ACN 632 145 334
INVEX THERAPEUTICS LTD
FINANCIAL REPORT
30 JUNE 2020
Invex Therapeutics Ltd – Consolidated Financial Report for the year ended 30 June 2020
Contents
Corporate Directory ......................................................................................................................................... 3
Chair’s Letter .................................................................................................................................................... 4
Directors’ Report .............................................................................................................................................. 6
Auditor's Independence Declaration……………………………………………………………………………… .…………………………19
Consolidated Statement of Profit or Loss and Other Comprehensive Income…………………………………………….20
Consolidated Statement of Financial Position..……………………………………………………………………………………….....21
Consolidated Statement of Changes in Equity ............................................................................................... 22
Consolidated Statement of Cash Flows .......................................................................................................... 23
Notes to the Financial Statements ................................................................................................................ 24
Directors’ Declaration .................................................................................................................................... 45
Independent Auditor’s Report........................................................................................................................ 46
Corporate Governance Statement ................................................................................................................. 49
ASX Additional Information ............................................................................................................................ 50
2
Invex Therapeutics Ltd – Consolidated Financial Report for the year ended 30 June 2020
Corporate Directory
This financial report includes the consolidated financial statements and notes of the Group consisting of Invex
Therapeutics Ltd and its controlled entity (Invex Therapeutics UK).
The Group’s functional and presentation currency is Australian Dollars ($).
A description of the Group’s operations and principal activity is included in the review of operations and activities in the
Directors’ report on pages 6 to 18. The Directors’ Report is not part of the Consolidated 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
UK Principal Place of Business
Unit 28, Birmingham Research Park
97 Vincent Drive
Edgbaston, Birmingham B15 2SQ
United Kingdom
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 – Consolidated Financial Report for the year ended 30 June 2020
Chair’s Letter
On behalf of the Board of Invex Therapeutics Ltd (Invex), I am delighted to report on our significant and numerous
achievements this year and the foundations of our strategy to increase shareholder value. Invex is focused on research
and development centred around understanding and defining the mechanisms that regulate pressure in the brain, and
in particular the potential to repurpose an already approved drug, Exenatide, to reduce intracranial pressure (ICP) and
address a significant unmet medical need. Invex has trade marked its repurposed Exenatide as Presendin™ and has
progressed rapidly since listing on the Australian Securities Exchange (ASX) in July 2019 with the key achievement being
the completion of a Phase II clinical trial in Idiopathic Intracranial Hypertenstion (IIH).
IIH features severely raised intracranial pressure which causes disabling daily headaches and can compress the optic
nerve, causing serious vision impairment in up to one third of those affected. IIH is a chronic disease which starts early
in life, at around 20-30 years, and it is most common in women who are obese. IIH is a rapidly growing orphan indication:
its incidence has increased by more than 350% in the last 10 years. Invex estimates the IIH annual addressable market
in the United States (US) and European Union (EU) could be around A$1.6 billion, representing a drug-treatable patient
population of approximately 21,500 newly diagnosed patients and a prevalence population of approximately 92,000
patients. There are currently no approved treatments for IIH, repesenting an attractive and unecumbered market for
Presendin™ upon clinical and regulatory success.
One of Invexs’ key corporate strategies is to maximise the value of our Exenatide assets through multiple layers of
protection utilising both regulatory and patent mechanisms. Our granted orphan drug designation for Exenatide in IIH
in both the US and Europe provides us seven and ten years market exclusivity, respectively, upon regulatory clearance
being granted. During the year we were awarded a Japanese patent on the use of Exenatide for pressure related
disorders of the brain, and just after the end of the financial year, received notification from the US Patent and
Trademark Office of a notice of allowance for Invex’s patent application covering the use of GLP-1 receptor agonists,
including Exenatide, in reducing elevated intracranial pressure. The allowance of our US patent should provide
protection until at least August 2035.
During the year Invex reported the results of its first clinical study of Exenatide in IIH. This trial was a single centre,
randomised Phase II, double-blind, placebo controlled clinical trial in 16 patients with active IIH comparing Exenatide
twice daily with placebo. The primary endpoint of the study was the change in ICP over 12 weeks of dosing as measured
by a real-time intracranial pressure (ICP) monitoring device. Secondary endpoints included a number of headache and
vision based measures.
Invex was and remains excited with the study outcomes. The study provided clear statistical and clinical evidence of
efficacy in the primary endpoint of a reduction in ICP, demonstrating both an immediate reduction in pressure and a
strong and sustained reduction in ICP at 12 weeks. This study provides the first evidence that Exenatide can both
significantly reduce ICP in IIH patients and provide a clinical benefit in terms of headache reduction and vision
improvement.
Exenatide was able to demonstrate a statistically significant and clinically meaningful improvement in visual acuity at
12 weeks, equating to one line improvement on a LogMAR eye chart. Additionally, there was a statistically significant
and clinically meaningful 7.7 day (37%) reduction in Monthly Headache Days for IIH patients receiving Exenatide. To
place this data into context, one line of vision improvement could mean the difference between driving or not, and that
magnitude of headache reduction is not typically seen for migraine drugs already approved by regulators, where a 1.5-
2.0 day improvement is considered clinically meaningful.
In July 2020, Invex received preliminary feedback from the European Medicines Agency (EMA) and US Food and Drug
Adminsitration (FDA) on the Invex’ proposed Phase III design and pre-clinical package for Presendin™. EMA indicated a
single pivotal study of Presendin™ against placebo would be sufficient to support a filing for regulatory approval in IIH
in Europe. EMA suggested ICP as the most appropriate primary endpoint, but also acknowledged that reduction in
headache frequency would also constitute an acceptable primary endpoint. The FDA stated they would need more
information to evaluate Invex’s proposed design but did guide that two well controlled studies would be required to
support registration in the US. Both regulatory agencies agreed that Invex’s proposed pre-clinical and human
pharmacokinetic approach was broadly acceptable for the proposed Phase III study. Investors should note these
discussions are currently early stage in nature and harmonising regulatory approaches to achieve approval in multiple
jurisdictions always requires multiple interactions.
4
Invex Therapeutics Ltd – Consolidated Financial Report for the year ended 30 June 2020
Chair’s Letter (continued)
In the year ahead, we will continue to refine the Presendin™ Phase III clinical study design and execute contracts for the
manufacture and supply of GMP grade Presendin™ for clinical trials and commercialisation. Having now received
regulatory advice we will also move forward with the necessary animal tolerability and human pharmacokinetic (PK)
studies for Presendin™. Most importantly, we still anticipate commencing a Phase III registration trial in IIH in the first
half of calendar year 2021.
Invex remains in a strong financial position with a robust, debt-free balance sheet to provide the funds to support our
pre-clinical and clinicial activities for Presendin™ in IIH, and also to explore a second disease indication in more detail.
I would like to acknowledge the significant progress achieved in our first year and thank my fellow Board members,
employees and our consultants for their contribution, which resulted in Invex; successfully listing on ASX, delivering
statisitcally significant and clinically meaningful Phase II data in IIH both on time and on budget, and undertaking a
transformational capital raise that funds the pre-clinical and clinical trials necessary to obtain regulatory clearance for
Presendin™ in IIH.
On behalf of the Board I would like to acknowledge our shareholders, patients and key clinician advisers for their
support. Invex remains committed to its mission of developing innovative therapies with a focus on pressure-related
disorders on the brain, particularly IIH. We believe Invex has the potential to profoundly improve patient health and
quality of life with such therapies and significantly increase shareholder value over time as we meet clinical, regulatory
and commerical milestones moving forward.
Dr Jason Loveridge
Chair
5
Invex Therapeutics Ltd – Consolidated Financial Report for the year ended 30 June 2020
Directors’ Report
Your Directors present their report together with the consolidated financial statements of the Invex Therapeutics Ltd
(Invex or Company) and its controlled entity (Group) for the financial year ended 30 June 2020.
Director
The name of the Directors in office for the year ended 30 June 2020 until the date of this report are as follows. All
Directors were in office for the entire year unless otherwise stated.
Dr Jason Loveridge
Non-executive Chair
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 30 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 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 – 3,374,462 shares and 800,000 unlisted options.
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 and 800,000 unlisted options.
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 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 and 200,000 unlisted options.
6
Invex Therapeutics Ltd – Consolidated Financial Report for the year ended 30 June 2020
Directors’ Report (continued)
Ms Narelle Warren
Non-executive Director/Company Secretary
Appointed 25 March 2019
Ms Warren is a Chartered Accountant with over twenty years of corporate advisory, financial management and company
secretarial experience. Ms Warren has co-ordinated and assisted in numerous 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 and 400,000 unlisted options.
Principal Activity
Invex is a biopharmaceutical Group focused on the repurposing of an already approved drug, Exenatide, for efficacious
treatment of neurological conditions derived from or involving raised intracranial pressure, such as Idiopathic
Intracranial Hypertension (IIH), acute stroke and traumatic brain injury. The Group’s first program is the development
of Presendin™ for IIH, a severe condition predominately in females which can lead to disabling headaches and
permanent vision loss. Presendin™ is the Group’s filed (and granted) trademark name for reformulated Exenatide
currently in development.
The principal activity of the Group during the year has been the reformulation of Exenatide to optimise the delivery of
the drug for patients with IIH, the prosecution of the Group’s patent portfolio and the exploration of other indications
involving raised intracranial pressure with the goal of expanding the Group’s proprietary drug candidates beyond
Presendin™. A Phase II clinical trial of Exenatide in IIH was completed during the year and the results announced.
Operating Results
The result of the Group for the year ended 30 June 2020 was a loss of $3,360,279 (2019: $232,122 loss). The net loss of
the Group predominantly related to Research & Development costs of $1,591,547 associated with the Phase II clinical
trial, pre-clinical reformulation studies of Presendin™, administration and corporate costs of $674,354 and non-cash
items; share-based payments of $983,392 and the write-off of acquisition costs of $117,946.
During the second half of the year, the Group completed a two tranche share placement $26,200,000 before costs. The
Company allotted 12,500,000 shares in May 2020 to raise $16,250,000 and the balance of 7,653,847 shares to raise
$9,950,001 were allotted in early July 2020.
The capital raised will allow the Group to meet its medium term clinical and other objectives, including the completion
and publication of top-line results of the Phase III study for Presendin™, drug manufacture and supply for the trials and
the commencement of a Phase II study for Presendin™ in a second indication in 1H CY2021.
Review of Operations
Invex successfully listed on the Australian Securities Exchange (ASX) on 5 July 2019, raising $12.0 million at an issue price
of $0.40 per share. In the Group’s first year since listing on ASX it has made considerable progress, meeting its business
objectives on time and within budget. The Group is pleased to report on its significant achievements as follows.
7
Invex Therapeutics Ltd – Consolidated Financial Report for the year ended 30 June 2020
Directors’ Report (continued)
The highlights include:
•
•
•
•
•
•
•
The repurposing of Exenatide for IIH progressed largely as planned and a number of potential formulations
were identified which were evaluated in pre-clinical animal models throughout the 2020 financial year. The
Group completed several pharmacokinetic (PK) studies of different proprietary formulations of Exenatide in
animals during the second half of the year. The Group has chosen a small number of potential final
formulations of Exenatide and commenced a process to identify a supplier of GMP grade Exenatide and a Final
Drug Product manufacturer for sufficient quantities of Presendin™ to undertake further clinical studies and
provide sufficient inventory to support initial commercialisation activities. The Group is currently in active
discussions with a number of potential suppliers and anticipates completing its selection process in the third
quarter of calendar year 2020.
In October 2019, Invex announced its application for a patent in Japan had been granted (patent number 2017-
512008).
The Group announced the 16th and final patient was recruited and dosed for the randomised, double-blind,
placebo controlled Phase II clinical trial targeting the treatment of IIH with Exenatide. The recruitment and
dosing was completed well ahead of schedule.
In December 2019 the Company incorporated a UK subsidiary, Invex Therapeutics Ltd (Invex UK) and entered
into a lease agreement to secure a principal place of business in the UK at the Birmingham Research Park in
Edgbaston. Invex UK is employing additional personnel to work alongside Professor Alexandra Sinclair to
manage and support the Group’s clinical trial programmes.
In January 2020 Invex announced the sixteenth and final patient had completed the 12-week dosing regimen
for the Group’s randomised Phase II trial of Exenatide in IIH.
In February 2020 the Trade Mark Application No UK00003462892 Presendin™ was granted in the UK.
In May 2020, Invex released the results of its Phase II study of Exenatide in IIH demonstrating:
o
o
o
o
Statistically significant reduction in Intracranial Pressure (ICP, the Primary Endpoint) in Idiopathic
Intracranial Hypertension (IIH) patients receiving Exenatide at 2.5 hours, 24 hours and 12 weeks (range
18.1-20.8% versus study hurdle of >10%)
ICP lowering effects of Exenatide in IIH patients for the first time in human patients
Statistically significant & clinically meaningful 7.7 day (37%) reduction in Monthly Headache Days for
IIH patients receiving Exenatide (key hurdle for migraine drug approval is 1.5-2.0 days per month)
Statistically significant & clinically meaningful improvement in visual acuity at 12 weeks, equating to
one line improvement on a LogMAR eye chart.
This Phase II data strongly supported moving Presendin™ into a Phase III clinical trial. The study provided clear
statistical and clinical evidence of efficacy in the primary, and in some key secondary endpoints, and
demonstrated both an immediate reduction in ICP and a strong and sustained clinical benefit in the IIH cohort
at 12 weeks.
•
In June 2020, the IIH Phase II data was presented by the study investigators during the scientific sessions at the
14th European Headache Federation (EHF) Congress on 29 June in Berlin, Germany (virtual Congress). The
presentation was titled “A randomised, placebo controlled, double blind trial of the effect of the GLP-1 receptor
agonist Exenatide on intracranial pressure in Idiopathic Intracranial Hypertension (IIH: Pressure Trial).”
• The Group appointed Carol Parish effective 20 July 2020 as Head of Clinical Operations to oversee and drive
the Group’s clinical programs, including its Phase III clinical program for Presendin™ as well as the necessary
lead-in requirements including regulatory and quality initiatives. Carol has over 30 years’ experience within
large and medium size pharmaceutical companies, having been accountable for all phases of drug development
and in multiple therapy areas, including neurology.
8
Invex Therapeutics Ltd – Consolidated Financial Report for the year ended 30 June 2020
Directors’ Report (continued)
Likely Developments
The Group has laid solid foundations during its first year of operations and continues to actively progress the necessary
lead-in requirements to commence a Phase III registration study of Presendin™ in 2021.
The successful completion and strong efficacy shown from the Phase II clinical trial for Exenatide represents an
important milestone for Invex, its shareholders and patients living with the burden of IIH.
Invex has a number of key milestones planned for the remainder of the 2021 financial year, including:
Finalisation of the Presendin™ Phase III design (Q3 CY2020)
Finalise supply of GMP Exenatide and Presendin™ manufacturing (Q3 CY2020)
•
•
• Complete animal tolerability study for Presendin™ (Q4 CY2020)
•
• Commence a Phase III registration trial in 1H CY2021
Initiate human pharmacokinetic (PK) study for Presendin™ (Q4 CY2020)
Dividends
No dividends were paid or recommended by the Directors since the commencement of the year.
Significant Changes in State of Affairs
Other than as outlined above, there were no significant changes in the Group’s state of affairs during the year.
Matters Subsequent to the End of the Financial Year
The impact of the Coronavirus (COVID-19) pandemic is ongoing and while it has not adversely financially impacted the
consolidated entity up to 30 June 2020, it is not practicable to estimate the potential impact, positive or negative, after
the reporting date. The situation is changing rapidly and the Company’s ability to operate normally is subject to
measures imposed by the Australian Government and other countries, such as; maintaining social distancing
requirements, quarantine, travel restrictions and other economic stimulus that may be provided.
On 2 July 2020 the Company allotted 7,653,847 ordinary shares, to raise $9,950,001 following shareholder approval at
General Meeting of Shareholders on 29 June 2020.
No other significant events occurred after balance date which may affect either the Group’s operations or results of
those operations or the Group’s state of affairs.
Meetings of Directors
During the year the following Director meetings were held.
Board Meetings
Number Eligible to
Attend
Number Attended
8
8
8
8
8
6
8
8
Director
Dr Jason Loveridge
Prof Alexandra Sinclair
Mr David McAuliffe
Ms Narelle Warren
Environmental Regulations
The Group is not subject to significant environmental regulation in respect of its research and development activities.
9
Invex Therapeutics Ltd – Consolidated Financial Report for the year ended 30 June 2020
Directors’ Report (continued)
Unissued Shares under Option
Unissued ordinary shares of Invex Therapeutics Ltd under option at the date of this report are as follows:
Date Options Granted
Expiry Date
Exercise Price
Number Under Option
22 November 2019
22 November 2023
21 January 2020
9 April 2020
Total
21 January 2023
9 April 2023
$0.60
$1.00
$0.60
2,200,000
1,250,000
60,000
3,510,000
Insurance of Officers and Indemnities
Invex paid a premium to insure the directors and secretary of the Group.
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
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 Group. 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 Group
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on
behalf of the Group, or to intervene in any proceedings to which the Group is a party, for the purpose of taking
responsibility on behalf of the Group for all or part of those proceedings.
No proceedings have been brought or intervened in on behalf of the Group with leave of the Court under section 237
of the Corporations Act 2001.
Non-audit services
The Group may decide to employ its auditor on assignments additional to their statutory audit duties where the
auditor’s expertise and experience with the Group is important.
During the year, other services were performed in addition to their statutory duties. The details of the amount paid are
disclosed in Note 23 of the consolidated financial report.
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.
Additional information
The earnings of the consolidated entity for the years since incorporation to 30 June 2020 are summarised below:
Sales revenue
EBITDA
EBIT
Loss after income tax
2020
$
2019
$
-
(3,360,279)
(3,360,279)
(3,360,279)
-
(232,122)
(232,122)
(232,122)
10
Invex Therapeutics Ltd – Consolidated Financial Report for the year ended 30 June 2020
Directors’ Report (continued)
Remuneration Report - Audited
The remuneration report outlines the remuneration arrangements which were in place during the year 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
A
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
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.
Given the size of the company Non-executive Directors may receive performance-based pay where they are required to
provide services outside the scope of their roles as Non-executive Directors.
Directors’ fees
The current base fees were last reviewed at a recent Board 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 was 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 or declared in the year ended to 30 June 2020.
11
Invex Therapeutics Ltd – Consolidated Financial Report for the year ended 30 June 2020
Directors’ Report (continued)
Remuneration Report - Audited (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.
12
Invex Therapeutics Ltd – Consolidated Financial Report for the year ended 30 June 2020
Directors’ Report (continued)
Remuneration Report - Audited (continued)
Long term incentives
The Group’s current Employee Share Option Plan (ESOP) is designed to provide medium and long term incentives for all
employees (including Non-executive and Executive Directors) and to attract and retain experienced Employees, Board
Members and Executive Officers and provide motivation to make the Group more successful.
As options granted to Directors and Employees are considered to represent the value of the services received over the
vesting period of the options, the assessed value of the options are recognised and expensed over the vesting period.
Options vesting during the period of issue are fully expensed under the accounting standards.
Other than options disclosed in section D of the remuneration report there have been no options issued to Directors
and Employees at the date of this financial report.
Voting and comments made at the Company's 2019 Annual General Meeting (AGM)
At the 2019 AGM, 98.5% of the votes received supported the adoption of the remuneration report for the year ended
30 June 2019. The company did not receive any specific feedback at the AGM regarding its remuneration practices.
Remuneration consultants
The Group did not engage any remuneration consultants during the year.
The Group 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 Group’s Key Management Personnel (KMP’s).
B Details of remuneration
Amounts of remuneration
Details of the remuneration of the directors and the KMP’s of the Group are found below:
Director
Date of appointment
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
13
Invex Therapeutics Ltd – Consolidated Financial Report for the year ended 30 June 2020
Directors’ Report (continued)
Remuneration Report - Audited (continued)
Key Management Personnel of the Group
Short-term employee benefits
Long-term
employee
benefits
Cash
salary &
fees
Other
Non
monetary
benefits
Annual
Leave
Post-employment
benefits
Super-
annuatio
n
Pensions
Retire-
ment
benefits
Share-
based
payments
Total
Total
remuneration
represented by
Options
Options
$
$
$
$
$
$
$
$
%
70,000 70,0001
12,923
35,000
130,000
2
-
12,923
12,923
235,000
70,000
38,769
Prof Alexandra Sinclair
70,000 70,0001
12,923
2020
Directors
Non-executive
Directors
Dr Jason Loveridge
David McAuliffe
Narelle Warren
Sub-total
Non-executive
Directors
Executive Director
Total key
management
personnel
compensation
1.
2.
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
173,546 326,469
43,387
91,310
53.16
35.77
86,773 229,696
37.78
303,706 647,475
-
173,546 326,469
53.16
-
477,252 973,944
47.55
305,000 140,000
51,692
These amounts relate to bonuses paid to Dr Jason Loveridge and Prof Alexandra Sinclair in recognition of their additional time and effort
in completion of the successful Phase II trial on time and within budget and also the $26.2 million capital raising.
This amount is in relation to Ms Warren’s Company Secretary, Finance and role with the Company and paid by the Company to Concept
Biotech Pty Ltd.
The relative proportions of remuneration that are linked to performance and those that are fixed are as follows:
Name
Executive Director
Prof Alexandra Sinclair
Fixed
remuneration
2020
Performance based
remuneration
2020
70,000
53.16%
14
Invex Therapeutics Ltd – Consolidated Financial Report for the year ended 30 June 2020
Directors’ Report (continued)
Remuneration Report - Audited (continued)
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
2019
Directors
Non-executive Directors
Dr Jason Loveridge
David McAuliffe
Narelle Warren
Sub-total
Non-executive directors
Executive Director
$
-
-
-
-
30,000 25,0001
30,000
25,000
Prof Alexandra Sinclair
-
Total KMP
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.
The relative proportions of remuneration that are linked to performance and those that are fixed are as follows:
Fixed
remuneration
2019
Performance based
remuneration
2019
70,000
-
Name
Executive Director
Prof Alexandra Sinclair
C
Service agreements
Executive Director
Name
Term of
agreement Fees
Termination benefit
Executive Director
Prof Alexandra Sinclair Open
$70,000
Relevant notice periods
apply, being
1 months’ notice with reason or 3 months
without reason.
15
Invex Therapeutics Ltd – Consolidated Financial Report for the year ended 30 June 2020
Directors’ Report (continued)
Remuneration Report - Audited (continued)
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 with the exception of Narelle Warren were paid the following fees during the year.
Name
Term of agreement
Base salary
including
superannuation Termination benefit
Non-Executive Directors
Dr
Loveridge
Jason
Consultancy
–
Open
$35,000 Relevant notice periods apply,
being
1 months’ notice with reason.
Dr Jason Loveridge – Bonus
Board approved
$70,000 Not applicable
Dr Jason Loveridge – Non-
executive fee
Shareholder Approval
by rotation
David McAuliffe-
executive fee
Non-
Shareholder Approval
by rotation
$35,000 Nil
$35,000 Nil
D
Share-based compensation
Options
The Company’s current Employee Share Option Plan (ESOP) was approved by the board of directors on 20 May 2019.
The ESOP is designed to provide medium and long term incentives for all employees (including Non-executive and
Executive Directors) and to attract and retain experienced employees, board members and executive officers and
provide motivation to make the Company more successful.
Under the ESOP, participants have been granted options which only vest if certain milestones are met. Participation in
the plan is at the board’s discretion and no individual has a contractual right to participate in the plan or to receive any
guaranteed benefit.
Any option may only be exercised after the option has vested and other conditions imposed by the board have been
satisfied. Options are granted under the ESOP for no consideration. Options granted under the ESOP carry no dividend
or voting rights. When exercisable, shares allotted pursuant to the exercise of options will be allotted following receipt
of relevant documentation and payments will rank equally with all other shares.
16
Invex Therapeutics Ltd – Consolidated Financial Report for the year ended 30 June 2020
Directors’ Report (continued)
Remuneration Report - Audited (continued)
As options granted to employees are considered to represent the value of the services received over the vesting period
of the options, the assessed value of the options are recognised and expensed over the vesting period. Options vesting
during the period of issue are fully expensed under the accounting standards.
The total Employee Options expense for the period is outlined below. The terms and conditions of each grant of options
over ordinary shares affecting remuneration of directors and other key management personnel in this financial year or
future reporting years are as follows:
2020
Name
Directors
Number of
options
granted
Grant date
Vesting date and
exercisable date
Expiry date Exercise price
Fair value
per option
at grant date
Dr Jason Loveridge
Prof Alexandra
Sinclair
800,000 22 Nov 2019
800,000
22 Nov 2019
David McAuliffe
200,000
22 Nov 2019
Narelle Warren
400,000
22 Nov 2019
50% -22 Nov 2021
50% 22 Nov 2022
50% -22 Nov 2021
50% 22 Nov 2022
50% -22 Nov 2021
50% 22 Nov 2022
50% -22 Nov 2021
50% 22 Nov 2022
22 Nov 2023
$0.60
$0.42
22 Nov 2023
$0.60
$0.42
22 Nov 2023
$0.60
$0.42
22 Nov 2023
$0.60
$0.42
All options were granted over unissued fully paid ordinary shares in the company. The number of options granted was
determined having regard to the satisfaction of performance measures. Options vest based on the provision of service
over the vesting period whereby the executive becomes beneficially entitled to the option on vesting date. Options are
exercisable by the holder as from the vesting date. There has not been any alteration to the terms or conditions of the
grant since the grant date. There are no amounts paid or payable by the recipient in relation to the granting of such
options other than on their potential exercise.
E
Equity instruments held by Key Management Personnel
Shareholdings
The numbers of shares in the Company held during the year by each director of Invex, including their personally related
parties are set out below. There were no shares granted during the reporting year as compensation.
2020
Name
Balance at
the start of
the year
Capital
Raising shares
subscribed for
Disposals
On Market
Purchases
Balance at the end of
the year
Directors
Dr Jason Loveridge
Prof. Alexandra Sinclair
David McAuliffe
Narelle Warren
Total
5,106,000
2,500,000
3,350,001
200,000
11,156,001
-
-
-
-
-
(1,770,000) 1
-
-
-
(1,770,000)
-
-
-
-
-
3,336,000
2,500,000
3,350,001
200,000
9,386,001
1. As a result of the liquidation of an entity of which Dr Jason Loveridge was a beneficiary 50% of the shareholding, representing 1,770,000 shares was transferred to another
beneficiary of the entity.
17
Invex Therapeutics Ltd – Consolidated Financial Report for the year ended 30 June 2020
Directors’ Report (continued)
Remuneration Report - Audited (continued)
Option holdings
The number of options over ordinary shares in the Group held during the year by each director of Invex Therapeutics
Ltd, including their personally related parties, are set out below.
2020
Name
Directors
Dr Jason Loveridge
Prof Alexandra
Sinclair
David McAuliffe
Narelle Warren
Total
Balance
at the
start of
the year
Granted as
compensation
Exercised/
Expired
Balance at
end of the
year
Vested and
exercisable Un-vested
Fair value
at grant
date
-
-
-
-
-
800,000
800,000
200,000
400,000
2,200,000
-
-
-
-
-
800,000
800,000
200,000
400,000
2,200,000
-
-
-
-
800,000
$0.42
800,000
200,000
400,000
2,200,000
$0.42
$0.42
$0.42
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 2020.
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 year 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.
David McAuliffe
Non- Executive Director
Perth, Western Australia, 27 August 2020
2020
$
130,000
-
130,000
2019
$
30,000
25,000
55,000
18
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 year ended 30 June 2020, 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 and the entity it controlled during the period.
Jarrad Prue
Director
BDO Audit (WA) Pty Ltd
Perth, 27 August 2020
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 – Consolidated Financial Report for the year ended 30 June 2020
Consolidated Statement of Profit or Loss and Other Comprehensive Income
For the year ended 30 June 2020
Note
4
5
5
5
9
13
6
Period from
incorporation
on 8 March
2019 to 30 June
2019
$
2020
$
165,703
132
(1,591,547)
(158,743)
(674,354)
(117,946)
(983,392)
(3,360,279)
-
(59,876)
(105,102)
(67,276)
-
-
(232,122)
-
(3,360,279)
(232,122)
-
-
(3,360,279)
(232,122)
(3,360,279)
(232,122)
(3,360,279)
(232,122)
Other income
Research and development expenditure
Capital raising expenses
Finance, compliance and administration expenses
Impairment of intangible asset
Share-based payment expenses
Loss before income tax from continuing operations
Income tax expense
Loss for the year from continuing operations
Other comprehensive income for the year, net of tax
Items that may be reclassified subsequently to profit or loss
Total other comprehensive income for the year, net of tax
attributable to members of the Group
Loss for the year is attributable to:
Owners of Invex Therapeutics Ltd
Total comprehensive income for the year is attributable to:
Owners of Invex Therapeutics Ltd
Loss per share (cents)
14
(5.98)
(0.98)
The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction
with the accompanying notes.
20
Invex Therapeutics Ltd – Consolidated Financial Report for the year ended 30 June 2020
Consolidated Statement of Financial Position
As at 30 June 2020
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
Unallocated shares
Total Current Liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Contributed equity
Reserves
Accumulated losses
TOTAL EQUITY
Note
2020
$
2019
$
7
8
9
10
11
12
13
15
26,300,459
116,882
26,417,341
12,170,247
85,620
12,255,867
-
-
26,417,341
117,946
117,946
12,373,813
712,946
1,302,427
2,015,373
2,015,373
24,401,968
935,491
-
935,491
935,491
11,438,322
27,017,127
977,242
(3,592,401)
24,401,968
11,670,444
-
(232,122)
11,438,322
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
21
Invex Therapeutics Ltd – Consolidated Financial Report for the year ended 30 June 2020
Consolidated Statement of Changes in Equity
For the year ended 30 June 2020
Contributed
Equity
$
Accumulated
Losses
$
Reserves
Total
Equity
$
Balance as at 1 July 2019
11,670,444
(232,122)
(Loss) for the year
Other comprehensive income for the
year
Total comprehensive (loss) for the
year
Fx reserve movement
Share-based
movement
Transactions with owners in their
capacity as owners:
Issue of share capital, net of
transaction costs
Balance as at 30 June 2020
payment
reserve
(3,360,279)
-
-
-
-
(11,438,322)
(3,360,279)
-
(3,360,279)
-
-
(6,275)
(3,360,279)
(6,275)
983,517
983,517
-
-
-
-
-
-
-
-
15,346,683
27,017,127
-
(3,592,401)
-
977,242
15,346,683
24,401,968
Contributed
Equity
$
Accumulated
Losses
$
Reserves
Balance as at 8 March 2019
(Loss) for the year
Other comprehensive income for the
year
Total comprehensive (loss) for the
year
Transactions with owners in their
capacity as owners:
Issue of share capital, net of
transaction costs
Balance as at 30 June 2019
1
-
-
-
-
(232,122)
-
(232,122)
11,670,443
11,670,444
-
(232,122)
Total
Equity
$
1
(232,122)
-
(232,122)
11,670,443
11,438,322
-
-
-
-
-
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
22
Invex Therapeutics Ltd – Consolidated Financial Report for the year ended 30 June 2020
Consolidated Statement of Cash Flows
For the year ended 30 June 2020
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
Subscription proceeds received for options
IPO capital raising costs
Placement capital raising costs
Subscriptions proceeds unallocated
Net cash inflow from financing activities
Net increase in cash and cash equivalents held
Cash and cash equivalents at the beginning of the period
Exchange rate differences on cash held
Cash and cash equivalents at end of financial year
7
Note
2020
$
2019
$
(1,769,096)
165,703
(1,603,393)
(230,264)
132
(230,132)
16
-
-
(8,191)
(8,191)
16,250,000
125
(847,881)
(971,066)
1,302,427
15,733,605
14,130,212
12,170,247
-
26,300,459
12,500,001
-
(91,431)
-
-
12,408,570
12,170,247
-
-
12,170,247
The above Consolidated Statement of Cash Flows should be read in conjunction with accompanying the notes.
23
Invex Therapeutics Ltd – Consolidated Financial Report for the year ended 30 June 2020
Notes to the Consolidated 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 and is the parent
entity. Invex Therapeutics Limited is a for-profit entity for the purpose of preparing the financial statements.
These consolidated financial statements comprise the Company and its controlled entity at the end of, or during
the year (together referred to as ‘the Group’) and were authorised for issue by the Board of Directors.
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 officially listed on the ASX on 3 July 2019. The comparative
period was 8 March 2019 to 30 June 2020.
2. New and amended Accounting Standards and Interpretations
The following new and amended Accounting Standards and Interpretations have been identified as those which
are relevant to its operations and effective for annual reporting period beginning on or after 1 July 2019.
•
AASB 16 will affect primarily the accounting by lessees 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 an identified asset for a period of time in exchange for consideration.
The consolidated entity has adopted AASB 16 from 1 July 2019 using the retrospective modified approach
and as such the comparatives have not been restated. The impact of adoption is not material to the financial
statements.
Other new and amended standards and Interpretations issued by the AASB have been determined by the Group to
have no impact, material or otherwise, on its business and therefore no further changes, other than those
mentioned above, are necessary to Group accounting policies. No retrospective change in accounting policy or
material reclassification has occurred requiring the inclusion of a third Statement of Financial Position as at the
beginning of the comparative financial period, as required under AASB 101.
24
Invex Therapeutics Ltd – Consolidated Financial Report for the year ended 30 June 2020
Notes to the Consolidated Financial Statements (continued)
3. Summary of Accounting Policies
The following material accounting policies adopted by the Group in the preparation of the financial report, have
been consistently applied unless otherwise stated.
(a) Parent entity information
In accordance with the Corporations Act 2001, these financial statements present the results of the consolidated
entity only. Supplementary information about the parent entity is disclosed in note 22.
(b) Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Invex Therapeutics
Ltd (Company or Invex) as at 30 June 2020 and the results of all subsidiaries for the year then ended. Invex
Therapeutics Ltd and its subsidiary together are referred to in these financial statements as the 'consolidated
entity’.
Subsidiaries are all those entities over which the consolidated entity has control. The consolidated entity controls
an entity when the consolidated entity is exposed to, or has rights to, variable returns from its involvement with
the entity and has the ability to affect those returns through its power to direct the activities of the entity.
Subsidiaries are fully consolidated from the date on which control is transferred to the consolidated entity. They
are de-consolidated from the date that control ceases.
Intercompany transactions, balances and unrealised gains on transactions between entities in the consolidated
entity are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the
impairment of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to
ensure consistency with the policies adopted by the consolidated entity.
The acquisition of subsidiaries is accounted for using the acquisition method of accounting.
(c) Foreign currency translation
The financial statements are presented in Australian dollars, which is Invex's functional and presentation
currency.
Foreign currency transactions
Foreign currency transactions are translated into Australian dollars using the exchange rates prevailing at the dates
of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from
the translation at financial year-end exchange rates of monetary assets and liabilities denominated in foreign
currencies are recognised in profit or loss.
Foreign operations
The assets and liabilities of foreign operations are translated into Australian dollars using the exchange rates at the
reporting date. The revenues and expenses of foreign operations are translated into Australian dollars using the
average exchange rates, which approximate the rates at the dates of the transactions, for the period. All resulting
foreign exchange differences are recognised in other comprehensive income through the foreign currency reserve
in equity.
The foreign currency reserve is recognised in profit or loss when the foreign operation or net investment is
disposed of.
(d) Operating segments
Operating segments are presented using the 'management approach', where the information presented is on the
same basis as the internal reports provided to the Chief Operating Decision Makers ('CODM'). The CODM is
responsible for the allocation of resources to operating segments and assessing their performance.
25
Invex Therapeutics Ltd – Consolidated Financial Report for the year ended 30 June 2020
Notes to the Consolidated Financial Statements (continued)
3. Summary of Accounting Policies (continued)
(e) Revenue recognition
Revenue is recognised when or as the Group transfers control of goods or services to a customer at the amount at
which the Group 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.
(f) 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 Group assesses whether there is objective evidence that a financial instrument has
been impaired.
(g) Right-of-use asset
A right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is measured at cost,
which comprises the initial amount of the lease liability, adjusted for, as applicable, any lease payments made at
or before the commencement date net of any lease incentives received, any initial direct costs incurred, and,
except where included in the cost of inventories, an estimate of costs expected to be incurred for dismantling and
removing the underlying asset, and restoring the site or asset.
Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the lease or the estimated
useful life of the asset, whichever is the shorter. Where the consolidated entity expects to obtain ownership of the
leased asset at the end of the lease term, the depreciation is over its estimated useful life. Right-of use assets are
subject to impairment or adjusted for any remeasurement of lease liabilities.
The consolidated entity has elected not to recognise a right-of-use asset and corresponding lease liability for short-
term leases with terms of 12 months or less and leases of low-value assets. Lease payments on these assets are
expensed to profit or loss as incurred.
(h) Lease liability
A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised at the
present value of the lease payments to be made over the term of the lease, discounted using the interest rate
implicit in the lease or, if that rate cannot be readily determined, the consolidated entity's incremental borrowing
rate. Lease payments comprise of fixed payments less any lease incentives receivable, variable lease payments
that depend on an index or a rate, amounts expected to be paid under residual value guarantees, exercise price of
a purchase option when the exercise of the option is reasonably certain to occur, and any anticipated termination
penalties. The variable lease payments that do not depend on an index or a rate are expensed in the period in
which they are incurred.
Lease liabilities are measured at amortised cost using the effective interest method. The carrying amounts are
remeasured if there is a change in the following: future lease payments arising from a change in an index or a rate
used; residual guarantee; lease term; certainty of a purchase option and termination penalties. When a lease
liability is remeasured, an adjustment is made to the corresponding right-of use asset, or to profit or loss if the
carrying amount of the right-of-use asset is fully written down.
26
Invex Therapeutics Ltd – Consolidated Financial Report for the year ended 30 June 2020
Notes to the Consolidated Financial Statements (continued)
3. Summary of Accounting Policies (continued)
(i) Share-based payments
Equity-settled and cash-settled share-based compensation benefits are provided to employees.
Equity-settled transactions are awards of shares, or options over shares, that are provided to employees in
exchange for the rendering of services. Cash-settled transactions are awards of cash for the exchange of services,
where the amount of cash is determined by reference to the share price.
The cost of equity-settled transactions are measured at fair value on grant date. Fair value is independently
determined using either the Binomial or 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, together
with non-vesting conditions that do not determine whether the consolidated entity receives the services that
entitle the employees to receive payment. No account is taken of any other vesting conditions.
The cost of equity-settled transactions are recognised as an expense with a corresponding increase in equity over
the vesting period. The cumulative charge to profit or loss is calculated based on the grant date fair value of the
award, the best estimate of the number of awards that are likely to vest and the expired portion of the vesting
period. The amount recognised in profit or loss for the period is the cumulative amount calculated at each
reporting date less amounts already recognised in previous periods.
The cost of cash-settled transactions is initially, and at each reporting date until vested, determined by applying
either the Binomial or Black-Scholes option pricing model, taking into consideration the terms and conditions on
which the award was granted. The cumulative charge to profit or loss until settlement of the liability is calculated
as follows:
•
during the vesting period, the liability at each reporting date is the fair value of the award at that date multiplied
by the expired portion of the vesting period.
from the end of the vesting period until settlement of the award, the liability is the full fair value of the liability
at the reporting date.
•
All changes in the liability are recognised in profit or loss. The ultimate cost of cash-settled transactions is the cash
paid to settle the liability.
(j) 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.
(k) 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.
(l) 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 Group 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.
27
Invex Therapeutics Ltd – Consolidated Financial Report for the year ended 30 June 2020
Notes to the Consolidated Financial Statements (continued)
3. Summary of Accounting Policies (continued)
(m) 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.
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 Group 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 Group’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 Group 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.
(n) 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.
(o) 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.
28
Invex Therapeutics Ltd – Consolidated Financial Report for the year ended 30 June 2020
Notes to the Consolidated Financial Statements (continued)
3. Summary of Accounting Policies (continued)
(p) Trade and other Payables
Trade and other payables represent liabilities for goods and services provided to the Group 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.
(q) Provisions, contingent liabilities and contingent assets
Provisions for legal disputes, onerous contracts or other claims are recognised when the Group 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 Group 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.
(r) 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.
(s)
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 Group 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 Group has made an irrevocable election at the time of initial
recognition to account for equity instruments through OCI.
29
Invex Therapeutics Ltd – Consolidated Financial Report for the year ended 30 June 2020
Notes to the Consolidated Financial Statements (continued)
3.
Summary of Accounting Policies (continued)
(t)
Intellectual Property
Intellectual property represents an intangible asset which underpins the business of the Group; this was acquired
at the Group’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 Group. This is subsequently measured on the cost model.
The Group 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.
(u) 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 Group.
Coronavirus (COVID-19) pandemic
Judgement has been exercised in considering the impacts that the Coronavirus (COVID-19) pandemic has had, or
may have, on the consolidated entity based on known information. This consideration extends to the nature of the
products and services offered, customers, supply chain, staffing and geographic regions in which the consolidated
entity operates. Other than as addressed in specific notes, there does not currently appear to be either any
significant impact upon the financial statements or any significant uncertainties with respect to events or
conditions which may impact the consolidated entity unfavourably as at the reporting date or subsequently as a
result of the Coronavirus (COVID-19) pandemic.
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 Group has
expensed all costs relating to research and development expenditure to date on the basis that the capitalisation
requirements have not been met.
The Group’s consideration of whether its internal projects to develop drugs are in a research phase or development
phase involves significant judgement.
The Group 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.
•
Share-based payment transactions
The Group measures the cost of equity-settled transactions by reference to the fair value of the equity instruments
at the date at which they are granted. The fair value is determined using a Black-Scholes model.
30
Invex Therapeutics Ltd – Consolidated Financial Report for the year ended 30 June 2020
Notes to the Consolidated Financial Statements (continued)
4. Other income
Interest income
5.
Loss for the Year
The loss for the year before income tax includes the following specific expenses:
(a)
(b)
(c)
Research and development expenses
Reformulation
Phase II Clinical Trial
Employee costs
Consultants
Scientific Advisory Board
PK Studies
CSO fees
Consumables
Patent expenses
Total
Capital raising expenses
ASX listing/quotation fees
Corporate advisory and consultants
Directors’ criminal and bankruptcy checks
Total
Administration expenses
Accounting and company secretarial fees
ASX, ASIC and bank fees
Director’s fees
Legal fees
Rent and office expenses
Audit and tax fees
Travel and entertainment
D&O Insurance
Investor relations and PR expenses
Other general expenses
Website and IT expenses
Total
2020
$
2019
$
165,703
132
2020
$
2019
$
227,791
621,377
28,932
262,367
10,999
86,314
140,000
-
213,767
1,591,547
27,583
131,160
-
158,743
134,652
45,290
70,000
68,661
28,943
47,136
73,845
51,691
105,451
37,117
11,568
674,354
55,633
-
-
-
-
-
-
642
3,601
59,876
88,988
14,423
1,691
105,102
20,136
-
-
-
4,885
20,263
10,320
-
6,840
-
4,832
67,276
31
Invex Therapeutics Ltd – Consolidated Financial Report for the year ended 30 June 2020
Notes to the Consolidated Financial Statements (continued)
6. Income Tax
(a)
The components of tax expense comprise:
Current tax
Deferred tax expense
Total income tax expense from continuing operations
Deferred income tax expense included in income tax expense comprises:
Decrease/(increase) in deferred tax assets
Decrease/(increase) in deferred tax liabilities
(b) The prima facie tax on profit from ordinary activities before income tax
is reconciliation of income tax expense to prima facie tax payable:
2020
$
2019
$
-
-
-
-
-
-
-
-
-
-
Loss before income tax
(3,360,279)
(232,122)
Prima facie tax benefit on loss from ordinary activities before income tax at
30% (2019: 27.5%)
(1,008,084)
(63,834)
Tax effect of:
-share-based payments
-intellectual property costs
-change in corporate tax rate
- entertainment
- other
-tax differential rate
Tax losses and temporary differences not recognised
Income tax expense/(benefit)
The applicable weighted average effective tax rate are as follows:
(c) Amounts recognised directly in equity
Aggregate current and deferred tax arising in the reporting period and not
recognised in net loss or other comprehensive income but directly debited
or credited to equity.
Current tax
Net deferred tax
(d) Deferred tax assets
Patents
Accruals
Business related costs
Australian tax losses
Foreign tax losses
Other
Capital raising costs in equity
295,018
99,514
(29,263)
1,882
552
13,578
628,803
-
30%
-
-
-
76
-
-
63,758
-
27.5%
270,995
258,132
1,080
6,600
62,406
736,768
40,735
(194)
385,872
1,233,267
-
4,125
19,416
91,844
-
-
206,506
321,891
32
Invex Therapeutics Ltd – Consolidated Financial Report for the year ended 30 June 2020
Notes to the Consolidated Financial Statements (continued)
7. Cash and Cash Equivalents
Cash at bank and on hand
8. Other Receivables
GST/VAT receivable
2020
$
2019
$
26,300,459
26,300,459
12,170,274
12,170,274
2020
$
116,882
116,882
2019
$
85,620
85,620
There are no other receivables that are past due or impaired at 30 June 2020.
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 2020, this is included as part of GST receivable above.
9.
Intangible assets
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 were 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.
The Board resolved to write-off the intangible asset as at 30 June 2020.
Shares issue to vendor
Acquisition costs
Impairment charge
10. Trade and Other Payables
Trade payables
Accruals and other payables
Trade payables are non-interest bearing and are normally settled on 30-day terms.
2020
$
2019
$
117,946
-
(117,946)
-
2020
$
30,398
682,548
712,946
109,755
-
8,191
117,946
2019
$
935,491
-
935,491
33
Invex Therapeutics Ltd – Consolidated Financial Report for the year ended 30 June 2020
Notes to the Consolidated Financial Statements (continued)
11. Unallocated Shares
Unallocated shares
2020
$
1,302,247
1,302,247
2019
$
-
-
Following shareholder approval on the 29 June 2020, these shares were allotted on the 2 July 2020.
12. Contributed Equity
Ordinary shares on issue –
fully paid
2020
$
27,017,127
27,017,127
2020
Number of
shares
67,500,001
67,500,001
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
ordinary shares on issue
in
fully paid
Balance at beginning of
financial period
shares
Ordinary
issued
pursuant to Acquisition (Mar
19) (Refer Note 9)
shares
Ordinary
issued
pursuant to Placement (Mar
19)
Initial Public Offering1
Placement (May 20)
Cost of capital raising
Balance at end of financial
year
2020
$
2020
Number
of shares
2019
$
2019
Number
of shares
11,670,444
55,000,001
1
1
-
-
-
-
-
-
109,755
4,500,000
500,000
20,500,000
12,000,000
30,000,000
16,250,000
12,500,000
-
-
(903,317)
-
(939,312)
27,017,127
67,500,001
11,670,444
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.
34
Invex Therapeutics Ltd – Consolidated Financial Report for the year ended 30 June 2020
Notes to the Consolidated Financial Statements (continued)
13. Reserves
Share-based payment reserve
Foreign currency translation reserve
Nature and Purpose of Reserve
2020
$
983,517
(6,275)
977,242
2019
$
-
-
-
The share-based payment reserve records the value of options, performance rights and performance shares issued to
the Group’s directors, employees, and third parties. The value of the amount disclosed during the period reflects
the value of options, performance rights and performance shares issued by the Group.
The Foreign currency translation reserve records exchange differences arising on translation of foreign controlled
entities.
Options outstanding at 30 June 2020
The following options over ordinary shares of the Company were granted at reporting date:
Grant Date
Expiry Date
Exercise
Price
Balance at
start of
Period
Granted
During the
Period
Exercised
during the
Period
Forfeited
during
the
Period
Balance at
Period end
Vested and
exercisable
at Period
end
22 Nov 2019
22 Nov 2023
$0.60
21 Jan 2020
21 Jan 2023
$1.00
9 April 2020
9 April 2023
$0.60
-
-
-
-
2,200,000
1,250,000
60,000
3,510,000
-
-
-
-
-
-
-
-
2,200,000
-
1,000,000
250,000
60,000
-
3,260,000
250,000
Reconciliation of movement in Share-based payment reserve:
Opening Balance - 1 July 2019
Share-based payment expense in respect to Director options on issue at 30 June 2020
and granted during the period
Share-based payment expense in respect to adviser options on issue at 30 June 2020 and
granted during the period
Share-based payment expense in respect to employee options on issue at 30 June 2020
and granted during the period
Closing Balance – 30 June 2020
Number of
Options
Value
$
-
2,200,000
477,252
1,250,000
500,707
60,000
5,558
3,510,000
983,517
35
Invex Therapeutics Ltd – Consolidated Financial Report for the year ended 30 June 2020
Notes to the Consolidated Financial Statements (continued)
14. Loss per share
Basic and Diluted (Loss) per Share – cents
2020
$
2019
$
Total basic and diluted loss per share – cents
(5.98)
(0.98)
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:
2020
$
2019
$
Net loss attributable to members of the Group
(3,360,279)
(232,122)
Earnings used in calculating basic and diluted earnings per share from
continuing operations
(3,360,279)
(232,122)
2020
Number of
shares
2019
Number of
shares
Weighted average number of Ordinary Shares used in calculating basic
and diluted earnings per share
56,165,385
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 2020
Subsequent to year end, the Company has issued 7,653,847 shares.
15. Accumulated Losses
Accumulated losses at the beginning of the financial period
Net loss attributable to members of the Group
Accumulated losses at the end of the financial year
2020
$
(232,122)
(3,360,279)
(3,592,401)
2019
$
-
(232,122)
(232,122)
36
Invex Therapeutics Ltd – Consolidated Financial Report for the year ended 30 June 2020
Notes to the Consolidated Financial Statements (continued)
16. Reconciliation of Net Cash Flows Operating Activities to Operating (Loss) After Tax
Loss (after income tax) for the year
(3,360,279)
(232,122)
2020
$
2019
$
Non-cash items included in profit or loss:
Write-off acquisition costs
Share-based payment expenses
Unrealised fx reserves
Net changes in working capital:
(Increase)/decrease in trade and other receivables
Increase in trade and other payables
Net cash used in operating activities
117,946
983,392
(6,275)
36,487
624,976
(1,603,393)
-
-
-
(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 and subsequent write-off (refer Note 9).
Share-based payment expense (refer Note 20).
FX reserve movements (refer Note 13).
17. Financial Risk Management
The Group’s principal financial instruments comprise cash, short-term deposits and trade payables.
The Group does not have any derivative instruments at 30 June 2020 and does not speculate in any financial
instruments.
Financial Risks
The activities of the Group 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 Group.
The Company Secretary/CFO monitors these risks by the review and analysis of monthly management accounts and
other financial data.
Interest Rate Risk
The Group’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 Group to cash flow interest rate risk.
37
Invex Therapeutics Ltd – Consolidated Financial Report for the year ended 30 June 2020
Notes to the Consolidated Financial Statements (continued)
17.
Financial Risk Management (continued)
The following table summarises interest rate risk for the Group.
2020
Interest-bearing financial
instruments
Cash and cash equivalents
2019
Interest-bearing financial
instruments
Cash and cash equivalents
Fixed Interest
Rate Maturing
Floating
Interest Rate
1 Year or
Less
1 to 5 Years
Total
Non-
Interest
Bearing
$
$
$
$
$
26,300,459
26,300,459
-
-
-
-
-
-
26,300,459
26,300,459
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
The Group 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 Group and have therefore not undertaken any further analysis of exposure.
Liquidity Risk
Liquidity risk is the risk that the Group 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 Group’s objective is to maintain a balance between continuity of funding and flexibility through the use of equity
funding.
38
Invex Therapeutics Ltd – Consolidated Financial Report for the year ended 30 June 2020
Notes to the Consolidated Financial Statements (continued)
17.
Financial Risk Management (continued)
The following table details the expected contractual maturity for its non-derivative financial liabilities.
2020
Financial liabilities due
Trade and other payables
2019
Financial liabilities due
Trade and other payables
Credit Risk Exposure
Total
$
1 year or
less
$
1 – 5
years
$
712,946
712,946
712,946
712,946
Total
$
1 year or
less
$
1 – 5
years
$
935,491
935,491
935,491
935,491
-
-
-
-
5+
years
$
-
-
5+
years
$
-
-
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet
its contractual obligations and arises principally from the Group’s 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
Foreign currency risk
2020
$
2019
$
26,300,459
12,170,247
The consolidated entity undertakes certain transactions denominated in foreign currency and is exposed to foreign
currency risk through foreign exchange rate fluctuations.
Foreign exchange risk arises from future commercial transactions and recognised financial assets and financial liabilities
denominated in a currency that is not the entity's functional currency. The risk is measured using sensitivity analysis and
cash flow forecasting.
39
Invex Therapeutics Ltd – Consolidated Financial Report for the year ended 30 June 2020
Notes to the Consolidated Financial Statements (continued)
18. Related Party Transactions
Key Management Personnel
There were no key management personnel, other than the directors, during the year ended 30 June 2020.
The names of each person holding the position of director of the Company during the financial year are set out below:
Prof. Alexandra Sinclair
- Dr Jason Loveridge
-
- Mr David McAuliffe
- Ms Narelle Warren
Transactions with key management personnel
(i)
Total key management personnel remuneration is as follows:
Short Term Benefits
Other non-cash Benefits
Post Employment Benefits
Share-based payments
2020
$
2019
$
445,000
51,692
-
477,252
973,944
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.
19. Interests in subsidiary
The consolidated financial statements incorporate the assets, liabilities and results of the following wholly-owned
subsidiary in accordance with the accounting policy described in note 3:
Name
Principal place of business /
Country of incorporation
Invex Therapeutics Ltd
United Kingdom
Invex Therapeutics Ltd UK was incorporated on 12 December 2019.
Ownership interest
2020
%
100
2019
%
-
40
Invex Therapeutics Ltd – Consolidated Financial Report for the year ended 30 June 2020
Notes to the Consolidated Financial Statements (continued)
20. Share-based payments
Share-based payments made during the year ended 30 June 2020 are summarised below.
Recognised Share-based payment expense
Options granted to Directors as incentive
Options granted to Advisers as incentive
Options granted to Employees as incentive
Options granted to Directors for services
2020
$
477,252
500,582
5,558
983,392
2019
$
-
-
-
-
The Group’s current Employee Share Option Plan (ESOP) was approved by the Board of Directors on 20 May 2019. The
ESOP is designed to provide medium and long term incentives for all employees (including Non-executive and Executive
Directors) and to attract and retain experienced Employees, Board Members and Executive Officers and provide
motivation to make the Group more successful.
Under the ESOP, participants have been granted options which only vest if certain milestones are met. Participation in
the plan is at the board’s discretion and no individual has a contractual right to participate in the plan or to receive any
guaranteed benefit.
Any option may only be exercised after the option has vested and other conditions imposed by the board have been
satisfied. Options are granted under the ESOP for no consideration. Options granted under the ESOP carry no dividend
or voting rights. When exercisable, shares allotted pursuant to the exercise of options will be allotted following receipt
of relevant documentation and payments will rank equally with all other shares.
As options granted to employees are considered to represent the value of the services received over the vesting period
of the options, the assessed value of the options are recognised and expensed over the vesting period. Options vesting
during the period of issue are fully expensed under the accounting standards. The total Directors and Employee Options
expense for the period is outlined below.
Tranche
Valuation
Date
Expiry Date
Exercise
Price
Granted
during the
period
Vested during the
Period
Total Share-based
Payment Expense for
the Period
$
1
2
3
22 Nov 2019
22 Nov 2023
21 Jan 2020
21 Jan 2023
9 April 2020
9 April 2023
$0.60
$1.00
$0.60
2,200,000
1,250,000
60,000
-
250,000
-
477,252
500,582
5,558
3,510,000
250,000
983,392
The weighted average remaining contractual life of options outstanding at the end of the year was 3.08 years.
41
Invex Therapeutics Ltd – Consolidated Financial Report for the year ended 30 June 2020
Notes to the Consolidated Financial Statements (continued)
20. Share-based payments (continued)
Appropriate values for the options using the Black Scholes Model applying the following inputs.
Tranche
Share price
Exercise price
Expected volatility
Expiry date (years)
Expected dividends
Risk free rate
Value per option
1
2
3
$0.71
$0.60
75%
4.00
Nil
0.77%
$0.42
$1.17
$1.00
75%
3.00
Nill
0.77%
$0.62
$0.92
$0.60
75%
3.00
Nil
0.77%
$0.55
The vesting conditions attached to the Tranche 1 and 3 Options are as follows:
•
•
50% of the Options will vest and become exercisable upon completion of 12 months continuous service from
date of issue; and
50% of the Options vest and become exercisable upon completion of 24 months continuous service from date
of issue.
The vesting conditions attached to the Tranche 2 Options are as follows:
•
•
•
•
•
250,000 of the Options vest from date of issue.
250,000 of the Options will vest and become exercisable 6 months from date of issue.
250,000 of the Options will vest and become exercisable 9 months from date of issue.
250,000 of the Options will vest and become exercisable 12 months from date of issue.
250,000 of the Options will vest and become exercisable 15 months from date of issue.
21. Matters Subsequent to end of Financial Year
The impact of the Coronavirus (COVID-19) pandemic is ongoing and while it has not adversely financially impacted the
consolidated entity up to 30 June 2020, it is not practicable to estimate the potential impact, positive or negative, after
the reporting date. The situation is changing rapidly and the Company’s ability to operate normally is subject to
measures imposed by the Australian Government and other countries, such as; maintaining social distancing
requirements, quarantine, travel restrictions and other economic stimulus that may be provided.
On 2 July 2020 the Company allotted 7,653,847 ordinary shares, to raise $9,950,001 following shareholder approval at
General Meeting of Shareholders on 29 June 2020.
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.
42
Invex Therapeutics Ltd – Consolidated Financial Report for the year ended 30 June 2020
Notes to the Consolidated Financial Statements (continued)
22. Parent Entity Information
Set out below is the supplementary information about the parent entity.
Statement of profit or loss and other comprehensive income
Loss after income tax
Total comprehensive income
Statement of financial position
Total current assets
Total assets
Total current liabilities
Total liabilities
Equity
Issued capital
Reserves
Accumulated losses
Total equity
23. 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
Taxation services
Independent Assurance Report
Total other services
Parent
2020
$
2019
$
(3,224,497)
(232,122)
(3,224,497)
(232,122)
Parent
2020
$
2019
$
26,393,062
12,255,867
157,095
117,946
2,006,132
935,491
2,006,132
935,491
27,017,127
983,517
(3,456,619)
11,670,444
-
(232,122)
24,544, 025
11,438,322
2020
$
2019
$
35,291
35,291
2,000
-
2,000
20,000
20,000
-
10,914
10,914
43
Invex Therapeutics Ltd – Consolidated Financial Report for the year ended 30 June 2020
Notes to the Consolidated Financial Statements (continued)
24. Dividends
There are no dividends paid or payable at 30 June 2020.
25. 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
-
-
There are no other commitments which require disclosure as at 30 June 2020.
26. Segment reporting
5+
years
$
-
-
The Group 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 Group 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 Group operated in one segment which is research and development activities within Australia. The Company is
domiciled in Australia.
27. Contingent Liabilities and Contingent Assets
The Directors are not aware of any contingent liabilities or contingent assets which require disclosure as at 30 June 2020.
44
Invex Therapeutics Ltd – Consolidated Financial Report for the year ended 30 June 2020
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 2020 and of the performance for the year
ended on that date of the Group.
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 Group 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 2020
45
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) and its subsidiary (the
Group), which comprises the consolidated statement of financial position as at 30 June 2020, the
consolidated statement of profit or loss and other comprehensive income, the consolidated statement
of changes in equity and the consolidated statement of cash flows for the year then ended, and notes
to the financial report, including a summary of significant accounting policies and the directors’
declaration.
In our opinion the accompanying financial report of the Group, is in accordance with the Corporations
Act 2001, including:
(i)
Giving a true and fair view of the Group’s financial position as at 30 June 2020 and of its
financial performance for the year 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 Group in accordance with the Corporations
Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s
APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code)
that are relevant to our audit of the financial report in Australia. We have 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
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.
Measurement of Share-Based Payments
Key audit matter
How the matter was addressed in our audit
During the financial year ended 30 June 2020, the
Group issued options to employees, advisors and
key management personnel, as disclosed in Note
20 of the financial report. The Group performed
calculations to record the related share based
payment expense in accordance with AASB 2
Share Based Payments in the consolidated
statement of profit or loss and other
comprehensive income.
Refer to Notes 3(i) and 3(u) of the financial
report for a description of the accounting policy
and significant estimates and judgements applied
to these arrangements.
Our procedures included, but were not limited
to the following:
(cid:127) Reviewing the relevant agreements to obtain
an understanding of the contractual nature
and terms and conditions of the share-based
payment arrangements;
(cid:127) Reviewing management’s determination of
the fair value of the share-based payments
granted, considering the appropriateness of
the valuation models used and assessing the
valuation inputs;
(cid:127) Involving our valuation specialists to assess
Due to the complex and judgemental estimates
used in determining the fair value of the share
based payments, we consider the Group’s
calculation of the share based payment expense
to be a key audit matter.
the assumptions used in the Group's
calculation being the share price of the
underlying equity, risk free rate and
volatility;
(cid:127) Assessing the allocation of the share-based
payment expense over the relevant vesting
period; and
(cid:127) Assessing the adequacy of the related
disclosures in the financial report.
Other information
The directors are responsible for the other information. The other information comprises the
information in the Group’s annual report for the year ended 30 June 2020, but does not include the
financial report and the auditor’s report thereon.
Our opinion on the financial report does not cover the other information and 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 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 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:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf
This description forms part of our auditor’s report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 11 to 18 of the directors’ report for the
year ended 30 June 2020.
In our opinion, the Remuneration Report of Invex Therapeutics Ltd, 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.
BDO Audit (WA) Pty Ltd
Jarrad Prue
Director
Perth, 27 August 2020
Invex Therapeutics Ltd – Consolidated Financial Report for the year ended June 2020
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 (Group).
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 4th Edition") where considered appropriate for Invex Therapeutics Ltd 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 Group’s corporate governance practises and copies of Group’s corporate governance
policies and the 2020 Corporate Governance Statement, approved by the Board and applicable as at 30 June 2020 are
available of the Group’s website:
http://www.invextherapeutics.com/company/corporate-governance
49
Invex Therapeutics Ltd – Consolidated Financial Report for the year ended June 2020
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 2020 is 75,153,848 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
274
416
184
357
86
1,317
Units
176,927
1,168,901
1,462,604
11,585,422
6,759,994
75,153,848
%
0.24
1.56
1.95
15.42
80.85
100
There were 79 holders of less than a marketable parcel of ordinary shares.
2. Top 20 Shareholders as at 27 August 2020
Name
Tattarang Pty Ltd
Tisia Nominees Pty Ltd
JK Nominees Pty Ltd
Anthony Grist
1
2
3
4
Dr Jason Loveridge
5
6 Mr David Jerimiah McAuliffe
7
HSBC Custody Nominees (Australia) Limited A/C 2
Alexandra Jean Sinclair
8
9 Ms Kathryn Mary Salkilld
10 Citicorp Nominees Pty Ltd
11 The University of Birmingham
12 Bannaby Investments Pty Limited
Sunset Capital Management Pty Ltd
13
14 BNP Paribas Nominees Pty Ltd HUB 24 Custodial Serv Ltd DRP
15 Cityscape Asset Pty Ltd
16 HSBC Custody Nominees (Australia) Limited-GSI EDA
Sandhurst Trustees Ltd
17
18
19 HSBC Custody Nominees (Australia) Limited-GSI EDA
20 CS Third Nominees Pty Limited
J P Morgan Nominees (Australia Limited
Total
Total remaining holders balance
Number of
shares
8,846,154
4,000,000
3,900,000
3,597,700
3,374,462
3,350,001
2,668,747
2,500,000
2,293,000
2,029,472
2,000,000
1,625,000
1,466,456
1,220,000
1,173,781
1,117,499
1,081,924
875,000
741,197
702,244
%
11.77
5.32
5.19
4.79
4.49
4.45
3.55
3.33
3.05
2.70
2.66
2.16
1.95
1.62
1.56
1.49
1.44
1.16
0.99
0.93
48,562,637
26,591,211
64.62
35.38
50
Invex Therapeutics Ltd – Consolidated Financial Report for the year ended June 2020
ASX Additional Information (continued)
3. Unquoted securities
The unlisted options over shares in the Company as at 27 August 2020 are as follows:
Holder
WACC Pty Ltd
Dr Jason Loveridge
Prof. Alexandra Sinclair
Philuchna Pty Ltd
David Jerimiah McAuliffe
Emma Hilton
Total
4. Voting rights
See note 12 of the financial statements.
5. Substantial shareholders as at 27 August 2020
Holder
Tattarang Pty Ltd
Tisia Nominees Pty Ltd
JK Nominees Pty Ltd
Total
Number of
options held
% of issued
capital held
1,250,000
800,000
800,000
400,000
200,000
60,000
3,510,000
35.61
22.79
22.79
11.40
5.70
1.71
100.00
Number of
shares held
% of issued
capital held
8,846,154
4,000,000
3,900,000
12,746,154
11.77
5.32
5.19
22.28
6. Restricted securities subject to escrow period
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 year ended 30 June 2020 in a way that is consistent with its business objective and
strategy.
51