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Annual Report 2022

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2022 Annual Report For the Year Ended 30th June 2022 ASX : NTI ACN 610 205 402 Contents Directors’ Report Auditor’s Independence Declaration Consolidated Statement of Profit or Loss & Other Comprehensive Income Consolidated Statement of Financial Position Consolidated Statement of Changes in Equity Consolidated Statement of Cash Flows Notes to the Consolidated Financial Statements Directors’ Declaration Independent Audit Report ASX Additional Information 02 32 33 34 35 37 38 63 64 68 Corporate Directory Directors Mark Davies Non-Executive Chairman Winton Willesee Non-Executive Director Allan Cripps Non-Executive Director and Chief Scientist Gerald Quigley Non-Executive and Director of Public Relations Company Secretary Erlyn Dawson Registered and Principal Office Suite 5 CPC, 145 Stirling Highway Nedlands WA 6009 Telephone: (08) 9389 3130 Website: www.neurotechinternational.com Email: info@neurotechinternational.com Auditors BDO Audit (WA) Pty Ltd Level 9, Mia Yellagonga Tower 2 5 Spring Street, Perth WA 6000 Share Registry Automic Registry Services Level 5/191 St Georges Terrace Perth WA 6000 Telephone: 1300 288 664 Home Exchange Australian Securities Exchange Ltd Central Park, 152-158 St Georges Terrace Perth WA 6000 ASX Code: NTI 2022 Annual Report • 1 Directors Report 2 • Neurotech International The Directors present their report together with the financial report of Neurotech International Limited and its controlled entities (Group) for the financial year ended 30 June 2022 and the Auditor’s Report thereon. Board of Directors The names and details of the Directors in office during the financial period and until the date of this report are set out below. Mark Davies Non-Executive Chairman Winton Willesee Non-Executive Director Allan Cripps Non-Executive Director and Chief Scientist Gerald Quigley Non-Executive and Director of Public Relations (appointed 7 July 2022) Brian Leedman Non-Executive Chairman (resigned 15 August 2022) Krista Bates Non-Executive Director (resigned 15 August 2022) Principal Activities Neurotech International Limited is a medical device and solutions company conducting clinical studies to assess the neuro- protective, anti-inflammatory and neuro-modulatory activities of its proprietary cannabis strains. Neurotech is also commercialising Mente, the world’s first home therapy that is clinically proven to increase engagement and improve relaxation in autistic children with elevated Delta band brain activity. Dividends Paid or Recommended The Directors of the Company do not recommend the payment of a dividend in respect of the current financial year ended 30 June 2022 (2021: Nil). Operating Results The consolidated Group’s net loss after providing for income tax for the year ended 30 June 2022 amounted to $3,362,241 (30 June 2021: $7,430,628). Refer Note 1(c) on the preparation of the financial statements on a going concern basis. 2022 Annual Report • 3 Review of Operations During the 2022 financial year, Neurotech was focused on delivering solutions for the treatment of conditions that improve quality of life, involving clinical studies to assess the neuro-protective, anti-inflammatory and neuro-modulatory activities of proprietary NTI/Dolce cannabis strains. To complement its Mente technology, Neurotech continued to progress its clinical program, conducting a world-first trial using the proprietary cannabis strain, NTI164, to treat Paediatric Autism Spectrum Disorder (ASD) at Monash Children’s Hospital, Melbourne. Landmark Paediatric ASD Study Using NTI1641 During the financial year period, NTI conducted its landmark Phase I/II study in paediatric ASD. The ongoing study has been designed to rigorously assess the safety and efficacy of NTI164 in a dose-escalation regime and to evaluate behaviours, focus and cognitive parameters using validated neuropsychological tools. The study was also designed to provide the foundation for follow up studies in the treatment of further neurological disorders such as Multiple Sclerosis, Attention Deficit Hyperactivity Disorder (ADHD), Motor Neuron Disease, Rett Syndrome and Cerebral Palsy. NTI164 is one of NTI’s proprietary cannabis strains, exclusively licenced from Dolce Cann Global (Ltd), in respect of neurological applications and is the world’s first full-spectrum medicinal cannabis product (less than 0.3% THC) to be successfully studied in children with ASD. The only drug currently approved by the FDA for children with ASD is Risperidone. Given the NTI trial results to date showed no serious adverse side effects and significant positive outcomes, the Company trusts it is well placed to make significant inroads into the ASD treatment market. Overall Study Design and Outline: • Open-label study. • The study population: Children aged between eight years through to seventeen years that have a medical diagnosis of Level II and III Autism Spectrum Disorder (ASD) as confirmed by the Autism Diagnostic Observational Schedule (ADOS-2) criteria. Study Primary Endpoints: • Safety and tolerability - across dose regime (5mg/kg, 10mg/kg, 15mg/kg and 20 mg/kg). • Safety was monitored and measured by clinical examination, full blood examinations, liver and renal function tests in addition to parent/carer and physician questionnaires. Study Behavioural Endpoints: • Efficacy was measured through parent/ carer and physician questionnaires to assess parameters including, but not limited to: • Anxiety • Participation • Irritability • Hyperactivity • Mood, and • Self-stimulation In total, over 2,250 assessment points were created through the landmark study. 4 • Neurotech International 1. ASX Announcement 12 May 2022 - Key Development in Current Paediatric Autism Spectrum Disorder Study “Wash Out Period” Removed from ASD Study Design In May 2022, Neurotech announced important advancements relating to the study protocol assessing NTI164 in children with autism spectrum disorder (ASD). Due to the significant number of requests from patient’s parents/ caregivers to the Principal Investigator and Human Research Ethics Committee (HREC) at Monash Children’s Hospital, the study protocol was modified to accommodate the ongoing treatment of study participants using NTI164. The original study design was developed in line with similar study protocols whereby participants would undertake a “wash out period”, where they reduce and subsequently stop taking the trial treatment. However, due to the positive impact that the treatment was having on the children’s ‘overall functioning’, patient’s parents and caregiver requested that the “wash out” period be removed from the study protocol. The patients remained on the treatment and continue to be monitored and treated under the guidance of Prof. M. Fahey and the Neuro-psychology team at Monash Children’s Hospital. 2022 Annual Report • 5 Preclinical Success with Targeted Combination Therapies The Company conducted two combination therapy preclinical trials during the 2022 financial year. These studies add to NTI’s preclinical portfolio, allowing the Company to build a strong pipeline of combination pharmaceuticals utilising market-leading off-patent generic actives that have demonstrated efficacy and tolerability. Importantly, NTI’s provisional patents include the combination treatment and formulation.2 In order to further develop and commercialise combination therapies, the Company plans to accelerate commercial negotiations with potential strategic partners. Details on these combination trials are as follows: NTI164 strain can significantly improve the efficacy of Prednisone and Diclofenac when combined (using much lower dosages). NTI164 + Prednisone NTI164 + Diclofenac Preclinical studies conducted in human derived neuronal cells to assess the proprietary combination formulation: NTI164 + Prednisone (125, 25, 5uM). Demonstrated: Studies have demonstrated that combination formulation is able to significantly reduce and normalize levels of key inflammatory markers vs prednisone alone. Efficacy: When combined with NTI164, prednisone efficacy was significantly increased, showing a 33% in the reduction of TNF-alpha and 87% reduction in the suppression of IL-6. Reducing the prednisone dose whilst achieving increased efficacy (with NTI164 compared to prednisone alone) could overcome many of the adverse side effects that are directly related to the dosage of prednisone. Preclinical studies in human neuronal cells to assess the proprietary combination formulation: NTI164 + Diclofenac (pharmaceutical active in VoltarenTM) Demonstrated: The combination reduced levels of key inflammatory biomarkers associated with onset and development of neuroinflammatory disorders. Efficacy: When combined with NTI164, Diclofenac’s effect was significantly enhanced, showing a 93% reduction in the expression of TNF-alpha, 80% reduction in the expression of IL-6 as well as 38% – 66% reduction in other key biomarkers. Combination of NTI164 + Diclofenac could overcome adverse side effects directly related to dosage of Diclofenac. 2. ASX Announcement 14 October 2021 - Provisional Patent Lodgements 6 • Neurotech International NTI164 + Diclofenac3 In June 2022, Neurotech reported positive preclinical research demonstrating that NTI164 in combination with Diclofenac (the active pharmaceutical ingredient in Voltaren™) can significantly improve Diclofenac effect at low doses (i.e. 5uM). The results indicated that when NTI164 was used in combination with (low dose) Diclofenac, significant anti-inflammatory synergistic action was seen. Lowering the Diclofenac dose while Table 1: Summary of Results increasing efficacy could alleviate many of the negative side effects that are directly tied to Diclofenac dosage. These findings could have far-reaching implications for the use of Diclofenac across a variety of applications and give NTI an excellent foundation on which to build strategic alliances and extend its clinical portfolio. Cytokine Control Inflammation only Diclofenac Diclofenac + NTI164 Significance Diclofenac vs Diclofenac + NTI164 % Reduction in Inflammation Diclofenac + NTI versus Diclofenac Cox 2 PROTEIN 0.755 +/- SEM 0.046 1 0 TNF-a 12.55 258.05 +/- SEM IL-6 2.65 4.75 1.83 262.05 +/- SEM 9.4 42.25 IL-1a 31.25 +/- SEM 1.02 GM-CSF 46 +/- SEM 2.44 79.5 6.95 356.5 57.56 0.565 0.35 P=0.05 0.184 228.8 5.307 200.3 30.21 70.5 3.674 477.75 43.88 0.058 15.55 5.51 40.3 8.64 34 1.62 164.5 36.55 P<0.001 P<0.001 P<0.001 P=0.001 Results are expressed as: Average +/- SEM (standard error of mean) Treatment groups include: Control: PBS Buffer Positive control: Inflammatory stimulation by Interferon gamma and Interleukin – 1B activation Diclofenac concentration 5uM Combination therapy: Diclofenac 5uM + NTI164 concentration 7.5ug/ml 38% 93% 80% 52% 66% Result Analysis: Calculated as % reduction in inflammation, Diclofenac versus Combination therapy (Diclofenac 5uM + NTI164 concentration 7.5ug/ml). Student’s t-test was used for statistical analysis. 3. ASX Announcement 9 June 2022 - Preclinical Success with Targeted Combination Therapies 2022 Annual Report • 7                     NTI164 + Prednisone4 In December 2021, Neurotech reported that NTI164 in combination with the commonly prescribed corticosteroid drug, Prednisone can significantly improve the efficacy of Prednisone alone (even at low doses (i.e. 5uM). When combined with Prednisone, NTI164 significantly reduced and normalised the levels of key inflammatory markers in human neuronal and microglial cells. These results could have significant applications with regards to the use of Prednisone across a variety of indications. By reducing the amount of Prednisone dose needed to achieve the desired effect could alleviate many of the side effects directly related to the dosage of Prednisone. These results provide NTI with an ideal platform to progress strategic partnerships and further expand its clinical trial portfolio. PDN 5uM concentration PDN (5uM)+ NTI164 (7.5ug/ml) Significance PDN vs PDN+NTI164 % Reduction in inflammation using combination therapy versus PDN alone Table 2: Summary of Results Biomarker Analysis Control PBS buffer Inflammation only: Interleukin & Interferon activation COX-2 PROTEIN 0.799 +/- SEM 0.075 1 0 TNF-a 20.33 45 +/- SEM 5.01 8.35 0.888 0.057 30.17 1.53 0.586 0.2 20.33 2.02 IL-6 9.5 366.33 228.5 30.33 +/- SEM 2.77 60.41 IL-1a 77.5 154.83 +/- SEM 38.66 33.11 11.53 144.5 27.54 25.27 69 22.52 GM-CSF 168.8 768.13 611.97 278.97 +/- SEM 83.29 294.36 375.14 138.58 P=0.0210 Significant P=0.0105 Significant P=0.0002 Highly Significant 34% 33% 87% P= 0.0213 Significant 53% P=0.0398 Significant 54% Results are expressed as: Average +/- SEM (standard error of mean) Treatment groups include: Control: PBS Buffer Positive control: Inflammatory stimulation by Interferon gamma and Interleukin – 1B activation Prednisone (PDN) concentration 5uM Combination therapy: Prednisone (PDN) 5uM + NTI164 concentration 7.5ug/ml Result Analysis: Calculated as % reduction in inflammation, PDN versus Combination therapy (prednisone 5uM + NTI164 concentration 7.5ug/ml). Student’s t-test was used for statistical analysis. 8 • Neurotech International 4. ASX Announcement 01 December 2021 - Preclinical Success with Targeted Combination Therapies: Prednisone + NTI164 Composition Lodged Oct 2021 Uniqueness of the NTI-164 strain – composition profile with low THC (<0.3%) and a unique combination of ‘rarer’ cannabinoids: CBDA, CBC, CBDP, CBDB & CBN Combination Lodged Oct 2021 The application, formulation and use of NTI164 Provisional Patents5 In October 2021, Neurotech filed its first strategic provisional patent applications with IP Australia to underpin future worldwide patent families in respect to research conducted into the novel neuro-regulatory and anti-inflammatory properties of the NTI/ Dolce medicinal cannabis strains. The two provisional patents have been lodged to cover: 1. Composition of Matter - covering the uniqueness of the NTI164 strain composition profile with low THC (<0.3%) and a unique combination of ‘rarer’ cannabinoids and; 2. The application, formulation, and use of the strain in relation to the treatment of a broad range of neuro-inflammatory disorders both on its own and in conjunction with current broadly available treatment options - ‘combination treatment therapies’. The provisional ‘composition patent’ relates to a unique composition of six identified cannabinoids with low THC (<0.3%). When taken together, these cannabinoids work synergistically and have been shown to suppress COX-2, IL2 and TNF- alpha – molecules of the immune system that are largely responsible for inflammation and pain in the human body. As previously announced, the ability to suppress these specific inflammatory molecules differs significantly from standard CBD isolate. The ‘combination patent’ invention relates to the NTI164 strain used in combination with an additional active ingredient (already being used to treat specific ailments). The invention also relates to pharmaceutical compositions, dosage forms and methods of treating neurological disorders by administering the composition to a patient. 5. ASX Announcement 13 October 2021 - Neurotech International | Provisional Patent Lodgements 2022 Annual Report • 9 Completion of Preclinical Studies relating to Biomarkers involved in Neuroinflammation6 In October 2021, Neurotech successfully completed preclinical studies in collaboration with RMIT University and Monash University assessing the effects of NTI164 on modulating neuro inflammatory Cytokines responses in cell culture models. Cytokines play an important role in the neuroinflammatory responses. These studies are an expansion of the earlier findings announced May 2021 in which NTI164 significantly suppressed the expression of COX-2 inhibition in human derived microglial cells.7 The results confirmed the potent anti-inflammatory and neuro-regulatory activity of the NTI164, specifically: • NTI164 reduced the inflammatory cytokine IL-12 by 44%, substantially outperforming CBD alone (15% reduction) and CBD/THC in combination (19% reduction) • NTI164 reduced the inflammatory cytokine TNF-alpha by 42%, outperforming CBD alone (29% reduction) and CBD/ THC in combination (25% reduction). 6. ASX Announcement 22 October 2021 - Successful completion of preclinical Multiple Sclerosis studies using NTI164 7. ASX Announcment 25 May 2021 - NTI Strains Demonstrat Potential Benefits for MS Management 10 • Neurotech International Table 3: Summary of Results Treatment Cytokine Results Expressed as: Average +/- Standard Deviation Statistical Significance Reduction Compared to Control Alone Control: Interleukin IL-12 99.91 +/- 12.88 (SD) and Interferon Activation NTI164 N=8 TNF -alpha IL-12 56.30 +/-18.24 N=8 TNF -alpha 58.28 +/- 15.08 N=8 CBD alone IL-12 84.40 +/- 6.54 N=8 TNF -alpha 71.13 +/- 12.81 N=8 CBD /THC (1:1) IL-12 80.77 +/- 12.23 N=8 TNF -alpha 74.49 +/- 14.30 N=8 44% reduction, P=0.0001 42% reduction, P<0.0001 15% reduction, P=0.008 29% reduction, P=0.0005 19% reduction, P=0.008 25% reduction, P=0.01 Assay details • • • Studies were carried out using Multiplex Quantitation System. The system allows for the accurate measurement of these neuro-markers levels. Measurements are done via fluorescence and expressed as F1 values. Positive controls: Interleukin and Interferon activity at 100%. Results are compared to positive control expressed as 100% activation and CB, CBD | THC where applicable NTI164 IL-12 P=0.0011 versus CBD alone 44% versus 15% (n=8) Highly significant NTI164 TNF-alpha P=0.0575 versus CBD alone 42% versus 29% (n=8) Significant NTI164 IL-12 P= 0.0069 versus CBD/THC combination 44% versus 19% (n=8) Highly significant NTI164 TNF-alpha P= 0.0446 versus CBD/THC combination 42% versus 25% (n=8) Positive trend 2022 Annual Report • 11 Mente Device Neurotech has continued the development, and commercialisation of Mente, pursuing its business model including engaging with partners on sales and distribution, whilst also using Mente as part of its cannabis research to discover if a complimentary therapeutic benefit occurs when used in conjunction with the cannabis strains. It may also be used to monitor the progress of certain subjects. 12 • Neurotech International Corporate Activity Appointment of Chief Executive Officer8 In March 2022, Neurotech appointed Dr. Alexandra Andrews as Chief Executive Officer. Dr. Andrews holds a Doctor of Philosophy (Ph.D.) in Neuroscience from the University of Western Australia and has expertise in corporate development, investor engagement, product development and commercialisation, clinical trials and regulatory environments. Dr. Andrews has previous experience as Director of Operations at NeuroScientific Biopharmaceuticals Ltd. Throughout her career, Dr. Andrews has worked closely with clinical researchers, investors and entrepreneurs, providing scientific and strategic input into clinical development plans and overseeing manufacturing. Dr. Andrews also brings commercial, transactional and project management experience, including a previous role at Linear Clinical Research where she focused on attracting partnerships with US biotechnology and pharmaceutical companies, as well as managing trial logistics. 8. ASX Announcement 03 March 2022 - Appointment of Chief Executive Officer 2022 Annual Report • 13 Matters Subsequent to the End of the Financial Year Breakthrough Results with NTI164 in Paediatric ASD9 In July 2022, Neurotech announced breakthrough results from their landmark ASD study with successful outcomes relating to the safety, tolerability, and efficacy of NTI164 on key behavioural parameters that impact ASD patients. The safety data concluded that NTI164 at 5, 10, 15 and 20mg/kg administered daily (divided into two doses), was safe and well-tolerated in the study population. The efficacy data demonstrated statistical significance at 28 days of treatment. 93% (13 out of 14 active patients) showed symptom improvement relating to severity of illness after 28 days of daily treatment with NTI164. The results also indicated: Global Improvement 64% of Patients Much Improved 29% Minimally Improved 7% of patients had “no change” Therapeutic Effect (Efficacy Index) Two patients recorded a Marked Therapeutic Index Score of 2 Representing “Vast improvement” meaning: complete or near remission of all symptoms. Ten patients recorded a Moderate Therapeutic Index Score of 5 & 6 Representing “Decided Improvement” meaning: partial remission of symptoms. 9. ASX Announcement 8 July 2022 – Breakthrough Results with NTI164 in Paediatric ASD 14 • Neurotech International Importantly, parental/carer observations also indicated consistent improvement in the trial participant’s ‘overall functioning’ when compared to baseline at the commencement of the trial. The average rating for the severity of illness at baseline was 4.4 (out of a score of 7 meaning extremely ill and 1 meaning, not ill) and this score was reduced to 3.6 after 28 days of NTI164 treatment. Specific instances of markedly improved behaviours (i.e. reduction in fear, agitation and anxiety) were observed and will be the key focus of the upcoming Phase II/III registration trials due to commence in calendar Q3 in 2022. The study has been granted HREC approval to continue for a further 54 weeks due to the positive therapeutic effects of NTI164 combined with feedback from parents and clinicians and their recent request for no “washout” period. Safety and efficacy assessments will continue. NTI164 Phase I/II Trials The Program First in human Phase I/II ASD paediatric study (S8) Commenced in May 2021 at Monash Children’s Hospital led by A/Prof. Michael Fahey Open label – single group 20 patients from 8 to 17yo, Level II and III Autism Spectrum Disorder Dose regime assessments 5mg/kg, 10mg/kg, 15mg/kg and 20mg/kg 2,250 Assessment points Parameters Anxiety, Participation, Irritability, Hyperactivity, Mood and Self-stimulation Outcomes 93% of patients showed improvement Global Improvement Therapeutic Effect (Efficacy Index) 64% of patients “much improved” 29% of patients “minimally improved” 7% of patients “no change” 2 patients Therapeutic Index Score of 2 Vast Improvement – complete or near remission of all symptoms 10 patients Therapeutic Index Score of 5 & 6 Decided improvement – Partial remission of symptoms 2022 Annual Report • 15 Regulatory Pathway The Company also initiated discussions with the Therapeutics Good Administration (TGA) to assess product scheduling and classification for the Australian Market. In collaboration with regulatory experts, the Company is now mapping out a full regulatory development roadmap/pathway for the registration and commercialisation of NTI164 for ASD and other neurological indications. The Company has initiated pre–IND (“Investigational New Drug”) discussions with the FDA and is in the process of developing a clear roadmap for product registration and commercial development in the USA with an initial face to face pre-IND meeting set for Q3 2022. The anti-inflammatory properties NTI strains in combination with minimal presence of THC (< 0.3%) provides clear pathways to commercialisation: Biopharmaceutical • FDA new drug registration • Huge potential upside • Partnering/licensing opportunities Combination • FDA new drug registration • Huge potential upside • Partnering/licensing opportunities 16 • Neurotech International Corporate On 7 July 2022 the Company appointed Mr Gerald Quigley as a Non-Executive Director. On 15 August 2022 the Company appointed Dr Thomas Duthy as a consultant to the Company with a focus on investor relations and Strategic Corporate Development. In addition, the Board has made a commitment to appoint Dr Duthy as an Executive Director, to assist the Company in this capacity effective 1 September 2022. On 15 August 2022 current Non-Executive Director Mr Mark Davies was appointed as Chairman of the Board and Mr Brian Leedman and Ms Krista Bates resigned as Directors. In addition to the above changes, the Company announced that current Non-Executive Director Professor Allan Cripps will be appointed as Chief Scientist and Gerald Quigley will be appointed as Director of Public Relations. On 16 August 2022 the Company announced the proposed issue of 20,000,000 options to Dr Thomas Duthy and 5,000,000 options to Professor Allan Cripps and 5,000,000 options to Mr Gerald Quigly as an equity based incentive component to their remuneration packages. These securities are subject to shareholder approval at a future General Meeting. Other than detailed above, no other matters or circumstances have arisen since 30 June 2022 that has significantly affected, or may significantly affect the Group’s operations, the results of those operations, or the Group’s state of affairs in future financial years. Significant Changes in State of Affairs Other than detailed in the Review of Operations, there were no significant changes in the state of affairs of the Group during the financial year. Impact of Covid-19 Global Pandemic The impact of the Coronavirus (COVID-19) pandemic is ongoing and is causing delay to business development activities and meetings. Whilst it has had limited financial impact for the consolidated entity up to 30 June 2022, it is not practicable to estimate the potential impact, positive or negative, after the reporting date. The situation is rapidly developing and is dependent on measures imposed by the Australian Government and other countries, such as maintaining social distancing requirements, quarantine, travel restrictions and any economic stimulus that may be provided. Outlook In addition to the development of the NTI/ Dolce cannabis strains detailed above, the Group remains committed to the development of Mente. The Board is reviewing the options for it to continue the development of Mente which includes accessing sufficient funding in a suitably attractive form to shareholders to fund the continued development. The overarching consideration of the Board is to maximise the value of its assets for the benefit of its shareholders. AGM The Company anticipates that it will hold its next Annual General Meeting (‘AGM’) on or before 23 November 2022. In accordance with ASX Listing Rule 3.13.1, the closing date for the receipt of nominations from persons wishing to be considered for election as a director of the Company is 30 September 2022. Any nominations must be received in writing no later than 5.00pm (WST) on 30 September 2022 at the Company’s registered office. Environmental Regulation National Greenhouse and Energy Reporting Act 2007 This is an Act to provide for the reporting and dissemination of information related to greenhouse gas emissions, greenhouse gas projects, energy production and energy consumption, and for other purposes. The Entity is not subject to the National Greenhouse and Energy Reporting Act 2007. 2022 Annual Report • 17 Board of Directors Mark Davies – Non-Executive Chairman Experience and Expertise Other Current Directorships Former Directorships in last 3 years Special Responsibilities Interests in Shares and Options Mark Davies graduated from the University of Western Australia with a Bachelor of Commerce. He has over 20 years’ experience in trading, investment banking and providing corporate advice. He worked at Montagu Stockbrokers before co-founding investment banking firm Cygnet Capital and more recently 1861 Capital. Mark specialises in providing corporate advice and capital raising services to emerging companies seeking business development opportunities and funding from the Australian market. None None Chairman of the Board (appointed 15 August 2022) 7,793,017 ordinary shares 2,000,000 unlisted $0.0189 options expiring 18 November 2022 2,000,000 unlisted $0.038 options expiring 30 November 2023 Winton Willesee – Non-Executive Director Experience and Expertise Mr Willesee is an experienced company director and secretary with over 20 years’ experience in various roles within the Australian capital markets. Mr Willesee has considerable experience with ASX listed and other companies over a broad range of industries having been involved with many successful ventures from early stage through to large capital development projects. He has a core expertise in strategy, company development, corporate governance, company public listings, merger and acquisition transactions and corporate finance. Mr Willesee holds a Master of Commerce, a Post-Graduate Diploma in Business (Economics and Finance), a Graduate Diploma in Applied Finance and Investment, a Graduate Diploma in Applied Corporate Governance, a Graduate Diploma in Education and a Bachelor of Business. He is a Fellow of the Financial Services Institute of Australasia, a Graduate of the Australian Institute of Company Directors, a Member of CPA Australia and a Fellow of the Governance Institute of Australia and the Institute of Chartered Secretaries and Administrators/Chartered Secretary. Non-Executive Chairman of New Zealand Coastal Seafoods Limited (ASX:NZS) Chairman of UUV Aquabotix Ltd (ASX:UUV) Non-Executive Director of Hvgrovest Ltd (ASX:HGV) Non-Executive Director of Nanollose Limited (ASX:NC6) Non-Executive Director of eSense Lab Ltd (ASX:ESE) (resigned 21 September 2021) 5,132,436 ordinary shares 2,000,000 unlisted $0.0189 options expiring 18 November 2022 2,000,000 unlisted $0.038 options expiring 30 November 2023 Other Current Directorships Former Directorships in last 3 years Interests in Shares and Options 18 • Neurotech International Allan Cripps – Non-Executive Director and Chief Scientist Experience and Expertise Other Current Directorships Former Directorships in last 3 years Special Responsibilities Professor Cripps is currently a Professor Emeritus in the School of Medicine and Dentistry and the Menzies Health Institute Queensland at Griffith University, Australia. He is a member of the Infection and Immunity Research Team at the Menzies Health Institute Queensland at Griffith University, Australia. He is recognised nationally and internationally as a distinguished academic, clinical scientist and health services leader and has made significant contributions in immunology, vaccine development, diagnostics health services delivery and professional health education. The focus of Professor Cripps’ research activities over the last 5 decades have been in the field of immunology and inflammation. In 2015 he was awarded an Officer of the Order of Australia (AO) in recognition of his contributions to mucosal immunization, public health and higher education. Professor Cripps has experience in the development of immunity in children and mucosal immune mechanisms, in recent years he has made a significant contribution to the field of immunology through translational research and human clinical studies. Professor Cripps is also a co-inventor on several patents in the fields of diagnostic technology and vaccine protein antigens for respiratory infection. He has published over 325 peer reviewed scientific papers and presented at many national and international scientific conferences. Non-Executive Director of BARD1 Life Sciences Limited None Chief Scientist (appointed 15 August 2022) Interests in Shares and Options 180,000 ordinary shares 500,000 unlisted $0.09 options expiring 12 May 2023 2022 Annual Report • 19 Gerald Quigley – Non-Executive Director and Director of Public Relations (Appointed 7 July 2022) Experience and Expertise Mr Quigley is a Pharmacist and consumer health commentator. As a leading media health commentator heard each week on television and radio stations across Australia. He has extensive knowledge relating to pharmaceutical and nutraceutical product development, dispensing & marketing in addition to product positioning within the relevant regulatory landscapes (e.g. TGA, FDA). Mr Quigley holds a Bachelor of Pharmacy. Other Current Directorships Former Directorships in last 3 years Special Responsibilities Nil Nil Director of Public Relations (appointed 7 July 2022) Interests in Shares and Options 277,777 ordinary shares Brian Leedman – Non-Executive Chairman (resigned 15 August 2022) Experience and Expertise Other Current Directorships Former Directorships in last 3 years Special Responsibilities Mr Leedman is formerly the Chairman (WA) of Ausbiotech, Founder and Executive Director of ResApp Health, Founder of Oncosil Medical and Biolife Sciences Limited (acquired by Imugene Limited) and Non-executive Director of Alcidion Corporation and former Chairman of NeuroScientific Biopharmaceuticals and former chairman of Nutritional Growth Solutions. He holds a BEc and an MBA from the University of Western Australia and has over 15 years’ experience in the biotechnology sector. Executive Director of ResApp Health Limited (ASX:RAP) appointed 18 May 2021 NGS Limited (ASX:NGS) (resigned 28 February 2022) Chairman of the Board (until 15 August 2022) Interests in Shares and Options at date of resignation 3,206,316 ordinary shares 10,000,000 unlisted $0.015 options expiring 31 October 2023 10,000,000 unlisted $0.02 options expiring 31 October 2023 20 • Neurotech International Krista Bates – Non-Executive Director (resigned 15 August 2022) Experience and Expertise Other Current Directorships Former Directorships in last 3 years Interests in Shares and Options at date of resignation Ms Bates is an experienced non-executive and executive director of listed companies (Australian Stock Exchange and London Stock Exchange) and various private companies in multiple jurisdictions. She is commercially experienced, particularly talented in turnarounds, structuring, risk mitigation and strategic roll-out of commercial initiatives. She has an exceptional legal background with over 23 years’ experience in the legal market, with extensive experience working in emerging markets in both a commercial and legal capacity. Ms Bates is currently a Non-executive Director of AusCann Holdings (ASX:AC8), Australian Cannabis Ventures and Australia-Africa Minerals & Energy Group. She was also a Corporate Partner at Lavan law firm. She is the founder of KB Corporate Advisors which provides legal and corporate advisory services. Non-executive Director of AusCann Holdings (ASX:AC8) None 450,000 ordinary shares 500,000 unlisted $0.09 options expiring 12 May 2023 Company Secretary Erlyn Dawson – Company Secretary Experience and Expertise Mrs Dawson is an experienced corporate professional with a broad range of corporate governance and capital markets experience, having been involved with several public company listings, merger and acquisition transactions and capital raisings for ASX-listed companies across a diverse range of industries. Mrs Dawson began her career in corporate recovery and restructuring at Ferrier Hodgson and is now the Managing Director of corporate services firm, Azalea Consulting, which provides outsourced company secretarial, accounting and administration services to a portfolio of ASX-listed companies. Mrs Dawson holds a Bachelor of Commerce (Accounting and Finance) and a Graduate Diploma in Applied Corporate Governance. She is a member of the Governance Institute of Australia/Chartered Secretary. 2022 Annual Report • 21 Directors’ Meetings Attendances by each Director during the year were as follows Director Mark Davies Winton Willesee Allan Cripps Brian Leedman Krista Bates Gerald Quigley1 ¹ 1. Appointed 7 July 2022 Number Eligible to Attend Number Attended 7 7 7 7 7 n/a 7 7 7 7 6 n/a 22 • Neurotech International DIRECTORS’ REPORT REMUNERATION REPORT (AUDITED) This Remuneration Report outlines the Director and Executive remuneration arrangements of the Group and the Group and has been audited in accordance with the requirements by section 308(3C) of the Corporations Act 2001 and the Corporations Regulations 2001. For the purposes of this report, Key Management Personnel of the Group are defined as those persons having authority and responsibility for planning, directing and controlling the major activities of the Group and the Consolidated Entity, directly or indirectly, including any Director (whether Executive or otherwise) of the Group. Key Management Personnel disclosed in the Report Names and positions held of Parent Entity Directors and Key Management Personnel in office at any time during the financial year are: Directors Mark Davies Non-Executive Chairman Winton Willesee Non-Executive Director Allan Cripps Brian Leedman Krista Bates Non-Executive Director and Chief Scientist Non-Executive Chairman (resigned 15 August 2022) Non-Executive Director (resigned 15 August 2022) Remuneration Governance The full Board filling the role of the Nomination and Remuneration Committee is responsible with respect to the following: (a) remuneration policies and practices; (b) remuneration of the Executive Officer and Executive Directors; (c) composition of the Board; and (d) performance Management of the Board and of the Executive Officer. Use of Remuneration Consultants During the year, the Group has not required or used any remuneration consultants. Executive Remuneration Policy and Framework The full Board reviews and make recommendations regarding the following: (a) (b) (c) (d) (e) (f) (g) strategies in relation to Executive remuneration policies; compensation arrangements for the Chairman, Non-Executive Directors, CEO, and other Senior Executives as appropriate; performance related incentive policies; the Group’s recruitment, retention and termination policies; the composition of the Board having regard to the skills/experience desired and skills/experience represented; the appointment of Board members; the evaluation of the performance of the CEO; NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2022 2022 Annual Report • 23 PAGE 17 DIRECTORS’ REPORT (h) (i) consideration of potential candidates to act as Directors; and succession planning for Board members. Key Management Personnel Remuneration Policy The Board’s policy for determining the nature and amount of remuneration of Key Management Personnel for the economic entity is as follows: The remuneration structure for Key Management Personnel is based on a number of factors including particularly the skills and experience of the individual concerned. The contracts for service between the Group and Key Management Personnel are on a continuing basis, subject to review with the Board proposing a review in the immediate future. There is no scheme to provide retirement benefits, other than statutory superannuation. On appointment to the Board, all Executive and Non-Executive Directors enter into an agreement with the Group. The structure of the performance-based elements of an Executive’s remuneration are designed to encourage retention of the Executives while also rewarding short term performance of the individual and long-term performance of the Group, and therefore contributing to the wealth of the Group’s shareholders. Executives are subject to an annual performance review against objectives relevant to their role, and the performance against these objectives is used to determine the amount of their annual short-term incentive bonus received. NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2022 18 24 • Neurotech International PAGE DIRECTORS’ REPORT Key Management Personnel Compensation The compensation of the Group’s Key Management Personnel is disclosed below: Short-term Benefits Termination Benefits Share-based payment 2022 Key Management Person Salary ($) Bonus ($) Post Retirement benefits ($) Annual leave ($) Termination Benefits ($) Shares Options ($) ($) Total ($) Performance related Total Share Based Payments ($) Directors Brian Leedman ³ 120,000 Mark Davies 40,000 Winton Willesee 40,000 Krista Bates ² ³ 40,000 Allan Cripps ² 40,000 Management Dr Alexandra Andrews ¹ 72,552 TOTAL 352,552 - - - - - - - - - - - - - - - - - 7,255 6,139 7,255 6,139 - - - - - - - - - - - - - - - - - - - - 120,000 40,000 40,000 13,935 13,935 53,935 10,742 10,742 50,742 - - - 26% 21% 59,280 59,280 145,226 41% 83,957 83,957 449,904 ¹ Refer Note 6 for details of share-based payments made to Dr Alex Andrews (CEO) during the financial period Key details of Dr Andrews employment contract are as follows: Appointment date: Annual base salary: Performance options: Notice period: 8 March 2022 $250,000 inclusive of superannuation 15,000,000 options (refer note 6) 3 months by either party ² Options were issued to Directors in the prior financial period – refer below for valuation methodology and assumptions ³ Resigned 15 August 2022 NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2022 19 2022 Annual Report • 25 PAGE DIRECTORS’ REPORT Short-term Benefits 2021 Key Management Person Salary ($) Bonus ($) Post Retirement benefits ($) Annual leave ($) Termination Benefits Termination Benefits ($) Share-based payment Shares and Share Rights ($) Options ($) Total Share Based Payments ($) Total ($) Performance related DIRECTORS Brian Leedman ¹ 85,000 Mark Davies ² ³ 43,600 Winton Willesee ² ³ 39,954 Krista Bates * 9,555 Allan Cripps * 4,758 Peter Griffiths ² (19,222) David Cantor ² 12,043 - - - - - - - TOTAL 175,688 - - - - - - - - - - - - - - - - - - - - - - - - - - 431,617 431,617 516,617 38,809 36,204 75,013 118,613 30,116 36,204 66,320 106,274 - - 8,291 8,291 17,846 3,051 3,051 7,809 84,448 24,583 109,031 89,809 22,665 - 22,665 34,708 176,038 539,950 715,988 891,676 - - - - - 27% - ¹ On 17 December 2020, pursuant to shareholder approval Mr Leedman was issued with 10,000,000 unlisted $0.015 options expiring 31 October 2023 and 10,000,000 unlisted $0.02 options expiring 31 October 2023. These were valued at $431,617 using the Black-Scholes option valuation model with the following inputs: Number of options in series Grant date share price Exercise price Expected volatility Option life Dividend yield Interest rate 10,000,000 $0.029 $0.015 112% 34 months nil 0.11% 10,000,000 $0.029 $0.02 112% 34 months nil 0.11% ² On 30 September 2020, ordinary shares were issued to directors in lieu of outstanding director’s fees following shareholder approval. The remuneration expense was recorded at fair value of $0.013 per share, and the expense recognised in the year ended 30 June 2020 was $283,500. The expense recognised in the financial year ended 30 June 2021 in order to reflect the fair value of the shares issued was $176,039. ³ On 17 December 2020, pursuant to shareholder approval Mr Davies and Mr Willesee were each issued with 2,000,000 unlisted $0.0038 options expiring 30 November 2023. These were valued at $36,204 for each director using the Black- Scholes option valuation model with the following inputs: Number of options in series Grant date share price Exercise price Expected volatility Option life Dividend yield Interest rate 4,000,000 $0.029 $0.038 112% 35 months nil 0.11% * On appointment as a director, the Company agreed to seek shareholder approval for the issue of 500,000 unlisted NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2022 20 26 • Neurotech International PAGE DIRECTORS’ REPORT options to Ms Bates and Professor Cripps, exercisable at $0.09 and conditional on remaining a director until the 2021 Annual General Meeting. Shareholder approval for the issue of these options was approved at the 2021 Annual General Meeting. The options were valued using the using the Black-Scholes option valuation model with the following inputs: Number of options in series Grant date share price Exercise price Expected volatility Option life Dividend yield Interest rate Valuation Ms Bates 500,000 $0.076 $0.09 120% 25 months nil 0.1% $22,078 Prof Cripps 500,000 $0.055 $0.09 120% 23 months nil 0.1% $13,662 Equity Instruments Disclosure Relating to Key Management Personnel Shares: Number of shares held by Parent Entity Directors and other Key Management Personnel of the Group, including their personally related parties, are set out below. Name Directors Mark Davies Winton Willesee Allan Cripps Gerald Quigley Alexandra Andrews Brian Leedman Krista Bates Total Balance at the start of the year Acquired as part of remuneration Acquired on market Disposed Other Balance at the end of the year 7,793,017 5,132,436 - - - 3,206,316 270,000 16,401,769 - - - - - - - - - - 180,000 - - - 180,000 360,000 - - - - - - - - - - - - - - - - 7,793,017 5,132,436 180,000 - - 3,206,316 450,000 16,761,769 NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2022 21 2022 Annual Report • 27 PAGE DIRECTORS’ REPORT Options Number of options held by Parent Entity Directors and other Key Management Personnel of the Group, including their personally related parties, are set out below. Name Mark Davies Winton Willesee Allan Cripps Gerald Quigley Alexandra Andrews Brian Leedman Krista Bates Total Balance at the start of the year Acquired as part of remuneration Disposed Other Balance at the end of the year 4,000,000 4,000,000 500,000 - - 20,000,000 500,000 - - - - 15,000,000 - - 29,000,000 15,000,000 - - - - - - - - - - - - - - - - 4,000,000 4,000,000 500,000 - 15,000,000 20,000,000 500,000 44,000,000 Voting and comments made at the Group’s 2021 Annual General Meeting The Group received a 98.82% “yes” votes on its remuneration report for the 2021 financial year (2020: 99.37% yes). The Group did not receive any specific feedback at the AGM or throughout the year on its remuneration practices. NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2022 22 28 • Neurotech International PAGE DIRECTORS’ REPORT Transactions with Related Parties Transactions between related parties are on normal commercial terms and conditions no more favourable than those available to other parties unless otherwise stated. For the year ended 30 June 2022 the aggregate amount recognised during the year relating to Directors, Key Management Personnel and their related parties were as follows. Director Transaction Transactions value for the year ended 30 June Balance outstanding as at 30 June Winton Willesee (Director and Shareholder (via an associated entity) of Azalea Consulting Pty Ltd) Winton Willesee (Director and Shareholder (via an associated entity) of Valle Corporate Pty Ltd) Corporate administration services Bookkeeping and accounting services 2022 ($) 2021 ($) 2022 ($) 2021 ($) 90,200 124,120 25,850 - 21,058 21,409 1,955 918 Total 111,258 145,529 27,805 918 Payments to Azalea Consulting Pty Ltd (director related entity of Winton Willesee) for corporate administration services including company secretarial and accounting services and front and registered office services. Payments to Valle Corporate Pty Ltd (director related entity of Winton Willesee) for bookkeeping and financial reporting services fees. This is the end of the Audited Remuneration Report. NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2022 23 2022 Annual Report • 29 PAGE INDEMNIFICATION OF DIRECTORS AND OFFICERS (a) Indemnification The Group has agreed to indemnify the current Directors and Group Secretary of the Group against all liabilities to another person (other than the Group or a related body corporate) that may arise from their position as Directors and Group Secretary of the Group, except where the liability arises out of conduct involving a lack of good faith. The Agreement stipulates that the Group will meet to the maximum extent permitted by law, the full amount of any such liabilities, including costs and expenses. (b) Insurance Premiums During the year ended 30 June 2022, the Company paid insurance premiums in respect of Directors and Officers Liability Insurance for Directors and Officers of the Company. The liabilities insured are for damages and legal costs that may be incurred in defending civil or criminal proceedings that may be brought against the Directors and Officers in their capacity as Directors and Officers of the Company 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. NON-AUDIT SERVICES No non-audit services were provided by the Group’s auditor during the year ended 30 June 2022 or 30 June 2021. INDEMNITY AND INSURANCE OF AUDITOR The Group has not, during or since the end of the financial year, indemnified or agreed to indemnify the auditor of the Group or any related entity against a liability incurred by the auditor. During the financial year, the Group has not paid a premium in respect of a contract to insure the auditor of the Group or any related entity. CORPORATE GOVERNANCE The Board is responsible for the overall corporate governance of the Group, and it recognises the need for the highest standards of ethical behaviour and accountability. It is committed to administrating its corporate governance structures to promote integrity and responsible decision making. The Group’s corporate governance structures, policies and procedures are described in its Corporate Governance Statement which is available at the Group’s website at: http://neurotechinternational.com/investor-centre/corporate-governance SHARES As at the date of this report there are 697,699,126 (2021: 696,819,126) ordinary shares on issue. 30 • Neurotech International NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2022 PAGE 24 OPTIONS All options granted confer a right of one ordinary share for every option held. The Group has the following unlisted options on issue as at 30 June 2022: Grant Date Expiry Date Exercise Price Balance at end of the year Vested and exercisable 18/11/2019 18/11/2024 18/11/2019 18/11/2024 18/11/2019 18/11/2022 06/04/2020 31/01/2023 30/09/2020 31/01/2023 17/12/2020 31/10/2023 17/12/2020 31/10/2023 17/12/2020 30/11/2023 22/12/2020 22/12/2022 12/05/2021 12/05/2023 01/03/2022 10/03/2024 01/03/2022 10/03/2024 01/03/2022 10/03/2024 ($) $0.0589 $0.0199 $0.0189 $0.005 $0.010 $0.015 $0.020 $0.038 $0.030 $0.090 $0.080 $0.120 $0.160 Number 6,500,000 5,429,754 10,000,000 16,590,356 33,000,000 10,000,000 10,000,000 4,000,000 6,620,000 Number 6,500,000 5,429,754 10,000,000 16,590,356 33,000,000 10,000,000 10,000,000 4,000,000 6,620,000 11,000,000 11,000,000 5,000,000 5,000,000 5,000,000 - - - 128,140,110 113,140,110 AUDITOR’S INDEPENDENCE DECLARATION The Auditor’s Independence Declaration as required under section 307C of the Corporations Act 2001 for the year ended 30 June 2022 has been received and can be found on page 27. This report is made in accordance with a resolution of Directors, pursuant to section 298(2)(a) of the Corporations Act 2001. Signed on behalf of the Board of Directors. Winton Willesee Non-Executive Director Dated at Perth, Western Australia, 31 August 2022 NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2022 2022 Annual Report • 31 PAGE 25 NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2022 PAGE 26 Auditor’s Independence Declaration Tel: +61 8 6382 4600 Fax: +61 8 6382 4601 www.bdo.com.au Level 9, Mia Yellagonga Tower 2 5 Spring Street Perth WA 6000 PO Box 700 West Perth WA 6872 Australia DECLARATION OF INDEPENDENCE BY GLYN O’BRIEN TO THE DIRECTORS OF NEUROTECH INTERNATIONAL LIMITED As lead auditor of Neurotech International Limited for the year ended 30 June 2022, I declare that, to the best of my knowledge and belief, there have been: 1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and 2. No contraventions of any applicable code of professional conduct in relation to the audit. This declaration is in respect of Neurotech International Limited and the entities it controlled during the period. Glyn O’Brien Director BDO Audit (WA) Pty Ltd Perth, 31 August 2022 BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation 32 • Neurotech International Consolidated Statement of Profit or Loss and Other Comprehensive Income CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2022 CONSOLIDATED Notes 30 June 2022 ($) 30 June 2021 ($) CONTINUING OPERATIONS Revenue Other income Cost of sales Obsolete stock write-off / (write back) Professional consultant and advisory expenses Professional legal expenses Corporate and administration expenses Depreciation and amortisation expenses Finance expenses Advertising and marketing expenses Employee benefits expense Share based payments expense Research expense Equipment and materials direct cost Other expenses LOSS BEFORE INCOME TAX Income tax benefit LOSS AFTER INCOME TAX Other comprehensive income/(loss) Items that may be reclassified subsequently to profit or loss: 3 4 5 5 6 7 8 38,262 569,842 (6,523) (26,857) 206,144 19,527 (16,233) 50,565 (304,192) (381,518) (59,896) (19,183) (346,180) (269,308) (588) (1,369) (12,478) - (1,709) (12,510) (538,838) (414,639) (83,957) (1,216,843) (2,578,153) (5,357,814) (669) (10,645) (13,992) (3,115) (3,362,241) (7,430,628) - - (3,362,241) (7,430,628) - - Exchange difference on translation of foreign operations 25,409 (26,702) Total comprehensive loss for the period (3,336,832) (7,457,330) Basic loss per share (cents per share) 23 (0.48) (1.51) The Consolidated Statement of Profit or Loss and Other Comprehensive Income are to be read in conjunction with the accompanying notes. NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2022 2022 Annual Report • 33 PAGE 27 Consolidated Statement of Financial Position CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2022 CONSOLIDATED Notes 30 June 2022 ($) 30 June 2021 ($) CURRENT ASSETS Cash and cash equivalents Trade and other receivables Prepayments Inventories TOTAL CURRENT ASSETS NON-CURRENT ASSETS Property, plant and equipment TOTAL NON-CURRENT ASSETS TOTAL ASSETS CURRENT LIABILITIES Trade and other payables TOTAL CURRENT LIABILITIES NON-CURRENT LIABILITIES Contingent consideration TOTAL NON-CURRENT LIABILITIES TOTAL LIABILITIES NET ASSETS EQUITY Contributed Equity Reserves Accumulated Losses TOTAL EQUITY 11 12 13 14 15 16 17 1,895,431 4,827,370 99,483 18,238 7,202 142,860 35,654 - 2,020,354 5,005,884 2,617 2,617 - - 2,022,971 5,005,884 592,980 592,980 - - 592,980 1,429,991 349,418 349,418 795,000 795,000 1,144,418 3,861,466 25,776,778 4,349,318 25,750,378 3,444,952 (28,696,105) (25,333,864) 1,429,991 3,861,466 The Consolidated Statement of Financial Position is to be read in conjunction with the accompanying notes. 34 • Neurotech International NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2022 PAGE 28 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED Consolidated Statement of Changes In Equity for the Year Ended 30 June 2022 30 JUNE 2022 Contributed Equity ($) Accumulated Losses ($) Share-based Payment Reserve ($) Foreign Currency Translation Reserve ($) Total ($) FINANCIAL YEAR ENDED 30 JUNE 2022 Balance at 1 July 2021 25,750,378 (25,333,864) 3,394,103 50,849 3,861,466 (Loss) for the year Exchange Difference Total comprehensive (loss) Transactions with equity holders in their capacity as equity holders Share issues on conversion of options (Note 15) Share based payments (Note 6) Options issued to Dolce Cann (Note 14) - - - (3,362,241) - (3,362,241) 26,400 - - - - - - - - - 83,957 795,000 - (3,362,241) 25,409 25,409 25,409 (3,336,832) - - - 26,400 83,957 795,000 Balance at 30 June 2022 25,776,778 (28,696,105) 4,273,060 76,258 1,429,991 The Consolidated Statement of Changes in Equity is to be read in conjunction with the accompanying notes. NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2022 2022 Annual Report • 35 PAGE 29 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED Consolidated Statement of Changes In Equity for the Year Ended 30 June 2022 30 JUNE 2022 Contributed Equity ($) Accumulated Losses ($) Share-based Payment Reserve ($) Foreign Currency Translation Reserve ($) Total ($) FINANCIAL YEAR ENDED 30 JUNE 2021 Balance at 1 July 2020 15,498,123 (17,903,236) 1,681,269 77,551 (646,293) - - - (7,430,628) - (7,430,628) - (7,430,628) (26,702) (26,702) (26,702) (7,457,330) (Loss) for the year Exchange Difference Total comprehensive (loss) Transactions with equity holders in their capacity as equity holders Share issues Shares Issued to Directors Share based payments – Note 6 Options issued for acquisition of Dolce Cann licence Options issued to Merchant Capital Options issued to Max Capital 10,465,844 459,539 - - - - - - - - - - - - - - - - 1,040,904 441,896 207,535 22,499 - - - - - - - - 10,465,844 459,539 1,040,904 441,896 207,535 22,499 (673,128) 3,861,466 Share issue costs (673,128) Balance at 30 June 2021 25,750,378 (25,333,864) 3,394,103 50,849 The Consolidated Statement of Changes in Equity is to be read in conjunction with the accompanying notes. 36 • Neurotech International NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2022 PAGE 30 CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED Consolidated Statement of Cash Flows for the Year Ended 30 June 2022 30 JUNE 2022 CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers Other receipts CONSOLIDATED Notes 30 June 2022 ($) 30 June 2021 ($) 38,262 569,333 71,953 19,527 Payments to suppliers and employees (3,561,846) (2,406,433) Interest paid Interest received (1,369) 486 (1,709) 134 NET CASH USED IN OPERATING ACTIVITIES 18 (2,955,134) (2,316,528) CASH FLOWS FROM INVESTING ACTIVITIES Payments for plant and equipment NET CASH USED IN INVESTING ACTIVITIES CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issue of shares Proceeds from issue of options Payment of share issue costs Repayment of borrowings (3,205) (3,205) 26,400 - - - NET CASH PROVIDED BY FINANCING ACTIVITIES 26,400 - - 7,620,629 200 (443,479) (46,582) 7,130,768 Net increase/(decrease) in cash held (2,931,939) 4,814,240 Effect of foreign exchange on cash balances Cash and cash equivalents at beginning of financial year Cash and cash equivalents at end of financial year 11 - 4,827,370 1,895,431 772 12,358 4,827,370 The Consolidated Statement of Cash Flows is to be read in conjunction with the accompanying notes. NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2021 2022 Annual Report • 37 PAGE 31 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Notes to the Consolidated Financial Statements 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES The primary accounting policies adopted in the preparation of the Financial Statements are set out below. These policies have been consistently applied to all years presented, unless otherwise stated. (a) General Information Neurotech International Limited (Company) or (Entity) is a public Company limited by shares, incorporated in Australia with operations in Malta. The Consolidated Financial Report of the Company as at and for the year ended 30 June 2022 comprises the Company and its subsidiaries (together referred to as the ‘Consolidated Entity’ or ‘Group’). Neurotech International Limited is a medical device and solutions company conducting clinical studies to assess the neuro-protective, anti-inflammatory and neuro-modulatory activities of its proprietary cannabis strains. Neurotech is also commercialising Mente, the world’s first home therapy that is clinically proven to increase engagement and improve relaxation in autistic children with elevated Delta band brain activity. The nature of the operations and principal activities of the Consolidated Entity are described in the Directors’ Report. (b) Basis of Preparation The financial report is a general-purpose financial report which has been prepared in accordance with Australian Accounting Standards and Interpretations issued by the Australian Accounting Standards Board and the Corporations Act 2001. Neurotech International Limited is a for profit entity for the purpose of preparing the Financial Statements. Australian Accounting Standards set out accounting policies that the AASB has concluded would result in a financial report containing relevant and reliable information about transactions, events and conditions. Compliance with Australian Accounting Standards ensures that the financial statements and notes also comply with International Financial Reporting Standards as issued by the IASB. Material accounting policies adopted in the preparation of this financial report are presented below and have been consistently applied. (i) Compliance with IFRS The Financial Statements of the Group also comply with International Financial Reporting Standards (IFRSs) and interpretations adopted by the International Accounting Standard Board (IASB). The Financial Statements were approved by the Board of Directors on 31st August 2022. (ii) Historical cost convention The financial report has been prepared on an accrual basis and is based on historical costs modified by the revaluation of selected non-current assets, financial assets and financial liabilities for which the fair value basis of accounting has been applied. All amounts are presented in Australian dollars, unless otherwise noted. (iii) Comparatives When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation for the current financial year. 38 • Neurotech International NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2022 PAGE 32 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Notes to the Consolidated Financial Statements (c) Going Concern The Directors are satisfied that the going concern assumption has been appropriately applied in preparing the financial statements and the historical financial information has been prepared on a going concern basis, which contemplates the continuity of normal business activity and the realisation of assets and the settlement of liabilities in the normal course of business. For the year ended 30 June 2022 the Group made an operating loss of $3,362,241 (2021: loss of $7,430,628), had cash outflows from operating activities of $2,955,135 (2021: $2,316,528). The Company had cash on hand as at 30 June 2022 of $1,895,431 (2021: $4,827,370) and net assets of $1,429,991 (2021: $3,861,466). The consolidated entity’s ability to continue as a going concern is dependent on raising further capital along with reducing costs and the cash impact of its costs. These factors indicate material uncertainty which may cast significant doubt as to whether the consolidated entity will continue as going concern and therefore whether they will realise their assets and extinguish their liabilities in the normal course of business and at the amounts stated in the financial report. The Directors believe that there are reasonable grounds to believe that the Company and consolidated entity will continue as going concern, after consideration of the following factors: - - - The Company has the ability to issue additional shares (or other securities) under the Corporations Act 2001 to raise further working capital and has been successful in doing this previously, as evidenced by the successful shares issued in the recent financial years; The Company may be able to access funding for its activities at the project level via investments or grants or a combination of both; and The consolidated entity has the ability to scale down its operations in order to curtail expenditure, in the event capital raisings are delayed or insufficient cash is available to meet projected expenditure. Accordingly, the Directors believe that the consolidated entity will be able to continue as going concerns and that it is appropriate to adopt the going concern basis in the preparation of the financial report. The consolidated entity’s ability to continue as a going concern is mainly dependent on its ability to obtain additional working capital through the issue of equity as and when required. Should the Group not be able to continue as a going concern, it may be required to realise its assets and discharge its liabilities other than in the ordinary course of business, and at amounts that differ from those stated in the financial statements and that the financial report does not include any adjustments relating to the recoverability and classification of recorded asset amounts or liabilities that might be necessary should the Group not continue as a going concern. (d) Impact of the adoption of new Accounting Standards There were no new accounting Standards adopted by the Group during the financial year. Significant Accounting Judgments, Estimates and Assumptions The preparation of the Financial Statements requires Management to make judgments, estimates and assumptions that affect the reported amounts in the Financial Statements. Management continually evaluates its judgments and estimates in relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its judgments and estimates on historical experience and on other various factors it believes to be reasonable under the circumstances, the result of which form the basis of the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future periods affected. NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2022 2022 Annual Report • 39 PAGE 33 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Notes to the Consolidated Financial Statements Information about significant areas of estimation uncertainty and critical judgments in applying accounting policies that have the most significant effect on the amount recognised in the Financial Statements are outlined below: (i) Share based payments The Group measures the cost of equity settled transactions with employees by reference to the fair value of equity instruments at the date at which they are granted. The fair value is determined using a Black-Scholes option pricing model, inputs used in valuing share-based payments, including options, are estimates. (ii) Treatment of costs incurred for Research and Development The Group’s consideration of whether its internal projects to develop medical devices are in a research phase or development phase involves significant judgement. The Group considers a project to be in a development phase when the following can be demonstrated: • • • • • • the technical feasibility of completing the intangible asset so that it will be available for use or sale; there is intention to complete the project; the existence of a market to be able to sell output resulting from the completion of the project; how the intangible asset will generate probable future economic benefits; there is adequate technical, financial and other resources available to complete the development and to use or sell the intangible asset; and expenditure attributable to the project can be reliably measured. When the above 6 criteria are met, the Group will recognise an intangible asset in relation to the project, otherwise costs incurred to date on the project are expensed as incurred. (e) Principles of Consolidation The Consolidated Financial Statements incorporate the assets and liabilities of all the subsidiaries that Neurotech International Limited (‘the Parent Entity’) has the power to control the Consolidated Entity when the Group is exposed to, or has rights to, variable returns from its involvement with the Consolidated Entity and has the ability to affect those returns through its power to direct the activities of the Consolidated Entity, the financial and operating policies as at 30 June 2022 and the results of all subsidiaries for the year ended 30 June 2022. All intercompany balances and transactions between the Group and the Consolidated Entity, including any unrealised profits or losses, have been eliminated on consolidation. Accounting policies of subsidiaries have been changed where necessary to ensure consistencies with those policies applied by the Group. Subsidiaries Subsidiaries are all entities controlled by the Consolidated Entity. The Financial Statements of subsidiaries are included in the Consolidated Financial Statements from the date that control commences until the date that control ceases. The accounting policies of subsidiaries have been changed when necessary to align them with the policies adopted by the Group. In the Company’s Financial Statements, investments in subsidiaries are carried at cost. The Financial Statements of the subsidiary are prepared for the same reporting period as the Group, using consistent accounting policies. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de- consolidated from the date that control ceases. In preparing the Consolidated Financial Statements, all intercompany balances and transactions, income and expenses and profit or losses resulting from inter-entity transactions have been eliminated in full. 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 Group. The investments in subsidiaries held by Neurotech International Limited are accounted for at cost in the separate Financial Statements of the Group less any impairment charges. The acquisition of subsidiaries is accounted for using the acquisition method of accounting. The acquisition method of accounting 40 • Neurotech International NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2022 PAGE 34 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Notes to the Consolidated Financial Statements involves allocating the cost of the business combination to the fair value of the assets acquired and the liabilities and contingent liabilities assumed at the date of acquisition. (f) Foreign Currency translation Functional and presentation currency Items included in the Financial Statements of each of the Group entities are measured using the currency of the primary economic environment in which the Entity operates (‘the functional currency’). The Consolidated Financial Statements are presented in Australian dollars (A$), which is Neurotech International Limited’s functional and presentation currency. The functional currency of the subsidiaries of Neurotech International Limited incorporated in Malta is the Euro (EUR€). Foreign currency transactions and balances Transactions in foreign currencies are initially recorded in the functional currency by applying the exchange rates ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the rate of exchange ruling at the reporting date. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate as at the date of the initial transaction. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined. Translation of Foreign Operations The Statement of Profit or Loss and Other Comprehensive Income is translated at the average exchange rates for the year. The exchange differences arising on the translation are taken directly to a separate component of equity. On disposal of the foreign entity, the deferred cumulative amount recognised in equity relating to that foreign operation will be recognised in the Statement of Profit or Loss and Other Comprehensive Income. (g) Revenue recognition The Group’s revenue is substantially from the sale of Mente devices, which to date are principally sold through Distributors which Neurotech has Distribution Agreements with Sales are recognised when control of the products has transferred, being when the products are delivered to the distributor, the distributor has full discretion over the channel and price to sell the products, and there is no unfulfilled obligation that could affect the distributor’s acceptance of the products. Delivery occurs when the products have been shipped to the specific location, the risks of obsolescence and loss have been transferred to the distributor, and either the distributor has accepted the products in accordance with the distribution agreement, the acceptance provisions have lapsed, or the group has objective evidence that all criteria for acceptance have been satisfied. With the exception of devices which are defective, Distributors are not able to return devices to Neurotech, that is, there is no “Right of Return”, consequentially it is not necessary for the Group to consider the probability of units being returned which would lead to the recognition of a refund liability, and a right of return asset. (h) Other income Interest Income Interest income is recognised using the effective interest method. The effective interest method uses the effective interest rate which is the rate that exactly discounts the estimated future cash receipts over the expected life of the financial asset. Research and development grants Government grants relating to research and development activities are recognised when received. NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2022 2022 Annual Report • 41 PAGE 35 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Notes to the Consolidated Financial Statements Government Grants Grants from the government are recognised at their fair value where there is a reasonable assurance that the grant will be received, and the group will comply with all attached conditions. Government grants relating to the purchase of property, plant and equipment are included in non-current liabilities as deferred income and are credited to profit or loss on a straight-line basis over the expected lives of the related assets. Government grants relating to costs are deferred and recognised in the profit or loss over the period necessary to match them with the costs that they are intended to compensate. (i) Research and development Research expenditure is recognised as an expense as incurred. Costs incurred on development projects (relating to the design and testing of new or improved products) are recognised as intangible assets when it is probable that the project will, after considering its commercial and technical feasibility, be completed and generate future economic benefits and its costs can be measured reliably. The expenditure capitalised comprises all directly attributable costs, including costs of materials, services, direct labour and an appropriate proportion of overheads. Other development expenditures that do not meet these criteria are recognised as an expense as incurred. Development costs previously recognised as an expense are not recognised as an asset in a subsequent period. Capitalised development costs are recorded as intangible assets and amortised from the point at which the asset is ready for use. (j) Income Tax Expenses or Benefit The income tax expense or benefit (revenue) for the period is the tax payable on the current period's taxable income based on the national income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences between the tax base of assets and liabilities and their carrying amounts in the Financial Statements, and to unused tax losses. Deferred tax assets and liabilities are recognised for all temporary differences, between carrying amounts of assets and liabilities for financial reporting purposes and their respective tax bases, at the tax rates expected to apply when the assets are recovered or liabilities settled, based on those tax rates which are enacted or substantively enacted for each jurisdiction. Exceptions are made for certain temporary differences arising on initial recognition of an asset or a liability if they arose in a transaction, other than a business combination, that at the time of the transaction did not affect either accounting profit or taxable profit. Deferred tax assets are only recognised for deductible temporary differences and unused tax losses if it is probable that future taxable amounts will be available to utilise those temporary differences and losses. Deferred tax assets and liabilities are not recognised for temporary differences between the carrying amount and tax bases of investments in controlled entities, associates and interests in joint ventures where the Parent Entity is able to control the timing of the reversal of the temporary differences and it is probable that the differences will not be reversed in the foreseeable future. Current and deferred tax balances relating to amounts are recognised directly in equity. Neurotech International Limited and its resident subsidiaries have unused tax losses. However, no deferred tax balances have been recognised, as it is considered that asset recognition criteria have not been met at this time. (k) Cash and cash equivalents For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Bank overdrafts are shown within borrowings in current liabilities in the Statement of Financial Position. 42 • Neurotech International NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2022 PAGE 36 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Notes to the Consolidated Financial Statements (l) Inventories Inventories consist of autism related neurofeedback medical equipment being held for resale and are valued at the lower of cost and net realisable value. Cost is determined on the first-in first-out basis. Net realisable value is the estimate of the selling price in the ordinary course of business, less the expected selling expenses. (m) 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 provision for impairment. Trade receivables are generally due for settlement within 30 days. Collectability of trade receivables is reviewed on an ongoing basis. The Group applies the AASB 9 simplified approach to measuring expected credit losses which uses a lifetime expected loss allowance for all trade receivables. Customers with heightened credit risk are provided for specifically based on historical default rates and forward-looking information. Trade receivables are written off when there is no reasonable expectation of recovery. Indicators that there is no reasonable expectation of recovery include, amongst others, the failure of a debtor to engage in a repayment plan with the Group. Other receivables are recognised at amortised cost, less any provision for impairment. (n) Right-of-use assets A right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is measured at cost, which comprises the initial amount of the lease liability, adjusted for, as applicable, any lease payments made at or before the commencement date net of any lease incentives received, any initial direct costs incurred, and, except where included in the cost of inventories, an estimate of costs expected to be incurred for dismantling and removing the underlying asset, and restoring the site or asset. Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the lease or the estimated useful life of the asset, whichever is the shorter. Where the Group expects to obtain ownership of the leased asset at the end of the lease term, the depreciation is over its estimated useful life. Right-of use assets are subject to impairment or adjusted for any re-measurement of lease liabilities. The Group has elected not to recognise a right-of-use asset and corresponding lease liability for short-term leases with terms of 12 months or less and leases of low-value assets. Lease payments on these assets are expensed to profit or loss as incurred. (o) 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 Group’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. NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2022 2022 Annual Report • 43 PAGE 37 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Notes to the Consolidated Financial Statements (p) Financial Assets Classification All the Group’s financial assets are classified in the category of “financial assets at amortised cost”. Management determines the classification of financial assets at initial recognition. Measurement Loans and receivables are non‑derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets, except for those with maturities greater than 12 months after the reporting period which are classified as non‑current assets. Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest rate method, less provision for impairment. The fair value of trade receivables and payables is their nominal value less estimated credit adjustments. (q) Property, Plant and Equipment Items of property, plant and equipment are initially recorded at historical cost less accumulated depreciation. Depreciation is calculated on the straight-line method to write off the cost of the assets to their residual values over their estimated useful life. The annual rates used for this purpose, which are consistent with those used in previous years, are as follows: Furniture and fittings Computer equipment and software Medical and other equipment 20% 20-25% 25% Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that the future economic benefits associated with the item will flow to the Group and the cost can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to the Statement of Profit or Loss and Other Comprehensive Income during the financial year in which they are incurred. The asset’s residual values and useful lives are reviewed, and adjusted if appropriate, at each statement of financial position date. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount. Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in the income statement. When revalued assets are sold, the amounts included in other reserves are transferred to retained earnings. (r) Intangible assets Project Development Costs Development costs that are directly attributable to the design and testing of identifiable and unique medical equipment products controlled by the Group are recognised as intangible assets when the following criteria are met: it is technically feasible to complete the product so that it will be available for use; • • management intends to complete the product and use or sell it; • • • there is an ability to use or sell the product; it can be demonstrated how the product will generate probable future economic benefits; adequate technical, financial and other resources to complete the development and to use or sell the 44 • Neurotech International NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2022 PAGE 38 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Notes to the Consolidated Financial Statements product are available; and the expenditure attributable to the product during its development can be reliably measured. • Directly attributable costs that are capitalised as part of the medical equipment product include the development employee costs and an appropriate portion of relevant overheads. Other development expenditures that do not meet these criteria are recognised as an expense as incurred. Development costs previously recognised as an expense are not recognised as an asset in a subsequent period. Medical equipment product development costs recognised as assets are amortised over their estimated useful lives, which does not exceed five years. Patents and trademarks Patents and trademarks are capitalised on the basis of the costs incurred to acquire and bring to use the respective medical equipment. These costs are amortised over their estimated useful lives of 5 to 15 years. Significant costs associated with patents and trademarks are deferred and amortised on a straight-line basis over the period of their expected benefit, being their finite useful life of up to 15 years and are carried at cost less accumulated amortisation and impairment losses. (s) Trade and Other Payables Liabilities are recognised for amounts to be paid in the future for goods or services received prior to the end of the period, whether or not billed to the Group before reporting date. Trade accounts payable are normally settled within 60 days. Financial liabilities are initially measured at their fair value and subsequently measured at amortised cost using the effective interest rate method and are derecognised if the Group’s obligations specified in the contract expire or are discharged or cancelled. (t) Borrowings Borrowings are recognised initially at the proceeds received and net of issue costs incurred. In subsequent periods, borrowings are stated at amortised cost using the effective yield method. Any difference between proceeds (net of issue costs) and the redemption value is recognised in the Statement of Profit or Loss and Other Comprehensive Income over the period of the borrowings using the effective yield method. (u) Employee Benefits Short term Employee Benefit Obligations Liabilities for wages and salaries, including non-monetary benefits and accumulating annual leave that are expected to be settled wholly within 12 months after the end of the period in which the employees render the related service are recognised in respect of employees’ service up to the end of the reporting period and are measured at the amounts expected to be paid when the liabilities are settled. All other short-term employee benefit obligations are presented as payables. Other long-term Employee Benefit Obligations The Group does not recognise a liability for annual leave at reporting date, annual leave taken during the course of employment and annual leave paid to employees upon termination of employment is recognised in the financial statements of the Group when the employee is paid for their leave. Termination Benefits Termination benefits are payable when employment is terminated by the Group before the normal retirement date, or when an employee accepts voluntary redundancy in exchange for these benefits. The Group recognised termination benefits at the earlier of the following dates: (a) when the Group can no longer withdraw the offer of those benefits; and (b) when the Entity recognised costs for a restructuring that is within the scope of AASB 137 and involves the payment of terminations benefits. NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2022 2022 Annual Report • 45 PAGE 39 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Notes to the Consolidated Financial Statements In the case of an offer made to encourage voluntary redundancy, the termination benefits are measured based on the number of employees expected to accept the offer. Benefits falling due more than 12 months after the end of the reporting period are discounted to present value. (v) Share-based payments Share-based payments which have been granted to employees comprise of shares, share rights and share options. Shares The value of shares granted and issued to key management personnel in a year is recognised as an employee benefit expense with a corresponding increase in equity (share capital). The value of shares granted and vested to key management personnel in one year, which will be issued in a future year are recognised as an employee benefit expense with a corresponding increase in equity (share capital reserve). Upon issuing of the shares, the value in the share capital reserve will be transferred to share capital. The value of shares granted and in the process of vesting to key management personnel are recognised as an employee benefit expense with a corresponding increase in equity (share-based payments reserve). Upon vesting and subsequent issue of the shares, the value in the share-based payments reserve will be transferred to share capital. The basis for the value recognised for each share is the price at the time when the terms of the grant are agreed between the Group and the counter party. Share rights The value of share rights granted to key management personnel in a year is recognised as an employee benefit expense with a corresponding increase in equity (share-based payments reserve). In the year in which the share rights become vested, the value of share rights which have vested will be recognised in share capital reserve. Upon issue of the related shares, the value in the share capital reserve is transferred to share capital. The basis for the value recognised for each share right is the price at the time when the terms of the grant are agreed between the Group and the counter party. Share options The fair value of options granted to employees (including Key Management Personnel) is recognised as an employee benefit expense with a corresponding increase in equity (share-based payments reserve). The fair value is measured at grant date and recognised over the period during which the employees become unconditionally entitled to the options. The fair value at grant date is determined using a Black-Scholes option pricing model that takes into account the exercise price, the term of the option, the vesting and performance criteria, the impact of dilution, the non-tradable nature of the option, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk-free interest rate for the term of the option. The fair value of the options granted excludes the impact of any non-market vesting conditions (for example, profitability and sales growth targets). Non-market vesting conditions are included in assumptions about the number of options that are expected to become exercisable. At each reporting date, the Entity revises its estimate of the number of options that are expected to become exercisable. The employee benefit expense recognised in each period takes into account the most recent estimate. This estimate also requires determination of the most appropriate inputs to the valuation model including the expected life of the share option, volatility and dividend yield and making assumptions about them. 46 • Neurotech International NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2022 PAGE 40 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Notes to the Consolidated Financial Statements (w) Share-based Payment Transactions for the acquisition of goods and services Share-based payment arrangements in which the Group receives goods or services as consideration for its own equity instruments are accounted for as equity-settled share-based payment transactions. The Group measures the value of equity instruments granted at the fair value of the goods and services received, unless that fair value cannot be measured reliably. If the fair value of the goods or services received cannot be reliably measured, the transaction is measured by the by reference to the fair value of the instruments granted. (x) Contributed Equity Ordinary shares are classified as equity. Costs directly attributable to the issue of new shares or options are shown as a deduction from the equity proceeds, net of any income tax benefit. Costs directly attributable to the issue of new shares or options associated with the acquisition of a business are included as part of the purchase consideration. (y) Earnings or Loss per share Basic earnings or loss per share are calculated by dividing the net profit or loss attributable to members of the Parent Entity for the reporting period by the weighted average number of ordinary shares of the Group. (z) Fair Value The fair values of financial assets and liabilities are determined in accordance with generally accepted pricing models based on estimated future cash flow. There are currently no assets and liabilities which require fair valuing under the measurement hierarchy. Due to their short-term nature, the carrying amounts of the current receivables, current payables and current borrowings are assumed to approximate their fair value. (aa) Goods and Services Tax Revenues, expenses and assets are recognised net of GST except where GST incurred on a purchase of goods and services is not recoverable from the taxation authority, in which case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense item. Receivables and payables are stated with the amount of GST included. The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the Statement of Financial Position. Cash flows are included in the Statement of Cash Flow on a gross basis and the GST component of cash flows arising from investing and financing activities, which is recoverable from, or payable to, the taxation authorities are classified as operating cash flows. Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation authority. NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2022 2022 Annual Report • 47 PAGE 41 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Notes to the Consolidated Financial Statements 2. Segment Information The Directors have considered the requirements of AASB 8 – Operating segments. Operating segments are identified, and segment information disclosed on the basis of internal reports that are regularly provided to, or reviewed by, the Group’s chief operating decision maker, which is the Board of Directors. In this regard, such information is provided using similar measures to those used in preparing the consolidated statement of profit or loss and other comprehensive income, consolidated statement of financial position and consolidated statement of cash flows. One segment is identified, being Medical Device Development and Distribution. The Group’s business includes the commercialisation of Mente, the world’s first home therapy that is clinically proven to increase engagement and improve relaxation in autistic children with elevated Delta band brain activity. Concurrently the Group is conducting clinical studies to assess the neuro-protective, anti-inflammatory and neuro-modulatory activities of its proprietary NTI/Dolce cannabis strains. 3. REVENUE FROM CONTRACTS WITH CUSTOMERS Revenue represents the value of medical equipment and services sold by the Group measured on a point in time basis. Sales Mente products 4. OTHER INCOME Research and development grants received Shipping of sales products Interest income Proceeds on sale of plant and equipment 5. EXPENSES Cost of sales expenses Cost of units sold (Mente Products) Obsolete stock provision CONSOLIDATED 30 June 2022 ($) 30 June 2021 ($) 38,262 38,262 206,144 206,144 CONSOLIDATED 30 June 2022 ($) 30 June 2021 ($) 569,333 23 486 - 569,842 - 222 135 19,170 19,527 CONSOLIDATED 30 June 2022 ($) 30 June 2021 ($) 6,523 26,857 33,380 16,233 (50,565) (34,332) 48 • Neurotech International NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2022 PAGE 42 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Notes to the Consolidated Financial Statements 6. SHARE BASED PAYMENTS EXPENSE The primary purpose of share-based payments is to remunerate Directors, other Key Management Personnel and Service providers for the services rendered to the Group. Options issued to Dr Alex Andrews (CEO) Options issued to directors Expense recognised for the year for options previously issued to Peter Griffiths (former CEO) Adjustment to valuation of shares issued to directors for director’s fees Options issued to Max Capital Options issued to Merchant Capital CONSOLIDATED 30 June 2022 ($) 30 June 2021 ($) 59,280 24,677 - - - - - 515,367 24,583 176,040 202,487 298,366 83,957 1,216,843 Options issued to CEO The share-based payments expense for the year ended 30 June 2022, included an amount of $59,280 representing the expense for the financial year of the options granted to the Group’s CEO Dr Alexandra Andrews on 1 March 2022. The assessed fair value of these options was determined using a Black-Scholes option pricing model with the following inputs: Input Number of options Underlying share price Exercise price Expected volatility Expiry date (years) Vesting date Expected dividends Risk free rate Total Value Tranche 1 Tranche 2 Tranche 3 Total 5,000,000 5,000,000 5,000,000 15,000,000 $0.05 $0.08 100% 2.0 $0.05 $0.12 100% 2.0 $0.05 $0.16 100% 2.0 8 Mar 2023 8 Sep 2023 8 Mar 2024 - - - 0.60% 1.34% 1.34% $103,419 $80,803 $65,408 $249,630 Expensed in the financial year ended 30 June 2022 $32,301 $16,779 $10,200 $59,280 Detailed remuneration disclosures for Directors and Executives for the year to 30 June 2022 are provided in the Remuneration Report on pages 23 to 29. NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2022 2022 Annual Report • 49 PAGE 43 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Notes to the Consolidated Financial Statements 7. RESEARCH EXPENSES Cash consideration for acquisition of Dolce Cann licence Shares issued pursuant to the prospectus dated 26 August 2020 Shares issued upon achievement of Stage 1 milestones Shares issued upon extension to the Biotechnology licence Shares issued to Canna Pacific Options issued pursuant to the prospectus dated 26 August 2020 Contingent consideration – Performance Rights Other R&D expense CONSOLIDATED 30 June 2022 ($) 30 June 2021 ($) - - - - - - - 2,578,153 2,578,153 50,000 494,000 1,188,000 960,000 116,000 441,896 795,000 1,312,918 5,357,814 During the prior year the Company acquired an exclusive worldwide licence to utilise proprietary cannabis strains from Dolce Cann Global Pty Ltd (‘Dolce) for medicinal use in treating neurological disorders including autism, epilepsy and ADHD. As part of this acquisition and pursuant to the prospectus dated 26 August 2020, the Company issued 38,000,000 ordinary shares and 38,000,000 options with an exercise price of $0.01 and an expiry date of 31 January 2023. On 22 December 2020 a further 33,000,000 ordinary shares were issued to Dolce, or its nominees, upon successful completion of the Stage 1 milestone in vitro assay assessments being completed. On 15 March 2021 a further 15,000,000 ordinary shares were issued to Dolce, or its nominees, for the extension of the biotechnology licence. On 12 May 2021 2,000,000 ordinary shares were issued to Canna Pacific Limited for contracted services provided. All share issue expenses were calculated using the closing share price applicable on the date the shares were issued. The option expense was calculated under the Black-Scholes option valuation model. ¹ Options issued on acquisition of Dolce Cann licence The expense of $441,896 was calculated using the Black Scholes option valuation model using the following inputs: Number of options in series Grant date share price Exercise price Expected volatility Option life Dividend yield Interest rate Unlisted options NTIOPT8 38,000,000 $0.015 $0.01 139% 34 months 0.00% 0.28% 50 • Neurotech International NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2022 PAGE 44 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Notes to the Consolidated Financial Statements 8. INCOME TAX The current taxation charge comprises taxation at 30.00% on the profit generated by one of the Group’s entities as adjusted for tax purposes. A deferred taxation asset arising on temporary differences and unused tax losses has not been recognised in these financial statements. The numerical reconciliation between tax expense and the accounting loss before income tax multiplied by the Group's applicable income tax rate is as follows: Accounting (loss) before income tax Income tax benefit calculated at the Group's statutory income tax rate of 30.00% (2021: 30.00%) Tax effect of non-deductible expenses Tax losses not brought to account Income tax benefit CONSOLIDATED 30 June 2022 ($) 30 June 2021 ($) (3,362,241) (6,636,100) (1,008,672) (1,824,928) 47,422 961,250 - 1,058,848 766,080 - Historical tax losses not brought to account are estimated at $7,632,858 (2021: $4,428,690). The benefit for tax losses will only be obtained if: (a) the Group derives future assessable income of a nature and an amount sufficient to enable the benefit from the deductions for the losses to be realised; (b) the Group continues to comply with the conditions for deductibility imposed by Law; and (c) no changes in tax legislation adversely affect the ability of the Group to realise these benefits. 9. FINANCIAL RISK MANAGEMENT i. Overview The financial risks arising from the Group’s operations comprise market, liquidity and credit risk. These risks arise in the normal course of business, and the Group manages its exposure to them in accordance with the Group’s portfolio risk management strategy. The objective of the strategy is to support the delivery of the Group’s financial targets while protecting its future financial security and flexibility by taking advantage of the natural diversification provided by the scale, diversity and flexibility of the Group’s operations and activities. This note presents information about the Group's exposure to each of the above risks, their objectives, policies and processes for measuring risk and the management of capital. The Group's Risk Management Framework is supported by the Board. The whole Board is responsible for approving and reviewing the Group's Risk Management Strategy and Policy. Management is responsible for monitoring appropriate processes for identifying, monitoring and managing significant business risks faced by the Group and considering the effectiveness of its internal control system. The Board has established an overall Risk Management Policy which sets out the Group’s system of risk oversight, management of material business risks and internal control. The Group holds the following financial instruments: NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2022 2022 Annual Report • 51 PAGE 45 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Notes to the Consolidated Financial Statements Financial assets Cash and cash equivalents Financial Liabilities Trade and other payables CONSOLIDATED 30 June 2022 ($) 30 June 2021 ($) 1,895,431 1,895,431 520,062 520,062 4,827,370 4,827,370 349,418 349,418 ii. Financial Risk Management Objectives The overall financial Risk Management Strategy focuses on the unpredictability of the finance markets and seeks to minimise the potential adverse effects on financial performance and protect future financial security. iii. Credit Risk Credit risk is the risk of the financial loss to the Group if counterparty to a financial instrument fails to meet its contractual obligations and the risk arises principally from the Group's cash and cash equivalents, deposits with banks and financial institutions, and receivables. Cash at bank is placed with reliable financial institutions. For banks and financial institutions, the Group banks only with financial institution with high quality standing or rating. The Group applies the AASB 9 simplified approach to measuring expected credit losses which uses a lifetime expected loss allowance for all trade receivables. To measure the expected credit losses, trade receivables have been grouped based on shared risk characteristics and the days past due. Trade receivables are written off when there is no reasonable expectation of recovery. Impairment losses on trade receivables are presented as net impairment losses within operating profit. Subsequent recoveries of amounts previously written off are credited against the same line item. The carrying amount of the Group’s financial assets represents the maximum credit exposure. The Group’s maximum exposure to credit risk at the reporting date was: Trade receivables Counterparties without external credit rating, past due but not impaired Existing customers (more than 6 months) with no defaults in the past Counterparties without external credit rating, past due and impaired Gross value Doubtful debt provision Net value CONSOLIDATED 30 June 2022 ($) 30 June 2021 ($) - - - - - 63,157 (63,157) - 52 • Neurotech International NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2022 PAGE 46 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Notes to the Consolidated Financial Statements Other receivables GST receivable Total trade and other receivables Cash at bank and Commercial Bills Cash at bank – National Australia Bank Cash at bank – Bank of Valletta Plc. ** Petty cash account 99,483 99,483 142,857 142,857 1,890,571 4,860 - 4,716,751 110,032 587 1,895,431 4,827,370 **Bank of Valletta is currently rated ‘BBB-’ by an international rating agency. iv. Liquidity Risk Liquidity risk arises from the financial liabilities of the Group and the Group’s subsequent ability to meet their obligations to repay their financial liabilities as and when they fall due. Ultimate responsibility for Liquidity Risk Management rests with the Board of Directors. The Board has determined an appropriate Liquidity Risk Management Framework for the management of the Group’s short, medium and long-term funding and liquidity management requirements. The Group manages liquidity risk by maintaining adequate reserves and continuously monitoring budgeted and actual cash flows and matching the maturity profiles of financial assets, expenditure commitments and liabilities. The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying amounts as the impact of the discounting is not significant. Contractual maturities of financial liabilities Less than 6 months ($) 6 – 12 months ($) More than 12 months ($) Total ($) Carrying Amount ($) Group - at 30 June 2022 Trade payables Total Group - at 30 June 2021 Trade payables Total 520,062 520,062 349,418 349,418 - - - - - - - - 520,062 520,062 520,062 520,062 349,418 349,418 349,418 349,418 The Group has an unsecured General Banking Facility of €60,000 ($91,056) by Bank of Valletta P.L.C., which was undrawn at 30 June 2022. v. Market Risk Market risk is the risk that changes in market prices, such as foreign exchange rates may affect the Group’s income or the value of its holdings of financial instruments. The objective of Market Risk Management is to manage and control market risk exposures within acceptable parameters, while optimising return. NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2022 2022 Annual Report • 53 PAGE 47 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Notes to the Consolidated Financial Statements vi. Foreign Exchange Risk The Group is exposed to currency risk on financial assets or liabilities that are denominated in a currency other than the respective functional currencies of the Group's, the Australian Dollar (AUD) for Parent Entity and Euro (EUR) for the subsidiaries of Consolidated Entity. The Parent Entity which has a functional currency of Australian Dollars has no exposure to foreign exchange risk as there are no financial assets or liabilities denominated in a foreign currency (30 June 2022: nil). The subsidiaries of the of the Parent Entity, which have a functional currency of the Euro (EUR) have no exposure to foreign exchange risk as there are no financial assets or liabilities denominated in a foreign currency (30 June 2022: nil). vii. Interest Rate Risk The Group’s exposure to interest rates primarily relates to the Group’s cash and cash equivalents. As the Group has no significant interest-bearing assets, its income and operating cash flows are substantially independent of changes in market interest rates. The Group has a low level of interest-bearing liabilities and as such does not actively manage exposure to interest rate risk Profile At the reporting date, the interest rate profile of the Group’s and the Entity’s interest-bearing financial instruments are: Variable Rate Instruments Financial Assets Financial Liabilities CONSOLIDATED 30 June 2022 ($) 30 June 2021 ($) 1,895,431 4,827,370 - - 1,895,431 4,827,370 As at 30 June 2022 the Group had no interest bearing borrowings or other liabilities. The Group’s exposure to interest rate risk and effective weighted average interest rate by maturing periods is set out in tables below. All cash balances and borrowings are subject to a floating interest rate. The Group does not earn interest on cash held in the EUR currency, and the below stated weighted average interest rate reflects this. 30 June 2022 Cash and cash equivalents 30 June 2021 Weighted Average Effective Interest Rate 0.10% Cash Available for use Total 1,895,431 1,895,431 Weighted Average Effective Interest Rate Cash Available for use Total Cash and cash equivalents 0.01% 4,827,370 4,827,370 Up to the end of the reporting period, the Group did not have any hedging policy with respect to interest rate risk as exposure to such risk was not deemed to be significant by the directors since these assets are of a short- term nature. Management considers the potential impact on profit or loss of a defined interest rate shift that is reasonably probable at the end of the reporting period to be immaterial. 54 • Neurotech International NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2022 PAGE 48 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Notes to the Consolidated Financial Statements Cash Flow Sensitivity Analysis for Variable Rate Instruments The Board’s assessment of a reasonably possible change in interest rates relating to the Company’s Cash and Cash equivalents and borrowings is disclosed in the table below: Number of basis points Cash and cash equivalents 25 Management considers the potential impact on profit or loss of a reasonably possible change in interest rates at rates. the end of immaterial based on reporting period the prevailing interest to be the 10. CAPITAL MANAGEMENT When managing capital, the Board’s objective is to maintain optimal returns to Shareholders and benefits for other Stakeholders. The Board also aims to maintain a capital structure that ensures the lowest cost of capital available to the Group. The Group has no formal financing and gearing policy or criteria during the year having regard to the early status of its development and low level of activity. This position has not changed from the previous year. 11. CASH AND CASH EQUIVALENTS Cash and cash equivalents included in the Consolidated Statement of Cash Flows comprise the following Consolidated Statement of Financial Position amounts: Cash at Bank and on hand Term Deposit CONSOLIDATED 30 June 2022 ($) 30 June 2021 ($) 1,880,431 4,827,370 15,000 - 1,895,431 4,827,370 The term deposit amount is used as security for credit cards. No amount of the Group’s Cash at bank and on hand is restricted (30 June 2021: Nil). Refer to Note 9 Financial Risk Management for risk exposure analysis for Cash and cash equivalents. 12. TRADE AND OTHER RECEIVABLES Trade receivables Provision for non-recovery Net Trade receivables GST/VAT/Sales Tax Receivable CONSOLIDATED 30 June 2022 ($) 30 June 2021 ($) - - - 99,483 99,483 63,157 (63,157) - 142,860 142,860 NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2022 2022 Annual Report • 55 PAGE 49 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Notes to the Consolidated Financial Statements 13. PAYABLES Trade payables Accrued expenses Provision for annual leave 14. CONTINGENT CONSIDERATION Contingent consideration CONSOLIDATED 30 June 2022 ($) 30 June 2021 ($) 520,062 66,779 6,139 592,980 323,977 25,441 - 349,418 CONSOLIDATED 30 June 2022 ($) 30 June 2021 ($) - - 795,000 795,000 As at 30 June 2021, the 15,000,000 Performance Rights with a vesting deadline of 1 March 2023 issued to Dolce Cann for the extension to the Biotechnology was treated as deferred consideration and classified as a non-current liability. The Performance Rights were valued at $0.053 each, being the Company’s share price on the issue date of 30 June 2021 with the vesting considered to have a probability of 100%. This contingent liability has been extinguished following the issue of the securities. 15. CONTRIBUTED EQUITY Ordinary Shares Total Share Capital Movements of share capital during the year CONSOLIDATED 2022 (Shares) 2021 (Shares) 2022 ($) 2021 ($) 697,699,126 696,819,126 25,776,778 25,750,378 697,699,126 696,819,126 25,776,778 25,750,378 Date Details No of shares Issue price ($) $ Opening Balance at 1 July 2021 696,819,126 25,750,378 16.11.2021 Exercise of options 24.01.2022 Exercise of options 396,000 484,000 0.03 0.03 11,880 14,520 Closing Balance at 30 June 2022 697,699,126 25,776,778 The holder of Ordinary Shares is entitled to participate in dividends and the proceeds on winding up of the Group in proportion to the number of and amounts paid on the shares held. On a show of hands every holder of ordinary shares present at a meeting in person or by proxy, is entitled to one vote, and upon a poll each share is entitled to one vote. Ordinary Shares have no par value and the Group does not have a limited amount of authorised capital. 56 • Neurotech International NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2022 PAGE 50 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Notes to the Consolidated Financial Statements Movements of share capital during the previous year Date Details No of shares Issue price ($) $ Opening Balance at 1 July 2020 27.07.2020 Placement Tranche 1 02.09.2020 Placement Tranche 2 30.09.2020 Shares issued in lieu of director’s fees 30.09.2020 Shares issued pursuant to prospectus dated 26 August 2020 215,215,629 32,250,000 67,750,000 35,349,127 38,000,000 15,498,123 161,250 338,750 459,539 494,000 $0.005 $0.005 $0.013 $0.013 06.11.2020 Exercise of NTIOPT7 options 15,096,786 $0.005 75,484 12.11.2020 Placement Tranche 1 97,000,000 $0.022 2,134,000 11.12.2020 Exercise of 3,987,832 NTIOPT6 unlisted options at $0.0084 3,987,832 $0.0084 33,498 11.12.2020 Exercise of 5,000,000 NTIOPT8 unlisted options at $0.01 5,000,000 $0.010 50,000 11.12.2020 Issue of shares in lieu of fees for services (share based payment) 1,750,000 $0.005 87,500 22.12.2020 Placement Tranche 2 16,636,363 $0.022 366,000 22.12.2020 Shares Issued to Dolce Cann for Stage 1 Milestones achieved 33,000,000 $0.036 1,188,000 04.03.2021 Exercise of NTIOPT12 options 2,500,000 $0.0300 75,000 15.03.2021 Placement 36,363,637 $0.0555 2,000,000 15.03.2021 Issue of Dolce Shares (First Tranche) - Extension to the Biotechnology Licence 15,000,000 $0.0640 960,000 15.03.2021 Exercise of NTIOOPT7 Options 23,796,786 $0.0050 118,984 15.03.2021 Exercise of NTIO Options 4,034 $0.0600 19.03.2021 Exercise of NTIO Options 420,791 $0.0600 26.03.2021 Exercise of NTIO Options 1,173,099 $0.0600 242 25,247 70,386 01.04.2021 `Exercise of NTIO Options 12,082,994 $0.0600 724,980 16.04.2021 Exercise of NTIO Options 500,000 $0.0600 30,000 16.04.2021 Exercise of NTIO Options 11,942,048 $0.0600 716,523 19.04.2021 Exercise of NTIOPT7 Options 20,000,000 $0.0050 100,000 12.05.2021 Issue of Canna Pacific Shares 2,000,000 $0.0580 116,000 19.05.2021 Exercise of NTIOPT13 options 10,000,000 $0.0600 600,000 Capital raising costs Closing Balance at 30 June 2021 696,819,126 (673,128) 25,750,378 NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2022 2022 Annual Report • 57 PAGE 51 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Notes to the Consolidated Financial Statements 16. RESERVES Balance as at 30 June 2020 Foreign exchange movement Share based payments Balance as at 30 June 2021 Foreign exchange movement Share based payments (note 6) Recognition of deferred consideration (note 14) CONSOLIDATED Foreign Currency Translation Reserve ($) Share Based Payments Reserve ($) Total Reserves ($) 1,681,269 77,551 1,758,820 - (26,702) (26,702) 1,712,834 - 1,712,834 3,394,103 - 83,957 795,000 50,849 25,409 - - 3,444,952 25,409 83,957 795,000 Balance at 30 June 2022 4,273,060 76,258 4,349,318 (a) Share-based payments Reserve The share-based payments reserve represents the value of options and share rights issued to key management personnel, vendors and for services in relation to capital raisings. The share-based payments reserve is used to record the value of the share-based payments provided to employees, consultants and for options issued pursuant to any acquisition or in exchange for services. (b) Foreign Currency Reserve The foreign currency reserve records foreign currency differences arising from the translation of financial information of the Group’s Maltese subsidiaries which have a functional currency of the Euro. 17. ACCUMULATED PROFIT/(LOSS) Accumulated (loss) at the beginning of the year Loss attributable to shareholders Accumulated (loss) at the end of the year CONSOLIDATED 30 June 2022 ($) 30 June 2021 ($) (25,333,864) (17,903,236) (3,362,241) (7,430,628) (28,696,105) (25,333,864) 58 • Neurotech International NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2022 PAGE 52 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Notes to the Consolidated Financial Statements 18. CASH FLOW INFORMATION Reconciliation of cash flow from operating activities with the loss from continuing operations after income tax: Non-cash flows in profit from ordinary activities Net (Loss) after Income Tax Share based payments Lease payments Share issue costs Changes in assets & liabilities (Increase)/Decrease in trade and other receivables (Increase)/Decrease in prepayments (Increase)/Decrease in inventories Increase/(Decrease) in trade and other payables (Decrease) arising from exchange rate movements CONSOLIDATED 30 June 2022 ($) 30 June 2021 ($) (3,362,241) (7,430,628) 83,957 4,990,971 - - 43,467 17,326 (7,202) 244,148 25,410 (864) (229,934) (116,823) - - 471,522 (772) Cash flow used in Operating Activities (2,955,135) 2,316,528) 19. INTERESTS IN OTHER ENTITIES Name of Entity Place of business/country of incorporation AAT Research Ltd AAT Medical Ltd Malta Malta Ownership Interest held by the Group 2022 100% 100% 2021 Principal Activities 100% Parent Group of AAT Medical Ltd 100% Executing medical research projects and developing novel technological devices that are marketable 20. MATTERS SUBSEQUENT TO THE END OF THE FINANCIAL YEAR On 7 July 2022 the Company appointed Mr Gerald Quigley as a Non-Executive Director. On 15 August 2022 the Company appointed Dr Thomas Duthy as a consultant to the Company with a focus on investor relations and Strategic Corporate Development. In addition, the Board has made a commitment to appoint Dr Duthy as an Executive Director, to assist the Company in this capacity effective 1 September 2022. On 15 August 2022 current Non-Executive Director Mr Mark Davies was appointed as Chairman of the Board and Mr Brian Leedman and Ms Krista Bates resigned as Directors. In addition to the above changes, the Company announced that as at 15 August 2022, current Non-Executive Director Professor Allan Cripps was appointed as Chief Scientist and Gerald Quigley as Director of Public Relations. NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2022 2022 Annual Report • 59 PAGE 53 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Notes to the Consolidated Financial Statements On 16 August 2022 the Company announced the proposed issue of 20,000,000 options to Dr Thomas Duthy and 5,000,000 options to Professor Allan Cripps and 5,000,000 options to Mr Gerald Quigley as an equity based incentive component to their remuneration packages. These securities are subject to shareholder approval at a future General Meeting. Other than detailed above, no other matters or circumstances have arisen since 30 June 2022 that has significantly affected, or may significantly affect the Group's operations, the results of those operations, or the Group's state of affairs in future financial years. 21. REMUNERATION OF AUDITOR During the year the following fees were paid or payable for services provided by the Auditor of the Entity and its related parties. Audit and Other Assurance Services BDO Audit (WA) Pty Ltd Total remuneration for Audit and Other Assurance Services CONSOLIDATED 30 June 2022 ($) 30 June 2021 ($) 53,319 53,319 50,040 50,040 22. COMMITMENTS The Company has no commitments not recognised as liabilities as at 30 June 2022 (2021: $nil). 23. LOSS PER SHARE Basic loss per share (cents per share) CONSOLIDATED 30 June 2022 ($) 30 June 2021 ($) (0.48) (1.51) (Loss) used in the calculation of Earnings (Loss) Per Share (3,362,241) (7,430,628) Weighted average number of ordinary shares 697,272,507 492,617,808 Effect of dilutive securities: Share options are not considered dilutive as the conversion of options to ordinary shares will result in a decrease in the net loss per share. 24. CONTINGENT LIABILITIES The Board is not aware of any circumstances or information, which leads them to believe there are any material contingent liabilities outstanding as at 30 June 2022. 60 • Neurotech International NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2022 PAGE 54 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Notes to the Consolidated Financial Statements 25. FAIR VALUES OF FINANCIAL ASSETS AND LIABILITIES At 30 June 2022 and 30 June 2021, the carrying amounts of financial assets and financial liabilities classified with current assets and current liabilities respectively approximated their fair values due to the short-term maturities of these assets and liabilities. The fair values of non-current financial assets and non-current financial liabilities are not materially different from their carrying amounts. 26. RELATED PARTY DISCLOSURES Parent Entity The legal Parent Entity of the Group is Neurotech International Limited (NTI). NTI owns 100% of the issued ordinary shares of AAT Research Limited (directly), AAT Medical Limited, and AAT Intellectual Property Limited (indirectly) which are the subsidiaries of AAT Research Limited. All subsidiaries are incorporated in Malta. Wholly owned Group transactions Loans made by Neurotech International Limited (NTI) to wholly owned subsidiary companies are contributed to meet required expenditure payable on demand and are not interest bearing. Key Management Personnel Short-term employee benefits Share-based payment CONSOLIDATED 30 June 2022 ($) 30 June 2021 ($) 365,946 83,957 449,903 175,688 715,998 891,686 Detailed remuneration disclosures for Directors and Executives for the year to 30 June 2022 are provided in the Remuneration Report on pages 23 to 29. Transactions with other related parties Transactions between related parties are on normal commercial terms and conditions no more favourable than those available to other parties unless otherwise stated. The following transaction occurred with related parties for the year ended 30 June 2022: Administration fee to Azalea Consulting Pty Ltd Bookkeeping and accounting services to Valle Corporate Pty Ltd Total CONSOLIDATED 30 June 2022 ($) 30 June 2021 ($) 116,050 23,013 139,063 124,120 21,409 145,529 Notes in relation to the table of related party transactions. Payments to Azalea Consulting Pty Ltd (director related entity of Winton Willesee) for corporate administration services including company secretarial and accounting services and front and registered office services. Payments to Valle Corporate Pty Ltd (director related entity of Winton Willesee) for bookkeeping and financial reporting services fees. NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2022 2022 Annual Report • 61 PAGE 55 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Notes to the Consolidated Financial Statements 27. PARENT ENTITY INFORMATION The following information related to the Parent Entity, Neurotech International Limited, as at 30 June 2022. The information presented here has been prepared using accounting policies as presented in Note 1. Current assets Non-current assets Total Assets Current liabilities Non-current liabilities Total Liabilities Net Assets Loss for the year Other comprehensive profit/(loss) for the year Total Comprehensive Loss for the Year 30 June 2022 ($) 30 June 2021 ($) 1,908,501 4,894,257 2,617 - 1,911,118 4,894,257 481,127 - 237,791 795,000 481,127 1,032,791 1,429,991 3,861,466 (3,104,705) (7,350,245) - - (3,104,705) (7,350,245) There are no other separate commitments and contingencies for the parent entity as at 30 June 2022. 62 • Neurotech International NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2022 PAGE 56 DIRECTORS’ DECLARATION Directors’ Declaration In the opinion of the Directors of Neurotech International Limited (Group): (a) the Financial Statements, comprising the consolidated statement of profit or loss and other comprehensive income, consolidated statement of financial position, consolidated statement of cash flows, consolidated statement of changes in equity, and Notes set out on pages 38 to 62, are in accordance with the Corporations Act 2001, including: (i) (ii) giving a true and fair view of the Group’s financial position as at 30 June 2022 and of their performance, for the financial period ended on that date; and complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and Corporations Regulations 2001; and other mandatory professional reporting requirements. (b) (c) the Financial Report also complies with International Financial Reporting Standards as disclosed in Note 1; and there are reasonable grounds to believe that the Group 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 by the Financial Officer for the financial period ended 30 June 2022. Signed in accordance with a resolution of the Directors. Winton Willesee Non-Executive Director Dated at Perth, Western Australia, 31 August 2022 NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2022 2022 Annual Report • 63 PAGE 57 Independent Auditor’s Report Tel: +61 8 6382 4600 Fax: +61 8 6382 4601 www.bdo.com.au Level 9, Mia Yellagonga Tower 2 5 Spring Street Perth WA 6000 PO Box 700 West Perth WA 6872 Australia INDEPENDENT AUDITOR’S REPORT To the members of Neurotech International Limited Report on the Audit of the Financial Report Opinion We have audited the financial report of Neurotech International Limited (the Company) and its subsidiaries (the Group), which comprises the consolidated statement of financial position as at 30 June 2022, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, and notes to the financial report, including a summary of significant accounting policies and the directors’ declaration. In our opinion the accompanying financial report of the Group, is in accordance with the Corporations Act 2001, including: (i) Giving a true and fair view of the Group’s financial position as at 30 June 2022 and of its financial performance for the year ended on that date; and (ii) Complying with Australian Accounting Standards and the Corporations Regulations 2001. Basis for opinion We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the Financial Report section of our report. We are independent of the Group in accordance with the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the directors of the Company, would be in the same terms if given to the directors as at the time of this auditor’s report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation 64 • Neurotech International Independent Auditor’s Report Material uncertainty related to going concern We draw attention to Note 1 in the financial report which describes the events and/or conditions which give rise to the existence of a material uncertainty that may cast significant doubt about the group’s ability to continue as a going concern and therefore the group may be unable to realise its assets and discharge its liabilities in the normal course of business. 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. In addition to the matter described in the Material uncertainty related to going concern section, we have determined the matter described below to be the key audit matter to be communicated in our report. Accounting for Share Based Payments Key audit matter How the matter was addressed in our audit During the year, the group awarded share based Our procedures included, but were not limited to the payments in the form of share options. following: Due to the complex and judgemental estimates used in determining the valuation of the share based payments in accordance with AASB 2 Share Based Payments, we consider the Group’s calculation of the share based payment expense, and associated disclosure to be a key audit matter. • • • • • Reviewing relevant supporting documentation to obtain an understanding of the contractual nature, terms and conditions of the share based payment arrangements; Considering the appropriateness of the valuation methodology used by management to measure and value the share-based payments; Involving our internal valuation specialists to assess the reasonableness of volatility rate used in the valuation; Assessing the allocation of the share-based payment expense over managements expected vesting period; and Assessing the adequacy of the related disclosures in the financial report. 2022 Annual Report • 65 Independent Auditor’s Report Other information The directors are responsible for the other information. The other information comprises the information in the Group’s annual report for the year ended 30 June 2022, but does not include the financial report and the auditor’s report thereon. Our opinion on the financial report does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Responsibilities of the directors for the Financial Report The directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error. In preparing the financial report, the directors are responsible for assessing the ability of the group to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or has no realistic alternative but to do so. Auditor’s responsibilities for the audit of the Financial Report Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report. A further description of our responsibilities for the audit of the financial report is located at the Auditing and Assurance Standards Board website (http://www.auasb.gov.au/Home.aspx) at: https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf This description forms part of our auditor’s report. 66 • Neurotech International Independent Auditor’s Report Report on the Remuneration Report Opinion on the Remuneration Report We have audited the Remuneration Report included in pages 17 to 24 of the directors’ report for the year ended 30 June 2022. In our opinion, the Remuneration Report of Neurotech International Limited, for the year ended 30 June 2022, complies with section 300A of the Corporations Act 2001. Responsibilities The directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards. BDO Audit (WA) Pty Ltd Glyn O'Brien Director Perth, 31 August 2022 2022 Annual Report • 67 ASX Additional Information ASX ADDITIONAL INFORMATION The shareholder information set out below was applicable as at 1 August 2022. 1. Quotation Listed securities in Neurotech International Limited are quoted on the Australian Securities Exchange under ASX code NTI (Fully Paid Ordinary Shares). 2. Voting Rights The voting rights attached to the Fully Paid Ordinary shares of the Company are: (a) (b) at a meeting of members or classes of members each member entitled to vote may vote in person or by proxy or by attorney; and on a show of hands, every person present who is a member has one vote, and on a poll every person present in person or by proxy or attorney has one vote for each ordinary share held. There are no voting rights attached to any Options or Performance Rights on issue. 3. Distribution of Shareholders i) Fully Paid Ordinary Shares Holdings Range Holders 1 – 1,000 1,001 – 5,000 5,001 – 10,000 10,001 – 100,000 100,001 and above 53 98 238 790 415 Units 7,835 315,693 2,035,978 32,130,081 663,209,539 % - 0.05 0.29 4.61 95.06 Total 1,594 697,699,126 100.00% On 1 August 2022, there were 162 holders of unmarketable parcels of less than 5,682 ordinary shares (based on the closing share price of $0.088). 68 • Neurotech International NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2022 PAGE 62 ii) NTIOPT3 - Unlisted Options exercisable at $0.0189 on or before 18 November 2022 Holdings Range Holders Units 1 – 1,000 1,001 – 5,000 5,001 – 10,000 10,001 – 100,000 100,001 and above Total - - - - 4 4 10,000,0001 10,000,000 100.00 100.00% 1Holders who hold more than 20% of securities are: Jameker Pty Ltd – 4,000,000 options Seivad Investments Pty Ltd - 2,000,000 options Chincherinchee Nominees Pty Ltd – 2,000,000 options Mr David Steven Cantor - 2,000,000 options iii) NTIOPT4 - Unlisted Options exercisable at $0.0589 on or before 18 November 2024 Holdings Range Holders Units 1 – 1,000 1,001 – 5,000 5,001 – 10,000 10,001 – 100,000 100,001 and above Total - - - - 1 1 1 All the securities in this class are held by: Shimano Ventures Ltd 1 – 1,000 1,001 – 5,000 5,001 – 10,000 10,001 – 100,000 100,001 and above Total - - - - 1 1 1 All the securities in this class are held by: Shimano Ventures Ltd 6,500,0001 6,500,000 100.00 100.00% 5,429,7541 5,429,754 100.00 100.00% iv) NTIOPT5 - Unlisted Options exercisable at $0.0199 on or before 18 November 2024 Holdings Range Holders Units % - - - - % - - - - % - - - - - - - - - - - - - - - - NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2022 2022 Annual Report • 69 PAGE 63 - - - - - - - - - - - - % - - - - % - - - - % - - - - v) NTIOPT7 - Unlisted Options exercisable at $0.005 on or before 31 January 2023 Holdings Range Holders Units 1 – 1,000 1,001 – 5,000 5,001 – 10,000 10,001 – 100,000 100,001 and above Total - - - - 3 3 16,590,3561 16,590,356 100.00 100.00% 1Holders who hold more than 20% of securities are: Javaler Pty Ltd - 5,945,178 options J & J Bandy Nominees Pty Ltd - 5,645,178 options Chincherinchee Nominees Pty Ltd – 5,000,000 options vi) NTIOPT8 - Unlisted Options exercisable at $0.010 on or before 31 January 2023 Holdings Range Holders Units 33,000,0001 33,000,000 100.00 100.00% vii) NTIOPT9 - Unlisted Options exercisable at $0.038 on or before 30 November 2023 Holdings Range Holders Units 1 – 1,000 1,001 – 5,000 5,001 – 10,000 10,001 – 100,000 100,001 and above Total - - - - 3 3 1Holders who hold more than 20% of securities are: Dutch Ink (2010) Pty Ltd – 22,000,000 options Dolce Cann Global Pty Ltd – 11,000,000 options 1 – 1,000 1,001 – 5,000 5,001 – 10,000 10,001 – 100,000 100,001 and above Total - - - - 2 2 4,000,0001 4,000,000 100.00 100.00% 1Holders who hold more than 20% of securities are: Chincherinchee Nominees Pty Ltd – 2,000,000 options Seivad Investments Pty Ltd – 2,000,000 options 70 • Neurotech International NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2022 PAGE 64 viii) NTIOPT10 - Unlisted Options exercisable at $0.015 on or before 31 October 2023 Holdings Range Holders Units ix) NTIOPT11 - Unlisted Options exercisable at $0.020 on or before 31 October 2023 Holdings Range Holders Units 1 – 1,000 1,001 – 5,000 5,001 – 10,000 10,001 – 100,000 100,001 and above Total - - - - 1 1 1 All the securities in this class are held by: Mr Brian Leedman & Mrs Natasha Leedman 1 – 1,000 1,001 – 5,000 5,001 – 10,000 10,001 – 100,000 100,001 and above Total - - - - 1 1 1 All the securities in this class are held by: Mr Brian Leedman & Mrs Natasha Leedman 10,000,0001 10,000,000 100.00 100.00% 10,000,0001 10,000,000 100.00 100.00% - - - - - - - - - - - - % - - - - % - - - - % - - - - x) NTIOPT12 - Unlisted Options exercisable at $0.030 on or before 22 December 2022 Holdings Range Holders Units 1 – 1,000 1,001 – 5,000 5,001 – 10,000 10,001 – 100,000 100,001 and above Total - - - - 6 6 1The following holder holds more than 20% of securities: Max Capital Pty Ltd – 3,630,000 options 6,620,0001 6,620,000 100.00 100.00% NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2022 2022 Annual Report • 71 PAGE 65 xi) NTIOPT14 - Unlisted Options exercisable at $0.09 on or before 12 May 2023 Holdings Range Holders Units 1 – 1,000 1,001 – 5,000 5,001 – 10,000 10,001 – 100,000 100,001 and above Total - - - - 4 4 1The following holder holds more than 20% of securities: Macaronis Pty Ltd – 8,000,000 options 11,000,0001 11,000,000 100.00 100.00% xii) NTIOPT15 - Unlisted Options exercisable at $0.08 on or before 10 March 2024 Holdings Range Holders Units % - - - - % - - - - % - - - - - - - - - - - - - - - - 5,000,0001 5,000,000 100.00 100.00% 5,000,0001 5,000,000 100.00 100.00% 1 – 1,000 1,001 – 5,000 5,001 – 10,000 10,001 – 100,000 100,001 and above Total - - - - 1 1 1 All the securities in this class are held by: Dr Alexandra Elizabeth Marion Heaton 1 – 1,000 1,001 – 5,000 5,001 – 10,000 10,001 – 100,000 100,001 and above Total - - - - 1 1 1 All the securities in this class are held by: Dr Alexandra Elizabeth Marion Heaton xiii) NTIOPT16 - Unlisted Options exercisable at $0.12 on or before 10 March 2024 Holdings Range Holders Units 72 • Neurotech International NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2022 PAGE 66 xiv) NTIOPT17 - Unlisted Options exercisable at $0.16 on or before 10 March 2024 Holdings Range Holders Units 5,000,0001 5,000,000 100.00 100.00% 1 – 1,000 1,001 – 5,000 5,001 – 10,000 10,001 – 100,000 100,001 and above Total - - - - 1 1 1 All the securities in this class are held by: Dr Alexandra Elizabeth Marion Heaton xv) Performance Rights expiring on 1 March 2023 Holdings Range Holders Units 1 – 1,000 1,001 – 5,000 5,001 – 10,000 10,001 – 100,000 100,001 and above Total - - - - 7 7 - - - - - - - - % - - - - % - - - - 15,000,0001 15,000,000 100.00 100.00% 1Holders who hold more than 20% of securities are: Martha Jane Medical Limited – 5,000,000 Performance Rights Dolce Cann Global Pty Ltd – 5,000,000 Performance Rights 4. Substantial Shareholders The Company has not received any notices of substantial shareholdings. 5. Restricted Securities There are no restricted securities listed on the Company’s register as at 1 August 2022. 6. On market buy-back There is currently no on market buy back in place. NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2022 2022 Annual Report • 73 PAGE 67 7. Twenty Largest Shareholders The twenty largest shareholders of the Company’s quoted securities as at 1 August 2022 are as follows: Name Quadrangle Capital Pty Ltd No. of Shares % 44,000,000 6.31% Gleneagle Securities Nominees Pty Limited 36,875,371 5.29% Jalaver Pty Ltd 33,900,000 4.86% J & J Bandy Nominees Pty Ltd 33,500,000 4.80% Citicorp Nominees Pty Limited 33,149,073 4.75% The Trust Company (Australia) Limited Greywood Holdings Pty Ltd 26,250,000 3.76% 24,200,000 3.47% Chincherinchee Nominees Pty Ltd 22,693,572 3.25% Dolce Cann Global Pty Ltd 22,000,000 3.15% 1 2 3 4 5 6 7 8 9 10 Mrs Melanie Therese Verheggen 17,038,528 2.44% 11 Spinite Pty Ltd 12 Mr Stephen John Dobson 17,000,000 2.44% 11,296,786 1.62% 13 14 15 16 17 18 Dutch Ink (2010) Pty Ltd BR Corporation Pty Ltd Haslingden Pty Ltd Seivad Investments Pty Ltd Britoak Pty Ltd 8,129,023 8,000,000 7,800,000 7,793,017 6,890,475 The Sun W Investment Pty Ltd 6,827,272 19 Mr Deming Liu 20 Gofour Sail Pty Ltd Total 6,700,000 6,555,677 380,598,794 54.55% 1.17% 1.15% 1.12% 1.12% 0.99% 0.98% 0.96% 0.94% 74 • Neurotech International NEUROTECH INTERNATIONAL LIMITED ANNUAL REPORT 2022 PAGE 68 2022 Annual Report • 75 Suite 5 CPC, 145 Stirling Highway Nedlands WA 6009, Australia info@neurotechinternational.com +61 (8) 9389 3130 ASX : NTI neurotechinternational.com 

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