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Your Health
in Your Hands
Annual Report 2021
Your Health
in Your Hands
We are passionate about
improving healthcare
outcomes by giving
people back control of
their medications through
simplicity, convenience
and education.
CONTENTS
FY21 Annual Report
Chair’s and CEO’s Report
Business Update
Board of Directors
Management Team
Directors’ Report
Remuneration Report
Governance and Disclosures
Auditor’s Independence Declaration
Financial Statements
Shareholder Information
Corporate Directory
2
14
17
18
20
22
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36
37
38
85
IBC
Every year, non-adherence to medication advice costs
thousands of lives. That’s why we have made it our mission
to help improve patient outcomes by connecting patients,
pharmacies and pharmaceutical companies.
By working to a common goal, MedAdvisor’s solution is
improving medication adherence and helping to solve a
multi-billion-dollar global health problem.
Here’s how we are doing it.
MedAdvisor Annual Report 2021 |
1
Your Health in Your Hands
We saw a health problem
and created a unique solution
Non-adherence results in 125,000 deaths p.a. in the US
and US$630b of unnecessary costs globally.
50% of the population
has a chronic disease
55% are no longer taking
medication after 6 months2
Lives lost per annum
Unnecessary costs
Australia
12m1
6.6m
9,000
AU$1.9b5
US
160m3
88m
125,0004
US$300b+
1
Adapted from Commonwealth Fund’s 2016 International Health
Policy Survey of Adults. And https://www.aihw.gov.au/reports/
australias-health/australias-health-2018/contents/
table-of-contents
2 Benner JS, Glynn RJ, MogunH, et al. Long term persistence in use
of statin therapy in elderly patients. JAMA 2002; 288(4):455–461.
3 https://www.cdc.gov/pcd/issues/2020/20_0130.htm
4 https://pubmed.ncbi.nlm.nih.gov/10185113/Australian number
calculated as an equivalent mortality rate to the US
5 Cutler et al. Pharmacist-led medication non-adherence
intervention: reducing the economic burden placed on the
Australian healthcare system.
2
| MedAdvisor Annual Report 2021
What is medication
non-adherence?
Medication non-adherence occurs when
a patient is not taking their medication as
prescribed. This can happen unintentionally,
for example by the patient forgetting or not
understanding the instructions, or intentionally
by choosing not to take medication due to side
effects, fear, inconvenience, or belief that the
medication is ineffective. The reality of medication
non-adherence was highlighted in a recent
study that showed between 40% to 60% of
patients could not accurately report adherence
instructions within 10-80 minutes after a
consultation[1]. It has also been shown that as
many as 59% of Australians have inadequate
health literacy[2].
This problem is further supported by the World
Health Organisation (WHO), which estimates that
medical adherence to long term therapies in
developed nations is as low as 50%, and that
closing the gap represents the largest driver of
the avoidable health costs that ensue, impacting
the funders of health care including governments,
health insurers and hospitals. In addition, low
medication adherence rates cost pharmaceutical
companies more than US$630b[3] in revenue each
year, which reduces their ability to invest in new
products and research and development.
Our Solution and Strategy
MedAdvisor is focused on improving medication
adherence through its data-rich, patient centric
digital platform, and delivering value from the
benefits generated.
1. Improving outcomes
Helping patients improve their medication
management (and health outcomes) by
empowering them through MedAdvisor’s
world-class apps and health programs.
2. Creating a strong network
Enhances value to other key stakeholders
(payers, providers, pharmaceutical companies
and pharmacists).
3. Ability to reach large patient
populations
Create extensive patient populations
in our markets, sufficient enough to attract
program sponsors.
4. Taking it global
Leverage Australian success to digitise
the US business and develop the UK business.
Our Objectives
Your health in your hands
Improving healthcare outcomes by giving
people back control of their medications through
simplicity, convenience and understanding.
Our Goal
100m digitally connected patients
receiving health programs p.a.
by 2025.
1 Mongkhon P, Ashcroft DM, Schofield CN, et al. BMJ Qual Saf
2018;27:902-914. 1.7% x Number of Hospitalisations (2016/17)
found here: https://www.aihw.gov.au/reports/hospitals/ahs-
2016-17-admitted-patient-care/contents/table-of-contents
2 AIHW in 2006, 41% of Australians aged 15-74 were assessed
as having adequate or more than adequate health literacy
skills (ABS 2006).
3 https://www.rdmag.com/news/2016/11/
medication-nonadherence-costs-billions-lost-revenue
MedAdvisor Annual Report 2021 | 3
Our reputation is built around
putting patient welfare first
MedAdvisor has put the patient at the centre of its platform,
and by doing so is solving the problem of medication non-adherence
through its patient centric solutions.
MedAdvisor benefits key stakeholders in health system
Pharmacies
• Increase customer loyalty
• Increased spend in
pharmacy from more
adherent patients
• Improved workflow
Pharmaceutical companies
• Increases revenue through
improved adherence to
their medications
the need
• Increases awareness of
• Reduced marketing spend
Providers
• Timely information
for patient
• Post-visit care
coordination
• Better outcomes
Patient
Improved lifestyle
and better health
outcomes
Payor
• Reduced hospitalisations
• Reduced medical cost
and reimbursements
• Improved outcomes
4
| MedAdvisor Annual Report 2021
Your Health in Your Hands
Why does medication
non-adherence exist?
There are two key drivers of
non-adherence:
1: UNINTENTIONAL
I intend to do what the Doctor told me, but:
• I forgot to take the medication dose
• I forgot to get supply (from pharmacy or Doctor)
• I took it incorrectly by accident
• I did not understand what the doctor told me
2: INTENTIONAL
I choose not to follow the regime because:
• I do not like the side effects
• I think the medication does not work
• I have fear or psychosocial reasons
• I know better than the doctor
• It is not convenient
Empowering patients with more
control and peace of mind
The MedAdvisor product suite is built upon a
sophisticated medication data platform that
supports a patient app, a pharmacy-based
module “PlusOne”, and digital health programs,
all of which are connected to dispensing networks.
The MedAdvisor app provides a digital
connection for patients to their pharmacist
to support them in their medication journey.
The app offers many features, including
important information regarding the prescribed
medication available to the patient, the ability to
pre-order medication, arrange delivery, dosage
reminders, a GP script renewal service and a
carer mode that allows loved ones to assume
care on behalf of a patient. MedAdvisor app
patients report that they feel more in control of
their health and medication, are more organised
around their medication use and save significant
time in the ordering process.
The added peace of mind that comes from
having easy access to medication history for
those in more frequent interactions with the
health system cannot be underestimated.
Facilitating stronger connections
for pharmacies and their patients
Pharmacies can better anticipate their patients’
needs by using our PlusOne in-pharmacy
platform. PlusOne offers pharmacies a
Software-as-a-Service solution that empowers
them to digitally connect to their patients,
automate medication reminders and offer
a range of ordering and medication related
services. In addition to allowing patients to
“click & collect” their medication, pharmacies
use PlusOne to alert them to health programs
and services funded by the government (through
6CPA) and pharmaceutical companies (through
MedAdvisor) that are relevant and appropriate
for their patients. Patients can be enrolled in
the system with a record of the delivery of the
program or service streamlined and any fees
earned by the pharmacy automatically claimed.
Pharmacies benefit from increased customer
loyalty, flow-on ancillary purchases and increased
spending from more adherent patients, coupled
with improved workflow and an ability to better
control cash flow and working capital.
Connecting with harder to
reach patients
MedAdvisor’s health programs offer
pharmaceutical companies a platform for
distribution of direct-to-patient and in-pharmacy
programs to large, geographically dispersed,
and hard-to-reach audiences. Information can
be effectively communicated, driving better
quality use of medicines and health literacy
and ultimately resulting in improved adherence.
MedAdvisor has estimated that medication
adherence can be improved by up to 20%+ for
users of the app and further again if a patient
is part of a MedAdvisor-initiated education
program. The result is improved medication
adherence which in turn reduces wastage and
marketing spend, thereby generating improved
returns to the pharmaceutical company.
Finally, the flow-on benefits of improved
medication adherence on the healthcare system
are significant through reduced medical costs
and hospitalisations.
MedAdvisor Annual Report 2021 | 5
We’ve proven that our
revenue model works
Australia’s business model is centred around the patient
MDR sells
software to
pharmacy
Pharmacies pay
SaaS fee and
sign up patients
Certain
transaction
fees
MedAdvisor
app
Pharmaceutical
companies pay
fees per patient,
per program
AU Strategic Priorities
MedAdvisor has established a strong presence in
the pharmacy market in Australia and is extending
its patient reach through enhancements with
its patient app. Overall, MedAdvisor has an
established network of greater than 65% of the
total Australian pharmacy market, representing
around 75% of script volumes in Australia.
In respect to patient reach, it is estimated that
there are more than 12 million patients with a
chronic condition in Australia[1], with MedAdvisor
having 2.0 million patients connected to its app.
MedAdvisor’s Australian model is centred
around the patient. Its app is free for patients,
with revenue generated from pharmacies
through SaaS and transaction fees, and from
pharmaceutical companies on a fee per patient
basis that use the technology and network for
content distribution. MedAdvisor estimates that
each patient on the MedAdvisor app adds
approximately $200 per annum in incremental
revenue to a pharmacy, demonstrating strong
ROI and stickiness of the solution for retail
pharmacy customers.
The Australian operation has undergone significant
change over the course of the last 12 months,
which has laid the foundations for continued
growth in the market. MedAdvisor continues
to innovate and enhance its product offering,
with a team of over 40 developers and engineers.
During the year, MedAdvisor has undertaken a
complete rebuild of the patient app, which greatly
simplifies the code base, allowing for a faster,
more responsive user experience. This new version
of the app is live in the UK and is expected to be
available in Australia in the first half of FY22.
In addition, MedAdvisor was the first conformant
patient app to facilitate ePrescribing in Australia
and launched a new medication home delivery
service during COVID-19 travel restrictions as well
as offering a “click & collect” service, features
that have now become widely used and critical
in helping certain patient cohorts in coping with
COVID-19 related restrictions. Finally, MedAdvisor
launched a new sign-up pathway for patients
known as “remote verification”, which allows
patients to sign up remotely, thereby reducing
the reliance on patients needing to physically
visit the pharmacy store for activation of the app.
1
Department of Health, Australian Government; (https://www.health.gov.au/health-topics/chronic-conditions-in-australia).
6
| MedAdvisor Annual Report 2021
Your Health in Your Hands Continuously enhancing
our platform
The in-pharmacy PlusOne module has seen
significant enhancements during the year, with a
new booking module integrated with HealthEngine
and our own booking system to enable a seamless
workflow for both flu and COVID-19 vaccinations.
To further improve workflow efficiencies for
pharmacists, we also completed an integration
with the Australian Immunisation Register (AIR),
enabling pharmacists to gain real time access
to patients’ immunisation records prior to
administering vaccinations through the
PlusOne system.
These enhancements place MedAdvisor in
a unique position in continuing to improve
medication adherence and health outcomes
and provide a strong platform for sustained
growth both in Australia and globally.
The investments that MedAdvisor has made in its
product development and the benefits that flow
to its stakeholders is evidenced by the low churn
amongst its pharmacy network, currently tracking
at just 5.0% per annum. We continue to expand
on an already strong market share having
recently signed a five-year agreement with
pharmacy wholesaler Australian Pharmaceutical
Industries Limited (API), which owns Priceline
Pharmacy, Soul Pattinson Chemist, and Pharmacist
Advice Pharmacy banner groups representing
approximately 450 pharmacies.
The MedAdvisor platform will provide a
comprehensive digital solution to the Priceline
Pharmacy network to better support its
customers in managing their total health and
wellbeing. The partnership is expected to
increase MedAdvisor’s patient reach and aligns
with the strategic priority of growing domestic
revenues through patient acquisition and
network expansion.
Over the last several years, MedAdvisor has
progressively deployed a string of new features
to the MedAdvisor app and PlusOne software
platform. To provide greater value and choice
to its network, MedAdvisor also introduced a new
tiered pricing for its SaaS platform, offering the
choice of either a standard or premium package.
The new pricing structure also included a price
increase to the standard package. To date,
feedback and take up of the premium pricing
package has been very positive, with pharmacy
churn remaining stable. MedAdvisor has increased
its ARR to $6.6m following the change to its
pricing model.
In March 2020, MedAdvisor responded quickly to
the challenges presented by COVID-19 by offering
a click and collect and delivery functionality in
app. Throughout FY21, the adoption has been
increasing steadily with nearly 30% of in-app
orders now using the click and collect functionality.
MedAdvisor Annual Report 2021 |
7
Establishing a strong
US footprint will provide an
unrivalled platform to expand
Adheris provides a unique opportunity to establish a clear leadership
position in the world’s largest healthcare market
Highlights
180m
Patients
2.2b
Scripts per
annum
~25k
Preferred
pharmacies
430m
Scripts
via prescribers
$35.3m
(US$)
FY21 revenue
US Market Opportunity
Revenue Source
Estimated Market Size
Patient Programs
Per patient,
per annum
Direct to consumer
Per patient,
per message
Adherence TAM:
US$1.9b
+
1
86%
of medication volume in generic with
payers motivated to influence outcomes
US$6.0b
2
p.a. patient awareness and advertising in US
Retail Pharmacy
SaaS &
transaction fees
55,000
SaaS – Pharmacies
in US
1
US$1b
Estimated value
(US)
40-60%
(est) of market
addressable
1
https://www.newswire.com/news/medication-adherence-market-expanding-due-to-specialized-market-21361444 and “Medication
Adherence Market Overview”, PS Market Research, September 2020 (https://www.psmarketresearch.com/market-analysis/
medical-adherence)
2 https://arstechnica.com/science/2019/01/healthcare-industry-spends-30b-on-marketing-most-of-it-goes-to-doctors
8
| MedAdvisor Annual Report 2021
Your Health in Your Hands Instant US traction via
Adheris acquisition
In late 2020, MedAdvisor acquired Adheris LLC,
a medication adherence company based in
the USA who we had already established a
go-to-market partnership with 18 months prior.
The acquisition provides a unique opportunity
for MedAdvisor to establish a clear leadership
in medication adherence in the world’s largest
healthcare market, and with an unrivalled
network to roll out its digital platform that
has been developed in Australia.
Adheris has been operating for 30 years and set
the industry standard for adherence measurement
and program performance. In this time, Adheris
has built a strong network with the ability to
reach +180 million patients via three channels
(direct mail, in-pharmacy prints, and via health
care practitioners), with over 80% of the top 100
pharmaceutical companies using Adheris to
run medication adherence programs.
Adheris has developed a sophisticated software
engine that enables patient and prescription
data to be extracted from approximately 25,000
pharmacies, which in turn is used to develop
robust, data-driven programs that yield actionable
insights. Adheris’ data analytics capability is
underpinned by its 15 patents, which provides it
with a clear competitive advantage. The business
was acquired for US$27.5m including two earn
outs of US$4m, paid in May 2021, and a further
US$3 million payable in May 2022 on meeting
certain revenue targets of US$32.5m for the
calendar year 2021.
A smooth integration is underway
The integration is proceeding well, with
additional investments made in sales and
business development capabilities, as well
as a transformational project to leverage
MedAdvisor’s digital assets and Adheris’ data
analytical capabilities. Investment in the team
is having a positive impact on sales pipeline
activities, with greater capacity resulting in
new customers and programs being added.
MedAdvisor’s strategic priorities for the US
centre on the digitisation of Adheris’ network,
which will enable MedAdvisor to leverage its
predictive analytical capability to deliver greater
Strategic Priorities
Digital Transformation
Roll-out MedAdvisor’s world class
Australian digital platform to patients
and pharmacies.
Dynamic Engagement
• Implement tailored and targeted
messaging to patients based on profile,
history and predictive algorithms
• Apply omni-channel engagement.
Expand Network of Partners
Transition to a patient centric model
which optimises outcomes for all
stakeholders (including payers,
providers and pharmacists).
value and increased returns, and extending into
the payer market and thereby increasing the
addressable market.
Implementing the digital
transformation
The digital transformation of the pharmacy
network is well underway with the integration of
critical digital endpoints with Adheris’ product
suite. To date, 30% of Adheris’ pharmacy network
has agreed to run digital health programs.
Currently, Adheris is running seven programs
across 6% of the pharmacy network. Importantly,
MedAdvisor has invested in a critical enabling
project called Dynamic Engagement. This changes
the way pharmaceutical companies engage with
Adheris from a price per message basis, to a true
omnichannel, price per patient basis. This allows
Adheris to leverage powerful data and analytics
to ensure the right patients are getting the right
messages via the most effective channels for
them, including much needed digital engagement
capabilities. This will enable a more targeted
and individualised approach for lifting patient
medication adherence and ROI. To date the
project is on track and is scheduled to go live
during the second half of FY22.
MedAdvisor successfully integrated with Cotiviti
owned HMS to run a patient discharge program
in Australia and launch initial health programs
via our secure digital platform.
MedAdvisor Annual Report 2021 | 9
Scaling our platform globally
will provide growth
opportunities
Founded in Australia and expanding to the UK
10 | MedAdvisor Annual Report 2021
Your Health in Your Hands UK key growth opportunity
• MedAdvisor is taking our leading SaaS solution
to a market size three times that of Australia’s,
with more attractive market dynamics
• Initial client, Day Lewis, live with a white
label offering to the market
• Supported by National Pharmacy Association
representing 6,500 independent pharmacies
• Integrated with NHS digital systems,
producing highly automated workflows
for patient and pharmacy
The entry into the UK market has provided
some challenges throughout the year, with
technical issues and the impact of COVID-19
delaying our planned roll out. However,
despite these challenges, the first batch of
implementations amongst both Day Lewis
and independent stores has been positively
received. Integration has involved considerable
work with the UK’s National Health Service,
as well as navigating challenges presented
by COVID-19 restrictions.
MedAdvisor has successfully passed the
necessary conformance requirements which
permit integration with various NHS systems.
The development of these integrations will
improve the workflow for pharmacy and
patient access to medication records including
the ability for patients to order from their GP.
South East Asia
Together with our partner Zuellig Pharma, we
have reassessed the strategic outlook for this
joint venture relative to other global opportunities
that we are now pursuing. As a result of this
review, the parties jointly determined that the
capital and time required to achieve success
in the region would be significant. As such, and
following our recent acquisition of Adheris,
we feel it is better for our shareholders that we
accelerate our operational focus as we strive
for improved return-on-investment across
our portfolio of businesses and in particular
our US market.
The parties have agreed to dissolve the joint
venture. MedAdvisor has ceased software
development efforts in Asia and is redeploying
headcount to focus on its other markets,
including the US. There will be a tapering of
activities in South East Asia where the joint
venture has existing commitments to execute
health programs for a small number of global
pharmaceutical customers. The joint venture
agreement will be terminated in H1 FY22.
We have enjoyed a valuable partnership with
Zuellig Pharma in Asia and we look forward to
potential future collaboration with Zuellig Pharma.
FIRST CLIENT 300 STORES
$300m TAM (14,000 Stores)
INITIAL SAAS ROLL OUT
PRIOR TO BUILD PATIENT AUDIENCE
MedAdvisor Annual Report 2021 |
11
FY21 financial and
non-financial highlights
FY20
Total operating revenue
$9.6m($30.6m LFL)1
FY21
Total operating revenue
$38.8m
US Programs
35.5% YoY
Digital Programs
8.3% YoY
Transaction Fees
4.8% YoY
FY20 / $21.4m LFL1
FY21 / $29.0m
FY20 / $2.1m
FY21 / $2.2m
SaaS
6.8% YoY
FY20 / $1.2m
FY21 / $1.3m
FY20 / $5.9m
FY21 / $6.3m
1
Like-for-Like revenue shows US revenue translated at a constant AUD/USD of $0.75 from date of acquisition to 30 June for FY20.
12
| MedAdvisor Annual Report 2021
Your Health in Your Hands AU Metrics
Network – Pharmacies
Network – Patients
Annual Recurring Revenue (ARR) – $
3,672
3,566
2.0m
1.7m
1.1m
1.2m
$6.3m $6.6m
$5.4m
$4.5m
3,297
3,099
FY18
FY19
FY20
FY21
FY18
FY19
FY20
FY21
FY18
FY19
FY20
FY21
Lifetime value to Cost of Acquisition
(LTV/CAC) ratio1
Pharmacy Churn %
Digital Programs
32
28
FY18
FY19
FY20
FY21
80
72
50
(5.3)
(5.3)
(5.2)
(5.0)
30
19
8
FY18
FY19
FY20
FY21
FY18
FY19
FY20
FY21
US Metrics
Average no. of programs
Revenue per program (US$)
Revenue per program for
Top 10 customers (US$)
123
106
$407m
$434m
84
82
$356m
$889m
$685m
$509m
$518m
$274m
FY18
FY19
FY20
FY21
FY18
FY19
FY20
FY21
FY18
FY19
FY20
FY21
% revenue from new customers
Churn as % of revenue
(lost customers)
3.3%
FY18
FY19
FY20
FY21
2.6%
(0.7%)
1.8%
1.6%
FY18
FY19
FY20
FY21
(3.2%)
(3.5%)
(4.0%)
1
Lifetime value represents the net margin generated by pharmacies allowing for churn .
Cost of acquisition is calculated as the cost of acquiring pharmacies and includes marketing costs and certain people costs.
LTV/CAC ratio shows the relationship of the lifetime value of pharmacies to the cost of acquiring.
MedAdvisor Annual Report 2021 |
13
FY21 – a year of
transformation
and integration
Chair’s and CEO’s Report
Chris Ridd Chairman
To our shareholders,
This year has been one of transformation
for MedAdvisor as we ready the business to
take advantage of key growth opportunities
across the US, Australia and the UK.
A patient-centric
technology business
MedAdvisor is a for purpose HealthTech company
leveraging software to address medication
non-adherence – a problem which costs US$630b
globally and more importantly, hundreds of
thousands of lives every year.
MedAdvisor already helps millions of people around
the globe to take their medication safely, effectively
and on time. Through a deep understanding of
patients and their medication needs, MedAdvisor
is providing solutions to improve health
outcomes for patients, increase revenue for
pharmaceutical companies and reduce costs for
payers. Our solutions include digital medication
management tools and direct to patient health
programs. The total global addressable market
is estimated to be more than $10b p.a.
MedAdvisor has built a SaaS business in
Australian that now boasts in excess of 65%
of the pharmacy market, enabling major
pharmacy chains and their 2.0m patients to
connect digitally. We also work with 12 of the
top 20 pharmaceutical companies to deliver
health programs to patients in Australia.
As Australia is only around 2% of the world
medicines market, our clear focus moving
forward is to pursue the US market, being one
that accounts for 46%[1] of total medication spend
globally. This year we acquired the number one
adherence business in the US in terms of reach,
Adheris. With a 30 year track record in medication
adherence, we now run programs with the
potential to reach 1 in 2 US residents through
our network of 25,000 pharmacies in the US.
The knowledge and experience in medication
adherence across our combined businesses
means that we understand how to deliver the
right message, through the right medium at
the right time. Combining a compelling patient
experience with deep medication data
analytics, we provide both pharmacy chains
and pharmaceutical companies with proven
tools and channels that help deliver improved
medication adherence to the patients that
we all serve.
Powered by data
The MedAdvisor business is underpinned by
a deep understanding of patient medication
data. With this understanding we can use
sophisticated data analytics and predictive
modelling capabilities to help design health
programs. We access this data through tight
integrations with the systems that power
1
https://www.statista.com/statistics/245473/market-share-of-the-leading-10-global-pharmaceutical-markets/#:~:text=The%20United%20
States%20was%20the,hospital%20market%20only%20for%20China).
14
| MedAdvisor Annual Report 2021
Your Health in Your Hands $630b
Global health
problem from
non-adherence
(US$)
$10b
Total global
addressable
market (p.a.)
2%
of the world’s
medicine market
is from Australia
46%
of the world’s
medicine market
is from the US
1 in 2
US residents
are accessible
through our
network of
25,000 US
pharmacies
Robert Read CEO & Managing Director
pharmacy across the globe, and this allows
us to have a live feed that we can provide
to patients or healthcare practitioners
as appropriate.
There are a number of key strategic
imperatives that we will focus on over the
next 12 months in order to deliver strong
results. These include:
Adheris has developed world leading
approaches to analysing and reporting on
adherence in the US. We have shown that
with this understanding of a patient’s
medication profile, we can design programs
that improve health outcomes around the
world. These improved health outcomes also
provide cost savings to payers, improved
revenues for pharmaceutical companies and
most importantly better health for patients.
With global reach
Originally developed in the Australian market,
MedAdvisor has expanded internationally to
pursue larger medication adherence markets
in Europe (UK) and the US that offer substantially
larger market sizes and growth prospects.
Underpinned by
operational excellence
MedAdvisor is on track to deliver profitable
growth and operating leverage through the
improvement of gross margins made possible
by the adoption of digital solutions globally,
particularly in the US. MedAdvisor is committed
to executing this strategy across its core markets
and has designed the organisation to achieve
this in the most efficient way possible.
Digitalisation of the US
Pharmacy Network
Adheris was clearly the best avenue
for MedAdvisor to enter the US with
accelerated pace.
By rolling out our digital platform into the
world’s largest market we can access an
$8b addressable market[2]. This gives us the
ability to drive top line revenue growth with
both adherence and awareness programs.
The integration of Adheris and MedAdvisor
has progressed on budget and on schedule.
Adheris has unmatched scale and reach to
run targeted health programs based on a deep
understanding of a patient’s medication profile.
The opportunity to add digital channels to the
existing direct mail and pharmacy prints of
Adheris allows MedAdvisor to introduce a new
revenue model known as Dynamic Engagement.
Dynamic Engagement allows MedAdvisor to
tailor programs to send messages to selected
patients via the right channels at the right time.
Changing the revenue model to a per patient
per annum, rather than per message basis,
will allow MedAdvisor to charge more per
program and increase gross margins in CY22.
2 Refer to page 8. Estimated Market size consists of 1) Patient Programs USD $1.9b+, 2) Direct to customer USD $6.0b, 3) Retail Pharmacy USD $1.0b.
MedAdvisor Annual Report 2021 |
15
Critical to this is to ensure that the pharmacy
network is enabled to run digital programs.
MedAdvisor has now secured agreement from
30% of this US pharmacy network, which enables
us to reach over 40 million people digitally in
the US during FY22. We are actively engaged
in discussions across all chains in the Adheris
network and focused on having all the US
chains active with digital and providing the
foundation for our growth initiatives in the US.
Drive revenue growth in large
addressable markets
In FY21, we generated $38.8m in operating revenue
and will look to drive both top line revenue as
well as margin growth in FY22 by working with
pharmaceutical companies to improve patient
outcomes. The revenue opportunities in the US,
Australia and the UK are significant over the
medium term. Following delays in the UK due
to the COVID-19 pandemic, we have now
commenced our SaaS roll out in this market,
aiming to replicate the success of our Australian
business model but in a market that is 3 times
the size. Continued revenue streams in Australia
are expected to grow in line with increased
patient volumes underpinned by our health
programs business. Furthermore, in a market
that commands 46% of global medication
spend, we will increase our share of wallet
from US pharmaceutical clients as they move
to embrace digital programs.
Thank you for joining us on this journey
as we continue to grow our global footprint.
Kind regards,
Chris Ridd
Chairman
Robert Read
CEO & Managing Director
22 September 2021
22 September 2021
16
| MedAdvisor Annual Report 2021
Your Health in Your Hands
Business update
MedAdvisor recorded operating revenue
of $38.8m, which reflects the inclusion
of Adheris from 17 November 2020.
On a like‑for‑like basis, the total revenue
growth is up 26.7% for the 12 months
to 30 June 2021.
Operating revenue growth
On a like for like basis, operating revenue growth
is up 26.7% for the 12 months to 30 June 2021.
The US revenue is characterised by a high
degree of repeat business with large global
pharmaceutical companies, of which over 95%
of revenue is of a recurring nature. Moreover,
the top 10 customers have remained stable,
delivering over 75% of revenue on average
for last three years.
Revenue growth in Australia of 6.5% was
impacted by resourcing issues within the local
sales team. This had now been addressed with
the recent appointment of new leadership and
business development resources. Despite the
challenges presented, the fundamentals of
the Australian business are sound and provide
an excellent platform for growth, with annual
recurring revenue (ARR) of $6.6m, up from
$6.3m, and with expected growth due to the
restructuring of pricing plans to a new tiered
approach. In addition, MedAdvisor’s annualised
churn of 5.0% represents an improvement on
FY20, and the Lifetime Value to Cost of Acquisition
ratio continues to improve. Overall, MedAdvisor
is well placed to drive greater value through
its stable and growing network of pharmacies,
and deliver further benefits to its end users,
the patients.
Improvements in Gross Margin
In respect of gross margin, MedAdvisor has
a reported gross margin of 55.0%, which is
down on a like‑for‑like basis 6.9% due to the
impact of a change in channel mix for Adheris,
and MedAdvisor re‑platforming its network
to facilitate its global expansion.
Adheris recorded a gross margin of 46% for
the period post‑acquisition, whilst MedAdvisor
recorded 80% for the 12 months ended
30 June 2021, with an underlying gross margin
of approximately 84% after adjusting for the
one‑off re‑platforming costs. MedAdvisor is
investing significantly in the transformation of
Adheris’ product suite which will drive accretion
in gross margin in calendar year 2022, which
involves the digitisation of the network and
extension of products to other participants
in the market such as insurance payers.
Opex efficiency
The acquisition of Adheris has transformed
MedAdvisor into a truly global medication
adherence company. MedAdvisor continues to
invest in developing its product and technology,
as well as its capability in delivering solutions
to its customers and patients. This is reflected
in MedAdvisor’s operating cost base, which
like‑for‑like has changed significantly
post acquisition.
Reported operating costs of $39.6m included
$2.0m for acquisition and related one‑off
restructuring costs and amortisation of acquired
intangibles of $1.4m. Operating costs after
allowing for these items was $36.2m, up 12.5%
on a like‑for‑like basis, driven by investments in
digitising the US product suite, additional sales
and IT infrastructure in the US, market entry for
the UK, and providing additional capability in
support functions to operate globally.
Overall the EBITDA loss adjusted for leases
and one off costs increased by $1.2m to $12.6m,
on a like‑for‑like basis. This was driven by higher
operating costs from the investments outlined
above. Reported EBITDA (lease adjusted)
was $14.6m.
MedAdvisor Annual Report 2021 |
17
Board of Directors
Chris Ridd
Non-Executive Chairman
BA , Post Grad Diploma
Strategic Mktg
Director since February 2020
Robert Read
CEO and Managing Director
B.Com, B.Arts, B.Psych, GAICD
Member of Audit and
Risk Committee
Member of People, Remuneration
and Nominations Committee
Director since 2015
Chris Ridd is non-executive director, advisor and
investor in various fast-growth, Australian-based
start-ups. He has 30 years’ experience in the IT
industry including 5 years as Managing Director for
Xero Australia and 15 years at Microsoft in various
senior executive roles. He led Xero’s expansion in the
Australian market from a small start-up to become
the largest online cloud accounting software
company, growing from seven staff and 3,500
customers, to over 300 staff and 320,000 paying
customers. In 2015, Chris was awarded The CEO
Magazine’s Financial Services Executive of the
Year & Runner Up in Managing Director of the Year.
Robert Read has led MedAdvisor since July 2015 as a
small private company, taking it through an initial ASX
listing and growing the business to now operate with a
dominant market share in Australia, a huge pharmacy
network in the US and evolving business in the UK.
Robert has extensive commercial experience in a wide
range of businesses, including Director of Commercial
Strategy and Operations in one of the world’s leading
pharmaceutical companies, GSK and roles in venture
capital and private equity. Robert brings a wide range
of skills to the position of CEO in leadership, sales and
marketing, financial performance improvement and
mergers and acquisitions.
Joshua Swinnerton
Executive Director and
Product Lead International
MEI, Grad Cert Eng., BE, BCS
Director since 2015
Sandra Hook
Non-Executive Director
GAICD
Chair of Audit and Risk Committee
Member of People, Remuneration
and Nominations Committee
Director since 2016
Josh Swinnerton has extensive experience leading and
managing sizeable IT ventures, including within large
companies, as a consultant, and as the technical
and operational lead of start-up companies. Prior to
founding MedAdvisor, Josh was the Chairman and
CTO of technology start-up DeskActive Pty Ltd which
he founded and sold into the US based DeskActive, Inc,
raising funds in the US for the company’s expansion
and managed software development. Prior to founding
DeskActive, Josh held senior software engineering
positions in a number of large IT companies. At Oakton
he was Technical Architect and Team Leader in a
multimillion-dollar project for a major client, while at
Unico Computer Systems and AdvaTel Josh held senior
positions as a Software Engineer. During this time,
Josh gained valuable experience in bridging the
gap between innovative technology and business
objectives. Josh also has extensive skills in building
and managing exceptional development teams.
18
| MedAdvisor Annual Report 2021
Sandra Hook has 25+ years’ experience developing
and implementing commercially successful business
and brands, driving growth and leading change.
Sandra has a track record in delivering customer-centred
business transformation, building digital businesses,
and transitioning traditional organisations in rapidly
evolving environments.
Sandra brings extensive operational, financial
management and strategic experience built over
a career which includes MD/CEO, COO, GM, and
Marketing Director with some of Australia’s largest
media companies including News Limited, Foxtel,
Federal Publishing Company, Murdoch Magazines
and Fairfax. She brings a strong focus on customer-
centric growth and digital innovation at Board level.
Sandra is an independent director on the board of
IVE Group Ltd (ASX:IGL) (May 2016 – Current), Redhill
Education Ltd (ASX: RDH) (August 2019 – Current), the
Sydney Fish Market Ltd and CRC Right Food Waste. She is
a trustee of the Sydney Harbour Federation Trust. Sandra
was previously an independent director on the board of
RXP Technology Ltd (ASX: RXP) (Feb 2016 – Nov 2020).
Your Health in Your Hands Jeffrey Sherman
Non-Executive Director
MBA, B.S.Bus Fin & Acct
(resigned 30 April 2021)
Lucas Merrow
Non-Executive Director
MBA, BSc
Director since 2021
(appointed 10 August 2021)
Jeff Sherman has more than 30 years of experience in
corporate and hospital-based finance. He previously
served as executive vice president and CFO of
Accentcare, executive vice-president and CFO of
Lifepoint Hospitals Inc., and held senior finance
positions at Tenet Healthcare Corporation.
Based in the US, Jeff recently served as the CFO
and Treasurer for HMS. Additionally, he was
responsible for corporate development, including
mergers and acquisitions. HMS was publicly traded
on the Nasdaq under the symbol HMSY. HMS was taken
private in a transaction completed on April 1, 2021.
Jeff led the sale process to Veritas Capital-Backed
Gainwell and stayed on for a transition period before
leaving the company on April 30, 2021.
Jim Xenos
Non-Executive Director
BSc, DipEd, AFAIM, GAICD
Chair of People, Remuneration
and Nominations Committee
Member of Audit and
Risk Committee
Director since 2015
Jim Xenos is an experienced general manager with
sales and marketing expertise and a track record in
building and leading high performing teams delivering
market share and profit growth in national and
multinational companies. Jim has a strong reputation
in forming brand and portfolio strategies, developing
new product launches with innovative go-to-market
activities in existing and new channels. He has
significant strength in establishing high performing
sales teams in highly competitive categories. Jim is
currently the CEO of NostraData Pty Ltd which he
co-founded in 2010. NostraData is a leading provider
of business intelligence to the pharmaceutical
industry. Prior to co-founding NostraData, Jim held
several Associate Director positions with GlaxoSmithKline
as well as holding the position of Head of Retail at
Sigma for the Heron brand. These positions helped
Jim to develop key skills in the areas of general
and financial management, marketing and
strategy development, sales management,
and team development.
Lucas Merrow is an experienced entrepreneur
with a successful track record of launching and
scaling technology-enabled businesses in healthcare.
Lucas co-founded and served as the CEO of Eliza
Corporation, the leader in health engagement
management and patient communications focused
on US-based health insurers. At Eliza, Lucas led
a team responsible for building the business
from concept to national scale and a successful
acquisition exit. With over 130 health plan customers
and 80 million insurance members under
management, Eliza was acquired by HMS Holdings
in 2017.
Prior to Eliza, Lucas co-founded and served as
the COO of Adheris Health, the leading firm in
prescription adherence and patient education
programs in the United States. At Adheris, Lucas led
the development of the technology platform and
pharmacy network that included nearly 25,000
pharmacies with access to over half of the US
population. Adheris was acquired by inVentiv Health
in 2006, returning over thirty-times initial capital
invested. Prior to Adheris, Lucas served in senior
business and technology development roles in
medical devices, disease management, and
wireless communications.
Peter Bennetto
Non-Executive Director
GAICD, SA Fin.
Member of Audit and
Risk Committee
Member of People, Remuneration
and Nominations Committee
Director since 2013
Peter Bennetto is an experienced company
director, with skills in banking, corporate finance
and governance. Peter has held several company
director positions in exploration, mining and
manufacturing companies listed on the ASX
since 1990. Peter was non-executive chairman of
Ironbark Zinc Limited (ASX:IBG) (Jun 2006 – Sep 2019)
and Kingwest Resources Ltd (ASX: KWR) (Apr 2018 –
Sep 2019).
MedAdvisor Annual Report 2021 |
19
Management Team
Simon Glover
Chief Financial Officer
MBA, B. Com, CA.
Craig Schnuriger
Acting Chief
Technology Officer
B. Bus Systems
Simon Glover holds over 25 years experience in senior
financial and operational leadership across a range
of industries including retail, aviation, gambling and
entertainment, technology and communications and
financial services across Australia and internationally.
Joining MedAdvisor in July 2019 as Chief Financial
Officer, Simon is responsible for corporate finance and
investor relations, while also leading the broader
finance team in supporting financial planning,
forecasting, business analytics and operating budgets.
Prior to joining MedAdvisor he held a number of
senior finance roles in large, listed companies
such as Tabcorp Holding (ASX:TAH) and Coles Group
(ASX:COL) and also brings prior industry experience
from his time at Mayne Pharma. Prior to 2006,
Simon was heavily involved in the international
expansion of Jetstar where he was responsible
for all finance matters relating to the launch of
the international business.
Ruba El Afifi
Chief Operating Officer
Executive MBA, B. Com
As MedAdvisor Acting CTO, Craig Schnuriger leads
the technical team as it scales MedAdvisor’s platform
to help patients manage their medication globally.
Prior to working at MedAdvisor, Craig had roles at
Ernst & Young, Shell and Tenix Solutions. In 2011, Craig
took his experience over to the US to work on the
first generation of pharmacy/insurance connected
mobile applications to support patients taking
chronic medications. He brought this expertise
back to the Australian market and has been with
MedAdvisor since its inception in 2013. Craig has
worked extensively within the pharmacy industry
within Australia and recognises the role of technology
in supporting patients, pharmacists, and doctors.
Over the years, Craig has held several roles at
MedAdvisor including Head of Engineering, Head
of Architecture and now Acting CTO.
Wayne Marinoff
EGM Sales & Marketing
B. Bus, Grad. Dip. Accounting
(commenced 8 June 2021)
Ruba El Afifi manages MedAdvisor operations and
the Australian Technology and Product team, and
the global people and culture strategy. She has
played a central role in driving operational excellence
for MedAdvisor since joining the organisation in 2018.
Ruba is a commercially astute strategic executive
with over 20 years’ experience in both large and
mid-entrepreneurial organisations. In addition,
Ruba brings a wealth of industry experience gained
in IT, finance and professional services with significant
experience in commercial transformation, aligning
people initiatives, business strategy and creating a
performance culture.
20
| MedAdvisor Annual Report 2021
Wayne Marinoff has worked in senior commercial
positions for almost 30 years within the pharmaceutical
industry for both large Australian and multinational
companies and prior to this spent over 8 years in
banking & finance.
Joining MedAdvisor in July 2021 as General Manager
Sales AU, Wayne is now responsible for revenue and
marketing activities in Australia and the UK with a focus
on growing the health programs in both markets.
Prior to joining MedAdvisor, he held several senior
sales, marketing and finance roles in large local and
international pharmaceutical companies such as
Arrotex/Arrow, Aspen (SA), Sigma and Eli Lilly (US).
Wayne prides himself on building and leading a
customer focused sales and marketing team to
deliver on both short – and long-term company
objectives.
Your Health in Your Hands Naomi Lawrie
General Counsel and
Company Secretary
LLB (Hons), BCom (Hons)
Naomi Lawrie holds over 20 years legal experience
including as a partner in a national law firm. She has
particular expertise in corporate and commercial
law and has consulted to companies in a variety of
sectors, including health and technology. Joining
MedAdvisor in August 2020 as General Counsel and
Company Secretary, Naomi is responsible for legal,
compliance and company secretarial matters.
John Ciccio
CEO Adheris
B. Arts (Government)
John Ciccio is a proven strategic growth leader
with over 20 years experience in the healthcare/life
sciences industry. His background is diverse and
includes leadership roles in commercial operations,
analytics, business development, product
development and finance. Prior to joining Adheris,
he served as President of the healthcare professional
social network, Skipta, which he helped lead to
exponential growth resulting in its eventual sale.
As President and CEO of Adheris, John is responsible
for overseeing all US operations of MedAdvisor and
for driving sustained growth through innovation. He is
also focused on maximising existing portfolios/solutions
and furthering the collaborative, family-like culture
that is unique to Adheris and its employees.
MedAdvisor Annual Report 2021 | 21
Directors’ Report
The Directors present their report with the Consolidated Financial Report of MedAdvisor Limited and its controlled entities
(the Group) for the year ended 30 June 2021.
Directors
The names of the Directors of MedAdvisor during or since the end of the financial year were:
Chris Ridd
Robert Read
Non‑Executive Chairman
Executive Director/Chief Executive Officer
Joshua Swinnerton
Executive Director/Founder
Peter Bennetto
Non‑Executive Director
Sandra Hook
Lucas Merrow
Non‑Executive Director
Non‑Executive Director (appointed 10 August 2021)
Jeffrey Sherman
Non‑Executive Director (resigned 30 April 2021)
Jim Xenos
Non‑Executive Director
The above named Directors held office during the whole of the financial year and since the end of the financial year
with the exception of Jeffrey Sherman (resigned 30 April 2021) and Lucas Merrow (appointed 10 August 2021).
The Company Secretaries during the financial year were Carlo Campiciano (until 1 June 2021) and Naomi Lawrie
(from 25 August 2020 and to the date of this report).
Information on the Directors, the current Company Secretary and the executive team can be found on pages 18 to 21 and
forms part of this report.
As at the date of this report, MedAdvisor has the following committees of the Board: Audit and Risk and People, Remuneration
and Nominations. Details of members of the committees of the Board during the year are included below and on pages 18 to 21
of the Annual Report.
Meetings of Directors
The number of Directors’ meetings, including meetings of the committees, held during the year ended 30 June 2021,
and numbers of meetings attended by each of the Directors were as follows:
Full meetings
of Directors
Audit and Risk
Meetings of committees
People,
Remuneration
and Nominations
Sales and Marketing
Held1
Attended
Held1
Attended
Held1
Attended
Held1
Attended
13
13
13
13
13
13
12
13
13
13
13
13
13
9
3
3
–
3
3
3
–
3
3
–
3
3
3
–
5
5
–
5
5
5
–
5
5
–
5
5
5
–
2
–
–
2
–
2
–
2
–
–
2
–
2
–
Chris Ridd
Robert Read
Josh Swinnerton
Peter Bennetto
Sandra Hook
Jim Xenos
Jeffrey Sherman
1.
Indicates the number of meetings held which the Director was eligible to attend following their appointment or up to
their retirement. Mr Lucas Merrow was appointed subsequent to the end of financial year.
22
| MedAdvisor Annual Report 2021
Your Health in Your Hands Principal activities
The principal activities of the Group continue to be the enhancement and growth of the MedAdvisor medication and
adherence platform. The platform is focused on improving health outcomes by connecting health professionals with
their patients using technology and enhancing medication adherence through health programs.
Operating results
During the financial year, the Group reported a comprehensive loss of $15,444,523 (2020: loss of $9,727,382). Operating revenue
totalled $38,772,576, growing 304% on the prior financial year (2020: $9,602,646).
Dividends
No dividends have been paid or declared by the Company since the beginning of the financial year.
Review of operations
Please refer to the Business Update and Management Commentary sections of this annual report on pages 2 to 17
for the following information in respect of the Group (which forms part of this Directors’ Report):
• A review of operations during the financial year and the results of those operations;
• Likely developments in the operations in future financial years and the expected results of those operations;
• Comments on the financial position; and
• Comments on business strategies and prospects for future financial years.
In respect of likely developments, business strategies and prospects for future financial years, material which if included
would be likely to result in unreasonable prejudice to the Group has been omitted.
Financial position
The Group has $7,150,865 in cash plus $115,757 in cash on deposit as security, bringing a total cash balance of $7,266,622
as of 30 June 2021 following a net cash decrease of $5,194,299 for the financial year.
The net assets of the Group at 30 June 2021 were $48,845,150, an increase in net assets of $31,824,541 from 30 June 2020.
Significant changes in the state of affairs
There were no other significant changes in the state of affairs of the Group that occurred during the financial year that are
not otherwise disclosed in this report.
Proceedings
No person has applied for leave of Court under section 237 of the Corporations Act 2001 to bring proceedings on behalf of the
Group or 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 any part of those proceedings. The Group was not a party to any such proceedings in the financial year.
Matters subsequent to the end of the financial year
MedAdvisor and ZP Pharma Holdings Pte Ltd have agreed to cease their joint venture in ZP MedAdvisor Pte Limited and
propose to wind‑up operations in H1 FY22. Refer to page 11 for further information.
Apart from the above, no matters or circumstances have arisen since the end of financial year that have significantly
affected, or may significantly affect, the operations of the Group, the results of those operations or the state of affairs
of the Group in future financial years.
MedAdvisor Annual Report 2021 | 23
Directors’ Report
Continued
Unissued ordinary shares or interests under option
Details of unissued ordinary shares or interests under option as at the date of this report are:
Unlisted ordinary shares under option
Class (ASX code)
MDRAI
MDRAI
MDRAI
MDRAI
MDRAI
MDRAI
MDRAI
MDRAI
MDRAI
MDRAI
MDRAI
MDRAI
MDRAI
MDRAI
MDRAI
MDRAI
MDRAI
MDRAI
MDRAI
MDRAI
MDRAQ
MDRAR
MDRAP
MDRAU
MDRAV
MDRAW
MDRAX
MDRAAC
MDRAT
MDRAY
MDRAZ
MDRAAA
MDRAAB
MDRAI
MDRAI
MDRAAD
MDRAAE
MDRAAF
Total
Grant date
15‑Apr‑16
15‑Dec‑16
27‑Oct‑17
19‑Dec‑17
12‑Apr‑18
24‑Sep‑18
10‑Jan‑19
25‑Aug‑19
23‑Dec‑19
23‑Dec‑19
23‑Dec‑19
23‑Dec‑19
23‑Dec‑19
23‑Dec‑19
28‑Apr‑20
28‑Apr‑20
27‑Jul‑20
27‑Jul‑20
17‑Nov‑20
18‑Dec‑20
21‑Dec‑20
21‑Dec‑20
21‑Dec‑20
7‑Apr‑21
7‑Apr‑21
7‑Apr‑21
7‑Apr‑21
7‑Apr‑21
7‑Apr‑21
28‑May‑21
28‑May‑21
28‑May‑21
28‑May‑21
15‑Jun‑21
7‑Jul‑21
7‑Jul‑21
7‑Jul‑21
7‑Jul‑21
Expiry date
14‑Apr‑31
14‑Dec‑31
28‑Oct‑32
19‑Dec‑32
12‑Apr‑33
24‑Sep‑33
10‑Jan‑34
25‑Aug‑34
8‑Dec‑34
8‑Dec‑34
8‑Dec‑34
8‑Dec‑34
8‑Dec‑34
8‑Dec‑34
26‑Apr‑35
26‑Apr‑35
13‑Jul‑35
22‑Apr‑35
17‑Nov‑35
8‑Dec‑30
30‑Oct‑23
30‑Oct‑24
30‑Oct‑29
24‑Mar‑36
24‑Mar‑36
24‑Mar‑36
24‑Mar‑36
24‑Mar‑36
24‑Mar‑31
28‑May‑28
28‑May‑28
28‑May‑28
28‑May‑28
25‑May‑36
6‑Jul‑36
6‑Jul‑36
6‑Jul‑36
6‑Jul‑36
Exercise price
# of Options
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.28
$0.49
$0.56
$0.63
$0.84
$0.00
$0.35
$0.00
$0.00
$0.00
$0.38
$0.60
$0.675
$0.70
$0.40
$0.60
$0.70
$1.00
$0.00
$0.00
$0.40
$0.43
$0.50
$0.58
$0.00
$0.00
$0.60
$0.70
$0.80
154,757
132,850
339,977
35,712
31,426
215,219
14,284
25,713
1,314,758
499,999
214,284
714,285
428,571
428,572
109,275
28,571
80,655
15,000
14,285
27,940
750,000
750,000
4,500,000
220,000
1,450,000
680,000
75,000
567,731
51,667
659,091
608,392
1,054,545
1,205,195
45,000
500,000
200,000
200,000
200,000
18,542,754
Shares issued on exercise of options
1,705,860 ordinary shares were issued during or since the end of the financial year as the result of the exercise of options.
Unlisted performance rights over unissued shares
ASX code
MDRAC
Grant date
1‑Jul‑15
Exercise price
$0.00
# of rights
Class
2,014,285
Unlisted
The holders of these options and performance rights do not have the right, by virtue of the option or performance right,
to participate in any share issue or interest issue of the Company or of any other body corporate or registered scheme.
24
| MedAdvisor Annual Report 2021
Your Health in Your Hands Remuneration Report
1. Introduction
The Directors of MedAdvisor present the Remuneration Report for the Group for the year ended 30 June 2021. This Remuneration
Report forms part of the Directors’ Report and has been audited in accordance with section 300A of the Corporations Act 2001.
The Remuneration Report details the remuneration arrangements for the Group’s Key Management Personnel (KMP) identified
in the table below:
Name
Title
Independent
Term
Non‑Executive Directors
Chris Ridd
Peter Bennetto
Sandra Hook
Jeffrey Sherman
Jim Xenos
Executive Directors
Chairman
Director
Director
Director
Director
Y
Y
Y
N
N
Robert Read
Chief Executive Officer (CEO)
Joshua Swinnerton
Director
Full financial year
Full financial year
Full financial year
Resigned 30 April 2021
Full financial year
Full financial year
Full financial year
Other Key Executives
Simon Glover
John Ciccio
Chief Financial Officer (CFO)
Full financial year
CEO – Adheris
Appointed 17 November 2020
Key Management Personnel are those persons having authority and responsibility for planning, directing and controlling
the activities of the entity, directly or indirectly, including any Director (whether executive or otherwise) of that entity.
References in the Remuneration Report to Executives only refer to ‘Executive Directors’ and ‘Other Key Executives’ identified
above.
Aside from the appointment of Lucas Merrow as a Non-Executive Director on the 10th of August 2021, there were no changes to
KMP after the reporting date and before the date the financial report was authorised for issue.
This Remuneration Report is presented in the Company’s functional currency of AUD.
2. Overview of Executive remuneration
(a) Remuneration principles
The principles of the Group’s executive strategy and supporting incentive programs and frameworks are:
• To align rewards to business outcomes that deliver value to shareholders;
• To drive a high-performance culture by setting challenging objectives and rewarding high performing individuals; and
• To ensure remuneration is competitive in the relevant employment marketplace to support the attraction, motivation,
and retention of executive talent.
(b) Remuneration governance
The Board is responsible for:
• Defining MedAdvisor’s remuneration strategy; and
• Determining the structure and quantum of remuneration for the CEO and other executives that support and drive the
achievement of MedAdvisor’s strategic objectives.
The Board has an overarching discretion with respect to the awards given under incentive plans and can adjust proposed
incentive or vesting outcomes, subject to the applicable rules governing each incentive plan.
MedAdvisor Annual Report 2021 | 25
Remuneration Report
Continued
The People, Remuneration and Nominations Committee (PRNC) operates independently from management and may
at its discretion appoint external advisors or instruct management to prepare and provide information as an input to its
decision‑making process.
Given the Company’s stage of development, the Company may consider it appropriate to use equity‑based remuneration
in lieu of cash to preserve capital and to retain and incentivise key executives and Directors. The Company will disclose terms
and valuations of all equity awards, and provide a cogent explanation where the approach is different from those of more
established companies.
Management provides information relevant to remuneration decisions and makes recommendations to the PRNC.
During the year the Committee appointed Aon Advisory Australia Pty Ltd to provide remuneration advisory services.
Such services were provided to the Committee free from any undue influence by management.
(c) Remuneration structure and framework
With the recent expansion in the USA, the Board recognises the need for a remuneration framework that will strike an
appropriate balance between the need to attract and retain high calibre candidates from within this highly competitive
market while still meeting the market and governance expectations of an ASX‑listed company.
The remuneration structure applicable to the Australian based key management personnel named in this Remuneration
Report consists of fixed and variable at‑risk remuneration in the form of short and long‑term incentive opportunities.
The table below details the structure.
Remuneration
component
Purpose
Fixed
Remuneration
Fixed remuneration includes base salary, Superannuation contributions and other ordinarily paid
benefits, allowances, and any applicable fringe benefits tax (FBT).
Set in consideration of the total overall remuneration package and the desired mix of fixed and
‘at risk’ remuneration. Positioning of the remuneration for each executive, MedAdvisor will be guided
by independent market remuneration analysis comprising similar sized companies, in similar
industries operating in similar jurisdictions. Other factors that will be considered include the
individual’s responsibilities, performance, qualifications, experience, and location as well as the
strategic imperatives of the Company.
Short‑term
incentives (STIs)
MedAdvisor performance measures involve the use of annual performance objectives, metrics,
performance appraisals and continuing emphasis on living the Company values. The performance
measures are set annually after consultation with the Directors and executives and are specifically
tailored to the areas where each executive has a level of control. The Key Performance Indicators
(KPI’s) for the Executive Team are aligned with the Group’s short‑term objectives and overall strategy.
Performance areas include:
• Financial – revenues and operating results; and
• Non‑financial – strategic and individual goals set for each executive having regard to their overall
accountability and scope of influence.
The CEO STI opportunity for FY21, FY22 and FY23 will be provided through an award of STI Options
approved at the 2020 AGM. The options are provided in lieu of a cash incentive for those years.
Vesting of the options subject to performance hurdles for each year comprising a mix of financial,
strategic and employee engagement metrics. The details of the STI options are described in
Section 5.
For other KMP and Non‑KMP employees the STI awards are determined annually and may be
delivered in cash and or equity subject to each participant achieving agreed Company and
individual KPIs for the year.
The Board may, at its discretion, award bonuses for exceptional performance in relation to each
person’s pre‑agreed KPIs.
26
| MedAdvisor Annual Report 2021
Your Health in Your Hands Remuneration
component
Purpose
Long‑term
incentives (LTIs)
Long‑term incentives ensure alignment of shareholder interests with executive interests by facilitating
the meaningful accumulation of MedAdvisor shares upon successful achievement of pre‑determined
long‑term business goals. The LTI is also expected to drive an ownership mentality in addition to
providing a retention element to MedAdvisor’s remuneration structure.
Consistent with prevalent market practice for similar size technology companies at similar stage of
development, LTI awards have, to date, been delivered through options and premium price options.
Options granted to employees under the MedAdvisor Employee Incentive Option Plan vest subject
to the service period and performance milestone conditions in accordance with the approved plan
rules. Unvested options will lapse immediately on the termination of the individual’s employment or
if a relevant vesting condition is not met. Vested options can be exercised at any time from the date
of vesting until their designated expiry date.
The LTI grants to executive KMP during FY21 included:
• CEO (Read) FY21 options – An award of 2.25 million options was approved at the 2020 AGM.
These are described in Section 5 – CEO FY21 LTI Award.
3. Statutory remuneration table
The amounts shown in this table are prepared in accordance with AASB 124 Related party disclosures and do not represent
actual cash payment received by executives for the year ended 30 June 2021. Amounts shown under Share‑Based Awards
reflect the accounting expense recorded during the year with respect to prior year awards that have or are yet to vest.
2021
Executive Directors
R Read
J Swinnerton
Non‑Executive Directors
C Ridd
P Bennetto
S Hook
J Xenos
Other Key Management Personnel
S Glover
J Ciccio
Cash Salary
and Fees
$
Cash
1
Bonus
$
Super‑
annuation
$
Value of
Share‑Based
Awards in
2021
Financial
Year2
$
Value of
Share‑Based
Awards
from prior
years2
$
Total
$
739,276
327,421
370,615
49,275
49,275
49,275
–
–
–
–
–
–
293,910
53,906
21,694
369,767
3,149
–
324,272
128,222
45,000
45,000
49,275
228,307
287,377
–
–
–
–
–
–
–
230,240
–
–
–
12,153
4,275
4,275
–
21,689
5,974
1,401,363
53,906
73,209
46,996
100,115
747,118
117,607
414,599
–
387,492
117,607
2,387,228
1. Cash bonuses are dependent on satisfying established performance measures determined by the People, Remuneration
and Nominations Committee. 100% of the awardable bonus payable was granted in FY21.
2. Share based entitlements have been measured at fair value on grant date determined in accordance with the Binomial
or Black-Scholes option pricing model.
MedAdvisor Annual Report 2021 | 27
Remuneration Report
Continued
Cash Salary
and Fees
$
Cash
Bonus
$
Super‑
annuation
$
2020
Executive Directors
R Read
J Swinnerton
Non‑Executive Directors
C Ridd
P Bennetto
S Hook
J Xenos
Other Key Management Personnel
S Glover
C Campiciano
292,113
281,157
40,639
69,000
45,000
45,000
198,103
166,719
1,137,731
–
–
–
–
–
–
–
–
–
Value of
Share‑Based
Awards in
2020
Financial
Year1
$
Value of
Share‑Based
Awards
from prior
years1
$
Total
$
129,642
18,316
461,073
–
–
–
230,921
–
47,882
21,878
–
–
–
–
–
–
–
282,703
44,500
75,555
280,196
49,275
264,821
204,069
21,002
1,546
3,861
6,555
4,275
4,275
18,836
15,472
75,822
430,323
18,316
1,662,192
1. Share based entitlements have been measured at fair value on grant date determined in accordance with the Binomial
or Black-Scholes option pricing model.
Remuneration linked to performance
The relative proportions of remuneration that are linked to performance and those that are fixed are as follows:
Executive Directors
R Read
J Swinnerton
Non‑Executive Directors
C Ridd
P Bennetto
J Xenos
S Hook
Other Key Management Personnel
S Glover
J Ciccio
Fixed Remuneration
At Risk – STI
At Risk – LTI
2021
2020
2021
2020
2021
2020
43%
100%
38%
100%
100%
100%
60%
74%
68%
100%
100%
100%
100%
18%
82%
n/a
7%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
n/a
50%
0%
62%
0%
0%
0%
40%
26%
32%
0%
0%
0%
0%
82%
18%
n/a
28
| MedAdvisor Annual Report 2021
Your Health in Your Hands 4. Service Agreements
Remuneration and other terms of employment for the Executive Directors and other Key Management Personnel are
formalised in a Service Agreement. The major provisions of the agreements relating to remuneration are set out below:
Name
Directors
R Read
J Swinnerton
Other Key Management Personnel
S Glover
J Ciccio
Base salary
Term of agreement
Notice period
$292,037
Undefined
$294,665
Undefined
$227,270
Undefined
$427,712
Undefined
9 months
9 months
6 months
12 months
Note: Base salary noted above is the current base salary and is exclusive of superannuation which under the applicable
service agreements is capped in accordance with the maximum superannuation contribution base for superannuation
guarantee purposes.
5. KMP Equity Awards
(a) CEO Equity Awards
At the 2020 AGM Shareholders approved the Company to issue 4,500,000, $0.70 exercise price options to the CEO comprising:
• 2.25 million short‑term incentive‑based Employee Incentive Options (STI Options).
• 2.25 million long‑term incentive‑based Employee Incentive Options (LTI Options).
The terms and vesting conditions of each these awards are as follows:
(i) 2020 STI Option Award
What was
awarded?
Approved at the FY2020 AGM
The CEO was granted a total of 2.25 million short‑term incentive‑based Employee Incentive Options
(STI Options). These were issued in 3 tranches as follows:
• Tranche 1 – 750,000 FY21 STI Options vesting upon the release of FY21 financial statements subject to
performance against the KPIs agreed by the Board for FY21;
• Tranche 2 – 750,000 FY22 STI Options vesting upon the release of FY22 financial statements subject
to performance against the KPIs agreed by the Board for FY22; and
• Tranche 3 – 750,000 FY23 STI Options vesting upon the release of FY23 financial statements subject
to performance against the KPIs agreed by the Board for FY23.
The options that vest may be exercised at any time from the date of vesting until the expiry
of the options.
Exercise Price
Each CEO STI Option was issued for an option acquisition fee of $0.0007 and has an exercise price
of $0.70.
MedAdvisor Annual Report 2021 | 29
Remuneration Report
Continued
How is
performance
measured?
Each tranche of STI Options per annum will vest subject to achieve of the performance hurdles set for
the year to which they are related.
The vesting criteria have been and will be structured in a realistic but challenging manner to properly
incentivise Mr Read to deliver optimal performance of the Company for the benefit of all shareholders.
The performance criteria and percentage of each tranche that can vest is summarised below:
• KPI 1: Financial Metrics
Financial metric targets will be determined by the Board before each financial year based on
internal budgets.
– Revenue targets – up to 35% (262,500) of the STI Options in the tranche will vest; and
– EBITDA targets – up to 35% (262,500) of the STI Options in the tranche will vest.
• KPI 2: Strategic Metrics
Strategic metric targets will be calibrated about expected levels of performance required to achieve
threshold (0%) and full (100%) vesting. Up to 20% (150,000) of the STI Options in the tranche will vest
against the following criteria:
– product roadmap for core products in US, Australia, UK and South East Asia;
– partner integration milestones; and
– commercial milestones and timeframes.
• KPI 3: Engagement Metrics
– If the Company achieves an engagement score of more than 70%, then 10% (75,000) of the tranche
will vest.
Expiry Date
The CEO STI Options all have an expiry date of 30 October 2029 but will lapse immediately if a relevant
vesting condition is not met.
Termination
All unvested options will lapse upon the CEO’s resignation or termination for cause.
In the event of death, disability, bona fide redundancy or other reasons approved by the Board prior to
the options becoming exercisable, the Board may determine to vary the service conditions and/or that
some or all or a pro‑rata number of options do not lapse.
All vested and unexercised STI Options must be exercised within 3 months of termination or they will lapse.
Fraud or
misconduct
The Board may determine that some or all of the options will lapse in circumstances such as fraud,
defalcation or gross misconduct.
(ii) 2020 LTI Option Award
What was
awarded?
The CEO was granted a total of 2.25 million long‑term incentive‑based Employee Incentive Options
(LTI Options). Each option gives the right to acquire an ordinary share upon payment of a pre‑determined
exercise price if the service and performance conditions have been met.
30
| MedAdvisor Annual Report 2021
Your Health in Your Hands What are
the vesting
conditions?
The LTI Options awarded in 2020 were issued in 3 tranches as follows:
• Tranche 1 – 750,000 FY21 LTI Options vesting after the release of FY21 financial statements subject to
the following:
– 50% of this tranche (375,000) vest subject to Mr Read remaining employed by the Company at the
date these options vest; and
– 50% of this tranche (375,000) vest subject to the total shareholder return of MedAdvisor meeting or
exceeding the 75th percentile of the TSR of the ASX All Technology Index for the period July 1, 2020
to June 30, 2021.
• Tranche 2 – 750,000 FY22 LTI Options vesting after the release of FY22 financial statements subject to
the following:
– 50% of this tranche (375,000) vest subject to Mr Read remaining employed by the Company at the
date these options vest; and
– 50% of this tranche (375,000) vest subject to the total shareholder return of MedAdvisor meeting
or exceeding the 75th percentile of the TSR of the ASX All Technology Index for the period July 1, 2021
to June 30, 2022.
• Tranche 3 – 750,000 FY21 LTI Options vesting after the release of FY23 financial statements subject to
the following:
– 50% of this tranche (375,000) vest subject to Mr Read remaining employed by the Company at the
date these options vest: and
– 50% of this tranche (375,000) vest subject to the total shareholder return of MedAdvisor meeting
or exceeding the 75th percentile of the TSR of the ASX All Technology Index for the period July 1, 2022
to June 30, 2023.
The options that vest may be exercised at any time from the date of vesting until the expiry of the options.
Exercise Price
Each CEO LTI Option was issued for an option acquisition fee of $0.0007 and has an exercise price of $0.70.
Expiry Date
The CEO STI Options all have an expiry date of 30 October 2029 but will lapse immediately if a relevant
vesting condition is not met.
Termination
All unvested LTI options will lapse upon the CEO’s resignation or termination for cause.
In the event of death, disability, bona fide redundancy or other reasons approved by the Board prior to
the options becoming exercisable, the Board may determine to vary the service conditions and/or that
some or all or a pro‑rata number of options do not lapse.
All vested and unexercised STI Options must be exercised within 3 months of termination or they will lapse.
Fraud or
misconduct
The Board may determine that some or all of the options will lapse in circumstances such as fraud,
defalcation or gross misconduct.
(iii) Other outstanding CEO Equity awards – unvested and vested and unexercised
• Mr Read was granted 1,178,569 options on 23 August 2019 by the Board with approval given by Shareholders at the 2019
AGM held on 18 November 2019. The options were issued to Mr Read for nil cost with a zero‑exercise price. Mr Read currently
holds 535,713 of these options, the remainder of which lapsed on 23 September 2020.
• Rights were issued to Mr Read (Read Rights) under his employment agreement dated 1 July 2015. Of the rights that have
vested 2,014,283 remain unexercised.
MedAdvisor Annual Report 2021 | 31
Remuneration Report
Continued
(b) Other Executive LTI Awards
CFO Equity Awards
• Mr Glover was granted 607,142 options on 19 December 2019 by the Board. The options issued were as follows:
– 428,571 options with an exercise price of $0.28 per share, which will vest equally over 3 years based on continuous
employment. 285,714 of these options have vested as at the date of this report, none have been exercised; and
– 178,571 options with a nil exercise price were issued and exercisable on achieving performance criteria. These options
vested on 1 August 2020 and were exercised on 14 October 2020.
• Mr Glover was granted 178,571 shares by the Board on 25 March 2021 with vesting conditions linked to performance through
the year FY21 financial year. These options remain unvested at the reporting date.
CEO Adheris Equity Awards
• Mr Ciccio was granted the following options by the Board on 25 March 2021:
– 900,000 Tenure options:
» 200,000 with an exercise price of $0.60, vesting 17 November 2022;
» 300,000 with an exercise price of $0.60, vesting 17 November 2023; and
» 400,000 with an exercise price of $0.70, vesting 17 November 2024.
– 1,100,000 Performance options:
» 800,000 linked to US Revenue performance, with an exercise price of $0.60, vesting 31 December 2021; and
» 300,000 linked to achievement of strategic objectives, with an exercise price of $0.60, vesting 31 December 2021.
6. Non‑Executive Director remuneration
The remuneration of Non‑Executive Directors (NEDs) is set by reference to payments made by other companies of similar size
and industry, and by reference to the Director’s skills and experience, as well as the time commitment expected of Directors.
Currently the NEDs are paid a single composite fee and do not receive additional fees for their involvement on Board
Committees, either as Chairman of Members of those committees. Chris Ridd received an additional fee for chairing
the Sales and Marketing Committee.
Given the Company’s stage of development and the financial restrictions placed on it, the Company may consider it
appropriate to issue unlisted options to Non‑Executive Directors, subject to obtaining shareholder approval.
Base Fees
Non‑Executive Chairman
$127,922 plus options granted on appointment
Independent Non‑Executive Directors
$49,275 plus options granted on appointment/reappointment
During FY21 and following approval at the 2020 AGM a total of 1,500,000 options were issued to the Chairman
Mr Chris Ridd (Ridd Options) in two tranches:
1.
750,000 Options exercisable at $0.60 on or before 30 October 2023 with an option acquisition fee of $1
(2023: Ridd Options); and
2. 750,000 Options exercisable at $0.675 on or before 30 October 2024 with an option acquisition fee of $1
(2024: Ridd Options).
Options not exercised by the above dates will lapse on the expiry date.
No other options or equity awards were granted to NEDs during FY21.
All other Directors’ unvested and vested and unexercised option holdings are fully disclosed in Section 7.
32
| MedAdvisor Annual Report 2021
Your Health in Your Hands Directors are permitted to be paid additional fees for special duties and time commitments above and beyond their
ongoing Board obligations.
Directors are entitled to be reimbursed for all business‑related expenses, including travel expenses incurred performing
their duties.
There is no minimum shareholding requirement for Directors.
7. Additional statutory disclosures
(a) Options held by Directors and key management personnel
The number of options and rights to acquire shares in the Company held during the reporting period by each
of the Directors and key management personnel of the Group including their related parties are set out below.
2021
Executive Directors
R Read
Non‑Executive Directors
C Ridd
S Hook
Other Key Management Personnel
S Glover
J Ciccio
Balance at
start of the
reporting
period
Granted as
remuneration
Exercised/
Lapsed
Vested and
exercisable
at end of the
reporting
period
3,192,852
4,500,000
642,856
2,549,996
–
1,500,000
714,285
–
–
–
607,142
178,571
178,571
–
2,000,000
–
–
714,285
142,857
150,000
(b) Shares held by Directors and key management personnel
Ordinary Shares
The number of ordinary shares in the Company held during the reporting period by each of the Directors and key
management personnel of the Group including their related parties are set out below.
2021
Executive Directors
R Read
J Swinnerton
Non‑Executive Directors
C Ridd
P Bennetto
S Hook
J Xenos
Other Key Management Personnel
S Glover
Balance at
start of the
reporting
period
2,594,285
15,008,943
–
1,748,665
178,571
20,583,723
–
Granted as
remuneration
Received or
Exercised
Other
changes
Held at end of
the reporting
period
–
–
–
–
–
–
–
200,000
70,000
2,864,285
–
–
–
–
–
178,571
526,316
15,535,259
184,210
184,210
(58,273)
1,690,392
71,428
249,999
–
–
20,583,723
178,571
MedAdvisor Annual Report 2021 | 33
Remuneration Report
Continued
2020
Executive Directors
R Read
J Swinnerton
Non‑Executive Directors
P Bennetto
S Hook
J Xenos
Other Key Management Personnel
C Campiciano
Balance at
start of the
reporting
period
2,594,285
25,008,943
1,748,665
178,571
20,583,723
3,362,842
Granted as
remuneration
Received or
Exercised
Other
changes
Held at end of
the reporting
period
–
–
–
–
–
–
–
–
–
–
–
57,147
–
2,594,285
(10,000,000)
15,008,943
–
–
–
–
1,748,665
178,571
20,583,723
3,419,989
(c) Other transactions with Directors and key management personnel:
During the financial year, the Group used the services of NostraData Pty Ltd of which Mr Jim Xenos is a Director and has
significant influence. The amounts billed relate to the provision of data services by NostraData Pty Ltd and amounted to
$141,173 (2020: $143,157).
Additional information
The earnings of the Group over the last 5 financial years are summarised below:
Revenue from services
38,772,576
9,602,646
8,241,993
6,604,762
4,242,746
2021
$
2020
$
2019
$
2018
$
2017
$
Other revenue
Total revenue
Total margin
EBITDA
EBIT
1,507,552
1,468,098
951,121
789,829
659,341
40,280,128
11,070,744
9,193,114
7,394,590
4,902,087
21,305,948
8,381,419
7,227,972
5,783,128
3,508,881
(13,608,000)
(9,172,683)
(7,842,054)
(4,256,876)
(3,288,317)
(16,819,435)
(9,684,907)
(8,101,368)
(4,453,869)
(3,428,643)
Profit (loss) after income tax
(14,371,990)
(9,779,590)
(8,101,385)
(4,454,211)
(3,429,927)
Share Price
$0.300
$0.500
$0.357
$0.343
$0.224
End of audited Remuneration Report.
34
| MedAdvisor Annual Report 2021
Your Health in Your Hands Directors’ Report
Continued
Indemnities given to, and insurance premiums paid for officers
The Company has indemnified the Directors and officers of the Company for costs incurred, in their capacity as a Director
or officer, for which they may be held personally liable, except where there is a lack of good faith.
During the financial year, the Company paid a premium in respect of a contract to insure the Directors and officers of the
Company against a liability to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits
disclosure of the nature of the liability and the amount of the premium.
Indemnities and insurance premiums of auditor
The Company has not, during or since the end of the financial year, indemnified or agreed to indemnify the auditor of the
Company or any related entity against a liability incurred by the auditor.
During the financial year, the Company has not paid a premium in respect of a contract to insure the auditor of the Company
or any related entity.
Non‑audit services
During the financial year, the Company’s auditor, RSM Australia Partners, provided services in relation to a R&D Tax Concession
claim, other general tax advice and provision of a whistle‑blower service, valued at $61,961. They did not perform any other
services in addition to this and their statutory audit duties.
Details of the amounts paid to RSM Australia Partners and its related practices for audit services provided during the year
are set out in Note 28 to the financial statements.
The Directors are satisfied that the provision of non‑audit services by RSM Australia Partners during the financial year is
compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. The Directors
are of the opinion that the services as disclosed in Note 28 to the financial statements do not compromise the auditor’s
independence for the following reasons:
(a) all non‑audit services have been reviewed and approved to ensure that they do not impact the integrity and objectivity
of the auditor; and
(b) none of the services undermine the general principles relating to auditor independence as set out in APES 110 ‘Code
of Ethics for Professional Accountants’ issued by the Accounting Professional and Ethical Standards Board, including
reviewing or auditing the auditor’s own work, acting in a management or decision‑making capacity for the Company,
acting as advocate for the Company or jointly sharing economic risks and rewards.
Auditor’s independence declaration
The auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is set out on page 37
and forms part of this report.
Auditor
RSM Australia Partners continues in office in accordance with section 327 of the Corporations Act 2001.
This Directors’ report is made in accordance with a resolution of Directors, pursuant to section 298(2)(a) of the
Corporations Act 2001.
On behalf of the Directors,
Chris Ridd
Chairman
22 September 2021
Camberwell, VIC
MedAdvisor Annual Report 2021 | 35
Governance and Disclosures
Corporate Governance Statement
The Board is committed to achieving and demonstrating the highest standards of corporate governance.
As such, the Group has adopted the 4th edition of the Corporate Governance Principles and Recommendations
which was released by the ASX Corporate Governance Council in February 2019.
The Group’s Corporate Governance Statement for the financial year ending 30 June 2021 is dated as at 30 June 2021
and the date of last review and Board approval was 22 September 2021. The Corporate Governance Statement is
available on MedAdvisor’s website at:
mymedadvisor.com/investors‑corporate‑governance > Governance Documents > Other.
36
| MedAdvisor Annual Report 2021
Your Health in Your Hands Auditor’s Independence Declaration
RSM Australia Partners
Level 21, 55 Collins Street Melbourne VIC 3000
PO Box 248 Collins Street West VIC 8007
T +61 (0) 3 9286 8000
F +61 (0) 3 9286 8199
www.rsm.com.au
AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of the financial report MedAdvisor Limited for the year ended 30 June 2021, I declare
that, to the best of my knowledge and belief, there have been no contraventions of:
(i)
(ii)
the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
any applicable code of professional conduct in relation to the audit.
RSM AUSTRALIA PARTNERS
B Y CHAN
Partner
Dated: 22 September 2021
Melbourne, Victoria
THE POWER OF BEING UNDERSTOOD
AUDIT | TAX | CONSULTING
RSM Australia Partners is a member of the RSM network and trades as RSM. RSM is the trading name used by the members of the RSM network. Each member of the
RSM network is an independent accounting and consulting firm which practices in its own right. The RSM network is not itself a separate legal entity in any jurisdiction.
RSM Australia Partners ABN 36 965 185 036
Liability limited by a scheme approved under Professional Standards Legislation
MedAdvisor Annual Report 2021 | 37
EQUITY
20. Issued capital
21. Reserves
22. Accumulated losses
GROUP STRUCTURE
23. Interest in subsidiaries
24. Business combinations
25. Non‑controlling interest
26. Parent entity information
OTHER
27. Financial risk management
28. Auditor’s remuneration
29. Related party transactions
30. Contingencies
31. Events subsequent to the reporting date
32. Key management personnel disclosures
Directors’ Declaration
Independent Auditor’s Report
Shareholder Information
Glossary
67
69
70
70
71
72
73
74
77
78
78
78
78
79
80
85
87
Financial Statements
Consolidated Statement of Profit or Loss
and other Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Consolidated Financial Statements
1.
Statement of significant accounting policies
2. Critical accounting judgements,
estimates and assumptions
KEY PERFORMANCE
3.
Earnings per share
4. Operating segments
5. Revenue
6. Expenses
7. Reconciliation of profit/(loss) after tax
to net cash flow from operations
8.
Income tax expense
ASSETS
9. Cash and cash equivalents
10. Trade and Other Receivables
11. Other assets
12. Property, Plant and Equipment
13. Right‑of‑use assets
14.
Intangible assets
LIABILITIES
15. Trade and Other Payables
16. Borrowings
17. Other liabilities
18. Lease liabilities
19. Employee benefits
38
| MedAdvisor Annual Report 2021
39
40
41
42
43
43
52
55
55
56
57
58
59
59
60
60
61
62
63
64
64
65
65
66
Your Health in Your Hands Consolidated Statement of Profit or Loss
and other Comprehensive Income
for the year ended 30 June 2021
Revenue from continuing operations
Other revenue
Direct expenses
Development costs
Employee benefits expenses
Marketing expenses
Depreciation and amortisation expenses
Directors’ fees
Other expenses
Finance costs
Loss before income tax
Income tax (expense)/income
Loss after income tax expense for the year
Other comprehensive income
Total comprehensive loss for the year
Loss for the year is attributable to:
Non‑controlling Interest
Owners of MedAdvisor Limited
Total comprehensive loss for the year is attributable to:
Non‑controlling Interest
Owners of MedAdvisor Limited
Loss per Share
Basic loss per share (cents)
Diluted loss per share (cents)
Notes
5(a)
5(b)
6(a)
Consolidated
Jun‑21
$
Jun‑20
$
38,772,576
9,602,646
1,507,552
1,468,098
(17,466,629)
(1,221,227)
(4,810,324)
(2,504,232)
6(b)
(24,151,663)
(11,501,162)
(2,244,415)
(2,425,110)
6(c)
6(b)
(3,211,436)
(512,224)
(282,069)
(217,892)
(4,918,739)
(2,353,387)
6(d)
(422,088)
(115,100)
(17,227,235)
(9,779,590)
8
2,855,245
–
(14,371,990)
(9,779,590)
(1,072,533)
52,208
(15,444,523)
(9,727,382)
25
(422,541)
(194,595)
(13,949,449)
(9,584,995)
(14,371,990)
(9,779,590)
25
(469,087)
(196,529)
(14,975,436)
(9,530,853)
(15,444,523)
(9,727,382)
3
3
(4.54)
(4.54)
(4.22)
(4.22)
The above statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes.
Comparative figures are for the full year ended 30 June 2020.
MedAdvisor Annual Report 2021 | 39
Consolidated Statement of Financial Position
as at 30 June 2021
ASSETS
Current Assets
Cash and cash equivalents
Trade and other receivables
Other assets
Total Current Assets
Non‑Current Assets
Other assets
Property, plant and equipment
Right‑of‑use assets
Intangible assets
Total Non‑Current Assets
Total Assets
LIABILITIES
Current Liabilities
Trade and other payables
Borrowings
Other liabilities
Leases
Employee benefits
Total Current Liabilities
Non‑Current Liabilities
Borrowings
Other payables
Leases
Employee benefits
Deferred tax liabilities
Total Non‑Current Liabilities
Total Liabilities
Net Assets
EQUITY
Contributed equity
Reserves
Retained earnings/(losses)
Equity attributable to the owners of MedAdvisor Limited
Non‑controlling interest
Total Equity
Consolidated
Notes
Jun‑21
$
Jun‑20
$
9
10
11
11
12
13
14
15
16
17
18
19
16
15
18
19
8
20
21
22
25
7,150,865
12,345,164
12,464,259
1,839,384
1,702,250
375,732
21,317,374
14,560,280
481,695
2,231,152
2,341,328
–
393,560
1,073,219
54,546,789
5,244,415
59,600,964
6,711,194
80,918,338
21,271,474
10,704,727
1,189,710
299,762
9,198,936
1,265,476
1,795,609
–
521,231
263,856
1,036,199
23,264,510
3,010,996
6,093,539
357,875
1,502,525
122,739
732,000
–
–
1,156,919
82,950
–
8,808,678
1,239,869
32,073,188
4,250,865
48,845,150
17,020,609
90,992,487
45,369,890
1,687,602
1,574,072
(44,231,164)
(30,281,714)
48,448,925
16,662,248
396,225
358,361
48,845,150
17,020,609
The above statement of financial position should be read in conjunction with the accompanying notes.
Comparative figures are for the full year ended 30 June 2020.
40
| MedAdvisor Annual Report 2021
Your Health in Your Hands Consolidated Statement of Changes in Equity
for the year ended 30 June 2021
Attributable to owners of MedAdvisor Ltd.
Contributed
Equity
$
Notes
Share
Options
Reserve
$
Foreign
Currency
Translation
Reserve
$
Retained
Earnings/
(Losses)
$
Non‑
Controlling
Interests
$
Total
Equity
$
Consolidated
Balance at 1 July 2020
45,369,890
1,570,838
3,234 (30,281,714)
358,361
17,020,609
Transactions with owners
in their capacity as owners:
Ordinary shares issued
20(a), 25
47,528,469
Capital raising costs (net of GST)
20(a)
(2,444,173)
3,152
–
Share Options issued
21
–
1,674,665
Share Options exercised
20(a), 21
538,300
(538,300)
–
–
–
–
–
–
–
–
506,951 48,038,572
–
–
–
(2,444,173)
1,674,665
–
Total comprehensive income for the year:
Exchange differences on
translation of foreign entities
21, 25
Loss after tax
–
–
240
(1,026,227)
–
(46,546)
(1,072,533)
–
– (13,949,449)
(422,541)
(14,371,990)
Balance at 30 June 2021
90,992,487
2,710,595
(1,022,993) (44,231,164)
396,225 48,845,150
Consolidated
Balance at 1 July 2019
28,136,013
1,204,843
(50,908) (20,645,126)
–
8,644,822
Transactions with owners
in their capacity as owners:
Ordinary shares issued
20(a), 25
17,120,000
Capital raising costs (net of GST)
20(a)
(467,903)
–
–
Share Options issued
21
–
947,775
Share Options exercised
20(a), 21
581,780
(581,780)
–
–
–
–
Total comprehensive income for the year:
Exchange differences on
translation of foreign entities
21, 25
AASB16 Retained
Earnings Adjustment
Loss after tax
–
–
–
–
–
–
54,142
–
–
–
–
–
–
–
554,890
17,674,890
–
–
–
(467,903)
947,775
–
(1,934)
52,208
(51,593)
–
(51,593)
(9,584,995)
(194,595)
(9,779,590)
Balance at 30 June 2020
45,369,890
1,570,838
3,234 (30,281,714)
358,361
17,020,609
The above statement of changes in equity should be read in conjunction with the accompanying notes.
Comparative figures are for the full year ended 30 June 2020.
MedAdvisor Annual Report 2021 | 41
Consolidated Statement of Cash Flows
for the year ended 30 June 2021
Cash Flows From Operating Activities
Receipts from customers (inclusive of GST)
Payments to suppliers and employees (inclusive of GST)
Receipt from R&D tax concession
Interest received
Interest and other costs of finance paid
Consolidated
Notes
Jun‑21
$
Jun‑20
$
37,957,934
10,129,859
(51,525,697)
(20,005,321)
1,331,479
1,188,204
38,573
101,394
(346,241)
(94,684)
Net cash inflow/(outflow) from operating activities
7
(12,543,952)
(8,680,548)
Cash Flows From Investing Activities
Payment for acquisition of subsidiary
Payments for property, plant and equipment
Payments for intangibles
Net cash inflow/(outflow) from investing activities
Cash Flows From Financing Activities
Proceeds from new share issue
Capital raising costs (net of GST)
Proceeds from debt raising
Transaction costs related to debt raising
Receipts from non‑controlling entities
Repayment of lease liabilities
Net cash inflow/(outflow) from financing activities
Net increase/(decrease) in cash held
Cash and cash equivalents at the beginning of the year
FX movement opening balance
24
12
14
20
20
16
16
25
18
(43,494,093)
–
(392,112)
(100,666)
–
(223,545)
(43,886,205)
(324,211)
47,528,469
17,100,000
(2,444,173)
(467,903)
6,777,262
(212,992)
–
–
525,464
554,890
(930,045)
(237,784)
51,243,985
16,949,203
(5,186,172)
7,944,444
12,345,164
4,400,720
(8,127)
–
Cash and cash equivalents at the end of the year
9
7,150,865
12,345,164
The above statement of cash flows should be read in conjunction with the accompanying notes.
Comparative figures are for the full year ended 30 June 2020.
42
| MedAdvisor Annual Report 2021
Your Health in Your Hands Notes to the Consolidated Financial Statements
for the year ended 30 June 2021
1. Statement of significant accounting policies
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of MedAdvisor Limited.
MedAdvisor Limited is a listed public company limited by shares, incorporated and domiciled in Australia.
The financial statements were authorised for issue on the 22 September 2021 by the Directors of the Company.
The principal accounting policies adopted in the preparation of the financial statements are set out below. These policies
are consistent with those of the previous financial year.
Basis of preparation
The financial statements are general purpose financial statements that have been prepared in accordance with Australian
Accounting Standards (AASB), Australian Accounting Interpretations, other authoritative pronouncements of the Australian
Accounting Standards Board and the Corporations Act 2001. The Company is a for‑profit entity for financial reporting
purposes under Australian Accounting Standards.
Australian Accounting Standards set out accounting policies that the AASB has concluded would result in financial
statements 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 these financial
statements are presented below and have been consistently applied unless otherwise stated.
The financial statements have been prepared on an accruals basis and are based on historical costs, modified, where
applicable, by the measurement at fair value of selected non‑current assets, financial assets, and financial liabilities.
The financial statements have been prepared on a going concern basis.
Accounting policies
(a) Parent entity information
In accordance with the Corporations Act 2001, these financial statements present the results of the consolidated entity only.
Financial information about the parent entity, MedAdvisor Limited, is disclosed in Note 26.
(b) Principles of consolidation
The consolidated financial statements incorporate all assets, liabilities and results of the parent MedAdvisor Limited and all
of its subsidiaries (together, the Group). Subsidiaries are entities the parent controls. The parent controls an entity when it is
exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns
through its power over the entity. A list of controlled entities is contained in Note 23 of the Financial Statements.
The assets, liabilities and results of all subsidiaries are consolidated into the financial statements of the Group from the date
on which control is obtained by the Group. The consolidation of a subsidiary is discontinued from the date that control ceases.
Intercompany transactions, balances and unrealised gains or losses on transactions between Group entities are fully
eliminated on consolidation. Accounting policies of subsidiaries have been changed and adjustments made where
necessary to ensure uniformity of the accounting policies adopted by the Group.
The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change in ownership interest,
without the loss of control, is accounted for as an equity transaction, where the difference between the consideration
transferred and the book value of the share of the non‑controlling interest acquired is recognised directly in equity
attributable to the parent.
Equity interests in a subsidiary not attributable, directly or indirectly, to the Group are presented as “non‑controlling interests”.
The Group initially recognises non‑controlling interests that are present ownership interests in subsidiaries and are entitled
to a proportionate share of the subsidiary’s net assets on liquidation at either fair value or at the non‑controlling interests’
proportionate share of the subsidiary’s net assets. Subsequent to initial recognition, non‑controlling interests are attributed
their share of profit or loss and each component of other comprehensive income. Non‑controlling interests are shown
separately within the equity section of the statement of financial position and statement of comprehensive income.
MedAdvisor Annual Report 2021 | 43
Notes to the Consolidated Financial Statements
Continued
Where the consolidated entity loses control over a subsidiary, it derecognises the assets including goodwill, liabilities
and non‑controlling interest in the subsidiary together with any cumulative translation differences recognised in equity.
The consolidated entity recognises the fair value of the consideration received and the fair value of any investment
retained together with any gain or loss through the Income Statement.
(c) 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 (CDM) that are used for making strategic
decisions. The CDM has been identified as the Chief Executive Officer. The CDM is responsible for the allocation of resources
to operating segments and assessing their performance.
(d) Foreign currency translation
The financial statements are presented in Australian dollars, which is MedAdvisor Limited’s functional and presentation currency.
Foreign currency transactions:
Foreign currency transactions are translated into Australian dollars using the exchange rates prevailing at the dates of the
transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation
at financial year‑end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised
through the Income Statement.
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 through the Income Statement when the foreign operation or net investment
is disposed of.
(e) Revenue recognition
The consolidated entity recognises revenue as follows:
Revenue from contracts with customers
Revenue is recognised at an amount that reflects the consideration to which the consolidated entity is expected to be entitled
in exchange for transferring goods or services to a customer. For each contract with a customer, the consolidated entity:
identifies the contract with a customer; identifies the performance obligations in the contract; determines the transaction
price which takes into account estimates of variable consideration and the time value of money; allocates the transaction
price to the separate performance obligations on the basis of the relative stand‑alone selling price of each distinct good
or service to be delivered; and recognises revenue when or as each performance obligation is satisfied in a manner that
depicts the transfer to the customer of the goods or services promised.
Variable consideration within the transaction price, if any, reflects concessions provided to the customer such as discounts,
rebates and refunds, any potential bonuses receivable from the customer and any other contingent events. Such estimates
are determined using either the ‘expected value’ or ‘most likely amount’ method. The measurement of variable consideration
is subject to a constraining principle whereby revenue will only be recognised to the extent that it is highly probable that a
significant reversal in the amount of cumulative revenue recognised will not occur. The measurement constraint continues
until the uncertainty associated with the variable consideration is subsequently resolved. Amounts received that are subject
to the constraining principle are recognised as a refund liability.
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| MedAdvisor Annual Report 2021
Your Health in Your Hands Licence fees
Licence fees are charged for the use of the MedAdvisor platform and the revenue recognised at the point at which the
customer has agreed to the terms and conditions of use of the platform and installs the interface on their computer
equipment and is able to benefit from and be rewarded for the use of the platform.
Rendering of services
Rendering of services revenue from health programs is recognised by reference to the stage of completion of the contracts.
Stage of completion is measured by reference to labour hours incurred to date as a percentage of total estimated labour
hours for each contract. Where the contract outcome cannot be reliably estimated, revenue is only recognised to the extent
of the recoverable costs incurred to date.
Interest
Interest revenue is recognised as interest accrues using the effective interest method. This is a method of calculating the
amortised cost of a financial asset and allocating the interest income over the relevant period using the effective interest
rate, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset
to the net carrying amount of the financial asset.
Other revenue
Other revenue is recognised when it is received or when the right to receive payment is established.
(f) Income tax
The income tax expense (income) for the period comprises current income tax expense (income) and deferred tax
expense (income).
Current income tax expense charged to the profit or loss is the tax payable on taxable income calculated using applicable
income tax rates enacted, or substantially enacted, as at the end of the reporting period. Current tax liabilities (assets) are
therefore measured at the amounts expected to be paid to (recovered from) the relevant taxation authority.
Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances during the year
as well as unused tax losses.
Current and deferred income tax expense (income) is charged or credited directly to equity instead of the profit or loss when
the tax relates to items that are credited or charged directly to equity.
Deferred tax assets and liabilities are ascertained based on temporary differences arising between the tax bases of assets
and liabilities and their carrying amounts in the financial statements. Deferred tax assets also result where amounts have
been fully expensed but future tax deductions are available. No deferred income tax will be recognised from the initial
recognition of an asset or liability, excluding a business combination, where there is no effect on accounting or taxable
profit or loss.
Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period when the asset
is realised or the liability is settled, based on tax rates enacted or substantively enacted at the end of the reporting period.
Their measurement also reflects the manner in which management expects to recover or settle the carrying amount of
the related asset or liability.
Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent that it is
probable that future taxable profit will be available against which the benefits of the deferred tax asset can be utilised.
Where temporary differences exist in relation to investments in subsidiaries, branches, associates, and joint ventures,
deferred tax assets and liabilities are not recognised where the timing of the reversal of the temporary difference can
be controlled and it is not probable that the reversal will occur in the foreseeable future.
MedAdvisor Annual Report 2021 | 45
Notes to the Consolidated Financial Statements
Continued
Current tax assets and liabilities are offset where a legally enforceable right of set‑off exists and it is intended that net
settlement or simultaneous realisation and settlement of the respective asset and liability will occur. Deferred tax assets and
liabilities are offset where a legally enforceable right of set‑off exists, the deferred tax assets and liabilities relate to income
taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where it is intended
that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur in future periods
in which significant amounts of deferred tax assets or liabilities are expected to be recovered or settled.
(g) Current and non‑current classification
Assets and liabilities are presented in the statement of financial position based on current and non‑current classification.
An asset is classified as current when: it is either expected to be realised or intended to be sold or consumed in the consolidated
entity’s normal operating cycle; it is held primarily for the purpose of trading; it is expected to be realised within 12 months
after the reporting period; or the asset is cash or cash equivalent unless restricted from being exchanged or used to settle
a liability for at least 12 months after the reporting period. All other assets are classified as non‑current.
A liability is classified as current when: it is either expected to be settled in the consolidated entity’s normal operating cycle;
it is held primarily for the purpose of trading; it is due to be settled within 12 months after the reporting period; or there is no
unconditional right to defer the settlement of the liability for at least 12 months after the reporting period. All other liabilities
are classified as non‑current.
Deferred tax assets and liabilities are always classified as non‑current.
(h) Cash and cash equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with banks and other short‑term highly liquid
investments with original maturities of three months or less.
(i) Trade and other receivables
Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective
interest method, less any allowance for expected credit losses. Trade receivables are generally due for settlement within
30 days.
The consolidated entity has applied the simplified approach to measuring expected credit losses, which uses a lifetime
expected loss allowance to measure the expected credit losses, trade receivables have been grouped based on days overdue.
Other receivables are recognised at amortised cost, less any allowance for expected credit losses.
(j) Work in progress
Work in progress on services contracts in progress comprises the cost of labour directly related to the performance of the
contract plus any other direct costs incurred in delivering the contract services.
(k) Investments and other financial assets
Investments and other financial assets are initially measured at fair value. Transaction costs are included as part of the initial
measurement, except for financial assets at fair value through profit or loss. Such assets are subsequently measured at either
amortised cost or fair value depending on their classification. Classification is determined based on both the business model
within which such assets are held and the contractual cash flow characteristics of the financial asset unless an accounting
mismatch is being avoided. Financial assets are derecognised when the rights to receive cash flows have expired or have
been transferred and the consolidated entity has transferred substantially all the risks and rewards of ownership. When there
is no reasonable expectation of recovering part or all of a financial asset, its carrying value is written off.
Financial assets at fair value through profit or loss
Financial assets not measured at amortised cost or at fair value through other comprehensive income are classified as
financial assets at fair value through profit or loss. Typically, such financial assets will be either: (i) held for trading, where they
are acquired for the purpose of selling in the short‑term with an intention of making a profit, or a derivative; or (ii) designated
as such upon initial recognition where permitted. Fair value movements are recognised through the Income Statement.
46
| MedAdvisor Annual Report 2021
Your Health in Your Hands Impairment of financial assets
The consolidated entity recognises a loss allowance for expected credit losses on financial assets which are either measured
at amortised cost or fair value through other comprehensive income. The measurement of the loss allowance depends upon
the consolidated entity’s assessment at the end of each reporting period as to whether the financial instrument’s credit risk
has increased significantly since initial recognition, based on reasonable and supportable information that is available,
without undue cost or effort to obtain.
Where there has not been a significant increase in exposure to credit risk since initial recognition, a 12‑month expected credit
loss allowance is estimated. This represents a portion of the asset’s lifetime expected credit losses that is attributable to a
default event that is possible within the next 12 months. Where a financial asset has become credit impaired or where it is
determined that credit risk has increased significantly, the loss allowance is based on the asset’s lifetime expected credit
losses. The amount of expected credit loss recognised is measured on the basis of the probability weighted present value
of anticipated cash shortfalls over the life of the instrument discounted at the original effective interest rate.
(l) Plant and equipment
Plant and equipment are measured on the cost basis and therefore carried at cost less accumulated depreciation and any
accumulated impairment. In the event the carrying amount of plant and equipment is greater than the estimated recoverable
amount, the carrying amount is written down immediately to the estimated recoverable amount and impairment losses are
recognised either through the Income Statement or as a revaluation decrease if the impairment losses relate to a revalued
asset. A formal assessment of recoverable amount is made when impairment indicators are present (refer to Note 1 (o) for details
of impairment).
The carrying amount of plant and equipment is reviewed annually by Directors to ensure it is not in excess of the recoverable
amount from these assets. The recoverable amount is assessed on the basis of the expected net cash flows that will be
received from the asset’s employment and subsequent disposal. The expected net cash flows have been discounted to
their present values in determining recoverable amounts.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when
it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be
measured reliably. All other repairs and maintenance are recognised as expenses through the Income Statement during the
financial period in which they are incurred.
Depreciation
The depreciable amount of all fixed assets including buildings and capitalised lease assets, but excluding freehold land, is
depreciated over the asset’s useful life to the Company commencing from the time the asset is held ready for use. Leasehold
improvements are depreciated over the shorter of either the unexpired period of the lease or the estimated useful lives of
the improvements.
Depreciation is calculated on a straight‑line basis over their estimated useful lives, as follows:
• Computer and office equipment – 3 years;
• Office furniture – 5 years; and
• Leasehold improvements – 5 years or unexpired lease period if shorter.
(m) Right‑of‑use assets
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 expected lease period. Where the Group 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.
MedAdvisor Annual Report 2021 | 47
Notes to the Consolidated Financial Statements
Continued
The Group 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.
(n) Intangible assets
Intangible assets acquired as part of a business combination, other than goodwill, are initially measured at their fair value
at the date of the acquisition. Intangible assets acquired separately are initially recognised at cost. Indefinite life intangible
assets are not amortised and are subsequently measured at cost less any impairment. Finite life intangible assets are
subsequently measured at cost less amortisation and any impairment. The gains or losses recognised through the Income
Statement arising from the derecognition of intangible assets are measured as the difference between net disposal proceeds
and the carrying amount of the intangible asset. The method and useful lives of finite life intangible assets are reviewed
annually. Changes in the expected pattern of consumption or useful life are accounted for prospectively by changing the
amortisation method or period.
Goodwill
Goodwill arises on the acquisition of a business. Goodwill is not amortised. Instead, goodwill is tested annually for impairment,
or more frequently if events or changes in circumstances indicate that it might be impaired and is carried at cost less
accumulated impairment losses. Impairment losses on goodwill are taken to profit or loss and are not subsequently reversed.
Brands
Acquired brands represent the value of brands in acquired subsidiaries and businesses that are separately fair valued at the
date of acquisition from the remaining goodwill. Brands are tested annually for impairment, or more frequently if events or
changes in circumstances indicate that it might be impaired.
Patents and trademarks
Significant costs associated with patents and trademarks are deferred and amortised on a straight‑line basis over the period
of their expected benefit, being their finite life of 10 years.
Relationships
Acquired customer and partner relationships represent the value attributed in acquired subsidiaries and businesses that are
separately fair valued at the date of acquisition. Relationship assets are amortised on a straight‑line basis over the period of
their expected benefit. Relationships acquired by the Group have a finite life of 10 years.
Software
Significant costs associated with software are deferred and amortised on a straight‑line basis over the period of their
expected benefit, being their finite life of 5‑10 years.
(o) Impairment of assets
At the end of each reporting period, the Company assesses whether there is any indication that an asset may be impaired.
The assessment will include the consideration of external and internal sources of information including dividends received
from subsidiaries, associates or jointly controlled entities deemed to be out of pre‑acquisition profits. If such an indication
exists, an impairment test is carried out on the asset by comparing the recoverable amount of the asset, being the higher
of the asset’s fair value less costs to sell and value in use, to the asset’s carrying amount. Any excess of the asset’s carrying
amount over its recoverable amount is recognised immediately through the Income Statement, unless the asset is carried
at a revalued amount in accordance with another Standard (e.g. in accordance with the revaluation model in AASB 116:
Property, Plant and Equipment). Any impairment loss of a revalued asset is treated as a revaluation decrease in accordance
with that other Standard.
Where it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable
amount of the cash‑generating unit to which the asset belongs.
Impairment testing is performed annually for goodwill, intangible assets with indefinite lives and intangible assets not yet
available for use.
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| MedAdvisor Annual Report 2021
Your Health in Your Hands (p) Trade and other payables
These amounts represent liabilities for goods and services provided to the consolidated entity prior to the end of the
financial year and which are unpaid. Due to their short‑term nature they are measured at amortised cost and are not
discounted. The amounts are unsecured and are usually paid within 30 days of recognition.
(q) Lease liabilities
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.
(r) Borrowings and finance costs
Loans and borrowings are initially recognised at the fair value of the consideration received, net of transaction costs.
They are subsequently measured at amortised cost using the effective interest method. All other finance costs are expensed
in the period in which they are incurred.
(s) Provisions
Provisions are recognised when the consolidated entity has a present (legal or constructive) obligation as a result of a past
event, it is probable the consolidated entity will be required to settle the obligation, and a reliable estimate can be made of
the amount of the obligation. The amount recognised as a provision is the best estimate of the consideration required to
settle the present obligation at the reporting date, taking into account the risks and uncertainties surrounding the obligation.
If the time value of money is material, provisions are discounted using a current pre‑tax rate specific to the liability.
The increase in the provision resulting from the passage of time is recognised as a finance cost.
(t) Employee benefits
Short‑term employee benefits
Liabilities for wages and salaries, including non‑monetary benefits, annual leave and long service leave expected to be
settled wholly within 12 months of the reporting date are measured at the amounts expected to be paid when the liabilities
are settled.
Other long‑term employee benefits
The liability for long service leave not expected to be settled within 12 months of the reporting date are measured as the
present value of expected future payments to be made in respect of services provided by employees up to the reporting
date. Consideration is given to expected future wage and salary levels, experience of employee departures and periods of
service. Expected future payments are discounted using market yields at the reporting date on corporate bonds with terms
to maturity and currency that match, as closely as possible, the estimated future cash outflows.
MedAdvisor Annual Report 2021 | 49
Notes to the Consolidated Financial Statements
Continued
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 is 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 is 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 through
the Income Statement 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; and
• 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 through the Income Statement. The ultimate cost of cash‑settled transactions
is the cash paid to settle the liability.
Market conditions are taken into consideration in determining fair value. Therefore any awards subject to market conditions are
considered to vest irrespective of whether or not that market condition has been met, provided all other conditions are satisfied.
If equity‑settled awards are modified, as a minimum an expense is recognised as if the modification has not been made.
An additional expense is recognised, over the remaining vesting period, for any modification that increases the total fair value
of the share‑based compensation benefit as at the date of modification.
If the non‑vesting condition is within the control of the consolidated entity or employee, the failure to satisfy the condition is
treated as a cancellation. If the condition is not within the control of the consolidated entity or employee and is not satisfied
during the vesting period, any remaining expense for the award is recognised over the remaining vesting period, unless the
award is forfeited.
If equity‑settled awards are cancelled, it is treated as if it has vested on the date of cancellation, and any remaining expense
is recognised immediately. If a new replacement award is substituted for the cancelled award, the cancelled and new award
is treated as if they were a modification.
(u) Fair value measurement
When an asset or liability, financial or non‑financial, is measured at fair value for recognition or disclosure purposes, the fair
value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between
market participants at the measurement date; and assumes that the transaction will take place either: in the principal market;
or in the absence of a principal market, in the most advantageous market.
Fair value is measured using the assumptions that market participants would use when pricing the asset or liability,
assuming they act in their economic best interests. For non‑financial assets, the fair value measurement is based on its
highest and best use. Valuation techniques that are appropriate in the circumstances and for which sufficient data are
available to measure fair value, are used, maximising the use of relevant observable inputs and minimising the use of
unobservable inputs.
There are no assets and liabilities held at fair value on a recurring or non‑recurring basis.
50
| MedAdvisor Annual Report 2021
Your Health in Your Hands (v) Issued capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are
shown in equity as a deduction, net of tax, from the proceeds.
(w) Business combinations
The acquisition method of accounting is used to account for business combinations regardless of whether equity
instruments or other assets are acquired.
The consideration transferred is the sum of the acquisition‑date fair values of the assets transferred, equity instruments
issued or liabilities incurred by the acquirer to former owners of the acquiree and the amount of any non‑controlling interest
in the acquiree. For each business combination, the non‑controlling interest in the acquiree is measured at either fair value
or at the proportionate share of the acquiree’s identifiable net assets. All acquisition costs are expensed as incurred to
profit or loss.
On the acquisition of a business, the consolidated entity assesses the financial assets acquired and liabilities assumed for
appropriate classification and designation in accordance with the contractual terms, economic conditions, the consolidated
entity’s operating or accounting policies and other pertinent conditions in existence at the acquisition‑date.
Where the business combination is achieved in stages, the consolidated entity remeasures its previously held equity interest
in the acquiree at the acquisition‑date fair value and the difference between the fair value and the previous carrying amount
is recognised through the Income Statement.
Contingent consideration to be transferred by the acquirer is recognised at the acquisition‑date fair value. Subsequent changes
in the fair value of the contingent consideration classified as an asset or liability is recognised through the Income Statement.
Contingent consideration classified as equity is not remeasured and its subsequent settlement is accounted for within equity.
The difference between the acquisition‑date fair value of assets acquired, liabilities assumed and any non‑controlling
interest in the acquiree and the fair value of the consideration transferred and the fair value of any pre‑existing investment in
the acquiree is recognised as goodwill. If the consideration transferred and the pre‑existing fair value is less than the fair value
of the identifiable net assets acquired, being a bargain purchase to the acquirer, the difference is recognised as a gain directly
through the Income Statement by the acquirer on the acquisition‑date, but only after a reassessment of the identification
and measurement of the net assets acquired, the non‑controlling interest in the acquiree, if any, the consideration transferred
and the acquirer’s previously held equity interest in the acquirer.
Business combinations are initially accounted for on a provisional basis. The acquirer retrospectively adjusts the provisional
amounts recognised and also recognises additional assets or liabilities during the measurement period, based on new
information obtained about the facts and circumstances that existed at the acquisition‑date. The measurement period ends
on either the earlier of (i) 12 months from the date of the acquisition or (ii) when the acquirer receives all the information
possible to determine fair value.
(x) Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to the owners of MedAdvisor Limited, excluding any
costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during
the financial year, adjusted for bonus elements in ordinary shares issued during the financial year.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account
the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the
weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential
ordinary shares.
MedAdvisor Annual Report 2021 | 51
Notes to the Consolidated Financial Statements
Continued
(y) Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not
recoverable from the tax authority. In this case it is recognised as part of the cost of the acquisition of the asset or as
part of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST
recoverable from, or payable to, the tax authority is included in other receivables or other payables in the statement
of financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities
which are recoverable from, or payable to the tax authority, are presented as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the tax authority.
(z) New or amended Accounting Standards and Interpretations adopted
The consolidated entity has adopted all of the new or amended Accounting Standards and Interpretations issued by the
Australian Accounting Standards Board (‘AASB’) that are mandatory for the current reporting period. Any new or amended
Accounting Standards or Interpretations that are not yet mandatory have not been early adopted. The consolidated entity’s
assessment of the impact of these new or amended Accounting Standards and Interpretations, most relevant to the
consolidated entity, are set out below.
Conceptual Framework for Financial Reporting (Conceptual Framework)
The revised Conceptual Framework is applicable to annual reporting periods beginning on or after 1 January 2020 and early
adoption is permitted. The Conceptual Framework contains new definition and recognition criteria as well as new guidance
on measurement that affects several Accounting Standards. Where the consolidated entity has relied on the existing
framework in determining its accounting policies for transactions, events or conditions that are not otherwise dealt with
under the Australian Accounting Standards, the consolidated entity may need to review such policies under the revised
framework. At this time, the application of the Conceptual Framework is not expected to have a material impact on the
consolidated entity’s financial statements.
(aa) Comparative figures
Where required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation
for the current financial year.
2. Critical accounting judgements, estimates and assumptions
The preparation of the financial statements requires management to make judgements, estimates and assumptions that
affect the reported amounts in the financial statements. Management continually evaluates its judgements and estimates in
relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its judgements, estimates and
assumptions on historical experience and on other various factors, including expectations of future events, management
believes to be reasonable under the circumstances. The resulting accounting judgements and estimates will seldom equal
the related actual results. The judgements, estimates and assumptions that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.
COVID‑19 pandemic
Judgement has been exercised in considering the impacts that the 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, or subsequent to, the reporting date.
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| MedAdvisor Annual Report 2021
Your Health in Your Hands Goodwill and other indefinite life intangible assets
The consolidated entity tests annually, or more frequently if events or changes in circumstances indicate impairment,
whether goodwill and other indefinite life intangible assets have suffered any impairment, in accordance with the accounting
policy stated in Note 1. The recoverable amounts of cash‑generating units (‘CGUs’) have been determined based on value‑in‑use
calculations. These calculations require the use of assumptions, including estimated discount rates based on the current
cost of capital and growth rates of the estimated future cash flows.
The recoverable amount of the consolidated entity’s goodwill has been determined by a value‑in‑use calculation using a
discounted cash flow model, based on a 3 year projection period approved by management and extrapolated for a further
2 years using a steady rate, together with a terminal value. Key assumptions are those to which the recoverable amount
of an asset or cash‑generating units is most sensitive.
Key assumptions
The following key assumptions were used in the discounted cash flow model for both CGUs:
CGU
Valuation method
Australia
Value in use
USA
Value in use
Years of
cash flow
projection
5
5
Pre‑tax
discount rate
Per annum
projected revenue
growth rate
Per annum increase
in operating costs
and overheads
2021
2020
2021
2020
2021
2020
24.43%
21.64%
5%‑32%
5%‑10%
3%‑5%
3%‑5%
15.38%
n/a
5%‑15%
n/a
3%‑5%
n/a
The pre‑tax discount rates reflects management’s estimate of the time value of money and the consolidated entity’s
weighted average cost of capital, the risk‑free rate and the volatility of the share price relative to market movements.
Management believes the projected revenue growth rates is prudent and justified based on current and expected growth
in the business. Similarly, management believes that the projected increase in operating costs and overheads is prudent
and justified based on the cost structure and control environment in the business.
Based on the above an impairment charge has not been applied as the carrying amount of goodwill does not exceed its
recoverable amount for the business.
Sensitivity
The Directors have made judgements and estimates in respect of impairment testing of goodwill. Should these judgements
and estimates not occur the resulting goodwill carrying amount may decrease. The sensitivities are as follows:
(a) With all other assumptions remaining constant:
• Revenue would need to decrease by more than 22.82% in the USA CGU before goodwill would need to be impaired; or
• Gross margin would need to decrease by more than 1.65% in the Australia CGU before goodwill would need to
be impaired.
(b) With all other assumptions remaining constant:
• the discount rate would be required to increase by more than 12.63% in the USA CGU before goodwill would need to
be impaired; or
• the discount rate would be required to increase by more than 4.5% in the Australia CGU before goodwill would need
to be impaired.
Management believes that other reasonable changes in the key assumptions on which the recoverable amount of the
goodwill is based would not cause the cash‑generating unit’s carrying amount to exceed its recoverable amount.
If there are any negative changes in the key assumptions on which the recoverable amount of goodwill is based, this would
result in a further impairment charge for the goodwill.
MedAdvisor Annual Report 2021 | 53
Notes to the Consolidated Financial Statements
Continued
Share‑based payment transactions
The consolidated entity measures the cost of equity‑settled transactions with employees by reference to the fair value of the
equity instruments at the date at which they are granted. The fair value is determined by using either the Binomial or Black‑Scholes
model taking into account the terms and conditions upon which the instruments were granted. The accounting estimates
and assumptions relating to equity‑settled share‑based payments would have no impact on the carrying amounts of assets
and liabilities within the next annual reporting period but may impact profit or loss and equity.
Impairment of non‑financial assets other than goodwill and other indefinite life intangible assets
The consolidated entity assesses impairment of non‑financial assets other than goodwill and other indefinite life intangible
assets at each reporting date by evaluating conditions specific to the consolidated entity and to the particular asset that
may lead to impairment. If an impairment trigger exists, the recoverable amount of the asset is determined. This involves fair
value less costs of disposal or value‑in‑use calculations, which incorporate a number of key estimates and assumptions.
Recovery of deferred tax assets
Deferred tax assets are recognised for deductible temporary differences only if the consolidated entity considers
it is probable that future taxable amounts will be available to utilise those temporary differences and losses.
Going concern
The financial statements have been prepared on the going concern basis, which contemplates continuity of normal business
activities and the realisation of assets and discharge of liabilities in the normal course of business.
As disclosed in the financial statements, the consolidated entity incurred a loss of $14,371,990 and had net cash outflows from
operating activities of $12,543,952 for the year ended 30 June 2021. As at that date the consolidated entity had net current
liabilities of $1,947,136.
The Directors believe that it is reasonably foreseeable that the consolidated entity will continue as a going concern and that
it is appropriate to adopt the going concern basis in the preparation of the financial report after consideration of the
following factors:
• The Directors have a cost reduction plan which will be executed from 1 October 2021 and it is estimated the plan will reduce
staff and overhead costs by $4.8 million per annum.
• Subsequent to the end of the financial year, the Australian business has signed up Pharmacy Alliance Group adding
additional annual recurring revenue.
• Subsequent to the end of the financial year, the consolidated entity has entered into a supply chain financing
arrangement with JP Morgan in relation to revenue with a key US customer. This arrangement will reduce the days
outstanding on the collection of trade debtors.
• The Directors have prepared cash flow forecasts for the next 12 months from the date of this report, incorporating all of the
above plans and events, which expects the consolidated entity to have a positive cash position.
• As disclosed in Note 16 Borrowings, the consolidated entity has a facility for $5,325,600 ($USD 4 million) of which $299,762
was drawn at 30 June 2021. The ability to utilise the facility is dependent on a calculation based the level of cash, trade
debtors, unbilled debtors available to consolidated entity at the time of drawdown.
• Should the Directors determine a capital raising is required, the Directors are confident this will be successful based on the
proven ability and track record for the consolidated entity to access funding as required.
54
| MedAdvisor Annual Report 2021
Your Health in Your Hands 3. Earnings per share
Consolidated
Jun‑21
$
Jun‑20
$
Earning per share for loss from continuing operations of MedAdvisor Limited
Loss for the year
(14,371,990)
(9,779,590)
Basic loss per share (cents)
Diluted loss per share (cents)
Weighted average number of ordinary shares
(4.54)
(4.54)
(4.22)
(4.22)
Weighted average number of ordinary shares used in calculating basic earnings per share
316,511,399
231,932,954
Adjustment for calculation of diluted earnings per share
Options over ordinary shares
Performance rights vested but not exercised
Performance rights not vested
17,481,320
7,239,208
2,014,283
2,071,426
–
–
336,007,002
241,243,588
4. Operating segments
The Board has determined that the Company has five reporting segments. The first being the business activities of the
MedAdvisor medication management and adherence platform, followed by activities associated with operations in the USA,
UK and Asia, and lastly the corporate function associated with being an ASX listed company. The Board monitors the Company
based on actual versus budgeted revenue and expenditure incurred. This internal reporting framework is the most relevant
to assist the Board with making decisions regarding the Company and its ongoing activities.
2021
AU
Operations
$
USA
Operations
$
UK
Operations
$
Asia
Operations
$
Corporate
$
Total
$
Segment revenues
11,287,341
28,950,108
21,321
21,358
–
40,280,128
Segment operating loss
(4,861,902)
(3,915,008)
(2,210,276)
(845,082)
(2,539,722)
(14,371,990)
Segment assets
11,886,522
67,797,446
Segment liabilities
6,906,364
20,966,514
132,570
123,277
910,256
191,544
80,918,338
26,682
4,050,351
32,073,188
Segment net assets
4,980,158
46,830,932
9,293
883,574
(3,858,807)
48,845,150
2020
AU
Operations
$
USA
Operations
$
UK
Operations
$
Asia
Operations
$
Corporate
$
Total
$
Segment revenues
10,664,778
378,935
25,335
1,696
–
11,070,744
Segment operating loss
(3,709,392)
(2,700,783)
(1,326,057)
(389,191)
(1,654,168)
(9,779,590)
Segment assets
Segment liabilities
9,838,965
4,104,511
529,136
91,934
Segment net assets
15,734,454
437,202
95,476
22,533
72,943
769,991
19,794
750,197
37,907
21,271,475
12,095
4,250,867
25,812
17,020,608
MedAdvisor Annual Report 2021 | 55
Notes to the Consolidated Financial Statements
Continued
5. Revenue
Disaggregation of revenue
(a) From continuing operations
Major service lines:
SaaS Revenue
Transaction and Development fees
Health Programs
Timing of revenue recognition:
Goods transferred at a point in time
Services transferred over time
(b) Other revenue
Interest received
Sundry Income – Government Grants
Sundry Income – R&D Tax Concession
Consolidated
Jun‑21
$
Jun‑20
$
6,312,367
5,913,620
2,256,076
2,462,002
30,204,133
1,227,024
38,772,576
9,602,646
6,312,367
5,913,620
32,460,209
3,689,026
38,772,576
9,602,646
38,573
137,500
109,213
170,681
1,331,479
1,188,204
1,507,552
1,468,098
During the year ended 30 June 2021, approximately $18.7m of the consolidated entity’s external revenue was derived from
sales to a global pharmaceutical company providing adherence programs.
Revenue by geographical region has been disclosed in note 4.
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| MedAdvisor Annual Report 2021
Your Health in Your Hands
6. Expenses
Profit/(loss) before income tax from continuing operations
includes the following specific expenses:
(a) Direct costs
Direct transaction costs
Direct costs of SMS services
Managed services costs for the MedAdvisor Platform
(b) Employee benefits expenses:
Development
Administration
Marketing
People and culture
Share‑based employee remuneration
Governance – Directors’ fees
(c) Depreciation and amortisation
Depreciation
Right‑of‑use assets
Office furniture and equipment
Leasehold improvements
Motor vehicles
Total depreciation
Amortisation
Software
Relationships
Intellectual property
Total amortisation
(d) Finance costs
Interest and finance charges paid/payable
Other bank charges
(e) Superannuation expense
Consolidated
Jun‑21
$
Jun‑20
$
15,823,109
525,948
1,117,572
98,730
461,313
661,184
17,466,629
1,221,227
9,909,916
5,329,673
6,745,903
1,588,127
5,519,073
3,236,364
696,792
399,224
1,279,979
947,774
24,151,663
11,501,162
282,069
217,892
24,433,732
11,719,054
854,044
238,493
631,948
59,856
5,724
74,802
31,081
6,903
1,551,572
351,279
1,209,105
148,165
437,979
12,780
1,659,864
3,211,436
407,797
14,291
422,088
–
12,780
160,945
512,224
94,684
20,416
115,100
Defined contribution superannuation expense
1,168,705
805,146
MedAdvisor Annual Report 2021 | 57
Notes to the Consolidated Financial Statements
Continued
7. Reconciliation of profit/(loss) after tax to net cash flow from operations
(a) Reconciliation of cash to the statement of cash flows:
Cash at bank – note 9
7,150,865
12,345,164
(b) Reconciliation of profit from ordinary activities
to net cash used in operating activities
Loss after income tax expense for the year
(14,371,990)
(9,779,590)
Consolidated
Jun‑21
$
Jun‑20
$
Add: Non‑cash items
Depreciation & amortisation
Other acquisition costs
Loss on sale of assets
Non‑cash share based payments
Doubtful debts
Other non‑cash movements
Unwinding of discounts
Foreign exchange differences
Changes in assets and liabilities, net of the effects of purchase and disposal of subsidiaries
(Increase)/decrease in trade and other receivables
(Increase)/decrease in other assets
Increase/(decrease) in payables
Increase/(decrease) in income in advance
(Increase)/decrease in deferred taxes
Net cash flows used in operating activities
3,211,436
512,224
3,256,760
19,310
1,279,979
–
–
–
947,774
42,572
(310,972)
270,000
12,481
33,127
–
51,824
7,502,121
1,824,394
(1,704,555)
(752,204)
183,695
31,538
(1,536,881)
(50,940)
221,620
46,254
(2,837,962)
–
(5,674,083)
(725,352)
(12,543,952)
(8,680,548)
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| MedAdvisor Annual Report 2021
Your Health in Your Hands
8. Income tax expense
(a) Tax expense/(income) comprises:
Current tax
Deferred tax
Consolidated
Jun‑21
$
Jun‑20
$
–
(2,855,245)
(2,855,245)
–
–
–
(b) The prima facie tax on profit/(loss) before income tax
is reconciled to the income tax as follows:
Profit/(loss) from continuing operations
(14,371,990)
(9,779,590)
Prima facie tax payable on profit/(loss) from ordinary activities
before income tax at 26.0% (2020: 27.5%)
(3,736,717)
(2,689,387)
Less:
Tax effect of:
– part of foreign exchange rate differences
– deferred tax assets not brought to account
Income tax expense/(benefit) attributable to entity
The applicable weighted average tax rates are as follows:
The value of tax losses which have not been recognised
in the statement of financial position
Summary of recognised deferred tax
MedAdvisor US net operating losses
Intangibles – amortisable
Intangibles – indefinite lived
Accruals
9. Cash and cash equivalents
Cash on hand
Cash at bank
(37,825)
–
919,297
2,689,387
(2,855,245)
19.9%
–
0%
7,708,178
6,788,881
Jun‑21
$
2,168,140
(2,070,690)
(1,430,357)
600,907
(732,000)
Consolidated
Jun‑21
$
–
Jun‑20
$
–
7,150,865
12,345,164
7,150,865
12,345,164
MedAdvisor Annual Report 2021 | 59
Notes to the Consolidated Financial Statements
Continued
10. Trade and Other Receivables
Trade debtors
Other debtors
Consolidated
Jun‑21
$
Jun‑20
$
11,062,583
1,525,428
1,401,676
313,956
12,464,259
1,839,384
The consolidated entity has recognised an accumulated loss of $64,977 in the income statement in respect to the expected
credit losses for the year ended 30 June 2021 (30 June 2020: $50,611).
The ageing of these receivables and allowances for expected credit losses provided for above are as follows:
Expected credit
loss rate
Carrying amount
Expected credit
losses allowance
Not overdue
0 to 3 months overdue
3 to 6 months overdue
Over 6 months overdue
Jun‑21
%
Jun‑20
%
Jun‑21
$
Jun‑20
$
0.2%
0.5%
4.5%
18%
0.5%
9,435,236
1,307,769
4%
45%
67%
1,484,700
12,865
194,780
211,532
14,675
42,063
11,127,581
1,576,039
Movements in the allowance for expected credit losses are as follows:
Opening balance
Provision acquired through acquisition of Adheris
Movement in loss allowance recognised during the year
Receivables written off during the year as uncollectable
Closing balance
11. Other assets
Current
Prepayments
Security deposits
Non‑Current
Prepayments
Security deposits
60
| MedAdvisor Annual Report 2021
Jun‑21
$
22,614
6,754
575
35,054
64,997
Jun‑21
$
50,611
57,207
5,119
Jun‑20
$
6,494
9,411
6,578
28,128
50,611
Jun‑20
$
35,000
–
58,183
(47,940)
(42,572)
64,997
50,611
Consolidated
Jun‑21
$
Jun‑20
$
1,575,974
248,464
126,276
1,702,250
127,268
375,732
357,875
123,820
481,695
–
–
–
Your Health in Your Hands 12. Property, Plant and Equipment
Office Furniture and Equipment
Cost
Accumulated depreciation
Net book value
Leasehold Improvements
Cost
Accumulated depreciation
Net book value
Motor Vehicles
Cost
Accumulated depreciation
Net book value
Total property, plant and equipment
Consolidated
Jun‑21
$
Jun‑20
$
4,291,315
422,308
(2,284,305)
(201,692)
2,007,010
220,616
509,261
217,539
(301,723)
(68,996)
207,538
148,543
28,462
(11,858)
16,604
31,149
(6,748)
24,401
2,231,152
393,560
Reconciliation of written down values at the beginning and end of the current and previous financial year:
Opening balance – 1 July 2019
Additions
Depreciation
Exchange differences
Closing balance – 30 June 2020
Opening balance – 1 July 2020
Additions
Office
Furniture and
Equipment
$
Leasehold
Improvements
$
Motor
Vehicles
$
Total
$
194,752
100,666
179,624
30,919
405,295
–
–
100,666
(74,802)
(31,081)
(6,903)
(112,786)
–
220,616
220,616
392,112
–
148,543
148,543
–
385
24,401
24,401
–
–
385
393,560
393,560
392,112
2,175,712
Assets acquired through business combinations
2,052,275
123,437
Depreciation
Disposals
Exchange differences
(631,948)
(59,856)
(5,724)
(697,528)
–
–
–
–
(26,045)
(4,586)
(2,073)
(32,704)
Closing balance – 30 June 2021
2,007,010
207,538
16,604
2,231,152
MedAdvisor Annual Report 2021 | 61
Notes to the Consolidated Financial Statements
Continued
Consolidated
Jun‑21
$
Jun‑20
$
5,238,395
1,669,452
(2,897,067)
(596,233)
2,341,328
1,073,219
Building –
Right‑of‑use
Asset
$
1,311,712
–
(238,493)
–
1,073,219
1,073,219
–
2,296,157
(854,044)
–
–
(174,004)
2,341,328
13. Right‑of‑use assets
Building – Right‑of‑use Asset
Cost
Accumulated depreciation
Net Book Value
Opening balance – 1 July 2019
Additions
Depreciation
Exchange differences
Closing balance – 30 June 2020
Opening balance – 1 July 2020
Additions
Assets acquired through business combinations
Depreciation
Lease modification
Lease termination
Exchange differences
Closing balance – 30 June 2021
62
| MedAdvisor Annual Report 2021
Your Health in Your Hands
14. Intangible assets
Goodwill
Cost
Net book value
Software
Cost
Accumulated amortisation
Net book value
Relationships
Cost
Accumulated amortisation
Net book value
Brands
Cost
Net book value
Intellectual Property*
Cost
Accumulated amortisation
Net book value
Total intangible assets
Consolidated
Jun‑21
$
Jun‑20
$
34,619,363
4,013,868
34,619,363
4,013,868
10,062,688
1,705,201
(2,268,259)
(535,313)
7,794,429
1,169,888
7,008,490
(438,031)
6,570,459
5,514,659
5,514,659
–
–
–
–
–
131,219
131,219
(83,340)
(70,560)
47,879
60,659
54,546,789
5,244,415
Reconciliation of written down values at the beginning and end of the current and previous financial year:
Goodwill
$
Software
$
Relationships
$
Brands
$
Opening balance – 1 July 2019
4,013,868
1,094,508
Additions
Amortisation
–
–
223,545
(148,165)
Closing balance – 30 June 2020
4,013,868
1,169,888
Opening balance – 1 July 2020
4,013,868
1,169,888
–
–
–
–
–
–
–
–
–
–
Intellectual
property*
$
Total
$
73,439
5,181,815
–
223,545
(12,780)
(160,945)
60,659
5,244,415
60,660
5,244,415
Additions – PPA accounting (note 24)
31,539,779
8,105,019
7,250,844
5,705,356
–
52,600,999
Amortisation
Disposals
–
–
(1,209,105)
(437,979)
–
–
–
–
Exchange differences
(934,284)
(271,373)
(242,406)
(190,698)
(12,780)
(1,659,864)
–
–
–
(1,638,761)
Closing balance – 30 June 2021
34,619,363
7,794,429
6,570,459
5,514,659
47,879
54,546,789
*
Intellectual property acquired includes copyright and trademarks.
MedAdvisor Annual Report 2021 | 63
Notes to the Consolidated Financial Statements
Continued
15. Trade and Other Payables
Current
Trade payables
Accrued abatements
Other payables
Non‑Current
Other payables
16. Borrowings
Current
Non‑Current
Consolidated
Jun‑21
$
Jun‑20
$
3,789,702
715,026
3,561,521
–
3,353,504
474,684
10,704,727
1,189,710
357,875
357,875
–
–
Consolidated
Jun‑21
$
Jun‑20
$
299,762
6,093,539
6,393,301
–
–
–
At 30 June 2021, MedAdvisor had a 3‑year loan facility comprising of:
• Tranche A: USD 5,000,000 (AUD 6,657,000) term loan used to repay the USD 5,000,000 in outstanding convertible notes on
issue to Syneos Health US, Inc issued as part of the Adheris acquisition and continue the investment in growth following
payment of the CY20 Earn Out.
• Tranche B: USD 4,000,000 (AUD 5,325,000) revolving line of credit in which AUD 299,762 has been drawn down at reporting date.
The loan facilities have an interest rate of 10.25% paid monthly on amounts borrowed. Principal is due at maturity. Other fees
included an upfront 1.65% establishment fee and a back‑end fee of USD 338,000 payable at maturity. Our financer has been
granted first‑ranking interest over all assets of MedAdvisor and its subsidiaries. MedAdvisor has complied with all debt
covenants throughout the reporting period.
Facility
Tranche A
Tranche B
Total
Commitment
(AUD)
Drawn at close
(AUD)
Maturity
Date
6,657,000
6,657,000
28‑May‑24
5,325,600
299,762
28‑May‑24
11,982,600
6,956,762
64
| MedAdvisor Annual Report 2021
Your Health in Your Hands 17. Other liabilities
Current
Income in advance
Gross pharmacy subscriptions in advance
Patient engagement program (PEP) fees in advance
Deferred consideration
Consolidated
Jun‑21
$
Jun‑20
$
137,275
5,029,962
4,031,699
412,521
108,710
–
9,198,936
521,231
Included in the purchase price for Adheris were performance‑based payments:
• USD 4,000,000 payable 6 months after acquisition, paid in May 2021; and
• USD 3,000,000 payable 18 months after acquisition, payable in May 2022. On the basis that the criteria for the first payment
was met and it is the Company’s expectation that the criteria will be met for the second payment, the liability has been
recognised in full as a current deferred consideration.
18. Lease liabilities
Current
Lease liability
Non‑Current
Lease liability
Consolidated
Jun‑21
$
Jun‑20
$
1,265,476
263,856
1,265,476
263,856
1,502,525
1,156,919
1,502,525
1,156,919
MedAdvisor Annual Report 2021 | 65
Notes to the Consolidated Financial Statements
Continued
Building –
Lease Liability
1,658,559
(332,468)
94,684
1,420,775
1,420,775
–
2,386,744
(1,091,651)
143,643
–
–
(91,510)
2,768,001
Consolidated
Jun‑21
$
Jun‑20
$
1,795,609
1,036,199
1,795,609
1,036,199
122,739
122,739
82,950
82,950
Opening Balance – 1 July 2019
Lease payments
Interest charge
Closing balance – 30 June 2020
Opening Balance – 1 July 2020
Additions
Liabilities acquired through business combinations
Lease payments
Interest charge
Lease modification
Lease termination
Exchange differences
Closing balance – 30 June 2021
19. Employee benefits
Current
Provision for employee leave
Non‑Current
Provision for employee leave
66
| MedAdvisor Annual Report 2021
Your Health in Your Hands 20. Issued capital
(a) Fully paid ordinary shares
Ordinary shares fully paid:
377,370,639
246,718,025
90,992,487
45,369,890
Jun‑21
Shares
Jun‑20
Shares
Jun‑21
$
Jun‑20
$
Movements in ordinary share capital:
Balance at 1 July 2019
EIP Options Exercised
New Share Issue
Options on issue 21 November 2019
Share Consolidation Adjustment (1:7)
Shares on issue post share consolidation (1:7)
EIP Options Exercised
Lapsed Share Based Payments
New Share Issue (as Consideration)
Share issue transaction costs, net of tax for the year
Balance at 30 June 2020
Balance at 1 July 2020
EIP Options Exercised
EIP Options & Rights Exercised
New Share Issue
New Share Issue
New Share Issue
EIP Options Exercised
New Share Issue
EIP Options Exercised
EIP Options Exercised
EIP Options Exercised
New Share Issue
EIP Options Exercised
EIP Options Exercised
Share issue transaction costs, net of tax for the year
Balance at 30 June 2021
# of shares
Issue price
$
1,371,912,422
4,156,666
342,500,000
1,718,569,088
(1,473,059,917)
245,509,171
$0.04
$0.05
1,168,854
$0.32
–
40,000
$0.50
246,718,025
246,718,025
166,666
1,290,490
92,163,007
8,480,966
10,430,949
42,853
184,210
72,847
189,682
19,046
17,500,001
77,615
34,282
377,370,639
$0.28
$0.28
$0.38
$0.38
$0.38
$0.27
$0.38
$0.26
$0.35
$0.28
$0.30
$0.31
$0.29
28,136,013
151,870
17,099,999
45,387,882
45,387,882
369,911
60,000
20,000
(467,903)
45,369,890
45,369,890
46,666
356,798
35,021,943
3,222,767
3,963,761
11,756
70,000
18,680
65,440
5,257
5,250,000
23,795
9,908
(2,444,173)
90,992,487
Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the company in proportion
to the number of and amounts paid on the shares held. The fully paid ordinary shares have no par value and the company
does not have a limited amount of authorised capital. On a show of hands every member present at a meeting in person
or by proxy shall have one vote and upon a poll each share shall have one vote.
There is no current on‑market share buy‑back.
MedAdvisor Annual Report 2021 | 67
Notes to the Consolidated Financial Statements
Continued
(b) Employee incentive options
Employee incentive plan options are unquoted and will vest in accordance with the rules of the plan. Unvested employee
incentive options lapse on termination of employment, or failure to meet performance based vesting conditions in
accordance with the conditions under which the options have been granted.
Issue Date
Expiry Date
14‑Apr‑16
14‑Apr‑31
15‑Dec‑16
14‑Dec‑31
27‑Oct‑17
27‑Oct‑32
19‑Dec‑17
19‑Nov‑32
12‑Apr‑18
12‑Apr‑33
24‑Sep‑18
24‑Sep‑33
10‑Jan‑19
10‑Jan‑34
25‑Aug‑19
25‑Aug‑34
Issued
#
Lapsed
#
Exercised
#
319,040
480,941
630,913
38,569
31,426
541,396
14,284
51,426
1
–
164,282
348,091
–
–
–
–
15,713
304,752
–
5,713
Balance
#
154,757
132,850
Vested Not
Exercised
#
154,757
132,850
38,569
31,426
220,931
14,284
25,713
38,569
31,426
152,363
9,522
11,428
Unvested
#
–
–
–
–
–
68,568
4,762
14,285
52,857
208,082
369,974
369,974
23‑Dec‑19
8‑Dec‑34
4,974,275
28‑Apr‑20
26‑Apr‑35
27‑Jul‑20
13‑Jul‑35
27‑Jul‑20
22‑Apr‑35
27‑Jul‑20
31‑May‑35
19‑Oct‑20
13‑Oct‑35
17‑Nov‑20
17‑Nov‑35
18‑Dec‑20
8‑Dec‑30
21‑Dec‑20
30‑Oct‑23
21‑Dec‑20
30‑Oct‑24
149,272
80,655
23,570
8,570
48,000
14,285
27,940
750,000
750,000
21‑Dec‑20
30‑Oct‑29
4,500,000
7‑Apr‑21
24‑Mar‑31
241,349
7‑Apr‑21
24‑Mar‑36
2,992,731
28‑May‑21
28‑May‑28
3,527,223
15‑Jun‑21
25‑May‑36
45,000
–
20,000
951,783
8,570
–
8,570
8,570
–
–
–
–
–
–
–
–
–
–
422,023
3,600,469
1,968,093
1,632,376
2,856
–
–
–
48,000
–
–
–
–
–
137,846
80,655
15,000
–
–
14,285
27,940
750,000
750,000
4,500,000
189,682
51,667
50,707
80,655
5,000
–
–
9,523
27,940
750,000
750,000
87,139
–
10,000
–
–
4,762
–
–
–
–
–
4,500,000
51,667
–
–
–
2,992,731
150,000
2,842,731
3,527,223
3,527,223
–
45,000
–
45,000
20,240,865
1,066,064
1,693,481
17,481,320
8,220,030
9,261,290
68
| MedAdvisor Annual Report 2021
Your Health in Your Hands 21. Reserves
Share options reserve
Foreign currency translation reserve
Consolidated
Jun‑21
$
Jun‑20
$
2,710,595
1,570,838
(1,022,993)
3,234
1,687,602
1,574,072
Movements in reserves
Movements in each class of reserves during the current and previous financial year are set out below:
Balance as at 1 July 2019
Share options issued
Share options exercised
Foreign currency translation
Closing balance – 30 June 2020
Opening balance – 1 July 2020
Share options issued
Share options exercised
Foreign currency translation
Closing balance – 30 June 2021
Share
Options
$
Foreign
Currency
$
Total
$
1,204,843
(50,908)
1,153,935
947,775
(581,780)
–
1,570,838
1,570,838
1,678,057
(538,300)
–
–
54,142
3,234
3,234
–
–
947,775
(581,780)
54,142
1,574,072
1,574,072
1,678,057
(538,300)
–
(1,026,227)
(1,026,227)
2,710,595
(1,022,993)
1,687,602
MedAdvisor Annual Report 2021 | 69
Notes to the Consolidated Financial Statements
Continued
22. Accumulated losses
Accumulated losses at the beginning of the year
AASB 16 Retained Earnings Adjustment
Accumulated losses at the beginning of the year – restated
Total loss for the year attributable to owners of MedAdvisor
Accumulated losses at the end of the year
Consolidated
Jun‑21
$
Jun‑20
$
(30,281,714)
(20,645,126)
–
(51,593)
(30,281,714)
(20,696,719)
(13,949,449)
(9,584,995)
(44,231,164)
(30,281,714)
23. Interest in subsidiaries
The consolidated financial statements incorporate the assets, liabilities and results of the following wholly‑owned
subsidiaries in accordance with the accounting policy described in note 1:
Name
Principal place of business/
Country of incorporation
MedAdvisor International Pty. Ltd.
Australia
Health Enterprises 2 Pty. Ltd.
Australia
MedAdvisor Welam UK Ltd.
MedAdvisor Welam USA Inc.
Adheris, LLC
UK
USA
USA
Ownership Interest
2021
%
100%
100%
100%
100%
100%
2020
%
100%
100%
100%
100%
–
Details regarding the acquisition of Adheris are set out in note 24.
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiary with
non‑controlling interests in accordance with the accounting policy described in note 1:
Name
Principal place of business/
Country of incorporation
ZP MedAdvisor Pte. Ltd.
Singapore
Parent ownership Interest
Non‑controlling Interest
2021
%
50%
2020
%
50%
2021
%
50%
2020
%
50%
70
| MedAdvisor Annual Report 2021
Your Health in Your Hands 24. Business combinations
On 17 November 2020, MedAdvisor Welam USA Inc, a wholly‑owned subsidiary of MedAdvisor Limited, acquired 100% of the
equity interests in Adheris, for the total consideration of AUD 45,197,476. Adheris provides tailored opt‑out, direct‑to‑patient
medication adherence programs in the USA and was acquired to accelerate MedAdvisor’s penetration in the US market by
leveraging Adheris’ existing pharmacy integrations.
Details of the acquisition are as follows:
Fair Value of consideration at acquisition date
Cash paid or payable to the vendor
Convertible note issued to the vendor
Deferred consideration for future performance
Total:
Recognised amounts of identifiable assets and liabilities
Trade and other receivables
Prepayments and other current assets
Fixed assets
Right of use assets
Intangible assets
Deferred tax liability
Trade and other payables
Deferred revenue
Employee benefits
Lease liability
Net assets acquired:
Goodwill:
Cash used to acquire business:
Acquisition date fair value of total consideration
Add: Net working capital adjustment to purchase price
Less: deferred consideration (note 17)
Acquisition costs paid
FX movement on timing of cash settlements
Net cash used
17 Nov 2020
$
28,668,170
6,887,211
9,642,095
45,197,476
9,228,749
2,078,681
2,175,712
2,296,157
21,061,220
(3,711,645)
(12,512,831)
(4,577,389)
(118,278)
(2,386,744)
13,533,632
31,663,844
45,197,476
2,203,115
(4,031,699)
1,053,645
(928,444)
43,494,093
MedAdvisor Annual Report 2021 | 71
Notes to the Consolidated Financial Statements
Continued
Consideration transferred
The agreed acquisition purchase price for Adheris was USD 27,500,000 which included USD 5,000,000 of convertible notes
issued to Syneos Health US, Inc on completion of the transaction. The purchase price was reduced by a net working capital
adjustment of USD 1,687,389 reducing the net purchase price (including the convertible note) to USD 25,812,611, which equated
to AUD 35,555,381.
The purchase agreement also included an additional consideration of USD 7,000,000 payable in 2 parts, 6 and 18 months after
settlement, on the condition of revenue targets being met as per the Purchase and Sale Agreement. The first revenue earn‑out
of USD 4,000,000 was settled in May 2021. The second revenue earn‑out of USD 3,000,000 is dependent on Adheris meeting
certain revenue criteria. Management expect to pay the maximum pay‑out in relation the second earn‑out consideration,
due in May 2022.
Goodwill on acquisition
Subsequent to the settlement of the Adheris transaction, the provisional goodwill was independently valued and allocated
against identifiable intangible assets with the residual allocated to Goodwill. Adopting the Mid‑Purchase Price Allocation
(PPA) valuation the resultant identifiable intangible assets and goodwill acquired was as follows:
Total intangible assets
Brand
Customer Relationships
Partner Relationships
inPharmacy Software
inHome Software
Goodwill
USD
$
AUD
$
38,261,454
52,702,864
4,142,000
5,705,356
3,223,000
4,439,489
2,041,000
2,811,355
4,458,000
6,140,628
1,410,000
1,942,190
22,987,454
31,663,844
Adheris’ contribution to the Group results
Adheris generated revenue of AUD 28,889,653 and incurred a loss of AUD (2,865,495) from acquisition date to reporting date.
Adheris’ FY21 full financial year loss was AUD (6,641,156).
25. Non‑controlling interest
Issued capital
Reserves
Accumulated losses
The non‑controlling interest has a 50% (2020: 50%) equity holding in ZP MedAdvisor Pte. Ltd.
Consolidated
Jun‑21
$
Jun‑20
$
1,061,842
554,890
(48,480)
(1,934)
(617,137)
(194,595)
396,225
358,361
72
| MedAdvisor Annual Report 2021
Your Health in Your Hands 26. 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
Net assets
Equity
Issued capital
Share options reserve
Accumulated losses
Total equity
Contingent liabilities
Parent
Jun‑21
$
Jun‑20
$
(2,539,722)
(1,654,168)
(2,539,722)
(1,654,168)
191,544
37,907
90,389,499
42,675,018
4,050,351
558,503
4,050,351
558,503
86,339,148
42,116,515
90,992,487
45,369,890
2,710,595
1,570,838
(7,363,934)
(4,824,213)
86,339,148
42,116,515
The parent entity had no contingent liabilities as at 30 June 2021 and 30 June 2020.
Capital commitments – property, plant & equipment
The parent entity had no capital commitments for property, plant & equipment as at 30 June 2021 and 30 June 2020.
Significant accounting policies
The accounting policies of the parent entity are consistent with those of the consolidated entity as disclosed in Note 1.
MedAdvisor Annual Report 2021 | 73
Notes to the Consolidated Financial Statements
Continued
27. Financial risk management
MedAdvisor’s activities expose it to a variety of financial risks: interest rate risk, liquidity risk, credit risk and foreign currency risk.
The Directors’ overall risk management strategy seeks to assist the Company in meeting its financial targets whilst
minimising potential adverse side effects on financial performance. Risk management policies are approved and reviewed
by the Directors on a regular basis. These include credit risk policies and future cash flow requirements.
The Company’s financial instruments consist mainly of deposits with banks, trade receivable and payables, and borrowings.
Totals for each category of financial instruments, measured in accordance with AASB 9 as detailed in the accounting policies
to these financial statements, are as follows:
Financial Assets
Cash and equivalents
Trade and other receivables
Financial Liabilities
Trade and other payables
Borrowings
Lease liabilities
Deferred consideration
(a) Interest rate risk
Consolidated
Jun‑21
$
Jun‑20
$
7,150,865
12,345,164
12,464,259
1,839,384
19,615,254
14,184,548
11,062,602
1,189,710
6,393,301
–
2,768,001
1,420,776
4,031,699
–
24,255,603
2,610,485
Exposure to interest risk arises on financial instruments whereby a future change in interest rates will affect future cash flows
or the fair value of fixed rate financial instruments.
The Group has minimal exposure to interest rate fluctuations as its loan facility, as outlined in note 16, is at a fixed interest rate
of 10.25% (2020: n/a).
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| MedAdvisor Annual Report 2021
Your Health in Your Hands (b) Liquidity risk
Liquidity risk arises from the possibility that the Company might encounter difficulty in settling its debts or otherwise meeting
its obligations related to financial liabilities. The Group manages this risk through the preparation of forward‑looking cash
flow analysis in relation to its operational, investing and financing activities. Borrowing facilities are in place to enable the
Group to borrow funds when necessary.
Financial liability and financial asset maturity analysis:
Consolidated – 2021
Financial Liabilities Due For Payment
Trade and other payables
Deferred consideration
Interest Bearing – Fixed Rate
Lease liabilities
Borrowings
Within
1 year
$
Between
1 and 2 years
$
Between
2 and 5 years
$
Total
$
11,062,602
4,031,699
–
–
–
–
11,062,602
4,031,699
1,265,476
959,579
542,946
2,768,001
299,762
–
6,093,539
6,393,301
Total financial liabilities
16,659,539
959,579
6,636,485
24,255,603
Financial Assets – Cash Flows Realisable
Cash and equivalents
Trade and other receivables
7,150,865
12,464,259
19,615,124
–
–
–
–
–
–
7,150,865
12,464,259
19,615,124
Net inflow/(outflow) on financial instruments
2,955,585
(959,579)
(6,636,485)
(4,640,479)
Consolidated – 2020
Financial Liabilities Due For Payment
Trade and other payables
Interest Bearing – Fixed Rate
Lease liabilities
Borrowings
Within
1 year
$
Between
1 and 2 years
$
Between
2 and 5 years
$
Total
$
1,189,710
–
–
1,189,710
263,856
275,900
881,019
1,420,776
–
–
–
–
Total financial liabilities
1,453,566
275,900
881,019
2,610,485
Financial Assets – Cash Flows Realisable
Cash and equivalents
Trade and other receivables
12,345,164
1,839,384
14,184,548
–
–
–
–
–
–
12,345,164
1,839,384
14,184,548
Net inflow/(outflow) on financial instruments
12,730,982
(275,900)
(881,019)
11,574,063
MedAdvisor Annual Report 2021 | 75
Notes to the Consolidated Financial Statements
Continued
(c) Credit risk
Exposure to credit risk relating to financial assets arises from the potential non−performance by counter parties of contract
obligations that could lead to a financial loss to the Group.
Credit risk is managed through the maintenance of procedures (such procedures include the utilisation of systems for the
approval, granting and removal of credit limits, regular monitoring of exposures against such limits and monitoring of the
financial stability of significant customers and counter parties), ensuring to the extent possible, that customers and counter
parties to transactions are of sound credit worthiness. Such monitoring is used in assessing receivables for impairment.
Credit terms are generally 30 days from the invoice date. Customers who do not meet the Group’s strict credit policies may
only purchase in cash or only use recognised credit cards.
Credit risk exposures
The maximum exposure to credit risk by class of recognised financial assets at balance date is equivalent to the carrying value
and classification of those financial assets (net of any allowance for Expected Credit Loss) as presented in the balance sheet.
Trade and other receivables that are neither past due or impaired are considered to be of high credit quality. Aggregates of
such amounts are as detailed in note 10.
(d) Foreign currency risk
The consolidated entity undertakes certain transactions denominated in foreign currency and is exposed to foreign currency
risk through foreign exchange rate fluctuations.
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. The consolidated entity the foreign exchange risk to be low and has not entered into any forward foreign
exchange contracts.
The carrying amount of the consolidated entity’s foreign currency denominated financial assets and financial liabilities at the
reporting date were as follows:
Consolidated
US dollars
British pounds
Assets
2021
$
Liabilities
2020
$
2021
$
2020
$
1,079,185
1,274,725
62,721
95,476
182,478
123,277
111,728
22,533
1,141,906
1,370,201
305,755
134,261
The consolidated entity had net assets denominated in foreign currencies of $836,151 as at 30 June 2021 (2020: $1,235,940).
Based on this exposure, had the Australian dollar weakened by 5% (2020: 5%) against these foreign currencies with all other
variables held constant, the consolidated entity’s loss before tax for the year would have been $41,808 lower (2020: $61,797
lower). The percentage change is the expected overall volatility of the significant currencies, which is based on management’s
assessment of reasonable possible fluctuations taking into consideration movements over the last 6 months each year and
the spot rate at each reporting date. The realised foreign exchange gain recognised through the Income Statement for the
year ended 30 June 2021 was $27,705 (2020: $52,208 loss).
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| MedAdvisor Annual Report 2021
Your Health in Your Hands (e) Price risk
The consolidated entity is not exposed to any significant price risk.
Fair value estimation
The fair values of financial assets and financial liabilities are presented in the following table and can be compared to their
carrying values as presented in the balance sheet. Fair values are those amounts at which an asset could be exchanged,
or a liability settled, between knowledgeable, willing parties in an arm’s length transaction.
Fair values derived may be based on information that is estimated or subject to judgment, where changes in assumptions
may have a material impact on the amounts estimated. Areas of judgment and the assumptions have been detailed below.
Where possible, valuation information used to calculate fair value is extracted from the market, with more reliable information
available from markets that are actively traded.
Differences between fair values and carrying amounts on financial instruments with fixed interest rates are due to the change
in discount rates being applied by the market since their initial recognition by the Company. Most of the instruments which
are carried at amortised cost are to be held until maturity and therefore the net fair value figures calculated bear little
relevance to the Company.
Financial Assets
Cash and equivalents
2021
2020
Net Carrying
Value
$
Net Fair
Value
$
Net Carrying
Value
$
Net Fair
Value
$
7,150,865
7,150,865
12,345,164
12,345,164
Trade and other receivables
12,464,259
12,464,259
1,839,384
1,839,384
Financial Liabilities
Trade and other payables
Borrowings
Lease liabilities
19,615,124
19,615,124
14,184,548
14,184,548
11,062,602
11,062,602
1,189,710
1,189,710
6,393,301
6,393,301
–
–
2,768,001
2,768,001
1,420,776
1,420,776
Deferred consideration
4,031,699
4,031,699
–
–
24,255,603
24,255,603
2,610,486
2,610,486
28. Auditor’s remuneration
Audit and review of financial statements
Group
Controlled entities
Taxation Services
Non‑audit Services
Consolidated
Jun‑21
$
Jun‑20
$
145,094
106,500
50,000
11,961
313,555
76,618
–
44,000
673
121,291
MedAdvisor Annual Report 2021 | 77
Notes to the Consolidated Financial Statements
Continued
29. Related party transactions
Other related parties include close family members of key management personnel and entities that are controlled
or jointly controlled by those key management personnel individually or collectively with their close family members.
Transactions between related parties are on normal commercial terms and conditions no more favourable than those
available to other persons unless otherwise stated.
NostraData Pty Ltd is an associated entity of the Company which has entered into the following related party transactions
with the Company during the financial year:
Total value of consulting, data and marketing services
Amounts due and payable to NostraData Pty Ltd at the end of the financial
year included in trade and other payables
Zuellig Pharma Pte Ltd and MedAdvisor Limited have a joint venture agreement
with 50% ownership interest in ZP MedAdvisor Pte Ltd each. The following contributions
for equity were advanced to the Company during the financial year
Consolidated
Jun‑21
$
141,173
Jun‑20
$
143,157
36,707
26,504
506,951
554,890
30. Contingencies
Neither the Group nor the parent entity have any contingent liabilities or contingent assets as at 30 June 2021 or 30 June 2020.
31. Events subsequent to the reporting date
MedAdvisor and ZP Pharma Holdings Pte Ltd have agreed to cease their joint venture in ZP MedAdvisor Pte Limited and propose
to wind‑up operations in H1 FY22.
Apart from the above, no matters or circumstances have arisen since the end of financial year that have significantly affected,
or may significantly affect, the operations of the Group, the results of those operations or the state of affairs of the Group in
future financial years.
32. Key management personnel disclosures
Compensation
The aggregate compensation made to Directors and other members of key management personnel of the consolidated
entity is set out below:
Consolidated
Jun‑21
$
Jun‑20
$
1,522,504
1,213,553
864,724
448,639
2,387,228
1,662,192
Short‑term employee benefits
Share‑based entitlements
Total compensation
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| MedAdvisor Annual Report 2021
Your Health in Your Hands Directors’ Declaration
The Directors of the Company declare that:
(a) The consolidated financial statements and notes set out on pages 38 to 78 are in accordance with the Corporations
Act 2001 and:
(i) comply with Accounting Standards, the Corporations Regulations 2001, and other mandatory professional
reporting requirements.
(ii) give a true and fair view of the consolidated entity’s financial position as at 30 June 2021 and of its performance
of the financial year ended on that date.
(b) There are reasonable grounds to believe the Company will be able to pay its debts when they become due and payable.
The basis of preparation confirms that the consolidated financial statements also comply with the International Financial
Reporting Standards as issued by the International Accounting Standards Board.
This declaration is made in accordance with a resolution of the Board of Directors.
Chris Ridd
Chairman
22 September 2021
Camberwell, VIC
MedAdvisor Annual Report 2021 | 79
Independent Auditor’s Report
80
| MedAdvisor Annual Report 2021
Your Health in Your Hands INDEPENDENT AUDITOR’S REPORT To the Members of MedAdvisor Limited Opinion We have audited the financial report of MedAdvisor Limited (the Company) and its subsidiaries (the Group), which comprises the consolidated statement of financial position as at 30 June 2021, 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 statements, including a summary of significant accounting policies, and the directors' declaration. In our opinion the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including: I. giving a true and fair view of the Group's financial position as at 30 June 2021 and of its financial performance for the year then ended; and II. complying with Australian Accounting Standards and the Corporations Regulations 2001. Basis for Opinion We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Report section of our report. We are independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board's APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the directors of the Company, would be in the same terms if given to the directors as at the time of this auditor's report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Key Audit Matters Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial report of the current period. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. MedAdvisor Annual Report 2021 | 81
Key Audit Matters (continued) Key Audit Matter How our audit addressed this matter Impairment of Intangible Assets Refer to Note 14 in the financial statements The Group has Intangible Assets of $54,546,789 as at 30 June 2021. We identified this area as a Key Audit Matter due to the size of the Intangible Assets balance, and because the directors’ assessment of the ‘value in use’ of the cash generating unit (“CGU”) involves judgements about the future underlying cash flows of the business and the discount rate applied to them. For the year ended 30 June 2021, management have performed an impairment assessment over the Intangible Assets balance by: • Identifying the CGU’s to which the intangible asset belongs; • Calculating the value in use of each CGU using a discounted cash flow model. These models used cash flows (revenues, expenses and capital expenditure) for the CGU for 5 years, with a terminal growth rate applied to the 5th year. These cash flows were then discounted to net present value using the CGU specific weighted average cost of capital (“WACC”); and • Comparing the resulting value in use of the CGU to their respective book values. Management also performed a sensitivity analysis over the value in use calculations by varying the assumptions used (growth rates, terminal growth rate and WACC) to assess the impact on the valuations. Our audit procedures in relation to management’s impairment assessment included: • Assessing management’s determination of the CGUs to which the Intangible Assets is allocated; • Assessing the valuation methodology used; • Challenging the reasonableness of key assumptions, including the cash flow projections, revenue growth rates, discount rates, and sensitivities used; • Checking the mathematical accuracy of the cash flow model, and reconciling input data to supporting evidence such as approved budgets, and considering the reasonableness of these budgets; and • Reviewing the accuracy of disclosures of critical estimates and assumptions in the financial statements in relation to the valuation methodologies. Independent Auditor’s Report
Continued
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| MedAdvisor Annual Report 2021
Your Health in Your Hands Key Audit Matters (continued) Key Audit Matter How our audit addressed this matter Acquisition Accounting Refer to Note 24 in the financial statements On 17 November 2020 the Group completed the 100% acquisition of US company, Adheris LLC. Management determined the acquisition to be a business combination under AASB 3 Business Combinations. The terms of the share purchase agreement involved the transfer of cash consideration and included contingent consideration. The purchase price must be allocated between the acquired assets and liabilities, at their respective fair values, with any difference recognised as goodwill on consolidation. This acquisition was considered a Key Audit Matter as the accounting for the transaction is complex and involves significant judgements in applying the accounting standards. This includes the recognition and valuation of consideration paid, contingent consideration payable and the determination of the fair value of the assets and liabilities acquired. Our audit procedures included, among others: • Obtaining the share purchase agreements and other associated documents to understand the key terms and conditions, and ensuring that the transaction has been accounted for in compliance with AASB 3; • Substantively testing the cash consideration transferred against bank statements; • Reviewing the reasonableness of the valuation of the contingent consideration payable; • Assessing the accuracy and completeness of the fair values of the identified assets and liabilities acquired; • Reviewing the work performed by management’s experts on the valuation of the identified tangible and intangible assets and the reasonableness of underlying assumptions in their respective valuations; with reference to the requirements of ASA 500 Audit Evidence, which establishes mandatory requirements in relation to using the work of a management's expert; and • Assessing the adequacy of the disclosures in respect of the business acquisition to ensure it was in line with AASB 3. MedAdvisor Annual Report 2021 | 83
Key Audit Matters (continued) Key Audit Matter How our audit addressed this matter Recognition of Revenue Refer to Note 5 in the financial statements The Group receives revenue from three core income streams, and the accounting for each of these differs. While SaaS Revenue from subscriptions are not complex and do not involve significant management judgements, the recognition of revenue generated from Transaction and Development Fees and Health Programs involves management estimates around the timing of delivery of services. Revenue recognition was considered a Key Audit Matter due to the materiality and significance of the balance. Our audit procedures in relation to the recognition of revenue included: • Assessing whether the Group’s revenue recognition policies were in compliance with AASB 15 Revenue from Contracts with Customers; • Evaluating the operating effectiveness of management’s controls related to revenue recognition; • Performing substantive analytical review procedures on the SaaS Revenue stream; • Performing detailed testing on a sample of contracts with customers and assessing the revenue recognised to various elements in the contracts; and • Reviewing revenue transactions before and after year-end to ensure that revenue is recognised in the correct period. Other Information The directors are responsible for the other information. The other information comprises the information included in the Group's annual report for the year ended 30 June 2021 but does not include the financial report and the auditor's report thereon. Our opinion on the financial report does not cover the other information and accordingly we do not express any form of assurance conclusion thereon. In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Independent Auditor’s Report
Continued
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| MedAdvisor Annual Report 2021
Your Health in Your Hands Responsibilities of the Directors for the Financial Report The directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error. In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so. Auditor's Responsibilities for the Audit of the Financial Report Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report. A further description of our responsibilities for the audit of the financial report is located at the Auditing and Assurance Standards Board website at: 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 the directors' report for the year ended 30 June 2021. In our opinion, the Remuneration Report of MedAdvisor Limited, for the year ended 30 June 2021, 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. RSM AUSTRALIA PARTNERS B Y CHAN Partner Dated: 22 September 2021 Melbourne, Victoria Shareholder Information
The shareholder information set out below was applicable as at 7 September 2021.
A. Equity security holders
Twenty largest holders of quoted equity securities
NATIONAL NOMINEES LIMITED
COTIVITI SERVICES LLC
EBOS PH PTY LTD
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
KOJENT PTY LTD
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