continued)
12. Loss per share
Basic and diluted loss per share is calculated by dividing the loss for the year attributable to ordinary equity
holders of the parent by the weighted average number of ordinary shares outstanding during the year.
The following table reflects the loss and share data used in the basic and diluted loss per share:
Basic and Diluted (Loss) per Share (cents)
Total basic and diluted loss per share (cents)
Loss per share
Net loss attributable to members of the Company
Earnings used in calculating basic and diluted earnings per share from
continuing operations
2019
(0.98)
2019
$
(232,122)
(232,122)
2019
Number of
shares
Weighted average number of Ordinary Shares used in calculating basic
and diluted earnings per share
23,596,492
Dilutive potential Ordinary Shares
As at balance date, there were no options on issue.
Conversions, Calls, Subscriptions or Issues after 30 June 2019
Subsequent to year end, the Company has not issued any shares.
29
Invex Therapeutics Ltd (formerly Invex Therapeutics Pty Ltd) - Financial Report for the period from incorporation on 8 March 2019 to 30
June 2019
Notes to the Financial Statements (continued)
13. Accumulated Losses
Net loss attributable to members of the company
Accumulated losses at the end of the financial period
2019
$
(232,122)
(232,122)
14. Reconciliation of Net Cash Flows Operating Activities to Operating (Loss) After Tax
Loss (after income tax) for the period
Non-cash items included in profit or loss:
Net changes in working capital:
Increase in trade and other receivables
Increase in trade and other payables
Net cash used in operating activities
2019
$
(232,122)
(18,510)
20,500
(230,132)
Non-cash investing and financing activities disclosed in other notes are:
Issue of shares for the acquisition of intellectual property rights (refer Note 9).
15. Financial Risk Management
The Company’s principal financial instruments comprise cash, short-term deposits and trade payables.
The Company does not have any derivative instruments at 30 June 2019 and does not speculate in any
financial instruments.
a) Financial Risks
The activities of the Company expose it primarily to the financial risks of interest rate risk, liquidity
risk, foreign exchange risk and credit risk. The Board of Directors is responsible for monitoring and
managing the financial risks of the Company. The Company Secretary/CFO monitors these risks by
the review and analysis of monthly management accounts and other financial data.
b) Interest Rate Risk
The Company’s main interest rate risk arises from cash held on deposit by Australian financial
Institutions. Cash held in term deposits is subject to prevailing variable interest rates and expose
the Company to cash flow interest rate risk.
30
Invex Therapeutics Ltd (formerly Invex Therapeutics Pty Ltd) - Financial Report for the period from incorporation on 8 March 2019 to 30
June 2019
Notes to the Financial Statements (continued)
15.
Financial Risk Management (continued)
The following table summarises interest rate risk for the Company.
Fixed Interest
Rate Maturing
Floating
Interest Rate
1 Year or
Less
1 to 5 Years
Total
Non-
Interest
Bearing
($)
($)
($)
($)
($)
12,170,247
12,170,247
-
-
-
-
-
-
12,170,247
12,170,247
30 June 2019
Interest-bearing financial
instruments
Cash and cash equivalents
Total
The Company does not rely on the generation of interest on cash at bank to provide working capital and does
not consider the exposure to be material to the Company and have therefore not undertaken any further
analysis of exposure.
c) Liquidity Risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they
fall due. The Board of Directors manage liquidity risk by continually monitoring cash reserves and
cashflow forecasts to ensure that financial commitments can be met as and when they fall due.
The Company’s objective is to maintain a balance between continuity of funding and flexibility
through the use of equity funding.
The following table details the expected contractual maturity for its non-derivative financial liabilities.
2019
Financial liabilities due
Trade and other payables
Total
Total
$
1 year or
less
$
1 – 5
years
$
935,491
935,491
935,491
935,491
-
-
5+
years
$
-
-
31
Invex Therapeutics Ltd (formerly Invex Therapeutics Pty Ltd) - Financial Report for the period from incorporation on 8 March 2019 to 30
June 2019
Notes to the Financial Statements (continued)
15.
Financial Risk Management (continued)
d) Credit Risk Exposure
Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial
instrument fails to meet its contractual obligations and arises principally from the Company’s cash
at bank. The carrying amount of the financial assets on the Statement of Financial Position
represents the maximum credit exposure.
All cash and cash equivalents are held with large reputable financial institutions within Australia and
therefore credit risk is considered minimal.
Cash and cash equivalents:
AA rated
16. Related Party Disclosure
a) Key Management Personnel
2019
$
12,170,247
There were no key management personnel, other than the directors, during the year ended 30 June
2019.
The names of each person holding the position of director of the Company during the financial
period are set out below:
Prof. Alexandra Sinclair
- Dr Jason Loveridge
-
- Mr David McAuliffe
- Ms Narelle Warren
32
Invex Therapeutics Ltd (formerly Invex Therapeutics Pty Ltd) - Financial Report for the period from incorporation on 8 March 2019 to 30
June 2019
Notes to the Financial Statements (continued)
16. Related Party Transactions (continued)
b) Transactions with key management personnel
(i)
Total key management personnel remuneration is as follows:
Short Term Benefits
Post Employment Benefits
Share based payments
2019
$
55,000
-
-
55,000
(ii)
Nil loans were payable to or receivable from KMPs during or at the end of the financial year.
Unless otherwise stated, none of the transactions incorporate special terms and conditions and no
guarantees were given or received.
17. Events Subsequent to Reporting Period
Since period end:
The Company was admitted to the Official List of the ASX and commenced trading on the 5 July 2019.
Other than as disclosed above, no matters or events have arisen since the end of the financial period which
significantly affected or may significantly affect the operations of the company, the results of those
operations or the state of affairs of the company in subsequent financial periods.
18. Auditor’s Remuneration
Amounts paid or payable to BDO for:
Audit services
-
Total audit services
an audit or review of the financial report of the entity
Independent Assurance Report
Total other services
19. Dividends
There are no dividends paid or payable at 30 June 2019.
2019
$
20,000
20,000
10,914
10,914
33
Invex Therapeutics Ltd (formerly Invex Therapeutics Pty Ltd) - Financial Report for the period from incorporation on 8 March 2019 to 30
June 2019
Notes to the Financial Statements (continued)
20. Commitments
2019
Total
$
1 year or
less
$
1 – 5
years
$
Phase II Clinical trial and reformulation
Total
753,154
753,154
753,154
753,154
-
-
5+
years
$
-
-
There are no other commitments which require disclosure as at 30 June 2019.
21. Segment reporting
The Company has identified its operating segments based on the internal reports that are reviewed and
used by the Board of Directors in assessing performance and determining the allocation of resources.
The Company is managed primarily on the basis of its research and development activities. Operating
segments are therefore determined on the same basis.
Reportable segments disclosed are based on aggregating operating segments where the segments are
considered to have similar economic characteristics.
The Company operated in one segment which is research and development activities within Australia.
The Company is domiciled in Australia.
22. Contingent Liabilities and Contingent Assets
The Directors are not aware of any contingent liabilities or contingent assets which require disclosure as
at 30 June 2019.
34
Invex Therapeutics Ltd (formerly Invex Therapeutics Pty Ltd) - Financial Report for the period from incorporation on 8 March 2019 to 30
June 2019
Directors’ Declaration
In the Directors’ opinion:
(a) the financial statements and notes are in accordance with the Corporations Act 2001, and:
(i)
(ii)
(iii)
complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory
professional reporting requirements; and
give a true and fair view of the financial position as at 30 June 2019 and of the performance for
the period ended on that date of the Company.
are in accordance with International Financial Reporting Standards issued by the International
Accounting Standards Board, as stated in note 1 to the financial statements; and
(b) In the Directors’ opinion, there are reasonable grounds to believe that the Company will be able to pay
its debts as and when they become due and payable; and
(c) The Directors have been given the declarations by the Executive Director as required by section 295A, of
the Corporations Act 2001.
This declaration is made in accordance with a resolution of the Board of Directors and is signed for and on
behalf of the directors by;
David McAuliffe
Non-executive Director
Perth, Western Australia, 27 August 2019
35
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
38 Station Street
Subiaco, WA 6008
PO Box 700 West Perth WA 6872
Australia
INDEPENDENT AUDITOR'S REPORT
To the members of Invex Therapeutics Ltd
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Invex Therapeutics Ltd (the Company), which comprises the
statement of financial position as at 30 June 2019, the statement of profit or loss and other compre-
hensive income, the statement of changes in equity and the statement of cash flows for the period
then ended, and notes to the financial report, including a summary of significant accounting policies,
and the directors’ declaration.
In our opinion the accompanying financial report of Invex Therapeutics Ltd, is in accordance with the
Corporations Act 2001, including:
(i)
Giving a true and fair view of the Company’s financial position as at 30 June 2019 and of its
financial performance for the period ended on that date; and
(ii)
Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the Financial
Report section of our report. We are independent of the Company in accordance with the
Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical
Standards Board’s APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to
our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in
accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been
given to the directors of the Company, would be in the same terms if given to the directors as at the
time of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report of the current period. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide
a separate opinion on these matters.
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275,
an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and
form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation.
Accounting for acquisition of core intellectual property rights
Key audit matter
How the matter was addressed in our audit
As disclosed in note 9 of the financial report, on
29 March 2019, the Company acquired the core
intellectual property rights including orphan drug
designations in Core Materials by issuing fully paid
ordinary shares in the capital of the Company.
Given the payment was made by way of issuing
shares; the consideration transferred is at fair
value and has been accounted for as a share
based payment in accordance with AASB 2. The
asset acquired by the Company has been
accounted as an intangible asset in accordance
with AASB 138.
The accounting for this transaction is a key audit
matter as this represents a significant transaction
during the period and requires judgement and the
use of assumptions regarding their recognition
and measurement.
Our procedures included, but were not limited
to the following:
·
·
·
·
·
·
·
obtaining an understanding of the
transaction, including an assessment of
whether the transaction constituted an
asset acquisition or business
combination;
reviewing relevant agreements to
understand the key terms and conditions
of the transaction;
holding discussions with management to
understand the share-based payment
arrangements in place;
assessing the appropriateness and
accuracy of the consideration paid;
reviewing management’s determination
of the fair value of the share-based
payments;
assessing the ownership of the
intellectual property rights transferred
to the Company in line with the
agreements; and
assessing the adequacy and
completeness of the related disclosures
in Note 2(g), Note 2(l) and Note 9.
Other information
The directors are responsible for the other information. The other information comprises the
information in the Company’s annual report for the period ended 30 June 2019, 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 we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
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 Company’s ability 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 Company or to
cease operations, or has no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the
Auditing and Assurance Standards Board website (http://www.auasb.gov.au/Home.aspx) at:
http://www.auasb.gov.au/auditors_responsibilities/ar2.pdf
This description forms part of our auditor’s report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 8 to 13 of the directors’ report for the
period ended 30 June 2019.
In our opinion, the Remuneration Report of Invex Therapeutics Ltd, for the period ended 30 June 2019,
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.
BDO Audit (WA) Pty Ltd
Jarrad Prue
Director
Perth, 27 August 2019
Invex Therapeutics Ltd (formerly Invex Therapeutics Pty Limited) - Financial Report for the period from incorporation on 8 March 2019 to
30 June 2019
Corporate Governance Statement
In fulfilling its obligations and responsibilities to its various stakeholders, the Board is a strong advocate of
corporate governance. This statement outlines the principal corporate governance procedures of Invex
Therapeutics Ltd (Company). The Board of Directors (Board) supports a system of corporate governance to
ensure that the management of Invex Therapeutics Ltd is conducted to maximise shareholder wealth in a
proper and ethical manner.
ASX Corporate Governance Council Recommendations
The Board has adopted corporate governance policies and practices consistent with the ASX Corporate
Governance Council's Principles of Good Corporate Governance and Best Practice Recommendations ("ASX
Principles and Recommendations 3rd Edition") where considered appropriate for Invex Therapeutics Limited
size and nature. Such policies include, but are not limited to the Board Charter, Board Committee Charters,
Code of Conduct, Trading in Securities, Continuous Disclosure, Shareholder Communication and Risk
Management Policies.
Further details in respect to the Company’s corporate governance practises and copies of Company’s
corporate governance policies and the 2019 Corporate Governance Statement, approved by the Board and
applicable as at 30 June 2019 are available of the Company’s website:
http://www.invextherapeutics.com/company/corporate-governance
40
Invex Therapeutics Ltd (formerly Invex Therapeutics Pty Limited) - Financial Report for the period from incorporation on 8 March 2019 to
30 June 2019
ASX Additional Information
Additional information required by the ASX Limited Listing Rules not disclosed elsewhere in this Annual
Report is set out below.
1. Shareholdings
The issued capital of the Company as at 27 August 2019 is 55,000,001 ordinary fully paid shares. All issued
ordinary fully paid shares carry one vote per share.
Ordinary Shares
Shares Range
1-1,000
1,001-5,000
5,001-10,000
10,001-100,000
100,001 and above
Total
Unmarketable parcels
Holders
174
265
104
226
67
836
Units
114,869
782,300
853,903
7,530,376
45,718,553
55,000,001
%
0.21
1.42
1.55
13.69
83.12
100.00
There were 114 holders of less than a marketable parcel of ordinary shares.
2. Top 20 Shareholders as at 27 August 2019
Name
1 Minderoo Group Pty Ltd
2
Tisia Nominees Pty Ltd
JK Nominees Pty Ltd
3
4 Warambi Sarl
5 Oakton Nominees Pty Ltd
6 Mr David Jerimiah McAuliffe
7
Alexandra Jean Sinclair
8
The University of Birmingham
Dr Jason Loveridge
9
10 Sunset Capital Management Pty Ltd
11 Bannaby Investments Pty Limited
12 Cityscape Asset Pty Ltd
13 BNP Paribas Nominees Pty Ltd HUB 24 Custodial Serv Ltd DRP
14 HSBC Custody Nominees (Australia) Limited
15 Ms Sophie Alice Loveridge
16 Ms Alexandra Loveridge
17 Ms Kathryn Mary Salkilld
18 Peter Kyros Pty Ltd
19 Alba Capital Pty Ltd
20 Denlin Nominees Pty Ltd
Total
Total remaining holders balance
Number of
shares
5,000,000
4,000,000
4,000,000
3,540,000
3,225,000
3,225,001
2,500,000
2,000,000
1,566,000
1,250,000
1,250,000
1,173,781
995,000
623,210
523,000
523,000
523,000
500,000
500,000
425,000
%
9.09
7.27
7.27
6.44
5.86
5.86
4.55
3.64
2.84
2.27
2.27
2.13
1.81
1.13
0.95
0.95
0.95
0.91
0.91
0.77
37,341,992
17,658,009
67.89
32.11
41
Invex Therapeutics Ltd (formerly Invex Therapeutics Pty Limited) - Financial Report for the period from incorporation on 8 March 2019 to
30 June 2019
ASX Additional Information (continued)
3. Unquoted securities
There are no unlisted options over shares in the Company as at 27 August 2019.
4. Voting rights
See note 11 of the financial statements.
5. Substantial shareholders as at 27 August 2019
Holder
Dr Jason Loveridge
Minderoo Group Pty Ltd
Anthony J Grist
JK Nominees Pty Ltd
Tisia Nominees Pty Ltd
David J McAuliffe
Number of
shares held
% of issued
capital held
5,106,000
5,000,000
4,000,000
4,000,000
4,000,000
3,350,001
9.28
9.09
7.27
7.27
7.27
6.09
Total
25,456,001
46.27
6. Restricted securities subject to escrow period
2,680,793 ordinary shares escrowed 12 months from issue.
21,069,220 ordinary shares escrowed 24 months from quotation.
7. On-market buyback
There is currently no on‐market buyback program for any of Invex’s listed securities.
8. Company cash and assets
In accordance with Listing Rule 4.10.19, the Company confirms that it has been using the cash and assets it
had acquired at the time of admission and for the period ended 30 June 2019 in a way that is consistent with
its business objective and strategy.
42