ANNUAL REPORT
For the year ended 30 June 2020
Noxopharm Limited
ABN 50 608 966 123
Noxopharm Limited (ASX:NOX)
2
Annual Report FY20
Corporate Directory
Board of Directors
Graham Kelly, Executive Chairman
Peter Marks, Non-Executive Deputy Chairman
Ian Dixon, Non-Executive Director
Boris Patkin, Non-Executive Director (appointed on 15 March 2020)
Fred Bart, Non-Executive Director (appointed on 8 May 2020)
Company Secretary
David Franks
Registered Office
Principal Place of Business
Suite 3, Level 4
828 Pacific Hwy
Gordon, NSW 2072
Suite 3, Level 4
828 Pacific Hwy
Gordon, NSW 2072
Website
www.noxopharm.com
Share Register
Automic Pty Ltd
Level 5, 126 Phillip Street
Sydney, NSW 2000
Auditors
William Buck Audit (Vic) Pty Ltd
Level 20, 181 William Street
Melbourne, VIC 3000
Stock Exchange
Australian Securities Exchange
20 Bridge Street
Sydney, NSW 2000
ASX Code
NOX
3
Noxopharm Limited (ASX:NOX)
Contents
Chairman’s Letter
Noxopharm CEO and Operations Report
Directors’ Report
Auditor’s Independence Declaration
Annual Financial Report - 30 June 2020
Consolidated Statement of Profit or Loss and Other Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Financial Statements
Directors' Declaration
Independent Auditor's Report to the Members
Shareholder Information
5
6
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25
26
27
28
29
30
58
59
63
4
Chairman’s Letter
Dear Shareholders,
It is my pleasure to present this activities overview for what has
been our 4th year of operation.
I would summarise the year by saying that we have taken
important strides in gaining a clearer understanding of what we
see as the substantial value of our main asset, Veyonda®.
Noxopharm has long regarded Veyonda® as something special,
but the work achieved during this past financial year has really
revealed what might be possible, and with that, bringing us
closer to reaching a commercial point.
For us, that point means an industry deal, and those sorts of
deals are often consummated at the stage Noxopharm believes
it is about to enter. If our drug was meant for a rare disease,
taking it all the way on our own to market might be plausible.
But the markets we are looking at are among the largest in the
pharmaceutical industry and that means needing to work with
and eventually handing Veyonda® over to someone with the
resources to do it justice, leaving the Company to focus on
repeating the process of drug discovery and development with
either a new or a variant compound.
Our confidence in achieving a commercial arrangement for the
benefit of shareholders comes from knowing that Veyonda® has
first-in-class, and arguably unique, functions in major areas of
need in the oncology market. What we have learnt about
Veyonda® this past year now will be applied to compiling and
finalising a data package that we believe prospective partners
will want to see.
The key highlights of the year are as follows:
R&D
•
•
•
•
•
•
Confirmation that idronoxil (the active ingredient in
Veyonda®) possesses both potent immune-activating
and anti-inflammatory properties, both believed to be
contributing to its anti-cancer properties
DARRT-1 Phase 1b study completed and data
announced; a durable anti-cancer effect achieved in a
high proportion of patients with limited lifespans and
who otherwise would be receiving palliative care
LuPIN study expanded from 32 to 56 patients at the
request of
investigators based on
the clinical
encouraging safety and efficacy outcomes
IND granted by FDA for Veyonda + doxorubicin in soft
tissue sarcomas
Decision taken to conduct Phase 1 (pilot) study of
Veyonda in COVID-19 patients on the basis of its anti-
inflammatory properties
Confirmation of
complement Veyonda in a drug pipeline.
two new drug programs
to
Annual Report FY20
“Our confidence in
achieving a commercial
arrangement for the benefit
of shareholders comes from
knowing that Veyonda® has
first-in-class, and arguably
unique, functions in major
areas of need in the
oncology market”
Corporate
•
•
•
I returned to the role of CEO to guide the day-to-day
business of the Company in what I see as a pivotal time
in its history
The appointment of two additional directors in Messrs
Boris Patkin and Fred Bart to help spread the growing
workload and bring additional commercial experience
to the Board
Conducting a successful fully underwritten, non-
renounceable rights issue in June that raised $7.9M
(before costs) that reinforced our cash reserves.
Like all businesses, the COVID-19 pandemic has had its
impacts, although minimally. Our current clinical trials are fully
recruited, so enrolment is unaffected; timelines with our
overseas contractors have been minimally affected; and most
NOX staff are working remotely, a situation that happily has
proved to have delivered increased productivity as staff
adjusted quickly and adapted well to the new working
arrangements. Ironically, the pandemic might just prove to be
what is known as a “black swan event” for Noxopharm and this
is the opportunity to test the STING-signaling antagonism of
Veyonda® to block the phenomenon of cytokine storm, now
identified as being responsible for many of the deaths and long-
term disabilities associated with SARS-CoV-2 infection.
The Company, from the Board down, is excited by the range of
opportunities it has on offer; the executive team is experienced
and their respective teams are productive and committed; we
have the necessary resources to drive the business forward; we
have a clear idea of what that business is, what we have to do
to monetise our assets and the realistic timeframes to achieve
this; and we have a high degree of confidence in the value of
those assets.
Our overriding objective remains to achieve maximum value for
those assets for the benefit of all shareholders.
It just remains for me to thank you for your trust, which I hope
we will continue to justify.
Yours sincerely
Graham Kelly
Executive Chairman
5
Noxopharm Limited (ASX:NOX)
Noxopharm CEO and Operations Report
Principal activities
Noxopharm Limited (ASX:NOX) is an Australian clinical-stage
drug development company focused on treating cancer with
Veyonda®, its lead drug candidate.
oncology
Veyonda is a novel dual-acting oncotoxic and immuno-
oncology drug designed to enhance the effectiveness of
standard
chemotherapy,
treatments,
radiotherapy and immuno-oncology drugs. Noxopharm is
focusing on proving Veyonda to be a meaningful treatment
offering a strong and durable anti-cancer response in end-stage
solid cancers that have stopped responding to standard
treatments, the largest sector of the oncology market, and one
without any significant competition.
i.e.,
Veyonda acts mainly by restoring the ability of the body’s
immune system to kill cancer cells and has shown strong
promise in treating a broad spectrum of cancers.
In addition, Noxopharm is developing a pipeline with an active
research and development (R&D) program for additional drug
candidates.
Noxopharm also is the major shareholder of US biotechnology
company Nyrada Inc. (ASX:NYR).
Senior Executive Team
Dr Graham Kelly
Chief Executive Officer
Dr Gisela Mautner
Chief Medical Officer
Ms Jeanette Bell
Chief Operating Officer
Mr Shawn Vanboheemen
Chief Financial Officer
Dr John Wilkinson
Chief Scientific Officer
Dr Olivier Laczka
Director, Drug Discovery &
Research
Review of operations
Investment highlights
• Pre-clinical data shows
(IDX), the active
ingredient in Veyonda, as achieving the major goal of
converting
tumours, a
tumours
significant pharma industry development milestone
idronoxil
‘COLD’
‘HOT’
to
• Lead drug candidate, Veyonda, is being progressed into
multi-national Phase 2 trial (DARRT-2) in Stage 4 prostate
cancer; on-schedule for commencement in Q1 2021
• Phase 1 pilot study (NOXCOVID) testing Veyonda in
patients with early-stage respiratory distress associated
with SARS-CoV-2
infection (COVID-19) on track to
commence Q3 2020
• Noxopharm remains well funded to continue progressing
its clinical trials with A$7.1million cash at end of quarter
6
Oncology programs
‘COLD’ to ‘HOT’ conversion achieved
Restoring cancer-fighting immune function in tumours (known
as converting ‘COLD’ tumours to ‘HOT’ tumours) has been
identified as one of the primary keys to more successful
treatment of many cancers. Efforts by the industry to develop
such a key to date have been patchy, and the challenge remains
largely unfulfilled. Noxopharm believes that it is on the verge of
achieving the key.
Two extensive pre-clinical studies were conducted this year
aiming at confirming the ability of IDX to deliver on this effect. A
Bridging Grant from the Australian Academy of Technology &
Engineering was awarded to Noxopharm and The University of
Hong Kong to support one of these projects. The second study
is being conducted within the Institute of Biochemistry at
Goethe-University in Frankfurt. While these ongoing projects
focus on different types of cancer and treatment combinations,
they both have confirmed the ability of IDX to activate the
cancer cell-fighting ability of immune cells and to increase their
ability to repopulate ‘COLD’ tumours.
Noxopharm regards this as a major and considerably valuable
piece of intellectual property. The data indicates that Veyonda
delivers an immunotherapy effect on top of its oncotoxic (killing
cancer cells selectively) with the potential to make standard
immune checkpoint
chemotherapy,
inhibitors all more potent. On its own, this result goes a long
way to underpinning the Company’s confidence in Veyonda
becoming a standard of care drug in end-stage cancer.
radiotherapy and
DARRT-1 trial finishes with clear evidence of efficacy
DARRT-1 final results were announced on 2nd December 2019,
with a radiology follow-up announcement on 30th April 2020.
The key outcomes were:
• A combination of Veyonda and low-dose external beam
radiotherapy (DARRT therapy) was safe and well tolerated
• DARRT therapy showed high response rates in both PSA
and pain
• 10/15 men at 6 months showed stable disease or better
based on tumour burden
• 27% of men showed an abscopal response.
Given the advanced nature of the cancer in these men and their
limited survival prospects, the Company regards this outcome
as a critically important test for Veyonda which it successfully
passed.
DARRT-2 trial in planning
The Company took the decision to move to the DARRT-2 study
on the back of the encouraging DARRT-1 data. This will be a
Phase 2 multinational study involving about 200 men and a
control arm of standard palliative care therapy. One important
change to DARRT-1 will be the use of repeat cycles of Veyonda
which the Company believes will provide an additional anti-
cancer benefit.
Noxopharm began designing this trial earlier this year with the
express purpose of delivering the type of data industry partners
are known to want to see.
LuPIN trial – expanded, fully recruited and positive data
presented
During the year the LuPIN trial was expanded from 32 to 56
patients at the request of the clinical investigators, a request
that the Company believes reflects a potential benefit of
treatment as evidenced by the release of interim data for the
first 32 patients to two international conferences. That data
showed:
•
62.5% of patients experienced a PSA response (> 50%
fall)
• Half of the patients experiencing severe pain at the
beginning of the study had a significant reduction in
pain
•
47% of patients were able to complete their full 6-cycles
of treatment, indicating a durable anti-cancer response
• Overall survival was 17.1 months
As we commented at the time, this is a remarkable outcome for
patients with such advanced stage of disease.
On 3rd March, we announced the trial was fully recruited.
COVID-19 opportunity
STING signalling blockade confirmed
inflammatory
immune and
STING (Stimulation of Interferon Genes) signalling is a critical
frontline response of the body to viral infections, triggering
appropriate
repair)
responses. In the case of about 20% of people infected with the
SARS-CoV-2
becomes
inappropriately large, triggering an excessive inflammatory
response marked by a release of chemicals known as cytokines
(‘cytokine storm’) that further damage the body, mainly
through blood clotting that deprives various organs of blood.
response
(tissue
STING
virus,
the
Annual Report FY20
COVID-19 clinical trial to be conducted
The STING signalling data coincided with the global worsening
of the COVID-19 pandemic, leaving the Company with little
choice from both commercial and humanitarian viewpoints
but to explore whether Veyonda could prove beneficial.
The cytokine storm that is believed responsible for most COVID-
19 deaths is associated with multiple cytokines. Drugs blocking
individual cytokines (eg. interleukin-6 and TNF-alpha) have
proved ineffective in preventing COVID-19 deaths, pointing to
the need to block multiple cytokines. This is what the evidence
suggests that Veyonda will do through blocking STING
signalling, the main headwaters of cytokine production.
On 21st April we announced the intention to apply to conduct
a Phase 1 trial in COVID-19 patients in the U.S., with a follow-up
announcement on 19 May confirming that the FDA had
responded positively, providing advice on the course of action
required. While continuing to act on this advice, the Company
decided in the interests of speed and cost, to conduct a Phase
1 pilot study (NOXCOVID) in Eastern Europe, starting with
appointing a CRO to oversee this task.
Building a strong pipeline
The Company continued with its aim of building a strong
pipeline with two main promising new assets emerging.
We announced the first of these on the 23rd April. It relates to
an aim to develop a first-in-class treatment of glioblastoma
multiforme (GBM), the primary form of adult brain cancer. The
proposed drug aims to slow the growth of GBM by blocking the
stimulatory effect of the main brain neurotransmitter,
glutamate, on the growth of brain cancer cells.
Expanding our intellectual property portfolio
The value of drug assets is highly dependent on the ability of
the Company to protect its IP. The Company continues to
ensure that its current patent applications all meet the
necessary
respective successful
requirements
International registration processes.
their
for
On 1st April 2020, the Company announced the results of
experiments conducted by the Hudson Institute of Medical
Research (Melbourne) showing IDX potently blocking the
excessive STING response in the laboratory to the type of
damage caused in COVID-19 patients. A provisional patent was
duly lodged.
It has also lodged two new patents in 2020. A provisional patent
entitled “Methods for the treatment of inflammation associated
with infection” has been lodged to protect the use of Veyonda
in septic shock associated with infection such as the SARS-CoV-
2 virus. An International PCT application recently was filed
concerning the use of Veyonda as an immuno-oncology
treatment.
“Restoring cancer-fighting immune function in tumours (known as
converting ‘COLD’ tumours to ‘HOT’ tumours) has been identified as
one of the primary keys to more successful treatment of many cancers.
Efforts by the industry to develop such a key to date have been patchy,
and the challenge remains largely unfulfilled. Noxopharm believes that
it is on the verge of achieving the key”
7
Noxopharm Limited (ASX:NOX)
Publications/conference presentations
Corporate and Financial
Veyonda and its active ingredient, IDX, were the subjects of a
number of presentations to scientific conferences this past
year. The Company continues
its
collaborators and internal staff to present new data to scientific
conferences, with the Company needing to balance publicity
with commercial-in-confidence issues and the lodgement of
new patent applications.
to encourage both
The principal corporate activity this quarter was the successful
conclusion of an entitlement issue that raised A$7,919,876. The
issue was fully underwritten by Canaccord Genuity (Australia).
The net proceeds to the Company after costs was A$7.33M.
Apart from general running costs, the funds will be applied to
the logistics of planning and setting up the DARRT-2 and
running the NOXCOVID study.
For the full year Noxopharm raised $11.7M through equity
raises and the rights issue, and received a further $3.7M from
the ATO for the 2019 Research and Development rebate.
As at 30 June 2020, Noxopharm had A$7.1m in cash.
In accordance with Listing Rule 4.7C, payments made to related
parties and their associates included in items 6.1 of the
Appendix 4C includes Director fees and salary (including
superannuation) for executive directors and related parties.
A review entitled “Idronoxil as an Anticancer Agent: Activity and
Mechanisms” was published in the International peer-reviewed
journal, Current Cancer Drug Targets, in which the different
properties of IDX were described.
Cybersecurity precautions
The Company’s growing global corporate profile brings with it
new challenges. Following numerous Australian Federal
Government and industry alerts in mid-June reporting the
targeting of the Australian healthcare sector among others, a
stringent appraisal of the Company’s internet and website
security was
initiated. Our technology (IT) and website
managers consciously monitor the collective security status of
all software and hardware, services, networks, information and
policies. Noxopharm complies with the Government guidelines
and strict compliance standards, to protect their sensitive data
which is growing stronger every day.
The advanced information technologies put in place have
meant that the indefinite transition from the workplace to
home during the Covid-19 lock-down has been possible
without any apparent additional security threat to the
Company.
“The Company took the decision to move to the DARRT-2 study on
the back of the encouraging DARRT-1 data. This will be a Phase 2
multinational study involving approximately 200 men”
8
Annual Report FY20
9
Noxopharm Limited (ASX:NOX)
Directors’ Report
The directors present their report, together with the financial statements, on the consolidated entity (referred to hereafter as the
'consolidated entity') consisting of Noxopharm Limited (referred to hereafter as the 'company' or 'parent entity') and the entities it
controlled at the end of, or during, the year ended 30 June 2020.
Directors
The following persons were directors of Noxopharm Limited during the whole of the financial year and up to the date of this report,
unless otherwise stated:
•
Dr. Graham Kelly, Executive Chairman
• Mr. Peter Marks, Non
Executive Deputy Chairman
•
Dr. Ian Dixon, Non
Executive Director
‐
• Mr. John Moore, Non-Executive Director (resigned 16 July 2019)
‐
•
Dr. Beata Niechoda, Non-Executive Director (appointed 16 July 2019, resigned 16 October 2019)
• Mr. Boris Patkin, Non-Executive director (appointed 25 March 2020)
• Mr. Fred Bart, Non-Executive Director (appointed 8 May 2020)
Principal activities
The consolidated entity's principal activity in the course of the current financial year continues to be drug development, with the
primary focus being the clinical development of Veyonda® (NOX66) as an adjuvant therapy in chemotherapy and radiotherapy in the
treatment of late-stage cancers. There were no significant changes in the nature of the Company’s principal activity during the financial
year.
Dividends
There were no dividends paid, recommended or declared during the current or previous financial year.
Review of operations
The loss for the consolidated entity after providing for income tax and non-controlling interest amounted to $272,093 (30 June 2019:
$11,222,785).
During the financial year, the consolidated entity has:
•
•
•
•
•
•
•
•
•
•
continued with its strategic objective of developing Veyonda® as a novel immuno-oncology drug with potential use for a
broad range of cancers in combination with radiotherapy, chemotherapy and immune checkpoint inhibitors;
completed the DARRT-1 Phase 1b clinical trial and made progress towards completing the Final Report;
released the final clinical data from the DARRT-1 study, reporting both on the tolerance of a combination of Veyonda® and
radiotherapy and the evidence of clinical signals of efficacy in a high proportion of patients;
expanded the LuPIN-1 Phase 2b clinical study from 32 to 56 patients at the request of the clinical investigators;
obtained an IND from the U.S. FDA for a Phase 1 study of Veyonda® and Doxorubicin as first-line therapy in soft tissue
sarcomas;
consolidated its drug pipeline with a focus on two drug programs;
obtained pre-clinical evidence identifying Idronoxil, the active ingredient in Veyonda®, as a potent inhibitor of STING
signalling;
decided on the basis of the STING antagonism to test the ability of Veyonda to prevent the development of cytokine storm
syndrome in COVID-19 patients; a pre-IND submission was made to the FDA, at the same time as making arrangements to
conduct a Phase 1b pilot study in 5 European hospitals;
overseen the listing of subsidiary Nyrada Inc. on the ASX in January, along with a successful IPO that raised $8.5M; and
seen the appointment of Dr. Graham Kelly as CEO following the resignation of Dr. Greg van Wyk.
10
Annual Report FY20
Significant changes in the state of affairs
Nyrada Inc., a subsidiary entity was listed on the ASX in January 2020. Due to Noxopharm losing control of Nyrada Inc. upon its listing,
the Nyrada group financial statements have been deconsolidated from the group consolidated financial statements from the date of
its listing resulting in a gain on disposal of $11, 585,717. The company has recognised an asset for $7,154,673, being the fair value of the
shares received by Noxopharm upon Nyrada's listing, shares received for partial conversion of the intercompany loan balance and
performance shares received.
There were no other significant changes in the state of affairs of the consolidated entity during the financial year.
Likely developments and expected results of operations
Information on likely developments in the operations of the consolidated entity and the expected results of operations have not been
included in this report because the directors believe it would be likely to result in unreasonable prejudice to the consolidated entity.
Matters subsequent to the end of the financial year
No matter or circumstance has arisen since 30 June 2020 that has significantly affected, or may significantly affect the consolidated
entity's operations, the results of those operations, or the consolidated entity's state of affairs in future financial years.
Environmental regulation
The consolidated entity is not subject to any significant environmental regulation under Australian Commonwealth or State law.
11
Noxopharm Limited (ASX:NOX)
Information on directors
Name:
Title:
Experience and
expertise:
Dr. Graham Kelly
Chief Executive Officer and Executive Chairman
‐
formed Department of Transplant Surgery in the Faculty of
Graham graduated with degrees in Science (1968) and Veterinary Science (1969) from The University of
Sydney. After graduation he joined the newly
Medicine at The University of Sydney, gaining a Doctor of Philosophy in 1972. The subject of his PhD thesis
was the manufacture and use of a novel drug for the treatment of tissue rejection in kidney transplant
recipients, with that drug subsequently being commercialised and used globally in kidney transplantation.
Graham was appointed Senior Research Fellow in Experimental Surgery at The University of Sydney,
contributing through research in the areas of organ recovery for transplantation and liver transplant
surgery. The increased susceptibility of organ transplant recipients to malignant cancer eventually led
Graham to focus on the causes of that phenomenon, and in turn, to the broader issue of the link between
diet and the incidences of certain cancers. The latter area of research led to a research interest in dietary
isoflavones and their role in human health.
Graham developed a theory that dietary isoflavones were metabolised within the body into novel chemicals
that possessed important hormone
like functions, and as such made important contributions to human
health. That theory provided the basis for Graham leaving academia and founding the company, Norvet
Ltd, which listed on the ASX in 1994. That company subsequently changed its name to Novogen Ltd and
listed in the US on NASDAQ (1998). Graham was variously CEO, Executive Chairman and an Executive
Director of Novogen, 1994
2006. He also was Executive Chairman of Marshall Edwards Inc (MEI) which listed
on London’s AIM exchange (2001) and NASDAQ (2003). MEI subsequently became MEI Pharma Inc. Graham
resigned from his executive and Board positions at Novogen and MEI in 2006.
‐
‐
In 2011, Graham joined private biotechnology company, Triaxial Pharmaceuticals Pty Ltd, as Executive
Chairman. Concerned at the direction being taken by the Novogen Board in having stripped all assets from
the Company and leaving it without a business, Graham engineered a reverse takeover of Novogen Ltd by
Triaxial in December 2012 and set about rebuilding the Company. He remained as CEO and Executive
Chairman of Novogen until June 2015 and was responsible for in
tropomyosin drug technology, for establishing a joint venture company with Yale University, and for
establishing a solid financial base.
licensing that Company’s anti
‐
‐
‐
2012, Graham addressed the matter of the transport of isoflavones in the blood of humans,
In early
conducting formulation studies in a private capacity that led shortly thereafter to the concept behind
NOX66. After leaving Novogen in 2015, Graham established private biotechnology company Noxopharm
Limited in order to commercialise NOX66. Noxopharm became a public company in August 2016. In 2017,
Graham also founded the Delaware registered Nyrada Inc. to house the non-oncology discoveries from
Noxopharm. Noxopharm is currently the largest shareholder in Nyrada Inc. which listed on the Australian
Securities Exchange in January 2020.
Other current
directorships:
Nyrada Inc (ASX:NYR).
Former directorships
(last 3 years):
N/A
Interests in shares:
36,992,294
Interests in options:
13,895,513
12
Name:
Title:
Experience and
expertise:
Peter Marks
Non
Executive Deputy Chairman
Annual Report FY20
‐
Peter brings over 30 years’ experience in corporate advisory, investment banking and director/advisory
roles to the Board. With several leading firms, Peter’s corporate skills lie in capital raising for pre
listed companies, cross border M&A transactions, corporate underwriting, and venture capital transactions
for companies in Australia, US & Israel.
IPO and
‐
Over this period Peter has been involved in a very broad range of transactions, with a special focus in the life
sciences, biotechnology, medical technology and high tech segments. He has been a Director and/or
Chairman of several public companies. He currently is a Director of Prana Biotechnology Ltd (ASX &
NASDAQ listed) since 2005 and Non
Executive Director of Emefcy Group Limited (ASX listed) since 2015.
Peter provides strategic and corporate advice at various stages of technology commercialisation for
companies to transition to an operating entity, and helps facilitate significant commercial transactions to
create shareholder value.
‐
Peter holds a Bachelor of Economics, Bachelor of Laws and a Graduate Diploma in Commercial Law from
Monash University, Australia. He also holds an MBA from the University of Edinburgh, Scotland.
Other current
directorships:
Alterity Therapeutics Limited (ASX: ATH) - since 29 July 2005 (formerly known as
Prana Biotechnology Limited), and Fluence Corporation Limited (ASX: FLC) - since 12 May 2015
Former directorships
(last 3 years):
N/A
Interests in shares:
700,000
Interests in options:
766,667
Name:
Title:
Dr. Ian Dixon
Non
Executive Director
Experience and
expertise:
‐
Dr Dixon has a PhD in biomedical engineering from Monash University, an MBA from Swinburne University
and professional engineering qualifications.
In 2011, Dr Dixon Co-Founded Cynata Inc, a company that is progressing the commercialisation of what has
become the Cymerus technology of ASX-listed Cynata Therapeutics Ltd (ASX-CYP).
Dr Dixon is a co-inventor of the LEAP Technology owned by Exopharm.
Dr Dixon brings to the Board an extensive technical and entrepreneurial background in founding, building
and running technology-based companies, in recognising the potential commercial value of early-stage
drug development, and in understanding the challenges involved in drug development.
Other current
directorships:
Medigard Ltd (ASX: MGZ) - since 21 November 2017, and Exopharm Ltd (ASX: EX1) -
since 11 December 2018
Former directorships
(last 3 years):
N/A
Interests in shares:
1,766,246
Interests in options:
1,200,000
13
Noxopharm Limited (ASX:NOX)
Name:
Title:
Experience and
expertise:
Mr. Fred Bart
Non-Executive Director
In 1985, Mr Bart was appointed the Managing Director of Textile Industries Australia The Group employed
over 1,200 people and distributed product to many countries worldwide. The Company manufactured and
distributed the majority of bed linen in Australia under brands like Sheridan and ACTIL The Company was
sold in 1987.
In 1989, Mr Bart established and chairs a number of private companies under the umbrella of the Bart
Group which covered hotels, retail, commercial and residential land development and technologies which
still continue to operate. The Group today employs in excess of 1,000 people and is active in many local and
overseas markets.
In 2001, Mr Bart became Chairman of Electro Optic Systems Holdings Limited (ASX: EOS). Since that time it
has grown to be one of Australia’s premier defence companies with activities in many countries worldwide
employing over 400 people and is currently included in the S&P/ASX 300.
In September 2000, Mr Bart became a director and Chairman of Audio Pixels Holdings Limited (ASX: AKP).
Audio Pixels is developing the first digital speaker in the world and currently has a market caitalisation of
over $600m.
In 2013, Mr Bart became Chairman and majority shareholder of Immunovative Therapies Limited, a private
Israeli company involved in the manufacture of vaccines for the treatment of certain forms of cancer. The
Company has undertaken trials in both collateral and liver cancers.
In March 2018, Mr Bart joined the Board of Weebit Nano Limited (ASX: WBT). Weebit is a developer of
memory technology (1,000 X faster, 1,000 X more energy efficient and 100X higher endurance) than existing
flash memory technologies.
In May 2020, Mr Bart was appointed to the Board of Noxopharm Limited (ASX: NOX).
Other current
directorships:
Chairman of Electro Optic Systems Holdings Limited (ASX: EOS)and Audio Pixels Holdings Limited
(ASX:AKP) and is a director of Weebit Nano Limited (ASX:WBT).
Former directorships
(last 3 years):
N/A
Interests in shares:
2,538,462
Interests in options:
846,154
14
Annual Report FY20
Name:
Title:
Mr. Boris Patkin
Non-Executive Director
Experience and
expertise:
Boris brings comprehensive market knowledge, thorough research and years of experience in investment
markets & Business Consulting.
Boris’s experience lends itself to Financial & Investment advising but also as a business consultant to further
enhance business opportunities in Medical technology & in sourcing other opportunities to enhance
investments. Boris has worked extensively with Israeli companies to explore various opportunities in the
Medical & disruptive technology space.
Boris has developed an in-depth understanding of industry trends and gained valuable insight into
domestic and international markets. Boris has specialised in reconstruction of Companies, Investments
&International trade. He has extensive experience in developing & adding value to public listed companies,
especially in the Medical, Resources & Retirement space.
Boris has completed a Bachelor of Science (Industrial Chemistry). Currently a member of TASSA, MeSAFAA
& an AR with Morgans Financial Ltd.
Other current
directorships:
Non-Executive Chairman of Ausmon Resources Ltd (ASX:AOA) - since 2014
Former directorships
(last 3 years):
N/A
Interests in shares:
630,000
Interests in options
60,000
'Other current directorships' quoted above are current directorships for listed entities only and excludes directorships of all other types
of entities, unless otherwise stated.
'Former directorships (last 3 years)' quoted above are directorships held in the last 3 years for listed entities only and excludes
directorships of all other types of entities, unless otherwise stated.
Company secretary
Mr. David Franks
David Franks (BEc, CA, FFin, FGIA, JP) has held the position of Company Secretary since 16 January 2017.
David is a Chartered Accountant, Fellow of the Financial Services Institute of Australia, Fellow of the Governance Institute of Australia,
Justice of the Peace, Registered Tax Agent and holds a Bachelor of Economics (Finance and Accounting) from Macquarie University.
With over 20 years in finance and accounting, initially qualifying with Price Waterhouse in their Business Services and Corporate Finance
Divisions, David has been CFO, Company Secretary and/or Director for numerous ASX listed and unlisted public and private companies,
in a range of industries covering energy retailing, transport, financial services, mineral exploration, technology, automotive, software
development and healthcare. David Franks is currently the Company Secretary for the following public entities: AUB Group Limited,
Aumake International Limited, Consolidated Operations Group Limited, Noxopharm Limited, Nyrada Inc., Tomorrow Entertainment
Limited, White Energy Company Limited, White Energy Technology Limited and ZIP Co Limited. David is also a Non-Executive Director
of JCurve Solutions Limited and a Director and Senior Executive of Automic Pty Ltd.
15
Noxopharm Limited (ASX:NOX)
Meetings of directors
The number of meetings of the company's Board of Directors ('the Board') and of each Board committee held during the year ended
30 June 2020, and the number of meetings attended by each director were:
Full Board
Audit and Risk Committee
Remuneration Committee
Attended
Held
Attended
Held
Attended
Held
Dr. Graham Kelly
Mr. Peter Marks
Dr. Ian Dixon
Mr John Moore
Dr. Beata Niechoda
Mr. Boris Patkin
Mr. Fred Bart
7
7
7
0
1
3
2
7
7
7
0
1
3
2
2
2
2
-
-
-
-
2
2
2
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Held: represents the number of meetings held during the time the director held office or was a member of the relevant committee.
All board members are members of the Audit and Risk Committee and Remuneration committee.
Remuneration report (audited)
The Remuneration report, which has been audited, outlines the key management personnel remuneration arrangements for the
consolidated entity, in accordance with the requirements of the Corporations Act 2001 and its Regulations.
Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities
of the entity, directly or indirectly, including all directors.
The remuneration report is set out under the following main headings:
•
•
•
•
•
•
Principles used to determine the nature and amount of remuneration
Details of remuneration
Service agreements
Share-based compensation
Additional information
Additional disclosures relating to key management personnel
Principles used to determine the nature and amount of remuneration
Remuneration governance
The objective of the remuneration committee (constituting the full Board) is to ensure that pay and rewards are competitive and
appropriate for the results delivered. The remuneration committee charter adopted by the Board aims to align rewards with
achievement of strategic objectives and the creation of value for shareholders. The remuneration framework applied provides a mix of
fixed and variable pay and a blend of short and long-term incentives as appropriate. Issues of remuneration are considered annually
or otherwise as required.
Non-Executive Directors
Fees and payments to Non
Company's policy is to remunerate Non
responsibilities. Fees for Non
interests with shareholders’ interests, Directors are encouraged to hold shares in the Company.
Executive Directors reflect the demands which are made on, and the responsibilities of, the Directors. The
Executive Directors at market rates (for comparable companies) for time commitment and
Executive Directors are not linked to the performance of the Company, however to align Directors’
‐
‐
‐
Executive Directors' fees and payments are reviewed annually by the Board of Directors. The Board of Directors considers advice
Executive Directors of comparable
Non
from external sources (excluding remuneration consultants) as well as the fees paid to Non
companies when undertaking the annual review process. Each director receives a fee for being a director of the company.
‐
‐
The Chairman's fees are determined independently to the fees of other Non
external market. The Chairman is not present at any discussions relating to determination of his own remuneration.
Executive Directors based on comparative roles in the
‐
Retirement benefits and allowances
No retirement benefits are payable other than statutory superannuation, if applicable to the Directors of the Company.
16
Other benefits
No motor vehicle, health insurance or other similar allowances are made available to Directors (other than through salary
arrangements).
sacrifice
‐
Executive remuneration
Annual Report FY20
Executive pay and reward consists of base pay, short
term performance incentives and other
remuneration such as superannuation. Superannuation contributions are paid into the executive’s nominated superannuation fund.
term performance incentives, long
‐
‐
Base Pay
Executives are offered a competitive level of base pay which comprises the fixed (unrisked) component of their pay and rewards. Base
pay for senior executives is reviewed annually to ensure market competitiveness. There are no guaranteed base pay increases included
in any senior executives’ contracts. Base pay was increased during the year.
Short
term and long
term incentives
‐
The Company currently operates an Executive Share Option Plan ("ESOP") which has been approved by shareholders in the 2016
Annual General Meeting.
‐
Performance based Remuneration
The purpose of a performance bonus is to reward individual performance in line with company objectives. Consequently, performance
based remuneration is paid to an individual where the individual’s performance clearly contributes to a successful outcome for the
consolidated entity. This is regularly measured in respect of performance against key performance indicators (KPI’s).
The Company uses a variety of KPI’s to determine achievement, depending on the role of the executive being assessed. These include:
•
•
•
Successful contract negotiations;
Company share price consistently reaching a targeted rate on the ASX or applicable market over a period of time;
Company undertaking clinical trials in their primary drug Veyonda® within specified time frame.
Securities trading Policy
The trading of Company's securities by employees and Directors is subject to, and conditional upon, the Securities Trading Policy
which is available on the Company's website (www.noxopharm.com).
If remuneration consultants are to be engaged to provide remuneration recommendations as defined under section 9B of the
Corporations Act 2001, then they are engaged by, and report directly to, the remuneration committee. No remuneration consultants
were engaged to provide remuneration services during the financial year.
Remuneration Policy vs Financial Performance
The Company’s policy is to remunerate based on industry practice and benchmark industry salaries rather than performance as this
takes into account the risk and liabilities assumed by directors and executives as a result of their involvement in an R&D Biotech
company. Directors and executives are fairly compensated for the extensive work they undertake.
Voting and comments made at the company's 2019 Annual General Meeting ('AGM')
At the 2019 AGM, more than 75% of the votes received supported the adoption of the remuneration report for the year ended 30 June
2019. The company did not receive any specific feedback at the AGM regarding its remuneration practices.
Details of remuneration
Amounts of remuneration
Details of the remuneration of key management personnel of the consolidated entity are set out in the following tables.
The key management personnel of the consolidated entity consisted of the following directors, executives and company secretary of
Noxopharm Limited:
•
Dr. Graham Kelly - Chief Executive Officer and Executive Chairman
• Mr. Peter Marks - Non Executive Deputy Chairman
•
Dr. Ian Dixon - Non Executive Director
• Mr. John Moore - Non Executive Director (resigned 16 July 2019)
• Mr. David Franks - Company Secretary
•
•
Dr. Greg van Wyk - Chief Executive Officer (resigned 31 October 2019)
Dr. Beata Niechoda (appointed 16 July 2019, resigned 16 October 2019)
• Mr. Boris Patkin - Non Executive Director (appointed 25 March 2020)
• Mr. Fred Bart - Non Executive Director (appointed 8 May 2020)
17
Noxopharm Limited (ASX:NOX)
2020
Directors:
Dr. Graham Kelly
Mr. Peter Marks
Dr. Ian Dixon
Mr. John Moore
Mr. Boris Patkin
Mr. Fred Bart
Dr. Beata Niechoda
Other Key Management
Personnel:
Mr. David Franks
Dr. Greg Van Wyk
*provision for annual leave
Short-term benefits
Post-
employment
benefits
Long-term
benefits
Share-based
payments
Cash salary
and fees
Cash
bonus
Non-
monetary *
Super-
annuation
Long service
leave
Equity-
settled
$
$
$
$
$
$
Total
$
371,846
80,000
57,500
7,500
11,250
6,534
29,625
-
-
-
-
-
-
-
315,000
80,000
52,511
7,500
11,250
5,967
29,625
-
186,042
629,065
-
-
-
-
-
-
-
-
-
-
7,725
31,500
17,621
-
-
-
-
-
-
-
-
-
4,989
-
-
567
-
-
10,556
-
-
-
-
-
-
-
-
8,475
8,475
-
137,768
7,725
47,612
17,621
8,475
710,498
Mr. David Franks, company secretary is also an associate of Automic Group who provides registry, accounting and company secretary
services to the Company. The contracts with Automic Group Associates are based on normal commercial terms. Payments made to
Automic Group during the year are disclosed in the related party transactions note of the financial statements.
2019
Directors:
Dr. Graham Kelly
Mr. Peter Marks
Dr. Ian Dixon
Mr. John Moore
Other Key Management
Personnel:
Mr. David Franks
Dr. Greg Van Wyk
*provision for annual leave
Short-term benefits
Post-
employment
benefits
Long-term
benefits
Share-based
payments
Cash salary
and fees
Cash
bonus
Non-
monetary *
Super-
annuation
Long service
leave
Equity-
settled
$
$
$
$
$
$
Total
$
50,695
62,453
10,419
303,056
1,065,077
-
-
-
-
-
7,808
-
-
-
-
-
32,712
208,295
-
-
90,000
52,711
-
7,333
7,333
19,536
17,674
3,862
1,833
228,947
70,231
87,935
14,281
344,934
1,652,363
638,454
175,583
82,192
52,711
-
186,042
1,134,982
-
-
-
-
-
-
-
18
The proportion of remuneration linked to performance and the fixed proportion are as follows:
Annual Report FY20
Name
Directors:
Dr. Graham Kelly
Mr. Peter Marks
Dr. Ian Dixon
Mr. John Moore
Dr. Beata Niechoda
Mr. Boris Patkin
Mr. Fred Bart
Other Key Management Personnel:
Mr. David Franks
Dr. Greg Van Wyk
Service agreements
Fixed remuneration
At risk - STI
At risk - LTI
2020
2019
2020
2019
2020
2019
100%
100%
100%
100%
100%
100%
100%
-
71%
84%
100%
100%
-
-
-
-
100%
99%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
29%
16%
-
-
-
-
-
100%
100%
-
1%
Remuneration and other terms of employment for key management personnel are formalised in service agreements. Details of these
agreements are as follows:
Name:
Title:
Dr. Graham Kelly
Chief Executive Officer and Executive Chairman
Agreement commenced:
9 August, 2016
Term of agreement:
Open
Details:
Annual salary of $300,000 plus superannuation of 10%. Notice period of 90 days by
Executive or the Company; 12 months by Company without cause.
Key management personnel have no entitlement to termination payments in the event of removal for misconduct.
19
Noxopharm Limited (ASX:NOX)
Share-based compensation
Issue of shares
There were no shares issued to directors and other key management personnel as part of compensation during the year ended 30
June 2020.
Options
The terms and conditions of each grant of options over ordinary shares affecting remuneration of directors and other key management
personnel in this financial year or future reporting years are as follows:
Grant date
Vesting date and
exercisable date
Expiry date
Exercise price
Fair value per option
at grant date
28 November 2017 *
28 November 2017
27 November 2020
28 November 2017 *
28 November 2017
27 November 2020
8 December 2017
1 December 2018
30 November 2021
8 December 2017
1 December 2019
30 November 2021
8 December 2017
1 December 2020
30 November 2021
10 December 2018
21 November 2019
21 November 2022
10 December 2018
21 November 2020
21 November 2022
10 December 2018
21 November 2021
21 November 2022
16 December 2019
16 December 2020
16 December 2023
$0.9963
$1.1994
$1.0800
$1.0800
$1.0800
$0.6200
$0.6200
$0.6200
$0.3200
$0.495
$0.465
$0.617
$0.617
$0.617
$0.288
$0.288
$0.288
$0.169
Options granted carry no dividend or voting rights.
* In accordance with Listing Rule 3.11.2, and further to the terms of these options issued and Listing Rule 6.22.2, the exercise price of the options has been
amended as a result of the 13 May 2020 pro-rata Entitlements Offer to shareholders.
The number of options over ordinary shares granted to and vested by directors and other key management personnel as part of
compensation during the year ended 30 June 2020 are set out below:
Number of options
granted during the
year
Number of options
granted during the
year
Number of options
vested during the
year
Number of options
vested during the
year
2020
2019
2020
2019
50,000
-
62,500
15,625
40,046
5,208
19,213
-
Name
Mr. David Franks
Dr. Greg van Wyk
Additional information
The factors that are considered to affect total shareholders return ('TSR') are summarised below:
Share price at financial year end (cents)
Share price HIGH for the financial year ended 30 June (cents)
Share price LOW for the financial year ended 30 June (cents)
2020
16.50
45.92
8.39
2019
47.50
72.00
35.50
2018
61.00
158.00
29.00
2017
36.50
67.50
13.50
20
Annual Report FY20
Additional disclosures relating to key management personnel
Shareholding
The number of shares in the company held during the financial year by each director and other members of key management personnel
of the consolidated entity, including their personally related parties, is set out below:
Balance at the
start of the year
Received as part of
remuneration
Additions3
Disposals/ other
Balance at the
end of the year
Ordinary shares
Dr. Graham Kelly1
31,465,756
Mr. Peter Marks
Dr. Ian Dixon
Mr. Boris Patkin
Mr. Fred Bart2
500,000
1,766,246
-
-
33,676,629
-
-
-
-
-
-
5,526,538
200,000
-
630,000
5,594,780
11,951,318
-
-
-
-
-
-
36,992,294
700,000
1,766,246
630,000
5,594,780
45,683,320
1 Excludes securities held in the name of spouse, Mrs. Prue Kelly, who holds 10,000 shares.
2 3,056,318 shares were disposed after year end further to requirements of the ASX and Listing Rules.
3 Issued as part of the non-renounceable rights offer.
Option holding - Company
The number of options over ordinary shares in the company held during the financial year by each director and other members of key
management personnel of the consolidated entity, including their personally related parties, is set out below:
Balance at the
start of the year
Granted/
acquired3
Exercised
Expired/
forfeited/ other
Balance at the
end of the year
Options over
ordinary shares
Dr. Graham Kelly1
12,075,000
1,820,5133
Mr. Peter Marks
Dr. Ian Dixon
Mr. Boris Patkin
Mr. Fred Bart 2
Mr. David Franks
Dr. Greg van Wyk
700,000
1,200,000
-
-
120,139
15,625
66,6673
-
60,0003
1,864,9273
50,000
-
14,110,764
3,862,107
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(15,625)
13,895,513
766,667
1,200,000
60,000
1,864,927
170,139
-
(15,625)
17,957,246
1 Excludes options held in in the name of the spouse, Mrs. Prue Kelly.
2 1,018,773 options were disposed after year end further to requirements of the ASX and Listing Rules.
3. Issued for participating in non-renounceable rights issue.
Other transactions with key management personnel and their related parties
Company secretarial and bookkeeping services - provided by Automic Group, an entity associated with Mr. David Franks, on
commercial terms and conditions. Total fees paid (excluding GST) to Automic Group for the year ended 30 June 2020 was $312,569
(2019: $268,388).
Prue Kelly, spouse of Graham Kelly (Executive Chairman) is employed as the Company's part time (FTE of 0.5) Investor Relations
Manager on the Company's employment terms and conditions.
This concludes the remuneration report, which has been audited.
21
Noxopharm Limited (ASX:NOX)
Shares under option
Unissued ordinary shares of Noxopharm Limited under option at the date of this report are as follows:
Grant/acquisition date
Expiry date
Exercise price
Number under option
31 January 20161
28 February 2021
31 January 20161
28 February 2021
28 November 20172
27 November 2020
28 November 20172
27 November 2020
8 December 20173
30 November 2021
10 December 20183
21 November 2022
23 July 20193,4
23 July 2023
3 December 20193,4
3 December 2023
23 December 20193
16 December 2023
18 June 20201
18 June 2023
14 August 20201
14 August 2023
$0.3000
$0.3000
$0.9963
$1.1994
$1.0800
$0.6200
$0.5605
$0.3055
$0.3200
$0.3000
$0.3000
1,292,858
18,950,358
500,000
500,000
386,343
866,042
4,722,222
2,666,666
930,128
20,304,792
25,304,819
76,424,228
1 Issued for participating in capital raises.
2 In accordance with Listing Rule 3.11.2, and further to the terms of these options issued and Listing Rule 6.22.2, the exercise price of the options has been
amended as a result of the 13 May 2020 pro-rata Entitlements Offer to shareholders.
3 Issued under the Noxopharm employee share plan.
4 Issued in relation to the convertible notes issued July 2019 and December 2019.
No person entitled to exercise the options had or has any right by virtue of the option to participate in any share issue of the company
or of any other body corporate.
Shares issued on the exercise of options
There were no ordinary shares of Noxopharm Limited issued on the exercise of options during the year ended 30 June 2020 and up to
the date of this report.
Indemnity and insurance of officers
The company has indemnified the directors and executives of the company for costs incurred, in their capacity as a director or
executive, for which they may be held personally liable, except where there is a lack of good faith.
During the financial year, the company paid a premium in respect of a contract to insure the directors and executives of the company
against a liability to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits disclosure of the nature of
the liability and the amount of the premium.
Indemnity and insurance of auditor
The company has not, during or since the end of the financial year, indemnified or agreed to indemnify the auditor of the company or
any related entity against a liability incurred by the auditor.
During the financial year, the company has not paid a premium in respect of a contract to insure the auditor of the company or any
related entity.
Proceedings on behalf of the company
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of the
company, or to intervene in any proceedings to which the company is a party for the purpose of taking responsibility on behalf of the
company for all or part of those proceedings.
22
Annual Report FY20
Non-audit services
There were no non-audit services provided during the financial year by the auditor.
Officers of the company who are former partners of William Buck Audit (Vic) Pty Ltd
There are no officers of the company who are former partners of William Buck Audit (Vic) Pty Ltd.
Auditor's independence declaration
A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out immediately
after this directors' report.
Auditor
William Buck Audit (Vic) Pty Ltd continues in office in accordance with section 327 of the Corporations Act 2001.
This report is made in accordance with a resolution of directors, pursuant to section 298(2)(a) of the Corporations Act 2001.
On behalf of the directors
___________________________
Dr Graham Kelly
Executive Chairman / Director
28 August 2020
23
AUDITOR’S INDEPENDENCE DECLARATION UNDER SECTION 307C OF THE CORPORATIONS ACT 2001 TO THE
DIRECTORS OF NOXOPHARM LIMITED
I declare that, to the best of my knowledge and belief, during the year ended 30 June 2020 there have been:
— no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the
audit; and
— no contraventions of any applicable code of professional conduct in relation to the audit.
William Buck Audit (Vic) Pty Ltd
ABN 59 116 151 136
N. S. Benbow
Director
Melbourne, 28 August 2020
14
Annual Report FY20
Annual Financial Report - 30 June 2020
General Information
The financial statements cover Noxopharm Limited as a consolidated entity consisting of Noxopharm Limited and the entities it
controlled at the end of, or during, the year. The financial statements are presented in Australian dollars, which is Noxopharm Limited's
functional and presentation currency.
Noxopharm Limited is a listed public company limited by shares, incorporated and domiciled in Australia. Its registered office and
principal place of business is:
Suite 3 Level 4
828 Pacific Highway
GORDON NSW 2072
A description of the nature of the consolidated entity's operations and its principal activities are included in the directors' report, which
is not part of the financial statements.
The financial statements were authorised for issue, in accordance with a resolution of directors, on 28 August 2020. The directors have
the power to amend and reissue the financial statements.
Corporate Governance Statement
The Corporate Governance Statement is available on the Company’s website at http://www.noxopharm.com
25
Noxopharm Limited (ASX:NOX)
Statement of Profit or Loss and Other
Comprehensive Income
For the year ended 30 June 2020
Revenue
Other income
Net gain on disposal of investments
Expenses
Corporate administration expenses
Research and development expenses
Depreciation expenses
Consulting, employee & director expenses
Settlement agreement relating to dispute
Finance costs
Share of loss of Associate
Loss before income tax expense
Income tax expense
Loss after income tax expense for the year
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
Loss for the year is attributable to:
Non-controlling interest
Owners of Noxopharm Limited
Total comprehensive income for the year is attributable to:
Continuing operations
Discontinued operations
Owners of Noxopharm Limited
Earnings per share for profit/(loss) from discontinued operations
attributable to the owners of Noxopharm Limited
Basic earnings per share
Diluted earnings per share
Earnings per share for profit/(loss) from continued operations
attributable to the owners of Noxopharm Limited
Basic earnings per share
Diluted earnings per share
Earnings per share for loss attributable to the owners of
Noxopharm Limited
Basic earnings per share
Diluted earnings per share
Consolidated
Notes
2020
$
2019
$
4
27
5
5
27
6
31
31
31
31
31
31
8,343,562
11,585,717
3,937,361
-
(3,384,328)
(7,332,722)
(241,445)
(5,407,893)
-
(3,466,847)
(1,095,617)
(999,573)
(2,753,554)
(6,616,431)
(62,098)
(6,234,042)
(176,614)
(667,201)
-
(12,572,579)
-
-
(999,573)
(12,572,579)
-
-
(999,573)
(12,572,579)
(727,480)
(272,093)
(999,573)
(10,402,633)
9,403,060
(999,573)
(999,573)
(1,349,794)
(11,222,785)
(12,572,579)
(7,094,625)
(4,128,160)
(12,572,579)
(12,572,579)
Cents
Cents
6.80
6.80
(7.52)
(7.52)
(0.20)
(0.20)
(3.38)
(3.38)
(5.81)
(5.81)
(9.20)
(9.20)
The above statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes
26
Statement of Financial Position
Annual Report FY20
As at 30 June 2020
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Other assets
Total current assets
Non-current assets
Receivables
Investments accounted for using the equity method
Plant and equipment
Right-of-use assets
Intangibles
Term deposit pledged for bank guarantee
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Borrowings
Employee entitlement
Total current liabilities
Non-current liabilities
Borrowings
Provisions
Total non-current liabilities
Total liabilities
Net assets/(liabilities)
Equity
Issued capital
Reserves
Accumulated losses
Consolidated
Notes
2020
$
2019
$
7
8
9
10
27
12
13
14
15
16
17
7,100,202
4,646,649
582,542
2,909,568
160,402
817,785
12,329,393
3,887,755
225,232
6,539,080
192,499
658,110
-
122,837
7,357,758
-
-
256,836
-
37,000
118,818
412,654
20,067,151
4,300,409
1,786,852
4,586,820
311,968
1,487,142
3,930,351
333,383
6,685,640
5,750,876
413,290
95,463
508,753
-
-
-
7,194,393
5,750,876
12,872,758
(1,450,467)
41,631,007
2,708,106
28,700,897
4,455,342
(31,466,355)
(33,256,912)
Equity/(deficiency) attributable to the owners of Noxopharm Limited
12,872,758
(100,673)
Non-controlling interest
Total equity/(deficiency)
-
(1,349,794)
12,872,758
(1,450,467)
The above statement of financial position should be read in conjunction with the accompanying notes
27
Noxopharm Limited (ASX:NOX)
Statement of Changes in Equity
For the year ended 30 June 2020
Issued
capital
Reserves
Accumulated
losses
Non-
controlling
interest
Total equity
Consolidated
$
$
$
$
$
Balance at 1 July 2018
28,449,283
3,732,810
(22,034,127)
-
10,147,966
Loss after income tax expense for the year
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
-
-
-
-
-
-
(11,222,785)
(1,349,794)
(12,572,579)
-
-
-
(11,222,785)
(1,349,794)
(12,572,579)
Transactions with owners in their capacity as owners:
Share-based payments (note 33)
176,614
722,532
Contributions of equity, net of transaction costs (note 14)
75,000
-
-
-
-
-
899,146
75,000
Balance at 30 June 2019
28,700,897
4,455,342
(33,256,912)
(1,349,794)
(1,450,467)
Issued
capital
Reserves
Accumulated
losses
Non-
controlling
interest Total equity
Consolidated
$
$
$
$
$
Balance at 1 July 2019
28,700,897
4,455,342
(33,256,912)
(1,349,794)
(1,450,467)
Loss after income tax expense for the year
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
Nyrada Warrants expense p/e 16 Jan 2020
-
-
-
-
259,614
-
-
-
(272,093)
(727,480)
(1,511,186)
-
-
-
(272,093)
(727,480)
(1,761,618)
Transactions with owners in their capacity as owners:
Contributions of equity, net of transaction costs (note 16)
12,930,110
-
Deconsolidation of Nyrada Inc. - derecognition of
option reserve
Deconsolidation of Nyrada Inc. - derecognition of
Convertible note reserve
Deconsolidation of Nyrada Inc. - derecognition of NCI
Expiry of options
Vesting of share-based payments (note 32)
-
(1,017,506)
(762,045)
-
-
-
-
(2,062,650)
2,062,650
1,835,351
-
-
-
-
-
259,614
-
-
-
12,930,110
(1,017,506)
-
-
-
-
-
1,835,351
12,872,758
-
-
2,077,274
2,077,274
Balance at 30 June 2020
41,631,007
2,708,106
(31,466,355)
Refer to note 27 Accounting for the Nyrada deconsolidation for additional information on the Nyrada derecognition.
The above statement of changes in equity should be read in conjunction with the accompanying notes
28
Statement of Cash Flows
For the year ended 30 June 2020
Cash flows from operating activities
Payments to suppliers and employees
Interest received
Receipt from R&D tax rebate
Annual Report FY20
Consolidated
Notes
2020
$
2019
$
(14,977,501)
(13,713,127)
7,288
3,832,255
186,687
3,750,675
Net cash used in operating activities
29
(11,137,958)
(9,775,765)
Cash flows from investing activities
Payments for plant and equipment
Proceeds from deconsolidation of Nyrada, net of cash balances
27
Proceeds from sale of plant and equipment
Net cash from/(used in) investing activities
Cash flows from financing activities
Proceeds from issue of shares
Proceeds from convertible notes, net of costs
Proceeds from borrowings
Lease Payments - building
Share issue transaction costs
Repayment of borrowings - convertible note
Net cash from financing activities
(3,000)
340,815
-
(6,397)
-
3,196
337,815
(3,201)
16
11,006,286
75,000
5,496,976
4,200,000
(271,142)
(785,680)
(5,585,000)
-
-
-
-
-
14,990,777
75,000
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
4,190,634
2,909,568
(9,703,966)
12,613,534
Cash and cash equivalents at the end of the financial year
7
7,100,202
2,909,568
See Note 30 for cash flows of discontinued operations
The above statement of cash flows should be read in conjunction with the accompanying notes
29
Noxopharm Limited (ASX:NOX)
Notes to the Financial Statements
Note 1. Significant accounting policies
This note provides a list of all significant accounting policies adopted in the preparation of these financial statements. These policies
have been consistently applied in this reporting period, unless otherwise stated. The financial statements are for Noxopharm Limited
("the Company") and its subsidiaries ("the consolidated entity").
New or amended Accounting Standards and Interpretations adopted
The consolidated entity has adopted all of the new or amended Accounting Standards and Interpretations issued by the Australian
Accounting Standards Board ('AASB') that are mandatory for the current reporting period.
Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.
The adoption of these Accounting Standards and Interpretations did not have any significant impact on the financial performance or
position of the consolidated entity.
The following Accounting Standards and Interpretations are most relevant to the consolidated entity:
The consolidated entity has adopted AASB 16 from 1 July 2019. The standard replaces AASB 117 'Leases' and for lessees eliminates the
classifications of operating leases and finance leases. Except for short-term leases and leases of low-value assets, right-of-use assets
and corresponding lease liabilities are recognised in the statement of financial position. Straight-line operating lease expense
recognition is replaced with a depreciation charge for the right-of-use assets (included in operating costs) and an interest expense on
the recognised lease liabilities (included in finance costs). In the earlier periods of the lease, the expenses associated with the lease
under AASB 16 will be higher when compared to lease expenses under AASB 117. However, EBITDA (Earnings Before Interest, Tax,
Depreciation and Amortisation) results improve as the operating expense is now replaced by interest expense and depreciation in
profit or loss. For classification within the statement of cash flows, the interest portion is disclosed in operating activities and the
principal portion of the lease payments are separately disclosed in financing activities.
Using the modified retrospective approach to the implementation of AASB 16, and with the building lease extension option exercised
in January 2020, the impact on the financial position of the Consolidated entity resulting from the adoption of AASB 16 was the
recording of the right of use asset and liability on the statement of financial position.
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 an estimate of costs expected to be
incurred for dismantling and removing the underlying asset and restoring the site or asset. Right-of-use assets are depreciated on a
straight-line basis over the unexpired period of the lease or the estimated useful life of the asset, whichever is the shorter. Where the
consolidated entity expects to obtain ownership of the leased asset at the end of the lease term, the depreciation is over its estimated
useful life. Right-of use assets are subject to impairment or adjusted for any remeasurement of lease liabilities.
Lease liabilities: A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised at the
present value of the lease payments to be made over the term of the lease, discounted using the interest rate implicit in the lease or, if
that rate cannot be readily determined, the consolidated entity's incremental borrowing rate. Lease payments comprise of fixed
payments less any lease incentives receivable, variable lease payments that depend on an index or a rate, amounts expected to be
paid under residual value guarantees, exercise price of a purchase option when the exercise of the option is reasonably certain to occur,
and any anticipated termination penalties. The variable lease payments that do not depend on an index or a rate are expensed in the
period in which they are incurred. Lease liabilities are measured at amortised cost using the effective interest method. The carrying
amounts are remeasured if there is a change in the following: future lease payments arising from a change in an index or a rate used;
residual guarantee; lease term; certainty of a purchase option and termination penalties. When a lease liability is remeasured, an
adjustment is made to the corresponding right-of use asset, or to profit or loss if the carrying amount of the right-of-use asset is fully
written down.
30
The effect of adopting AASB 16 as at 1 July 2019 (increase / (decrease)) is as follows:
Annual Report FY20
Assets
Right-of-use assets
Total Assets
Liabilities
Borrowings - current
Borrowings – non-current
Total Liabilities
Total Adjustment to equity:
Operating lease commitments as at 30 June 2019
Weighted average incremental borrowing rate as at 1 July 2019
Discounted operating lease commitments at 1 July 2019
Lease liability at 1 July 2019
Post execution of the 3 year lease extension option in January 2020*
Operating lease commitments as at 30 June 2019
Weighted average incremental borrowing rate as at 1 July 2019
Discounted operating lease commitments at 1 July 2019
Lease liabilities at 1 July 2019
* On adoption of AASB16 we included the option, increasing the operating lease commitment
733,784
733,784
180,140
553,644
733,784
-
99,108
5%
96,666
96,666
875,791
5%
733,784
733,784
Australian Accounting Standards and Interpretations that have been recently been issued or amended but are not yet mandatory, have
not been early adopted by the consolidated entity for the annual reporting period ended 30 June 2020. The consolidated entity has
not yet assessed the impact of these new or amended Accounting Standards and Interpretations.
Accounting Standard
The revised Conceptual Framework for Financial
Reporting
AASB 2018-6 Amendments to Australian Accounting
Standards – the definition of a business
AASB 2018-6 Amendments to Australian Accounting
Standards – Definition of Material
AASB 2018-6 Amendments to Australian Accounting
Standards – Classification of liabilities as Current of
Non-Current
Mandatory date for annual
reporting periods on or after
Reporting period
standard adopted by the
consolidated entity
01/01/2020
01/07/2020
01/01/2020
01/07/2020
01/01/2020
01/07/2020
01/01/2022
01/07/2023
31
Noxopharm Limited (ASX:NOX)
Basis of preparation
These general purpose financial statements have been prepared in accordance with Australian Accounting Standards and
profit
interpretations issued by the Australian Accounting Standards Board and the Corporations Act 2001. Noxopharm Limited is a for
entity for the purpose of preparing the financial statements. These financial statements also comply with International Financial
Reporting Standards as issued by the International Accounting Standards Board ('IASB').
‐
Historical cost convention
These financial statements have been prepared under the historical cost convention.
Critical accounting estimates
The preparation of the financial statements requires the use of certain critical accounting estimates. It also requires management to
exercise its judgement in the process of applying the consolidated entity's accounting policies.
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations
of future events that may have a financial impact on the entity and that are believed to be reasonable under the circumstances
The consolidated entity makes estimates and assumptions concerning the future. The resulting accounting estimates will, by
definition, seldom equal the related actual results.
Parent entity information
In accordance with the Corporations Act 2001, these financial statements present the results of the consolidated entity only.
Supplementary information about the parent entity is disclosed in note 25.
Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Noxopharm Limited ('company' or
'parent entity') as at 30 June 2020 and the results of all subsidiaries for the year then ended. Noxopharm Limited and its subsidiaries
together are referred to in these financial statements as the 'consolidated entity'.
Subsidiaries are all those entities over which the consolidated entity has control. The consolidated entity controls an entity when the
consolidated entity is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect
those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control
is transferred to the consolidated entity. They are de-consolidated from the date that control ceases.
Intercompany transactions, balances and unrealised gains on transactions between entities in the consolidated entity are eliminated.
Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred. Accounting
policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the consolidated entity.
The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change in ownership interest, without
the loss of control, is accounted for as an equity transaction, where the difference between the consideration transferred and the book
value of the share of the non-controlling interest acquired is recognised directly in equity attributable to the parent.
Non-controlling interest in the results and equity of subsidiaries are shown separately in the statement of profit or loss and other
comprehensive income, statement of financial position and statement of changes in equity of the consolidated entity. Losses incurred
by the consolidated entity are attributed to the non-controlling interest in full, even if that results in a deficit balance.
Where the consolidated entity loses control over a subsidiary, it derecognises the assets including goodwill, liabilities and non-
controlling interest in the subsidiary together with any cumulative translation differences recognised in equity. The consolidated entity
recognises the fair value of the consideration received and the fair value of any investment retained together with any gain or loss in
profit or loss.
Foreign currency translation
The financial statements are presented in Australian dollars, which is Noxopharm Limited's functional and presentation currency. The
entity's subsidiary, Noxopharm Asia Limited, uses Hong Kong dollars as its functional currency and all other subsidiaries use Australian
dollars as their functional currency.
Foreign currency transactions
Foreign currency transactions are translated into Australian dollars using the exchange rates prevailing at the dates of the transactions.
Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at financial year-end
exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss.
32
Annual Report FY20
Foreign operations
The assets and liabilities of foreign operations are translated into Australian dollars using the exchange rates at the reporting date. The
revenues and expenses of foreign operations are translated into Australian dollars using the average exchange rates, which
approximate the rates at the dates of the transactions, for the period. All resulting foreign exchange differences are recognised in other
comprehensive income through the foreign currency reserve in equity.
The foreign currency reserve is recognised in profit or loss when the foreign operation or net investment is disposed of.
Other Income recognition
Interest
Interest revenue is recognised as interest accrues using the effective interest method. This is a method of calculating the amortised
cost of a financial asset and allocating the interest income over the relevant period using the effective interest rate, which is the rate
that exactly discounts estimated future cash receipts through the expected life of the financial asset to the net carrying amount of the
financial asset.
Government research and development tax incentives
Government grants, including research and development incentives are recognised at fair value when there is reasonable assurance
that the grant will be received and all grant conditions will be met. Grants relating to research and development expenditure are
recognised as income over the periods necessary to match the grant costs they are compensating. The incentive is recognised as
income as it is not tied to offsetting assessable income in tax.
Current and non-current classification
Assets and liabilities are presented in the statement of financial position based on current and non-current classification.
An asset is classified as current when: it is either expected to be realised or intended to be sold or consumed in the consolidated entity's
normal operating cycle; it is held primarily for the purpose of trading; it is expected to be realised within 12 months after the reporting
period; or the asset is cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least 12 months
after the reporting period. All other assets are classified as non-current.
A liability is classified as current when: it is either expected to be settled in the consolidated entity's normal operating cycle; it is held
primarily for the purpose of trading; it is due to be settled within 12 months after the reporting period; or there is no unconditional right
to defer the settlement of the liability for at least 12 months after the reporting period. All other liabilities are classified as non-current.
Associates
Associates are entities over which the consolidated entity has significant influence but not control or joint control. Investments in
associates are accounted for using the equity method. Under the equity method, the share of the profits or losses of the associate is
recognised in profit or loss and the share of the movements in equity is recognised in other comprehensive income. Investments in
associates are carried in the statement of financial position at cost plus post-acquisition changes in the consolidated entity's share of
net assets of the associate. Goodwill relating to the associate is included in the carrying amount of the investment and is neither
amortised nor individually tested for impairment. Dividends received or receivable from associates reduce the carrying amount of the
investment.
When the consolidated entity's share of losses in an associate equals or exceeds its interest in the associate, including any unsecured
long-term receivables, the consolidated entity does not recognise further losses, unless it has incurred obligations or made payments
on behalf of the associate.
The consolidated entity discontinues the use of the equity method upon the loss of significant influence over the associate and
recognises any retained investment at its fair value. Any difference between the associate's carrying amount, fair value of the retained
investment and proceeds from disposal is recognised in profit or loss.
Research and development costs
Research and development costs are expensed as incurred.
Finance costs
Finance costs attributable to qualifying assets are capitalised as part of the asset. All other finance costs are expensed in the period in
which they are incurred.
Goods and Services Tax ('GST') and other similar taxes
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not recoverable from
the taxation authority. In this case it is recognised as part of the cost of acquisition of the asset or as part of the expense. Receivables
and payables are stated inclusive of the amount of GST receivable or payable.
33
Noxopharm Limited (ASX:NOX)
The net amount of GST recoverable from, or payable to, the taxation authority is included with other receivables or payables in the
statement of financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities, which are
recoverable from, or payable to the taxation authority, are presented as operating cash flow.
New Accounting Standards and Interpretations not yet mandatory or early adopted
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet mandatory, have not
been early adopted by the consolidated entity for the annual reporting period ended 30 June 2020. The consolidated entity has not
yet assessed the impact of these new or amended Accounting Standards and Interpretations.
Note 2. Critical accounting judgements, estimates and assumptions
The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the
reported amounts in the financial statements. Management continually evaluates its judgements and estimates in relation to assets,
liabilities, contingent liabilities, revenue and expenses. Management bases its judgements, estimates and assumptions on historical
experience and on other various factors, including expectations of future events, management believes to be reasonable under the
circumstances. The resulting accounting judgements and estimates will seldom equal the related actual results. The judgements,
estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities
(refer to the respective notes) within the next financial year are discussed below.
Research and Development Rebate
With the successful track record of the consolidated entity in obtaining the Research and Development rebate form the ATO, the
estimated 2020 rebate for $4.5m has been accrued as of into income for the year ended 30 June 2020.
Share-based payment transactions
The consolidated entity measures the cost of equity-settled transactions with employees by reference to the fair value of the equity
instruments at the date at which they are granted. The fair value is determined by using either the Binomial or Black-Scholes model
taking into account the terms and conditions upon which the instruments were granted. The accounting estimates and assumptions
relating to equity-settled share-based payments would have no impact on the carrying amounts of assets and liabilities within the next
annual reporting period but may impact profit or loss and equity.
Non-recognition of carried forward tax losses
The balance of future income tax benefit arising from tax losses and timing differences have not been recognised as an asset because
recovery is not regarded as probable. The cumulative future income tax benefit which has not been recognised as an asset will only be
obtained if:
i)
ii)
iii)
The Group derives future assessable income of a nature and amount sufficient to enable the benefit to be realised,
The Group continues to comply with the conditions for the deductibility imposed by law, and
No changes in tax legislation adversely affecting the Group realising the benefit.
Going Concern
The financial report has been prepared on a going concern basis, which assumes continuity of normal business activities and the
realisation of assets and the settlement of liabilities in the ordinary course of business. The consolidated entity has incurred net loss
after tax of $999,573 and net cash outflows from operating activities of $11,318,098 for the year ended 30 June 2020. At 30 June 2020,
the consolidated entity’s cash position was $7,100,202.
Should the Company determine in the future that it is in the best interest of shareholders to bring forward or expand its currently
anticipated clinical program, it would need to do so with completing a capital raising program to match the increased expenditure
profile. Based on the Company's solid capital raising history and successful non-renounceable rights issue in June 2020 that raised
$7.9M, it is envisioned that adequate capital will continue to be raised so the consolidated entity will be able to continue as a going
concern.
Based on the cash flow forecasts and current (28 August 2020) cash position, the directors are confident that the consolidated entity
will be able to continue as a going concern. The consolidated entity has the ability to scale its R&D activities and administration expense
based on each capital raise, so careful planning is undertaken to ensure that each phase of project activity or administration spend is
aligned to capital being raised.
Management acknowledges that uncertainty remains over the consolidated entity's ability to meet its funding requirements. However,
as described above, management has a reasonable expectation that the consolidated entity has adequate resources to continue in
operational existence for the foreseeable future. If for any reason the consolidated entity is unable to continue as a going concern, then
this could have an impact on the consolidated entity's ability to realise assets at their recognised values, and to extinguish liabilities in
the normal course of business at the amounts stated in the consolidated financial statements.
34
Annual Report FY20
Leases
Determination of lease term:
In determining the lease term, management considers all facts and circumstances that create an economic incentive to exercise an
extension option, or not exercise a termination option. Extension options (or periods after termination options) are only included in
the lease term if the lease is reasonably certain to be extended (or not terminated). Potential future cash outflows have not been
included in the lease liability because it is not reasonably certain that the leases will be extended (or not terminated). The assessment
is reviewed if a significant change in circumstances occurs which affects this assessment and that is within the control of the lessee.
The currently leases do not contain an extension option.
Determination of incremental borrowing rate:
Operating lease commitments were discounted using a weighted average interest rate of 5% over the 3 year lease term. This rate was
determined by analysing secured and unsecured business loan rates with a 3 year term, and analysis of rental yields.
Discontinued Operation and Nyrada Deconsolidation
In January 2020, Nyrada Inc. a subsidiary of the consolidated entity listed on the ASX resulting in the consolidated entity losing control
due to the undiluted consolidated entity's shareholding in Nyrada Inc. decreasing from 66.7% to 30.5%. It was determined that the
consolidated entity has retaining significant influence, but not control over Nyrada Inc. under AASB 128. Nyrada Inc. has been treated
as a discontinued operation, with the assets and liabilities, any related non-controlling interest and other components of equity of
Nyrada Inc. being derecognised from the consolidated entity's financial statements from the date of the listing. Refer note 27
Accounting for the Nyrada deconsolidation.
Valuation of performance shares received on Nyrada ASX listing
On Nyrada's listing on the ASX, the consolidated entity received and 12,000,600 performance shares, with a fair value of $960,048. These
performance shares will convert to ordinary shares upon Nyrada Inc. achieving the following performance milestones on or before 25
November 2024:
1.
2.
6,000,300 shares if the trading price for the Company’s CDIs achieving at least AU$0.40 for 5 consecutive trading days on the ASX;
and the Scientific Advisory Board to the Company determining that, based on in-vivo data, the final lead neuroprotectant drug
candidate is ready to proceed to pre-clinical safety and toxicology studies; and
6,000,300 shares if the trading price for the Company’s CDIs achieving at least AU$0.40 for 5 consecutive trading days on the ASX;
and the Scientific Advisory Board to the Company determining that, based on in-vivo data, the final lead peripheral neuropathic
pain drug candidate is ready to proceed to pre-clinical safety and toxicology studies.
These performance shares were externally valued considering Level 3 hierarchy fair value inputs such as - the IPO offer price being the
spot price for valuation purposes, a risk free interest rate of 0.88% (based on Australian government bond rate as a proxy), the Monte
Carlo approach for estimating the probability of the vesting conditions being achieved, and an estimated historical volatility factor
(based on the historical volatility of returns on Noxopharm's shares as there is no pre IPO trading history for Nyrada).
The performance shares are issued for nil consideration and no consideration is payable on conversion of these performance shares
into ordinary shares.
Note 3. Operating segments
The consolidated entity continues to operate in one segment, being the clinical development in the field of both oncology and non-
oncology in the pan-pacific region. The segment details are therefore fully reflected in the body of the annual report.
Note 4. Other income
Interest income
R&D tax incentives/Government Grants
Other income
Consolidated
2020
$
2019
$
11,307
8,332,255
186,686
3,750,675
8,343,562
3,937,361
35
Consolidated
2020
$
2019
$
758,163
346,526
179,876
561,941
473,208
254,718
183,160
502,787
123,949
815,967
437,727
330,815
307,112
242,065
186,880
412,778
-
20,210
3,384,328
2,753,554
1,091,162
3,332,270
460,599
212,260
51,988
259,614
785,728
3,771,127
621,894
332,136
219,824
503,333
5,407,893
6,234,042
Noxopharm Limited (ASX:NOX)
Note 5. Expenses
Loss before income tax includes the following specific expenses:
Corporate Administration expenses
Corporate administration expenses
Audit, accounting and company secretarial fees
Travel and entertainment expenses
Insurances
Legal fees
ASX and filing fees
Consulting fees
IPO and placement costs
Marketing and advertising
Consulting, Employee and Director expenses
Consulting expenses
Employee related expenses
Superannuation and other employee related expenses
Director expenses (excluding executive directors)
Share-based payment expense - Noxopharm Limited
Share-based payment expense - Nyrada Inc
36
Note 6. Income tax
Numerical reconciliation of income tax expense and tax at the statutory rate
Loss before income tax expense
Tax at the statutory tax rate of 27.5%
Tax effect amounts which are not deductible/(taxable) in calculating taxable income:
R&D tax incentives
Other expenses not deductible
Deferred tax (liability)/asset relating to tax losses not recognised
Net movement in temporary differences not recognised
Income tax expense
Annual Report FY20
Consolidated
2020
$
2019
$
(999,573)
(12,572,579)
(274,883)
(3,457,459)
2,499,677
1,125,203
(2,535)
(2,169,447)
(52,812)
(61,747)
2,503,578
(109,575)
-
-
Consolidated
2020
$
2019
$
Tax losses not recognised
Unused tax losses for which no deferred tax asset has been recognised
30,669,067
33,221,546
Potential tax benefit @ 27.5%
8,433,993
9,135,925
The above potential tax benefit for tax losses has not been recognised in the statement of financial position. These tax losses can only
be utilised in the future if the continuity of ownership test is passed, or failing that, the same business test is passed.
Deferred tax assets not recognised
Deferred tax assets not recognised comprises temporary differences attributable to:
Other
Employee provisions
Total deferred tax assets not recognised
Accounting policy for income tax
Consolidated
2020
$
2019
$
241,241
112,044
213,193
91,680
353,285
304,873
The income tax expense or revenue for the period is the tax payable on the current period's taxable income based on the applicable
income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and
to unused tax losses.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the reporting
period in the countries where the Company's subsidiaries and associates operate and generate taxable income. Management
periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to
interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.
Deferred tax assets are recognised only if it is probable that future taxable amounts will be available to utilise those temporary
differences and losses.
37
Noxopharm Limited (ASX:NOX)
Note 7. Current assets - cash and cash equivalents
Cash at bank and in hand
Bank debit cards
Consolidated
2020
$
2019
$
7,034,958
2,824,077
65,244
85,491
7,100,202
2,909,568
Accounting policy for cash and cash equivalents
Cash includes cash at bank (including debit cards) and in hand.
For the purposes of the Statement of cash flows, cash and cash equivalents consist of cash and cash equivalents as defined above.
Note 8. Current assets - trade and other receivables
Accounts receivable
Other receivables
R&D rebate receivable
Consolidated
2020
$
2019
$
8,776
137,873
4,500,000
-
160,402
-
4,637,873
160,402
Accounting policy for trade and other receivables
Trade and other receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective
interest method, less an allowance for impairment, once they become over due by more than 60 days. A separate account records the
impairment.
An allowance for a doubtful debt is made when there is objective evidence that the consolidated entity will not be able to collect the
debts. The criteria used to determine that there is objective evidence that an impairment loss has occurred include whether the
Financial Asset is past due and whether there is any other information regarding increased credit risk associated with the Financial
Asset. Bad debts which are known to be uncollectible are written off when identified.
Other receivables are recognised at amortised cost, less any allowance for expected credit losses.
Note 9. Current assets - other assets
Prepayments
Inventories
Consolidated
2020
$
2019
$
63,312
519,230
121,385
696,400
582,542
817,785
The inventories are mainly materials that are used in the research and development process. These materials are recognised as an
expense as and when they are utilised in the research and development process.
38
Note 10. Non-current assets - receivables
Annual Report FY20
Consolidated
2020
$
2019
$
Loan in Nyrada Inc.
225,232
-
The loan to Nyrada Inc. is the discounted present value of the balance of the Noxopharm-Nyrada inter-company loan post the Nyrada
Inc. listing on the ASX. This loan is unsecured and non-interest bearing and is to be repaid within 3 years of the IPO, or periodically from
up to 50% of the proceeds of future capital raises. The face value of the loan is $342,321, discounted at 15% over three years.
Note 11. Non-current assets - investments accounted for using the equity method
Consolidated
2020
$
2019
$
Investment in Associate
6,359,080
-
Refer to note 27 for further information on accounting for the Nyrada deconsolidation.
Note 12. Non-current assets - right-of-use assets
Consolidated
2020
$
2019
$
Land and buildings - right-of-use
658,110
-
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out below:
Balance at 1July 2019
Opening balance
Amortisation expense
Balance at 30 June 2020
Accounting policy for right-of-use assets
Consolidated
2020
$
2019
$
-
733,784
(75,674)
658,110
-
-
-
-
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.
39
Noxopharm Limited (ASX:NOX)
Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the lease or the estimated useful life of the
asset, whichever is the shorter. Where the consolidated entity expects to obtain ownership of the leased asset at the end of the lease
term, the depreciation is over its estimated useful life. Right-of use assets are subject to impairment or adjusted for any remeasurement
of lease liabilities.
The consolidated entity has elected not to recognise a right-of-use asset and corresponding lease liability for short-term leases with
terms of 12 months or less and leases of low-value assets. Lease payments on these assets are expensed to profit or loss as incurred.
Note 13. Current liabilities - borrowings
Short term loan
Convertible notes payable
Lease liability - building
Consolidated
2020
$
2019
$
4,342,000
-
-
3,930,351
244,820
-
4,586,820
3,930,351
Refer to note 19 for further information on financial instruments.
The lease liability is in relation to the building lease and resulting from the implementation of AASB 16.
The convertible note held by Nyrada Inc. has been deconsolidated from the group consolidated accounts upon Nyrada's listing on the
ASX on 16 January 2020.
On 12 February 2020, the company signed a $5 million loan agreement with an existing Noxopharm shareholder, secured by the
Company's anticipated 2020 R&D rebate. The loan interest rate is 10% p.a. capitalised with a termination date of the earlier of 10
business days after Noxopharm receives the R&D rebate, and 12 months from the date of the loan agreement. While not expected, if
the borrowings under the loan are greater than the R&D rebate the company will use best endeavours to raise and hold liquid funds
(cash) and repay the amount in cash. As a last resort Noxopharm can issue shares for the difference payable. If new shares are issued,
the number of new shares issued will be calculated in accordance with the following formula:
A=B/C
Where:
A = number of new shares to be issued to the lender
B = the repayment by share issue amount; and
C= the new share price ($0.18)
The proceeds of the loan were used to extinguish existing convertible notes and repaid a total of $4.16m to The Lind Partners, LLC and
CST Investment Funds to reduce the convertible loan balance to zero.
Accounting policy for borrowings
Loans and borrowings are initially recognised at the fair value of the consideration received, net of transaction costs. They are
subsequently measured at amortised cost using the effective interest method.
40
Note 14. Non-current liabilities - borrowings
Annual Report FY20
Consolidated
2020
$
2019
$
Lease liability - building
413,290
-
Refer to note 19 for further information on financial instruments.
The lease liability is in relation to the building lease and resulting from the implementation of AASB 16.
Accounting policy for lease liability
A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised at the present value of the
lease payments to be made over the term of the lease, discounted using the interest rate implicit in the lease or, if that rate cannot be
readily determined, the 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.
The options on the building leases were renewed in January 2020 and expire in January 2023. No further option period is available in
the current leases.
Note 15. Non-current liabilities - employee entitlements
Long service leave
95,463
-
Consolidated
2020
$
2019
$
41
Noxopharm Limited (ASX:NOX)
Note 16. Equity - issued capital
Consolidated
Consolidated
2020
Shares
2019
Shares
2020
$
2019
$
Ordinary shares - fully paid
213,200,580
122,601,393
41,631,007
28,700,897
Date
Shares
$
1 July 2018
121,901,310
28,449,283
Movements in ordinary share capital
Details
Balance
Exercise of options
Exercise of options
28 September 2018
2 October 2018
Shares issued to Kazia
17 December 2018
Share placement
Balance
Collateral shares issued
Shares issued to Lind Partners
Shares issued to CST Capital
25 March 2019
30 June 2019
23 July 2019
23 August 2019
23 August 2019
Shares issued to Lind Partners
26 September 2019
Shares issued to CST Capital
26 September 2019
Shares issued to Lind Partners
25 October 2019
Shares issued to CST Capital
25 October 2019
Shares issued to Lind Partners
25 October 2019
Shares issued to CST Capital
25 October 2019
Shares issued to Lind Partners
3 December 2019
Shares issued to CST Capital
3 December 2019
Collateral shares issued
3 December 2019
Shares issued to Lind Partners
23 December 2019
Shares issued to CST Capital
23 December 2019
Shares issued to Lind Partners
18 February 2020
Shares issued to CST Capital
18 February 2020
Share Placement
Placement Cost
Rights Issue
Cost of Rights Issue
Conversion of Collateral Shares
21 February 2020
21 February 2020
18 June 2020
18 June 2020
20 April 2020
200,000
50,000
15,457
434,626
60,000
15,000
7,110
169,504
122,601,393
28,700,897
3,000,000
270,279
270,279
309,598
309,598
302,115
302,115
302,115
302,115
323,625
323,625
1,500,000
1,041,667
1,041,667
1,530,613
1,403,062
17,152,280
-
60,914,434
-
-
-
100,000
100,000
100,000
100,000
100,000
100,000
100,000
100,000
100,000
100,000
-
250,000
250,000
300,000
275,000
3,087,410
(187,610)
7,918,876
(598,070)
634,504
Balance
30 June 2020
213,200,580
41,631,007
42
Annual Report FY20
Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the company in proportion to the
number of and amounts paid on the shares held. The fully paid ordinary shares have no par value and the company does not have a
limited amount of authorised capital.
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each share shall
have one vote.
Share buy-back
There is no current on-market share buy-back.
Capital risk management
The consolidated entity's objectives when managing capital is to safeguard its ability to continue as a going concern, so that it can
provide returns for shareholders and benefits for other stakeholders and to maintain an optimum capital structure to reduce the cost
of capital.
Capital is regarded as total equity, as recognised in the statement of financial position, plus net debt. Net debt is calculated as total
borrowings less cash and cash equivalents.
In order to maintain or adjust the capital structure, the consolidated entity may adjust the amount of dividends paid to shareholders,
return capital to shareholders, issue new shares or sell assets to reduce debt.
The consolidated entity would look to raise capital when an opportunity to invest in a business or company was seen as value adding
relative to the current company's share price at the time of the investment. The consolidated entity is not actively pursuing additional
investments in the short term as it continues to integrate and grow its existing businesses in order to maximise synergies.
Accounting policy for issued capital
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the
proceeds.
43
Noxopharm Limited (ASX:NOX)
Note 17. Equity - reserves
Options reserve
Options reserve - Nyrada Inc
Convertible note reserve
Consolidated
2020
$
2019
$
2,708,106
2,935,405
-
-
757,892
762,045
2,708,106
4,455,342
The convertible note reserve represents the conversion option on convertible note agreements with fixed conversion formulae. These
convertible notes were held by the Company's subsidiary, Nyrada Inc., which was deconsolidated during the period. Refer note 27.
Option reserve
The reserve is used to recognise the value of equity benefits provided to employees and directors as part of their remuneration, and
other parties as part of their compensation for services.
Option reserve - Nyrada Inc
The reserve was deconsolidated from the consolidated entity’s financial statements from the date of Nyrada's listing on the ASX. Refer
note 27.
Note 18. Equity - dividends
There were no dividends paid, recommended or declared during the current or previous financial year.
Note 19. Financial instruments
Financial risk management objectives
The Board is responsible for overseeing the establishment and implementation of the risk management system, and reviews and
assesses the effectiveness of the consolidated entity's implementation of that system on a regular basis.
The consolidated entity’s activities expose it to a variety of financial risks: market risk (including currency risk, interest rate risk and
price risk), credit risk and liquidity risk. The consolidated entity's overall risk management program focuses on the unpredictability of
financial markets and seeks to minimise potential adverse effects on the financial performance of the consolidated entity. The
consolidated entity uses different methods to measure different types of risk to which it is exposed.
The consolidated entity's financial instruments consist of cash and cash equivalents, trade and other receivables, and trade and other
payables and borrowings.
Cash and cash equivalents
Investments accounted for using the equity method – performance shares
Term Deposits
Trade and other payables
Convertible Notes
Short term loan
Lease liabilities
44
Consolidated
2020
$
2019
$
7,100,202
2,909,568
960,040
122,837
-
118,818
(1,786,852)
(1,487,142)
-
(3,930,351)
(4,342,000)
(658,110)
-
-
1,396,117
(2,389,107)
Annual Report FY20
Market risk
Foreign currency risk
The consolidated entity undertakes certain transactions denominated in foreign currency and is exposed to foreign currency risk
through foreign exchange rate fluctuations.
Foreign exchange risk arises from future commercial transactions and recognised financial assets and financial liabilities denominated
in a currency that is not the entity's functional currency. The foreign currency risk is deemed to be minimal as most of the transactions
are primarily conducted in the entity's functional currency and changes in foreign exchange rate would not have any significant impact
to the financial position of the entity.
Price risk
The consolidated entity is not exposed to any significant price risk.
Interest rate risk
The interest rate risk is deemed to be minimal as the cash are held in fixed interest rate term deposit and therefore changes in variable
rates does not affect the interest earned on these term deposit. Interest earned on non-term deposit account are minimal.
Except as disclosed in note 14 Borrowings, the consolidated entity does not have any external interest bearing borrowings.
There is no interest rate risk with the short term loan as is has a fixed interest rate.
Liquidity risk
Vigilant liquidity risk management requires the consolidated entity to maintain sufficient liquid assets (mainly cash and cash
equivalents) and available borrowing facilities to be able to pay debts as and when they become due and payable.
The Company is exposed to liquidity risk via its trade and other payables.
Liquidity risk is the risk that the Company will encounter difficulty in raising funds to meet the commitments associated with its
financial instruments. Responsibility for liquidity risk rests with the Board who manage liquidity risk by monitoring undiscounted cash
flow forecasts and actual cash flows provided to them by the Company's Management at Board meetings to ensure that the Company
continues to be able to meet its debts as and when they fall due. Contracts are not entered into unless the Board believes that there is
sufficient cash flow to fund the additional activity.
45
Noxopharm Limited (ASX:NOX)
Remaining contractual maturities
The following tables detail the consolidated entity's remaining contractual maturity for its financial instrument liabilities. The tables
have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the financial
liabilities are required to be paid. The tables include both interest and principal cash flows disclosed as remaining contractual
maturities and therefore these totals may differ from their carrying amount in the statement of financial position.
Weighted
average
interest rate
1 year or less
Between 1
and 2 years
Between 2
and 5 years
Over 5 years
Remaining
contractual
maturities
Consolidated - 2020
%
$
$
$
$
$
Non-derivatives
Non-interest bearing
Trade payables
-
1,786,852
-
Lease liability
5.00%
244,820
413,290
Interest bearing – fixed rate
Other loans
10.00%
4,484,000
-
Total non-derivatives
6,515,672
413,290
-
-
-
-
-
-
-
-
1,786,852
658,110
4,484,000
6,928,962
Weighted
average
interest rate
1 year or less
Between 1
and 2 years
Between 2
and 5 years
Over 5 years
Remaining
contractual
maturities
Consolidated - 2019
%
$
$
$
$
$
Non-derivatives
Non-interest bearing
Trade payables
-
1,487,142
Convertible notes
15.00%
3,990,100
Total non-derivatives
5,477,242
-
-
-
-
-
-
-
-
-
1,487,142
3,990,100
5,477,242
The cash flows in the maturity analysis above are not expected to occur significantly earlier than contractually disclosed above.
Fair value of financial instruments
The fair values of cash and cash equivalents, trade and other receivables and trade and other payables approximate to their carrying
amounts largely due to being liquid assets or liabilities that will be settled within 12 months.
The convertible notes are deemed to be carried close to the fair value on the basis of market rates has been used to initially determine
the opening position of the notes.
46
Annual Report FY20
Note 20. Fair value measurement
Accounting policy for fair value measurement
When an asset or liability, financial or non-financial, is measured at fair value for recognition or disclosure purposes, the fair value is
based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market
participants at the measurement date; and assumes that the transaction will take place either: in the principal market; or in the absence
of a principal market, in the most advantageous market.
Fair value is measured using the assumptions that market participants would use when pricing the asset or liability, assuming they act
in their economic best interests. For non-financial assets, the fair value measurement is based on its highest and best use. Valuation
techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, are used,
maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
Note 21. Key management personnel disclosures
Other key management personnel
The following persons also had the authority and responsibility for planning, directing and controlling the major activities of the
consolidated entity, directly or indirectly, during the financial year:
•
Dr. Graham Kelly – Chief Executive Officer and Executive Chairman
• Mr. Peter Marks - Non Executive Deputy Chairman
•
Dr. Ian Dixon - Non Executive Director
• Mr. John Moore - Non Executive Director (resigned 16 July 2019)
• Mr. David Franks - Company Secretary
•
•
Dr. Greg van Wyk - Chief Executive Officer (resigned 31 October 2019)
Dr. Beata Niechoda - Non Executive Director (appointed 16 July 2019, resigned 16 October 2019)
• Mr. Boris Patkin - Non Executive Director (appointed 25 March 2020)
• Mr Fred Bart - Non Executive Director (appointed 8 May 2020)
Compensation
The aggregate compensation made to directors and other members of key management personnel of the consolidated entity is set
out below:
Short-term employee benefits
Post-employment benefits
Long-term benefits
Share-based payments
Consolidated
2020
$
2019
$
636,790
1,205,213
47,612
17,621
8,475
87,935
14,281
344,934
710,498
1,652,363
Other Transactions with Key Management Personnel
Company secretarial and bookkeeping services - provided by the Automic Group (formerly Franks & Associates Pty Ltd), an entity
associated with Mr. David Franks, on commercial terms and conditions.
47
Noxopharm Limited (ASX:NOX)
Note 22. Remuneration of auditors
During the financial year the following fees were paid or payable for services provided by William Buck Audit (Vic) Pty Ltd, the auditor
of the company, and unrelated firms:
Audit services - William Buck Audit (Vic) Pty Ltd
Audit or review of the financial statements
Audit services - unrelated firms (Nexia Sydney Audit Pty Ltd)
Audit or review of the financial statements
Other services - unrelated firms (Nexia Sydney Audit Pty Ltd)
Due diligence
Consolidated
2020
$
2019
$
43,000
53,500
-
-
-
20,249
10,985
31,234
Note 23. Contingent liabilities
The consolidated entity has given bank guarantees as at 30 June 2020 of $118,818 (2018: $118,818) to its landlords.
Note 24. Related party transactions
Parent entity
Noxopharm Limited is the parent entity.
Subsidiaries
Interests in subsidiaries are set out in note 26.
Key management personnel
Disclosures relating to key management personnel are set out in note 21 and the remuneration report included in the directors' report.
Transactions with related parties
Company secretarial and bookkeeping / financial accounting services - provided by Automic Group), an entity associated with Mr.
David Franks, on commercial terms and conditions. Total fees (excluding GST) paid to Automic Group Pty Limited for the year ended
30 June 2020 was $312,596 (2019: $268,388). Automic is the share registry of Noxopharm Limited. All services provided by Automic
Group during the year ended 30 June 2020 and to the date of this report were on commercial terms.
Prue Kelly, spouse of Graham Kelly (Chief Executive Officer and Executive Chairman) is employed as the Company's part time Investor
Relation Manager on the Company's employment terms and condition.
Receivable from and payable to related parties
There were no trade receivables from related parties at the current and previous reporting date. There were trade payables to the
Automic Group of $60,256 as at 30 June 2019 (2019: $65,523).
Loans to/from related parties
There were no loans to or from related parties at the current and previous reporting date.
48
Note 25. Parent entity information
Set out below is the supplementary information about the parent entity.
Statement of profit or loss and other comprehensive income
Loss after income tax
Total comprehensive income
Statement of financial position
Total current assets
Total assets
Total current liabilities
Total liabilities
Equity
Issued capital
Options reserve
Accumulated losses
Total equity
Annual Report FY20
Parent
2020
$
2019
$
(4,301,729)
(8,279,301)
(4,301,729)
(8,279,301)
Parent
2020
$
2019
$
12,327,841
2,718,882
21,673,059
5,508,004
6,685,639
1,493,069
7,194,392
1,493,069
41,631,007
28,700,897
2,708,106
2,935,405
(29,860,446)
(27,621,367)
14,478,667
4,014,935
Guarantees entered into by the parent entity in relation to the debts of its subsidiaries
The parent entity had no guarantees in relation to the debts of its subsidiaries as at 30 June 2020.
Contingent liabilities
Except as outlined in note 23, the parent entity had no contingent liabilities as at 30 June 2020 and 2019.
Capital commitments - Property, plant and equipment
The parent entity had no capital commitments at 30 June 2020 and 2019.
Significant accounting policies
The accounting policies of the parent entity are consistent with those of the consolidated entity, as disclosed in note 1, except for the
following:
•
•
Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity.
Dividends received from subsidiaries are recognised as other income by the parent entity and its receipt may be an indicator
of an impairment of the investment.
49
Noxopharm Limited (ASX:NOX)
Note 26. Interests in subsidiaries and associates
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in accordance with
the accounting policy described in note 1:
Name
Noxopharm Asia Limited
Norbio Holding Pty Ltd ^
Nyrada Inc. ^
Nyrada Pty Ltd (formerly Norbio No 1 Pty Ltd) ^
Norbio No 2 Pty Ltd ^
Cardio Therapeutics Pty Ltd ^
Pharmorage Pty Limited (registered 19 May 2020)
Ownership interest
Principal place of
business /
Country of incorporation
2020
%
2019
%
Hong Kong
Australia
USA
Australia
Australia
Australia
Australia
100.00%
30.51%
30.51%
30.51%
30.51%
30.51%
100.00%
100.00%
100.00%
66.67%
66.67%
66.67%
66.67%
-
Pharmorage Pty Limited was incorporated during the year as a vehicle for an intended future project. This entity has no assets or
liabilities at the end of the financial year.
^ Refer note 27 for detail on the decreased ownership interest
Note 27. Accounting for the Nyrada Deconsolidation
In January 2020, Nyrada Inc. a subsidiary of the consolidated entity listed on the ASX resulting in the consolidated entity losing control,
whilst retaining significant influence over Nyrada Inc. under AASB 128. On a pre-diluted basis, and not including its interests in the
performance shares, the consolidated entity retained a 30.5% interest in Nyrada, which lead the directors to conclude that the
consolidated entity retained a significant influence over Nyrada. As a result, Nyrada Inc. has been treated as a discontinued operation,
with the assets and liabilities, any related non-controlling interest and other components of equity of Nyrada Inc. being derecognised
from the consolidated entity's financial statements from the date of the listing.
The resulting investment in Nyrada Inc. has been accounted for using the equity method of accounting.
On Nyrada's listing the consolidated entity received 19,873,245 ordinary fully paid shares valued at $3,974,649 as consideration for the
consolidated entity's pre-listing investment in Nyrada Inc. The consolidated entity received an additional 13,500,000 ordinary fully paid
shares valued at $2,700,000 as consideration for part of the intercompany loan balance with Nyrada Inc.
In addition to the $2,700,000 worth of ordinary fully paid shares received for partial settlement of the intercompany loan balance, the
Company received $500,000 in cash as part consideration of the intercompany loan.
In addition the consolidated entity received 12,000,600 performance shares, with a fair value of $960,040. These performance shares
will convert to ordinary shares upon Nyrada Inc. achieving the following performance milestones on or before 25 November 2024:
1.
2.
6,000,300 shares if the trading price for the Company’s CDIs achieving at least AU$0.40 for 5 consecutive trading days on the
ASX; and the Scientific Advisory Board to the Company determining that, based on in-vivo data, the final lead neuroprotectant
drug candidate is ready to proceed to pre-clinical safety and toxicology studies; and
6,000,300 shares if the trading price for the Company’s CDIs achieving at least AU$0.40 for 5 consecutive trading days on the
ASX; and the Scientific Advisory Board to the Company determining that, based on in-vivo data, the final lead peripheral
neuropathic pain drug candidate is ready to proceed to pre-clinical safety and toxicology studies.
These performance shares were externally valued considering Level 3 hierarchy fair value inputs including - the IPO offer price being
the spot price for valuation purposes, a risk free interest rate of 0.88% (based on Australian government bod rate as a proxy), the Monte
Carlo approach for estimating the probability of the vesting conditions being achieved, and an estimated historical volatility factor
(based on the historical volatility of returns on Noxopharm's shares as there is no pre IPO trading history for Nyrada).
The subsidiary entity convertible note reserve for $762,045 was derecognised to gain on sale of investments on deconsolidation.
Up to the date of the transaction, the results of Nyrada were included within the consolidated results of consolidated entity. Following
the transactions, the results are reflected in the share of loss of associate. The directors have also considered the results of Nyrada to
represent a discontinued operation, and therefore they have been separately disclosed as such in the statement of profit or loss and
other comprehensive income.
50
Annual Report FY20
At 16 January 2020
$
159,185
224,938
6,032
37,000
(7,795)
(467,771)
(3,475,100)
(7,795)
(2,077,274)
(1,017,506)
(762,045)
(3,255,788)
$
3,974,649
2,700,000
960,048
500,000
225,232
8,359,929
Analysis of Assets, Liabilities and Equity over which the consolidated entity has lost control
Current Assets
Cash and cash equivalents
Prepayments
Non-Current Assets
Plant and equipment
Intangible asset
Current Liabilities
Employee entitlements
Trade and other payables
Convertible note payable
Non-Current Liabilities
Employee entitlements
Equity and Reserves
Non-controlling interest
Option reserve (warrants)
Convertible note reserve
Net Liabilities and Equity Deconsolidated
Consideration received on Deconsolidation
The following consideration was received as part of the Nyrada Inc. deconsolidation:
19,873,245 Ordinary fully paid shares
13,500,000 Ordinary fully paid shares as consideration for intercompany loan
12,000,600 Performance shares
Cash as consideration for part of the intercompany loan
Fair value of the balance of the intercompany loan receivable
51
Noxopharm Limited (ASX:NOX)
Gain on deconsolidation of subsidiary
Total consideration received
plus: carrying amount of interest retained
Net liabilities derecognised
Gain on deconsolidation of subsidiary
Net cash inflow from the deconsolidation of subsidiary
Cash received on deconsolidation
Less cash balances deconsolidated
Net cash received on deconsolidation
Minority interest at date of deconsolidation
Minority interest at 30 June 2019
Loss incurred at date of transaction
Balance at deconsolidation
Carrying amount of investments accounted for using the Equity method
Fair value of consideration received
less: share of loss of Associate
Balance at 30 June 2020
8,359,929
(3,255,788)
11,585,717
500,000
(159,185)
340,815
1,394,794
727,480
2,077,274
7,634,697
(1,095,617)
6,539,080
Associates are accounted for using the Equity method of accounting. The consolidated entity's share of Nyrada Inc. losses for the period
16 January to 30 June 2020 was ($1,095,617).
Note 28. Matters subsequent to the end of the financial year
On 14 August 2020, the Company granted 25,304,819 options with an exercise price of $0.30, expiring 14 August 2023.
On 21 July 2020 CST Investment Fund purchased the final 811,022 collateral shares outstanding for $129,764. No further collateral
shares are outstanding.
Except as noted above, no matter or circumstance has arisen since 30 June 2020 that has significantly affected, or may significantly
affect the consolidated entity's operations, the results of those operations, or the consolidated entity's state of affairs in future financial
years.
52
Note 29. Reconciliation of loss after income tax to net cash used in operating activities
Annual Report FY20
Loss after income tax expense for the year
(999,573)
(12,572,579)
Consolidated
2020
$
2019
$
Adjustments for:
Depreciation and amortisation
Share-based payments
Net loss on disposal of plant and equipment
Gain on deconsolidation of Nyrada
Share of loss - Associate
Non-cash finance costs
Accrued interest
Change in operating assets and liabilities:
Increase in trade and other receivables
Increase in other current assets
Decrease in inventory
Increase in trade and other payables
Increase in employee entitlements
241,445
311,602
-
(11,585,717)
1,095,617
3,429,305
(4,019)
(4,722,649)
-
177,170
767,481
151,380
62,098
899,146
2,089
-
-
650,899
-
(37,757)
(50,885)
572,610
600,150
98,464
Net cash used in operating activities
(11,137,958)
(9,775,765)
53
Noxopharm Limited (ASX:NOX)
Note 30. Discontinued Operations
On 16 January 2020, Nyrada Inc. a subsidiary of the consolidated entity listed on the ASX resulting in the consolidated entity losing
control, whilst retaining significant influence over Nyrada Inc. under AASB 128. Nyrada Inc. has been treated as a discontinued
operation, with the assets and liabilities, any related non-controlling interest and other components of equity of Nyrada Inc. being
derecognised from the consolidated entity's financial statements from the date of the listing and reported as a discontinued operation.
Financial Performance and cash flow information
The financial performance and cash flow information in relation to the discontinued operation presented are for the period ending 16
January 2020 and the year ended 30 June 2019.
Revenue
Expenses
Employee benefits
Administration expenses
Research and development costs
Share based payments
Finance costs
From 1 Jul 2019
to 16 Jan 2020
$
2019
$
-
505,697
(740,675)
(338,678)
(659,373)
(384,182)
(59,749)
(1,398,142)
(1,040,282)
(1,041,201)
(503,333)
(650,899)
Loss from discontinued operation
(2,182,657)
(4,128,160)
Net cash used in operating activities
Net cash outflow from investing activities
Net cash inflow from financing activities
From 1 Jul 2019
to 16 Jan 2020
$
2019
$
(2,296,687)
(2,005,359)
(2,999)
1,355,817
(441)
-
Net decrease in cash used by discontinued operation
(943,869)
(2,005,800)
The carrying amount of assets and liabilities were:
Cash and cash equivalents
Prepayments
Plant and equipment
Intangible asset
Total assets
Trade and other payables
Convertible note payable
Employee entitlements
Total liabilities
Net assets/(liabilities)
At 30 Jun 2020
At 30 Jun 2019
$
5,146,169
1,078,845
5,524
37,000
6,267,268
(696,883)
$
1,102,397
-
3,740
37,000
1,143,143
(2,124,165)
-
(3,930,351)
(43,785)
(43,093)
(740,668)
(6,067,609)
5,526,600
(4,954,466)
54
Note 31. Earnings per share
Loss after income tax
Non-controlling interest
Annual Report FY20
Consolidated
2020
$
2019
$
(999,573)
(12,572,579)
727,480
1,349,794
Loss after income tax attributable to the owners of Noxopharm Limited
(272,093)
(11,222,785)
Profit attributable to discontinued operations
Loss attributable to continued operations
Consolidated
2020
$
2019
$
9,403,060
(12,572,579)
(10,402,633)
(7,094,625)
Loss after income tax attributable to the owners of Noxopharm Limited
(999,573)
(11,222,785)
Weighted average number of ordinary shares used in calculating
basic earnings per share
Weighted average number of ordinary shares used in calculating
diluted earnings per share
Earnings per share for profit/(loss) from discontinued operations attributable to
the owners of Noxopharm Limited
Basic earnings per share
Diluted earnings per share
Earnings per share for loss from continued operations attributable to the owners
of Noxopharm Limited
Basic earnings per share
Diluted earnings per share
Earnings per share for loss attributable to the owners of Noxopharm Limited
Basic earnings per share
Diluted earnings per share
Number
Number
138,357,822
122,005,806
138,357,822
122,005,806
Cents
Cents
6.80
6.80
(7.52)
(7.52)
(0.20)
(0.20)
(3.38)
(3.38)
(5.81)
(5.81)
(9.20)
(9.20)
The 51,119,409 (2019: 25,802,084) options issued could potentially dilute basic earnings per share in the future, but were not included
in the calculation of diluted earnings per share because they are anti-dilutive for the periods presented.
Accounting policy for earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to the owners of Noxopharm Limited, excluding any costs of
servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the financial year,
adjusted for bonus elements in ordinary shares issued during the financial year.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after
income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted average
number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares.
55
Noxopharm Limited (ASX:NOX)
Note 32. Share-based payments
During the year, the Company has granted the following share-based payments:
2020
Grant date
Expiry date
Exercise
price
23/07/2019
23/07/2023
$0.5605
23/12/2019
16/12/2023
$0.3200
03/12/2019
23/12/2023
$0.3055
Balance at
the start of
the year
2,558,868
Granted
Exercised
-
-
-
4,722,222
930,128
2,666,666
2,558,868
8,319,016
2019
Grant date
Expiry date
Exercise
price
Balance at
the start of
the year
Granted
Exercised
28/11/2017
27/11/2020
$0.9963
28/11/2017
27/11/2020
$1.1994
08/12/2017
30/11/2021
$1.0800
500,000
500,000
789,470
-
-
-
10/12/2018
21/11/2022
$0.6200
-
975,417
1,789,470
975,417
Set out below are the options exercisable at the end of the financial year:
Expired/
forfeited/
other
Balance at
the end of
the year
(306,482)
2,252,386
-
-
-
4,722,222
930,128
2,666,666
(306,482)
10,571,402
Expired/
forfeited/
other
Balance at
the end of
the year
-
-
500,000
500,000
(206,019)
583,451
-
975,417
(206,019)
2,558,868
-
-
-
-
-
-
-
-
-
Grant date
28/11/2017
08/12/2017
10/12/2018
23/07/2019
03/12/2019
18/06/2020
Expiry date
27/11/2020
30/11/2021
21/11/2022
23/07/2023
03/12/2023
18/06/2023
2020
Number
2019
Number
1,000,000
257,565
288,680
4,722,222
2,666,666
20,304,792
29,239,925
1,000,000
188,615
-
-
-
-
1,188,615
The weighted average remaining contractual life of options outstanding at the end of the financial year was 2.99 years.
For the options granted during the financial year, the valuation model inputs used to determine the fair value at the grant date, are as
follows:
Grant date
Expiry date
Share price
at grant
date
Exercise
price
Expected
volatility
Dividend
yield
Risk-free
interest
rate
Fair value
at grant
date
23/07/2019
23/07/2023
$0.4550
$0.5605
84.00%
23/12/2019
16/12/2023
$0.2900
$0.3200
84.00%
03/12/2019
03/12/2023
$0.3500
$0.3055
84.00%
-
-
-
0.73%
$0.251
0.94%
$0.169
0.74%
$0.216
56
Annual Report FY20
Accounting policy for share-based payments
Equity-settled and cash-settled share-based compensation benefits are provided to employees.
Equity-settled transactions are awards of shares, or options over shares, that are provided to employees in exchange for the rendering
of services. Cash-settled transactions are awards of cash for the exchange of services, where the amount of cash is determined by
reference to the share price.
The cost of equity-settled transactions are measured at fair value on grant date. Fair value is independently determined using either
the Binomial or Black-Scholes option pricing model that takes into account the exercise price, the term of the option, the impact of
dilution, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free
interest rate for the term of the option, together with non-vesting conditions that do not determine whether the consolidated entity
receives the services that entitle the employees to receive payment. No account is taken of any other vesting conditions.
The cost of equity-settled transactions are recognised as an expense with a corresponding increase in equity over the vesting period.
The cumulative charge to profit or loss is calculated based on the grant date fair value of the award, the best estimate of the number
of awards that are likely to vest and the expired portion of the vesting period. The amount recognised in profit or loss for the period is
the cumulative amount calculated at each reporting date less amounts already recognised in previous periods.
The cost of cash-settled transactions is initially, and at each reporting date until vested, determined by applying either the Binomial or
Black-Scholes option pricing model, taking into consideration the terms and conditions on which the award was granted. The
cumulative charge to profit or loss until settlement of the liability is calculated as follows:
•
•
during the vesting period, the liability at each reporting date is the fair value of the award at that date multiplied by the
expired portion of the vesting period.
from the end of the vesting period until settlement of the award, the liability is the full fair value of the liability at the reporting
date.
All changes in the liability are recognised in profit or loss. The ultimate cost of cash-settled transactions is the cash paid to settle the
liability.
Market conditions are taken into consideration in determining fair value. Therefore any awards subject to market conditions are
considered to vest irrespective of whether or not that market condition has been met, provided all other conditions are satisfied.
If equity-settled awards are modified, as a minimum an expense is recognised as if the modification has not been made. An additional
expense is recognised, over the remaining vesting period, for any modification that increases the total fair value of the share-based
compensation benefit as at the date of modification.
If the non-vesting condition is within the control of the consolidated entity or employee, the failure to satisfy the condition is treated
as a cancellation. If the condition is not within the control of the consolidated entity or employee and is not satisfied during the vesting
period, any remaining expense for the award is recognised over the remaining vesting period, unless the award is forfeited.
If equity-settled awards are cancelled, it is treated as if it has vested on the date of cancellation, and any remaining expense is
recognised immediately. If a new replacement award is substituted for the cancelled award, the cancelled and new award is treated
as if they were a modification.
57
Noxopharm Limited (ASX:NOX)
Directors’ Declaration
In the directors' opinion:
•
•
•
•
the attached financial statements and notes comply with the Corporations Act 2001, the Accounting Standards, the
Corporations Regulations 2001 and other mandatory professional reporting requirements;
the attached financial statements and notes comply with Australian Accounting Standards as issued by the Australian
Accounting Standards Board as described in note 1 to the financial statements;
the attached financial statements and notes give a true and fair view of the consolidated entity's financial position as at 30
June 2020 and of its performance for the financial year ended on that date; and
there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and
payable.
The directors have been given the declarations required by section 295A of the Corporations Act 2001.
Signed in accordance with a resolution of directors made pursuant to section 295(5)(a) of the Corporations Act 2001.
On behalf of the directors
___________________________
Dr Graham Kelly
Director
28 August 2020
58
Noxopharm Limited
Independent auditor’s report to members
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Noxopharm Limited (the Company) and its
controlled entities (the Group), which comprises the consolidated statement of financial
position as at 30 June 2020, the consolidated statement of comprehensive income, the
consolidated statement of changes in equity and the consolidated statement of cash flows
for the year then ended, and notes to the financial statements, including a summary of
significant accounting policies and other explanatory information, and the directors’
declaration.
In our opinion, the accompanying financial report of the Group, is in accordance with the
Corporations Act 2001, including:
(i) giving a true and fair view of the Group’s financial position as at 30 June 2020 and of
its financial performance for the year ended on that date; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations
2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our
responsibilities under those standards are further described in the Auditor’s
Responsibilities for the Audit of the Financial Report section of our report. We are
independent of the Group in accordance with the auditor independence requirements of
the Corporations Act 2001 and the ethical requirements of the Accounting Professional and
Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants
(including Independence Standards) (the Code) that are relevant to our audit of the
financial report in Australia. We have also fulfilled our other ethical responsibilities in
accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.
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.
Noxopharm Limited
Shareholder information
30 June 2020
LISTING OF NYRADA ON THE ASX
Area of focus
Nyrada Inc. (Nyrada), a subsidiary of the Company in
the prior reporting periods (and its controlled entities),
completed its listing on the ASX on 16 January 2020. As
reported in Note 27 to the financial statements, the
following transactions occurred in connection with this
transaction:
— Upon listing, the Company owned 33,373,245
ordinary fully paid shares in Nyrada and also
12,000,600 performance shares, which vest when
specified assets of Nyrada achieve either the later of
a trading price performance threshold or become
clinic-ready;
— On a pre-diluted basis, the Company’s interest in
Nyrada and its controlled entities diluted from 67%
down to 30.5%; and
— Two members of the Noxopharm board remained on
the board of Nyrada.
In accounting for the acquisition, the directors
considered the following:
— That, post-listing, the Company lost control of
Nyrada, but notwithstanding this, retained a
significant interest in Nyrada, and have accounted
for their investment in Nyrada associate using equity
interest accounting;
— That the performance shares had market
performance conditions attached to them and
therefore accounting for them as an asset was made
with the assistance of an expert valuer;
— That a non-interest bearing 3-year loan to Nyrada
post-listing was recognised at its discounted fair
value; and that
— Warrants and convertible note equity interests
previously issued in-respect of Nyrada represented
an interest in Nyrada’s capital were effectively
derecognised from equity.
In-addition to this, the Directors considered that the
cumulative profit and loss result arising from the
transaction, accounting for cumulative minority interest
taken to equity, to meet the definition of a discontinued
operation, and as a consequence, the entire amount has
been classified as such in the statement of profit or loss
and other comprehensive income.
How our audit addressed it
Our audit procedures included the
following;
— Examining and cross-referencing
disclosures in the Nyrada
Prospectus and legal due diligence
files accompanying its ASX listing;
— Consulting with our Technical team
on matters concerning whether or
not Nyrada represented both a
significant interest and discontinued
operation to the Company, as
defined under accounting
standards;
— Examining the bona fides of the
expert employed to value the
performance shares and
recomputing their valuation and
examining significant valuation
inputs;
— Recomputing the accounting for the
spin-out, including factoring in the
impacts of the de-recogntion of
warrants including the share-based
payment reserve and the minority
interest equity account;
— Consulting with our tax team to
ensure that the Company had
sufficient available tax losses
arising from prior and current
periods that could be applied
against any gain arising from the
transaction; and
— Applying equity interest accounting
to the Nyrada investment post-
listing.
We also ensure that all disclosures in
respect of the transaction were
appropriately in-line with the
requirements of Australian Accounting
Standards.
50
Noxopharm Limited
Shareholder information
30 June 2020
CONVERTIBLE NOTES
Area of focus
During the year the Group funded its operations using
convertible notes, subscribed to by Lind Partners and
CST Investment Funds.
These convertible notes had variable conversion
clauses which were accounted for as embedded
derivative liabilities on the statement of financial
position.
In order to manage these equity conversions, the note
deeds required the Company to issue in-advance
collateral shares, to be held by the investor in the event
of an equity conversion.
On 12 February 2020 the convertible note arrangements
were settled and the convertible notes and their
associated embedded derivatives were derecognised
from the Statement of Financial Position.
A small number of residual collateral shares that
remained unexercised as at 30 June 2020 in-respect of
the convertible note arrangements, as disclosed were
subsequently paid after year end by those investors.
How our audit addressed it
Our audit procedures included the
following;
— We developed an understanding of
the terms and conditions of the
convertible notes on issue which
included the requisite conditions to
be met for conversion;
— We examined legal documentation
evidencing the termination of the
convertible note arrangements,
including the right to recover
collateral shares previously issued
to the convertible note investors in-
advance of their (expected)
conversion; and
— We recomputed finance charges
imputed into the convertible notes,
including those arising from the
amortization of options issued to
the convertible note investors which
were valued in equity at their grant
date by applying the Black-Scholes
option pricing model.
Finally, we evaluated the adequacy of
the disclosures made by the Group in-
respect of the convertible notes.
Other Information
The directors are responsible for the other information. The other information comprises the information in the Group’s
annual report for the year ended 30 June 2020 but does not include the financial report and the auditor’s report thereon.
Our opinion on the financial report does not cover the other information and we do not express any form of assurance
conclusion thereon. In connection with our audit of the financial report, our responsibility is to read the other information and,
in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge
obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we
conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing
to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in
accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the
directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free
from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as a going
concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless
the directors either intend to liquidate the Group or to cease operations, or has no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable
51
Noxopharm Limited
Shareholder information
30 June 2020
assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian
Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error
and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of these financial statements is located at the Auditing and
Assurance Standards Board website at:
http://www.auasb.gov.au/auditors_responsibilities/ar1.pdf
This description forms part of our independent auditor’s report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in the directors’ report for the year ended 30 June 2020.
In our opinion, the Remuneration Report of Noxopharm Limited, for the year ended 30 June 2020, complies with section
300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration Report in
accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration
Report, based on our audit conducted in accordance with Australian Auditing Standards.
William Buck Audit (Vic) Pty Ltd
ABN 59 116 151 136
N.S. Benbow
Director
Melbourne, 28 August, 2020
52
Annual Report FY20
Shareholder Information
The shareholder information set out below was applicable as at 25 August 2020.
Distribution of equitable securities
Analysis of number of equitable security holdings by size of holding:
No. of holders
of NOX -
ordinary shares
% by
holder
number
Total
number of
shares
% by
security
number
No. of holders
NOXO - listed
options at $0.30
Exp 18 June 2023
1 to 1,000
1,001 to 5,000
5,001 to 10,000
244
725
444
8.94%
112,085
0.05%
26.58%
2,116,740
0.99%
16.28%
3,600,012
1.69%
10,001 to 100,000
1,047
38.38%
36,895,916
17.30%
100,001 and over
268
9.82%
170,515,827
79.96%
320
397
138
180
30
% by
holder
number
Total
number
of shares
% by
security
number
30.05%
141,974
0.70%
37.28%
950,362
4.74%
12.96%
994,566
4.88%
16.90%
5,529,537
27.36%
2.82%
12,648,353
62.32%
2,728
100%
213,240,580
100%
1065
100%
20,264,792
100%
NOXOA - listed
options at
$0.315 expiry
14 Aug 2023
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and over
-
1
7
46
36
90
% by
holder
number
Total
number
of shares
% by
security
number
-
1.11%
7.78%
-
4,904
45,186
-
0.02%
0.18%
51.11%
1,796,515
7.10%
40.00%
23,458,214
92.70%
100%
25,304,819
100%
No. of holders of
(Exercise price of
$1.08, expiry 27 Nov
2020). Vest 1 Dec 2018
% by
holder
number
Total
number
of shares
% by
security
number
-
-
-
7
-
7
-
-
-
-
-
-
100%
121,143
100%
-
-
100%
121,143
100%
No. of holders of
(Exercise price of
$1.08, expiry 27
Nov 2020). Vest 1
Dec 2019
% by
holder
number
Total
number of
shares
% by
security
number
No. of holders of
(Exercise price of
$1.08, expiry 27 Nov
2020). Vest 1 Dec2020
% by
holder
number
Total
number
of shares
% by
security
number
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and over
-
-
-
7
-
7
-
-
-
-
-
-
100%
121,143
100%
-
-
100%
121,143
100%
-
-
-
7
-
7
-
-
-
-
-
-
100%
121,143
100%
-
-
100%
121,143
100%
No. of holders of
(Exercise price of
$0.996271,
expiry 27 Nov
2020)
% by
holder
number
Total number
of shares
% by
security
number
No. of holders of
(Exercise price of
$1.199371, expiry 27
Nov 2020)
% by
holder
number
Total
number of
shares
% by
security
number
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and over
-
-
-
-
2
2
-
-
-
-
100%
100%
500,000
500,000
-
-
-
-
100%
100%
63
-
-
-
-
2
2
-
-
-
-
-
-
-
-
100%
100%
500,000
500,000
100%
100%
Noxopharm Limited (ASX:NOX)
No. of holders
of (Exercise
price of
$0.30, expiry
28 Feb 2021)
% by holder
number
Total number
of shares
No. of holders of
(Exercise price of
$0.62, expiry 27
Nov 2022), Vest
21 Nov 2019
% by security
number
% by holder
number
Total number
of shares
% by security
number
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and over
-
-
-
4
9
-
-
-
31%
69%
-
-
-
2,214
1.09%
200,218
98.91%
13
100%
202,432
100%
-
-
15
-
-
15
-
-
-
-
100%
288,681
100%
-
-
-
-
100%
288,681
100%
No. of holders
of (Exercise
price of $0.62,
expiry 27 Nov
2022), Vest 21
Nov 2020
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and over
-
-
15
-
-
15
% by
holder
number
Total
number of
shares
% by
security
number
-
-
-
-
100%
288,681
100%
-
-
-
-
100%
288,681
100%
No. of holders of
(Exercise price of
$0.62, expiry 27
Nov 2022), Vest
21 Nov 2020
-
-
15
-
-
15
% by
holder
number
Total number
of shares
% by
security
number
-
-
-
-
100%
288,681
100%
-
-
-
-
100%
288,681
100%
No. of holders
of (Exercise
price of
$0.58, expiry
23 Jul 2023)
% by
holder
number
Total
number of
shares
No. of holders of
(Exercise price of
$0.325 expiry
3 Dec 2023)
% by security
number
% by holder
number
Total number
of shares
% by security
number
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and over
-
-
-
-
2
2
-
-
-
-
-
-
-
-
100%
4,722,222
100%
100%
4,722,222
100%
-
-
-
-
2
2
-
-
-
-
-
-
-
-
100%
2,666,666
100%
100%
2,666,666
100%
No. of holders
of (Exercise
price of $0.58,
expiry 23 Jul
2023).
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and over
-
-
1
12
2
15
% by
holder
number
Total number of
shares
% by
security
number
-
-
7%
80%
13%
-
-
7,212
0.78%
667,708
71.79%
255208
27.44%
100%
930,128
100%
64
Annual Report FY20
The shareholder information set out below was applicable at 25 August 2020.
Equity security holders
Twenty largest quoted equity security holders
The names of the twenty largest security holders of quoted equity securities are listed below:
MILLIGENE PTY LTD (THE GE + PR KELLY FAM TRUST)
36,489,106
17.11
Ordinary shares
Number held
% of total shares
MRS ELEANORE GOODRIDGE
RGT CAPITAL FUND NO 5 (NOXO) PTY LTD
LINK TRADERS (AUST) PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
RHLC PTY LIMITED RHLC S/F A/C
HALCYON NOMINEES PTY LTD HALCYON SUPER FUND A/C
JAMBER INVESTMENTS PTY LTD THE AMBER SCHWARZ FAM A/C
BLACKCOURT (NSW) PTY LIMITED LAWSAM SUPER FUND A/C
MR FREDERICK BART
DRH SUPERANNUATION PTY LTD DRH SUPERFUND NO 2 A/C
KALE CAPITAL CORPORATION LIMITED
SUBURBAN HOLDINGS PTY LTD THE SUBURBAN SUPER FUND A/C
LINK TRADERS (AUST) PTY LTD
HELIUM MANAGEMENT PTY LTD HELIUM S/F A/C
UBS NOMINEES PTY LTD
MR LIZHONG YU
LAWSAM PTY LTD
BERNE NO 132 NOMINEES PTY LTD 331898 A/C
GRANDOR PTY LTD MARK SCOTT FAMILY P/F A/C
9,727,989
6,500,333
4,941,224
3,746,098
3,220,000
3,001,003
2,752,762
2,596,276
2,538,462
2,400,000
2,280,506
2,015,565
1,790,776
1,766,246
1,671,000
1,638,000
1,542,424
1,468,784
1,400,000
4.56
3.05
2.32
1.76
1.51
1.41
1.29
1.22
1.19
1.13
1.07
0.95
0.84
0.83
0.78
0.77
0.72
0.69
0.66
93,486,554
43.86%
65
Noxopharm Limited (ASX:NOX)
Listed Options (NOX)
MILLIGENE PTY LTD (THE GE + PR KELLY FAM TRUST)
LINK TRADERS (AUST) LTD
MR FREDERICK BART
JAMBER INVESTMENTS PTY LTD (THE AMBER SCHWARZ FAM A/C)
BLACKCOURT (NSW) PTY LIMITED (LAWSAM SUPER FUND A/C)
RGT CAPITAL FUND NO 5 (NOXO) PTY LTD
COSMOS NOMINEES PTY LTD (THE PLASTICS CENTRE S/F A/C)
MS JIN QIN WANG
SOLEVU PTY LTD (RT LIN SUPER FUND A/C)
LINK TRADERS (AUST) PTY LTD
MR NICHOLAS DERMOTT MCDONALD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
LAWSAM PTY LTD
UBS NOMINEES PTY LTD
DECANTE PTY LTD (J M EHRLICH SUPER FUND A/C)
MS ALISON CLAIRE JAFFEE
MR MATTHEW JAMES SACHR
BAHAR SUPER PTY LIMITED (BEACH FAMILY S/F A/C)
MKCTX JURACICH INVESTMENTS PTY LTD (MKCTX JURACICH FAMILY A/C)
SUBURBAN HOLDINGS PTY LIMITED (SUBURBAN SUPER FUND A/C)
Ordinary shares
Number held
% of total shares
1,820,513
1,647,075
846,154
834,254
754,691
754,627
699,324
363,090
360,266
352,925
350,000
340,066
337,919
284,741
276,585
274,410
268,351
261,733
208,500
191,959
8.98%
8.13%
4.18%
4.12%
3.72%
3.72%
3.45%
1.79%
1.78%
1.74%
1.73%
1.68%
1.67%
1.41%
1.36%
1.35%
1.32%
1.29%
1.03%
0.95%
11,227,183
55.40%
66
Listed Options (NOXOA)
CS THIRD NOMINEES PTY LIMITED (HSBC CUST NOM AU LTD 13 A/C)
CG NOMINEES (AUSTRALIA) PTY LTD
MRS ELEANORE GOODRIDGE
MR PHILLIP JOHN COULSON & MRS MARIA-LUISA COULSON (COULSON
FAMILY A/C)
LINK TRADERS (AUST) PTY LTD
JAMBER INVESTMENTS PTY LTD (AMBER SCHWARZ FAM ANZ ML A/C)
INVESTMENT ADMINISTRATION SERVICES P/L (KNIGHTMDA A/C)
LAWSAM PTY LTD
MGL CORP PTY LTD (LEVERAGED EQUITIES A/C)
BLUE LAKE PARTNERS PTY LTD
MANDATE 322 PTY LTD (DORSIA A/C)
GINGA PTY LTD (T G KLINGER SUPER FD A/C)
SOLEVU PTY LTD (RT LIN SUPER FUND A/C)
DR JOSHUA EHRLICH
MS JIN QIN WANG
MS ALISON CLAIRE JAFFEE
RAMSGATE HOLDINGS PTY LIMITED
WHIMPLECREEK PTY LTD (THE STAWELL FAMILY A/C)
CITICORP NOMINEES PTY LIMITED
PERSHING SECURITIES AUSTRALIA PTY LTD
MR DAVID ROSS HANNON
ONE DIGGER PTY LTD (DIGGER SUPERFUND A/C)
MS JIN QIN WANG
Annual Report FY20
Ordinary shares
Number held
% of total shares
6,410,256
5,000,000
1,282,053
1,163,771
914,879
914,879
897,436
666,667
512,820
448,718
384,615
356,355
333,333
315,938
296,410
256,412
256,411
256,410
256,410
256,410
217,438
188,368
171,795
25.33%
19.76%
5.07%
4.60%
3.62%
3.62%
3.55%
2.63%
2.03%
1.77%
1.52%
1.41%
1.32%
1.25%
1.17%
1.01%
1.01%
1.01%
1.01%
1.01%
0.86%
0.74%
0.68%
21,180,183
85.98%
67
Noxopharm Limited (ASX:NOX)
Holders of more than 20% of unquoted equity security holders (excluding Employee Incentive Schemes)
Unlisted Options (Exercise price $0.30, expiry 28 February 2021)
MILLIGENE PTY LTD (THE GE + PR KELLY FAM TRUST)
12,075,000
59.65%
Number held
% of total securities
Unlisted Options (Exercise price $0.30, expiry 28 February 2021)
CS THIRD NOMINEES PTY LIMITED (HSBC CUST NOM AU LTD 13 A/C)
6,410,256
25.33%
Unlisted Options (Exercise price $0.996271, expiry 27 November 2020)
SHANTI CAPITAL PTY LTD (PETER MARKS SUPER A/C)
HELIUM MANAGEMENT PTY LTD (HELIUM S/F A/C)
Unlisted Options (Exercise price $1.99371, expiry 27 November 2020)
SHANTI CAPITAL PTY LTD (PETER MARKS SUPER A/C)
HELIUM MANAGEMENT PTY LTD (HELIUM S/F A/C)
Unlisted Options (Exercise price $0.58, expiry 23 July 2023)
LIND GLOBAL MACRO FUND LP
L1 CAPITAL
Unlisted Options (Exercise price $0.325, expiry 3 December 2023)
LIND GLOBAL MACRO FUND LP
L1 CAPITAL
Substantial holders
Substantial holders in the company are set out below:
250,000
250,000
250,000
250,000
2,361,111
2,361,111
1,333,333
1,333,333
50.00%
50.00%
50.00%
50.00%
50.00%
50.00%
50.00%
50.00%
MILLIGENE PTY LTD (THE GE + PR KELLY FAM TRUST) and others
36,489,106
17.11
Ordinary shares
Number held
% of total shares
Voting rights
The voting rights attached to ordinary shares are set out below:
Ordinary shares
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each share shall
have one vote.
Options
All quoted and unquoted options do not carry any voting rights.
There are no other classes of equity securities.
ASX Listing Rule 3.13.1 and 14.3
The Company advises that the Annual General Meeting (AGM) of the Company is scheduled for Tuesday 17 November 2020 at 2.00pm
(AEDT). The location of the AGM is subject to COVID-19 restrictions, including regulatory requirements. Further details, including any
hybrid or virtual meeting arrangements, will be confirmed closer to the AGM.
Further to Listing Rule 3.13.1, Listing Rule 14.3, nominations for election of directors at the AGM must be received not less than 30
Business Days before the meeting, being no later than Tuesday 6 October 2020.
68
Annual Report FY20
69
Noxopharm Limited (ASX:NOX)
70