NUHEARA LIMITED
ABN 29 125 167 133
ANNUAL REPORT
FOR THE YEAR ENDED 30 JUNE 2023
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 17, 221 St Georges Terrace
Perth WA 6000
Phone: 1300 850 505 (within Australia)
+61 (3) 9415 4000 (outside Australia)
Auditors
RSM Australia Partners
Level 32 Exchange Tower
2 The Esplanade
Perth WA 6000
Phone: +61 (8) 9261 9100
+61 (8) 9261 9111
Fax:
Directors
The Hon Cheryl Edwardes AM
Independent Non-Executive Chairman
Justin Miller
Managing Director/CEO
David Cannington
Non-Executive Director
Kathryn Giudes
Independent Non-Executive Director
David Buckingham
Independent Non-Executive Director
Leroy Liu (Yean-Shao Liu)
Non-Executive Director
Company Secretary
Susan Park – 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
DIRECTORS’ REPORT ........................................................................................................................................... 2
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 ............................................................................................................................... 57
INDEPENDENT AUDITOR’S REPORT .................................................................................................................. 58
ASX ADDITIONAL INFORMATION...................................................................................................................... 63
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 2023
Annual Report.
The 2023 financial year was a transformational year for Nuheara as we successfully transited into
a medical device company, following the creation of a new over-the-counter (“OTC”) hearing
market by the US Food and Drug Administration (“FDA”). Nuheara, with over 8 years of
developing and selling hearable products was ideally positioned to capitalise on this market
opportunity and following the receipt of US FDA certification in October 2022 we were delighted
to successfully launch the world’s first US FDA cleared self-fitting OTC hearing aid in January 2023.
As a global hearing healthcare technology company that combines the best of consumer
hearables with medical device (hearing) expertise, we are uniquely well positioned to provide
smart, affordable and lifestyle-based hearing solutions to the millions of people who are not
currently being serviced with traditional hearing solutions. Over the last 12 months, since the
OTC market was created, we have put in place what we believe are the key requisites to
successfully address this mass market opportunity and deliver sustainable long-term value creation for our shareholders.
Our HP Hearing Pro product offers a leading consumer earbud experience plus hearing benefits (including customised self-fit) and is
priced attractively to drive adaption of consumers with perceived to moderate hearing loss. Our brand license relationship with HP
enables us to sell our product under a trusted household name brand. To ensure these affordable products are accessible to the
largest audience within the US we have focused our distribution efforts on securing leading retailers. While it has taken some time
for key retailers to adapt to the market opportunity, we were pleased in recent months to secure additional agreements which means
that HP Hearing Pro will be available in approximately 5,000 retail points-of-sale across the US from October.
We also continue to invest heavily in research and development, with the key focus presently on developing our next generation
hearing product which integrates a single chip which we have developed with our strategic partner, Realtek. We expect to launch
this product at the Consumer Electronics Show in January 2024, and we are excited by the enhanced consumer benefits and features
it will offer.
Our success is built on the foundation of our people. In April 2023, we announced a new enhanced organisational structure to reflect
our transition to a medical device company and better support our future growth. As part of this, we were pleased to both appoint
some key new senior executives and promote existing key leaders within the organisation.
The growth foundations of our business are now in place, and with multiple global market opportunities available, we are confident
that our efforts will translate into further growth for Nuheara and we now see a clear path ahead to sustainable profitability.
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 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 ongoing
support. I look forward with confidence for the Company’s continued success over the coming 12 months.
Yours faithfully
The Hon Cheryl Edwardes AM
Non-Executive Chairman
1
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 2023.
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 Chairman and non-executive Director on a number of ASX-listed boards and a former member of the Foreign
Investment Review Board.
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:
Westgold Resources Limited - appointed 28 March 2022*
Red Hawk Mining Limited formerly Flinders Mines Limited - appointed 17 June 2019*
Vimy Resources Limited - appointed 26 May 2014 and stepped down 4 August 2022 on the merger with Deep Yellow
Limited
* 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 and Non-Executive Director
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.
2
NUHEARA LIMITED
ABN 29 125 167 133
DIRECTORS’ REPORT
1. DIRECTORS (continued)
Kathryn Giudes BSc, ASc, MAICD - Independent Non-Executive Director; Chair of Remuneration and Nomination Committee
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 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, resigned October 2021
Livehire Limited – appointed 1 November 2021, resigned 11 March 2022
Locality Planning Energy Holdings Limited – appointed 3 March 2022*
* Denotes current directorship
David Buckingham Engineering Science B.Tech (Hons), ACA, ICAEW, GAICD - Independent Non-Executive Director; Chair of
Audit and Risk Committee
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:
OpenLearning Limited – appointed 10 September 2020, resigned 23 May 2022
Pentanet Limited – appointed 10 December 2020*
Hiremii Limited – appointed 3 May 2021*
Way2VAT Limited – appointed 15 September 2022*
* Denotes current directorship
Leroy Liu (Yean-Shao Liu) BS Chem. Eng, MS Chem. Eng, INSEAD – Non-Executive Director
Appointed: 15 March 2023
Mr Liu senior executive career spans extensively across technology, mergers and acquisitions, and venture capital. Based in
Taiwan, Mr Liu is currently the Chief Strategy Officer at Realtek Semiconductor Corporation. Prior to that Mr Liu was APAC
General Manager with Dialog Semiconductor.
Mr Liu has bachelor’s and master’s degrees in chemical engineering from the National Taiwan University and is an INSEAD
alumni.
Mr Liu did not have any directorships in other listed companies during the past three years.
3
NUHEARA LIMITED
ABN 29 125 167 133
DIRECTORS’ REPORT
2. COMPANY SECRETARIES
Susan Park B. Com, CA, F Fin, GAICD, AGIA – Company Secretary
Appointed: 6 June 2016
Ms Park has over 25 years' experience in the corporate finance industry and is founder and Managing Director of consulting
firm Park Advisory 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 Fellow of the Governance Institute of Australia and is a Graduate Member of the Australian Institute
of Company Directors
Jean-Marie Rudd B. Bus, CA, GAICD – Chief Financial Officer and Joint Company Secretary
Appointed: 30 November 2016 – Resigned: 20 October 2022
3. PRINCIPAL ACTIVITIES
The principal activity of the Group is the development and commercialisation of its proprietary hearing technology and
products as regulated medical devices.
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 2023.
5. OPERATING AND FINANCIAL REVIEW
Our business model and objectives
Nuheara is a global hearing technology company which is changing people’s lives by enhancing the power to hear and making
hearing solutions affordable and accessible. Nuheara provides smart, affordable and lifestyle-based hearing solutions which
can benefit the millions of people who are currently not being serviced with traditional hearing solutions. In the USA alone
we estimate that the total addressable market for our OTC hearing products is approximately 68 million people, being 26%
of the adult population who have perceived-to-moderate hearing loss. Our research & development investment, technology
and regulatory capabilities mean we can combine the best of consumer hearables plus medical device (hearing) expertise,
positioning us uniquely well to capitalise on this large nascent market opportunity (both in the USA and globally).
Nuheara is headquartered in Perth, Australia.
Operating results
Revenue from ordinary activities for the year was $1,931,264, compared with revenue of $3,865,582 for the year ended 30
June 2022; a decrease of 50%. Following the launch of the Group’s HP Hearing Pro OTC hearing aid in early 2023, revenue in
the second half of the year increased materially versus the first half of the year at $1,165,642 versus $765,622 and was 31%
higher than the revenue in the second half of the prior year.
The Group recorded negative gross profit of $951,472, reflecting the inclusion in cost of goods sold of $1,862,157 in respect
of write downs of inventory to net realizable value relating to the Group’s Nuheara-branded products (30 June 2022 write
down: $713,901). Excluding these write downs, underlying gross profit was $910,685.
The Group recorded a net loss after tax attributable to members of $12,617,576 in the year ended 30 June 2023. This was
15% lower than the restated net loss after tax attributable to members for the year ended 30 June 2022 of $14,801,105. The
net loss after tax result represented a loss of 8.39 cents per share (basic and diluted), compared to a restated loss of 16.07
cents per share last year.
Net cash inflows of $1,848,662 were attributable to $10,828,181 received through capital raisings (net of share issue
expenses), $2,500,000 from proceeds of issue of convertible notes, $61,688 from proceeds from sale of assets held at fair
value; offset by $7,480,364 in net operating outflows, $2,876,524 for the purchase of intangible assets (capitalised
development costs and trademarks), $5,005 for the purchase of plant and equipment and $1,179,314 net repayments from
other borrowings.
At year-end, the Group held $2,320,101 in cash (30 June 2022: $441,525).
4
NUHEARA LIMITED
ABN 29 125 167 133
DIRECTORS’ REPORT
5. OPERATING AND FINANCIAL REVIEW (continued)
Review of Operations
(i) US FDA creates OTC Hearing aid market, enabling Nuheara’s transformation into a medical device company
In August 2022, the US FDA released its landmark final ruling, establishing a regulatory category for over-the-counter (“OTC”)
hearing aids in the United States. This allows hearing solutions to be offered to a much greater audience of consumers by
enabling producers and retailers to increase accessibility and affordability versus the traditional hearing solutions model.
Nuheara, with over 8 years of developing and selling unregulated hearable products, was ideally positioned to capitalise on
this market opportunity and in October 2022 received its historic and world first US FDA certification for its 510(K) self-fitting
hearing aids, enabling its transition into a medical device company.
(ii) Successful launch of Nuheara’s HP Hearing Pro
In January 2023, Nuheara launched the world’s first US FDA cleared self-fitting OTC hearing aid, HP Hearing Pro at the
Consumer Electronics Show (CES) 2023 in Las Vegas. Subsequently, mass production and shipment commenced in February
2023 with product sales of over $1m invoiced by end of June 2023. The product was initially on sale through 302 Best Buy
retail stores in the US, with Nuheara also engaging with other leading retailers to further expand the category for consumers
and extend its retail distribution reach (see Likely Developments section below).
(iii) Strategic partnership with Realtek Semiconductor Corporation
In July 2022, the Company announced that it had entered into a strategic partnership with Taiwan based Realtek
Semiconductor Corporation (Realtek), to include a cornerstone investment by Realtek in Nuheara.
By way of a signed Memorandum of Understanding, Nuheara and Realtek are partnering together to develop chipset
(Integrated Circuits or ICs) and technology solutions to globally penetrate multiple hearing related markets. These include
the global True Wireless Stereo (TWS) with Personal Sound Amplification Product (PSAP) chipset market and the regulated
OTC Hearing Aid market.
The Partnership was initially supported by a placement of 14,166,667 ordinary shares at $0.12 to Realtek for a total of $1.7
million. On 8 September 2022, Nuheara announced a follow-on round of funding from Realtek. By way of a signed Convertible
Note, Nuheara raised $2.5 million from Realtek. The Convertible Note was issued under the Company’s Listing Rule 7.1
placement capacity. Funds from these investments are being used for product research and development, medical
device/hearing aid market and regulatory development, and working capital. Realtek also supported and participated in
subsequent capital raises, as outlined below.
A key initiative under the partnership is to enable Nuheara to deliver its next generation of hearing aid products by integrating
Realtek’s advanced chipset (see below). The partnership can also help enable Nuheara to expand to co-developing TWS PSAP
chipset and technology solutions for the broader consumer electronics market.
(iv) Next generation product development
Substantial investment in research and development has been the key driver of Nuheara successfully positioning itself as a
product leader in the nascent US OTC market. Notwithstanding the market positioning of the current generation HP Hearing
Pro product, work is ongoing with the next generation product. A key aspect of this development is the embedding of a single
Realtek chipset, versus four chips currently, which will enable us to provide enhanced consumer benefits; gives us increased
control of the design and manufacture of the product; and can enable us to explore Original Equipment Manufacturer (OEM)
partnership opportunities.
(v) Enhanced organisational structure to better support current US footprint and future growth
In April 2023, the Group’s announced its new enhanced organisation structure to reflect its transition to a medical device
company and better support its future growth, including capitalising on the new US OTC hearing aid market opportunity and
OEM opportunities. The structure included the appointment of new senior executives together with the reassignment of
existing executives to better align with the Group’s growth strategy.
Capital Raisings
Capital raise December 2022
On 22 December 2022, Nuheara announced that it was completing a capital raise of $3m (before costs) through a placement
of approximately 16.8m new shares to existing and new sophisticated and professional investors at $0.18 per fully paid up
ordinary share. The placement was supported by Realtek who contributed $1.5m of the total funds raised. The share
placement was to fund working capital to increase production for the rollout of the Company’s US FDA cleared OTC hearing
aids.
The placement of 16.8m new shares was undertaken under the Company’s ASX Listing Rule 7.1 placement capacity with
settlement of the placement and the issue of the shares taking place on 30 December 2022.
5
5. OPERATING AND FINANCIAL REVIEW (continued)
NUHEARA LIMITED
ABN 29 125 167 133
DIRECTORS’ REPORT
Capital raise March 2023
On 8 March 2023, Nuheara announced that it was completing a capital raise of $3m (before costs) through a placement of
approximately 17.49m new shares to existing and new sophisticated and professional investors at $0.17 per fully paid up
ordinary share. The placement was again supported by Realtek who contributed $0.6m of the total funds raised. The share
placement was to fund working capital to increase production and marketing of the Group’s hearing devices in key markets.
The placement of 17.49m new shares was undertaken under the Company’s ASX Listing Rule 7.1 placement capacity with
settlement of the placement and issue of the shares taking place on 13 March 2023.
Capital raise June 2023
On 6 June 2023, Nuheara announced that it was completing a capital raise of $4.4m (before costs) through a placement at
$0.145 per share, a premium to the Company’s last closing share price, to sophisticated and professional investors. Existing
shareholders Realtek, Farjoy and Salter Brothers supported the placement with funds raised to support working capital to
ramp up production, marketing, and promotions for the ongoing rollout of HO Hearing PRO hearing aids in the US. $3.52m
(before costs) of these funds were received in June 2023 being the issue of 24.28m shares under the Company’s ASX Listing
Rule 7.1 placement capacity. The balance of $880,000 of the funds related to amounts to be issued to Realtek and therefore
were subject to shareholder approval under Listing Rule 10.11 and accordingly were not received in the year ended 30 June
2023 (see events after balance sheet date below).
Close out of Subscription Agreement
On 12 July 2022, 26 July 2022 and 27 July 2022, Healthcare 2030 issued subscription notices for the remaining shares under
the Subscription Agreement entered into in December 2021. The issue of 19,502,164 shares in respect of these three
subscription notices finalised the agreement with Healthcare 2030.
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
Diluted loss per share
Review of Financial Condition
Liquidity and Capital Resources
2023
(8.39)
(8.39)
Restated
2022
(16.07)
(16.07)
At year-end, the Company held $2,320,101 in cash (30 June 2022: $441,525).
The net tangible asset/(liability) backing of the Group was 0.22 cents per share (2022: (3.59) cents per share). As at 30 June
2023 the number of shares on issue was 197,069,884 (30 June 2022: 103,198,611). A share consolidation of 20 ordinary
shares into 1 ordinary share of the Company was completed on 6 May 2022. The number of ordinary shares for the purpose
of net tangible asset/(liability) backing per ordinary share has been adjusted for the share consolidation.
Asset and Capital Structure
Debts:
Trade and other payables
Interest bearing loans and borrowings
Less: Cash and cash equivalents
Net debts
Total equity
Total capital employed
2023
$
2,150,959
2,624,398
(2,320,101)
2,455,256
5,110,664
7,565,920
Restated
2022
$
3,631,789
2,948,758
(441,525)
6,139,022
2,145,572
8,284,594
The level of gearing in the Group is within acceptable limits set by the Directors.
6
NUHEARA LIMITED
ABN 29 125 167 133
DIRECTORS’ REPORT
5. OPERATING AND FINANCIAL REVIEW (continued)
Share issues during the year
The Group issued 93,871,273 shares during the year as follows (2022: 282,619,844 shares before the 6 May 2022 share
consolidation and 2,916,655 shares following the share consolidation):
Date
12 July 2022
12 July 2022
12 July 2022
12 July 2022
12 July 2022
12 July 2022
12 July 2022
Number
37,548
60,982
83,022
104,222
42,110
14,166,667
1,904,762
26 July 2022
11,142,857
27 July 2022
6,454,545
30 December 2022
13 March 2023
12 June 2023
12 June 2023
12 June 2023
12 June 2023
16,807,781
17,491,049
180,498
510,551
62,942
50,864
12 June 2023
224,049
12 June 2023
270,962
12 June 2023
24,275,862
Details
Shares issued under Salary Sacrifice Share Plan (Directors)
Shares issued under Salary Sacrifice Share Plan (Directors)
Shares issued under Salary Sacrifice Share Plan (Directors)
Shares issued under Salary Sacrifice Share Plan (Directors)
Shares issued under Salary Sacrifice Share Plan (Directors)
Shares issued by way of share placement
Shares issued by way of conversion under Convertible Note
funding agreement
Shares issued by way of conversion under Convertible Note
funding agreement
Shares issued by way of conversion under Convertible Note
funding agreement
Shares issued by way of share placement
Shares issued by way of share placement
Shares issued under Salary Sacrifice Share Plan (Directors)
Shares issued under Employee Share Plan
Shares issued under Employee Share Plan
Shares issued for conversion of accrued interest payable under
Convertible Note agreement
Shares issued for conversion of accrued interest payable under
Convertible Note agreement
Shares issued for conversion of accrued interest payable under
Convertible Note agreement
Shares issued for conversion of accrued interest payable under
Convertible Note agreement
Share Issue
Price
$0.6863
$0.4226
$0.2985
$0.1876
$0.1376
$0.12
$0.105
$0.105
$0.11
$0.18
$0.17
$0.1979
$0.17
$0.388
$0.237
$0.225
$0.182
$0.145
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.
The highest risk factors for the Company’s Board and Management to monitor and mitigate are currently seen as follows:
•
•
•
•
•
•
•
Delays in growth of the new and nascent OTC hearing aid market in the USA;
Loss of key relationships with major retail and OEM customers and partners;
Supply chain disruption risks affecting the Company’s ability to sell product and drive revenues;
Loss of key personnel in competitive employment markets, particularly sector-specialists and employees with
significant involvement in the development and delivery of the Company’s technology and products;
Security over Company owned Intellectual Property (IP);
Data breaches arising from Cyber Security threats to the Company’s core systems and networks;
Continued access to liquidity and capital to grow and operate the Company’s business; and
7
NUHEARA LIMITED
ABN 29 125 167 133
DIRECTORS’ REPORT
5. OPERATING AND FINANCIAL REVIEW (continued)
Risk Management (continued)
• Non compliance with sector specific regulation over medical hearing device standards, particularly in light of
the new US FDA OTC regulations highlighted above.
Note, this is not an all-inclusive list of all risks that the Company faces but the key risks that the Board deem to be most
important to monitor and mitigate at present. Please refer to the Company’s risk management policy in the Company’s
Corporate Governance page of the Company’s website for further information on Risk Management.
6. SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
Refer to the Review of Operations section within the Operating and Financial Review above for details of significant changes
in the state of affairs occurring during the year ended 30 June 2023.
7. LIKELY DEVELOPMENTS
As noted in the Operating and Financial Review, the Company during the past 12 months has transitioned into serving the
new regulated OTC hearing category. The Company is the process of significantly increasing its distribution footprint in the
US retail market, with the total number of retail points-of-sale to increase to approximately 5,000 before the end of the 2023
calendar year. It is expected that these developments can enable the Company to drive increased revenue and cash receipts.
8. SIGNIFICANT EVENTS AFTER BALANCE DATE
Receipts from June 2023 capital raise
As noted above, Realtek’s portion of the June 2023 capital raise of $880,000 was subject to shareholder approval which was
obtained at a general meeting of shareholders on 20 July 2023. The funds were received in August 2023 with 6,068,966 shares
issued to Realtek on 10 August 2023 at $0.145 per share. On that same date an additional 311,644 shares were issued to
Realtek for conversion of accrued interest payable under their $2.5m Convertible Note agreement at $0.16 per share.
9. ENVIRONMENTAL REGULATION
The Group’s operations are not subject to any significant environmental, Commonwealth or State, regulations or laws.
10. UNQUOTED SHARE OPTIONS
As at the date of this report, the Group has 8,216,520 unquoted options over ordinary shares. These options have been issued
on the following terms.
Number of Unquoted Options
1,213,236
125,000
425,000
50,000
250,000
546,878
50,000
375,000
2,004,459
2,118,612
TOTAL
7,158,185
Exercise Price
$1.00 each
$0.87 each
$0.68 each
$0.37 each
$0.48 each
$0.56 each
$0.153 each
$0.182 each
$0.255 each
$0.27 each
Expiry Date
03 February 2024
02 March 2024
31 August 2024
04 January 2025
28 April 2025
28 October 2023
03 June 2025
12 June 2026
12 June 2026
12 June 2026
Option holders do not have any rights to participate in any issues of shares or other interests in the Group or any other entity.
8
11. REMUNERATION REPORT (AUDITED)
NUHEARA LIMITED
ABN 29 125 167 133
DIRECTORS’ REPORT
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
David Buckingham
Leroy Liu (Yean-Shao Liu)
Executives
John Luna
Jean-Marie Rudd
Ivan Kelly
Position
Independent Non-Executive Chairman
Managing Director
Chief Executive Officer (until 9 May 2022 and again since 15 May 2023)
Executive Director/Chief Marketing Officer (to 15 March 2022)
Non-Executive Director (since 15 March 2022)
Independent Non-Executive Director
Independent Non-Executive Director
Non-Executive Director (Appointed 15 March 2023)
Position
Chief Executive Officer (Resigned 15 May 2023)
Chief Financial Officer/Joint Company Secretary (Resigned 20 October 2023)
Chief Financial Officer (Appointed 1 May 2023)
Except as noted, the named persons held their current position for the whole of the financial year. There were no other
changes to KMP after the reporting date and before the date the annual report was authorised for issue.
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 $400,000 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 significantly 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.
9
11. REMUNERATION REPORT (AUDITED) (continued)
NUHEARA LIMITED
ABN 29 125 167 133
DIRECTORS’ REPORT
Australian-based executives receive a superannuation guarantee contribution required by the Government, currently 11%
(10.5% to 30 June 2023) 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 Nuheara Incentive Option Plan (Option Plan) to align Directors’ interests with shareholders’ interests.
Options granted under the Option Plan 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, including relating to an element of remuneration that has not vested
or has vested but remains subject to a holding lock. 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.
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.
The tables below set out summary information about the Group’s earnings and movements in shareholder wealth for the five
years to 30 June 2023:
Revenue
Net loss before tax
Net loss after tax
Share price at start of year (post-
consolidation)
Share price at end of year (post-
consolidation)
Basic earnings per share (cents
per share, post-consolidation)
Diluted earnings per share (cents
per share post-consolidation)
2023
$
1,931,264
(13,030,255)
(12,619,733)
2023
$0.12
$0.18
(8.39)
(8.39)
Restated
2022
$
3,865,582
(14,315,229)
(14,793,653)
2022
$0.88
$0.12
Restated
2021
$
10,741,421
(7,891,409)
(7,891,409)
2021
$0.24
$0.88
Restated
2020
$
1,739,535
(11,690,733)
(11,690,733)
2020
$1.20
$0.24
2019
$
2,218,714
(10,025,151)
(10,027,238)
2019
$1.96
$1.20
(16.07)
(10.18)
(22.97)
(21.80)
(16.07)
(10.18)
(22.97)
(21.80)
10
NUHEARA LIMITED
ABN 29 125 167 133
DIRECTORS’ REPORT
11. REMUNERATION REPORT (AUDITED) (continued)
Details of remuneration provided to Directors and executives during the year are as follows:
Cheryl Edwardes
Justin Miller
2023
2022
2023
2022
David Cannington (1)
2023
Kathryn Giudes
David Buckingham
Jean-Marie Rudd (2)
John Luna (3)
Leroy Liu
(Yean-Shao Liu) (4)
Ivan Kelly (5)
TOTAL
TOTAL
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2023
2023
2022
Salary &
Fees
$
90,000
90,000
407,200
407,200
110,440
240,582
65,000
65,000
65,000
65,000
147,606
265,000
357,211
59,042
-
20,000
1,262,457
1,191,824
Short-Term
Employee
Benefits
Post
Employment
Benefits
Non-
monetary(6)
$
Annual
Leave
$
Superannuation
$
-
-
-
-
2,077
22,108
15,425
9,314
-
1,702
-
-
-
-
1,759
4,655
52,037
-
-
-
-
-
-
-
3,956
-
8,438
28,836
-
-
55,874
30,219
-
1,784
23,892
42,106
9,450
9,000
42,756
40,720
11,596
24,163
6,825
6,500
6,825
6,500
16,231
26,500
-
-
-
2,100
95,783
113,383
Long
Term
Employee
Benefits
Long
Service
Leave
$
-
-
30,756
9,499
-
(15,960)
-
-
-
-
(21,621)
8,600
-
-
-
9,135
2,139
Share-
Based
Payments
Options(7)
$
0
7,516
982
8,759
982
8,759
-
-
-
5,741
2,716
24,497
10,172
34,094
Total
$
99,450
106,516
505,879
490,917
123,018
259,246
71,825
71,500
71,825
77,241
146,691
333,208
419,420
130,410
-
-
1,711
16,563
89,366
25,595
1,463,703
1,469,037
(1) David Cannington retired as Executive Director/Chief Marketing Officer on 15 March 2022. when he became a Non-Executive
Director. In addition to being a Non-Executive Director, during 2023 David Cannington was temporarily employed on fixed
term executive basis to support the marketing initiatives of the business.
(2) Jean-Marie Rudd resigned 20 October 2022.
(3) John Luna was appointed Chief Executive Officer on 9 May 2022 and resigned on 15 May 2023.
(4) Leroy Liu (Yean-Shao Liu) was appointed as a Non-Executive Director on 15 March 2023.
(5) Ivan Kelly was appointed as Chief Financial Officer on 1 May 2023, commencing employment initially on a part-time basis.
(6) Non-monetary benefits include insurance, health care benefits, car parking and mobile phone allowance.
(7) The value of the options granted to KMP as part of their remuneration is calculated as at the grant date using the Black
Scholes pricing model. The amounts disclosed as part of remuneration for the financial year have been determined by
allocating the grant date value on a straight-line basis over the period from grant date to vesting date.
The proportion of remuneration for 2023 and 2022 reported above is 100% fixed. There was a STI scheme in operation in
2022 which was available to John Luna and Jean-Marie Rudd where a maximum of 20% of the salary was available to be paid.
However, the STI criteria were not met and therefore no bonus was achieved or paid.
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 (2022: $407,200) per
annum (exclusive of superannuation). Mr Miller will also be entitled to participate in short-term incentives of up to 20%
(2022: 20%) of the base package. For the financial year ended 30 June 2023 Mr Miller did not earn a bonus under the incentive
plan (2022: nil).
The Miller Agreement commenced on 2 March 2016 with Mr Miller’s appointment as Executive Director, Managing Director
and Chief Executive Officer. The role of Chief Executive Officer was relinquished upon the promotion of John Luna into the
position with effect from 9 May 2022, but Mr Miller was reappointed as Chief Executive Officer following Mr Luna’s
resignation on 15 May 2023. 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.
John Luna – Chief Executive Officer – resigned 15 May 2023
Mr John Luna was engaged as the Chief Executive Officer of the Group from 9 May 2022 until his resignation on 15 May 2023
pursuant to an employment and services agreement between the Group and Mr Luna (Luna Agreement).
The total annual remuneration payable to Mr Luna under the Luna Agreement was a salary of US$275,700 per annum (2022:
US$275,700), a health care allowance of US$37,800 per annum (2022: US$37,800), and a telecommunications allowance of
US$200 per month (2021: US$100 per month). Mr Luna was also entitled to participate in short-term incentives of up to 20%
(2022: nil) of the base package. For the financial year ended 30 June 2023 Mr Luna did not earn a bonus under the incentive
plan (2022: nil).
Mr Luna is also subject to restrictions in relation to the use of confidential information during and after his employment with
the Group ceased, being directly or indirectly involved in a competing business during the continuance of his employment
with the Group, and for a period of six months after his employment with the Group ceases, on terms which are otherwise
considered standard for agreements of this nature.
The Luna Agreement contains additional provisions considered standard for agreements of this nature.
12
NUHEARA LIMITED
ABN 29 125 167 133
DIRECTORS’ REPORT
11. REMUNERATION REPORT (AUDITED) (continued)
Ivan Kelly – Chief Financial Officer Appointed 1 May 2023
Mr Ivan Kelly was appointed as the Chief Financial Officer of the Group on 1 May 2023, pursuant to an employment and
services agreement between the Group and Mr Kelly (Kelly Agreement).
The total annual remuneration payable to Mr Kelly under the Kelly Agreement on a full-time basis is a salary of $300,000 per
annum (exclusive of superannuation) and a telecommunications allowance of $200 per month. Mr Kelly will also be entitled
to participate in short-term incentives of up to 20% of the base package from the 2024 financial year.
The Kelly Agreement commenced on 1 May 2023 and employment under the Kelly Agreement will continue until terminated
in accordance with the Kelly Agreement (Term). During the Term, the Kelly Agreement may be terminated by the Group at
any time:
•
•
by three months' written notice to Mr Kelly, at which time the Group will immediately pay Mr Kelly 3 months’
base salary in lieu; or
by summary notice in circumstances where Mr Kelly neglects to perform his duties or comply with reasonable
or proper direction or engages in serious misconduct.
Otherwise, the Kelly Agreement may be terminated by Mr Kelly at any time for any reason by giving not less than three
months' notice in writing to the Group. Mr Kelly may also terminate the Kelly Agreement immediately by giving notice if at
any time the Group is in breach of a material term of the Kelly Agreement.
In the event of a change of control, Mr Kelly will receive a bonus payment comprising of a lump sum gross payment of six
months’ base salary.
Mr Kelly 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 six months after his employment with the Group ceases, on terms which are otherwise
considered standard for agreements of this nature.
The Kelly Agreement contains additional provisions considered standard for agreements of this nature.
Jean-Marie Rudd – Chief Financial Officer and Joint Company Secretary resigned 20 October 2022
Ms Jean-Marie Rudd was engaged as the Chief Financial Officer/Joint Company Secretary of the Group until her resignation
on 20 October 2022, 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 was a salary of $265,000 per annum (exclusive
of superannuation) (2022: $265,000) and a telecommunications allowance of $200 per month (2022: $200 per month). Ms
Rudd was also entitled to participate in short-term incentives of up to 20% (2022: 20%) of the base package. Ms Rudd was
not awarded a bonus under the incentive plan for the financial year ended 30 June 2023 (2022: nil).
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
11. REMUNERATION REPORT (AUDITED) (continued)
KMP shareholdings
The number of ordinary shares the Group held by KMP during the financial year is as follows:
Opening
balance
1 July 2022
43,702
3,567,182
3,226,151
Issued
during
the year
56,262
127,279
61,601
71,092
40,632
141,912
115,670
-
7,165,709
-
-
222,608
508,382
Ordinary Shares
Cheryl Edwardes
Justin Miller(1)
David Cannington
Kathryn Giudes(2)
David
Buckingham(3)
Jean-Marie
Rudd(4)
John Luna
Total
Notes:
Acquired
during
the year
Disposed
during
the year
Closing Balance
30 June 2023
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
99,964
3,694,461
3,287,752
111,724
141,912
115,670
222,608
7,674,091
(1) 619,093 shares are held by Wasagi Corporation Pty Ltd as trustee for the Wasagi Family Trust and 75,368 shares
are held by Mr Justin Miller and Mrs Kym Miller as trustee for the BBFC Super Fund, both of which Mr Miller is a
beneficiary.
(2) 32,000 shares are held by Aylesham Pty Ltd as trustee for the Norval Court Super Fund of which Mrs Giudes is a
beneficiary, 47,711 shares are held by Kathryn Foster Pty Ltd as trustee for the Kathryn Foster Family Trust of which
Mrs Giudes is a beneficiary, and 32,013 shares are held by Wayne Giudes, Mrs Giudes’ husband.
(3) 141,912 shares are held by The Buckingham Family Trust of which Mr Buckingham is a beneficiary.
(4) 115,670 shares are held by the Rudd Family Trust of which Ms Rudd is a beneficiary.
Shares issued to KMP under Salary Sacrifice Share Plan
508,382 shares were issued to KMP during the financial year (2022: 154,495 post-consolidation):
Name
Cheryl Edwardes
Cheryl Edwardes
Cheryl Edwardes
Cheryl Edwardes
Justin Miller
Justin Miller
Justin Miller
Justin Miller
David Cannington
David Cannington
David Cannington
David Cannington
Kathryn Giudes
Kathryn Giudes
Kathryn Giudes
Kathryn Giudes
John Luna
John Luna
Date
12 July 2022
12 July 2022
12 July 2022
12 July 2022
12 July 2022
12 July 2022
12 July 2022
12 July 2022
12 July 2022
12 July 2022
12 July 2022
12 July 2022
12 July 2022
12 July 2022
12 July 2022
12 July 2022
12 July 2022
12 June 2023
Share Issue
Price
$0.6863
$0.4226
$0.2985
$0.1876
$0.6863
$0.4226
$0.2985
$0.1876
$0.6863
$0.4226
$0.2985
$0.1876
$0.6863
$0.4226
$0.2985
$0.1876
$0.1376
$0.1979
Number
6,556
10,648
15,074
23,984
14,832
24,089
34,101
54,257
11,425
18,555
22,961
8,660
4,735
7,690
10,886
17,321
42,110
180,498
508,382
Total
$4,500
$4,500
$4,500
$4,500
$10,180
$10,180
$10,180
$10,180
$7,841
$7,841
$6,855
$1,625
$3,250
$3,250
$3,250
$3,250
$5,793
$35,721
$137,396
Note the shares issued on 12 July 2022 related to remuneration for the financial year ended 30 June 2022. For the financial
year ended 30 June 2023 a total of 588,368 shares are to issued to KMP as remuneration under the Nuheara Employee Salary
Sacrifice Plan (2022: 327,884 post-consolidation shares). 180,498 of these shares were issued during the financial year (12
June 2023) with the remaining 407,870 shares still to be issued at the date of this report.
14
11. REMUNERATION REPORT (AUDITED) (continued)
NUHEARA LIMITED
ABN 29 125 167 133
DIRECTORS’ REPORT
KMP Share Options
The relevant beneficial interest of KMP in the options over ordinary share capital of the Group is as follows:
Opening
balance
1 July 2022
150,000
150,000
150,000
100,000
50,000
150,000
-
750,000
Issued
during
the year
Exercised
during
the year
Expired
during
the year
Closing Balance
30 June 2023
-
-
-
-
-
-
375,000
375,000
-
-
-
-
-
-
-
-
-
-
-
-
(50,000)
-
-
(50,000)
150,000
150,000
150,000
100,000
-
150,000
375,000
1,075,000
Options
Cheryl Edwardes
Justin Miller(1)
David Cannington
David
Buckingham(2)
Jean-Marie Rudd
John Luna
Ivan Kelly
Total
Notes:
(1) 150,000 options are held by Wasagi Corporation Pty Ltd as trustee for the Wasagi Family trust of which Mr
Miller is a beneficiary.
(2) 100,000 options are held by The Buckingham Family Trust of which Mr Buckingham is a beneficiary.
There were 375,000 options issued during the financial year to KMP (2022: 150,000 options post-consolidation), being options
issued at an exercise price of $0.182 to Ivan Kelly on 12 June 2023, expiring 12 June 2026, with a fair value of $36,810.
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
15
NUHEARA LIMITED
ABN 29 125 167 133
DIRECTORS’ REPORT
12. DIRECTORS’ MEETINGS
The following table sets out the number of meetings of the Group’s Directors held during the year ended 30 June 2023 and
the number of meetings attended by each Director:
BOARD
AUDIT & RISK
MANAGEMENT
COMMITTEE
NOMINATION &
REMUNERATION
COMMITTEE
Number
Attended
14
14
14
14
14
4
Liu)
Number
Eligible
to
Attend
14
14
14
14
14
4
Number
Attended
2
-
-
2
2
-
Number
Eligible
to
Attend
2
-
-
2
2
-
Number
Attended
2
-
-
2
2
-
Number
Eligible
to Attend
2
-
-
2
2
-
Director
Cheryl Edwardes
Justin Miller
David Cannington
Kathryn Giudes
David Buckingham
Leroy
(Yean-Shao
(Appointed 15 March 2023)
Liu
13. 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 $138,149.
14. 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.
15. NON-AUDIT SERVICES
The Board of Directors is satisfied that there was no provision of non-audit services during the year.
16. AUDITOR’S INDEPENDENCE DECLARATION
The auditor’s independence declaration for the year ended 30 June 2023 has been received and can be found on page 17 of
the financial report.
Made and signed in accordance with a resolution of the Directors.
Justin Miller
Co-founder and Managing Director
Perth, 29 September 2023
16
AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of the financial report of Nuheara Limited for the year ended 30 June 2023, I
declare that, to the best of my knowledge and belief, there have been no contraventions of:
(i)
(ii)
The auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
Any applicable code of professional conduct in relation to the audit.
RSM AUSTRALIA PARTNERS
Perth, WA
Dated: 29 September 2023
MATTHEW BEEVERS
Partner
NUHEARA LIMITED
ABN 29 125 167 133
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2023
NOTES
4
4
5
5
5
5
3
Revenue
Cost of goods sold
Gross profit
Other income
Marketing and promotional
Product development and technology related expenses
General and administrative
Net finance costs
(Loss)/gain on embedded derivative associated with convertible notes
Total expenses
Loss before tax from continuing operations
Income tax benefit/(expense)
Net loss after tax from continuing operations
Other comprehensive loss
Items that may be reclassified subsequently to profit or loss
Exchange differences on translating foreign operations
Total other comprehensive loss
Total comprehensive loss
Loss after tax attributable to:
Owners of the Company
Non-controlling interests
Net loss after tax from continuing operations
Total comprehensive loss attributable to:
Owners of the Company
Non-controlling interests
Total comprehensive loss
Earnings per share
Basic loss per share (cents per share)
Diluted loss per share (cents per share)
* Comparatives restated – refer Note 2
2023
$
1,931,264
(2,882,736)
(951,472)
1,846,278
(2,078,448)
(4,281,676)
(4,896,397)
(516,561)
(2,151,979)
Restated*
2022
$
3,865,582
(3,153,296)
712,286
1,910,994
(5,399,307)
(6,121,811)
(5,137,019)
(334,195)
53,823
(12,078,783)
(15,027,515)
(13,030,255)
(14,315,229)
410,522
(12,619,733)
(478,424)
(14,793,653)
890
890
(12,618,843)
118
118
(14,793,535)
(12,617,576)
(2,157)
(12,619,733)
(14,801,105)
7,452
(14,793,653)
(12,616,686)
(2,157)
(12,618,843)
(14,800,987)
7,452
(14,793,535)
24
24
(8.39)
(8.39)
(16.07)
(16.07)
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 2023
30 June2023
$
Restated*
30 June 2022
$
Restated*
1 July 2021
$
NOTES
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Inventory
Financial assets held at fair value
Other current assets
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
Financial liabilities
Income tax payable
Provisions
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Financial liabilities
Deferred income
Provisions
Deferred tax
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Share option reserve
Option premium on convertible note
Foreign currency translation reserve
Accumulated losses
Non-controlling interests
TOTAL EQUITY
* Comparatives restated – refer Note 2
31
6
7
8
9
10
11
12
13
14
14
15
16
3
17
17
14
2,320,101
3,257,626
2,130,112
-
321,558
8,029,397
102,579
212,560
-
4,673,007
4,988,146
441,525
3,007,247
3,355,010
69,677
-
6,873,459
175,846
394,754
-
5,848,725
6,419,325
7,276,355
3,363,757
1,099,077
-
-
11,739,189
229,996
-
1
5,330,903
5,560,900
13,017,543
13,292,784
17,300,089
2,150,959
303,013
-
648,409
3,102,381
2,443,154
1,766,265
55,205
539,874
4,804,498
3,631,789
3,338,593
12,419
682,969
7,665,770
215,223
2,174,927
132,693
958,599
3,481,442
1,573,665
-
-
940,997
2,514,662
-
1,848,484
90,670
492,593
2,431,747
7,906,879
11,147,212
4,946,409
5,110,664
2,145,572
12,353,680
79,295,192
4,847,403
205,198
(7,458)
(79,234,966)
5,295
5,110,664
64,294,132
4,469,726
-
(7,458)
(66,618,280)
7,452
2,145,572
59,966,708
4,211,722
-
(6,478)
(51,818,272)
-
12,353,680
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 2023
Ordinary
Shares
$
Accumulated
Losses*
$
Option
Premium on
Convertible
Notes
$
Balance at 30 June 2021
Restatement – Note 2*
Balance at 1 July 2021
59,966,708
-
59,966,708
(51,325,679)
(492,593)
(51,818,272)
Comprehensive income/(loss)
Loss for the year*
Exchange differences on
translating foreign operations
Total comprehensive income/
(loss) for the year
Transactions with owners in
their capacity as owners
Shares issued during the year
Share issue costs
Transfers on exercise of
options
Options issue costs
Equity-settled share-based
payments
Balance at 30 June 2022*
-
-
-
(14,801,105)
1,098
(14,800,007)
4,453,343
(245,903)
119,984
-
-
-
-
-
-
-
64,294,132
(66,618,280)
Balance at 1 July 2022*
64,294,132
(66,618,280)
Comprehensive loss
Loss for the year
Exchange differences on
translating foreign operations
Total comprehensive loss for
the year
Transactions with owners in
their capacity as owners
Shares issued during the year
Share issue costs
Options issue costs
Equity settled share-based
payments
Option premium on issue of
convertible notes
Balance at 30 June 2023
-
-
-
(12,617,576)
890
(12,616,686)
15,963,979
(962,919)
-
-
-
-
-
-
-
-
Share
Option
Reserve
$
4,211,722
-
4,211,722
-
-
-
-
-
(119,984)
(575)
378,563
Foreign
Currency
Translation
Reserve
$
Non-
Controlling
Interests
$
Total*
$
(6,478)
-
(6,478)
-
(980)
(980)
-
-
-
-
-
-
-
-
12,846,273
(492,593)
12,353,680
7,452
(14,793,653)
-
118
7,452
(14,793,535)
-
-
-
-
-
4,453,343
(245,903)
-
(575)
378,563
4,469,726
(7,458)
7,452
2,145,572
4,469,726
(7,458)
7,452
2,145,572
-
-
-
-
-
(70)
377,747
-
-
-
-
-
-
-
-
(2,157)
(12,619,733)
-
890
(2,157)
(12,618,843)
-
-
-
-
-
15,963,979
(962,919)
(70)
377,747
205,198
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
79,295,192
(79,234,966)
205,198
4,847,403
(7,458)
5,295
5,110,664
205,198
-
* Comparatives restated – refer Note 2
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 2023
NOTES
2023
$
2022
$
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers
Interest received
Grants and rebates received
Other income
Payments to suppliers and employees
Interest and other costs of finance paid
Income tax paid
NET CASH FLOWS USED IN OPERATING ACTIVITIES
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from the sale of assets held for sale
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 and lease payments
Proceeds from share and option issues
Share raising costs
NET CASH FLOWS FROM FINANCING ACTIVITIES
31
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS HELD
Cash and cash equivalent at beginning of the financial year
Effect of foreign exchange rate changes
CASH AND CASH EQUIVALENTS AT THE END OF THE FINANCIAL YEAR
31
917,701
13,571
2,085,929
22,978
(10,480,799)
(19,122)
(20,622)
(7,480,364)
61,688
(5,005)
(2,876,524)
(2,819,841)
2,735,864
(1,415,178)
11,384,330
(556,149)
12,148,867
1,848,662
441,525
29,914
2,320,101
4,001,610
1,987
1,819,178
42,281
(15,144,277)
(22,439)
-
(9,301,660)
-
(93,463)
(4,451,679)
(4,545,142)
5,748,906
(1,508,529)
2,986,700
(246,477)
6,980,600
(6,866,202)
7,276,355
31,372
441,525
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 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 2023 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.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
(a) 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.
Material uncertainty relating to going concern
For the year ended 30 June 2023 the Group has incurred a loss of $12,619,733 and incurred net operating cash outflows
of $7,480,364. As disclosed in Note 20 the Group received $880,000 in August 2023 being the balance of receipts from
the capital raise announced on 6 June 2023. In addition, the Group at 30 June 2023 had within other receivables
$1,386,027, being the amount expected to be received for its R&D tax rebate for the 2023 financial year.
The Directors remain committed to the long-term business plan and do expect that the Group will require additional
funding to provide the required working capital and headroom to deliver its growth plan. Directors have prepared a cash
flow forecast for the period to September 2024 which indicates that subject to further capital raisings the Group will
have sufficient funds to continue as a going concern. Directors believe there are reasonable grounds to believe that the
Group will be able to continue as a going concern after consideration of the following factors:
•
•
•
•
The Group has a strong historic record of raising funds and has recently attracted strong investor support,
including from a number of institutions and a key strategic investor;
Recent communications with investors and the broader investment community give Directors confidence of its
ability to raise additional capital
The Group is now manufacturing and selling its new OTC approved HP Hearing Pro hearing aid device to its
retail sales partners and is starting to build a sustainable source of revenue with good underlying unit
economics (which it expects to further improve when it releases its next generation product);
The Group, from October, is materially increasing the number of points-of-sales with key retail partners in the
USA which it expects to help drive materially increased revenue and cash receipts;
22
NUHEARA LIMITED
ABN 29 125 167 133
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Material uncertainty relating to going concern (continued)
•
•
•
•
•
In addition, the Group is in active discussions with potential Original Equipment Manufacturer (OEM) partners
which would further accelerate its revenue growth and sales receipts, including via potential service fee
income;
The Group is also exploring the potential for other sources of non-equity funding, for example invoice financing
or R&D tax rebate financing, which can enable it to support its working capital requirements as its increases
levels of production and manufacturing ahead of sales;
The Group proactively engages with key suppliers and creditors in relation to payment terms to manage its
cash out flows in line with available funds;
The Group actively manages the level of its discretionary operating expenditure, including marketing and
promotional costs, in line with the funds available to the Group; and
The Group carefully considers the appropriate levels of capital expenditure and research and development
investment for new products in line with funds expected to be available to the Group.
Due to the risks inherent in executing the plans outlined above there is a material uncertainty which may cast significant
doubt on the Group’s ability to continue as a going concern and whether it will be able to pays its debts as and when they
fall due, and realise its assets and extinguish its liabilities in the normal course of business and at the amounts stated in the
financial statements.
Parent entity
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.
In accordance with the Corporations Act 2001, these financial statements present the results of the consolidated entity
only. Supplementary information about the legal parent entity, Nuheara Limited, is disclosed in note 32.
Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Nuheara Limited as at 30
June 2023 and the results of all subsidiaries for the year then ended. Nuheara Limited and its subsidiaries together are
referred to in these financial statements as the ‘Group’ or 'consolidated entity'.
Subsidiaries are all those entities over which the consolidated entity has control. The consolidated entity controls an entity
when the consolidated entity is exposed to, or has rights to, variable returns from its involvement with the entity and has
the ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated
from the date on which control is transferred to the consolidated entity. They are de-consolidated from the date that
control ceases.
Intercompany transactions, balances and unrealised gains on transactions between entities in the consolidated entity are
eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset
transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies
adopted by the consolidated entity.
The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change in ownership interest,
without the loss of control, is accounted for as an equity transaction, where the difference between the consideration
transferred and the book value of the share of the non-controlling interest acquired is recognised directly in equity
attributable to the parent.
Non-controlling interest in the results and equity of subsidiaries are shown separately in the statement of profit or loss and
other comprehensive income, statement of financial position and statement of changes in equity of the consolidated entity.
Losses incurred by the consolidated entity are attributed to the non-controlling interest in full, even if that results in a deficit
balance.
Where the consolidated entity loses control over a subsidiary, it derecognises the assets including goodwill, liabilities and
non-controlling interest in the subsidiary together with any cumulative translation differences recognised in equity. The
consolidated entity recognises the fair value of the consideration received and the fair value of any investment retained
together with any gain or loss in profit or loss.
23
NUHEARA LIMITED
ABN 29 125 167 133
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(a) Basis of preparation (continued)
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 22.
New or Amended Accounting Standards and Interpretations Adopted
The consolidated entity has adopted all of the new or amended Accounting Standards and Interpretations issued by the
Australian Accounting Standards Board (‘AASB’) that are mandatory for the current reporting period.
New Accounting Standards and Interpretations not yet mandatory or early adopted
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet mandatory,
have not been early adopted by the consolidated entity for the annual reporting period ended 30 June 2023. The
consolidated entity has not yet assessed the impact of these new or amended Accounting Standards and Interpretations.
(a) 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.
(b) Employee benefits provision
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.
(c) Government grants
Government grants are recognised where there is reasonable assurance that the grant will be received and all attached
conditions will be complied with. When the grant relates to an expense item, it is recognised as income on a systematic
basis over the periods that the related costs, for which it is intended to compensate, are expensed. When the grant relates
to an asset, it is recognised as deferred income and recognised as income over the expected useful life of the related asset.
(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
24
NUHEARA LIMITED
ABN 29 125 167 133
1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(d) Impairment of assets (continued)
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.
(e)
Intangible assets
The method and useful lives of finite life intangible assets are reviewed annually. Changes in the expected pattern of
consumption or useful life are accounted for prospectively by changing the amortisation method or period.
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.
(f) 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.
(g) 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.
(h) Financial instruments
Financial assets and financial liabilities are recognised in the Group’s statement of financial position when the Group
becomes a party to the contractual provisions of the instrument.
Financial assets and financial liabilities are initially measured at fair value, except for trade receivables that do not have a
significant financing component which are measured at transaction price. Transaction costs that are directly attributable to
the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair
value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as
appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial
liabilities at fair value through profit or loss are recognised immediately in profit or loss.
25
NUHEARA LIMITED
ABN 29 125 167 133
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(i) Financial assets
All regular way purchases or sales of financial assets are recognised and derecognised on a trade date basis. Regular way
purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame established
by regulation or convention in the marketplace.
All recognised financial assets are measured subsequently in their entirety at either amortised cost or fair value, depending
on the classification of the financial assets.
(j) Classification of financial assets
Debt instruments that meet the following conditions are measured subsequently at amortised cost:
•
•
The financial asset is held within a business model whose objective is to hold financial assets in order to
collect contractual cash flows; and
The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments
of principal and interest on the principal amount outstanding.
All other financial assets are measured at fair value through profit or loss (FVTPL).
Amortised cost and the effective interest method
The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating interest
income over the relevant period. For financial assets the effective interest rate is the rate that exactly discounts estimated
future cash receipts (including all fees and points paid or received that form an integral part of the effective interest rate,
transaction costs and other premiums or discounts) excluding expected credit losses, through the expected life of the debt
instrument, or, where appropriate, a shorter period, to the gross carrying amount of the debt instrument on initial
recognition.
The amortised cost of a financial asset is the amount at which the financial asset is measured at initial recognition minus
the principal repayments, plus the cumulative amortisation using the effective interest method of any difference between
that initial amount and the maturity amount, adjusted for any loss allowance. The gross carrying amount of a financial asset
is the amortised cost of a financial asset before adjusting for any loss allowance.
Interest income is recognised using the effective interest method for debt instruments measured subsequently at amortised
cost. For financial assets, interest income is calculated by applying the effective interest rate to the gross carrying amount
of a financial asset, except for financial assets that have subsequently become credit-impaired (see below). For financial
assets that have subsequently become credit-impaired, interest income is recognised by applying the effective interest rate
to the amortised cost of the financial asset. If, in subsequent reporting periods, the credit risk on the credit-impaired
financial instrument improves so that the financial asset is no longer credit-impaired, interest income is recognised by
applying the effective interest rate to the gross carrying amount of the financial asset.
Interest income is recognised in profit or loss and is included in Other income.
Financial assets at FVTPL
Financial assets that do not meet the criteria for being measured at amortised cost are measured at FVTPL. Specifically,
investments in equity instruments are classified as at FVTPL.
Financial assets at FVTPL are measured at fair value at the end of each reporting period, with any fair value gains or losses
recognised in profit or loss. The net gain or loss recognised in profit or loss includes any dividend or interest earned on the
financial asset and is included in Other income. Fair value is determined in the manner described in Note 8.
26
NUHEARA LIMITED
ABN 29 125 167 133
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(k) Foreign exchange gains and losses
The carrying amount of financial assets that are denominated in a foreign currency is determined in that foreign currency
and translated at the spot rate at the end of each reporting period. Specifically:
•
•
For financial assets measured at amortised cost, exchange differences are recognised in profit or loss in the
General and administrative line item; and
For financial assets measured at FVTPL, exchange differences are recognised in profit or loss in the General
and administrative line item as part of the fair value gain or loss.
(l)
Impairment of financial assets
The Group recognises a loss allowance for expected credit losses (ECL) on trade receivables and contract assets. The amount
of expected credit losses (ECL) is updated at each reporting date to reflect changes in credit risk since initial recognition of
the respective financial instrument.
(m) Derecognition of financial assets
The Group derecognises a financial asset only when the contractual rights to the cash flows from the asset expire, or when
it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. On
derecognition of a financial asset measured at amortised cost, the difference between the asset’s carrying amount and the
sum of the consideration received and receivable is recognised in profit or loss.
(n) Financial liabilities and equity
Debt and equity instruments are classified as either financial liabilities or as equity in accordance with the substance of the
contractual arrangements and the definitions of a financial liability and an equity instrument.
(o) Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its
liabilities. Equity instruments issued by the Group are recognised at the proceeds received, net of direct issue costs.
Repurchase of the Company’s own equity instruments is recognised and deducted directly in equity. No gain or loss is
recognised in profit or loss on the purchase, sale, issue or cancellation of the Company’s own equity instruments.
(p) Lease liabilities
A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised at the present
value of the lease payments to be made over the term of the lease, discounted using the interest rate implicit in the lease
or, if that rate cannot be readily determined, the consolidated entity's incremental borrowing rate. Lease payments
comprise of fixed payments less any lease incentives receivable, variable lease payments that depend on an index or a rate,
amounts expected to be paid under residual value guarantees, exercise price of a purchase option when the exercise of the
option is reasonably certain to occur, and any anticipated termination penalties. The variable lease payments that do not
depend on an index or a rate are expensed in the period in which they are incurred.
Lease liabilities are measured at amortised cost using the effective interest method. The carrying amounts are remeasured
if there is a change in the following: future lease payments arising from a change in an index or a rate used; residual
guarantee; lease term; certainty of a purchase option and termination penalties. When a lease liability is remeasured, an
adjustment is made to the corresponding right-of use asset, or to profit or loss if the carrying amount of the right-of-use
asset is fully written down.
27
NUHEARA LIMITED
ABN 29 125 167 133
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(q) Financial liabilities
Financial liabilities are measured subsequently at amortised cost using the effective interest method.
The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest
expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash
payments, including all fees and points paid or received that form an integral part of the effective interest rate, transaction
costs and other premiums or discounts, through the expected life of the financial liability, or, where appropriate, a shorter
period, to the amortised cost of a financial liability.
Derecognition of financial liabilities
The Group derecognises financial liabilities when, and only when, the Group’s obligations are discharged, cancelled or have
expired. The difference between the carrying amount of the financial liability derecognised and the consideration paid and
payable is recognised in profit or loss.
Derivative financial instruments
Derivatives are recognised initially at fair value at the date a derivative contract is entered into and are subsequently
remeasured to their fair value at each reporting date. The resulting gain or loss is recognised in profit or loss immediately.
Compound instruments
The component parts of convertible notes issued by the Group are classified separately as financial liabilities and equity in
accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity
instrument. A conversion option that will be settled by the exchange of a fixed amount of cash or another financial asset
for a fixed number of the Company’s own equity instruments is an equity instrument. At the date of issue, the fair value of
the liability component is estimated using the prevailing market interest rate for a similar non-convertible instrument. This
amount is recorded as a liability on an amortised cost basis using the effective interest method until extinguished upon
conversion or at the instrument’s maturity date.
The conversion option classified as equity is determined by deducting the amount of the liability component from the fair
value of the compound instrument as a whole. This is recognised and included in equity, net of income tax effects, and is
not subsequently remeasured. Where the conversion option remains unexercised at the maturity date of the convertible
note, the balance recognised in equity will be transferred to accumulated losses. No gain or loss is recognised in profit or
loss upon conversion or expiration of the conversion option.
Where the conversion option will not be settled by the exchange of a fixed amount of cash or another financial asset for a
fixed number of the Company’s own equity instruments, the conversion option is bifurcated from the host liability,
measured on an amortised cost basis and recorded as an embedded derivative.
Embedded derivatives
An embedded derivative is a component of a hybrid contract that also includes a non-derivative host – with the effect that
some of the cash flows of the combined instrument vary in a way similar to a stand-alone derivative. Derivatives embedded
in hybrid contracts with hosts that are financial liabilities are treated as separate derivatives when they meet the definition
of a derivative, their risks and characteristics are not closely related to those of the host contracts and the host contracts
are not measured at FVPL. The embedded derivative is measured at fair value through the profit and loss and is remeasured
at each reporting date and at exercise date. An embedded derivative is presented as a non-current liability if the remaining
maturity of the hybrid instrument to which the embedded derivative relates is more than 12 months and is not expected
to be realised or settled with 12 months.
28
NUHEARA LIMITED
ABN 29 125 167 133
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(r) 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:
•
•
•
•
assets and liabilities are translated at exchange rates prevailing at the end of the reporting period;
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
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.
(s) 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 profit or loss.
(t)
Inventories
Inventories are stated at the lower of cost and net realisable value. Cost comprises direct materials and, where applicable,
direct labour costs and those overheads that have been incurred in bringing the inventories to their present location and
condition. Cost is calculated using the weighted average cost method. Net realisable value represents the estimated selling
price less all estimated costs of completion and costs to be incurred in marketing selling and distribution.
29
NUHEARA LIMITED
ABN 29 125 167 133
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(u) Right-of-use assets
A right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is measured at cost, which
comprises the initial amount of the lease liability, adjusted for, as applicable, any lease payments made at or before the
commencement date net of any lease incentives received, any initial direct costs incurred, and, except where included in
the cost of inventories, an estimate of costs expected to be incurred for dismantling and removing the underlying asset,
and restoring the site or asset.
Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the lease or the estimated useful
life of the asset, whichever is the shorter. Where the consolidated entity expects to obtain ownership of the leased asset
at the end of the lease term, the depreciation is over its estimated useful life. Right-of use assets are subject to impairment
or adjusted for any remeasurement of lease liabilities.
The Group has elected not to recognise a right-of-use asset and corresponding lease liability for short-term leases with
terms of 12 months or less and leases of low-value assets. Lease payments on these assets are expensed to profit or loss as
incurred.
(v) 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 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.
All revenue is stated net of the amount of goods and services tax.
(w) 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.
30
NUHEARA LIMITED
ABN 29 125 167 133
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(x) Share-based payments
Equity-settled and cash-settled share-based compensation benefits are provided to employees.
Equity-settled transactions are awards of shares, or options over shares, that are provided to employees in exchange for
the rendering of services. Cash-settled transactions are awards of cash for the exchange of services, where the amount of
cash is determined by reference to the share price.
The cost of equity-settled transactions are measured at fair value on grant date. Fair value is independently determined
using either the Binomial or Black-Scholes option pricing model that takes into account the exercise price, the term of the
option, the impact of dilution, the share price at grant date and expected price volatility of the underlying share, the
expected dividend yield and the risk free interest rate for the term of the option, together with non-vesting conditions that
do not determine whether the consolidated entity receives the services that entitle the employees to receive payment. No
account is taken of any other vesting conditions.
The cost of equity-settled transactions are recognised as an expense with a corresponding increase in equity over the
vesting period. The cumulative charge to profit or loss is calculated based on the grant date fair value of the award, the
best estimate of the number of awards that are likely to vest and the expired portion of the vesting period. The amount
recognised in profit or loss for the period is the cumulative amount calculated at each reporting date less amounts already
recognised in previous periods.
The cost of cash-settled transactions is initially, and at each reporting date until vested, determined by applying either
the Binomial or Black-Scholes option pricing model, taking into consideration the terms and conditions on which
the award was granted. The cumulative charge to profit or loss until settlement of the liability is calculated as follows:
•
•
during the vesting period, the liability at each reporting date is the fair value of the award at that date
multiplied by the expired portion of the vesting period.
from the end of the vesting period until settlement of the award, the liability is the full fair value of the liability
at the reporting date
All changes in the liability are recognised in profit or loss. The ultimate cost of cash-settled transactions is the cash paid to
settle the liability.
Market conditions are taken into consideration in determining fair value. Therefore, any awards subject to market
conditions are considered to vest irrespective of whether or not that market condition has been met, provided all other
conditions are satisfied.
If equity-settled awards are modified, as a minimum an expense is recognised as if the modification has not been made. An
additional expense is recognised, over the remaining vesting period, for any modification that increases the total fair value
of the share-based compensation benefit as at the date of modification.
If the non-vesting condition is within the control of the consolidated entity or employee, the failure to satisfy the condition
is treated as a cancellation. If the condition is not within the control of the consolidated entity or employee and is not
satisfied during the vesting period, any remaining expense for the award is recognised over the remaining vesting period,
unless the award is forfeited.
If equity-settled awards are cancelled, it is treated as if it has vested on the date of cancellation, and any remaining expense
is recognised immediately. If a new replacement award is substituted for the cancelled award, the cancelled and new award
is treated as if they were a modification.
Equity-settled share-based payment transactions with parties other than employees are measured at the fair value of the
goods or services received, except where that fair value cannot be estimated reliably, in which case they are measured at
the fair value of the equity instruments granted, measured at the date the entity obtains the goods or the counterparty
renders the service.
31
NUHEARA LIMITED
ABN 29 125 167 133
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(z) 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.
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.
The Group has not formed a consolidated tax group for taxation purposes.
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.
32
NUHEARA LIMITED
ABN 29 125 167 133
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(aa) Fair value measurement
When an asset or liability, financial or non-financial, is measured at fair value for recognition or disclosure purposes, the
fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date; and assumes that the transaction will take place either: in the
principal market; or in the absence of a principal market, in the most advantageous market.
Fair value is measured using the assumptions that market participants would use when pricing the asset or liability,
assuming they act in their economic best interests. For non-financial assets, the fair value measurement is based on its
highest and best use. Valuation techniques that are appropriate in the circumstances and for which sufficient data are
available to measure fair value, are used, maximising the use of relevant observable inputs and minimising the use of
unobservable inputs.
Assets and liabilities measured at fair value are classified into three levels, using a fair value hierarchy that reflects the
significance of the inputs used in making the measurements. Classifications are reviewed at each reporting date and
transfers between levels are determined based on a reassessment of the lowest level of input that is significant to the
fair value measurement.
(ab) Trade and other payables
These amounts represent liabilities for goods and services provided to the consolidated entity prior to the end of the
financial year and which are unpaid. Due to their short-term nature they are measured at amortised cost and are not
discounted. The amounts are unsecured and are usually paid within 30 to 60 days of recognition, depending on payment
terms granted.
(ac) Trade and other receivables
Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective
interest method, less any allowance for expected credit losses. Trade receivables are generally due for settlement within
30 to 60 days.
The consolidated entity has applied the simplified approach to measuring expected credit losses, which uses a lifetime
expected loss allowance. To measure the expected credit losses, trade receivables have been grouped based on days
overdue.
Other receivables are recognised at amortised cost, less any allowance for expected credit losses.
(ad) Current and non-current classification
Assets and liabilities are presented in the statement of financial position based on current and non-current classification.
An asset is classified as current when: it is either expected to be realised or intended to be sold or consumed in the
consolidated entity's normal operating cycle; it is held primarily for the purpose of trading; it is expected to be realised
within 12 months after the reporting period; or the asset is cash or cash equivalent unless restricted from being exchanged
or used to settle a liability for at least 12 months after the reporting period. All other assets are classified as non-current.
A liability is classified as current when: it is either expected to be settled in the consolidated entity's normal operating cycle;
it is held primarily for the purpose of trading; it is due to be settled within 12 months after the reporting period; or there is
no unconditional right to defer the settlement of the liability for at least 12 months after the reporting period. All other
liabilities are classified as non-current.
Deferred tax assets and liabilities are always classified as non-current.
33
NUHEARA LIMITED
ABN 29 125 167 133
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(ae) Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to the owners of the Company, excluding any costs
of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the
financial year, adjusted for any bonus elements in ordinary shares issued during the financial year.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account
the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the
weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential
ordinary shares.
(af) Comparative figures
When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation
for the current financial year. Refer Note 2.
2. RESTATEMENT OF COMPARATIVES
In preparing the 30 June 2023 financial statements the Group recognised that its treatment of deferred tax assets and
liabilities had failed to properly determine the tax cost base of certain assets and had also offset deferred tax assets against
deferred tax liabilities across Group entities despite no set off being available as the Group is not taxed as a consolidated
tax group. As a result, the Group restated its 1 July 2021 balance sheet to recognise a deferred tax liability of $492,593. It
also restated its income tax expense for the year ended 30 June 2022 to properly recognise its movement in its deferred
tax liabilities, with an additional $466,005 of income tax expense recognised in the Consolidated Statement of Profit or Loss
and Other Comprehensive Income. The total combined impact on the Group’s accumulated losses at 30 June 2022 was
therefore $958,599.
In addition, the Group had incorrectly classified convertible notes of $1,854,240 at 30 June 2022 as a non-current financial
liability despite the Group not having an unconditional right to defer settlement for at least 12 months at balance date. This
has been restated to classify as a current financial liability at 30 June 2022, with no impact on total liabilities.
The following tables show the effect of these matters on the Group’s Consolidated Statement of Profit or Loss and Other
Comprehensive Income and Consolidated Statement of Financial Position.
Consolidated Statement of Profit or Loss and Other Comprehensive Income for year ended 30 June 2022 (extracts)
Loss before tax from continuing operations
Income tax expense
Net loss after tax from continuing operations
Reported
2022
$
Consolidated
Adjustments
Restated
2022
$
(14,315,229)
(12,419)
(14,327,648)
-
(466,005)
(466,005)
(14,315,229)
(478,424)
(14,793,653)
34
NUHEARA LIMITED
ABN 29 125 167 133
2. RESTATEMENT OF COMPARATIVES (continued)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Consolidated Statement of Financial Position (extracts)
NON-CURRENT LIABILITIES
Deferred tax
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Accumulated losses
TOTAL EQUITY
CURRENT LIABILITIES
Financial liabilities
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Financial liabilities
Deferred tax
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Accumulated losses
TOTAL EQUITY
Reported 30
June 2021
$
Consolidated
Adjustments
Restated
1 July 2021
$
-
1,939,154
492,593
492,593
492,593
2,431,747
4,453,816
492,593
4,946,409
12,846,273
(492,593)
12,353,680
(51,325,679)
12,846,273
(492,593)
(492,593)
(51,818,272)
12,353,680
Reported 30
June 2022
$
Consolidated
Adjustments
Restated
30 June 2022
$
1,484,353
5,811,530
1,854,240
1,854,240
3,338,593
7,665,770
2,069,463
-
4,377,083
(1,854,240)
958,599
(895,641)
215,223
958,599
3,481,442
10,188,613
958,599
11,147,212
3,104,171
(958,599)
2,145,572
(65,659,681)
3,104,171
(958,599)
(958,599)
(66,618,280)
2,145,572
35
NUHEARA LIMITED
ABN 29 125 167 133
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
3. INCOME TAX
Income tax (benefit)/expense
Current income tax expense
Deferred income tax (benefit)/expense
Income tax (benefit)/expense
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 25% (2022: 25%)
Tax effect of amounts which are not deductible/(taxable):
Non-deductible expenses
Non assessable-non-exempt income related expenditure/(income)
Temporary differences
Tax loss not brought to account as a deferred tax asset
Adjustments for prior years
Income tax (benefit)/expense
Recognised deferred tax liability comprises of temporary differences
attributable to:
Amounts recognised in profit or loss:
Intangible Assets
Tax losses
Deferred tax liability
Deferred tax liability - movements
Opening balance at 1 July
(Credited)/charged to profit or loss
Closing balance at 30 June
Unrecognised deferred tax assets
Unrecognised temporary differences
Unrecognised deferred tax assets/(liabilities) relates to the following:
Interest receivable
Prepayments
Property, plant & equipment
Convertible note
R&D grant liability
Foreign exchange
Software development costs
Trade and other payables
Right of use asset
Employee benefits
Provisions
Business related costs
Capital losses
Tax losses
Potential unrecognised deferred tax asset @ 25% (2022: 25%)
2023
$
Restated
2022
$
8,203
(418,725)
(410,522)
12,419
466,005
478,424
2023
$
(13,030,255)
-
(13,030,255)
(3,257,564)
18,699
(18,000)
461,414
2,376,726
8,203
(410,522)
2023
$
Restated
2022
$
(14,315,229)
-
(14,315,229)
(3,578,807)
46,388
(51,850)
245,417
3,817,276
-
478,424
Restated
2022
$
591,818
(51,944)
539,874
1,010,543
(51,944)
958,599
2023
$
958,599
(418,725)
539,874
2023
$
(463)
(104,940)
(23,574)
273,534
441,566
(24,508)
109,894
17,260
1,691
125,604
48,582
352,612
469,143
14,717,265
16,403,666
Restated
2022
$
492,594
466,005
958,599
Restated
2022
$
-
(84,470)
(33,262)
67,710
81,611
(15,648)
82,824
7,344
1,267
130,417
60,297
274,983
467,145
12,837,615
13,877,833
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.
36
NUHEARA LIMITED
ABN 29 125 167 133
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
4. REVENUE AND OTHER INCOME
Revenue by type
Revenue from sales of products
Total revenue
Revenue by geography
USA
Australia
Rest of World
Total revenue
Other Income
Grant income
Amortisation - R&D tax offset grant
Sale of mining interests
Sundry income
Total other income
5. EXPENSES
Profit before income tax from continuing operations includes the following
specific expenses:
Employee benefits
Defined contribution plans (superannuation)
Equity-settled share-based payments (unquoted options)
Salary and wages
Other employee benefits
Total employee benefits
Net Finance costs
Interest on loans
Interest on convertible loans (at effective interest rate method)
Interest on lease liabilities
Other finance costs
Interest income
Total net finance costs
Depreciation and amortisation
Depreciation on property, plant and equipment
Depreciation on right-of use assets
Amortisation of intangible assets
Total depreciation and amortisation
Other (gains)/losses
Net foreign exchange (gains)/losses
Total other (gains)/losses
37
2023
$
2022
$
1,931,264
1,931,264
3,865,582
3,865,582
1,336,355
254,518
340,391
1,931,264
36,600
1,794,689
-
14,989
1,846,278
1,801,931
1,082,022
981,629
3,865,582
179,580
1,619,456
69,677
42,281
1,910,994
2023
$
2022
$
217,519
8,490
3,055,570
167,104
3,448,683
71,046
445,029
6,177
9,730
(15,421)
516,561
78,272
182,194
4,084,060
4,344,526
339,974
185,808
3,837,786
370,936
4,734,504
54,000
270,840
5,148
5,377
(1,170)
334,195
147,613
151,828
4,126,612
4,426,053
(91,170)
(91,170)
(30,693)
(30,693)
NUHEARA LIMITED
ABN 29 125 167 133
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
6. TRADE AND OTHER RECEIVABLES
Trade receivables
R&D Tax Offset receivable
Prepayments
Supplier payments in advance
GST receivable
Other receivables
2023
$
758,656
1,386,027
423,818
599,752
77,919
11,454
3,257,626
2022
$
157,564
2,049,329
341,781
295,249
163,030
294
3,007,247
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.
7. INVENTORIES
Raw materials - at lower of cost or net realisable value
Finished goods - at lower of cost or net realisable value
2023
$
1,286,365
843,747
2,130,112
2022
$
899,162
2,455,848
3,355,010
Included in cost of goods sold is $1,862,157 ($713,901) in respect of write downs of inventory to net realisable value.
8. FINANCIAL ASSETS HELD AT FAIR VALUE
2023
$
2022
$
Financial assets held at fair value
-
69,677
The Group held Nil (2022:17,959 shares in Vox Royalty Corp (TSX-V:VOX))
The Group measures all equity investments at fair value. Where the Group’s management has elected to present fair
value gains and losses on equity investments in Other Comprehensive Income, there is no subsequent reclassification
of fair value gains and losses to the Consolidated Income Statement following the derecognition of the investment.
Changes in the fair value of financial assets are recognised in other gains/(losses) in the Consolidated Income Statement
as applicable. Impairment losses (and reversal of impairment losses) on equity investments measured at fair value in
Other Comprehensive Income are not reported separately from other changes in fair value.
9. OTHER CURRENT ASSEST
2023
$
2022
$
Deposits for equipment
321,558
-
38
NUHEARA LIMITED
ABN 29 125 167 133
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
10. PLANT AND EQUIPMENT
Plant and equipment – at cost
Less: accumulated depreciation
Total plant and equipment
Opening balance - plant and equipment
Additions
Disposals
Depreciation
Closing balance – plant and equipment
11. RIGHT OF USE ASSET
2023
$
1,361,170
(1,258,591)
102,579
2023
$
175,846
5,005
-
(78,272)
102,579
2022
$
1,356,166
(1,180,320)
175,846
2022
$
229,996
94,664
(1,226)
(147,588)
175,846
The Group's lease portfolio includes a building. The building lease has an average of 1.2 years as its lease term.
Options to extend or terminate
There are no extension options for the building lease.
(i) Lease related amounts recognised in the Consolidated Statement of
Financial Position
Right of use assets
Leased building
Less: accumulated depreciation
Closing balance
2023
$
2022
$
546,582
(334,022)
212,560
546,582
(151,828)
394,754
(ii) Lease related amounts recognised in the Consolidated Statement
of Profit or Loss
2023
$
2022
$
Depreciation charge related to right-of-use assets
Interest expense on lease liabilities (under finance cost)
182,194
6,177
167,011
5,148
(iii) Lease related amounts recognised in the Consolidated Statement of
Cash Flows
2023
$
2022
$
Total yearly operating cash outflows for leases
187,319
151,983
39
NUHEARA LIMITED
ABN 29 125 167 133
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
12. 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 30 June 2021
Additions
Amortisation charge
Balance as at 30 June 2022
Additions
Amortisation charge
Balance as at 30 June 2023
13. TRADE AND OTHER PAYABLES - CURRENT
Trade creditors
Unearned Income (1)
Other creditors and accrued expenses
2023
$
2022
$
25,497,402
(21,497,521)
3,999,881
22,626,545
(17,530,207)
5,096,338
1,133,939
(460,813)
673,126
4,673,007
1,096,455
(344,068)
752,387
5,848,725
Patents
&
Trademarks
$
876,303
(21,653)
(102,263)
752,387
37,484
(116,745)
673,126
2023
$
1,354,202
64,194
732,563
2,150,959
Total
$
5,330,903
4,644,434
(4,126,612)
5,848,725
2,908,341
(4,084,059)
4,673,007
2022
$
2,318,324
13,654
1,299,811
3,631,789
Development
Costs
$
4,454,600
4,666,087
(4,024,349)
5,096,338
2,870,857
(3,967,314)
3,999,881
(1) Unearned income represents sales receipts that cannot be recognised as revenue until product shipped.
14. FINANCIAL LIABILITIES
CURRENT
Short term loan (1)
Lease liability
Insurance premium funding
Convertible note – Healthcare 2030(3)
Embedded derivative associated with convertible note – Healthcare 2030
NON-CURRENT
Lease liability
Convertible note - Realtek(2)
Embedded derivative associated with convertible note - Realtek
2023
$
Restated
2022
$
-
141,318
161,695
-
-
303,013
1,151,478
184,599
148,276
1,249,182
605,058
3,338,593
2023
$
Restated
2022
$
78,006
2,243,379
121,769
2,443,154
215,223
-
-
215,223
-
-
-
(1) Short term loan
On 6 April 2022, Nuheara entered into a loan agreement with Innovation Structure Finance Co., LLC (Radium Capital) under
which Nuheara was entitled to receive funding of up to 80% of its presently earned R&D tax incentive rebate (R&D Tax
Offset) in respect of the financial year ended 30 June 2022 (R&D Tax Offset).
40
NUHEARA LIMITED
ABN 29 125 167 133
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
14. FINANCIAL LIABILITIES (continued)
(1) Short term loan (continued)
The loan was secured over the Group’s right, title and interest in:
•
•
•
the R&D Tax Offset, the proceeds of the R&D Tax Offset and Radium Capital’s rights to apply for or obtain the
R&D Tax Offset;
any Claim that Nuheara may have against any party arising out of or in connection with the R&D Tax Offset,
any application for a R&D Refund or any failure to generate or receive the R&D Tax Offset, including but not
limited to, any claim or rights against Nuheara’s tax agent, accountants or advisers; and
all books and records of the Group relevant to the R&D Tax Offset, all advice provided by Nuheara’s tax agent,
accountants or advisers in relation to the R&D Tax Offset or any application of the R&D Tax Offset, all
applications, filings or registrations with any Government Agency in relation to the R&D Tax Offset (or
application thereof) or to the preparation or lodgment of Nuheara’s tax return.
The short term loan was fully repaid on 30 November 2022.
(2) Convertible Note - Realtek
On 8 September 2022, Nuheara announced the issue of a convertible note to Realtek Semiconductor Corporation
(“Realtek”), raising $2.5 million as part of a follow-on round of funding from Realtek.
The key terms of the Convertible Note are as follows:
• Maturity date: 7 September 2024
•
•
Conversion price: A$0.16
Conversion: Convertible (in whole or part) by Realtek at any time prior to the Maturity Date into such number
of shares as is determined by the Conversion Price
Interest Conversion Price: means the 30-trading day VWAP of shares immediately prior to the relevant
interest payment date, subject to a floor price of $0.16
Interest: 8% per annum payable quarterly either (at Realtek’s election) into cash or converted into such
number of shares as is determined by the Interest Conversion Price.
Security: A first ranking security interest over all of the Company’s assets to Realtek to secure payment of the
outstanding amount and any accrued interest owed to Realtek (Outstanding Amount), and
Repayment: Unless fully converted, the Company must redeem all convertible notes by repaying the
Outstanding Amount and any accrued but unpaid interest on the maturity date. The Company cannot prepay
the convertible notes.
•
•
•
•
At inception the convertible notes have been accounted for as follows:
Convertible notes amortised cost
Embedded derivative liability
Conversion option – equity
$
2,084,243
210,559
205,198
2,443,154
41
NUHEARA LIMITED
ABN 29 125 167 133
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
14. FINANCIAL LIABILITIES (continued)
(2) Convertible Note – Realtek (continued)
The valuation inputs at inception, each conversion date and at 30 June 2023 are as follows:
Valuation Date
Face value converted
Underlying share price
Interest conversion price
Conversion price
Maturity date
Expected future volatility
Risk free rate
Interest rate
Discount rate
Grant
9 Sep 2022
$2,500,000
19.5 cents
20.8 cents
16.0 cents
Conversion
12 Jun 2023
$12,055
18.3 cents
23.7 cents
16.0 cents
Conversion
Conversion
12 Jun 2023
12 Jun 2023
$50,411
18.3 cents
22.5 cents
$49,315
18.3 cents
18.2 cents
16.0 cents
16.0 cents
Revaluation
30 Jun 2023
$2,500,000
17.0 cents
17.8 cents
16.0 cents
7 Sep 2024
7 Sep 2024
7 Sep 2024
7 Sep 2024
7 Sep 2024
100%
3.02%
8.0%
18.8%
100%
3.97%
8.0%
n/a
Value per interest conversion right
10.10 cents
6.60 cents
Number of interest conversion shares
Fair value of the embedded derivative
Fair value of the host liability
Fair value of equity
Fair value of convertible notes
2,084,745
$210,559
$2,084,243
$205,198
$2,500,000
50,864
$3,357
n/a
n/a
n/a
(3) Convertible Note – Healthcare 2030
100%
3.97%
8.0%
n/a
6.90 cents
224,049
$15,549
n/a
n/a
n/a
100%
3.97%
8.0%
n/a
8.00 cents
270,962
$21,677
n/a
n/a
n/a
100%
4.18%
8.0%
n/a
7.10 cents
1,715,061
$121,769
n/a
n/a
n/a
The Group entered into an 18-month $3 million share purchase agreement (Agreement) announced on 23 December
2021 by HealthCare 2030, LLC (the Investor), a US-based investment vehicle that invests solely in healthcare-related
companies and is managed by Bergen Asset Management LLC (the Manager). The Manager is a decade-old institutional
manager and manages funds which have an extensive history of successful investments in listed companies globally,
including on the ASX and in the healthcare sector. The Manager is not a party to the Agreement, and as such, does not
have any rights or obligations under the Agreement.
Under the Agreement the Investor agreed to invest $3,000,000 for $3,180,000 worth of Shares (Subscription Shares),
by way of the Investor making a prepayment for Subscription Shares. The Company received the $3,000,000
subscription funds on 29 December 2021 (the Settlement) and pursuant to the Agreement, issued 9,375,000 Shares
with a deemed issue price of $0.016 in satisfaction of a $150,000 fee payable to the Investor and 9,800,000 Shares with
a deemed issue price of $0.017 per Share which may be credited towards the ultimate number of Subscription Shares
to be issued. The Company subsequently issued 46,153,846 Subscription Shares with a deemed issue price of $0.013
per Subscription Share on 9 February 2022, towards the ultimate number of Subscription Shares to be issued under the
Agreement, satisfying $600,000 of the $3,180,000 worth of Subscription Shares which the Investor is entitled to be
issued.
Under the Agreement, the Company will issue the Subscription Shares, at the Investor’s request, within 18 months of
the date of the funding. The number of Subscription Shares to be issued will be determined by applying the Purchase
Price (as detailed further below) to the subscription amount, but subject to a Floor Price (as detailed further below).
The price at which the Investor could require the Subscription Shares (Purchase Price) to be issued was equal to $0.06
initially, representing a premium of approximately 216% to the closing price of the Company’s shares on 22 December
2021. Subject to the Floor Price described below, following 22 January 2022, the Purchase Price reset to the average
of the five daily volume-weighted average prices selected by the Investor during the 20 consecutive trading days
immediately prior to the date of the Investor’s notice to issue shares, less a 5% discount (or a 7.5% discount if the
Subscription Shares are issued after the first anniversary of the initial placement) (rounded down to the nearest one
tenth of a cent if the share price is at 10 cents or below, half a cent if the share price is at above 10 cents and at 20 cents
or below, or whole cent if the share price is above 20 cents). The Purchase Price is, nevertheless, the subject of the
floor price of $0.01 (Floor Price). If the Purchase Price formula results in a price that is less than the Floor Price, and
provided that the average of the daily VWAPs for the two consecutive actual trading days immediately prior to the
42
NUHEARA LIMITED
ABN 29 125 167 133
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
14. FINANCIAL LIABILITIES (continued)
(3) Convertible Note – Healthcare 2030 (continued)
The Group entered into an 18-month $3 million share purchase agreement (Agreement) announced on 23 December
2021 by HealthCare 2030, LLC (the Investor), a US-based investment vehicle that invests solely in healthcare-related
companies and is managed by Bergen Asset Management LLC (the Manager). The Manager is a decade-old institutional
manager and manages funds which have an extensive history of successful investments in listed companies globally,
including on the ASX and in the healthcare sector. The Manager is not a party to the Agreement, and as such, does not
have any rights or obligations under the Agreement.
Under the Agreement the Investor agreed to invest $3,000,000 for $3,180,000 worth of Shares (Subscription Shares),
by way of the Investor making a prepayment for Subscription Shares. The Company received the $3,000,000
subscription funds on 29 December 2021 (the Settlement) and pursuant to the Agreement, issued 9,375,000 Shares
with a deemed issue price of $0.016 in satisfaction of a $150,000 fee payable to the Investor and 9,800,000 Shares with
a deemed issue price of $0.017 per Share which may be credited towards the ultimate number of Subscription Shares
to be issued. The Company subsequently issued 46,153,846 Subscription Shares with a deemed issue price of $0.013
per Subscription Share on 9 February 2022, towards the ultimate number of Subscription Shares to be issued under the
Agreement, satisfying $600,000 of the $3,180,000 worth of Subscription Shares which the Investor is entitled to be
issued.
Under the Agreement, the Company will issue the Subscription Shares, at the Investor’s request, within 18 months of
the date of the funding. The number of Subscription Shares to be issued will be determined by applying the Purchase
Price (as detailed further below) to the subscription amount, but subject to a Floor Price (as detailed further below).
The price at which the Investor could require the Subscription Shares (Purchase Price) to be issued was equal to $0.06
initially, representing a premium of approximately 216% to the closing price of the Company’s shares on 22 December
2021. Subject to the Floor Price described below, following 22 January 2022, the Purchase Price reset to the average
of the five daily volume-weighted average prices selected by the Investor during the 20 consecutive trading days
immediately prior to the date of the Investor’s notice to issue shares, less a 5% discount (or a 7.5% discount if the
Subscription Shares are issued after the first anniversary of the initial placement) (rounded down to the nearest one
tenth of a cent if the share price is at 10 cents or below, half a cent if the share price is at above 10 cents and at 20 cents
or below, or whole cent if the share price is above 20 cents). The Purchase Price is, nevertheless, the subject of the
floor price of $0.01 (Floor Price). If the Purchase Price formula results in a price that is less than the Floor Price, and
provided that the average of the daily VWAPs for the two consecutive actual trading days immediately prior to the
notice is less than the Floor Price, and no event of default has occurred, the Company may forego issuing shares and
instead opt to repay the applicable subscription amount in cash (with a 5% premium), subject to the Investor’s right to
receive Subscription Shares at the Floor Price in lieu of such cash repayment. The Purchase Price is not the subject of a
cap.
The Company also has the right (but no obligation) to forego issuing shares in relation to the Investor’s request for
issuance and instead opt to repay the subscription amount by making a payment to the Investor equal to the greater
of the Purchase Price or the average of the daily VWAPs for the two consecutive actual trading days prior to receipt of
the request.
On 27 June 2022, Healthcare 2030 issued a final subscription notice for the remaining shares under the Subscription
Agreement entered into in December 2021. The issue of the shares in July 2023 finalised the agreement with Healthcare
2030 with the fair value of the associated embedded derivatives at each conversion date as follows:
Valuation Date
Face value converted
Underlying share price
Conversion price
Maturity date
Expected future volatility
Risk free rate
Interest rate
Value per interest conversion right
Number of interest conversion shares
Fair value of the embedded derivative
12 July 2022
$200,000
17.5 cents
10.5 cents
26 July 2022
$1,170,000
29.0 cents
10.5 cents
27 July 2022
$710,000
27.5 cents
11.0 cents
23 June 2023
23 June 2023
23 June 2023
90%
2.81%
0.0%
17.55 cents
11,142,857
$1,955,788
90%
2.69%
0.0%
14.64 cents
6,454,545
$945,154
90%
2.58%
0.0%
6.83 cents
1,904,762
$130,152
43
NUHEARA LIMITED
ABN 29 125 167 133
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
15. DEFERRED INCOME
R&D Tax Offset deferred liability – cost at 1 July
Less: accumulated amortisation
At 30 June
16. PROVISIONS
CURRENT
Employee provisions
Provision for refunds and warranty claims
Total Provisions
NON-CURRENT
Employee provisions
17. ISSUED CAPITAL
Ordinary shares
Issued and paid-up capital
197,069,884 (2022: 103,198,611) Ordinary shares, fully paid
Movements during the period:
Opening Balance at 1 July 2021
6 July 2021 – shares issued on exercise of options @ $0.025
9 July 2021 – shares issued under Salary Sacrifice Share Plan @ $0.0459
31 August 2021 – shares issued on exercise of options @ $0.025
4 October 2021 - shares issued on exercise of options @ $0.025
29 December 2021 – shares issued in satisfaction of the Company’s obligation
to pay a fee to Healthcare 2030 LLC under the Share Placement Agreement @
$0.016
29 December 2021 – shares issued by way of share placement to Healthcare
2030 LLC under Share Placement Agreement @ $0.016
31 December 2021 – shares issued by way of share placement @ $0.016
24 January 2022 - shares issued by way of share placement @ $0.016
7 February 2022 - shares issued by way of conversion under Convertible Note
funding agreement @ $0.013
26 April 2022 - shares issued by way of conversion under Convertible Note
funding agreement @ $0.011
6 May 2022 – share consolidation (1 share for every 20 shares held)
30 June 2022 – shares issued by way of share placement @ $0.12
Transfers from Option Issue Reserve on exercise of options
Less: Share issue costs
Closing balance as at 30 June 2022
2023
$
2022
$
10,664,523
(8,898,258)
1,766,265
9,278,496
(7,103,569)
2,174,927
2023
$
2022
$
468,899
179,510
648,409
2023
$
55,205
443,572
239,397
682,969
2022
$
132,693
2023
$
2022
$
79,295,192
64,294,132
Number of
Shares
2022
2022
$
1,723,004,193
59,966,708
1,709,120
1,089,890
1,000,000
24,943
37,500
50,043
25,000
-
9,375,000
150,000
9,800,000
101,312,500
66,700,000
166,600
1,621,000
1,067,200
46,153,846
600,000
45,454,545
(1,905,342,091)
2,916,665
-
-
103,198,611
500,000
-
236,000
119,984
(245,903)
64,294,132
44
NUHEARA LIMITED
ABN 29 125 167 133
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
17. ISSUED CAPITAL (continued)
Opening Balance at 1 July 2022
2 July 2022 – balance of Share Placement proceeds
12 July 2022 shares issued under Salary Sacrifice Share Plan (Directors) @
$0.6863
12 July 2022 shares issued under Salary Sacrifice Share Plan (Directors) @
$0.4226
12 July 2022 shares issued under Salary Sacrifice Share Plan (Directors) @
$0.2985
12 July 2022 shares issued under Salary Sacrifice Share Plan (Directors) @
$0.1876
12 July 2022 shares issued under Salary Sacrifice Share Plan (Directors) @
$0.1376
12 July 2022 - shares issued by way of share placement @ $0.12
12 July 2022 – shares issued by way of conversion under Convertible Note
funding agreement @ $0.105
26 July 2022 – additional payment relating to the purchase of 9,800,000
initial share placement to Healthcare 2030 LLC
26 July 2022 - shares issued by way of conversion under Convertible Note
funding agreement at $0.105
27 July 2022 - shares issued by way of conversion under Convertible Note
funding agreement at $0.11
30 December 2022 - shares issued by way of share placement @ $0.18
13 March 2023 - shares issued by way of share placement @ $0.17
12 June 2023 shares issued under Salary Sacrifice Share Plan (Directors) @
$0.1979
12 June 2023 – shares issued under Employee Share Plan @ $0.17
12 June 2023 – shares issued under Employee Share Plan @ $0.388
12 June 2023 – shares issued for conversion of accrued interest payable
under Convertible Note agreement @$0.237
12 June 2023 – shares issued for conversion of accrued interest payable
under Convertible Note agreement @$0.225
12 June 2023 – shares issued for conversion of accrued interest payable
under Convertible Note agreement @$0.182
12 June 2023 - shares issued by way of share placement @ $0.145
Less: Share issue costs
Closing balance as at 30 June 2023
Holders of ordinary shares
Number of
Shares
2023
103,198,611
-
37,548
60,982
83,022
104,222
2023
$
64,294,132
114,000
25,771
25,771
24,785
19,555
42,110
14,166,667
5,793
1,700,000
1,904,762
269,650
-
51,450
11,142,857
2,634,709
6,454,545
16,807,781
17,491,049
1,386,187
3,025,401
2,973,478
180,498
510,551
62,942
50,864
35,721
86,794
24,421
3,357
224,049
15,459
270,962
24,275,862
-
197,069,884
21,677
3,520,000
(962,919)
79,295,192
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.
45
NUHEARA LIMITED
ABN 29 125 167 133
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
17. ISSUED CAPITAL (continued)
Unquoted Options
Issued unquoted options
8,216,520 (2022: 4,391,283)
2023
$
2022
$
4,847,403
4,469,726
Description
Number
Grant
Date
Exercise
Price
Expiry
Date
Unquoted Options
1,213,236
3-Feb-20
$1.00 each
3-Feb-24
Unquoted Options
Unquoted Options
Unquoted Options
Unquoted Options
Unquoted Options
Unquoted Options
Unquoted Options
Unquoted Options
Unquoted Options
Unquoted Options
858,335
100,000
100,000
125,000
425,000
50,000
250,000
546,878
50,000
375,000
21-Aug-20
$0.50 each
3-Feb-20
$1.00 each
21-Aug-20
$2.00 each
21-Aug-23
21-Aug-23
21-Aug-23
2-Mar-21
$0.87 each
2-Mar-24
31-Aug-21
$0.68 each
31-Aug-24
4-Jan-22
$0.37 each
4-Jan-25
28-Apr-22
$0.48 each
28-Apr-25
28-Apr-22
$0.56 each
28-Oct-23
3-Jun-22
$0.153 each
3-Jun-25
12-Jun-23
$0.182 each
12-Jun-26
Unquoted Options
2,004,459
24-Apr-23
$0.255 each
12-Jun-26
Unquoted Options
2,118,612
24-Apr-23
$0.27 each
12-Jun-26
Total Unquoted Options
8,216,520
Weighted
Average
time until
expiry
7 months
2 months
2 months
2 months
8 months
14 months
18 months
22 months
4 months
23 months
35 months
35 months
35 months
23 months
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 30 Share Based Payments.
Movements during the period for number of options
Balance unquoted options at 1 July 2021
31 August 2021 – issue of employee options at $0.0341
4 January 2022– issue of employee options at $0.0183
28 April 2022– issue of investor relations options at $0.024
28 April 2022– issue of broker options at $0.028
Less: Options exercised/forfeited/cancelled
6 May 2022 – share consolidation (1 option for every 20 options held)
3 June 2022– issue of employee options at $0.153
Less: Options exercised/forfeited/cancelled
Movement in valuation of options issued
Less: Option issue costs
Balance unquoted options at 30 June 2022
Movements during the period for number of options
Balance unquoted options at 1 July 2022
12 June 2023– issue of employee options @ $0.182
12 June 2023– issue of broker options @ $0.270
12 June 2023– issue of broker options @ $0.255
Less: Options exercised/forfeited/cancelled
Movement in valuation of options issued
Less: Option issue costs
Balance unquoted options at 30 June 2023
46
Number of
Options
2022
69,318,038
12,000,000
2,500,000
5,000,000
10,937,500
(10,479,999)
(84,934,256)
75,000
(25,000)
-
-
4,391,283
Number of
Options
2023
4,391,283
375,000
2,118,612
2,004,459
(672,834)
-
-
8,216,520
2022
$
4,211,722
-
-
-
-
-
-
-
-
258,579
(575)
4,469,726
2023
$
4,469,726
-
-
-
-
377,747
(70)
4,847,403
NUHEARA LIMITED
ABN 29 125 167 133
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
17. ISSUED CAPITAL (continued)
Capital Management
When managing capital, management’s objective is to ensure the Group 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.
18. 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.
There are two (2022: one) customers that accounted for over 10% of revenue, these customers make up 57% (2022: 21%)
of revenue.
19. 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 26, Interests of KMP.
Transactions with director related entities
During the year, there were no transactions with director related entities.
20. EVENTS OCCURRING AFTER BALANCE DATE
Receipts from June 2023 capital raise
Realtek’s portion of the capital raise announced on 6 June 2023 of $880,000 was subject to shareholder approval which
was obtained at a general meeting of shareholders on 20 July 2023. The funds were received in August 2023 with 6,068,966
shares issued to Realtek on 10 August 2023 at $0.145 per share. On that same date an additional 311,644 shares were
issued to Realtek for conversion of accrued interest payable under their $2.5m Convertible Note agreement at $0.16 per
share.
21. COMMITMENTS FOR EXPENDITURE
These amounts are payable, if required, over various times over the next five years.
Lease Commitment
The Group has a rental agreement for office space in Western Australia, which is used as the Group’s head office, this
commenced 1 September 2021 for a period of 36 months.
Office Lease
Due within 1 year
Due 1 to 5 years
2023
$
193,407
32,405
2022
$
187,319
225,812
47
NUHEARA LIMITED
ABN 29 125 167 133
22. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
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.
Impairment of non-financial 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.
Warranty provision
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.
Share-based payment transactions
The Group measures the cost of equity-settled transactions 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 30.
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 30.
Capitalisation of Intangible Assets
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.
Convertible Notes
The components of the Group's convertible notes are assessed and measured at fair value at inception. Idendtified
embedded derivatives are measured at fair value at each reporting date and on exercise. Determination of fair value of
each component of the Group’s convertible notes involves management judgements and estimates in relation to the
methods to be applied to determine fair value and data assumptions utilised.
Income tax
In assessing whether future taxable profits will be available to utilise temporary differences and losses, management review
the past performance of the relevant entity, the budgets for the forthcoming financial year, sales forecasts and sales
pipelines
Valuation of Inventories
In determining an estimate of inventories net realisable value requires a high degree of estimation and judgment. The net
realisable value is assessed by using recent sales experience, the ageing of inventories, forecast sales and the expected
selling price.
48
NUHEARA LIMITED
ABN 29 125 167 133
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
22. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (continued)
R&D tax rebate
Significant judgement is required in determining the R&D tax rebate receivable. There are many processes undertaken in
determining the claim and satisfying the statutory eligibility requirements for which the ultimate outcome is uncertain.
The Company recognises a R&D tax rebate when a reliable estimate of the receivable can be determined in consultation
with its independent R&D tax advisors.
Where the outcome of the R&D tax rebate claim is different from the carrying amounts, such differences will impact the
statement of profit or loss and other comprehensive income or, where appropriate, as an offset against deferred income
in the period in which such determination is made.
23. 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.
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 2023
Financial assets
Cash at bank
Trade and other receivables
Total financial assets
Financial liabilities
Trade and other payables (Note 13)
Insurance funding (Note 14)
Lease liability (Note 14)
Convertible note (Note 14)
Embedded derivative associated
with convertible note
Total financial liabilities
Weighted Average
Effective Interest
Rate
%
2.13%
3%
9.1%
Interest
Bearing
$
Non-Interest
Bearing
$
2,148,831
-
2,148,831
-
161,695
219,324
2,243,379
171,270
3,257,626
3,428,896
2,150,959
-
-
-
Total
$
2,320,101
3,257,626
5,577,727
2,150,959
161,695
219,324
2,243,379
-
121,769
121,769
2,624,398
2,272,728
4,897,126
49
NUHEARA LIMITED
ABN 29 125 167 133
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
23. FINANCIAL INSTRUMENTS (continued)
Interest Rate Risk (continued)
30 June 2022
Financial assets
Cash at bank
Trade and other receivables
Total financial assets
Financial liabilities
Trade and other payables (Note 13)
Short term loan (Note 14)
Insurance funding (Note 14)
Lease liability (Note 14)
Convertible note (Note 14)
Embedded derivative associated
with convertible note
Total financial liabilities
Weighted Average
Effective Interest
Rate
%
0.10%
-
14%
0.01%
13.6%
Interest
Bearing
$
Non-Interest
Bearing
$
344,480
-
344,480
-
1,151,478
148,276
399,822
1,249,182
97,045
3,007,247
3,104,292
3,631,788
-
-
-
-
Total
$
441,525
3,007,247
3,448,772
3,631,788
1,151,478
148,276
399,822
1,249,182
-
605,058
605,058
2,948,758
4,236,846
7,185,604
The Group’s policy is 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 2023, 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.
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.
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.
50
NUHEARA LIMITED
ABN 29 125 167 133
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
23. FINANCIAL INSTRUMENTS (continued)
Liquidity Risk (continued)
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.
The following are the contractual maturities of financial liabilities:
30 June 2023
Liquid financial liabilities
Trade and other payables
Insurance Funding
Lease liability
Convertible note
Embedded derivative associated
with convertible note
Total financial liabilities
30 June 2022
Liquid financial liabilities
Trade and other payables
Short term loan
Insurance Funding
Lease liability
Convertible note
Embedded derivative associated
with convertible note
Total financial liabilities
Net Fair Values
< 6 months
$
6-12 months
$
1-5 years
$
Total
$
2,150,959
-
-
-
-
167,632
193,408
-
-
2,150,959
361,040
-
-
32,405
2,243,379
121,769
2,397,553
2,150,959
167,632
225,813
2,243,379
121,769
4,909,552
< 6 months
$
6-12 months
$
1-5 years
$
Total
$
3,631,788
-
-
-
-
3,631,788
-
1,151,478
151,616
187,320
1,249,182
605,058
3,344,654
-
-
-
225,813
-
-
225,813
3,631,788
1,151,478
151,616
413,133
1,249,182
605,058
7,202,255
Financial assets and liabilities book values are considered to approximate fair value at year end.
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 2023 is not material
(2022: not material).
51
NUHEARA LIMITED
ABN 29 125 167 133
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
24. 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
2023
Cents
(8.39)
(8.39)
Restated
2022
Cents
(16.07)
(16.07)
2023
$
(12,617,576)
Restated
2022
$
(14,801,105)
2023
No.
2022
No.
Weighted average number of ordinary shares – basic loss per share (cents per share)
150,430,019
92,112,710
The diluted loss per share is the same as the basic loss per share as the potential ordinary shares of the Company are not
considered dilutive.
A share consolidation of 20 ordinary shares into 1 ordinary share of the Company was completed on 6 May 2022. The
weighted average number of ordinary shares for the year ended 30 June 2022 for the purpose of basic and diluted
earnings per share has been adjusted for the share consolidation.
25. AUDITOR’S REMUNERATON
RSM Australia Partners were appointed the auditors of the company on 14 July 2023.
Amounts received, or due and receivable by the auditors:
RSM Australia Partners
- audit of the financial report
SW Audit (appointed 22 July 2022, resigned 14 July 2023)
- audit and review of the financial statements
Walker Wayland (resigned 22 July 2022)
- - audit and review of the financial statements
No non-audit fees have been provided by the Group’s auditors
26. INTERESTS OF KEY MANAGEMENT PERSONNEL (KMP)
2023
$
2022
$
63,000
-
236,040
27,500
-
299,040
27,000
54,500
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
Long-term benefits
Post-employment benefits
Share based payments - options
2023
$
1,342,222
9,135
95,783
16,563
1,463,703
2022
$
1,264,149
2,139
113,383
89,366
1,469,037
52
NUHEARA LIMITED
ABN 29 125 167 133
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
27. CONTINGENT ASSETS AND LIABILITIES
Contingent Assets
The Group has rights to a US$450,000 asset payable in cash, following the registration of the El Molino royalty rights on the
applicable mining tenement in Peru and the satisfaction of other customary completion conditions. No asset has been
recognised within these financial statements because the proceeds are not virtually certain.
28. 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.
29. INFORMATION ABOUT CONTROLLED ENTITIES
The controlled entities listed below have share capital consisting solely of ordinary shares which are held directly. 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
Nuheara, Inc
Terrace Gold Pty Ltd
Nuheara (UK) Ltd
Nuheara (Canada) Inc
Nuheara NL B.V
Principal
Place of
Business
Perth, Australia
Washington, USA
Perth, Australia
Perth, Australia
Perth, Australia
Perth, Australia
Ownership interest
held by
the Company
Proportion of
non-controlling
interest
2023
100%
100%
80%
100%
100%
100%
2022
100%
100%
80%
100%
100%
0%
2023
0%
0%
20%
0%
0%
0%
2022
0%
0%
20%
0%
0%
0%
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, refer to Note 8.
30. SHARE BASED PAYMENTS
Shares
During the financial year 508,382 shares ($137,396) were issued to KMP under the Group’s Salary Sacrifice Share Plan (2022:
154,995 shares post-consolidation), with 180,498 shares ($35,721) relating to remuneration earned during the financial
year and 327,884 shares ($101,675) relating to remuneration earned during the prior financial year. During the financial
year, 573,493 shares ($111,215) were granted to non KMP employees as remuneration earned during the financial year
(2022: 36,703 share post-consolidation, $12,500).
Options
The 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 progressively, subject to meeting specified performance criteria. The options
are issued for no consideration and carry no entitlements to voting rights or dividends.
During the financial year, 375,000 unquoted options were granted to KMP (2022: 150,000), and no options were issued to
non-KMP employees (2022: 650,000 options)
Ivan Kelly (Chief Financial Officer)
Total
Employee
Options
375,000
375,000
53
NUHEARA LIMITED
ABN 29 125 167 133
30. SHARE BASED PAYMENTS (continued)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
During the financial year, 4,123,071 unquoted options were granted to brokers relating to capital raises, with the related
costs included within share issue costs (2022: 796,875 options post-consolidation).
A summary of the movements of all options issued is as follows:
Options outstanding and exercisable as at 30 June 2020
Granted
Forfeited
Lapsed without Exercise
Exercised
Options outstanding and exercisable as at 30 June 2021
Granted
Forfeited
Lapsed without Exercise
Exercised
Options outstanding and exercisable as at 30 June 2022
Granted
Forfeited
Lapsed without Exercise
Exercised
Options outstanding and exercisable as at 30 June 2023
No.
(post consolidation)
2,325,736
2,310,011
(762,501)
(175,000)
(247,338)
3,450,908
1,596,878
(324,168)
(175,000)
(157,335)
4,391,283
4,498,071
(485,334)
(187,500)
-
8,216,520
Weighted Average
Exercise Price
(post consolidation)
$1.40
$0.14
-
-
-
$0.82
$0.19
-
-
-
$0.72
$0.08
-
-
-
$0.73
The weighted average remaining contractual life of options outstanding at year end was 1.89 years (2022: 1.59). The
weighted average exercise price of outstanding options at the end of the reporting period was $0.73 (2022: $0.72).
The fair value of options granted during the year was $374,251 (2022: $248,208). These values were calculated using the
Black-Scholes option pricing model, applying the following inputs:
Employee
Options
31/08/2021
Employee
Options
04/01/2022
Investor
Relations
Options
28/04/2022
Broker
Options
28/04/2022
Employee
Options
03/06/2022
Employee
Options
12/06/2023
Broker
Options
12/06/2023
Broker
Options
12/06/2023
$0.62
$0.32
$0.24
$0.24
$0.12
$0.18
$0.18
$0.18
80%
$0.682
31/08/2024
80%
$0.366
04/01/2025
80%
$0.480
28/04/2025
80%
$0.560
28/10/2023
80%
$0.153
03/06/2025
80%
$0.182
12/06/2026
80%
$0.27
12/06/2026
80%
$0.255
12/06/2026
0.19%
1.03%
2.66%
2.25%
2.95%
3.78%
3.78%
3.78%
600,000
125,000
250,000
546,878
75,000
375,000
2,118,612
2,004,459
$0.304
$182,221
$0.156
$19,458
$0.087
$21,750
$0.038
$20,513
$0.057
$4,265
$0.0098
$36,810
$0.081
$170,761
$0.083
$166,679
Grant Date
Share price
on issue date
(post
consolidation)
Expected
volatility
Exercise price
Expiry date
Risk free
interest rate
Number
issued
Value per
option
Total
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 $8,490 (2022: $185,808), which relates to net movements in equity-settled
share-based payment transactions.
54
NUHEARA LIMITED
ABN 29 125 167 133
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
31. 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
Adjustments for:
Depreciation and amortisation expenses
Profit on sale of property plant & equipment
Option expenses
Sale of mining interests
Right of use asset cost
Interest expense
Borrowing costs on convertible note
(Gain)/loss on embedded derivative associated with convertible notes
Salary sacrifice share issues
Deferred income tax (benefit)/expense
Changes in assets and liabilities
(Increase)/decrease in trade debtors
Decrease in other receivables
Decrease/(increase) in inventories
Increase in right of use asset
(Increase) in other current assets
(Decrease)/increase in trade creditors
(Decrease)/increase in other payables
(Decrease)/increase in lease liabilities
(Decrease)/increase in provision for employee entitlements
(Decrease)/increase in provision for refunds and warranty claims
(Decrease)/increase in provision for income tax payable
(Decrease)/increase in deferred income
Net cash used in operating activities
* Refer Note 2
Cash and Cash equivalents
Cash at bank and on hand
Short-term deposits
2023
$
Restated*
2022
$
(12,619,733)
(14,793,653)
4,344,526
-
8,490
7,989
(6,177)
86,953
445,029
2,151,979
248,611
(418,725)
(601,092)
350,713
1,224,898
-
(321,558)
(964,123)
(704,517)
(180,498)
(52,161)
(59,887)
(12,419)
(408,662)
(7,480,364)
2023
$
2,166,621
153,480
2,320,101
4,426,080
(27)
185,808
(69,677)
(5,148)
47,185
342,003
(53,823)
50,043
466,005
127,088
529,590
(2,255,935)
(546,582)
1,727,173
319,615
399,822
54,894
(264,540)
12,419
-
(9,301,660)
2022
$
282,380
159,145
441,525
During the year ended 30 June 2023 the Group received some payments from its retailer customers for products sold which
were paid via credit notes against marketing amounts incurred with the same customers. The Statement of Cash Flows is
prepared on an actual cash flow basis and therefore these amounts, totalling $685,000, are excluded from Receipts from
customers and from Payments to suppliers and employees within operating cash flows.
55
NUHEARA LIMITED
ABN 29 125 167 133
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
32. 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
2023
$
(9,434,246)
-
(9,434,246)
7,966,647
1,005,414
8,972,061
2,962,169
4,264,624
7,226,793
1,745,268
2022
$
(5,445,669)
-
(5,445,669)
5,048,319
1,330,181
6,378,500
5,267,723
5,476,089
10,743,812
(4,365,312)
79,295,192
5,013,492
(82,563,416)
1,745,268
64,294,132
4,469,726
(73,129,170)
(4,365,312)
56
NUHEARA LIMITED
ABN 29 125 167 133
DIRECTORS’ DECLARATION
The Directors of Nuheara Limited declare that:
the financial statements and notes, as set out on page 18 to 56, 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 Reporting Standards (IFRS); and
give a true and fair view of the financial position as at 30 June 2023 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 and the company will be able to pay
its debts as and when they become due and payable.
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 and Managing Director
Perth, 29 September 2023
57
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF
NUHEARA LIMITED
Opinion
We have audited the financial report of Nuheara Limited (Company) and its subsidiaries (Group), which comprises
the consolidated statement of financial position as at 30 June 2023, the consolidated statement of profit or loss
and other comprehensive income, the consolidated statement of changes in equity and the consolidated
statement of cash flows for the year then ended, and notes to the financial statements, including a summary of
significant accounting policies, and the directors' declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001,
including:
(i)
Giving a true and fair view of the Group's financial position as at 30 June 2023 and of its financial
performance for the year then ended; and
(ii) Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor's responsibilities for the audit of the financial report section of our
report. We are independent of the Group in accordance with the auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board's
APES 110 Code of Ethics for Professional Accountants (Code) that are relevant to our audit of the financial report
in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been given to
the directors of the Company, would be in the same terms if given to the directors as at the time of this auditor's
report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Emphasis of Matter
We draw attention to Note 2 to the financial statements which states that the amounts reported in the previously
issued 30 June 2022 Financial Report have been restated and disclosed as comparatives in this financial report.
The financial report of Nuheara Limited for the year ended 30 June 2022 was audited by another auditor who
expressed an unmodified opinion on that report on 8 October 2022. Our opinion is not modified in respect of this
matter.
Material Uncertainty Related to Going Concern
We draw attention to Note 1, which indicates that the Group incurred a loss of $12,619,733 and had net operating
cash outflows of $7,480,364 for the year ended 30 June 2023. As stated in Note 1, these events or conditions,
along with other matters as set forth in Note 1, indicate that a material uncertainty exists that may cast significant
doubt on the Group’s ability to continue as a going concern. Our opinion is not modified in respect of this matter.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of
the financial report of the current period. These matters were addressed in the context of our audit of the financial
report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
In addition to the matter described in the Material Uncertainty Related to Going Concern section, we have
determined the matters described below to be the key audit matters to be communicated in our report.
Key Audit Matter
Capitalisation and Carrying Value of Intangible assets
Refer to Note 12 in the financial statements
As at 30 June 2023, the Group had Intangible Assets
comprising capitalised development costs and patents
and trademarks of $25,497,402 and $1,133,939,
respectively.
How our audit addressed this matter
Our audit procedures included, among others:
Assessing whether the Group's policy for
capitalising costs is in accordance with
Australian Accounting Standards;
This considered to be a key audit matter due to the
management judgements required:
in determining whether costs incurred are
capital in nature, the timing from which they
should be capitalised; and the period over which
these should be amortised, and
in assessing the probability of future economic
benefits associated with these assets and the
existence of indicators of impairment at 30 June
2023.
In addition, management estimates are applied in the
allocation and apportionment of expenditure to the
relevant development activities.
Obtaining an understanding of the nature of the
company's development activities and critically
reviewing management's assessment that they
meet the criteria for recognition as an intangible
asset set out in AASB 138 Intangible Assets;
Obtaining the calculations and supporting
workings used to quantify the capitalised
development costs and on a sample basis
testing these to ascertain whether the costs
incurred were directly attributable to the projects
eligible for capitalisation;
Challenging management on the basis for
capitalisation of costs including the allocation
and apportionment methods applied and
management’s assessment of and expected
future benefits relating to these assets;
On a sample basis, testing additions of
capitalised costs to supporting documentation
including agreeing wages and salaries to payroll
records for employees undertaking
development activities;
Testing the mathematical accuracy of the
amortisation of capitalised development costs
and patents and trademarks for consistency
with the Group policy;
Evaluating management's assessment that no
impairment indicators existed at 30 June 2023
in regard to capitalised development costs and
patents and trademarks, including having
regard to corroborating evidence gathered as
part of the audit process; and
Evaluating the appropriateness of the
disclosures in the financial report.
Key Audit Matter
Carrying value of Inventories
Refer to Note 7 in the financial statements
The Group has inventory with a carrying value of
$2,130,112 as of 30 June 2023.
The valuation of inventory is considered a key audit
matter, due to the materiality of the balance and the
significant management judgments and estimates
involved in assessing whether inventory items are
recorded at the lower of net realisable value at 30 June
2023.
How our audit addressed this matter
Our audit procedures included:
Assessing whether the Group's policy for
capitalising costs is in accordance with
Australian Accounting Standards;
On a sample basis, testing the costing of
inventory to costing calculations and input costs
to supporting documentation;
For a sample of inventory items on hand at year
end, evaluating management’s estimate of net
realisable value by reference to recent sales
transactions; and
On a sample basis, testing the mathematical
accuracy of net realisable adjustments made to
the carrying value of inventory items.
Key Audit Matter
Accounting for Convertible notes
Refer to Note 14 in the financial statements
The Group entered into an 18-month $3 million share
purchase agreement announced on 23 December
2021 by HealthCare 2030, LLC (“HealthCare 2030”).
Under the Agreement the Investor agreed to invest
$3,000,000 for $3,180,000 worth of Shares. This
agreement was finalised in July 2023.
On 8 September 2022, the Group issued a convertible
note
to Realtek Semiconductor Corporation
(“Realtek”) raising $2.5 million.
The measurement and classification of convertible
notes is considered a key audit matter due to the
materiality of the balance and the complexity of the
required under Australian
treatment
accounting
Accounting Standards.
How our audit addressed this matter
Our audit procedures included:
Assessing the Group’s accounting policy for
compliance with Australian Accounting
Standards;
Reading the convertible notes agreements to
understand their terms and evaluating the
classification of the convertible notes against
the criteria contained within Australian
Accounting Standards;
Vouching the proceeds from the issue of
Realtek convertible notes to bank statements
and other supporting documentation;
Through the use of RSM Corporate Finance
Specialists, assessing the fair value of the
equity, debt and embedded derivative
components of the convertible notes at
inception and of the embedded derivatives at
required re-measurement dates, including
challenging the reasonableness of key inputs
used by management to determine fair value;
Assessing for compliance with Australian
Accounting Standards the accounting adopted
on the finalisation of the HealthCare 2030 in
July 2023, including testing the mathematical
accuracy of journals posted by management
affecting the profit and loss and equity;
Checking the mathematical accuracy of the
remeasurement at year-end of the convertible
note debt component measured at amortised
cost using the effective interest rate method;
and
Assessing the appropriateness of the
disclosures in financial report including
restatement of comparative balances.
Other Information
The directors are responsible for the other information. The other information comprises the information included
in the Group's annual report for the year ended 30 June 2023 but does not include the financial report and the
auditor's report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent with the financial report or our knowledge
obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true and fair
view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal
control as the directors determine is necessary to enable the preparation of the financial report that gives a true
and fair view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as
a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic
alternative but to do so.
Auditor's Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from
material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably
be expected to influence the economic decisions of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the Auditing and
Assurance Standards Board website at: http://www.auasb.gov.au/auditors_responsibilities/ar1.pdf. This
description forms part of our auditor's report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in the directors’ report for the year ended 30 June 2023.
In our opinion, the Remuneration Report of Nuheara Limited, for the year ended 30 June 2023, complies with
section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration Report
in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.
RSM AUSTRALIA PARTNERS
Perth, WA
Dated: 29 September 2023
MATTHEW BEEVERS
Partner
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 27 September
2023.
1.
Distribution schedule and number of holders of equity securities as at 27 September 2023
Fully Paid Ordinary Shares
Unquoted Options – exercisable at
$0.37 on or before 04/01/2025
Unquoted Options – exercisable at
$0.68 on or before 31/08/2024
Unquoted Options – exercisable at
$0.48 on or before 28/04/2025
Unquoted Options – exercisable at
$0.56 on or before 28/10/2023
Unquoted Options – exercisable at
$0.153 on or before 03/06/2025
Unquoted Options – exercisable at
$0.87 on or before 02/03/2024
Unquoted Options – exercisable at
$1.00 on or before 03/02/2024
Unquoted Options – exercisable at
$0.255 on or before 12/06/2026
Unquoted Options – exercisable at
$0.27 on or before 12/06/2026
Unquoted Options – exercisable at
$0.182 on or before 12/06/2026
Convertible notes
1 – 1,000
1,130
1,001 –
5,000
1,168
5,001 –
10,000
446
10,001 –
100,000
861
100,001 –
and over
205
Total
3,810
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1
-
-
-
-
-
-
-
-
-
-
5
-
-
-
-
-
-
-
1
4
-
11
1
5
-
-
-
-
-
-
2
1
2
-
-
1
1
1
1
1
1
6
1
19
1
5
1
1
1
1
1
The number of holders holding less than a marketable parcel of fully paid ordinary shares as at 27 September 2023 is 1,949.
63
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 27 September 2023 are:
Rank
1
Name
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
FARJOY PTY LTD
Shares
26,697,981
% of Total
Shares
13.12
21,201,775
10.42
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
BOND STREET CUSTODIANS LIMITED
20,000,000
REALTEK SEMICONDUCTOR CORPORATION
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
FIAGO PTY LTD
ADMAN LANES PTY LTD
WASAGI CORPORATION PTY LTD
MR XUAN KHOA PHAM
MR DAVID ROBERT CANNINGTON
DR STEPHEN DENNIS GIPPS
KETOM PTY LTD
JAMORE PTY LTD
SMARIM PTY LTD
DR STEPHEN DENNIS GIPPS
MR JOSEPH ZANCA + MRS SZERENKE ZANCA
CITICORP NOMINEES PTY LIMITED
YARRAANDOO PTY LTD
MR STEPHEN CHARLES STUART WATTS
DR STEPHEN DENNIS GIPPS + MS SAM FISCHER
6,380,610
6,171,766
4,640,369
4,000,000
3,619,093
3,463,785
3,287,752
2,299,999
2,236,291
2,139,036
1,800,000
1,250,000
1,200,000
1,158,132
1,125,000
1,100,500
1,001,800
9.83
3.14
3.03
2.28
1.97
1.78
1.70
1.62
1.13
1.10
1.05
0.88
0.61
0.59
0.57
0.55
0.54
0.49
114,773,889
56.41
Stock Exchange Listing – Listing has been granted for 203,450,494 ordinary fully paid shares of the Group on issue on the Australian
Securities Exchange. The unquoted securities on issue as at 27 September 2023 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
Realtek Semiconductor Corporation
FARJOY PTY LTD
Salter Brothers Emerging Companies Limited
Shares
32,924,696
21,201,775
19,860,641
% of Total
Shares
16.18
10.42
9.76
Date of Notice
10 August 2023
13 June 2023
15 June 2022
64
NUHEARA LIMITED
ABN 29 125 167 133
ADDITIONAL ASX INFORMATION
4.
Unquoted Securities
The number of unquoted securities on issue as at 27 September 2023:
Security
Unquoted Options – exercisable at $0.37 on or before 04/01/2025
Unquoted Options – exercisable at $0.68 on or before 31/08/2024
Unquoted Options – exercisable at $0.48 on or before 28/04/2025
Unquoted Options – exercisable at $0.56 on or before 28/10/2023
Unquoted Options – exercisable at $0.153 on or before 03/06/2025
Unquoted Options – exercisable at $0.87 on or before 02/03/2024
Unquoted Options – exercisable at $1.00 on or before 03/02/2024
Unquoted Options – exercisable at $0.182 on or before 12/06/2026
Unquoted Options – exercisable at $0.255 on or before 12/06/2026
Unquoted Options – exercisable at $0.27 on or before 12/06/2026
Convertible notes ($1 face value)
5.
Holder Details of Unquoted Securities
Number
on issue
50,000
425,000
250,000
546,878
50,000
125,000
1,213,236
375,000
2,004,459
2,118,612
2,500,000
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 27 September 2022 are detailed below:
Number of
Securities
1,213,236
250,000
156,250
2,004,459
2,118,612
2,500,000
Security
Unquoted Options – exercisable at $1.00 on or
before 03/02/2024
Unquoted Options – exercisable at $0.48 on or
before 28/04/2025
Unquoted Options – exercisable at $0.56 on or
before 28/10/2023
Unquoted Options – exercisable at $0.255 on or
before 12/06/2026
Unquoted Options – exercisable at $0.27 on or
before 12/06/2026
Convertible notes
Name
Lind Global Macro Fund LP
Ketom Pty Ltd
Jetosea Pty Ltd
CIRCUMFERENCE CAPITAL CT PTY LTD
CIRCUMFERENCE CAPITAL CT PTY LTD
Realtek Semiconductor Corporation
6.
Restricted Securities
The Group had no restricted securities as at 27 September 2023.
7.
Voting Rights
All fully paid ordinary shares carry one vote per ordinary share without restriction.
Unquoted options have no voting rights.
8.
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 https://www.nuheara.com/corporate-governance/.
65
NUHEARA LIMITED
ABN 29 125 167 133
ADDITIONAL ASX INFORMATION
9.
Adjustments to financial information presented in Appendix 4E (preliminary final report)
In finalising the 30 June 2023 annual report preparation and audit process the Group recognised that its initial accounting
treatment relating to convertible notes presented in the Appendix 4E (preliminary final report) for the year ended 30 June
2023 had been incorrect in relation to the valuation of the Realtek convertible note at inception, the conversion of related
interest shares and also the treatment of share conversions relating to the Healthcare 2030 convertible note in July 2022.
This resulted in the net loss before tax presented in the Appendix 4E for the year ended 30 June 2023 being $1,882,122 lower
than the net loss included in the final Consolidated Statement of Profit or Loss.
In addition, as described in Note 2 to the financial statements, the Group identified that its treatment of deferred tax assets
and liabilities had failed to properly determine the tax cost base of certain assets and had also offset deferred tax assets
against deferred tax liabilities across Group entities despite no set off being available as the Group is not taxed as a
consolidated tax group, with this requiring both a restatement of prior year comparative results (as outlined in the financial
statements) and resulting in an additional income tax benefit for the year ended 30 June 2023 of $418,725 versus the
Consolidated Statement of Profit or Loss presented in the Appendix 4E.
The combined impact of the above was an increase in the net loss for the year ended 30 June 2023 attributable to members
of $1,463,397 and a reduction in net assets at 30 June 2023 of $1,014,798 (including an increase in accumulated losses from
adjustments to prior periods of $958,598). The following tables show the effect of these matters on the Group’s Consolidated
Statement of Profit or Loss and Other Comprehensive Income and Consolidated Statement of Financial Position versus those
presented in the Appendix 4E.
Consolidated Statement of Profit or Loss and Other Comprehensive Income for year ended 30 June 2023 (extracts)
Total expenses
Loss before tax from continuing operations
Income tax (expense)/benefit
Net loss after tax from continuing operations
Earnings per share
Basic loss per share (cents)
Diluted loss per share (cents)
Consolidated Statement of Financial Position (extracts)
NON-CURRENT LIABILITIES
Financial liabilities
Deferred tax
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Option premium on convertible note
Accumulated losses
TOTAL EQUITY
Appendix 4E
Preliminary
$
Adjustments
$
Final
Reported
$
(10,196,661)
(11,148,133)
(8,203)
(11,156,336)
(1,882,122)
(1,882,122)
418,725
(1,463,397)
(12,078,783)
(13,030,255)
410,522
(12,619,733)
(7.41)
(7.41)
(0.98)
(0.98)
(8.39)
(8.39)
Appendix 4E
Preliminary
$
Adjustments
$
Final
Reported
$
1,968,230
-
3,789,700
474,924
539,874
1,014,798
2,443,154
539,874
4,804,498
6,892,081
1,014,798
7,906,879
6,125,462
(1,014,798)
5,110,664
77,155,934
937,258
(76,812,970)
6,125,462
2,139,258
(732,060)
(2,421,996)
(1,014,798)
79,295,192
205,198
(79,234,966)
5,110,664
Net tangible assets per share (cents)
0.74
(0.52)
0.22
66
NUHEARA LIMITED
ABN 29 125 167 133
ADDITIONAL ASX INFORMATION
9. Adjustments to financial information in Appendix 4E (preliminary final report) - continued
Updated Results for Announcement to the Market as per the Annual Report
Current reporting period:
Previous corresponding period:
Year ended 30 June 2023
Year ended 30 June 2022
Revenue from ordinary activities
Loss from ordinary activities after tax attributable to members
Net loss for the period attributable to members
Amount
$
1,931,264
(12,617,576)
(12,617,576)
% Change
up(+)/down(-)
-50%
-15%
-15%
67