NUHEARA LIMITED
ABN 29 125 167 133
APPENDIX 4E
PRELIMINARY FINAL REPORT
1. Results for Announcement to the Market
Current reporting period:
Previous corresponding period:
Year ended 30 June 2021
Year ended 30 June 2020
Revenue from ordinary activities
Loss from ordinary activities after tax attributable to members
(from continuing operations)
Net loss for the period attributable to members
2. Dividend Information
Amount
$
12,623,653
% Change
up(+)/down(-)
+185%
(7,200,681)
(7,200,681)
+38%
+38%
The directors do not recommend the payment of a dividend in relation to the financial year ended 30 June 2021 (2020: Nil).
3. Net tangible assets per security
Net tangible asset backing per ordinary share
2021
$
0.004
2020
$
0.001
As at 30 June 2021 the number of shares on issue was 1,723,004,193 (30 June 2019: 1,359,811,585).
4. Details of joint venture entities
The Company does not have any interests in joint ventures.
5. Details of entities over which the company has control
Name of Entity
Nuheara IP Pty Ltd
Terrace Gold Pty Ltd
Nuheara, Inc
6. Audit
%
Interest
100%
80%
100%
Country of
Registration
Australia
Australia
USA
Date of gain
of control
25 February 2016
25 February 2016
21 June 2016
This report is based on financial statements which have been audited by Walker Wayland WA Audit Pty Ltd.
7. Commentary on the results
The Group achieved a net loss after tax of $7,200,681. This compared with a net loss after tax of $11,690,733 for the year ended 30
June 2020, an improvement of 38%. The net loss after tax result represented a loss of 0.46 cents per share, compared to a loss of
1.14 cents per share last year.
Net cash inflows of $2,845,645 were attributable to $10,945,806 received through capital raisings (net of share issue expenses),
offset by $210,000 paid for the buy back of convertible notes conversion notices, $3,925,291 in net operating outflows, $58,012 for
the purchase of plant and equipment and $3,906,858 for the purchase of intangible assets (capitalised development costs and
trademarks).
Revenue from ordinary activities for the year was $12,623,653. This compared with revenue of $4,436,581 for the year ended 30
June 2020, an increase of 185%.
At year-end, the Company held $7,276,355 in cash reserves (30 June 2020: $4,430,710).
Detailed commentary on the results for the year is contained in the annual financial report that accompanies this announcement.
NUHEARA LIMITED
ABN 29 125 167 133
ANNUAL REPORT
FOR THE YEAR ENDED 30 JUNE 2021
NUHEARA LIMITED
ABN 29 125 167 133
CORPORATE DIRECTORY
Principal Place of Business
190 Aberdeen Street
Northbridge WA 6003
Phone: +61 (8) 6555 9999
+61 (8) 6555 9998
Fax:
Share Registry
Computershare Investor Services Pty Limited
Level 11, 172 St Georges Terrace
Perth WA 6000
Phone: 1300 850 505 (within Australia)
+61 3 9415 4000 (outside Australia)
Auditors
Walker Wayland WA Audit Pty Ltd
Level 3, 1 Preston Street
Como WA 6152
Phone: +61 (8) 9364 9988
+61 (8) 9367 3444
Fax:
Directors
The Hon Cheryl Edwardes AM
Independent Non-Executive Chairman
Justin Miller
Managing Director/CEO
David Cannington
Executive Director/Chief Marketing Officer
Kathryn Giudes (formerly Foster)
Independent Non-Executive Director
David Buckingham
Independent Non-Executive Director
Company Secretaries
Susan Park – Company Secretary
Jean-Marie Rudd – Joint Company Secretary
ASX Code
NUH
Website and Email
Website: www.nuheara.com
Email: administration@nuheara.com
Registered Office
190 Aberdeen Street
Northbridge WA 6003
Phone: +61 (8) 6555 9999
+61 (8) 6555 9998
Fax:
NUHEARA LIMITED
ABN 29 125 167 133
TABLE OF CONTENTS
Chairman’s Letter .................................................................................................................................................................................... 1
Director’s Report ..................................................................................................................................................................................... 3
Remuneration Report .............................................................................................................................................................................. 9
Auditor’s Independence Declaration ..................................................................................................................................................... 17
Consolidated Statement of Profit or Loss and Other Comprehensive Income ...................................................................................... 18
Consolidated Statement of Financial Position ....................................................................................................................................... 19
Consolidated Statement of Changes in Equity ...................................................................................................................................... 20
Consolidated Statement of Cashflows ................................................................................................................................................... 21
Notes to the Consolidated Financial Statements .................................................................................................................................. 22
Directors’ Declaration ............................................................................................................................................................................ 44
Independent Auditor’s Report ............................................................................................................................................................... 45
ASX Additional Information ................................................................................................................................................................... 50
NUHEARA LIMITED
ABN 29 125 167 133
CHAIRMAN’S LETTER
Dear Shareholders
On behalf of the Board of Nuheara Limited, I am pleased to present you with the Company’s
2021 Annual Report.
The 2021 financial year was a successful year for Nuheara, successfully advancing the
execution of our growth strategy across multiple paths. Despite the global uncertainty
caused by COVID-19, we have been able to grow and sustain a financially strong and
responsible business guided by a clear purpose, allowing us to make a positive and
significant impact in people’s lives with our hearing technologies.
The 2021 financial year saw the Company deliver a record annual operating performance,
including new revenue records and triple-digit revenue growth in each of our product
categories. Our Direct-To-Consumer (DTC) sales channel underpinned the strong 2021
results, demonstrating the sales impact being generated from Nuheara’s increased global
awareness. Overall, the results firmly delivered on our long held strategy to scale the
Company’s sales across multiple global sales fronts, within both Product and Services sales
channels.
We continued to invest in research and development activities to support our long-term
growth plans, including certification under ISO 9001:2015 to provide context and validation to Nuheara’s aspiration to be the world’s
leader in smart hearing solutions. The accreditation places Nuheara in a solid position to apply our products, technology and
processes to FDA regulatory requirements in the United States.
The Company’s hearing technologies and industry position were validated by the long term manufacture and supply agreement with
USD$31 billion New York Stock Exchange Listed HP Inc (NYSE:HPQ) (HP). The Hardware Purchase Agreement has a contracted initial
term of three years (with automatic renewals for successive one-year periods) and manages the design, manufacture, and supply of
multiple products throughout the life of the contract.
The first Nuheara manufactured product supplied under the agreement is our HP Elite Wireless Earbud. Utilising Nuheara’s
Intellectual Property, these earbuds were designed as a premium compact audio product enhancing the user’s ability to be
productive, provide a personalised experience and be used comfortably in dynamic and ever-changing physical environments. The
Product also carries a Nuheara co-brand.
Our strong working relationship with HP has been critical in developing and manufacturing Elite Wireless Earbuds seamlessly. As
global leaders in our respective markets of PCs and Hearables, Nuheara anticipates the strengthening of its partnership with HP over
the next three years
In line with the Company’s growth strategy and substantial increase in revenue over the past 12 months, we further strengthened
our management team to support the next growth phase with the appointment of new key hires and the creation of an Innovation
Team. The newly established Innovation Team will further leverage global opportunities in the hearing healthcare market to enhance
the use and take-up of Nuheara’s products through methodical data analysis, deeper consumer insights and stronger digital
audiological processes.
Also during the year, Nuheara’s IQbuds2 MAX was placed on the cover of TIME magazine and named as one of the world’s Best
Inventions of 2020 that made the world better, smarter and even a bit more fun. The recognition from TIME put Nuheara at the
pinnacle of product innovation globally.
In December 2020, Nuheara successfully raised $11.5 million in gross proceeds from a strongly supported Share Placement. The
placement continued our careful management of the capital requirements of the Company as it rapidly grows.
Nuheara’s mission is to transform the way people hear by creating smart hearing solutions that are both accessible and affordable.
We are committed to this mission and will continue to invest in research and development initiatives, our people and other areas to
remain at the forefront of hearing industry innovation, provide better hearing experiences for consumers, and drive sustainable long-
term value for our shareholders.
The growth foundations of our business are now in place, and with multiple global market opportunities available, we are confident
that our efforts from both a technology and sales point of view will translate into further growth for Nuheara.
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NUHEARA LIMITED
ABN 29 125 167 133
CHAIRMAN’S LETTER
I would like to extend my thanks to the Company’s Co-founder, Managing Director and CEO Mr Justin Miller, my fellow Directors, our
management team and all of our other employees for their dedication and commitment that has made Nuheara into a successful
global company at the forefront of hearing innovation. On behalf of the Board, I would also like to thank shareholders for their
continued support during the period. I look forward to delivering further news on the Company’s continued success over the next 12
months.
Yours faithfully
The Hon Cheryl Edwardes AM
Non-Executive Chairman
2
NUHEARA LIMITED
ABN 29 125 167 133
DIRECTORS’ REPORT
The Directors have the pleasure in presenting their report, together with the financial statements of the Group, being the
Company and its controlled entities, for the year ended 30 June 2020.
1.
DIRECTORS
The Directors in office at any time during or since the end of the financial year are:
The Hon. Cheryl Edwardes AM LLM, BA, GAICD - Independent Non-Executive Chairman
Appointed: 1 January 2020
Mrs Edwardes has a strong legal and governance background with an extensive career spanning across government and
business. She is a Board member of the Foreign Investment Review Board (FIRB) and Chairman and non-executive Director
on a number of ASX-listed boards.
During her political career, Mrs Edwardes held positions as the first female Attorney General for Western Australia, Minister
for Environment and Labour Relations, and was the Member for Kingsley for nearly 17 years. Mrs Edwardes was awarded an
Order of Australia in the Queen’s Birthday Honours 2016 for “significant service to the people and Parliament of Western
Australia, to the law and to the environment, and through executive roles with business, education and community
organisations”. Cheryl was also named in the 100 Women of Influence 2016, inducted into Western Australian Women’s Hall
of Fame 2016 and was a finalist in the Women in Resources Award 2015.
During the past three years, Mrs Edwardes served as a director of the following listed Companies:
Vimy Resources Limited – appointed 26 May 2014*
Flinders Mines Limited - appointed 17 June 2019*
Auscann Group Holdings Ltd – appointed 19 January 2017, resigned 19 January 2020
* Denotes current directorship
Justin Miller – Co-founder, Managing Director and Chief Executive Officer
Appointed: 25 February 2016
Mr Miller is a serial entrepreneur who has developed a thorough knowledge of the global technology and innovation
marketplace during his 25-year executive career. Throughout the course of his career, Mr Miller has successfully founded and
managed the aggressive and profitable growth of technology, manufacturing and service-related companies. This includes
strategic acquisitions, capital raisings, research & development, product development & onshore/offshore manufacture,
significant staff growth and multi-million-dollar sales deals involving both direct & channel sales models.
Mr Miller founded ASX-listed IT services Company Empired Limited and most recently was the founder and CEO of industrial
hearing and communication company, Sensear Pty Ltd, where he was responsible for growing the global business from the
San Francisco bay area.
Mr Miller did not have any directorships in other listed companies during the past three years.
David Cannington B. Bus (Marketing) – Co-founder, Executive Director, and Chief Marketing Officer
Appointed: 25 February 2016
Mr Cannington has over 25 years' global sales and marketing experience. He has held senior positions in sales and marketing
for companies spanning consumer packaged goods (Cadbury Schweppes), advertising (McCann Erickson) data analytics
(Neochange) and hearing technology (Sensear Pty Ltd). He has advised many start-ups on go-to-market and growth strategies
and was the founding CEO of ANZA Technology Network, a leading cross-pacific technology entrepreneurs’ network. Mr
Cannington has been recognised as one of the most influential Australian technology executives in Silicon Valley and brings
a global perspective to technology commercialisation.
Mr Cannington did not have any directorships in other listed companies during the past three years.
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NUHEARA LIMITED
ABN 29 125 167 133
DIRECTORS’ REPORT
1.
DIRECTORS (continued)
Kathryn Giudes (formerly Foster) BSc, ASc, MAICD - Independent Non-Executive Director
Appointed: 12 February 2019
Mrs Giudes has a strong background in technology, sales and early stage start-up companies. Mrs Giudes has more than two
decades of experience designing, building and running large internet-based businesses. Prior to becoming a professional non-
executive director, Mrs Giudes was executive Senior Director of Xbox Games Marketplace as well as Microsoft Store online
where she managed the profit and loss and global expansion in over 200 geographies with annual revenue budgets in the low
billions of dollars. She has extensive technical and commercial experience in software and hardware solutions and advises
companies on strategy and technology. Mrs Giudes is currently the Managing Director of macroDATA Digital Solutions, a
green datacentre company in Australia.
Mrs Giudes is a non-executive director for Class Limited, Livehire Limited and for other non-listed companies in Australia.
Mrs Giudes holds a Bachelor of Science (BSc) in International Marketing from Oregon State University and Associate of Science
(ASc) - Computer Science and Information Systems from SCC Seattle, USA.
During the past three years, Ms Giudes served as a director of the following listed Companies:
Class Limited – appointed 1 July 2015, retiring October 2021*
Livehire Limited – appointed 1 July 2021*
* Denotes current directorship
David Buckingham Engineering Science B.Tech (Hons), ACA, ICAEW, GAICD - Independent Non-Executive Director
Appointed: 1 November 2019
Mr Buckingham has a diverse career which spans extensively across technology, growth, mergers and acquisitions and
disrupting entrenched industries by focusing on technology, service and the customer experience. His career began in the
United Kingdom with PricewaterhouseCoopers and he later moved into the telecommunications industry to which he
devoted much of his career. He has worked for Telewest Global as the Group Treasurer and Director of Financial Planning,
Virginmedia, as Finance Director Business Division and iiNet where he held the roles of Chief Financial Officer and Chief
Executive Officer between 2008 and 2015. In early 2016 he joined the ASX listed education provider Navitas Limited as Chief
Financial Officer. He subsequently became the Chief Executive Officer in 2017 until Navitas was acquired by a private equity
group in July 2019.
During the past three years, Mr Buckingham served as a director of the following listed Companies:
Navitas Limited – appointed 1 July 2018, resigned 5 July 2019
OpenLearning Limited – appointed 10 September 2020*
Pentanet Limited – appointed 10 December 2020*
Hiremii Limited – appointed 3 May 2021*
* Denotes current directorship
2.
COMPANY SECRETARIES
Susan Park B. Com, ACA, F Fin, GAICD, AGIA – Company Secretary
Appointed: 6 June 2016
Ms Park has over 20 years' experience in the corporate finance industry and is founder and Managing Director of consulting
firm Park Corporate Pty Ltd, which specialises in the provision of corporate governance and company secretarial advice to
ASX listed companies. Ms Park holds a Bachelor of Commerce degree from the University of Western Australia majoring in
accounting and finance, is a Member of Chartered Accountants Australia and New Zealand, a Fellow of the Financial Services
Institute of Australasia, a Member of the Governance Institute of Australia and is a Member of the Australian Institute of
Company Directors.
Jean-Marie Rudd B. Bus, ACA, GAICD – Chief Financial Officer and Joint Company Secretary
Appointed: 30 November 2016
Ms Rudd has over 25 years' experience in the corporate sector and professional services, including over 15 years as Chief
Financial Officer and Company Secretary in ASX listed companies. Ms Rudd holds a Bachelor of Business degree from Curtin
University majoring in accounting, is a Member of Chartered Accountants Australia and New Zealand and a Member of the
Australian Institute of Company Directors.
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NUHEARA LIMITED
ABN 29 125 167 133
DIRECTORS’ REPORT
3.
PRINCIPAL ACTIVITIES
The principal activity of the Group is the development and commercialisation of its proprietary hearing and wearables
technology platform.
4.
DIVIDENDS
No dividend has been declared or paid by the Group since the start of the financial year and the Directors do not recommend
a dividend in relation to the financial year ended 30 June 2021.
5.
OPERATING AND FINANCIAL REVIEW
Our business model and objectives
Nuheara is transforming the way people hear by developing personalised hearing device solutions that are multifunctional,
accessible and affordable. The Group is selling globally, via traditional retail and Direct-To-Consumer, to an underserviced
segment of the hearing market that fits between traditional headphones and hearing aids. Nuheara's advanced market
offering also includes government supply contracts, for fully subsidised products, to support mainstream mild-to-moderate
hearing challenges through to more complex hearing sensitivity disorders including Autism/APD.
Nuheara is headquartered in Perth, Australia.
Operating results
The Group achieved a net loss after tax of $7,200,681. This compared with a net loss after tax of $11,690,733 for the year
ended 30 June 2020, an improvement of 38%. The net loss after tax result represented a loss of 0.46 cents per share,
compared to a loss of 1.14 cents per share last year.
Net cash inflows of $2,845,645 were attributable to $10,945,806 received through capital raisings (net of share issue
expenses), offset by $210,000 paid for the buy back of convertible notes conversion notices, $3,925,291 in net operating
outflows, $58,013 for the purchase of plant and equipment and $3,906,858 expended on intangible assets (capitalised
development costs and trademarks).
Further discussion on the Group’s operations is provided below.
Review of Operations
Revenue and other income for the year was up 185% to $12,623,653 (2020: $4,436,581). At 30 June 2021 the Group held
$7,276,355 in cash reserves.
Capital Raisings
The Group successfully completed a capital raising in December 2020, raising $11,500,000 (before costs). Funds raised were
used to:
•
•
Support manufacturing in relation to the initial 3-year supply agreement of co-branded products with HP Inc; and
To accelerate direct-to-consumer sales and marketing, which had achieved record sales and collections.
Funding Agreement
On 24 January 2020, Nuheara executed an agreement for a 24-month $2.5 million convertible note (Funding Agreement) with
the Lind Global Macro Fund, LP, an entity managed by The Lind Partners (together “Lind”), a New York-based institutional
fund manager. The funding was provided as a secured convertible note with a 24-month term, the proceeds of which were
used to fund the mass production and marketing of the (at the time) recently released IQbuds2 MAX and working capital
requirements.
On 7 January 2021, the Company announced that it had closed out the Convertible Security Funding Agreement (Agreement)
with The Lind Partners (Lind). On the success of the Placement noted above, Nuheara issued a buy-back notice to Lind for the
remaining convertible note balance of $850,000. Under the terms of the Agreement, Lind elected to convert the buy-back
into shares at an issue price of $0.04 per share (the same issue price as the Placement), being 90% of the five lowest daily
VWAPs in the 20 trading days prior to the buy-back notice being served.
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NUHEARA LIMITED
ABN 29 125 167 133
DIRECTORS’ REPORT
6.
OPERATING AND FINANCIAL REVIEW (continued)
Performance indicators
Management and the Board monitor the Group’s overall performance, from the execution of its strategic plan through to the
performance of the Group against operating plans and financial budgets.
The Board, together with management have identified key performance indicators (KPI’s) that are used to monitor
performance. Directors receive the KPI’s for review prior to each monthly Board meeting allowing all Directors to actively
monitor the Group’s performance.
Shareholder returns
The Group’s return to shareholders is as follows:
Basic loss per share (cents per share)
Diluted loss per share (cents per share)
Review of Financial Condition
Liquidity and Capital Resources
2021
(0.46)
(0.45)
2020
(1.14)
(1.09)
The Statement of Cash Flows illustrates that cash used in operating activities amounted to $3,925,291 (2020: outflow of
$5,433,327). Net outflows of $3,964,870 used in investing activities comprised: $3,906,858 in development costs that were
capitalised as intangible assets, $58,012 as payment for plant and equipment. The net cash outflows from operating and
investing activities were funded by $10,945,806 cash received from the raising of funds from the issues of shares, net of share
raising costs and $210,000 paid for the buy back of convertible notes conversion notices.
The net tangible asset backing of the Group was 0.04 cents per share (2020: 0.01 cents per share).
Asset and Capital Structure
Debts:
Trade and other payables
Less: Cash and cash equivalents
Net cash
Total equity
Total capital employed
2021
$
2020
$
12,383,106
(7,276,355)
5,106,751
12,667,472
17,774,223
5,074,240
(4,430,710)
643,530
6,219,562
6,863,092
The level of gearing in the Group is within acceptable limits set by the Directors.
Share issues during the year
The Group issued 363,192,609 shares (2020: 377,601,293 shares) during the year:
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
10 July 2020 - 10,000,000 collateral shares purchased under Convertible Note funding agreement at $0.011
(shares issued in January 2020)
14 July 2020 - 10,000,000 collateral shares purchased under Convertible Note funding agreement at $0.011
(shares issued in January 2020)
5 August 2020 – shares issued by way of conversion under Convertible Note funding agreement at $0.023
21 August 2020 – shares issued on exercise of options at $0.025
24 August 2020 – shares issued by way of conversion under Convertible Note funding agreement at $0.035
31 August 2020 – shares issued on exercise of options at $0.025
1 October 2020 – shares issued on exercise of options at $0.025
21 October 2020 - shares issued by way of conversion under Convertible Note funding agreement at $0.043
2 November 2020 – shares issued on exercise of options at $0.025
20 November 2020 - shares issued by way of conversion under Convertible Note funding agreement at $0.037
1 December 2020 – shares issued on exercise of options at $0.025
2 December 2020 – shares issued by way of conversion under Convertible Note funding agreement at $0.037
6 January 2021 – shares issued on exercise of options at $0.025
6 January 2021 – shares issued by way of conversion under Convertible Note funding agreement at $0.040
7 January 2021 – shares issued by way of share placement at $0.040 each
3 May 2021 – shares issued on exercise of options at $0.025
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NUHEARA LIMITED
ABN 29 125 167 133
DIRECTORS’ REPORT
5.
OPERATING AND FINANCIAL REVIEW (continued)
Risk Management
The Group takes a proactive approach to risk management. The Board is responsible for ensuring that risks, and opportunities,
are identified on a timely basis and that the Group’s objectives and activities are aligned with the risks and opportunities
identified by the Board. The Group believes that it is crucial for all Board members to be part of this process, and as such the
Board has not established a separate risk management committee. Instead, sub-committees are convened as appropriate in
response to issues and risks identified by the Board as a whole and the sub-committee further examines the issue and reports
back to the Board.
The Board has several mechanisms in place to ensure that management’s objectives and activities are aligned with the risks
identified by the Board. These include the following:
•
•
Implementation of Board approved budget and Board monitoring of progress against budget, including the establishment
and monitoring of financial KPI’s; and
• The establishment of committees to report on specific business risks.
•
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
6.
Significant changes in the state of affairs during the year ended 30 June 2021 are as follows:
The Group maintains its vision of building an ecosystem of affordable and accessible software and hardware products for a
hearing market that is currently underserviced. To that end, the Group’s decision to concentrate on high-end high value
hearing products saw the ongoing success of its new third generation product, IQbuds2 MAX.
Sales of IQbuds2 MAX have been achieved almost exclusively via the Group’s Direct-To-Consumer (DTC) online sales platform,
further validating the sales model’s ability to reach and transact with global customers. The DTC model is proving to be a
viable alternative as traditional hearing clinics and retailers shutter around the world during the COVID-19 crisis. Nuheara
also continues to pursue other traditional sales channels in accordance with its business strategy, including partnerships and
distributor relationships in the healthcare sector to extend brand awareness and drive further sales.
The Group’s record sales and collections through the current financial year, supported by the Group’s rapidly growing DTC
business and expanding OEM partnerships, was further validated with the announcement of the signing of a 3-year
manufacture and supply agreement (Supply Agreement) with USD$31 billion valued New York Stock Exchange Listed, HP Inc
(NYSE: HPQ) (HP). This umbrella supply agreement is designed to manage the design, manufacture, and supply of multiple
products throughout the life of the contract.
The first Nuheara manufactured product to be supplied under the Supply Agreement is a HP branded true wireless earbud
with charging case – Elite Wireless Earbuds. Utilising Nuheara owned and developed IP, Elite Wireless Earbuds is designed as
a premium, compact audio earbud product that will enhance the user’s ability to be productive, provide a personalised
experience and can be used comfortably in dynamic and every-changing physical environments. The Product also carries a
Nuheara co-brand.
7.
LIKELY DEVELOPMENTS
Consistent with the Group’s business plan, Nuheara will continue to work towards the productisation and commercialisation
of its smart hearing products, including current offerings, IQbuds2 MAX, and IQstream TV plus the development of new
generation products.
8.
SIGNIFICANT EVENTS AFTER BALANCE DATE
There were no significant events after balance date.
9.
ENVIRONMENTAL REGULATION
The Group’s operations are not subject to any significant environmental, Commonwealth or State, regulations or laws.
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NUHEARA LIMITED
ABN 29 125 167 133
DIRECTORS’ REPORT
10.
SHARE OPTIONS
As at the date of this report, the Group has 67,338,038 options over ordinary shares. These options have been issued on the
following terms.
Number of Unlisted Options
1,000,000
2,500,000
24,264,706
3,750,000
27,323,332
2,000,000
2,000,000
4,500,000
TOTAL
67,338,038
Exercise Price
$0.09 each
$0.09 each
$0.05 each
$0.026 each
$0.025 each
$0.05 each
$0.10 each
$0.0435 each
Expiry Date
17 September 2021
17 April 2022
3 February 2024
4 June 2023
21 August 2023
21 August 2023
21 August 2023
2 March 2024
Option holders do not have any rights to participate in any issues of shares or other interests in the Group or any other entity.
This report, which forms part of the Directors’ Report, details the amount and nature of remuneration of each Key
Management Personnel (KMP) of the Group. The following people were identified KMP during the year:
Directors
Cheryl Edwardes
Justin Miller
David Cannington
Kathryn Giudes (formerly Foster)
David Buckingham
Executives
Jean-Marie Rudd
Independent Non-Executive Chairman
Managing Director/Chief Executive Officer
Executive Director/Chief Marketing Officer
Non-Executive Director
Non-Executive Director
Chief Financial Officer/Joint Company Secretary
There were no other changes to KMP after the reporting date and before the date the annual report was authorised for issue.
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NUHEARA LIMITED
ABN 29 125 167 133
DIRECTORS’ REPORT
11. REMUNERATION REPORT (AUDITED)
Remuneration policy
The remuneration policy of the Group has been designed to align KMP objectives with shareholder and business objectives
by providing a fixed remuneration component and offering specific long-term incentives based on key performance areas
affecting the consolidated group’s financial results. The Board believes the remuneration policy to be appropriate and
effective in its ability to attract and retain high-quality KMP to run and manage the consolidated group, as well as create goal
congruence between Directors, executives and shareholders.
The remuneration policy is to provide a fixed remuneration component, performance related bonus and a specific equity
related component. The Board believes that this remuneration policy is appropriate given the stage of development of the
Group and the activities which it undertakes and is appropriate in aligning executives’ objectives with shareholder and
business objectives.
The remuneration policy, in regard to settling terms and conditions for the Executive Directors and executives, has been
developed by the Board, taking into account market conditions and comparable salary levels for companies of similar size
and operating in similar sectors. The Board reviews the remuneration packages of all KMP on an annual basis.
The maximum remuneration of Non-Executive Directors is to be determined by Shareholders in general meeting in
accordance with the Constitution, the Corporations Act and the ASX Listing Rules, as applicable. At present the maximum
aggregate remuneration of Non-Executive Directors is $250,000 per annum.
The apportionment of Non-Executive Director Remuneration within that maximum will be made by the Board having regard
to the inputs and value to the Group of the respective contributions by each Non-Executive Director. Remuneration is not
linked to specific performance criteria.
The Board policy is to remunerate Non-Executive Directors at market rates for comparable companies for time, commitment
and responsibilities. The Board determines payment to the Non-Executive Directors and reviews their remuneration on an
individual basis, based on market practices, duties and accountability. Independent external advice is sought when required.
Remuneration is not linked to the performance of the Group.
There are no service or performance criteria on the options granted to Directors as, given the speculative nature of the
Group’s activities and the small management team responsible for its running, it is considered the performance of the
Directors and the performance and value of the Group are closely related. The Board has a policy of granting options to KMP
with exercise prices above the respective share price at the time that the options were agreed to be granted. As such, options
granted to KMP will generally only be of benefit if the KMP’s perform to the level whereby the value of the Group increases
sufficiently to warrant exercising the options granted. Given the stage of development of the Group and the high-risk nature
of its activities, the Board considers that the prospects of the Group and resulting impact on shareholder wealth are largely
linked to the success of this approach, rather than by referring to current or prior year earnings.
Australian-based executives receive a superannuation guarantee contribution required by the Government, currently 9.5%
and do not receive any other retirement benefit. Executives may also choose to sacrifice part of their salary to increase
contributions towards superannuation. Upon retirement, KMP are paid employee benefit entitlements accrued to the date
of retirement.
All remuneration paid to KMP is valued at the cost to the Group and expensed.
KMP are also entitled and encouraged to participate in the employee option arrangements to align Directors’ interests with
shareholders’ interests. Options granted under the arrangement do not carry dividend or voting rights. Each option is entitled
to be converted into one ordinary share once the interim or final financial report has been disclosed to the public and is
measured using the Black-Scholes methodology.
KMP or closely related parties of KMP are prohibited from entering into hedge arrangements that would have the effect of
limiting the risk exposure relating to their remuneration. In addition, the Board’s remuneration policy prohibits Directors and
KMP from using the Group’s shares as collateral in any financial transaction, including margin loan arrangements.
9
NUHEARA LIMITED
ABN 29 125 167 133
DIRECTORS’ REPORT
11. REMUNERATION REPORT (AUDITED) (continued)
Performance-based remuneration policy
Key performance indicators (KPI’s) are set annually, with a certain level of consultation with KMP. The measures are
specifically tailored to the area everyone is involved in and has a level of control over. The KPI’s target areas the Board believes
hold greater potential for group expansion and profit, covering financial and non-financial, as well as short and long-term
goals. The level set for each KPI is based on budgeted figures for the Group and respective industry standards.
Performance in relation to the KPI’s is assessed annually, with bonuses being awarded depending on the number and deemed
difficulty of the KPI’s achieved. Following the assessment, the KPI’s are reviewed by the Board considering the desired and
actual outcomes, and their efficiency is assessed in relation to the Group’s goals and shareholder wealth, before the KPI’s are
set for the following year.
Relationship between remuneration policy and Group performance
The remuneration policy has been tailored to increase goal congruence between shareholders, Directors and executives. Two
methods have been applied to achieve this aim, the first being a performance-based bonus based on KPI’s, and the second
being the issue of options to encourage the alignment of personal and shareholder interests.
The Group seeks to emphasise reward incentives for results and continued commitment to the Group through the provision
of various cash bonus reward schemes, specifically the incorporation of incentive payments based on the achievement of
financial targets, ratios, and continued employment with the Group.
10
11. REMUNERATION REPORT (AUDITED) (continued)
Details of remuneration provided to Directors and executives during the year are as follows:
NUHEARA LIMITED
ABN 29 125 167 133
DIRECTORS’ REPORT
Short-Term Employee Benefits
Salary & Allowances
$
Cash Bonus
$
Post-Employment Benefits
Superannuation
$
Share-Based Payments
Shares
$
Options
$
Cheryl Edwardes
Justin Miller
David Cannington
Kathryn Giudes (formerly Foster)
David Buckingham
Jean-Marie Rudd
TOTAL
TOTAL
2021
2020(1)
2021
2020(1)
2021
2020(1)
2021
2020(1)
2021
2020(1)
2021
2020(1)
2021
2020(1)
75,000
28,125
407,200
357,900
344,929
277,454
65,000
56,875
50,000
27,083
267,400
236,675
1,209,529
984,112
-
-
-
-
-
-
-
-
-
-
-
-
-
-
7,125
2,672
38,684
33,849
29,798
26,073
6,175
5,403
4,750
2,573
25,175
22,028
111,707
92,598
-
-
-
-
-
-
-
-
-
-
-
-
-
-
72,100
-
25,200
-
25,200
-
-
-
72,100
-
86,100
-
280,700
-
(1) Senior executive and Board remuneration was reduced by 50% for the period 1 April 2020 to 30 June 2020 in response to the onset of the COVID-19 crisis.
Total
$
154,225
30,797
471,084
391,749
399,927
303,527
71,175
62,278
126,850
29,656
378,675
258,703
1,601,936
1,076,710
11
NUHEARA LIMITED
ABN 29 125 167 133
DIRECTORS’ REPORT
11. REMUNERATION REPORT (AUDITED) (continued)
Services Agreements
Justin Miller – Co-founder, Managing Director and Chief Executive Officer
Mr Miller has been engaged as an Executive Director of the Group pursuant to an employment and services agreement
between the Group and Mr Miller (Miller Agreement).
The total annual remuneration payable to Mr Miller under the Miller Agreement is a salary of $407,200 (2020: $407,200) per
annum (exclusive of superannuation). Mr Miller will also be entitled to participate in short-term cash incentives of up to 20%
(2020: 40%) of the base package.
The Miller Agreement commenced on 2 March 2016 and employment under the Miller Agreement will continue until
terminated in accordance with the Miller Agreement (Term). During the Term, the Miller Agreement may be terminated by
the Group at any time:
• by six months' written notice to Mr Miller, at which time the Group will immediately pay Mr Miller 6 months’ base salary
in lieu;
• by three written months' notice to Mr Miller in cases of prolonged illness or incapacity (mental or physical); or
• by summary notice in circumstances where Mr Miller neglects to perform his duties, or comply with reasonable or proper
direction, or engages in serious misconduct.
Otherwise, the Miller Agreement may be terminated by Mr Miller at any time for any reason by giving not less than three
months' notice in writing to the Group. Mr Miller may also terminate the Miller Agreement immediately by giving notice if at
any time the Group is in breach of a material term of the Miller Agreement.
In the event of a change of control, Mr Miller will receive a bonus payment comprising of a lump sum gross payment of 12
months’ base salary.
Mr Miller is also subject to restrictions in relation to the use of confidential information during and after his employment with
the Group ceases, being directly or indirectly involved in a competing business during the continuance of his employment
with the Group, and for a period of 12 months after his employment with the Group ceases, on terms which are otherwise
considered standard for agreements of this nature.
The Miller Agreement contains additional provisions considered standard for agreements of this nature.
David Cannington – Co-founder, Executive Director and Chief Marketing Officer
Mr Cannington has been engaged as an Executive Director of the Group pursuant to an employment and services agreement
between the Group and Mr Cannington (Cannington Agreement).
The total annual remuneration payable to Mr Cannington under the Cannington Agreement is a salary of $313,662 (2019:
$313,662) per annum (exclusive of superannuation) and a telecommunications allowance of $200 per month (2020: $200 per
month). Mr Cannington will also be entitled to participate in short-term cash incentives of up to 20% (2020: nil) of the base
package.
The Cannington Agreement commenced on 2 March 2016 and employment under the Cannington Agreement will continue
until terminated in accordance with the Cannington Agreement (Term). During the Term, the Cannington Agreement may
be terminated by the Group at any time:
• by six months' written notice to Mr Cannington, at which time the Group will immediately pay Mr Cannington 6 months’
base salary in lieu;
• by three months' written notice to Mr Cannington in cases of prolonged illness or incapacity (mental or physical); or
• by summary notice in circumstances where Mr Cannington neglects to perform his duties or comply with reasonable or
proper direction or engages in serious misconduct.
Otherwise, the Cannington Agreement may be terminated by Mr Cannington at any time for any reason by giving not less
than three months' notice in writing to the Group. Mr Cannington may also terminate the Cannington Agreement immediately
by giving notice if at any time the Group is in breach of a material term of the Cannington Agreement.
In the event of a change of control, Mr Cannington will receive a bonus payment comprising of a lump sum gross payment of
12 months’ base salary.
12
NUHEARA LIMITED
ABN 29 125 167 133
DIRECTORS’ REPORT
13. REMUNERATION REPORT (AUDITED) (continued)
Services Agreements (continued)
David Cannington – Co-founder, Executive Director and Chief Marketing Officer (continued)
Mr Cannington is also subject to restrictions in relation to the use of confidential information during and after his employment
with the Group ceases, being directly or indirectly involved in a competing business during the continuance of his employment
with the Group, and for a period of 12 months after his employment with the Group ceases, on terms which are otherwise
considered standard for agreements of this nature.
The Cannington Agreement contains additional provisions considered standard for agreements of this nature.
Jean-Marie Rudd – Chief Financial Officer and Joint Company Secretary
Ms Jean-Marie Rudd has been engaged as a Chief Financial Officer/Joint Company Secretary of the Group pursuant to an
employment and services agreement between the Group and Ms Rudd (Rudd Agreement).
The total annual remuneration payable to Ms Rudd under the Rudd Agreement is a salary of $265,000 per annum (exclusive
of superannuation) (2020: $265,000) and a telecommunications allowance of $200 per month (2020: $200 per month). Ms
Rudd will also be entitled to participate in short-term cash incentives of up to 20% (2020: nil) of the base package.
The Rudd Agreement commenced on 16 August 2016 and employment under the Rudd Agreement will continue until
terminated in accordance with the Rudd Agreement (Term). During the Term, the Rudd Agreement may be terminated by
the Group at any time:
• by three months' written notice to Ms Rudd, at which time the Group will immediately pay Ms Rudd 3 months’ base salary
in lieu;
• by one months' written notice to Ms Rudd in cases of prolonged illness or incapacity (mental or physical); or
• by summary notice in circumstances where Ms Rudd neglects to perform her duties or comply with reasonable or proper
direction or engages in serious misconduct.
Otherwise, the Rudd Agreement may be terminated by Ms Rudd at any time for any reason by giving not less than three
months' notice in writing to the Group. Ms Rudd may also terminate the Rudd Agreement immediately by giving notice if at
any time the Group is in breach of a material term of the Rudd Agreement.
In the event of a change of control, Ms Rudd will receive a bonus payment comprising of a lump sum gross payment of 6
months’ base salary.
Ms Rudd is also subject to restrictions in relation to the use of confidential information during and after her employment with
the Group ceases, being directly or indirectly involved in a competing business during the continuance of her employment
with the Group, and for a period of six months after her employment with the Group ceases, on terms which are otherwise
considered standard for agreements of this nature.
The Rudd Agreement contains additional provisions considered standard for agreements of this nature.
13
NUHEARA LIMITED
ABN 29 125 167 133
DIRECTORS’ REPORT
14. REMUNERATION REPORT (AUDITED) (continued)
KMP shareholdings
The number of ordinary shares the Group held by KMP during the financial year is as follows:
Ordinary Shares
Cheryl Edwardes
Justin Miller(1)
David Cannington
Kathryn Giudes(2)
(formerly Foster)
David Buckingham(3)
Jean-Marie Rudd(4)
Total
Opening balance
1 July 2020
or balance on
appointment
554,447
69,025,209
69,025,209
640,000
588,235
311,396
140,144,496
Issued
during
the year
Acquired
during
the year
Closing Balance
30 June 2021
or resignation date
554,447
69,025,209
69,025,209
-
-
-
640,254
1,000,000
-
1,640,254
1,280,254
1,588,235
311,396
141,784,750
-
-
-
-
-
-
-
Notes:
(1) 68,142,857 shares are held by Wasagi Corporation Pty Ltd as trustee for the Wasagi Family Trust and 882,352 shares are
held by Mr Justin Miller and Mrs Kym Miller as trustee for the BBFC Super Fund, both of which Justin Miller is a beneficiary.
(2) 640,000 shares are held by Aylesham Pty Ltd as trustee for the Norval Court Super Fund of which Kathryn Giudes is a
beneficiary and 640,254 shares are held by Wayne Giudes, Mrs Giudes’ husband.
(3) 1,588,235 shares are held by The Buckingham Family Trust of which David Buckingham is a beneficiary.
(4) 311,396 shares are held by the Rudd Family Trust of which Jean-Marie Rudd is a beneficiary.
The relevant beneficial interest of KMP in the options over ordinary share capital of the Group is as follows:
Options
Cheryl Edwardes
Justin Miller(1)
David Cannington
David Buckingham
Jean-Marie Rudd(2)
Total
Opening
balance
1 July 2020
or balance on
appointment
-
-
-
-
-
-
Issued
during
the year
3,000,000
3,000,000
3,000,000
3,000,000
3,000,000
15,000,000
Exercised
during
the year
Expired
during
the year
(1,000,000)
-
(1,000,000)
Closing Balance
30 June 2021
or resignation date
3,000,000
3,000,000
3,000,000
2,000,000
3,000,000
14,000,000
-
-
-
-
-
-
Notes:
(1) 3,000,000 options are held by Wasagi Corporation Pty Ltd as trustee for the Wasagi Family trust of which Justin Miller is
a beneficiary.
(2) 3,000,000 options are held by the Rudd Family Trust of which Jean-Marie Rudd is a beneficiary.
Options granted
There were 15,000,000 options issued to KMP for the year ended 30 June 2021 (2020: nil).
Shares issued
During the 2021 year, no shares were issued as remuneration (2020: nil).
Other transactions with KMP and/or their related parties
During the year there were no other transactions with KMP and/or related parties.
END OF REMUNERATION REPORT
14
NUHEARA LIMITED
ABN 29 125 167 133
DIRECTORS’ REPORT
15. DIRECTORS’ MEETINGS
The following table sets out the number of meetings of the Group’s Directors held during the year ended 30 June 2021 and
the number of meetings attended by each Director:
BOARD
AUDIT & RISK
MANAGEMENT
COMMITTEE
NOMINATION &
REMUNERATION
COMMITTEE
Number
Eligible
to
Attend
14
14
14
14
Number
Attended
3
-
-
3
Number
Eligible
to
Attend
3
-
-
3
Number
Attended
14
14
14
14
Number
Attended
2
-
-
2
Number
Eligible
to Attend
2
-
-
2
14
14
3
3
2
2
Director
Cheryl Edwardes
Justin Miller
David Cannington
Kathryn Giudes
(formerly Foster)
David Buckingham
16.
INDEMNIFYING OFFICERS OR AUDITOR
The Group has paid premiums to insure all Directors against liabilities for costs and expenses incurred by them in defending
legal proceedings arising from their conduct while acting in the capacity of Director of the Group, other than conduct involving
a wilful breach of duty in relation to the Group. The premiums in total amounted to $111,000.
17. PROCEEDINGS ON BEHALF OF THE GROUP
No person has applied for leave of court to bring proceedings on behalf of the Group or intervene in any proceedings to which
the Group is a party, for the purpose of taking responsibility on behalf of the Group for all or any part of those proceedings.
The Group was not a party to any such proceedings during the year.
18. AUDITOR
Walker Wayland WA Audit Pty Ltd has been appointed auditor of the Group in accordance with section 327 of the
Corporations Act 2001. The Directors are of the opinion that the auditor has procedures in place to ensure there will be no
deterioration of audit quality as a result of the extension, and the extension will not give rise to a conflict of interest situation.
19. NON-AUDIT SERVICES
The Board of Directors is satisfied that there was no provision of non-audit services during the year.
20. AUDITOR’S INDEPENDENCE DECLARATION
The auditor’s independence declaration for the year ended 30 June 2021 has been received and can be found on page 17 of
the financial report.
15
NUHEARA LIMITED
ABN 29 125 167 133
DIRECTORS’ REPORT
Made and signed in accordance with a resolution of the Directors.
Justin Miller
Co-founder, Managing Director and Chief Executive Officer
Perth, 17 August 2021
16
NUHEARA LIMITED
ABN 29 125 167 133
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2021
Revenue
Cost of revenue
Gross profit
Other income
Salaries and employee benefits
Marketing and promotional
Product development and technology related expenses
General and administrative
Share based payments
Total expenses
Loss before tax from continuing operations
Income tax benefit
Net loss after tax from continuing operations
Total comprehensive loss attributable to:
Equity holders
Total comprehensive loss
Earnings per share
Basic loss per share (cents per share)
Diluted loss per share (cents per share)
NOTES
3
3
4
2
2021
$
10,741,421
(4,150,989)
6,590,432
1,882,232
(3,488,590)
(4,467,867)
(4,609,763)
(3,003,595)
(103,530)
2020
$
1,739,535
(1,691,789)
47,746
2,697,046
(5,231,511)
(3,658,232)
(3,681,092)
(2,618,684)
753,994
(13,791,113)
(11,738,479)
(7,200,681)
(11,690,733)
-
(7,200,681)
-
(11,690,733)
(7,200,681)
(7,200,681)
(11,690,733)
(11,690,733)
20
20
(0.46)
(0.45)
(1.14)
(1.09)
The accompanying notes form part of these consolidated financial statements.
18
NUHEARA LIMITED
ABN 29 125 167 133
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2021
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Inventory
Disposal group – mining tenements held for sale
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Plant and equipment
Right of use asset
Other assets
Intangible assets
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Lease liabilities
Provisions
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Financial liabilities
Provisions
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Share option reserve
Foreign currency translation reserve
Accumulated losses
TOTAL EQUITY
NOTES
27
5
6
7
8
9
10
11
12
12
2021
$
2020
$
7,276,355
1,620,729
1,099,077
-
9,996,161
229,996
-
1
5,046,647
5,276,644
4,430,710
1,566,874
411,604
153,544
6,562,732
387,916
27,275
5,063
4,879,857
5,300,111
15,272,805
11,862,843
1,573,666
-
940,997
2,514,663
-
90,670
90,670
2,619,278
27,271
438,266
3,084,815
2,508,843
49,623
2,558,466
2,605,333
5,643,281
12,667,472
6,219,562
59,841,737
759,803
(130,356)
(47,803,712)
12,667,472
46,295,932
656,273
25,518
(40,758,161)
6,219,562
The accompanying notes form part of these consolidated financial statements.
19
NUHEARA LIMITED
ABN 29 125 167 133
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2021
Balance at 1 July 2019
Comprehensive income
Loss for the year
Total comprehensive loss for the year
Transactions with owners in their
capacity as owners
Shares issued during the year
Share issue costs
Options
year
Movement in valuation of options
issued in prior periods
Foreign currency translation
movements
Balance at 30 June 2020
issued/forfeited during the
Comprehensive income
Loss for the year
Total comprehensive loss for the year
Transactions with owners in their
capacity as owners
Shares issued during the year
Share issue costs
Options issued/forfeited during the
year
Movement in valuation of options
issued in prior periods
Foreign currency translation
movements
Balance at 30 June 2021
8,706,724
(736,319)
-
-
-
14,409,083
(863,278)
-
-
-
Share
Option
Reserve
$
1,410,267
Foreign
Currency
Translation
Reserve
$
(6,478)
Ordinary
Shares
$
Accumulated
Losses
$
38,325,527
(29,031,432)
-
-
(11,690,733)
(11,690,733)
-
-
-
-
(968,841)
214,847
Total
$
10,697,884
(11,690,733)
(11,690,733)
8,706,724
(736,319)
(968,841)
214,847
(4,000)
6,219,562
-
-
-
-
-
-
31,996
25,518
(35,996)
-
46,295,932
(40,758,161)
656,273
-
-
(7,200,681)
(7,200,681)
-
-
-
(33,259)
136,789
-
-
-
-
-
(7,200,681)
(7,200,681)
14,409,083
(863,278)
(33,259)
136,789
155,130
-
(155,874)
(744)
59,841,737
(47,803,712)
759,803
(130,356)
12,667,472
Balance at 1 July 2020
46,295,932
(40,758,161)
656,273
25,518
6,219,562
-
-
-
-
-
-
-
-
The accompanying notes form part of these consolidated financial statements.
20
NUHEARA LIMITED
ABN 29 125 167 133
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2021
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers
Interest received
Grants and rebates received
Proceeds from the sale of assets held for sale
Payments to suppliers and employees
Interest and other costs of finance paid
NET CASH FLOWS USED IN OPERATING ACTIVITIES
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for plant and equipment
Payment for the acquisition of intangibles
NET CASH FLOWS USED IN INVESTING ACTIVITIES
CASH FLOWS FROM FINANCING ACTIVITES
Proceeds from borrowings (net of transaction costs)
Repayment of borrowings
Proceeds from share and option issues
Share raising costs
NET CASH FLOWS FROM FINANCING ACTIVITIES
NET INCREASE IN CASH AND CASH EQUIVALENTS HELD
Cash and cash equivalent at beginning of the financial year
CASH AND CASH EQUIVALENTS AT THE END OF THE FINANCIAL YEAR
NOTES
2021
$
2020
$
8,845,545
8,579
1,968,322
143,595
(14,891,332)
-
(3,925,291)
3,379,102
69,371
2,076,745
517,668
(11,472,808)
(3,405)
(5,433,327)
27
(58,012)
(3,906,858)
(3,964,870)
(22,709)
(3,511,218)
(3,533,927)
-
(210,000)
11,809,083
(863,277)
10,735,806
2,845,645
4,430,710
7,276,355
2,407,480
-
8,506,724
(736,319)
10,177,885
1,210,631
3,220,079
4,430,710
The accompanying notes form part of these consolidated financial statements.
21
NUHEARA LIMITED
ABN 29 125 167 133
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
It is important to read the following definitions in order to assist with understanding this report.
For the purposes of this report:
Nuheara IP Pty Ltd or Company refers to the Company purchased by Nuheara Limited on 25 February 2016. As required by
Australian Accounting Standard AASB 3: Business Combinations, Nuheara Limited is deemed to have been acquired by
Nuheara IP Pty Ltd as at 25 February 2016 under the reverse acquisition rules. While the financial statements are headed
with the legal acquirer, Nuheara Limited, the consolidated financial statements presented are a continuation of those of
the accounting acquirer, Nuheara IP Pty Ltd.
Nuheara Limited or Listed Entity means only the legal entity of Nuheara Limited, which is listed on the Australian Securities
Exchange (ASX: NUH). Nuheara Limited is the legal parent of Nuheara IP Pty Ltd although Nuheara IP Pty Ltd has been
treated as the acquirer for accounting purposes in the consolidated financial statements.
Wild Acre Metals Limited (ASX: WAC) means Nuheara Limited and all its controlled entities prior to the purchase of Nuheara
IP Pty Ltd. On 25 February 2016, the Company’s name was changed from Wild Acre Metals Limited to Nuheara Limited and
the ASX code was subsequently changed from WAC to NUH.
The financial report for Nuheara Limited for the year ended 30 June 2020 was authorised for issue in accordance with a
resolution by the Board of Directors.
Nuheara Limited is incorporated in Australia and is a listed public Company whose shares are publicly traded on the
Australian Securities Exchange (ASX). Its registered office and principal place of business is located at 190 Aberdeen Street,
Northbridge, Western Australia.
1.
(a)
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
Basis of preparation
These general-purpose consolidated financial statements have been prepared in accordance with Australian Accounting
Standards, interpretations of the Australian Accounting Standards Board (AASB), International Financial Reporting
Standards (IFRS) as issued by the International Accounting Standards Board, and the Corporations Act 2001. The Group is
a for-profit entity for financial reporting purposes under the Australian Accounting Standards.
Material accounting policies adopted in the preparation of these consolidated financial statements are presented below
and have been consistently applied unless otherwise stated.
Reporting Basis and Conventions
Except for cash flow information, the consolidated financial statements have been prepared on an accruals basis and are
based on historical costs, modified where applicable, by the measurement of fair value of selected non-current assets,
financial assets and financial liabilities.
Critical accounting estimates
The preparation of consolidated financial statements in conformity with IFRS requires the use of certain critical accounting
estimates. It also requires management to exercise its judgment in the process of applying the Group’s accounting policies.
The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant
to the consolidated financial statements are disclosed in Note 17.
22
NUHEARA LIMITED
ABN 29 125 167 133
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1.
(a)
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Basis of preparation (continued)
New and Amended Accounting Policies Adopted by the Group (continued)
Accounting Standards for Application in Future Periods
The AASB has issued a number of new and amended Accounting Standards that have mandatory application dates for future
reporting periods, some of which are relevant to the Group. The directors have decided not to early-adopt any of the new
and amended pronouncements.
(b)
Business combinations
A business combination is accounted for by applying the acquisition method, unless it is a combination involving entities or
businesses under common control. The business combination will be accounted for from the date that control is attained,
whereby the fair value of the identifiable assets acquired, and liabilities assumed (including contingent liabilities) is
recognised (subject to certain limited exemptions).
When measuring the consideration transferred in the business combination, any asset or liability resulting from a
contingent consideration arrangement is also included. Subsequent to initial recognition, contingent consideration
classified as equity is not remeasured and its subsequent settlement is accounted for within equity. Contingent
consideration classified as an asset or liability is remeasured in each reporting period to fair value, recognising any change
to fair value in profit or loss, unless the change in value can be identified as existing at acquisition date.
All transaction costs incurred in relation to business combinations are recognised as expenses in profit or loss when
incurred.
The acquisition of a business may result in the recognition of goodwill or a gain from a bargain purchase.
(c)
Employee benefits
Provision is made for the Group’s liability for employee benefits arising from services rendered by employees to balance
date. Employee benefits that are expected to be settled within one year have been measured at the amounts expected to
be paid when the liability is settled. Employee benefits payable later than one year have been measured at the present
value of the estimated future cash outflows to be made for those benefits. Those cash flows are discounted using market
yields on national government bonds with terms to maturity that match the expected timing of cash flows.
(d)
Impairment of assets
At the end of each reporting period, the Group assesses whether there is any indication that an asset may be impaired. The
assessment will include the consideration of external and internal sources of information including dividends received from
subsidiaries, associates or jointly controlled entities deemed to be out of pre-acquisition profits. If such an indication exists,
an impairment test is carried out on the asset by comparing the recoverable amount of the asset, being the higher of the
asset’s fair value less costs to sell and value in use, to the asset’s carrying amount.
Any excess of the asset’s carrying amount over its recoverable amount is recognised immediately in profit or loss, unless
the asset is carried at a revalued amount in accordance with another Standard (e.g. in accordance with the revaluation
model in AASB 116: Property, Plant and Equipment). Any impairment loss of a revalued asset is treated as a revaluation
decrease in accordance with that other Standard.
Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable
amount of the cash-generating unit to which the asset belongs. Impairment testing is performed annually for goodwill,
intangible assets with indefinite lives and intangible assets not yet available for use.
23
NUHEARA LIMITED
ABN 29 125 167 133
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(e)
Intangible assets
Research and development
Research phase
No intangible asset arising from research (or from the research phase of an internal project) is recognised. Expenditure on
research (or on the research phase of an internal project) is recognised as an expense when incurred.
Development phase
An intangible asset arising from development (or from the development of an internal project) is recognised if, and only if,
all the following have been demonstrated:
the technical feasibility of completing the intangible asset so that it will be available for use or sale;
the intention to complete the intangible asset and use or sell it;
the ability to use or sell the intangible asset;
•
•
•
• how the intangible asset will generate probable future economic benefits;
•
the availability of adequate technical, financial, and other resources to complete the development and to use or sell
the intangible asset; and
the ability to measure reliably the expenditure attributable to the intangible asset during its development.
•
Development costs include costs directly attributable to the development activities. Development costs not capitalised are
recognised as an expense when incurred.
Following initial recognition, the Group will adopt the cost model. As a result, any development costs carried forward will
be carried forward at its cost less any accumulated amortization and any accumulated impairment losses.
Capitalised development costs have a finite useful life and are amortised on a straight-line basis over 2.5 years.
Patents and trademarks
Patents and Trademarks are recognised at cost of acquisition. They have a finite life and are carried at cost less any
accumulated amortisation and any impairment losses.
Patents and trademarks are amortised on a straight-line basis over 10 years.
(f)
Cash and cash equivalents
Cash and cash equivalents include cash on hand and deposits held at call with financial institutions, which are readily
convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
(g)
Financial instruments
Initial recognition and measurement
Financial assets and financial liabilities are recognised when the group becomes a party to the contractual provisions to the
instrument. For financial assets, this is equivalent to the date that the Group commits itself to either the purchase or sale
of the asset (i.e. trade date accounting is adopted).
Financial instruments are initially measured at fair value plus transaction costs, except where the instrument is classified at
fair value through the Consolidated Statement of Profit or Loss, in which case transaction costs are expensed to profit or
loss immediately.
24
NUHEARA LIMITED
ABN 29 125 167 133
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1.
(g)
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Financial instruments (continued)
Classification and subsequent measurement
Financial instruments are subsequently measured at fair value or amortised cost using the effective interest method, or
cost. Amortised cost is calculated as the amount at which the financial asset or financial liability is measured at initial
recognition less principal repayments and any reduction for impairment and adjusted for any cumulative amortisation of
the difference between that initial amount and the maturity amount calculated using the effective interest method.
The effective interest method is used to allocate interest income or interest expense over the relevant period and is
equivalent to the rate that discounts estimated future cash payments or receipts (including fees, transaction costs and
other premiums or discounts) over the expected life (or when this cannot be reliably predicted, the contractual term) of
the financial instrument to the net carrying amount of the financial asset or financial liability. Revisions to expected future
net cash flows will necessitate an adjustment to the carrying amount with a consequential recognition of an income or
expense item in profit or loss.
The Group does not designate any interests in subsidiaries, associates or joint venture entities as being subject to the
requirements of Accounting Standards specifically applicable to financial instruments.
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an
active market and are subsequently measured at amortised cost. Gains or losses are recognised in profit or loss through
the amortisation process and when the financial asset is derecognised.
Financial liabilities
Non-derivative financial liabilities other than financial guarantees are subsequently measured at amortised cost. Gains or
losses are recognised in profit or loss through the amortisation process and when the financial liability is derecognised.
Impairment
From 1 January 2019, the Group assesses on a forward-looking basis the expected credit losses associated with its debt
instruments carried at fair value. The impairment methodology applied depends on whether there has been a significant
increase in credit risk. For trade receivables, the Group applies the simplified approach permitted by AASB 9 Financial
Instruments, which requires expected lifetime losses to be recognised from initial recognition of the receivables.
Derecognition
Financial assets are derecognised when the contractual rights to receipt of cash flows expire or the asset is transferred to
another party whereby the entity no longer has any significant continuing involvement in the risks and benefits associated
with the asset. Financial liabilities are derecognised when the related obligations are discharged, cancelled or have expired.
The difference between the carrying amount of the financial liability extinguished or transferred to another party and the
fair value of consideration paid, including the transfer of non-cash assets or liabilities assumed, is recognised in profit or
loss.
Fair value estimation
The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or for
disclosure purposes.
The fair value of financial instruments traded in active markets (such as publicly traded derivatives, and trading and
available-for-sale securities) is based on quoted market prices at the balance date. The quoted market price used for
financial assets held by the Group is the current bid price; the appropriate quoted market price for financial liabilities is the
current ask price.
The nominal value less estimated credit adjustments of trade receivables and payables are assumed to approximate their
fair values. The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual
cash flows at the current market interest rate that is available to the Group for similar financial instruments.
25
NUHEARA LIMITED
ABN 29 125 167 133
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1.
(h)
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Foreign currency transactions and balances
Functional and presentation currency
The functional currency of each of the Group’s entities is measured using the currency of the primary economic
environment in which that entity operates. The financial statements are presented in Australian dollars, which is the parent
entity’s functional currency.
Transactions and balances
Exchange differences arising on the translation of non-monetary items are recognised directly in other comprehensive
income to the extent that the underlying gain or loss is recognised in other comprehensive income; otherwise the exchange
difference is recognised in profit or loss.
Foreign controlled entities
The financial results and position of foreign operations, whose functional currency is different from the Group’s
presentation currency, are translated as follows:
income and expenses are translated at average exchange rates for the period;
retained earnings are translated at the exchange rates prevailing at the date of the transaction; and
• assets and liabilities are translated at exchange rates prevailing at the end of the reporting period;
•
•
• exchange differences arising on translation of foreign operations with functional currencies other than Australian
dollars are recognised in other comprehensive income and included in the foreign currency translation reserve in the
Consolidated Statement of Financial Position. These differences are recognised in profit or loss in the period when a
foreign operation is disposed.
(i)
Issued Capital
Ordinary shares and options 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. Incremental costs directly attributable to the issue of new shares or options, for the acquisition of a
business, are not included in the cost of the acquisition as part of the purchase consideration.
(j)
Plant and equipment
Plant and equipment and leasehold improvements are stated at cost less accumulated depreciation and impairment. Cost
includes expenditure that is directly attributable to the acquisition of the item.
Depreciation is provided on plant and equipment and is calculated on a straight-line basis so as to write off the net cost of
each asset over its expected useful life to its estimated residual value. Leasehold improvements are depreciated over the
period of the lease or estimated useful life, whichever is the shorter, using the straight-line method. The estimated useful
lives, residual values and depreciation method are reviewed, and adjusted if appropriate, at the end of each annual
reporting period.
The following depreciation rates that are used in the calculation of depreciation:
Office equipment - 10% - 25%
Plant and Equipment - 15%
Leasehold improvements - 40%
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater
than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains and losses are
included in the statement of profit or loss and other comprehensive income. When revalued assets are sold, amounts
included in the revaluation surplus relating to that asset are transferred to retained earnings.
26
NUHEARA LIMITED
ABN 29 125 167 133
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(k)
Inventories
Inventories are measured at the lower of cost and net realisable value. The cost of manufactured products includes direct
materials, direct labour and an appropriate proportion of variable and fixed overheads. Overheads are applied on the basis
of normal operating capacity. Costs are assigned based on weighted average costs.
(l)
Principles of consolidation
On 25 February 2016, Nuheara Limited acquired all of the issued shares of Nuheara IP Pty Ltd, resulting in Nuheara IP Pty
Ltd becoming a wholly owned subsidiary of Nuheara Limited. The acquisition resulted in the original shareholders of
Nuheara IP Pty Ltd holding a controlling interest in Nuheara Limited (formerly known as Wild Acre Metals Limited). Pursuant
to AASB 3: Business Combinations, this transaction represents a reverse acquisition with the result that Nuheara IP Pty Ltd
was identified as the acquirer, for accounting purposes, of Nuheara Limited (the “acquiree” and “legal parent”). Wild Acre
Metals Limited was not considered a business as it only held disposal groups in Australia and Peru.
Accordingly, in the year to 30 June 2016 it was treated as an asset purchase and the excess consideration paid was disclosed
as listing costs in the Consolidated Statement of Profit or Loss and Other Comprehensive Income.
A list of controlled entities is contained in Note 25.
(m)
Revenue recognition
Revenue from the sale of goods is recognised when the Group has delivered the products to the customer, the customer
has accepted the products and collectability of the related receivables is reasonably assured.
These products are sold under standard warranty terms. These terms may require the Group to provide a refund for faulty
products. The Group's obligation to provide a refund for these faulty products is recognised as a provision in accordance
with AASB 137: Provisions, Contingent Liabilities and Contingent Assets.
A receivable is recognised when the goods are delivered. The Group's right to consideration is deemed unconditional at this
time, as only the passage of time is required before payment of that consideration is due. There is no significant financing
component because sales are made within a credit term of 30 to 90 days.
Customers have a right to return products within 30 days as stipulated in the current contract terms. At the point of sale, a
refund liability is recognised based on an estimate of the products expected to be returned, with a corresponding
adjustment to revenue for these products. Consistent with the recognition of the refund liability, the Group further has a
right to recover the product when customers exercise their right of return, so consequently the Group recognises a right to
returned goods asset and a corresponding adjustment is made to cost of sales. Historical experience of product returns is
used to estimate the number of returns using the expected value method. It is considered highly probable that significant
reversal in the cumulative revenue will not occur given the consistency in the rate of return presented in the historical
information.
Revenue from services rendered is recognised over time as services are delivered. Payment for services is collected within
a short period following the transfer of control or commencement of delivery of services (usually within 90 days), as
applicable.
Interest revenue is recognised using the effective interest method, which for floating rate financial assets is the rate
inherent in the instrument. Dividend revenue is recognised when the right to receive a dividend has been established.
Revenue from the sale of tenement interests is recognised at the time of the transfer of the significant risks and rewards of
ownership.
All revenue is stated net of the amount of goods and services tax.
27
NUHEARA LIMITED
ABN 29 125 167 133
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(n)
Provisions
Warranty provisions
Provision is made in respect of the Group’s best estimate of the liability on all products under warranty at the end of the
reporting period. The provision is measured as the present value of future cash flows estimated to be required to settle the
warranty obligation. The future cash flows have been estimated by reference to historical averages for warranty claims.
Long service leave and annual leave
The Group expects annual leave benefits to be settled wholly within 12 months of the reporting date. The Group recognises
a liability for long service leave and annual leave measured as the present value of expected future payments to be made
in respect of services provided by employees up to the reporting date. Consideration is given to expected future wage and
salary levels, experience of employee departures, and periods of service.
Employees in Australia are entitled to long service leave in accordance with statutory requirements. International
employees are granted the same annual and long service leave entitlements as those in Australia.
(o)
Share-based payments
Equity-settled share-based payments are measured at fair value at the date of grant. Fair value of options is measured by
use of a Black-Scholes model. The expected life used in the model has been adjusted, based on management’s best
estimate, for the effects of non-transferability, exercise restrictions, and behavioural considerations. The fair value of
shares is the market value of the shares at the grant date.
The fair value determined at the grant date of options issued as part of the equity-settled share-based payments is expensed
on a straight-line basis over the vesting period, based on the Group’s estimate of shares that will eventually vest.
(p)
Taxes
Income Tax
The income tax expense income for the year comprises current income tax expense (income) and deferred tax expense
(income).
Current income tax expense charged to profit, or loss is the tax payable on taxable income. Current tax liabilities (assets)
are measured at the amounts expected to be paid to (recovered from) the relevant taxation authority.
Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances during the year
as well as unused tax losses.
Current and deferred income tax expense (income) is charged or credited outside profit or loss when the tax relates to
items that are recognised outside profit or loss.
Except for business combinations, no deferred income tax is recognised from the initial recognition of an asset or liability,
where there is no effect on accounting or taxable profit or loss.
Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period when the asset is
realised or the liability is settled and their measurement also reflects the manner in which management expects to recover
or settle the carrying amount of the related asset or liability.
Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent that it is
probable that future taxable profit will be available against which the benefits of the deferred tax asset can be utilised.
Where temporary differences exist in relation to investments in subsidiaries, branches, associates, and joint ventures,
deferred tax assets and liabilities are not recognised where the timing of the reversal of the temporary difference can be
controlled and it is not probable that the reversal will occur in the foreseeable future.
28
NUHEARA LIMITED
ABN 29 125 167 133
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(p)
Taxes (continued)
(i)
Income Tax (continued)
Current tax assets and liabilities are offset where a legally enforceable right of set-off exists and it is intended that net
settlement or simultaneous realisation and settlement of the respective asset and liability will occur. Deferred tax assets
and liabilities are offset where: (a) a legally enforceable right of set-off exists; and (b) the deferred tax assets and liabilities
relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities,
where it is intended that net settlement or simultaneous realisation and settlement of the respective asset and liability will
occur in future periods, in which significant amounts of deferred tax assets or liabilities are expected to be recovered or
settled.
Goods and services tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST except:
• Where the GST incurred on a purchase of goods and services is not recoverable from the taxation authority, in which
case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable;
and
• Receivables and payables are stated with the amount of GST included.
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables
in the Consolidated Statement of Financial Position.
Cash flows are included in the Consolidated Statement of Cash Flows on a gross basis and the GST component of cash flows
arising from investing and financing activities, which is recoverable from, or payable to, the taxation authority, are classified
as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation
authority.
(q)
Convertible note
The component of the convertible note that exhibits characteristics of a liability is recognised as a liability in the
Consolidated Statement of Financial Position, net of transaction costs.
On issuance of the convertible note, the fair value of the liability component is determined using the market rate for an
equivalent non-convertible bond and this amount is carried as a long-term liability on the amortised cost basis until
extinguished on conversion or redemption. The increase in the liability due to the passage of time is recognised as a finance
cost.
The remainder of the proceeds is allocated to the conversion option that may either be recognised as equity and included
in shareholders’ equity, net of transaction costs, or recognised as an embedded derivative and accounted for separately
from the host (convertible note) as a liability. If classified as equity, the carrying value of the conversion option is not
remeasured in subsequent years. If classified as an embedded derivative, the carrying value is valued each reporting period
at fair value through the Consolidated Statement of Profit or Loss and other Comprehensive Income.
Interest on the liability component of the instruments is recognised as an expense in the Consolidated Statement of Profit
or Loss and Other Comprehensive Income.
Transaction costs are apportioned between the liability and equity components of the convertible shares based on the
allocation of proceeds to the liability and equity components when the instruments are first recognised.
(r)
Comparative figures
When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation
for the current financial year.
29
NUHEARA LIMITED
ABN 29 125 167 133
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1.
(s)
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
New and amended accounting policies adopted by the Group
Standards and Interpretations applicable to 30 June 2021
In the year ended 30 June 2021, the Directors have reviewed all of the new and revised Standards and Interpretations
issued by the AASB that are relevant to the Group and effective for the current annual reporting period.
As a result of this review, the Directors have determined that there is no material impact of the new and revised Standards
and Interpretations on the Group and, therefore, no material change is necessary to the Group accounting policies.
2.
INCOME TAX
Income tax expense
Current income tax
Deferred income tax
Income tax expense
(i)
Numerical reconciliation of income tax expense to prima facie tax
payable
Numerical reconciliation of income tax expense to prima facie tax payable
Loss from continuing operations before income tax expense
Loss before tax from disposal group
Loss before income tax
Tax credit at the Australian tax rate of 27.5% (2020: 27.5%)
Tax effect of amounts which are not deductible/(taxable) in calculating taxable
income:
Non-deductible expenses
Non assessable-non-exempt income related expenditure/(income)
Temporary differences
Tax loss not brought to account as a deferred tax asset
R&D Tax Offset
Non-assessable income
Income tax expense
(ii)
Unrecognised deferred tax assets/(liabilities)
Unrecognised temporary differences
Unrecognised deferred tax (liability) relates to the following:
Interest receivable
Prepayments
Software
Trade and other payables
Borrowing costs
Convertible note
Employee benefits
Provisions
Business related costs
Foreign exchange
Tax Losses
Potential unrecognised deferred tax asset @ 27.5% (2020: 27.5%)
2021
$
2020
$
-
-
-
-
-
-
2021
$
(7,200,680)
(7,200,680)
(1,980,187)
33,454
(52,152)
973,140
1,423,120
(383,626)
(13,750)
-
2020
$
(11,690,733)
-
(11,690,733)
(3,214,952)
1,170
(68,858)
1,123,711
2,925,030
(460,340)
(305,761)
-
2021
$
2020
$
(225)
(115,807)
3,537,125
7,425
7,240
-
144,653
142,207
415,463
99,170
10,794,758
15,034,744
(307)
(5,236)
2,508,606
23,650
19,901
57,432
98,444
52,524
480,053
(24,951)
9,482,186
12,692,302
The tax losses do not expire under current legislation. Deferred tax assets have not been recognised in respect of these
items because it is not probable that future taxable profits will be available against which the Group can utilise the
benefits.
30
NUHEARA LIMITED
ABN 29 125 167 133
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
3.
4.
REVENUE AND OTHER INCOME
Revenue from sales of products
Revenue from Original Equipment Manufacture (OEM) sales and service
Interest income
Grants and rebates received
Sale of mining interests
Sundry income
Total revenue and other income
PRODUCT DEVELOPMENT AND TECHNOLOGY RELATED
EXPENSES
Product development, including research and development costs(i)
Inventory and components written off(ii)
2021
$
6,474,907
4,266,516
8,279
1,876,822
(9,948)
7,079
12,623,653
2021
$
4,396,892
412,871
4,609,763
2020
$
1,739,535
-
61,565
2,168,245
464,979
2,257
4,436,581
2020
$
2,015,220
1,665,872
3,681,092
(i) Excludes expenditure directly attributable to development activities that are capitalised as an intangible asset under
Australian Accounting Standards.
(ii) Inventories are stated at the lower of cost or market. The Group periodically reviews the value of items in inventory
and provides write-downs or write-offs of inventory based on its assessment of market conditions. Write-downs
and write-offs are charged as an expense to the Statement of Profit or Loss. For the year to 30 June 2021, the
company experienced total write-downs and write-offs of $412,871 (30 June 2020: $1,665,872), including a one-
time charge of $299,232 attributable to the development of superior technology (30 June 2020: $716,570).
5.
TRADE AND OTHER RECEIVABLES
2021
$
2020
$
Trade and other receivables
1,620,729
1,566,874
The Group applies the simplified approach to providing for expected credit losses prescribed by AASB 9, which permits
the use of the lifetime expected loss provision for all trade receivables. To measure the expected credit losses, trade
receivables have been individually assessed based on credit risk characteristics. The expected credit losses also
incorporate forward-looking information.
Credit risk – trade and other receivables
The Group has no significant credit risk with respect to any single counterparty. The class of assets described as trade
and other receivables is considered to be the main source of credit risk related to the Group. The trade and other
receivables as at 30 June are considered to be of low credit risk.
6.
PLANT AND EQUIPMENT
Plant and equipment – at cost
Less: accumulated depreciation
Total plant and equipment
Opening balance - plant and equipment
Additions
Disposals
Depreciation
Foreign currency translation movement
Closing balance – plant and equipment
2021
$
1,277,161
(1,047,165)
229,996
2021
$
387,916
58,060
-
(215,980)
-
229,996
2020
$
1,220,359
(832,443)
387,916
2020
$
605,957
32,145
(2,964)
(247,222)
-
387,916
31
NUHEARA LIMITED
ABN 29 125 167 133
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
7.
RIGHT OF USE ASSET
The Group's lease portfolio includes buildings. These leases have an average of 2 years as their lease term.
Options to extend or terminate
There are no extension options for the building lease.
(i) AASB 16 related amounts recognised in the Consolidated Statement of
Financial Position
2021
$
2020
$
Right of use assets
Leased building
Less: accumulated depreciation
Net carrying amount
Movements in carrying amounts:
Recognised on initial application of AASB 16
(previously classified as operating leases under AASB 117)
Depreciation
Closing balance – plant and equipment
(ii) AASB 16 related amounts recognised in the Consolidated Statement
of Profit or Loss
Depreciation charge related to right-of-use assets
Interest expense on lease liabilities (under finance cost)
(iii) AASB 16 related amounts recognised in the Consolidated Statement of
Cash Flows
Total yearly operating cash outflows for leases
8.
INTANGIBLE ASSETS
Development costs – at cost
Less: accumulated amortisation and impairment losses
Net carrying amount
Patents & Trademarks – at cost
Less: accumulated amortisation and impairment losses
Net carrying amount
Total intangible assets
Balance as at 1 July 2019
Balance as at 30 June 2020
Additions – internally developed
Amortisation charge
Balance as at 30 June 2021
9.
TRADE AND OTHER PAYABLES - CURRENT
Trade creditors
Unearned Income(i)
Other creditors and accrued expenses
190,927
(190,927)
-
190,927
(163,652)
27,275
190,927
(190,927)
-
2021
$
27,275
1,195
2021
$
27,275
2021
$
16,790,810
(12,620,466)
4,170,344
1,118,102
(241,805)
876,303
5,046,647
190,927
(163,652)
27,275
2020
$
163,652
7,164
2020
$
170,820
2020
$
13,098,989
(8,971,790)
4,127,199
903,072
(150,414)
752,658
4,879,857
Total
$
5,241,203
4,879,857
3,906,857
(3,740,067)
5,046,647
2021
$
591,270
37,432
944,964
1,573,666
2020
$
365,585
1,762,754
2,945,901
5,074,240
Development
Costs
$
Patents
&
Trademarks
$
4,650,885
4,127,199
3,691,821
(3,728,873)
4,252,107
590,318
752,658
215,036
(11,193)
794,540
(i) Unearned income represents sales that cannot be recognised as revenue until shipped.
32
NUHEARA LIMITED
ABN 29 125 167 133
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
10. PROVISIONS – CURRENT
Employee provisions
Provision for refunds and warranty claims
11.
FINANCIAL LIABILITIES – NON-CURRENT
Convertible note
2021
$
437,060
503,937
940,997
2020
$
313,839
124,427
438,266
2021
$
2020
$
2,508,243
-
The Group entered into a 24-month $2.5 million convertible note (Funding Agreement) with the Lind Global Macro Fund,
LP, an entity managed by The Lind Partners (together “Lind”), a New York-based institutional fund manager. The
convertible note was secured and had a 24-month term.
The Funding Agreement included provisions that allow for conversion of securities outstanding to Lind into fully paid
ordinary shares in the capital of the Company, optional cash payments by the Company or early repayment, without
penalty and subject to Lind’s buy back conversion rights for up to 33% of the outstanding face value. Lind invested $2.5
million into Nuheara who issued a secured redeemable convertible security with a face value of $3.0 million. Nuheara
had the right to redeem at any time without penalty. Other than following an event of default, the convertible note did
not bear interest.
On 7 January 2021, the Group announced that it had closed out the Convertible Security Funding Agreement
(Agreement) with The Lind Partners (Lind). Nuheara issued a buy-back notice to Lind for the convertible note balance of
$850,000. Under the terms of the Agreement, Lind elected to convert the buy-back into shares at an issue price of $0.04
per share (the same issue price as the Placement), being 90% of the five lowest daily VWAPs in the 20 trading days prior
to the buy-back notice being served.
12.
ISSUED CAPITAL
Ordinary shares
Issued and paid up capital
1,723,004,193 (2020: 1,359,811,585) Ordinary shares, fully paid
Movements during the period number of shares
Opening balance at 1 July 2019
15 July 2019 - 80,000,000 shares issued by way of share placement at $0.050
3 February 2020 - 20,000,000 collateral shares issued pursuant to Convertible
Note funding agreement at $0.000
1 June 2020 - 176,865,999 shares issued under share purchase plan at $0.017
4 June 2020 - 88,235,294 shares issued by way of share placement to SPP
underwriters at $0.017
5 June 2020 - 12,500,000 shares issued by way of conversion under
Convertible Note funding agreement at $0.016
Less: Share issue costs
Closing balance as at 30 June 2020
2021
$
59,841,737
2020
$
46,295,932
Number of
Shares
2020
982,210,292
80,000,000
20,000,000
176,865,999
2020
$
38,325,527
4,000,000
-
3,006,722
88,235,294
1,500,000
12,500,000
-
1,359,811,585
200,000
(736,318)
46,295,932
33
NUHEARA LIMITED
ABN 29 125 167 133
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
12.
ISSUED CAPITAL (continued)
Ordinary shares (continued)
Movements during the period number of shares
Opening balance at 1 July 2020
10 July 2020 - 10,000,000 collateral shares purchased under Convertible Note
funding agreement at $0.011 (shares issued in January 2020)
14 July 2020 - 10,000,000 collateral shares purchased under Convertible Note
funding agreement at $0.011 (shares issued in January 2020)
5 August 2020 – shares issued by way of conversion under Convertible Note
funding agreement at $0.023
21 August 2020 – shares issued on exercise of options at $0.025
24 August 2020 – shares issued by way of conversion under Convertible Note
funding agreement at $0.035
31 August 2020 – shares issued on exercise of options at $0.025
1 October 2020 – shares issued on exercise of options at $0.025
21 October 2020 - shares issued by way of conversion under Convertible Note
funding agreement at $0.043
2 November 2020 – shares issued on exercise of options at $0.025
20 November 2020 - shares issued by way of conversion under Convertible
Note funding agreement at $0.037
1 December 2020 – shares issued on exercise of options at $0.025
2 December 2020 – shares issued by way of conversion under Convertible
Note funding agreement at $0.037
6 January 2021 – shares issued on exercise of options at $0.025
6 January 2021 – shares issued by way of conversion under Convertible Note
funding agreement at $0.040
7 January 2021 – shares issued by way of share placement at $0.040 each
3 May 2021 – shares issued on exercise of options at $0.025
Less: Share issue costs
Closing balance as at 30 June 2021
Holders of ordinary shares
Number of
Shares
2021
1,359,811,585
2021
$
46,295,932
-
-
8,695,653
2,666,667
20,000,000
353,333
537,880
8,139,535
50,000
6,756,757
160,000
6,756,757
159,360
110,000
110,000
200,000
66,667
700,000
8,833
4,167
350,000
1,250
250,000
4,000
250,000
-
21,250,000
287,500,000
166,667
-
1,723,004,193
850,000
11,500,000
4,167
(863,278)
59,841,737
Holders of ordinary shares have the right to receive dividends as declared, and in the event of winding up the Group, to
participate in the proceeds from the sale of all surplus assets in proportion to the number of shares held and the amount
paid up. At shareholders’ meetings, each ordinary share is entitled to one vote when a poll is called, otherwise each
shareholder has one vote on a show of hands.
Unlisted Options
Issued unlisted options
69,318,038 (2019: 46,514,706) unlisted options
Description
Number
Grant
Date
Unlisted Options
1,000,000
17/09/2018
Unlisted Options
2,500,000
17/04/2019
Unlisted Options
24,264,706
03/02/2020
Unlisted Options
3,750,000
04/06/2020
Unlisted Options
29,303,332
21/08/2020
Unlisted Options
2,000,000
21/08/2020
Unlisted Options
2,000,000
21/08/2020
Exercise
Price
$0.09
$0.09
$0.05
$0.026
$0.025
$0.05
$0.10
2021
$
759,803
Expiry
Date
17/09/2021
2020
$
656,273
Weighted
Average
time until
expiry
3 months
17/04/2022
10 months
03/02/2024
31 months
04/06/2023
23 months
21/08/2023
26 months
21/08/2023
26 months
21/08/2023
26 months
Unlisted Options
4,500,000
02/03/2021
$0.0435
02/03/2024
32 months
Total Unlisted
Options
69,318,038
27 months
34
NUHEARA LIMITED
ABN 29 125 167 133
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
13.
ISSUED CAPITAL (continued)
Unlisted Options (continued)
For information relating to share options issued to KMP and contractors including details of options issued, exercised and
lapsed during the financial year, refer to Note 26 Share Based Payments.
Movements during the period for number of options
Balance unlisted options at 30 June 2019
3 February 2020 - issue of employee options @ $0.05 each
4 June 2020 - issue of underwriter options @ $0.026 each
Less: Options exercised/forfeited
Movement in valuation of options issued in prior reporting periods
Balance unlisted options at 30 June 2020
Balance unlisted options at 30 June 2020
10 July 2020 – issue of director options @ $0.025
21 August 2020 – issue of director options @ $0.025
21 August 2020 – issue of director options @$0.050
21 August 2020 – issue of director options @ $0.010
21 August 2020 – issue of employee options @ $0.025
2 March 2021 – issue of employee options @ $0.0435
Less: Options exercised/forfeited/cancelled
Movement in valuation of options issued in prior reporting periods
Balance unlisted options at 30 June 2021
Capital Management
Number of
Options
2020
56,000,000
24,264,706
3,750,000
(37,500,000)
-
46,514,706
Number of
Options
2021
46,514,706
6,000,000
2,000,000
2,000,000
2,000,000
29,200,000
5,000,000
(23,396,668)
-
69,318,038
2020
$
1,410,267
36,108
560
(1,005,509)
214,847
656,273
2021
$
656,273
15,722
8,196
13,994
10,796
194,035
13,509
(289,511)
136,789
759,803
When managing capital, management’s objective is to ensure the entity continues as a going concern as well as to maintain
optimal returns to shareholders and benefits for other stakeholders. Management also aims to maintain a capital structure
to ensure the lowest costs of capital available to the Group.
The Group’s capital comprises equity and options as shown in the Consolidated Statement of Financial Position. The Group
is not exposed to externally imposed capital requirements.
There have been no changes in the strategy adopted by management to control the capital of the Group since the prior
year.
13. OPERATING SEGEMENTS
Nuheara Limited, Nuheara IP Pty Ltd and Nuheara, Inc are operating within the hearing health sector, and have been
aggregated to one reportable segment given the similarity of the products manufactured for sale, method in which products
are delivered, types of customers and regulatory environment.
14. RELATED PARTY DISCLOSURES
Key Management Personnel (KMP)
Any person(s) having authority and responsibility for planning, directing or controlling the activities of the Group, directly
or indirectly (whether executive or otherwise) of that Group, are considered KMP. For details of disclosures relating to KMP
refer to Note 22, Interests of KMP.
Transactions with director related entities
During the year, there were no transactions with director related entities.
35
NUHEARA LIMITED
ABN 29 125 167 133
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
15.
EVENTS OCCURRING AFTER BALANCE DATE
There were no significant events after balance date.
16. COMMITMENTS FOR EXPENDITURE
These amounts are payable, if required, over various times over the next five years.
Operating Lease Commitment
The Group has a rental agreement which commenced 1 September 2018 for a period of 24 months.
Office Lease
Due within 1 year
Due 1 to 5 years
2021
$
29,173
-
2020
$
28,470
-
17. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
Estimates and judgments are continually evaluated and are based on historical experience and other factors, including
expectations of future events that are believed to be reasonable under the circumstances.
The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition,
seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.
Estimated impairment of assets
The Group assesses impairment of its assets at the end of each reporting period by evaluating conditions and events specific
to the Group that may be indicative of impairment triggers. Where impairment has been triggered, assets are written down
to their recoverable amounts. An impairment trigger includes operating losses and net cash outflows.
The ability of capitalised development costs to generate sufficient future economic benefits to recover the carrying amount
is usually subject to greater uncertainty before the asset is available for use than after it is available for use. Judgement has
been made in the estimation of future profitability and net cash flows in the assessment of fair value for capitalised
development costs, and in the resulting determination that no impairment existed at balance date. Management
acknowledges that a modest reduction in realised revenue growth against these forecasts may result in an impairment at
a later date.
Estimated warranty costs
Provision is made in respect of the Group’s best estimate of the liability on all products under warranty at the end of the
reporting period. The provision is measured as the present value of future cash flows estimated to be required to settle the
warranty obligation. The future cash flows have been estimated by reference to an industry average of warranty claims.
Valuation of options
Share-based payment transaction:
The Group 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 using a Black-Scholes model, using the
assumptions detailed in Note 26.
The Group measures the cost of cash-settled share-based payments at fair value at the grant date using the Black-Scholes
formula, taking into account the terms and conditions upon which the instruments were granted, as discussed in Note 26.
36
NUHEARA LIMITED
ABN 29 125 167 133
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
17. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (continued)
Capitalisation of development costs
Under AASB 138: Intangible Assets, an entity is required to recognise an intangible asset if, and only if, certain criteria are
met. Judgement has been made in the determination that research expenditure incurred during the year did not meet the
definition of an intangible asset. The group has assessed the effective life of development assets to be 2.5 years.
Net Smelter Royalties
The Group holds an 80% interest in Terrace Gold Pty Ltd (“Terrace”). Terrace holds a 0.5% Net Smelter Royalty over the El
Molino Gold Project and part of the El Galeno Copper Project located in Northern Peru, currently owned under joint venture
by China Minmetals and Jiangxi Copper.
Management has ascertained that the probability of Net Smelter Royalty revenue was nil at balance date.
Convertible Notes
The Group's convertible notes have been treated as a financial liability, in accordance with the principles set out in AASB
132. The key criterion for liability classification is whether there is an unconditional right to avoid delivery of cash for
another financial asset to settle the contractual obligation. The terms and conditions applicable to the convertible notes
require the Group to settle the obligation in either cash, or in the Company's own shares.
The notes are convertible into ordinary shares of the parent entity, at the option of the holder, or repayable in 24 months
from draw-down date. The conversion rate is based on a variable formula subject to adjustments for share price movement.
Management determined that these terms give rise to a derivative financial liability. The initial consideration received for
the note was deemed to be fair value of the liability at the issue date. The liability will subsequently be recognised on a fair
value basis at each reporting period.
18.
FINANCIAL INSTRUMENTS
Overview
The Group has exposure to the following risks from their use of financial instruments:
•
•
•
•
interest rate risk
credit risk
liquidity risk
foreign exchange risk
This note presents information about the Group’s exposure to each of the above risks.
The Board of Directors has overall responsibility for the establishment and oversight of the risk management framework.
Risk management policies are established by the Board of Directors to identify and analyse the risks faced by the Group, to
set appropriate risk limits and controls, and to monitor risks and adherence to limits.
The Group’s principal financial instruments are cash, short-term deposits, receivables, and payables.
37
NUHEARA LIMITED
ABN 29 125 167 133
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
18.
FINANCIAL INSTRUMENTS (continued)
(i)
Interest Rate Risk
The Group’s exposure to interest rate risk, which is the risk that a financial instrument's value will fluctuate as a result of
changes in market interest rates and the effective weighted average interest rates on those financial assets and financial
liabilities, is as follows:
30 June 2021
Financial assets
Cash at bank
Trade and other receivables
Total financial assets
Financial liabilities
Trade and other payables
Convertible note
Total financial liabilities
30 June 2020
Financial assets
Cash at bank
Trade and other receivables
Total financial assets
Financial liabilities
Trade and other payables
Convertible note
Total financial liabilities
Weighted Average
Effective Interest
Rate
%
0.25%
-
-
-
Weighted Average
Effective Interest
Rate
%
4.5%
-
-
-
Interest
Bearing
$
Non-Interest
Bearing
$
Total
$
5,221,068
5,221,068
-
-
-
2,055,287
1,620,729
3,676,016
1,573,666
-
1,573,666
7,276,355
1,620,729
8,897,084
1,573,666
-
1,573,666
Interest
Bearing
$
Non-Interest
Bearing
$
Total
$
3,967,877
-
3,967,877
-
-
-
462,833
1,566,874
2,029,707
5,074,240
2,308,843
7,383,083
4,430,710
1,566,874
5,997,584
5,074,240
2,308,843
7,383,083
It is the Group’s policy to settle trade payables within the credit terms allowed and therefore not incur interest on overdue
balances.
Sensitivity analysis
If interest rates on cash balances had weakened/strengthened by 1% at 30 June 2021, there would be no material impact
on the statement of profit or loss and other comprehensive income. There would be no material effect on the equity
reserves, other than those directly related to the statement of profit or loss and other comprehensive income movements.
(ii)
Credit Risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its
contractual obligations.
The maximum exposure to credit risk, excluding the value of any collateral or other security, at balance date to recognised
financial assets is the carrying amount, net of any allowances for doubtful debts, as disclosed in the Consolidated Statement
of Financial Position and notes to the financial statements.
(iii)
Liquidity Risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s approach
to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when
due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group’s
reputation.
Liquidity risk is reviewed regularly by the Board.
The Group manages liquidity risk by monitoring forecast cash flows and liquidity ratios such as working capital. The Group
did not have any financing facilities available at reporting date.
38
NUHEARA LIMITED
ABN 29 125 167 133
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
19.
FINANCIAL INSTRUMENTS (continued)
(iii)
Liquidity Risk (continued)
The following are the contractual maturities of financial liabilities:
30 June 2021
Liquid financial liabilities
Trade and other payables
Convertible note
Total financial liabilities
-
30 June 2020
Liquid financial liabilities
Trade and other payables
Convertible note
Total financial liabilities
Net Fair Values
< 6 months
$
6-12 months
$
1-5 years
$
Total
$
1,573,666
-
1,573,666
< 6 months
$
6-12 months
$
5,074,240
-
5,074,240
-
-
-
-
-
-
-
-
-
1,573,666
-
1,573,666
1-5 years
$
Total
$
-
2,308,843
2,308,843
5,074,240
2,308,843
7,383,083
With the exception of convertible notes which are measured at fair value, due to the short-term nature of the above assets
and liabilities, their carrying values are assumed to approximate their fair values.
(iv)
Foreign exchange risk
Exposure to foreign exchange risk may result in the fair value, or future cash flows, of a financial instrument fluctuating due
to movement in foreign exchange rates of currencies in which the Group holds financial instruments, which are other than
the AUD functional currency of the Group.
With instruments being held by overseas operations, fluctuations in the US dollar may impact on the Group’s financial
results unless those exposures are appropriately hedged.
It is the Group’s policy that hedging is not necessary, as the Group does not hold funds of any significance in any other
denomination than Australian dollars.
The foreign currency risk on net financial assets/(liabilities) in the books of the Group at balance date in 2021 is not material
(2020: not material).
20.
EARNINGS PER SHARE
Basic loss per share (cents per share)
Diluted loss per share (cents per share)
Basic loss per share
The earnings and weighted average number of ordinary shares used in the
calculation of basic loss per share are as follows:
Loss
Weighted average number of ordinary shares – basic loss per share
Weighted average number of ordinary shares – diluted loss per share
2021
Cents
(0.46)
(0.45)
2021
$
2020
Cents
(1.14)
(1.09)
2020
$
(7,200,681)
(11,690,733)
2021
No.
2020
No.
1,549,699,910
1,616,176,259
1,017,934,136
1,069,557,029
39
NUHEARA LIMITED
ABN 29 125 167 133
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
21. AUDITOR’S REMUNERATON
Amounts received, or due and receivable by the current auditors for audit or review of
the financial report
47,500
38,838
2021
$
2020
$
22.
INTERESTS OF KEY MANAGEMENT PERSONNEL (KMP)
Refer to the Remuneration Report contained in the Directors’ Report for details of the remuneration paid or payable to
each member of the Group’s KMP.
The totals of remuneration paid to KMP of the Group during the year are as follows:
Short term benefits
Post-employment benefits
Share based payments - options
23. CONTINGENT LIABILITIES
2021
$
1,209,529
111,707
280,700
1,601,936
2020
$
984,112
92,598
-
1,076,710
The Group has $10,809,440 relating to advanced purchase orders for future production runs and to secure componentry
and product inventory for expected future growth in sales.
24. COMPANY DETAILS
Registered Office
The registered office is at 190 Aberdeen Street, Northbridge, Western Australia 6003.
Principal Place of Business
The principal place of business is at 190 Aberdeen Street, Northbridge, Western Australia 6003.
25.
INFORMATION ABOUT CONTROLLED ENTITIES
The controlled entities listed below have share capital consisting solely of ordinary shares which are held directly by the
Group. The proportion of ownership interests held equals the voting rights held by the Group. Each controlled entity’s
principal place of business is also its country of incorporation.
Name of
Controlled
Entity
Nuheara IP Pty Ltd
Wild Acre Metals (Peru) SAC
(liquidated on 15/01/2021)
Nuheara, Inc
Terrace Gold Pty Ltd
Principal
Place of
Business
Perth, Australia
Lima, Peru
New York, USA
Perth, Australia
Ownership interest
held by
the Company
Proportion of
non-controlling
interest
2021
100%
0%
100%
80%
2020
100%
100%
100%
80%
2021
0%
0%
0%
20%
2020
0%
100%
0%
20%
The Group holds an 80% interest in Terrace Gold Pty Ltd (“Terrace”). Terrace holds a 0.5% Net Smelter Royalty over the El
Molino Gold Project and part of the El Galeno Copper Project located in Northern Peru, currently owned under joint venture
by China Minmetals and Jiangxi Copper.
40
NUHEARA LIMITED
ABN 29 125 167 133
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
26.
SHARE BASED PAYMENTS
Shares and options granted to KMP
During the financial year, no shares were granted to KMP (2020: nil) and 15,000,000 unlisted options were granted to KMP
(2020: nil):
Cheryl Edwardes
David Buckingham
Justin Miller
David Cannington
Jean-Marie Rudd
Total
Director
Options
Employee
Options
3,000,000
3,000,000
-
-
-
6,000,000
3,000,000
3,000,000
3,000,000
9,000,000
The Group’s shareholders approved an Incentive Option Plan on 14 August 2020, with the main objective to attract,
motivate and retain key employees and provide selected employees with the opportunity to participate in the future growth
of the Group.
Employees are granted options which vest over three years from commencement with the Group, subject to meeting
specified performance criteria. The options are issued for no consideration and carry no entitlements to voting rights or
dividends of the Group. The number available to be granted is determined by the Board and is based on performance
measures including growth in shareholder return, return on equity, cash earnings and group EPS growth.
During the financial year no options vested with KMP (2020: nil). No shares were issued to non-KMP employees (2020: nil)
and 31,200,000 unlisted options were issued to non-KMP employees (2020: nil).
A summary of the movements of all Group options issued is as follows:
Options outstanding and exercisable as at 30 June 2019
Granted
Forfeited
Exercised
Options outstanding and exercisable as at 30 June 2020
Granted
Forfeited/Lapsed
Exercised
Options outstanding and exercisable as at 30 June 2021
No.
56,000,000
28,014,706
(37,500,000)
-
46,514,706
46,200,000
(19,302,761)
(4,093,907)
69,318,038
Weighted Average
Exercise Price
$0.09
$0.05
-
-
$0.07
$0.007
-
-
$0.041
The weighted average remaining contractual life of options outstanding at year end was 2.25 years (2020: 2.56). The
weighted average exercise price of outstanding options at the end of the reporting period was $0.041 (2020: $0.07).
The fair value of options granted during the year was $1,123,640 (2020: $380,3160). These values were calculated using
the Black-Scholes option pricing model, applying the following inputs:
Grant Date
Share price on issue date
Expected volatility
Exercise price
Expiry date
Risk free interest rate
Number issued
Value per option
Total
Employee
Options
10/07/2020
$0.021
100%
$0.025
21/08/2023
0.25%
6,000,000
$0.012
$50,400
Director
Options
21/08/2020
$0.055
100%
$0.025
21/08/2023
0.25%
2,000,000
$0.041
$57,400
Director
Options
21/08/2020
$0.055
100%
$0.050
21/08/2023
0.25%
2,000,000
$0.035
$49,000
Director
Options
21/08/2020
$0.055
100%
$0.100
21/08/2023
0.25%
2,000,000
$0.027
$37,800
Employee
Options
21/08/2020
$0.055
100%
$0.025
21/08/2023
0.25%
29,200,000
$0.041
$838,040
Employee
Options
02/03/2021
$0.043
100%
$0.025
02/03/2024
0.10%
5,000,000
$0.026
$91,000
Historical share price volatility has been the basis for determining expected share price volatility as it assumed that this is
indicative of future volatility.
Included in the Statement of Profit or Loss is $103,530 (2020:($753,994), which relates to net movements in equity-settled
share-based payment transactions.
41
NUHEARA LIMITED
ABN 29 125 167 133
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
27. NOTES TO THE STATEMENT OF CASHFLOWS
Reconciliation of net loss to net cash flows used in operating activities
Loss from ordinary activities after income tax
Add back non-cash items:
Loss on property plant & equipment
Depreciation and amortisation expenses
Income tax
Share based payments expense
Sale of mining interests
Right of use asset cost
Convertible note fair value adjustment
Borrowing costs on convertible note
WAM (Peru) transactions
Changes in assets and liabilities
(Decrease)/Increase in trade debtors
Increase in assets held for sale
Increase/(Decrease) in other receivables
Increase/(Decrease) in inventories
Increase/(Decrease) in non-current assets
Increase/(Decrease) in trade creditors
(Decrease)/Increase in other payables
(Decrease)/Increase in lease liabilities
Increase in provision for employee entitlements
Increase/(Decrease) in provision for warranty claims
Net cash used in operating activities
Cash and Cash Equivalents
Cash at bank and on hand
Short-term deposits
2021
$
2020
$
(7,200,681)
(11,690,733)
-
3,983,277
-
103,530
9,948
-
301,157
-
-
(1,870,269)
143,595
91,093
1,767,490
5,062
225,685
(2,001,456)
(27,271)
164,039
379,510
(3,925,291)
2021
$
2,309,215
4,967,140
7,276,355
21
4,284,205
-
(753,994)
(464,979)
(190,927)
208,843
92,520
(7,260)
1,778,657
517,668
(949,259)
(434,299)
(1,549)
(201,034)
2,311,576
27,271
80,597
(40,651)
(5,433,327)
2020
$
2,744,436
1,686,274
4,430,710
42
NUHEARA LIMITED
ABN 29 125 167 133
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
28. PARENT ENTITY FINANCIAL INFORMATION
Nuheara IP Pty Ltd was acquired by Nuheara Limited (previously Wild Acre Metals Limited) on 25 February 2016. As required
by Australian Accounting Standard AASB3: Business Combinations, Nuheara Limited is deemed to have been acquired by
Nuheara IP Pty Ltd as at 25 February 2016 under the reverse acquisition rules. Accordingly, Nuheara IP Pty Ltd is the Parent
Entity for accounting purposes.
The following information has been extracted from the books and records of the legal parent, Nuheara Limited, and has
been prepared in accordance with Australian Accounting Standards.
Results for the parent entity:
Net loss
Other comprehensive income
Total comprehensive loss for the year
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Net assets
Total equity of the parent entity
Contributed equity
Reserves
Accumulated losses
Total Equity
2021
$
2020
$
(6,615,030)
-
(6,615,030)
20,765,840
11,604,990
2,370,830
12,904,103
90,670
12,994,773
19,376,057
(11,785,510)
-
(11,785,510)
8,836,670
10,021,068
18,857,738
5,378,441
1,137,574
6,516,015
12,341,723
66,616,101
1,050,968
(48,291,012)
19,376,057
53,070,295
947,438
(41,676,010)
12,341,723
43
NUHEARA LIMITED
ABN 29 125 167 133
DIRECTORS’ DECLARATION
The Directors of Nuheara Limited declare that:
(1)
the financial statements and notes, as set out on page 18 to 43, are in accordance with the Corporations Act 2001
and:
(a)
(b)
comply with Australian Accounting Standards which, as stated in the accounting policy Note 1 to the financial
statements, constitutes compliance with International Accounting Reporting Standards (IFRS); and
give a true and fair view of the financial position as at 30 June 2021 and of the performance for the year ended
on that date of the Group;
the Directors have given the declarations required by S295A of the Corporations Act 2001 from the Chief Executive
Officer and Chief Financial Officer;
in the Directors’ opinion, there are reasonable grounds to believe that the Group will be able to pay its debts as and
when they become due and payable.
(2)
(3)
This declaration is made in accordance with a resolution of the Board of Directors.
On behalf of the Board of Directors:
Justin Miller
Co-founder, Managing Director and Chief Executive Officer
Perth, 17 August 2021
44
NUHEARA LIMITED
ABN 29 125 167 133
ADDITIONAL ASX INFORMATION
The following additional information is required by the Australian Securities Exchange. The information is current as at 10 August
2021.
(1)
Distribution schedule and number of holders of equity securities as at 10 August 2021
Fully Paid Ordinary Shares
Unlisted Options:
9 cents, exp 17/9/2021
Unlisted Options:
9 cents, exp 17/4/2022
Unlisted Options:
5 cents, exp 3/2/2024
Unlisted Options:
2.6 cents, exp 4/6/2023
Unlisted Options:
2.5 cents, exp 21/8/2023
Unlisted Options:
2.5 cents, exp 21/8/2023
Unlisted Options:
2.5 cents, exp 21/8/2023
Unlisted Options:
5 cents, exp 21/8/2023
Unlisted Options:
10 cents, exp 21/8/2023
Unlisted Options:
2.5 cents, exp 21/8/2023
Unlisted Options:
5 cents, exp 21/8/2023
Unlisted Options:
10 cents, exp 21/8/2023
Unlisted Options:
4.35 cents, exp 2/3/2024
1 – 1,000
138
1,001 –
5,000
106
5,001 –
10,000
476
10,001 –
100,000
2,132
100,001 –
and over
1,384
Total
4,236
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1
-
-
-
-
-
-
-
-
-
-
-
-
1
1
1
-
-
-
-
-
-
1
3
1
1
11
22
22
1
1
1
1
1
9
1
3
1
1
13
23
23
1
1
1
1
1
9
The number of holders holding less than a marketable parcel of fully paid ordinary shares as at 10 August 2021 is 1,009.
50
NUHEARA LIMITED
ABN 29 125 167 133
ADDITIONAL ASX INFORMATION
(2)
20 Largest holders of quoted equity securities
The names of the twenty largest holders of fully paid ordinary shares (ASX code: NUH) as at 10 August 2021 are:
Rank
1
Name
NATIONAL NOMINEES LIMITED
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
FARJOY PTY LTD
WASAGI CORPORATION PTY LTD
MR DAVID ROBERT CANNINGTON
FIAGO PTY LTD
BOND STREET CUSTODIANS LIMITED
JAMORE PTY LTD
MR XUAN KHOA PHAM
CITICORP NOMINEES PTY LIMITED
MR MILAN TRIFUNOVIC
MR STEPHEN CHARLES STUART WATTS
MRS QUYNH CHI PHAN
MRS WEI YA JUN FENG HU
MR JOSEPH ZANCA + MRS SZERENKE ZANCA
DR LIONEL JOSHUA HOVEY
MR ZHEN XIN GAO
MR PAUL JOHN ANSTEE + MR RODNEY MICHAEL SMITH
BNP PARIBAS NOMINEES PTY LTD
MR ALAN DAVIS
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
Shares
179,769,599
118,740,919
68,586,279
64,366,770
58,260,722
46,000,000
40,837,861
35,000,000
27,399,588
23,315,000
18,850,000
18,000,000
14,945,570
12,000,000
10,480,000
10,477,490
9,100,000
8,476,893
8,095,238
% of Total
Shares
10.42
6.88
3.97
3.73
3.38
2.67
2.37
2.03
1.59
1.35
1.09
1.04
0.87
0.70
0.61
0.61
0.53
0.49
0.47
7,305,688
780,007,617
0.42
45.20
Stock Exchange Listing – Listing has been granted for 1,725,803,203 ordinary fully paid shares of the Group on issue on the Australian
Securities Exchange. The unquoted securities on issue as at 10 August 2021 are detailed below in part (4).
(3)
Substantial shareholders
Substantial shareholders in Nuheara Limited and the number of equity securities over which the substantial shareholder has a
relevant interest as disclosed in substantial holding notices provided to the Group are listed below:
Name
National Nominees Limited
Farjoy Pty Ltd
Shares
179,769,599
% of Total
Shares
10.42
118,740,919
6.88
51
NUHEARA LIMITED
ABN 29 125 167 133
ADDITIONAL ASX INFORMATION
(4)
Unquoted Securities
The number of unquoted securities on issue as at 10 August 2021:
Security
Unlisted Options – exercisable at 9 cents on or before 17/09/2021
Unlisted Options – exercisable at 9 cents on or before 17/4/2022
Unlisted Options – exercisable at 5 cents on or before 03/02/2024
Unlisted Options – exercisable at 2.6 cents on or before 04/06/2023
Unlisted Options – exercisable at 2.5 cents on or before 21/08/2023
Unlisted Options – exercisable at 5 cents on or before 21/08/2023
Unlisted Options – exercisable at 10 cents on or before 21/08/2023
Unlisted Options – exercisable at 4.35 cents on or before 02/03/2024
Number
on issue
1,000,000
2,500,000
24,264,706
3,750,000
27,323,332
2,000,000
2,000,000
4,500,000
67,338,038
(5)
Holder Details of Unquoted Securities
The holders that hold more than 20% of a given class of unquoted securities that were not issued under an employee incentive
scheme as at 10 August 2021 are detailed below:
Security
Unlisted Options –
exercisable at 9 cents on or before 03/02/2024
Name
Citicorp Nominees Pty Limited
Number of
Securities
24,264,706
(6)
Restricted Securities
The Group had no restricted securities as at 10 August 2021.
(7)
Voting Rights
All fully paid ordinary shares carry one vote per ordinary share without restriction.
Unquoted options have no voting rights.
(8)
Company Secretary
The Company Secretaries are Ms Susan Park and Ms Jean-Marie Rudd.
(9)
Registered Office
The Group’s Registered Office is 190 Aberdeen Street, Northbridge, WA 6003, Australia.
Telephone: +61 8 6555 9999
(10)
Share Registry
The Group’s Share Registry is as follows:
Computershare Investor Services Pty Limited
11/172 St Georges Terrace, Perth WA 6000
Telephone: +61 (0)3 9415 4000 or 1300 850 505 (within Australia)
(11) On-Market Buy-back
The Group is not currently performing an on-market buy-back.
52
NUHEARA LIMITED
ABN 29 125 167 133
ADDITIONAL ASX INFORMATION
(12)
Corporate Governance
The Board of Nuheara Limited is committed to achieving and demonstrating the highest standards of Corporate Governance. The
Board is responsible to its Shareholders for the performance of the Group and seeks to communicate extensively with Shareholders.
The Board believes that sound Corporate Governance practices will assist in the creation of Shareholder wealth and provide
accountability. In accordance with ASX Listing Rule 4.10.3, the Group has elected to disclose its Corporate Governance policies and
its compliance with them on its website, rather than in the Annual Report. Accordingly, information about the Group 's Corporate
Governance practices is set out on the Group 's website at www.nuheara.com/corporate -governance.
(13)
Application of Funds
During the financial year, Nuheara Limited confirms that it has used its cash and assets (in a form readily convertible to cash) in a
manner which is consistent with the Group’s business objectives.
53