Medibio
Annual Report 2021

Plain-text annual report

Medibio Limited Appendix 4E Preliminary final report 1. Company details Name of entity: ABN: Reporting period: Previous period: Medibio Limited 58 008 130 336 For the year ended 30 June 2021 For the year ended 30 June 2020 2. Results for announcement to the market $ Revenues from ordinary activities up 35.7% to 1,265,823 Loss from ordinary activities after tax attributable to the Owners of Medibio Limited Loss for the year attributable to the Owners of Medibio Limited down down 61.6% to (1,486,602) 61.6% to (1,486,602) Dividends There were no dividends paid, recommended or declared during the current financial period. Comments The loss for the consolidated entity after providing for income tax amounted to $1,486,602 (30 June 2020: $3,872,404). 3. Net tangible assets Net tangible assets per ordinary security 4. Control gained over entities Not applicable. 5. Loss of control over entities Not applicable. 6. Dividends Reporting Previous period Cents period Cents 0.10 (0.04) Current period There were no dividends paid, recommended or declared during the current financial period. Previous period There were no dividends paid, recommended or declared during the previous financial period. 7. Dividend reinvestment plans Not applicable. Medibio Limited Appendix 4E Preliminary final report 8. Details of associates and joint venture entities Not applicable. 9. Foreign entities Details of origin of accounting standards used in compiling the report: Not applicable. 10. Audit qualification or review Details of audit/review dispute or qualification (if any): The financial statements have been audited and an unqualified opinion has been issued. 11. Attachments Details of attachments (The Annual Report of Medibio Limited for the year ended 30 June 2021 is attached): 12. Signed Signed ___________________________ Date: 31 August 2021 Claude Solitario Managing Director Medibio Limited ABN 58 008 130 336 Annual Report - 30 June 2021 Medibio Limited Contents 30 June 2021 Corporate directory Directors' report Auditor's independence declaration Statement of profit or loss and other comprehensive income Statement of financial position Statement of changes in equity Statement of cash flows Notes to the financial statements Directors' declaration Independent auditor's report to the members of Medibio Limited Shareholder information 2 3 15 16 17 18 19 20 42 43 46 1 Medibio Limited Corporate directory 30 June 2021 Directors Mr Claude Solitario (Managing Director and CEO) Mr Peter Carlisle (Non-Executive and Lead Independent Director) Ms Melanie Leydin (Director and Joint Company Secretary) Company secretaries Ms Melanie Leydin Mr Mathew Watkins Registered office Share register Auditor Legal advisors Level 4, 100 Albert Road South Melbourne VIC 3205 Telephone: +61 3 9692 7222 Facsimile: +61 3 9077 9233 Computershare Investor Services Pty Limited Level 3, 60 Carrington Street Sydney, NSW, 2000 Telephone: 1300 850 505 William Buck (Qld) Level 21, 307 Queen Street Brisbane QLD 4000 Telephone: +61 7 3229 5100 Facsimile: +61 7 3221 6027 Gadens Level 25 Bourke Place 600 Bourke Street Melbourne VIC 3000 Telephone: +61 3 9252 2555 Facsimile: +61 3 9252 2500 Bankers Westpac Banking Corporation Stock exchange listing Medibio Limited securities are listed on the Australian Securities Exchange (ASX code: MEB, MEBOB and MEBOC) Website www.medibio.com.au Corporate Governance Statement The Corporate Governance Statement is available on the Company’s website. Please refer to https://medibio.com.au/corporate-governance/ Annual General Meeting The Company advises that its Annual General Meeting will be held on Thursday, 11th November 2021. 2 Medibio Limited Directors' report 30 June 2021 The Directors present their report, together with the financial statements, on the consolidated entity (referred to hereafter as the 'consolidated entity') consisting of Medibio Limited (referred to hereafter as the 'Company' or 'parent entity') and the entities it controlled at the end of, or during, the year ended 30 June 2021. Directors The following persons were Directors of Medibio Limited during the whole of the financial year and up to the date of this report, unless otherwise stated: Mr Claude Solitario, Managing Director and CEO Mr Peter Carlisle, Non-Executive and Lead Independent Director Ms Melanie Leydin, Director Principal activities The principal activity of the Group is conducting clinical research, product development and early stage commercialization of a mental health technology using objective biomarkers to assist in the screening, diagnosing, monitoring, and management of depression and other mental health conditions. Review of operations The loss for the consolidated entity after providing for income tax amounted to $1,486,602 (30 June 2020: $3,872,404). The loss for the period reflected substantially the continuing development of Company’s intellectual property, including the Sleep Analysis of Depressive Burden study (SADB) and the development of its sleep staging software, MEBsleep; the development of the Company’s consumer app, LUCA and the commercialization of its corporate wellness product, ilumenTM . The aim of SADB is to identify clinical depressive burden in patients with sleep disturbance who undergo a sleep study in a clinical environment. The SADB trial involves the development of the depressive burden platform known as MEB-001 consisting of sleep staging algorithm, overlayed by resting heart rate and heart rate variability algorithms, leading to the depressive burden analysis. Algorithm development for MEB-001 is progressing very well and in accordance with our expectations. In August 2020 Medibio was granted a patent entitled “Method and System for Monitoring Stress Conditions.” The patent relates to a software method, using machine learning, for monitoring stress conditions by analysing heartrate collected during sleep, including a pre-sleep period, a sleep period and a post-sleep period. The patent will play an important part in protecting Medibio’s consumer app and strengthening its intellectual property protection and competitive advantage in the US market. In October 2020, Medibio entered into a Clinical Trial Agreement (“CTA”) with MedBridge Healthcare LLC (“MedBridge”), to support the SADB trial. MedBridge is the leading provider of sleep laboratory management services in the United States, operating over 130 sleep disorder diagnostic centres and performing over 70,000 sleep disorder diagnostic procedures annually. MedBridge’s expertise and reputation in sleep medicine in the United States is exemplary, and the size of their operations will help ensure that the SADB trial will be undertaken as quickly and efficiently as possible. In November 2020, Medibio signed a three-year Global Master License and Services Agreement (the “Agreement”) with Compass Group Plc. (“Compass”) for Medibio's corporate mental health product, ilumen. Under the terms of the Agreement, Medibio will make ilumen available to Compass companies electing to adopt the technology for the benefit of their employees. The agreement also grants Compass companies the right to license ilumen to their clients, which includes many multinational corporations. Revenue generation will depend on the rate and level of adoption by Compass companies and their clients. The annual licence fee is a SaaS (Software as a Service) fee calculated per-employee, per annum based on the size of the workforce of the particular company enrolled in the program, regardless of the level of employee participation. Based on the learnings from Compass, Medibio has activated a focussed marketing campaign for ilumen targeting a number of large corporations and government departments. Regrettably, COVID-19 and related lockdowns have had a detrimental effect on financial resources and staffing levels of most corporations, which has impacted the decision making process. Border closures has also impeded Medibio’s ability to generate new opportunities and deepen existing relationships. Nevertheless, ilumen continues to generate interest from corporations in Australia and internationally, and although time frames have lengthened, opportunities are being pursued as effectively and efficiently as possible. 3 Medibio Limited Directors' report 30 June 2021 In April 2021 Medibio secured a pre-submission meeting with the FDA for the 1st July 2021 to inform its new 510(k) application. The FDA has since requested a number of postponements due to the effects of COVID-19 on their internal resources allocation. The Medibio clinical team is currently consulting with the FDA and its regulatory advisers to review and assess the most efficient way forward given the delays with its 510(k) application and having regard to the encouraging progress of MEB-001. In May 2021 Medibio was awarded a further patent from the US Patent and Trademark Office for the Company’s “Method and System for Assessing Mental State”. The patent relates to a computer-implemented method of assessing the mental state of a subject by receiving a sequence of heartbeat data samples obtained overnight through three distinct periods: a pre-sleep, sleep, and a post-sleep period. This patent enriches the Company’s intellectual property and further strengthens its strategic protection across the Company’s key commercial markets, including clinical, corporate and consumer. The awarding of this patent is timely given that the company is currently undertaking trials to validate MEB-001. The 2021 financial year has seen the development of the Company’s consumer app, which continues on time and on budget. Medibio’s pioneering work in the use of biometric data to aid in the early detection and screening of mental health conditions, together with its patented method of assessing stress by monitoring overnight heart rate, underpins the functionality of the Consumer App and provides a significant point of differentiation in the marketplace. Medibio’s app and algorithms will identify how stress is affecting individuals and produce stress assessment data to inform behavioural exercises, educational tools, and goal-setting features to help users improve their mental health. A paid media plan strategy, which includes social channels such as Facebook, Instagram, LinkedIn, Twitter and TikTok has been developed in preparation for the launch of the consumer app in the US in October 2021 to coincide with World Mental Health Day. Significant changes in the state of affairs On 13 July 2020, the Group completed the fully underwritten Non-Renounceable Entitlement Offer and issued 252,865,843 fully paid ordinary shares at $0.006 (0.6 cents) per share raising $1,517,195 before costs. On 26 August 2020, the Group converted 21 listed options exercisable at $0.03 per option to 21 ordinary shares. On 9 October 2020, the Group issued 16,000,000 unlisted options to employees and are subject to various vesting conditions and meeting certain KPI’s in line with the Company’s strategic plans. The options are exercisable at $0.012 (1.2 cents) per option expiring on 6 October 2023. On 8 December 2020, the Group issued 2,900,000 unlisted options with exercise price at $0.012 (1.2 cents) per option expiring on 6 October 2023. On the same date, the Group issued 11,250,000 unlisted options to a Director of the Company for his services as Director. The options are exercisable at $0.011 (1.1 cents) per option expiring on 8 December 2025. On 15 February 2021, the Group completed the Placement Tranche One by issuing 222,222,222 fully paid ordinary shares at an issue price of $0.009 (0.9 cents) per share and 55,555,555 free attaching Options with exercise price at $0.015 (1.5 cents) per Option to sophisticated and professional investors, raising $2,000,000 before costs. On 15 February 2021, the Group issued 59,114,285 unlisted options with exercise price at $0.015 (1.5 cents) per option expiring on 28 February 2024 for services provided by the Lead Manager of the Company's Capital Raising. On 8 April 2021, the Group issued 111,111,111 fully paid ordinary shares at an issue price of $0.009 (0.9 cents) per share and 27,777,778 free attaching options exercisable at $0.0015 (1.5 cents) per Option under Placement Tranche Two. On 8 April 2021, the Group issued 34,885,715 unlisted options with exercise price at $0.015 per option expiring on 28 February 2024 for services provided by the Lead Manager of the Company's Capital Raising. On 8 April 2021, the Group issued 111,111,051 fully paid ordinary shares at an issue price of $0.009 (0.9 cents) per share under SPP and 27,777,676 options exercisable at $0.015 per Option, expiring on 28 February 2024 attached for every four (4) Shares issued. On 15 April 2021, the Group issued 1,800,000 unlisted options with exercise price at $0.012 (1.2 cents) per option expiring on 6 October 2023 to an eligible consultant of the Company under the Company's Employee Incentive Plan. On 18 May 2021, the Group issued 2,954,545 fully paid ordinary shares at a deemed issue price of $0.011 per share to settle service fee for a third party. 4 Medibio Limited Directors' report 30 June 2021 There were no other significant changes in the state of affairs of the consolidated entity during the financial year. Matters subsequent to the end of the financial year No matter or circumstance has arisen since 30 June 2021 that has significantly affected, or may significantly affect the consolidated entity's operations, the results of those operations, or the consolidated entity's state of affairs in future financial years. Likely developments and expected results of operations Likely developments in the operations of the Group in future financial years, are referred to in the Review of Operations. Environmental regulation The consolidated entity is not subject to any significant environmental regulation under Australian Commonwealth or State law. Information on Directors Name: Title: Experience and expertise: Mr Claude Solitario Managing Director and CEO Mr Solitario brings 30 years of experience in the development of new and emerging technology, with a deep understanding of licensing and commercialisation of intellectual property. As a founding shareholder of Medibio he is one the Company’s major shareholders and brings an extensive financial background having served as a financial executive for many public and private companies. Other current directorships: None Former directorships (last 3 years): None Interests in shares: Interests in options: 52,220,086 fully paid ordinary shares 3,000,000 unlisted options exercisable at $0.014 expiring on 13 June 2023 30,333,040 quoted options exercisable at $0.03 expiring on 1 December 2021 4,000,000 unlisted options exercisable at $0.015 expiring on 19 August 2024 3,000,000 unlisted options exercisable at $0.011 expiring on 20 December 2023 11,250,000 unlisted options exercisable at 0.011 expiring on 8 December 2025 5 Medibio Limited Directors' report 30 June 2021 Name: Title: Experience and expertise: Mr Peter Carlisle Non-Executive and Lead Independent Director Mr Carlisle serves as Managing Director of Olympics & Action Sports at global sports marketing agency, Octagon. He has served on numerous non-profit boards and has worked to develop and promote programs focused on a variety of mental health issues. An expert at the forefront of the booming action sports industry for more than two decades, he has successfully transitioned his creative marketing strategies to emerge as the leader in the representation and marketing of Olympic and Action Sports athletes. Mr Carlisle is one of only two sports agents to be inducted into Sports Business Journal’s “Forty-Under-Forty” Hall of Fame. Mr Carlisle oversees a global business that provides career management for the company’s Olympics and Action Sports clients through contract negotiations, endorsements, licensing and merchandising opportunities as well as successfully developing content-driven programs for athletes that are re-defining the term “athlete marketing.” He oversees some of the worlds most recognisable athletes. Mr Carlisle is highly decorated and respected with multiple recognition awards including Sports Illustrated’s “Top 15 Most Influential Sports Agents”, Member of Sports Business Journal’s “Forty-Under-Forty” Hall of Fame following three career “Forty Under 40” Awards (’07, ’04, ‘03), Two-time recipient of Sports Business Journal’s “20 Most Influential People: Sports Agents” (’06, ‘04) amongst others. None Other current directorships: Former directorships (last 3 years): None Interests in shares: Interests in options: 125,500 fully paid ordinary shares 559,556 unlisted options exercisable at $0.44 expiring on 18 June 2022 4,000,000 unlisted options exercisable at $0.014 expiring on 13 June 2023 3,600,000 unlisted options exercisable at $0.011 expiring on 20 December 2023 Name: Title: Qualifications: Experience and expertise: Ms Melanie Leydin Director and Joint Company Secretary B.Bus Acc Corp law Melanie Leydin holds a Bachelor of Business majoring in Accounting and Corporate Law. She is a member of the Institute of Chartered Accountants, Fellow of the Governance Institute of Australia and is a Registered Company Auditor. She graduated from Swinburne University in 1997, became a Chartered Accountant in 1999 and since February 2000 has been the principal of Leydin Freyer. The practice provides outsourced company secretarial and accounting services to public and private companies across a host of industries including but not limited to the Resources, technology, bioscience, biotechnology and health sectors. Melanie has over 25 years’ experience in the accounting profession and over 15 years’ experience holding Board positions including Company Secretary of ASX listed entities. She has extensive experience in relation to public company responsibilities, including ASX and ASIC compliance, control and implementation of corporate governance, statutory reorganisation of Companies and shareholder relations. E2 Metals Limited reporting, financial Other current directorships: Former directorships (last 3 years): Australian Primary Hemp Limited (ASX: APH) (formerly Alchemia Limited) resigned 2 Interests in shares: Interests in options: October 2019 None 2,600,000 unlisted options exercisable at $0.02 expiring on 19 August 2023 2,200,000 unlisted options exercisable at $0.011 expiring on 20 December 2023 'Other current directorships' quoted above are current directorships for listed entities only and excludes directorships of all other types of entities, unless otherwise stated. 6 Medibio Limited Directors' report 30 June 2021 'Former directorships (last 3 years)' quoted above are directorships held in the last 3 years for listed entities only and excludes directorships of all other types of entities, unless otherwise stated. Company secretaries Ms Melanie Leydin, CA (Joint Company Secretary) Refer to information on Directors for further information. Mr Mathew Watkins, CA (Joint Company Secretary) Mr Watkins is a Company Secretariat with the Company Secretarial and chartered accounting firm, Leydin Freyer. Mathew completed a Bachelor of Business (Accounting) with a minor in Advanced Finance at Swinburne University of Technology and is a member of the Institute of Chartered Accountants of Australia and New Zealand. He specialises in Company Secretarial and Accounting Services for ASX listed and unlisted public companies in the mining, biotech and industrial sectors. His skillset includes ASX statutory reporting, ASX compliance, Corporate Governance and board and secretarial support.He is Company Secretary on various ASX Listed Companies. Meetings of Directors The number of meetings of the Company's Board of Directors ('the Board') held during the year ended 30 June 2021, and the number of meetings attended by each Director were: C Solitario P Carlisle M Leydin Full Board Attended Held 9 9 9 9 9 9 Held: represents the number of meetings held during the time the Director held office. The Board did not have separate Committees during the year and the Board fulfilled the role of Nomination & Remuneration and the Audit & Risk Committees. Remuneration report (audited) The remuneration report details the key management personnel remuneration arrangements for the consolidated entity, in accordance with the requirements of the Corporations Act 2001 and its Regulations. Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly, including all Directors. The remuneration report is set out under the following main headings: ● ● ● ● ● ● Principles used to determine the nature and amount of remuneration Details of remuneration Service agreements Share-based compensation Additional information Additional disclosures relating to key management personnel 7 Medibio Limited Directors' report 30 June 2021 Principles used to determine the nature and amount of remuneration The performance of the Group depends upon the quality of its Directors and executives. The objective of the consolidated entity's executive reward framework is to ensure reward for performance is competitive and appropriate for the results delivered. The framework aligns executive reward with the achievement of strategic objectives and the creation of value for shareholders, and it is considered to conform to the market best practice for the delivery of reward. The remuneration philosophy is to attract, motivate and retain high performance and high quality personnel. The Board of Directors is responsible for determining and reviewing compensation arrangements for the directors, and the executive team. The Board assesses the appropriateness of the nature and amount of emoluments of such officers on a periodic basis by reference to relevant employment market conditions with the overall objective of ensuring maximum stakeholder benefit from the retention of a high-quality Board and executive team. ● ● ● ● competitiveness and reasonableness acceptability to shareholders performance linkage / alignment of executive compensation transparency The reward framework is designed to align executive reward to shareholders' interests. The Board have considered that it should seek to enhance shareholders' interests by: ● focusing on sustained growth in shareholder wealth, consisting of growth in share price, driving towards dividends, and delivering constant or increasing return on assets as well as focusing the executive on key non-financial drivers of value attracting and retaining high calibre executives ● Additionally, the reward framework should seek to enhance executives' interests by: ● ● ● rewarding capability and experience reflecting competitive reward for contribution to growth in shareholder wealth providing a clear structure for earning rewards In accordance with best practice corporate governance, the structure of non-executive Director and executive Director remuneration is separate. Non-executive Directors remuneration Fees and payments to non-executive directors reflect the demands and responsibilities of their role. Non-executive directors' fees and payments are reviewed annually by the Nomination and Remuneration Committee (or in its absence the Board). The Nomination and Remuneration Committee may, from time to time, receive advice from independent remuneration consultants to ensure non-executive directors' fees and payments are appropriate and in line with the market. The chairman's fees are determined independently to the fees of other non-executive directors based on comparative roles in the external market. ASX listing rules require the aggregate non-executive directors' remuneration be determined periodically by a general meeting. The most recent determination was at the General Meeting held on 11 September 2017, where the shareholders approved a maximum annual aggregate remuneration of $750,000. Senior management and executive remuneration The consolidated entity aims to reward senior management and executives based on their position and responsibility, with a level and mix of remuneration which has both fixed and variable components. The senior management and executive remuneration and reward framework has four components: ● ● ● ● base pay and non-monetary benefits short-term performance incentives share-based payments other remuneration such as superannuation and long service leave The combination of these comprises the senior management and executive's total remuneration. Fixed remuneration, consisting of base salary, superannuation and non-monetary benefits, are reviewed annually by the Nomination and Remuneration Committee (or in its absence the Board) based on individual and business unit performance, the overall performance of the consolidated entity and comparable market remunerations. 8 Medibio Limited Directors' report 30 June 2021 The short-term incentives ('STI') program is designed to align the targets of the business units with the performance hurdles of executives. STI payments are granted to executives based on specific annual targets and key performance indicators ('KPI's') being achieved. KPI's include revenue targets, relevant regulatory approvals, financial efficiencies, amongst other operational matters. The long-term incentives ('LTI') include long service leave and share-based payments. These may include increase in shareholders value relative to the entire market and the increase compared to the consolidated entity's direct competitors. Following the restructure of the Board and senior management during the year the Company is currently in the process of updating its STI and LTI programs. Voting and comments made at the Company's 12 November 2020 Annual General Meeting ('AGM') At the 12 November 2020 AGM, 93.96% of the votes received supported the adoption of the remuneration report for the year ended 30 June 2020. The Company did not receive any specific feedback at the AGM regarding its remuneration practices. Details of remuneration Amounts of remuneration Details of the remuneration of key management personnel of the consolidated entity are set out in the following tables.Unless otherwise noted, the named persons were key management personnel for the whole of the period ended 30 June 2021. The key management personnel of the consolidated entity consisted of the following Directors of Medibio Limited: ● ● ● ● Mr Claude Solitario, Managing Director and CEO Mr Peter Carlisle, Non-Executive and Lead Independent Director Ms Melanie Leydin, Director and Joint Company Secretary Mr Mathew Watkins, Joint Company Secretary Short-term benefits Post- employment benefits Long-term benefits Share- based payments Cash salary and fees $ Cash bonus $ Non- Super- monetary annuation $ $ Long service leave $ Equity- settled $ Total $ - 136,986 165,945 302,931 - - - - - - - 45,000 45,000 - 13,013 - 92,025 242,024 - - - 13,013 - - - 137,025 165,945 452,969 30 June 2021 Non-Executive Directors: P Carlisle (2) Executive Directors: C Solitario Other Key Management Personnel: M Leydin (1) (1) Includes Director fees and fees paid to Leydin Freyer, of which Melanie Leydin is a director, in respect of the Company Secretarial Services. No additional fees were paid in respect of Mr Watkins Joint Company Secretarial appointment. (2) Expected to be settled in shares subject to shareholder approval 9 Medibio Limited Directors' report 30 June 2021 30 June 2020 Non-Executive Directors: P Carlisle L Wipperman Heine (1) L Ragen Ide (2) L Ojala (3) M Phelps (4) P Kennedy (5) F Prendergast (6) Executive Directors: C Solitario D Kaysen (8) Other Key Management Personnel: M Leydin (7) Short-term benefits Post- employment benefits Long-term benefits Share- based payments Cash salary and fees $ Cash bonus $ Non- Super- monetary annuation $ $ Long service leave $ Equity- settled $ Total $ - - - - - - - 64,805 455,145 141,631 661,581 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 6,157 - - 6,157 - - - - - - - - - - - 20,268 - - - - - - 20,268 - - - - - - 67,810 190,950 138,772 646,095 42,416 321,444 184,047 989,182 (1) L Wipperman Heine resigned as director on 22 November 2019 (2) L Ragen Ide resigned as director on 22 November 2019 (3) L Ojala resigned as director on 22 November 2019 (4) M Phelps resigned as director on 29 August 2019 (5) P Kennedy resigned as director on 29 August 2019 (6) F Prendergast resigned as director on 29 August 2019 (7) Melanie Leydin is a Director and Joint Company Secretary, undertakes executive functions in her role as Joint Company Secretary and as such is referred to as Other Key Management Personnel for the purposes of the Remuneration Report. Fees paid to Leydin Freyer, of which Melanie Leydin is a director, in respect of the Company Secretarial Services. No additional fees were paid in respect of Mr Watkins Joint Company Secretarial appointment. (8) D Kaysen salaries paid above include a notice payment of USD$90,000, as a part of his resignation from the company. The proportion of remuneration linked to performance and the fixed proportion are as follows: Name Non-Executive Directors: P Carlisle Executive Directors: C Solitario D Kaysen Other Key Management Personnel: M Leydin Fixed remuneration At risk - STI 30 June 2021 30 June 2020 30 June 2021 30 June 2020 30 June 2021 30 June 2020 At risk - LTI - - 62% - 51% 70% 100% 77% - - - - - - - - 100% 100% 38% - 49% 30% - 23% 10 Medibio Limited Directors' report 30 June 2021 Service agreements Remuneration and other terms of employment for key management personnel are formalised in service agreements. Details of these agreements are as follows: Name: Title: Agreement commenced: Term of agreement: Details: Mr Claude Solitario Managing Director 1 January 2020 Ongoing Total remuneration for the position is a package of $150,000 (inclusive of statutory superannuation). Termination of the agreement by either party with 3 month’s written notice. The position also includes an options sign on package which includes the issue of 11,250,000 exercisable within 5 years of the date of grant with an exercise price equal to the 30 day VWAP immediately prior to the date of grant. The options were approved by shareholers at the 12 November 2020 Annual General Meeting. Key management personnel have no entitlement to termination payments in the event of removal for misconduct. Share-based compensation Issue of shares There were no shares issued to Directors and other key management personnel as part of compensation during the year ended 30 June 2021. Options The terms and conditions of each grant of options over ordinary shares affecting remuneration of Directors and other key management personnel in this financial year or future reporting years are as follows: Name Number of options granted Grant date Vesting date and exercisable date Expiry date Exercise price at grant date Fair value per option C Solitario 11,250,000 08/12/2020 08/12/2020 08/12/2025 $0.011 $0.00818 Options granted carry no dividend or voting rights. There were no other options over ordinary shares granted to or vested by Directors and other key management personnel as part of compensation during the year ended 30 June 2021. Additional information The earnings of the Group for the five years to 30 June 2021 are summarised below: 2021 $ 2020 $ 2019 $ 2018 $ 2017 $ Revenue and other income Net profit/(loss) before tax Net profit/(loss) after tax 1,265,823 (1,486,602) (1,486,602) 932,831 (3,872,404) (3,872,404) 4,132,291 (6,587,039) (6,587,039) 2,600,592 (16,300,382) (16,300,382) 3,156,565 (9,785,072) (9,785,072) The factors that are considered to affect total shareholders return ('TSR') are summarised below: 2021 2020 2019 2018 2017 Share price at financial year start ($) Share price at financial year end ($) Basic earnings per share (cents per share) 0.01 0.01 (0.10) 0.01 0.01 (0.44) 0.14 0.01 (3.05) 0.36 0.14 (8.81) 0.33 0.36 (7.44) 11 Medibio Limited Directors' report 30 June 2021 Additional disclosures relating to key management personnel Shareholding The number of shares in the Company held during the financial year by each Director and other members of key management personnel of the consolidated entity, including their personally related parties, is set out below: Balance at Received as part of the start of the year remuneration Additions* Disposals/ other Balance at the end of the year Ordinary shares C Solitario P Carlisle M Leydin 41,812,576 125,500 - 41,938,076 - 10,407,510 - - - - - 10,407,510 - 52,220,086 - 125,500 - - - 52,345,586 *Shares issued upon participation in the Company’s Entitlement Issue as announced 10 June 2020. Option holding The number of options over ordinary shares in the Company held during the financial year by each Director and other members of key management personnel of the consolidated entity, including their personally related parties, is set out below: Options over ordinary shares C Solitario P Carlisle M Leydin Balance at the start of the year Granted Exercised Expired/ forfeited/ other Balance at the end of the year 40,333,040 11,250,000 - - 53,292,596 11,250,000 8,159,556 4,800,000 - - - - - 51,583,040 8,159,556 - - 4,800,000 - 64,542,596 This concludes the remuneration report, which has been audited. 12 Medibio Limited Directors' report 30 June 2021 Shares under option Unissued ordinary shares of Medibio Limited under option at the date of this report are as follows: Grant date 19/08/2019 11/09/2017 06/06/2018 21/06/2018 15/05/2019 19/07/2019 19/08/2019 19/08/2019 19/08/2019 22/11/2019 02/06/2020 18/06/2020 09/10/2020 08/12/2020 08/12/2020 15/02/2021 15/02/2021 08/04/2021 08/04/2021 08/04/2021 15/04/2021 Expiry date 01/12/2021 11/10/2022 18/06/2022 18/06/2023 13/06/2023 14/06/2023 19/08/2023 19/08/2024 19/08/2024 20/12/2023 02/06/2022 02/06/2022 06/10/2023 06/10/2023 08/12/2025 28/02/2024 28/02/2024 28/02/2024 28/02/2024 28/02/2024 06/10/2023 Exercise price Number under option $0.030 $0.450 $0.440 $0.450 $0.014 $0.010 $0.020 $0.015 $0.015 $0.011 $0.030 $0.030 $0.012 $0.012 $0.011 $0.015 $0.015 $0.015 $0.015 $0.015 $0.012 836,328,519 2,000,000 3,637,113 1,350,000 14,500,000 9,500,000 2,600,000 3,750,000 4,000,000 8,800,000 7,500,000 20,000,000 16,000,000 2,900,000 11,250,000 55,555,555 59,114,285 27,777,778 27,777,676 34,885,715 1,800,000 1,151,026,641 No person entitled to exercise the options had or has any right by virtue of the option to participate in any share issue of the Company or of any other body corporate. Shares issued on the exercise of options The following ordinary shares of Medibio Limited were issued during the year ended 30 June 2021 and up to the date of this report on the exercise of options exercised Date options exercised 26/08/2020 Exercise price Number of shares issued $0.030 21 Indemnity and insurance of officers The Company has indemnified the Directors and executives of the Company for costs incurred, in their capacity as a Director or executive, for which they may be held personally liable, except where there is a lack of good faith. During the financial year, the Company paid a premium in respect of a contract to insure the Directors and executives of the Company against a liability to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits disclosure of the nature of the liability and the amount of the premium. Indemnity and insurance of auditor The Company has not, during or since the end of the financial year, indemnified or agreed to indemnify the auditor of the Company or any related entity against a liability incurred by the auditor. During the financial year, the Company has not paid a premium in respect of a contract to insure the auditor of the Company or any related entity. 13 Medibio Limited Directors' report 30 June 2021 Proceedings on behalf of the Company No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of the Company, or to intervene in any proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the Company for all or part of those proceedings. Non-audit services The Company may decide to employ the auditor on assignments additional to their statutory audit duties where the auditor’s expertise and experience with the Company and/or the Group are important. Details of the amount paid or payable to the auditor (William Buck (Qld)) for audit and non-audit services provided during the year are set out in Note 24 . The Board of Directors has considered the position and, in accordance with the advice received from the Audit and Risk Committee, is satisfied that the provision of the non-audit services is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001 for the following reasons: ● ● All non-audit services have been reviewed by the Audit and Risk Committee (or in its absence the Board) to ensure they do not impact the impartiality and objectivity of the auditor. None of the services undermine the general principles relating to auditor independence as set out in Professional Statement APES 110 Code of Ethics for Professional Accountants (including Independence Standards) issued by the Accounting Professional and Ethical Standards Boards, including reviewing or auditing the auditor’s own work, acting in a management or a decision-making capacity for the Company, acting as advocate for the Company or jointly sharing economic risk and rewards. Officers of the Company who are former partners of There are no officers of the Company who are former partners of William Buck (Qld). Auditor's independence declaration A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out immediately after this Directors' report. Auditor William Buck (Qld) continues in office in accordance with section 327 of the Corporations Act 2001. This report is made in accordance with a resolution of Directors, pursuant to section 298(2)(a) of the Corporations Act 2001. On behalf of the Directors ___________________________ Claude Solitario Managing Director 31 August 2021 14 AUDITOR’S INDEPENDENCE DECLARATION UNDER SECTION 307C OF THE CORPORATIONS ACT 2001 TO THE DIRECTORS OF MEDIBIO LIMITED I declare that, to the best of my knowledge and belief during the year ended 30 June 2021 there have been: — no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the audit; and — no contraventions of any applicable code of professional conduct in relation to the audit. William Buck (Qld) ABN 21 559 713 106 M J Monaghan Director Dated this 31st day of August 2021 Medibio Limited Statement of profit or loss and other comprehensive income For the year ended 30 June 2021 Revenue Sales Other income Expenses Cost of sales Employee costs Research and development expenses Finance costs Depreciation and amortisation expense Other expenses Impairment expense Loss before income tax expense Consolidated Note 30 June 2021 30 June 2020 $ $ 5 6 7 8 9 101,656 1,164,167 133,500 799,331 (170,700) (634,856) (430,770) (16,282) (198,518) (1,301,299) - (204,688) (1,866,489) (359,954) (36,687) (148,865) (1,985,003) (203,549) (1,486,602) (3,872,404) Income tax expense 10 - - Loss after income tax expense for the year attributable to the Owners of Medibio Limited (1,486,602) (3,872,404) Other comprehensive income Items that may be reclassified subsequently to profit or loss Foreign currency translation Other comprehensive income for the year, net of tax Total comprehensive income for the year attributable to the Owners of Medibio Limited 109,742 19,157 109,742 19,157 (1,376,860) (3,853,247) Cents Cents Basic earnings per share Diluted earnings per share 30 30 (0.10) (0.10) (0.44) (0.44) The above statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes 16 Medibio Limited Statement of financial position As at 30 June 2021 Assets Current assets Cash and cash equivalents Trade and other receivables Other current assets Total current assets Non-current assets Other assets Right-of-use assets Intangibles Total non-current assets Total assets Liabilities Current liabilities Trade and other payables Lease liabilities Employee benefits Other liabilities Total current liabilities Total liabilities Net assets Equity Issued capital Reserves Accumulated losses Total equity Consolidated Note 30 June 2021 30 June 2020 $ $ 11 12 2,311,552 32,156 320,735 2,664,443 812,503 32,505 16,688 861,696 13 14 6,757 23,076 78,271 71,440 14,685,301 13,002,170 14,715,134 13,151,881 17,379,577 14,013,577 15 16 17 760,794 24,811 133,075 45,000 963,680 1,204,221 76,905 123,063 - 1,404,189 963,680 1,404,189 16,415,897 12,609,388 18 19 96,066,735 91,669,201 5,323,117 (84,382,930) 6,218,694 (85,869,532) 16,415,897 12,609,388 The above statement of financial position should be read in conjunction with the accompanying notes 17 Medibio Limited Statement of changes in equity For the year ended 30 June 2021 Consolidated Issued capital $ Foreign currency translation reserves $ Share based payments reserves $ Accumulated losses $ Total equity $ Balance at 1 July 2019 84,424,838 (142,176) 4,821,109 (80,499,301) 8,604,470 Adjustment upon adoption of AASB 16 - - - (11,225) (11,225) Balance at 1 July 2019 - restated 84,424,838 (142,176) 4,821,109 (80,510,526) 8,593,245 Loss after income tax expense for the year Other comprehensive income for the year, net of tax Total comprehensive income for the year Transactions with Owners in their capacity as Owners: Contributions of equity, net of transaction costs Share-based payments (note 31) - - - - - (3,872,404) (3,872,404) 19,157 19,157 - - 19,157 - (3,872,404) (3,853,247) 7,244,363 - - - - 625,027 - - 7,244,363 625,027 Balance at 30 June 2020 91,669,201 (123,019) 5,446,136 (84,382,930) 12,609,388 Consolidated Issued capital $ Foreign currency translation reserves $ Share based payments reserves $ Accumulated losses $ Total equity $ Balance at 1 July 2020 91,669,201 (123,019) 5,446,136 (84,382,930) 12,609,388 Loss after income tax expense for the year Other comprehensive income for the year, net of tax Total comprehensive income for the year Transactions with Owners in their capacity as Owners: Contributions of equity, net of transaction costs Share-based payments (note 31) Share issue costs - - - - - (1,486,602) (1,486,602) 109,742 - - 109,742 109,742 - (1,486,602) (1,376,860) 5,549,696 - (1,152,162) - - - - 785,835 - - - - 5,549,696 785,835 (1,152,162) Balance at 30 June 2021 96,066,735 (13,277) 6,231,971 (85,869,532) 16,415,897 The above statement of changes in equity should be read in conjunction with the accompanying notes 18 Medibio Limited Statement of cash flows For the year ended 30 June 2021 Cash flows from operating activities Receipts from operations Government grants R&D grants received Payments to suppliers and employees Consolidated Note 30 June 2021 30 June 2020 $ $ 149,022 312,652 803,168 (2,965,728) 233,480 - 674,158 (4,496,456) Net cash used in operating activities 29 (1,700,886) (3,588,818) Cash flows from investing activities Refund of deposits Interest received Payments for intangibles Net cash used in investing activities Cash flows from financing activities Proceeds from issue of shares (net of transaction costs) Payment of lease liabilities Net cash from financing activities Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at the beginning of the financial year Effects of exchange rate changes on cash and cash equivalents - 1,330 (1,833,285) 28,958 7,562 (1,541,468) (1,831,955) (1,504,948) 18 4,974,242 (52,094) 4,708,647 (154,625) 4,922,148 4,554,022 1,389,307 812,503 109,742 (539,744) 1,333,090 19,157 Cash and cash equivalents at the end of the financial year 11 2,311,552 812,503 The above statement of cash flows should be read in conjunction with the accompanying notes 19 Medibio Limited Notes to the financial statements 30 June 2021 Note 1. General information Medibio Limited (‘Medibio’, ‘the Company’, or ‘the Parent’) is a for profit company limited by shares incorporated in Australia whose shares are publicly traded on the Australian Securities Exchange. The nature of the operations and principal activities of Medibio Limited and the entities it controlled (‘the Group’) are described in the Directors’ Report. Note 2. Significant accounting policies The principal accounting policies adopted in the preparation of the financial statements are set out either in the respective notes or below. These policies have been consistently applied to all the years presented, unless otherwise stated. Going concern As at 30 June 2021, the Group had a net asset position of $16,415,897 (30 June 2020: $12,609,388). As at 30 June 2021 it had: ● ● ● ● Incurred a comprehensive loss for the period of $(1,486,602)(30 June 2020 $3,872,404) Net cash outflows from operations of $1,700,886 (30 June 2020: $3,588,818) Cash at bank of $2,311,552 (30 June 2020: $812,503) Current asset exceed current liabilities by $1,700,763 (30 June 2020 current liabilities exceed current assets by: $542,493 ) The Group’s ability to continue as a going concern is dependent upon the generation of cash from operations, the sufficiency of current cash reserves to meet existing obligations, the ability to reschedule planned research and development activity, raising of further equity and receipt of grant funding and research and development tax incentives. The Management Team has assessed the operating and research costs along with future research and development activities in order to establish future funding requirements. Medibio undertook a comprehensive review of internal operations to identify costs savings, these savings are being applied predominantly to the commercialisation of ilumen™ and the FDA program with the hiring of technology vendors who possess the specific skills needed for R&D work, thereby providing more flexibility in how funds are spent. The Company has demonstrated a strong record of securing funding in order to fund the Company’s operations and the Board is confident that it will be able to secure additional funding, which will be required in the next 12 months. Accordingly, the directors believe the Group will be able to pay its debts as and when they fall due for a period of at least 12 months from the date of signing the financial statements. Basis of preparation These general purpose financial statements have been prepared in accordance with Australian Accounting Standards and Interpretations issued by the Australian Accounting Standards Board ('AASB') and the Corporations Act 2001, as appropriate for for-profit oriented entities. These financial statements also comply with International Financial Reporting Standards as issued by the International Accounting Standards Board ('IASB'). Historical cost convention The financial statements have been prepared under the historical cost convention, except for, where applicable, the revaluation of financial assets and liabilities at fair value through profit or loss, financial assets at fair value through other comprehensive income, investment properties, certain classes of property, plant and equipment and derivative financial instruments. Critical accounting estimates The preparation of the financial statements requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the consolidated entity's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed in note 3. Parent entity information In accordance with the Corporations Act 2001, these financial statements present the results of the consolidated entity only. Supplementary information about the parent entity is disclosed in note 26. 20 Medibio Limited Notes to the financial statements 30 June 2021 Note 2. Significant accounting policies (continued) Principles of consolidation The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Medibio Limited ('Company' or 'parent entity') as at 30 June 2021 and the results of all subsidiaries for the year then ended. Medibio Limited and its subsidiaries together are referred to in these financial statements as the 'Group'. Subsidiaries are all those entities over which the consolidated entity has control. The consolidated entity controls an entity when the consolidated entity is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the consolidated entity. They are de-consolidated from the date that control ceases. Intercompany transactions, balances and unrealised gains on transactions between entities in the consolidated entity are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the consolidated entity. The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change in ownership interest, without the loss of control, is accounted for as an equity transaction, where the difference between the consideration transferred and the book value of the share of the non-controlling interest acquired is recognised directly in equity attributable to the parent. Where the consolidated entity loses control over a subsidiary, it derecognises the assets including goodwill, liabilities and non-controlling interest in the subsidiary together with any cumulative translation differences recognised in equity. The consolidated entity recognises the fair value of the consideration received and the fair value of any investment retained together with any gain or loss in profit or loss. Foreign currency translation The financial statements are presented in Australian dollars, which is Medibio Limited's functional and presentation currency. Foreign currency transactions Foreign currency transactions are translated into Australian dollars using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at financial year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss. Foreign operations The assets and liabilities of foreign operations are translated into Australian dollars using the exchange rates at the reporting date. The revenues and expenses of foreign operations are translated into Australian dollars using the average exchange rates, which approximate the rates at the dates of the transactions, for the period. All resulting foreign exchange differences are recognised in other comprehensive income through the foreign currency reserve in equity. The foreign currency reserve is recognised in profit or loss when the foreign operation or net investment is disposed of. Income tax The income tax expense or benefit for the period is the tax payable on that period's taxable income based on the applicable income tax rate for each jurisdiction, adjusted by the changes in deferred tax assets and liabilities attributable to temporary differences, unused tax losses and the adjustment recognised for prior periods, where applicable. Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to be applied when the assets are recovered or liabilities are settled, based on those tax rates that are enacted or substantively enacted, except for: ● When the deferred income tax asset or liability arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and that, at the time of the transaction, affects neither the accounting nor taxable profits; or When the taxable temporary difference is associated with interests in subsidiaries, associates or joint ventures, and the timing of the reversal can be controlled and it is probable that the temporary difference will not reverse in the foreseeable future. ● 21 Medibio Limited Notes to the financial statements 30 June 2021 Note 2. Significant accounting policies (continued) Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses. The carrying amount of recognised and unrecognised deferred tax assets are reviewed at each reporting date. Deferred tax assets recognised are reduced to the extent that it is no longer probable that future taxable profits will be available for the carrying amount to be recovered. Previously unrecognised deferred tax assets are recognised to the extent that it is probable that there are future taxable profits available to recover the asset. Deferred tax assets and liabilities are offset only where there is a legally enforceable right to offset current tax assets against current tax liabilities and deferred tax assets against deferred tax liabilities; and they relate to the same taxable authority on either the same taxable entity or different taxable entities which intend to settle simultaneously. Current and non-current classification Assets and liabilities are presented in the statement of financial position based on current and non-current classification. An asset is classified as current when: it is either expected to be realised or intended to be sold or consumed in the consolidated entity's normal operating cycle; it is held primarily for the purpose of trading; it is expected to be realised within 12 months after the reporting period; or the asset is cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least 12 months after the reporting period. All other assets are classified as non-current. 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. Impairment of non-financial assets (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 2 and note 14. The estimate of recoverable amount involves significant judgement. Goods and Services Tax ('GST') and other similar taxes Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not recoverable from the tax authority. In this case it is recognised as part of the cost of the acquisition of the asset or as part of the expense. Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the tax authority is included in other receivables or other payables in the statement of financial position. Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which are recoverable from, or payable to the tax authority, are presented as operating cash flows. Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the tax authority. 22 Medibio Limited Notes to the financial statements 30 June 2021 Note 2. Significant accounting policies (continued) 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 or amortised on a straight-line basis over the unexpired period of the lease or the estimated useful life of the asset, whichever is the shorter. Where the consolidated entity expects to obtain ownership of the leased asset at the end of the lease term, the depreciation is over its estimated useful life. Right-of use assets are subject to impairment or adjusted for any remeasurement of lease liabilities. The consolidated entity has elected not to recognise a right-of-use asset and corresponding lease liability for short-term leases with terms of 12 months or less and leases of low-value assets. Lease payments on these assets are expensed to profit or loss as incurred. 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, or to profit or loss if the carrying amount of the right-of-use asset is fully written down. New Accounting Standards and Interpretations not yet mandatory or early adopted Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet mandatory, have not been early adopted by the consolidated entity for the annual reporting period ended 30 June 2021. The consolidated entity has not yet assessed of the impact of these new or amended Accounting Standards and Interpretations. 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. 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. 23 Medibio Limited Notes to the financial statements 30 June 2021 Note 3. Critical accounting judgements, estimates and assumptions In applying the Group's accounting policies management continually evaluates judgments, estimates and assumptions based on experience and other factors, including expectations of future events that may have an impact on the Group. All judgments, estimates and assumptions made are believed to be reasonable based on the most current set of circumstances available to management. Actual results may differ from the judgments, estimates and assumptions. Significant judgments, estimates and assumptions made by management in the preparation of these financial statements are outlined below: Estimation of useful lives of assets The consolidated entity determines the estimated useful lives and related depreciation and amortisation charges for its property, plant and equipment and finite life intangible assets. The useful lives could change significantly as a result of technical innovations or some other event. The depreciation and amortisation charge will increase where the useful lives are less than previously estimated lives, or technically obsolete or non-strategic assets that have been abandoned or sold will be written off or written down. Impairment of non-financial assets (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 2. The estimate of recoverable amount involves significant judgement. Impairment of assets and investments The Group determines whether non-current assets (excluding goodwill and indefinite useful life intangible assets) should be tested for impairment based on identified impairment triggers. At the end of each reporting period management assesses the impairment triggers based on their knowledge and judgement. Where an impairment trigger is identified, an estimate of the recoverable amount is required. Capitalisation of Development costs The Group capitalises development costs when it is probable that the project will be a success; the Group is able to use or sell the asset; has sufficient resources; the intent to complete the development and costs can be measured reliably. This involves significant judgement. Share based payments The Group measures the cost of equity-settled transactions with employees, directors and advisors with reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined using the Binomial or Black-scholes method taking into account the terms and conditions upon which they were granted. These calculations can involve significant estimates and judgements. Note 4. Operating segments The Group has identified its operating segments based on the internal reports that are reviewed and used by the board of directors (chief operating decision makers) in assessing performance and determining the allocation of resources. The Company has one operating segment, being the research, development and commercialisation of its Software as a Service product, and two geographical locations, being Australia and the United States. The US based subsidiary is maintained to support US and Canadian research, development, and commercialisation activities. Revenue earned during 2021 was sourced from both Australia and USA. All assets reside in two geographical regions being Australia $17,212,030 (2020: $10,883,359) and USA $167,547 (2020: $3,258,463 ). Note 5. Sales Sales Consolidated 30 June 2021 30 June 2020 $ $ 101,656 133,500 24 Medibio Limited Notes to the financial statements 30 June 2021 Note 5. Sales (continued) 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. Sale of goods Revenue from the sale of goods is recognised at the point in time when the customer obtains control of the goods, which is generally at the time of delivery. Rendering of services Revenue from a contract to provide services is recognised over time as the services are rendered based on either a fixed price or an hourly rate. 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. Government grants and assistance Government grants relating to costs are deferred and recognised in profit or loss over the period necessary to match them with the costs that they are intended to compensate. 25 Medibio Limited Notes to the financial statements 30 June 2021 Note 6. Other income R&D grant received Other income Interest received Government assistance Note 7. Employee costs Wages and salaries Share-based compensation expense Payroll taxes and benefits Other employee expenses Superannuation Note 8. Finance costs Leasing costs Other finance costs Note 9. Other expenses Consulting and advisory expenses Legal fees Listing fees and share registry charges Sales and marketing Other administration expenses 26 Consolidated 30 June 2021 30 June 2020 $ $ 803,168 47,017 1,330 312,652 674,158 117,611 7,562 - 1,164,167 799,331 Consolidated 30 June 2021 30 June 2020 $ $ 352,921 221,625 41,126 6,170 13,014 1,135,307 248,080 107,734 350,781 24,587 634,856 1,866,489 Consolidated 30 June 2021 30 June 2020 $ $ 9,991 6,291 10,091 26,596 16,282 36,687 Consolidated 30 June 2021 30 June 2020 $ $ 620,573 62,542 58,412 7,092 552,680 804,056 525,588 72,419 916 582,024 1,301,299 1,985,003 Medibio Limited Notes to the financial statements 30 June 2021 Note 10. Income tax expense Numerical reconciliation of income tax expense and tax at the statutory rate Loss before income tax expense Tax at the statutory tax rate of 26% (2020: 27.5%) Tax effect amounts which are not deductible/(taxable) in calculating taxable income: Tax effect of temporary differences and current year loss not brought to account Income tax expense The potential deferred tax asset will only be obtained if: Consolidated 30 June 2021 30 June 2020 $ $ (1,486,602) (3,872,404) (386,517) (1,064,911) 386,517 1,064,911 - - future assessable income is derived of a nature and of an amount sufficient to enable the benefit to be realised; (i) (ii) the conditions for deductibility imposed by tax legislation continue to be complied with; and (iii) no changes in tax legislation adversely affect the Group in realising the benefit. At 30 June 2021, there is no recognised or unrecognised deferred tax liability (2020: nil) for taxes that would be payable on the unremitted earnings of certain of the Group’s subsidiaries, as the Group has no liability for additional taxation should such amounts be remitted. Tax consolidation Effective 1 July 2003, for the purposes of income taxation, Medibio Limited and its 100% owned subsidiaries have formed a tax consolidated group. Members of the group have entered into a tax sharing arrangement in order to allocate income tax expense to the wholly-owned subsidiaries on a pro-rata basis. In addition, the agreement provides for the allocation of income tax liabilities between the entities should the head entity default on its tax payment obligations. Tax accounting by members of the tax consolidated group Members of the tax consolidated group have entered into a tax funding arrangement. The tax funding arrangement provides for the allocation of current taxes to members of the tax consolidated group in accordance with the available fractions belonging to each subsidiary, which is directly linked to prior year losses that have been accumulated. In the event of the Company generating future taxable profits, the tax losses will be absorbed according to the available fractions within the group. The allocation of taxes under the tax funding agreement is recognised as an increase/decrease in the subsidiaries’ intercompany accounts with the tax consolidated group head company, Medibio Limited. The Group has applied the group allocation approach in determining the appropriate amount of current taxes to allocate to members of the tax consolidated group. Note 11. Current assets - cash and cash equivalents Cash at bank Consolidated 30 June 2021 30 June 2020 $ $ 2,311,552 812,503 Accounting policy for cash and cash equivalents Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. 27 Medibio Limited Notes to the financial statements 30 June 2021 Note 12. Current assets - trade and other receivables Trade receivables Consolidated 30 June 2021 30 June 2020 $ $ 32,156 32,505 Accounting policy for 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. Note 13. Non-current assets - right-of-use assets Right-of-use assets - land and buildings Less: Accumulated depreciation Consolidated 30 June 2021 30 June 2020 $ $ 230,762 (207,686) 581,972 (510,532) 23,076 71,440 The consolidated entity leases land and buildings for its offices under agreements of between 3 to 5 years with, in some cases, options to extend. The leases have various escalation clauses. On renewal, the terms of the leases are renegotiated. Reconciliations Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out below: Consolidated Balance at 1 July 2020 Depreciation expense Balance at 30 June 2021 Land and buildings $ 71,440 (48,364) 23,076 Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the lease or the estimated useful life of the asset, whichever is the shorter. Where the consolidated entity expects to obtain ownership of the leased asset at the end of the lease term, the depreciation is over its estimated useful life. Right-of use assets are subject to impairment or adjusted for any remeasurement of lease liabilities. The consolidated entity has elected not to recognise a right-of-use asset and corresponding lease liability for short-term leases with terms of 12 months or less and leases of low-value assets. Lease payments on these assets are expensed to profit or loss as incurred. 28 Medibio Limited Notes to the financial statements 30 June 2021 Note 14. Non-current assets - intangibles Goodwill - at cost Goodwill - Acquisition of Vital Conversations Pty Ltd Goodwill - Accumulated impairment losses Capitalized Development Expenses ilumen Application Development - at cost Less: Accumulated amortisation MEB-001 Application Development - at cost Data files - at cost Consolidated 30 June 2021 30 June 2020 $ $ 444,999 309,100 (754,099) - 444,999 309,100 (754,099) - 4,381,065 3,283,941 750,772 (150,154) 600,618 750,772 - 750,772 1,908,974 1,172,813 7,794,644 7,794,644 14,685,301 13,002,170 Accounting policy for 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 in profit or loss 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. Research and development Research costs are expensed in the period in which they are incurred. Development costs are capitalised when it is probable that the project will be a success considering its commercial and technical feasibility; the consolidated entity is able to use or sell the asset; the consolidated entity has sufficient resources and intent to complete the development; and its costs can be measured reliably. Capitalised development costs are amortised on a straight-line basis over the period of their expected benefit, being their finite life of 5 years. Indefinite Life Intangible Assets Data files are indefinite life. All other development costs will have a finite life once completed and ready for use. The sleep and algorithm data in these files are at the core of the Group’s intellectual property and all current and future developments with no foreseeable limit to the period over which the assets are expected to generate net cash inflows. The recoverable amount of the group’s indefinite life intangible assets has been determined by fair value less costs to sell based on the cost approach, with the recoverable amount based on the cost to collect further data files from recent and ongoing studies. Consideration has also been given to outcomes of the studies and progress in developing the technology as well as published costs of studies. Key assumptions include the costs paid to suppliers for data files as well as the allocation of internal staff time to generate and analyze additional data files. There has been no change since the prior period in the calculation method. 29 Medibio Limited Notes to the financial statements 30 June 2021 Note 15. Current liabilities - trade and other payables Trade payables Refer to note 21 for further information on financial instruments. Consolidated 30 June 2021 30 June 2020 $ $ 760,794 1,204,221 Accounting policy for 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. Note 16. Current liabilities - employee benefits Employee benefits Accounting policy for employee benefits Consolidated 30 June 2021 30 June 2020 $ $ 133,075 123,063 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. Note 17. Current liabilities - Other liabilities Accrued director fees Note 18. Equity - issued capital Consolidated 30 June 2021 30 June 2020 $ $ 45,000 - Ordinary shares - fully paid 1,795,061,498 1,094,796,705 96,066,735 91,669,201 Consolidated 30 June 2021 30 June 2020 30 June 2021 30 June 2020 Shares Shares $ $ 30 Medibio Limited Notes to the financial statements 30 June 2021 Note 18. Equity - issued capital (continued) Movements in ordinary share capital Details Date Shares Issue price $ Balance Share issued Share purchase plan and placement Conversion of convertible notes Share issued for settlement of debt Share issued for settlement of payables Share issued via placement Share issue costs 1 July 2019 19 July 2019 29 August 2019 29 August 2019 2 June 2020 2 June 2020 18 June 2020 Balance Underwritten Non-Renounceable Entitlement Offer Exercise of options Shares issued via placement Shares issued via placement Shares issued via SPP Shares issued for settlement of payables Share issue costs (options) Share issue costs 30 June 2020 13 July 2020 26 August 2020 15 February 2021 8 April 2021 8 April 2021 18 May 2021 15 February 2021 30 June 2021 248,801,499 35,000,000 435,995,500 275,333,040 15,000,000 1,333,333 83,333,333 - 1,094,796,705 252,865,843 21 222,222,222 111,111,111 111,111,051 2,954,545 - - 84,424,838 350,000 4,359,955 2,753,330 150,000 9,333 500,000 (878,255) $0.010 $0.010 $0.010 $0.010 $0.007 $0.006 $0.000 91,669,201 1,517,195 1 2,000,000 1,000,000 1,000,000 32,500 (609,209) (542,953) $0.006 $0.030 $0.009 $0.009 $0.009 $0.011 $0.000 $0.000 Balance 30 June 2021 1,795,061,498 96,066,735 Ordinary shares Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the Company in proportion to the number of and amounts paid on the shares held. The fully paid ordinary shares have no par value and the Company does not have a limited amount of authorised capital. 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. Share buy-back There is no current on-market share buy-back. Capital risk management The consolidated entity's objectives when managing capital is to safeguard its ability to continue as a going concern, so that it can provide returns for shareholders and benefits for other stakeholders and to maintain an optimum capital structure to reduce the cost of capital. Capital is regarded as total equity, as recognised in the statement of financial position, plus net debt. Net debt is calculated as total borrowings less cash and cash equivalents. In order to maintain or adjust the capital structure, the consolidated entity may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt. The consolidated entity would look to raise capital when an opportunity to invest in a business or company was seen as value adding relative to the current Company's share price at the time of the investment. The consolidated entity is not actively pursuing additional investments in the short term as it continues to integrate and grow its existing businesses in order to maximise synergies. The capital risk management policy remains unchanged from the 2020 Annual Report. Accounting policy for issued capital Ordinary shares are classified as equity. 31 Medibio Limited Notes to the financial statements 30 June 2021 Note 18. Equity - issued capital (continued) 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. Note 19. Equity - reserves Share based payment reserve Foreign currency translation reserve Consolidated 30 June 2021 30 June 2020 $ $ 6,231,971 (13,277) 5,446,136 (123,019) 6,218,694 5,323,117 Movements in reserves Movements in each class of reserve during the current and previous financial year are set out below: Consolidated Balance at 1 July 2019 Foreign currency translation Share options issued Balance at 30 June 2020 Foreign currency translation Share options issued Balance at 30 June 2021 Note 20. Equity - dividends Foreign currency translation reserve $ Share Based payments reserve $ Total $ (142,176) 19,157 - 4,821,109 - 625,027 4,678,933 19,157 625,027 (123,019) 109,742 - 5,446,136 - 785,835 5,323,117 109,742 785,835 (13,277) 6,231,971 6,218,694 There were no dividends paid, recommended or declared during the current or previous financial year. Note 21. Financial instruments Financial risk management objectives The Group’s principal financial instruments comprise receivables, payables, cash, investments and short-term deposits. The main risks arising from the Group’s financial instruments are credit risk, interest rate risk, foreign exchange risk and liquidity risk. The Group uses different methods to measure and manage different types of risks to which it is exposed. These include monitoring the levels of exposure to interest rates and assessments of market forecast for interest rates. Market risk Foreign currency risk The Group is exposed to fluctuations in foreign currencies on purchases of goods in currencies other than the Group’s functional currency. The Group manages the risk by monitoring the level of exposure to foreign currency transactions and limiting where possible. Interest rate risk The Group’s exposure to market interest rates relates primarily to the Group’s funds held on term deposit. At the end of the reporting period the Group had the following financial asset exposed to interest rate risk. 32 Medibio Limited Notes to the financial statements 30 June 2021 Note 21. Financial instruments (continued) Financial assets Cash and cash equivalents Consolidated 30 June 2021 30 June 2020 $ $ 2,311,552 812,503 The Group’s policy is to place funds on interest-bearing term deposit that are surplus to immediate requirements. The Group’s interest rate exposure is reviewed near the maturity date of term deposits, to assess whether more attractive rates are available without increasing risk. The following sensitivity analysis is based on the interest rate exposures in existence at the end of the reporting period. At 30 June 2021, if interest rates had moved, as illustrated in the table below, with all other variables held constant, post- tax loss and equity would have been affected as follows: Consolidated - 30 June 2021 Increase Effect on profit before tax Basis point change Effect on equity Basis point change Decrease Effect on profit before tax Effect on equity Cash and cash equivalents Cash and cash equivalents 100 50 23,115 11,558 23,115 11,558 (100) (50) (23,115) (11,558) (23,115) (11,558) 34,673 34,673 (34,673) (34,673) Consolidated - 30 June 2020 Increase Effect on profit before tax Basis point change Effect on equity Basis point change Decrease Effect on profit before tax Effect on equity Cash and cash equivalents Cash and cash equivalents 100 50 8,125 4,063 8,125 4,063 (100) (50) (8,125) (4,063) (8,125) (4,063) 12,188 12,188 (12,188) (12,188) The movements in losses are due to higher/ (lower) interest income from cash balances. There is no impact on equity other than impact on accumulated losses. Credit risk Credit risk arises from the financial assets of the Group, which comprise cash and cash equivalents and trade and other receivables. The Group’s maximum exposures to credit risk at the end of the reporting period in relation to each class of recognised financial assets is the carrying amount of those assets as indicated in the Statement of Financial Position. The Group minimises concentrations of credit risk in relation to trade receivables by having payment terms of 30 days and receivable balances are monitored on an ongoing basis with the result that the Group has currently never had an exposure to bad debts. It is the Group’s policy that all customers who wish to trade on credit terms are subject to credit verification procedures. Term deposits are placed with major financial institutions to minimise the risk of default of counterparties. Liquidity risk The Group’s objective is to maintain sufficient funds to finance its current operations and additional funds to ensure its long-term survival. The Group has no finance facilities in place and therefore it is currently dependent on capital raisings and government tax incentives for short-term survival. Liquidity risk is monitored through the development of future rolling cash flow forecasts that are tabled and reviewed at each board meeting. All liabilities are due and payable within 12 months. 33 Medibio Limited Notes to the financial statements 30 June 2021 Note 21. Financial instruments (continued) Fair value of financial instruments The carrying amount of all recognised financial assets and financial liabilities is considered a reasonable approximation of their fair value due to their short-term nature. Note 22. Fair value measurement Accounting policy for 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. Note 23. Key management personnel disclosures Directors The following persons were Directors of Medibio Limited during the financial year: Mr Claude Solitario, Managing Director Mr Peter Carlisle, Non-Executive and Lead Independent Director Ms Melanie Leydin, Director Other key management personnel The following person also had the authority and responsibility for planning, directing and controlling the major activities of the consolidated entity, directly or indirectly, during the financial year: Mr Mathew Watkins Compensation The aggregate compensation made to Directors and other members of key management personnel of the consolidated entity is set out below: Short-term employee benefits Post-employment benefits Termination benefits Share-based payments Consolidated 30 June 2021 30 June 2020 $ $ 302,931 13,013 - 137,025 527,523 6,157 134,058 321,444 452,969 989,182 34 Medibio Limited Notes to the financial statements 30 June 2021 Note 24. Remuneration of auditors During the financial year the following fees were paid or payable for services provided by , the auditor of the Company: Consolidated 30 June 2021 30 June 2020 $ $ 37,000 37,000 13,125 - 12,000 952 13,125 12,952 50,125 49,952 Audit services - Audit or review of the financial statements Other services - Tax compliance EGM and AGM attendance Note 25. Related party transactions Parent entity Medibio Limited is the parent entity. Subsidiaries Interests in subsidiaries are set out in note 27. Key management personnel Disclosures relating to key management personnel are set out in note 23 and the remuneration report included in the Directors' report. Other transactions with related parties: Transactions with related parties There were no transactions with related parties during the current and previous financial year. Receivable from and payable to related parties There were trade payables of $20,867 to Leydin Freyer at 30 June 2021. Loans to/from related parties There were no loans to or from related parties at the current and previous reporting date. Note 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 Other comprehensive income for the year, net of tax Total comprehensive income 35 Parent 30 June 2021 30 June 2020 $ $ (707,413) (328,955) - - (707,413) (328,955) Medibio Limited Notes to the financial statements 30 June 2021 Note 26. Parent entity information (continued) Statement of financial position Total current assets Total non-current assets Total assets Total current liabilities Total non-current liabilities Total liabilities Net assets Equity Issued capital Share based payment reserve Accumulated losses Total equity Parent 30 June 2021 30 June 2020 $ $ 2,457,927 576,970 23,783,841 36,482,856 26,241,768 37,059,826 605,839 577,527 6,149,563 6,186,952 6,755,402 6,764,479 19,486,366 30,295,347 96,066,735 91,669,201 4,676,985 (66,050,839) 5,148,298 (81,728,667) 19,486,366 30,295,347 Guarantees entered into by the parent entity in relation to the debts of its subsidiaries The parent entity had no guarantees in relation to the debts of its subsidiaries as at 30 June 2020 and 30 June 2021. Contingent liabilities The parent entity had no contingent liabilities as at 30 June 2020 and 30 June 2021. Capital commitments - Property, plant and equipment The parent entity had no capital commitments for property, plant and equipment as at 30 June 2020 and 30 June 2021. Significant accounting policies The accounting policies of the parent entity are consistent with those of the consolidated entity, as disclosed in note 2, except for the following: ● ● ● Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity. Investments in associates are accounted for at cost, less any impairment, in the parent entity. Dividends received from subsidiaries are recognised as other income by the parent entity and its receipt may be an indicator of an impairment of the investment. 36 Medibio Limited Notes to the financial statements 30 June 2021 Note 27. Interests in subsidiaries The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in accordance with the accounting policy described in note 2: Name BioProspect Australia Pty Ltd* Australian Phytochemicals Pty Ltd* BioProspect America Pty Ltd* Medibio Limited – USA** Invatec Health Pty Ltd* Annapanna Pty Ltd** * ** Dormant entities Human health – CHR diagnostic development Note 28. Events after the reporting period Principal place of business / Country of incorporation Ownership interest 30 June 2021 30 June 2020 % % Australia Australia Australia USA - Delaware Australia Australia 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% No matter or circumstance has arisen since 30 June 2021 that has significantly affected, or may significantly affect the consolidated entity's operations, the results of those operations, or the consolidated entity's state of affairs in future financial years. Note 29. Reconciliation of loss after income tax to net cash used in operating activities Loss after income tax expense for the year Adjustments for: Interest received Impairment expense Share-based payments and share-based compensation expense Depreciation on the right of use assets Change in operating assets and liabilities: Decrease/(increase) in prepayments (Increase) / decrease in trade and other receivables (Decrease) / increase in trade and other payables (Decrease) / increase in employee entitlements Net cash used in operating activities Note 30. Earnings per share Consolidated 30 June 2021 30 June 2020 $ $ (1,486,602) (3,872,404) (1,330) - 254,126 198,518 (7,562) 203,549 407,412 148,865 (232,533) 349 (443,426) 10,012 167,366 (17,631) (604,161) (14,252) (1,700,886) (3,588,818) Consolidated 30 June 2021 30 June 2020 $ $ Loss after income tax attributable to the Owners of Medibio Limited (1,486,602) (3,872,404) 37 Medibio Limited Notes to the financial statements 30 June 2021 Note 30. Earnings per share (continued) Weighted average number of ordinary shares used in calculating basic earnings per share 1,471,728,946 882,414,832 Weighted average number of ordinary shares used in calculating diluted earnings per share 1,471,728,946 882,414,832 Number Number Basic earnings per share Diluted earnings per share Accounting policy for earnings per share Cents Cents (0.10) (0.10) (0.44) (0.44) Basic earnings per share Basic earnings per share is calculated by dividing the profit attributable to the Owners of Medibio 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. Note 31. Share-based payments Expense recognised for employee services received during the year Consolidated Consolidated 2021 $ 2020 $ Share-based compensation related to options granted to employees 84,601 151,033 Expense recognised for consulting services received during the year Consolidated Consolidated 2021 $ 2020 $ Share-based compensation related to options granted to directors 92,025 314,661 Expense recognised for other services received during the year Share-based compensation related to options granted for settlement of services 609,209 159,333 Consolidated 30 June 2021 30 June 2020 $ $ 38 Medibio Limited Notes to the financial statements 30 June 2021 Note 31. Share-based payments (continued) Set out below are summaries of options granted: 30 June 2021 Grant date Expiry date price Exercise Balance at the start of the year Granted Exercised 11/09/2017 30/11/2017 06/06/2018 21/06/2018 21/06/2018 15/05/2019 19/07/2019 19/08/2019 19/08/2019 22/11/2019 02/06/2020 18/06/2020 15/04/2021 09/10/2020 08/12/2020 08/12/2020 15/02/2021 15/02/2021 08/04/2021 08/04/2021 08/04/2021 11/10/2022 30/11/2020 18/06/2022 18/06/2023 11/10/2020 13/06/2023 14/06/2023 19/08/2023 19/08/2024 20/12/2023 02/06/2022 02/06/2022 06/10/2023 06/10/2023 08/12/2025 06/10/2023 28/02/2024 28/02/2024 28/02/2024 28/02/2024 28/02/2024 2,000,000 $0.450 - 3,000,000 $0.400 - 3,637,113 $0.440 - 1,350,000 $0.450 - $0.800 3,000,000 - $0.014 14,500,000 - 9,500,000 $0.014 - 2,600,000 $0.020 - 7,750,000 $0.015 - 8,800,000 $0.011 - $0.300 7,500,000 - $0.300 20,000,000 - 1,800,000 - $0.012 - 16,000,000 $0.012 - 11,250,000 $0.011 - $0.012 2,900,000 - 55,555,555 $0.015 - 59,114,285 $0.015 - 27,777,676 $0.015 - 27,777,778 $0.015 - 34,885,715 $0.015 83,637,113 237,061,009 Expired/ forfeited/ other Balance at the end of the year - (3,000,000) - - (3,000,000) 2,000,000 - 3,637,113 1,350,000 - - 14,500,000 9,500,000 - 2,600,000 - 7,750,000 - 8,800,000 - - 7,500,000 - 20,000,000 1,800,000 - - 16,000,000 - 11,250,000 - 2,900,000 - 55,555,555 - 59,114,285 - 27,777,676 - 27,777,778 - 34,885,715 (6,000,000) 314,698,122 - - - - - - - - - - - - - - - - - - - - - - Weighted average exercise price $0.097 $0.012 $0.000 $0.600 $0.025 30 June 2020 Grant date Expiry date price Exercise Balance at the start of the year Granted Exercised Expired/ forfeited/ other Balance at the end of the year 05/11/2016 11/09/2017 30/11/2017 30/11/2017 06/06/2018 21/06/2018 21/06/2018 15/05/2019 19/07/2019 19/08/2019 19/08/2019 22/11/2019 02/06/2020 18/06/2020 30/11/2019 11/10/2022 30/11/2019 30/11/2020 18/06/2022 18/06/2023 11/10/2020 13/06/2023 14/06/2023 19/08/2023 19/08/2024 20/12/2023 02/06/2022 02/06/2022 3,500,000 $0.480 2,000,000 $0.450 3,000,000 $0.400 3,000,000 $0.400 3,637,113 $0.440 8,875,000 $0.450 $0.800 3,000,000 $0.010 14,500,000 $0.010 $0.020 $0.015 $0.011 $0.030 $0.030 - - - - - - - - - 15,000,000 - 2,600,000 - 19,000,000 - 8,800,000 7,500,000 - - 20,000,000 41,512,113 72,900,000 - - - - - - - - - - - - - - - - (3,500,000) 2,000,000 - - (3,000,000) 3,000,000 - 3,637,113 - 1,350,000 (7,525,000) - 3,000,000 - 14,500,000 (5,500,000) 9,500,000 - 2,600,000 (11,250,000) 7,750,000 - 8,800,000 7,500,000 - - 20,000,000 (30,775,000) 83,637,113 Weighted average exercise price $0.317 $0.019 $0.000 $0.211 $0.097 39 Medibio Limited Notes to the financial statements 30 June 2021 Note 31. Share-based payments (continued) For the options granted during the current financial year, the valuation model inputs used to determine the fair value at the grant date, are as follows: Grant date Expiry date Share price Exercise at grant date price Volatility Risk-free Fair value interest rate 19/07/2019 19/08/2019 19/08/2019 22/11/2019 02/06/2020 18/06/2020 09/10/2020 08/12/2020 08/12/2020 06/10/2020 15/02/2021 08/04/2021 18/04/2021 14/06/2023 19/08/2023 19/08/2024 20/12/2023 02/06/2022 02/06/2022 06/10/2023 08/12/2025 06/10/2023 06/10/2023 28/02/2024 28/02/2024 06/10/2023 $0.020 $0.015 $0.015 $0.008 $0.007 $0.006 $0.011 $0.010 $0.010 $0.011 $0.011 $0.009 $0.011 $0.010 $0.020 $0.015 $0.011 $0.030 $0.030 $0.012 $0.011 $0.012 $0.012 $0.015 $0.015 $0.012 127.00% 127.00% 127.00% 127.00% 254.00% 256.00% 119.00% 121.00% 121.00% 119.00% 121.00% 120.08% 120.08% 0.95% 0.69% 0.69% 0.82% 0.27% 0.26% 0.01% 0.12% 0.12% 0.01% 0.01% 0.01% 0.01% $0.01717 $0.01155 $0.01273 $0.00563 $0.00582 $0.00509 $0.00753 $0.00818 $0.00665 $0.00753 $0.00729 $0.00511 $0.00704 The consolidated entity issued 59.1 million quoted options on 15 February 2021 and 34.9 million quoted options on 8 April 2021 with an exercise price of 1.5 cents. Both options expire 28 February 2024 and were issued for the purpose of services rendered for capital raising initiatives. The fair value of these options upon issue was $609,209, which is based on the price on grant date for these quoted options, which has been capitalised as share raising costs. Accounting policy for share-based payments Equity-settled and cash-settled share-based compensation benefits are provided to employees. Equity-settled transactions are awards of shares, or options over shares, that are provided to employees in exchange for the rendering of services. Cash-settled transactions are awards of cash for the exchange of services, where the amount of cash is determined by reference to the share price. The cost of equity-settled transactions are measured at fair value on grant date. Fair value is independently determined using either the Binomial or Black-Scholes option pricing model that takes into account the exercise price, the term of the option, the impact of dilution, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the option, together with non-vesting conditions that do not determine whether the consolidated entity receives the services that entitle the employees to receive payment. No account is taken of any other vesting conditions. The cost of equity-settled transactions are recognised as an expense with a corresponding increase in equity over the vesting period. The cumulative charge to profit or loss is calculated based on the grant date fair value of the award, the best estimate of the number of awards that are likely to vest and the expired portion of the vesting period. The amount recognised in profit or loss for the period is the cumulative amount calculated at each reporting date less amounts already recognised in previous periods. The cost of cash-settled transactions is initially, and at each reporting date until vested, determined by applying either the Binomial or Black-Scholes option pricing model, taking into consideration the terms and conditions on which the award was granted. The cumulative charge to profit or loss until settlement of the liability is calculated as follows: ● during the vesting period, the liability at each reporting date is the fair value of the award at that date multiplied by the expired portion of the vesting period. from the end of the vesting period until settlement of the award, the liability is the full fair value of the liability at the reporting date. ● All changes in the liability are recognised in profit or loss. The ultimate cost of cash-settled transactions is the cash paid to settle the liability. 40 Medibio Limited Notes to the financial statements 30 June 2021 Note 31. Share-based payments (continued) 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. 41 Medibio Limited Directors' declaration 30 June 2021 In the Directors' opinion: ● ● ● ● the attached financial statements and notes comply with the Corporations Act 2001, the Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements; the attached financial statements and notes comply with International Financial Reporting Standards as issued by the International Accounting Standards Board as described in note 2 to the financial statements; the attached financial statements and notes give a true and fair view of the consolidated entity's financial position as at 30 June 2021 and of its performance for the financial year ended on that date; and there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable. The Directors have been given the declarations required by section 295A of the Corporations Act 2001. Signed in accordance with a resolution of Directors made pursuant to section 295(5)(a) of the Corporations Act 2001. On behalf of the Directors ___________________________ Claude Solitario Managing Director 31 August 2021 42 Medibio Limited Independent auditor’s report to members Report on the Audit of the Financial Report Opinion We have audited the financial report of Medibio 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 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 other explanatory information, 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 ended on that date; and (ii) complying with Australian Accounting Standards and the Corporations Regulations 2001. Basis for Opinion We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report. We are independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Material Uncertainty Related to Going Concern We draw attention to Note 2 in the financial report, which indicates that the Group incurred a total comprehensive loss of $1,486,602 during the year ended 30 June 2021 and had net cash outflows from operations of $1,700,886. As stated in Note 2, these events or conditions, along with other matters as set forth in Note 2, indicate that a material uncertainty exists that may cast significant doubt on the Group’s ability to continue as a going concern. Our opinion is not modified in respect of this matter. Key Audit Matters Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial report of the current period. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. VALUATION OF IDENTIFIABLE INTANGIBLE ASSETS How our audit addressed it Our audit procedures included: — Agreeing the cost of studies to supporting invoices from the external bodies conducting the studies; — Agreeing the cost per data file calculation based on the number of data files obtained; — Confirming that the recoverable amount based on the amounts calculated was in excess of the carrying amount; — Reviewed management’s impairment assessments — Reviewed whether intangible assets were eligible for capitalisation by examining and re-calculating the remuneration of employees conducting work on application development as well as the nature of the asset. — Reviewed announcements to the market and held discussions with management to confirm the progress of the development of the technology and outcomes of studies to determine if there were any other indicators of impairment for the intangible assets. We also considered the adequacy of the Group’s disclosures in relation to identifiable intangible assets. Refer also to notes 2, 3 and 14 — The group has $14.7 million of identifiable intangible assets (2020: $13 million) including Development Costs of $6.29million and Data Files of $7.79 million. During the year ended 30 June 2021 it capitalised $1.83m in development costs. — The carrying values of the identifiable intangible assets calls for significant judgement by the directors as the technology behind each component is still in development. The development costs and data files are not yet available for use. Accounting standards require that these assets be tested for amortisation and impairment annually by comparing its carrying amount with its recoverable amount and useful life. — The estimated recoverable amount has been calculated based on the fair value less costs to sell based on the cost approach with the recoverable amount based on the cost to collect further data files from recent studies and consideration has also been given to the outcomes of the studies and the progress in developing the technology. — An assessment is also required against the criteria in AASB 138 Intangible Assets to be able to capitalise internally generated intangible assets. Overall due to the high level of judgement involved, and the significant carrying amounts involved, we have determined that this is a key judgemental area that our audit concentrated on. SHARE BASED PAYMENTS Refer also to notes 2, 3 and 31 The group grants options to its Directors, service providers and key management personnel by way of share-based payment arrangements, including the issue of shares and options. The arrangements require significant judgements and estimations by management, including the following: — Identifcation of the grant date of each arrangement, and the evaluation of the fair value of the underlying share-based payment arrangement as at that grant date; — The evaluation of the vesting charge taken to the profit or loss in-respect of the accrual of service and performance conditions attached to those share-based payment arrangements; — The evaluation of key inputs into the Black Scholes option pricing model, including the significant judgement of the forecast volatility of the share option over its exercise period. The results of these share-based payment arrangements materially affect the disclosures in the financial statements. How our audit addressed it Our audit procedures included: — In determining the grant dates, we evaluated what were the most appropriate dates based on the terms and conditions of the share-based payment arrangements. — Evaluating the fair values of share-based payment arrangements by agreeing assumptions to third party evidence. — Reviewing the inputs into the valuation of the Options conducted at 30 June 2021. — For the specific application of the valuation models, we re-tested the key assumptions used in the model and recalculated those fair values using the skill and know-how of our in-house specialists. We considered that the forecast volatility applied in the model to be appropriately reasonable and within industry norms. We also considered the adequacy of the Group’s disclosures in relation to Share Based Payments. Other Information The directors are responsible for the other information. The other information comprises the information in the Group’s annual report for the year ended 30 June 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 we do not express any form of assurance conclusion thereon. In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Responsibilities of the Directors for the Financial Report The directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error. In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or has no realistic alternative but to do so. Auditor’s Responsibilities for the Audit of the Financial Report Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report. A further description of our responsibilities for the audit of these financial statements is located at the Auditing and Assurance Standards Board website at: http://www.auasb.gov.au/auditors_responsibilities/ar1.pdf This description forms part of our independent auditor’s report. Report on the Remuneration Report Opinion on the Remuneration Report We have audited the Remuneration Report included in pages 7 to 12 of the directors’ report for the year ended 30 June 2021. In our opinion, the Remuneration Report of Medibio 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. William Buck (Qld) ABN 21 559 713 106 M J Monaghan Director Brisbane, 31 August 2021 Medibio Limited Shareholder information 30 June 2021 The shareholder information set out below was applicable as at 16 August 2021. Distribution of equitable securities Analysis of number of equitable security holders by size of holding: Fully paid Ordinary Shares 1 - 1,000 1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,001 Over Number of holders of ordinary shares Number of ordinary shares held Percentage of ordinary shares held 259 424 171 975 77,773 1,168,647 1,359,219 55,991,881 1,314 1,736,463,978 3,143 1,795,061,498 - 0.07% 0.08% 3.12% 96.74% Minimum Parcel Size Holders Units Unmarketable parcels 71,429 1,503 29,030,067 Listed Options @ $0.015 Exp 28 Feb 2024 (MEBOC) 1 - 1,000 1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,001 Over Listed Options @ $0.03 Expiring 1 December 2021 (MEBOB) 1 - 1,000 1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,001 Over Number of holders of listed options Number of listed options Percentage of listed options 1 - - 77 7 - - 3,458,288 166 201,652,714 244 205,111,009 - - - 1.69% 98.31% Number of holders of unlisted options Number of unlisted options Percentage of unlisted options % 4 - - 39 260 - - 3,740,000 269 832,588,259 312 836,328,519 - - - 0.45% 99.55% 46 Medibio Limited Shareholder information 30 June 2021 Equity security holders Twenty largest quoted equity security holders The names of the twenty largest security holders of quoted equity securities are listed below: Name HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED ROOKHARP CAPITAL PTY LIMITED MR CLAUDE SOLITARIO SOLITARIO FAMILY ACCOUNT CITICORP NOMINEES PTY LIMITED UBS NOMINEES PTY LTD MR GAVIN JEREMY DUNHILL MRS YAN WANG AUST WEST COAST TRAVEL A/C MR JOHN YACOUB SUNSET CAPITAL MANAGEMENT PTY LTD SUNSET SUPERFUND A/C MR MALCOLM DOUGLAS PAIN PAUL ANTHONY PORTER MRS YAN WANG AUST WEST COAST TRAVEL A/C MR KEITH WILLIAM ROUND + MRS DIANNE SUZANNE ROUND MR KANAN IZZAT DEBUSCEY PTY LTD DR STEPHEN ROBERT DESMOND ADDIS + MS CORINNE MAY WHOLAGAN DAISYS SUPERFUND A/C BNP PARIBAS NOMINEES PTY LTD SIX SIS LTD BRIANT NOMINEES PTY LTD DANTEEN PTY LTD SPUNCOPIC PTY LIMITED MRS HONG LIANG Twenty largest quoted option holders The names of the twenty largest security holders of quoted options MEBOB are listed below: Listed Options @ $0.015 Exp 28 Feb 2024 Number of fully paid ordinary shares held 164,470,097 91,966,666 52,037,550 36,419,794 27,307,199 24,000,000 22,777,778 20,550,000 20,000,000 17,000,000 15,000,000 13,888,888 13,408,218 12,500,000 12,000,000 11,500,000 11,161,490 11,111,112 11,111,112 10,665,583 10,227,500 609,102,987 % of total shares issued 9.16% 5.12% 2.89% 2.03% 1.52% 1.34% 1.27% 1.14% 1.11% 0.95% 0.84% 0.77% 0.75% 0.70% 0.67% 0.64% 0.62% 0.62% 0.62% 0.59% 0.57% 47 Medibio Limited Shareholder information 30 June 2021 Name CELTIC CAPITAL PTY LTD INCOME A/C MR BRENT JOSEPH EVITT B&J BE FUND A/C MERCURY ANETAC CAPITAL PTY LTD SUNSET CAPITAL MANAGEMENT PTY LTD SUNSET SUPERFUND A/C VENUS ANETAC PTY LTD RGC FAMILY A/C HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED ROOKHARP CAPITAL PTY LIMITED MR KE LU WLP INVESTMENTS PTY LTD GOLDSTAKE CORPORATION PTY LTD MRS YAN WANG AUST WEST COAST TRAVEL A/C MR MD AKRAM UDDIN MS ANGELA MARGARET DAY MR DALE MAURICE RAYNES AUKERA CAPITAL PTY LTD AUKERA DISCRETIONARY A/C BRIANT NOMINEES PTY LTD BRIANT SUPER FUND A/C DANTEEN PTY LTD SHANTO PTY LTD SHANTO SUPER FUND A/C MR JEREMY DAVID RUBEN + MRS VANESSA RUBEN JVR S/F A/C BEEMUH HOLDINGS PTY LTD GH FAMILY A/C The names of the twenty largest security holders of quoted options MEBOC are listed below: Listed Options @ $0.03 Expiring 1 December 2021 Name FIRST INVESTMENT PARTNERS PTY LTD HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED MR SAMUEL GERSHON JACOBS + MRS SARITA DEVI JACOBS + MISS MANEKHA BRIDGETTE JACOBS THE PHOENIX SUPERFUND A/C MR VARUN MAHINDRU MR CLAUDE SOLITARIO SOLITARIO FAMILY ACCOUNT JACOBS CAPITAL PTY LTD UBS NOMINEES PTY LTD MR PETER ANDREW PROKSA MR BRENT JOSEPH EVITT B&J BE FUND A/C FIRST INVESTMENT PARTNERS PTY LTD SUPER MSJ PTY LTD MSJ SUPER FUND A/C VENUS ANETAC PTY LTD RGC FAMILY A/C BROWN BRICKS PTY LTD HM A/C MR ANGUS HOLMES STREET MR JOHN YACOUB MISS KRUTI BHAGANI MR SURENDRA CHANDRAJIT DENLIN NOMINEES PTY LTD DR STEPHEN ROBERT DESMOND ADDIS + MS CORINNE MAY WHOLAGAN DAISYS SUPERFUND A/C SPUNCOPIC PTY LIMITED 48 % of total Number of options held options issued 21,281,665 18,709,585 10,000,000 8,416,666 8,325,082 7,648,306 6,666,667 6,000,000 5,000,000 4,840,694 4,444,445 4,000,000 3,150,000 3,068,889 3,000,000 2,777,778 2,777,778 2,749,016 2,600,000 2,500,000 127,956,571 10.38% 9.12% 4.88% 4.10% 4.06% 3.73% 3.25% 2.93% 2.44% 2.36% 2.17% 1.95% 1.54% 1.50% 1.46% 1.35% 1.35% 1.34% 1.27% 1.22% % of total options issued Number of options held 100,000,000 51,300,000 11.96% 6.13% 50,000,000 40,000,000 30,333,040 30,000,000 26,057,200 25,000,000 24,671,500 20,000,000 20,000,000 20,000,000 15,000,000 10,416,000 10,200,000 10,000,000 10,000,000 10,000,000 9,000,000 8,000,000 519,977,740 5.98% 4.78% 3.63% 3.59% 3.12% 2.99% 2.95% 2.39% 2.39% 2.39% 1.79% 1.25% 1.22% 1.20% 1.20% 1.20% 1.08% 0.96% Medibio Limited Shareholder information 30 June 2021 Options over ordinary shares issued Number on issue Number of holders 109,587,113 41 Substantial holders Substantial holders in the Company, as disclosed in substantial holding notices given to the Company, are set out below: FIL Limited and its associated entities Details of the holder of 20% or more of the unlisted options* Ordinary shares % of total Number held shares issued 121,928,459 7.77 Unlisted Options* % of total unlisted options issued Number held Mr Claude Solitario 24,150,000 26.31 *This excludes unlisted options issued under the Company’s Employee Incentive Option Plan. Director Nomination The Company will hold its Annual General Meeting of shareholders on 11 November 2021. The Company also advises that in accordance with ASX Listing Rule 14.5 and the Company’s constitution the Closing Date for receipt of nominations for the position of Director is 30 September 2021. Any nominations must be received in writing no later than 5.00pm (Melbourne time) on this date at the Company’s Registered Office. Voting rights The voting rights attached to securities are set out below: Ordinary shares On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each share shall have one vote. Options (listed and unlisted) The listed and unlisted options on issue do not carry any voting rights. There are no other classes of equity securities. 49 

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