Optiscan Imaging Limited
Appendix 4E
Preliminary final report
1. Company details
Name of entity:
ABN:
Reporting period:
Previous period:
Optiscan Imaging Limited
81 077 771 987
For the year ended 30 June 2023
For the year ended 30 June 2022
2. Results for announcement to the market
Revenues from ordinary activities
Loss from ordinary activities after tax attributable to the
owners of Optiscan Imaging Limited
Loss for the year attributable to the owners of Optiscan
Imaging Limited
up
up
up
65.9%
2.8%
2.8%
to
to
to
$
1,680,180
(4,351,500)
(4,351,500)
Dividends
There were no dividends paid or declared during the current financial period.
Comments
The loss for the consolidated entity after providing for income tax amounted to $4,351,500 (30 June 2022: $4,233,037).
Financial performance
During the financial year ending 30 June 2023 (FY23), the consolidated entity generated ordinary revenue of $1,680,180
from sales, system rentals and the provision of services, compared to $1,013,039 in the previous corresponding period.
The 66% increase in sales revenue was mainly driven by strong demand from Carl Zeiss Meditech (CZM) and the sale of a
ViewnVivo® research device to an American pharmaceutical company.
Other income generated for the financial year was $968,813 (2022: $1,267,208). The Company recorded research
and development incentive income of $737,570 (2022: $941,790), a decrease by 21% mainly due to the change in nature of
R&D expenses incurred compared to last year. As the Company continues to invest in R&D to accelerate commercialisation,
the Company has been able to leverage on external skills, expertise, and access non-dilutive funding through various grant
programs. This included $180,103 (2022: $294,205) from the BioMedTech Horizons program and $20,000 grant from the
the Australian Government Entrepreneurs’ Growth Program.
Further investment in commercial and R&D activity for the financial period increased total expenses for FY23 to $7,000,493
(2022: $6,513,284). These expenses include the expansion of the Company into the US to enable commercial presence
and effectiveness in the local US market. Regulatory activities have also progressed with applications to the United States
Food & Drug Administration (FDA) to market the InVivage® device for sale in market.
The net operating cash outflow for FY23 was $3,152,494 compared to $3,833,578 for the previous financial year. This
improvement is due to increased cash receipts from customers from higher sales recorded for the year.
Optiscan Imaging Limited
Appendix 4E
Preliminary final report
Financial position
The net assets decreased by $3,547,973 to $3,044,436 at 30 June 2023 (30 June 2022: $6,592,409). The working capital
position of the consolidated entity as at 30 June 2023 resulted in an excess of current assets over current liabilities
of $2,223,048 (30 June 2022: $6,322,121).
The decrease in the net asset position of the consolidated entity was primarily a result of increased commercial and R&D
activity detailed above on items such as expansion into the US, investment in product development particularly in AI/ML,
and regulatory activities with consultants and the FDA, to market and sell the InVivage® device in the US.
Capital raise
During the reporting period, the Company launched a partially underwritten renounceable entitlement offer to raise $16.7m
to fund its strategic portfolio expansion. The Offer involved the issuance of up to 208,735,201 shares at an issue price of
$0.08 per share, with the objective of raising up to $16,698,816. The Company successfully completed the capital raise of the
full Offer of $16.7m following the financial year end in July 2023.
3. Net tangible assets
Reporting
period
Cents
Previous
period
Cents
Net tangible assets per ordinary security
0.42
1.08
The net tangible assets per ordinary security has been calculated excluding the Right of use asset amount and Intangibles.
4. Control gained over entities
A wholly owned subsidiary was set up in the US to expand the Company's presence and business in US.
5. Loss of control over entities
Not applicable.
6. Dividends
Current period
There were no dividends paid or declared during the current financial period.
Previous period
There were no dividends paid or declared during the previous financial period.
Optiscan Imaging Limited
Appendix 4E
Preliminary final report
7. Dividend reinvestment plans
Not applicable.
8. Details of associates and joint venture entities
Not applicable.
9. Foreign entities
Details of origin of accounting standards used in compiling the report:
A wholly owned subsidiary was set up in the US to expand the Company's presence and business in US. The consolidated
financial statements have been prepared in accordance with Australian Accounting Standards that also complies with the
International Financial Reporting Standards.
10. Audit qualification or review
Details of audit/review dispute or qualification (if any):
The financial statements have been audited and an unmodified opinion has been issued.
11. Attachments
Details of attachments (if any):
The Annual Report of Optiscan Imaging Limited for the year ended 30 June 2023 is attached.
12. Signed
Signed ___________________________
Date: 30 August 2023
Robert Cooke
Non-executive Chairman
Optiscan Imaging Limited
ABN 81 077 771 987
Annual Report – 30 June 2023
Optiscan Imaging Limited
Contents
30 June 2023
Corporate directory
Directors' report
Auditor's independence declaration
Consolidated statement of profit or loss and other comprehensive income
Consolidated statement of financial position
Consolidated statement of changes in equity
Consolidated statement of cash flows
Notes to the consolidated financial statements
Directors' declaration
Independent auditor's report to the members of Optiscan Imaging Limited
Shareholder information
2
3
25
26
27
28
29
30
60
61
65
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Optiscan Imaging Limited
Corporate directory
30 June 2023
Directors
Mr Robert Cooke (Non-executive Chairman)
Prof Camile Farah (Managing Director)
Ms Karen Borg (Non-executive Director)
Mr Ron Song (Non-executive Director)
Mr Sean Gardiner (Non-executive Director)
Company secretary
Mr Justin Mouchacca
Notice of annual general meeting
The Company is proposing to hold its Annual General Meeting on Thursday
23 November 2023.
Registered office
Principal place of business
Share register
Auditor
16 Miles Street
Mulgrave, Victoria, 3170
Phone No.: (03) 9598 3333
Fax No.: (03) 9562 7742
16 Miles Street
Mulgrave, Victoria, 3170
Phone No.: (03) 9598 3333
Fax No.: (03) 9562 7742
Computershare Investor Registry Services
Yarra Falls
452 Johnston Street
Abbotsford, Victoria, 3067
Phone No.: (03) 9415 5000
Grant Thornton Audit Pty Ltd
Collins Square, Tower 5,
727 Collins Street, Melbourne VIC 3008
Australia
Stock exchange listing
Optiscan Imaging Limited securities are listed on the Australian Securities
Exchange (ASX code: OIL)
Website
www.optiscan.com
Corporate governance statement
www.optiscan.com/about-us/compliance
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Optiscan Imaging Limited
Directors' report
30 June 2023
The Directors present their report, together with the financial statements, on the consolidated entity (referred to hereafter
as the 'consolidated entity' or the 'Group') consisting of Optiscan Imaging Limited (referred to hereafter as 'Optiscan',
the 'Company' or 'parent entity') and the entities it controlled at the end of, or during, the year ended 30 June 2023.
Directors
The following persons were directors of Optiscan Imaging Limited during the whole of the financial year and up to the
date of this report, unless otherwise stated:
Mr Robert Cooke (Non-executive Chairman)
Prof Camile Farah (Managing Director)
Ms Karen Borg (Non-executive Director)
Mr Ron Song (Non-executive Director)
Mr Sean Gardiner (Non-executive Director)
Principal activities
The principal activity of the consolidated entity during the year was the development and commercialisation of confocal
endomicroscopes. The consolidated entity carries out its principal activity through the development of the “InVivage®”,
Optiscan’s own clinical device, Optiscan’s collaboration with Carl Zeiss Meditech (CZM), and developing new pre-clinical
markets for Optiscan’s ViewnVivo® products and services.
Dividends
There were no dividends paid, recommended or declared during the current or previous financial year.
Operating and Financial review
The loss for the consolidated entity after providing for income tax amounted to $4,351,500 (30 June 2022: $4,233,037).
Financial performance
During the financial year ending 30 June 2023 (FY23), the consolidated entity generated ordinary revenue of $1,680,180
from sales, system rentals and the provision of services, compared to $1,013,039 in the previous corresponding period.
The 66% increase in sales revenue was mainly driven by strong demand from Carl Zeiss Meditech (CZM) and the sale of a
ViewnVivo® research device to an American pharmaceutical company.
Other income generated for the financial year was $968,813 (2022: $1,267,208). The Company recorded research
and development incentive income of $737,570 (2022: $941,790), a decrease by 21% mainly due to the change in nature of
R&D expenses incurred compared to last year. As the Company continues to invest in R&D to accelerate commercialisation,
the Company has been able to leverage on external skills, expertise, and access non-dilutive funding through various grant
programs. This included $180,103 (2022: $294,205) from the BioMedTech Horizons program and $20,000 grant from the
the Australian Government Entrepreneurs’ Growth Program.
Further investment in commercial and R&D activity for the financial period increased total expenses for FY23 to $7,000,493
(2022: $6,513,284). These expenses include the expansion of the Company into the US to enable commercial presence
and effectiveness in the local US market. Regulatory activities have also progressed with applications to the United States
Food & Drug Administration (FDA) to market the InVivage® device for sale in market.
The net operating cash outflow for FY23 was $3,152,494 compared to $3,833,578 for the previous financial year. This
improvement is due to increased cash receipts from customers from higher sales recorded for the year.
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Optiscan Imaging Limited
Directors' report
30 June 2023
Financial position
The net assets decreased by $3,547,973 to $3,044,436 at 30 June 2023 (30 June 2022: $6,592,409). The working capital
position of the consolidated entity as at 30 June 2023 resulted in an excess of current assets over current liabilities
of $2,223,048 (30 June 2022: $6,322,121).
The decrease in the net asset position of the consolidated entity was primarily a result of increased commercial and R&D
activity detailed above on items such as expansion into the US, investment in product development particularly in AI/ML,
and regulatory activities with consultants and the FDA, to market and sell the InVivage® device in the US.
Capital raise
During the reporting period, the Company launched a partially underwritten renounceable entitlement offer to raise $16.7m
to fund its strategic portfolio expansion. The Offer involved the issuance of up to 208,735,201 shares at an issue price of
$0.08 per share, with the objective of raising up to $16,698,816. Engaging substantial shareholders, Peters Investments Pty
Ltd (Peters) and Orchid Capital Investments Pte. Ltd (Orchid) partially underwrote the Offer, with Peters underwriting
$6,950,000 (86,875,000 shares) and Orchid underwriting $2,863,733 (35,796,663 shares), both at the issue price of $0.08
per share. Additionally, both Peters and Orchid agreed to subscribe to their full entitlements under the Offer, being
$3,221,250 (35,791,667 shares) and $2,684,550 (29,828,333 shares) respectively. The Offer also included a shortfall
facility for Eligible Shareholders who could apply for additional shares in excess of their pro-rata entitlement after taking
up their full entitlement. The Company successfully completed the capital raise of the full Offer of $16.7m following the
financial year end in July 2023.
The funds raised under the Offer will be used to further the Company’s research and development (R&D) projects specifically
for both rigid and flexible surgical applications, to develop improved image capture, AI and telepathology capabilities, to
undertake clinical studies to satisfy the FDA in relation to premarket notification applications for new addressable markets,
to increase the commercial exposure of the Company specifically in the US, and for general working capital purposes.
Operational review
“INVIVAGE®” ORAL CANCER SCREENING DEVICE
Optiscan has developed the “InVivage®” intra-oral digital microscope. This hand-held confocal endomicroscope is a clinical
device intended for Oral Cancer Screening and/or Surgical Margin determination. The platform technology will also be used
for additional devices and other clinical applications.
United States Food & Drug Administration (“FDA”) 510(k) Pathway for InVivage® device
In August 2022, Optiscan submitted its application for FDA 510(k) clearance to market the InVivage® clinical device for
human oral cancer screening in the United States. In January 2023, the Agency advised that it considered the intended use
and drug-device combination were novel, and should be assessed through the De Novo pathway instead. The Company
has been working with the FDA since then to address feedback from the review, and incorporate enhancements into a
De Novo submission. This process has allowed Optiscan to further improve the InVivage® device, explore contrast agent
formulations, and advance probe disinfection and sterilisation requirements. To enable the best possible outcome, the
De Novo submission will be lodged when all matters are satisfactorily addressed for both the Company and the FDA.
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Optiscan Imaging Limited
Directors' report
30 June 2023
Oral Cancer Studies
During the reporting period, the Melbourne Dental School clinical imaging study concluded, with all intended
imaging completed and a significant amount of data included in the Company’s FDA 510(k) submission for the InVivage®
device. The collaborative study with the Melbourne Dental School also yielded data to be submitted to academic journals,
and as supporting evidence for the FDA submission. The study was supported by the BioMedTech Horizons Program grant,
an initiative of the Medical Research Future Fund operated by MTPConnect. The project fostered strong collaboration in
health technology development, and reanalyzed data has been incorporated into the Company’s De Novo submission.
The Company continued data curation, annotation and correlation as part of the Oral Lesion clinical study undertaken
at the Australian Centre for Oral Oncology Research & Education, which the Company subsequently acquired via issuance
of 6,000,000 shares on 8 December 2022, being total consideration of $600,000 at market value on that date. One
publication from this study was featured in the Journal of Oral Pathology & Medicine, and presented at international
conferences, including a keynote presentation by Dr Farah at the American Academy of Oral Medicine’s annual conference
in May 2023. These results demonstrated extremely high diagnostic accuracy of 88.9% for the presence of oral
precancer/cancer, with sensitivity (Sn) at 86.8%, specificity (Sp) at 92%, positive predictive value (PPV) at 94.3% and negative
predictive value (NPV) at 82.1%. 100% of cancer cases were diagnosed correctly using Optiscan’s confocal probe, with
real-time clinical assessment of its images.
Finally, the imaging phase of the Adelaide Dental School study was successfully completed, yielding positive results for
determination of oral cancer on resected tumors compared to traditional histopathology. The team is preparing manuscripts
and seeking future research. The data shared with Optiscan further reinforces the technology’s effectiveness for ex vivo
imaging in surgery, and will be instrumental in supporting additional clinical studies for in vivo and ex vivo margin assessment.
BREAST CANCER SURGICAL MARGIN ASSESSMENT STUDY
The Breast Cancer Intraoperative Assessment Study, conducted at Royal Melbourne, Frances Perry and Epworth
Hospitals concluded recruitment for the first and second stages of image analysis and correlation with histopathology. The
collaborative work between Optiscan, breast surgeon Professor Bruce Mann, pathologist Dr Anand Murugasu and the Breast
Cancer Network Australia is supported by the Medical Device Partnering Program (MDPP). Ongoing image analysis of these
datasets and correlation with histopathology aim to demonstrate the technology’s utility in breast resection surgery.
VIEWNVIVO® LIFE SCIENCES RESEARCH DEVICE
Optiscan is actively expanding its off-shore distribution model and sales opportunities for its ViewnVivo® preclinical device.
Following new appointments in sales and marketing, Optiscan commenced a training program for Distributor Partners in
the Asia Pacific region. The program focused on improving technical expertise, preclinical applications, and sales strategies,
and empowers distributors to effectively market and sell ViewnVivo®. The focus on marketing and sales content will
strengthen the ViewnVivo® value proposition to the pre-clinical research market.
China
The Company entered into an agreement with China-based Sinsi Technology Co Ltd (Sinsi) to target the greater China market,
including Hong Kong and Macau, with Biotimes covering Shanghai. Despite COVID-19 restrictions and the pandemic
impacting on-site demonstration, Sinsi has generated multiple leads. Good lead generation has been obtained by both Sinsi
and Biotimes, and ongoing discussions continue to refine distributor agreements and expand the Company’s presence in
China, given the large academic and research based in that country.
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Optiscan Imaging Limited
Directors' report
30 June 2023
Asia Pacific
During the period, the Company collaborated closely with its other distributors in Taiwan (J&H Technology) and Korea
(Chayon) through the newly established Optiscan-based Applications and Customer Support team. Despite the impact of
COVID-19, the Company focused on developing prospective revenue pipeline by providing sustained sales and marketing
support across the APAC distribution network.
The Company launched a new digital marketing campaign for ViewnVivo®, in the APAC region. The high level of engagement
prompted a global rollout and increased awareness and interest in the product. Following business reviews and limited
traction by the distributor in South Korea, the Company terminated its agreement with Chayon and exited its Taiwan
arrangements.
North America
The Company continued its focus on the North American market with direct sales and marketing in that jurisdiction
undertaken by the team in the Melbourne office. After extensive discussions with US based entities, the Company adopted
a new strategic approach for direct sales and marketing in North America, leading to termination of distributor arrangements
with Advanced Microscopy Consultancy Services Inc. The Company received an order from an undisclosable large American
pharmaceutical company for its ViewnVivo® device, coupled with feedback from US-based sales and marketing entities, and
in alignment with the Company’s focus on the US market, resulted in the moving ahead with the establishment of a US-based
sales and corporate development team. This team will enhance Optiscan’s presence in the region, enhance the Company’s
commercialisation efforts in life sciences, and strengthen collaborations with hospitals, academic research institutions and
other medical device companies pertaining to the emerging clinical portfolio.
PRODUCT DEVELOPMENT
Since signing an agreement with Canadian-based software company, Prolucid Technologies, the Company has made significant
progress with the development of its artificial intelligence/machine learning (AI/ML) and telepathology applications for use
with the InVivage® device and subsequent devices. A proof-of-concept telepathology solution based on cloud infrastructure
has been demonstrated, and suitable AI/ML pipelines were identified. These solutions will be taken forward for further
development, verification and implementation over the coming year. Concurrently, technology roadmaps have being finalized
to enhance the Company’s core imaging capabilities and accelerate its product portfolio, supported by the partially
underwritten capital raise. These include devices to satisfy large market segments including intraoperative surgery, pathology,
gastroenterology and veterinary medicine.
MANUFACTURING & PRODUCTION
During the year, the Company made significant improvements to its manufacturing and production processes, leading to
enhanced efficiencies. The addition of new staff, a streamlined supply chain review, close collaboration with key suppliers and
effective integration of all outputs into the Company’s expanded Enterprise Resource Planning software (M1) has further
enhanced operational productivity. The transition and implementation of M1 enables further finetuning of procedures and
processes, and total integration and further automation of its productivity tools.
The Company finished the year having fulfilled all committed production and service specific orders, rounding out the financial
year on a positive. During the period, the Company also successfully completed the ISO 13485:2016 Annual Surveillance
Audit.
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Optiscan Imaging Limited
Directors' report
30 June 2023
PERSONNEL AND FACILITIES
The Company continued to refine its management and operational structure, taking on new staff to expand its manufacturing
and research capabilities, while implementing its Enterprise Resource Planning system (ERP) (M1). The Company appointed
1.1 full-time equivalent employees to its clinical trials team to support its capacity to conduct feasibility studies and
comprehensive clinical trials in support of new product developments, ensuring the delivery of high-quality data to support
regulatory and commercialisation outcomes. The Company also successfully completed installation of solar panels to reduce
its carbon footprint and lower its energy costs.
During the year, the Company established its US subsidiary Optiscan Imaging Inc. and commenced work on hiring a corporate
development and business development presence through direct US-based hires. These will provide the Company local
presence, agility and intelligence in moving ahead with US commercialisation of its products and services.
BUSINESS DEVELOPMENT
Aligning with the Company’s growth strategy and in preparation for the launch of InVivage® in the US, and the further
promotion of the ViewnVivo® preclinical device, the Company attended conferences, trade exhibitions and professional
society meetings, to raise its profile and better understand customer needs. Notable events included Pathology Visions (Las
Vegas; October 2022), the AdvaMed MedTech conference (Boston; October 2022), Medica (Dusseldorf; November 2022)
and the American Academy of Oral Medicine (Savannah; May 2023). These meetings are used to promote both the life
sciences and clinical products and make connections with suppliers, partners, and potential customers.
The Company joined Medical Alley, the world’s largest MedTech association based in Minnesota where the Company will
base itself during its US expansion. Dr Camile Farah met with key US opinion leaders, urban development and
commercialisation agents, strategic contract manufacturers, R&D firms and Medical Alley staff in Minneapolis, St Paul and
Rochester Minnesota.
MARKETING, COMMUNICATIONS & PUBLIC RELATIONS
In November 2022, the Company unveiled its new corporate branding, Company logo, value proposition and website at its
Annual General Meeting. With the tagline ‘Immediate Informed Decisions’, the new branding forms an integral part of all
communications. A new marketing communications system was also implemented and integrated into the Company Customer
Relationship System (CRM). This facilitated regular communications with investors, customers and stakeholders. The period
saw the Company continue to make excellent progress with its marketing, communications and public relations efforts,
providing consistent updates to shareholders and customers throughout the course of the year.
The Company has maintained a strong presence in various media and online forums. During the period, the Company signed
an agreement with Bulls N’ Bears for online market coverage, including the West Australia media platforms which reach
nearly 600,000 followers. The Company also pursued broader radio and newspaper coverage opportunities and will continue
to target media and public relations coverage to raise the Company's profile and awareness.
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Optiscan Imaging Limited
Directors' report
30 June 2023
COVID-19 Update
From 14 October 2022, the Government advised that it was no longer mandatory to isolate when testing positive for
COVID-19. Employees were still encouraged to stay home if feeling unwell, to wear a mask for 5 days when returning to
work after overseas travel, and to undertake bi-annual COVID-19 risk assessment per guidance from Safe Work Australia.
Based on the latest risk assessment undertaken in Q4 2023, COVID-19 remains low risk for Optiscan.
COVID-19 impacted Optiscan’s marketing efforts, particularly in Australia and overseas, and especially in China after
partnering with Sinsi Technology Co Limited. The imposition of travel restrictions hindered the ability to conduct on-site
product demonstrations, limiting the Company’s reach to potential customers. The gradual lifting of travel restrictions
increased the ability to attend face-to-face meetings with potential customers, with the Company also using video
conferencing to generate new leads and business.
The Company prioritised employee safety and well-being during the pandemic, maintaining its COVID-19 safe plan
throughout its premises, and supplying additional face masks, antibacterial wipes and hand sanitiser in the workplace.
The Board continued to regularly review the consolidated entity's funding requirements and actively investigate government
funding and other programs to support the consolidated entity.
Likely developments
With the launch of the US office, the commercial focus will be to get operations underway with staff on the ground to
generate sales revenue in the coming year. Regarding product development and R&D, with the receipt of funds through the
captial raise, there will be increased activity in this area to ensure the Company continues to progress in bringing innovative
solutions to the market.
Significant changes in the state of affairs
There were no significant changes in the state of affairs of the consolidated entity during the financial year other than the
items noted below:
●
●
During the financial period, the Company issued 900,000 fully paid ordinary shares relating to conversion of
unlisted options following receipt of exercise notices with different exercise prices.
On 8 December 2022, the Company issued 6,000,000 fully paid ordinary shares to Professor Farah to acquire
intellectual property that was approved by shareholders during the Annual General Meeting.
Matters subsequent to the end of the financial year
The Company successfully completed its pro rata entitlement offer by issuing 208.7m shares that raised $16.7m following the
financial year end in July 2023. This was based on the offer of one fully paid ordinary share for every three shares as
announced to ASX on 30 May 2023. Eligible shareholders were able to purchase their entitlements at an issue price of $0.08
per share. The offer was partially underwritten by both its substantial shareholders Peter Investments Pty Ltd and
Orchid Capital Investment Ptd. Ltd.
The main purpose of the capital raise was to undertake R&D projects for rigid and flexible surgical applications, improve core
image capture capability, advance Artificial Intelligence (AI) and Telepathology service solutions alongside the development
of new clinical devices, and for general working capital purposes.
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Optiscan Imaging Limited
Directors' report
30 June 2023
Matters subsequent to the end of the financial year (continued)
Other than the capital raise, no other matter or circumstance has arisen since 30 June 2023 that has significantly affected
or may significantly affect the consolidated entity's operations, the results of those operations, or the consolidated entity's
state of affairs in future financial years.
Risk statement
The Group is committed to the effective management of risk to reduce uncertainty in its commercial activities and business
outcomes and to protect and enhance shareholder value. There are various risks that could have a material impact on the
achievement of the Group’s strategic objectives and future prospects.
Key risks and mitigation activities associated with the Group’s objectives are set out below:
Research and development risks
Biotechnology, scientific research, medical product development and the commercialisation of the results of that work can
be considered high-risk undertakings. Investment in research and development (R&D) companies cannot be assessed on
the same fundamentals as trading and manufacturing companies. The Company is reliant on the success of its R&D projects
and the effective and successful commercialisation of the results of the Company’s R&D. The Company is developing
medical imaging systems which must undergo vigorous testing to satisfy regulatory authorities.
The development of new medical devices is an inherently high-risk process with a traditionally high rate of failure. There is
no guarantee that the Company’s R&D projects will be successful or prove themselves to be commercially effective and
successful. The failure to achieve the objectives of the Company’s R&D projects may prevent the Company from being able
to commercialise a technology. This, in turn, may cause the Company to cease being able to operate as a going concern
and have a serious adverse effect on the value of its securities. The Company strives to mitigate any potential product failures
through its investment in R&D activities.
Manufacturing and supply chain risk
The Group relies on manufacturers to supply and manufacture key components of its products and is exposed to supply
shortages, long order lead times and price increases. In addition, several of its existing suppliers are based in different
countries which results in different lead times. The Group has taken active steps to manage these risks by exploring the re-
location of some of its manufacturing and assembly elements to other countries, adopting a very specific focused discipline
on managing its supplier relationships and procurement activities and increasing its inventory holdings of key products and
product components, with inventory on hand having increased during the year.
Distribution network risk
The vast majority of the Group’s sales are sold through its distribution network, with a number of formal distribution
agreements in place across the regions in which it operates. These agreements include minimum purchase requirements
and can, where deemed necessary, be terminated on relatively short notice. It remains important that the Group maintains
good working relationships with its key distribution partners in order to enhance its growth prospects and financial
performance. The Group’s focus on developing highly innovative and sought after products and investment in client service
capability with a view to supporting distributors and providing after sale service are mitigating factors which assist the Group
in managing this risk. Further, the regular review of its distribution partners and the adjustment of coverage across regional
and vertical markets is another mitigating factor that assists the Group in managing the distribution network risk.
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Optiscan Imaging Limited
Directors' report
30 June 2023
Key personnel risk
The Group is reliant on its key management and technical personnel and the Group’s future prospects are dependent on
retaining and attracting suitably qualified personnel. The Group manages these risks by ensuring it adopts remuneration
practices, incentive schemes and employment policies which promote staff retention and recruitment. The Group’s
employment agreements also allow it to limit the ability of key personnel to join competitors or compete directly with the
Group.
Intellectual property risk
The Group has developed a range of proprietary items of Intellectual Property (IP) that are regarded as novel and inventive
comprising know how, hardware, software, copyright and trademarks. The value of the Group’s products is dependent on its
ability to protect this IP. The Group manages this risk by ensuring that its dealings with employees, contractors and third
parties are governed by legal agreements which support the Group’s ownership and control over its IP and the disclosure of
sensitive information belonging to the Group.
General economic conditions risks
The general economic climate may affect the performance of the Group. These factors include the general level of
international and domestic economic activity, inflation and interest rates. These factors are beyond the control of the Group
and their impact cannot be predicted.
Environmental regulation
The consolidated entity is not subject to any significant environmental regulation under Australian Commonwealth or State
law.
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Optiscan Imaging Limited
Directors' report
30 June 2023
Information on directors
Name:
Title:
Qualifications:
Experience and expertise:
Mr Robert Cooke
Non-executive Chairman
B. Health Administration, Grad. Dip. Acc and Fin
Robert is the former Managing Director & CEO of Healthscope, one of Australia’s
leading private hospital, medical centre and pathology operators between 2010 and
2017. He is currently a non-executive chairman of Memphasis Limited (ASX: MEM),
Midas Healthcare and is a Director of SMS Healthcare. With a 40+ year career in the
health industry, his experience spans to executive leadership of publicly listed and
privately owned healthcare companies, and a management of private and public hospitals
in Australia, Asia and the UK.
Memphasys Limited (ASX: MEM)
Other current directorships:
Former directorships (last 3 years): None
Special responsibilities:
Interests in shares:
Interests in options:
Member of Audit & Risk and Remuneration & Nomination Committees.
290,000 fully paid ordinary shares
None
Experience and expertise:
Name:
Title:
Qualifications:
Prof Camile Farah
CEO & Managing Director
BDSc MDSc (OralMed OralPath) PhD GCEd (HE) GCExLead FRACDS (OralMed)
MAICD AFCHSM CHM FOMAA FIAOO FICD FPFA FAIM
Professor Farah is a highly accomplished executive, academic, researcher and author
with 25 years’ experience in the healthcare, biotech and medical research sectors. He
is dual trained oral clinician and maxillofacial pathologist with appointments at
Hollywood Private Hospital, Precision Pathology and Genomics for Life. Professor
Farah is a leading Australian expert in oral cancer and precancerous pathology based
on his clinical and research expertise having published 250 clinical and scientific
articles and a bestselling textbook. He is a former Dean and Chief Executive of the
Oral Health Centre at the University of Western Australia. He holds an Adjunct
Professor title at CQ University and an Honorary Professorial Research Fellowship at
the Peter MacCallum Cancer Centre. In addition to managing his own consulting
business, he is Executive Director of the Australian Centre for Oral Oncology Research
& Education which undertakes cutting edge research in head and neck cancer. He
currently serves as a non-executive director and Honorary Treasurer of the Australian
and New Zealand Head and Neck Cancer Society.
Other current directorships:
None
Former directorships (last 3 years): None
Special responsibilities:
Interests in shares:
Interests in options :
Member of the Audit & Risk Committee
8,691,652 fully paid ordinary shares
12,000,000 unlisted options
11
Optiscan Imaging Limited
Directors' report
30 June 2023
Name:
Title:
Qualifications:
Experience and expertise:
Ms Karen Borg
Non-executive Director
B. Arts
Karen is a highly experienced senior executive, who has held global leadership
positions in multiple sectors, including medical devices and technology, aged care,
consumer products and government. Karen's background is in commercial management,
global marketing and sales and government policy.
Karen was most recently Chief Executive Officer, Catholic Healthcare Ltd and prior to
this was CEO Healthdirect and the inaugural Chief Executive for Jobs for NSW.
Her international healthcare experience includes President (Asia Pacific and Middle East)
of ResMed Inc (ASX: RMD) and several senior roles with Johnson & Johnson Medical
Devices companies, including Global Vice President (based in USA).
Other current directorships:
Former directorships (last 3 years): None
Special responsibilities:
Interests in shares:
Interests in options:
Karen holds a Bachelor of Arts from the University of Sydney and was a NSW finalist
for Telstra Businesswoman of the Year 2017.
Somnomed Ltd (ASX: SOM)
Chair of the Audit & Risk Committee and member of the Remuneration & Nomination
Committee.
99,716 fully paid ordinary shares
None
Name:
Title:
Experience and expertise:
Mr Ron Song
Non-executive Director
Ron had a 25 year business career in Australia before being headhunted in 1999 to
assist in expanding a European motor vehicle franchise in Singapore. In a short time,
Ron assisted in developing the franchise into a highly profitable business. He
subsequently expanded and developed a second company in the motor vehicle
industry, Premium Automobiles Pty Ltd, where he was the Managing Director for seven
years before advising and developing a premier Singaporean wellness company,
Fabulous Image Lifestyle, which was successfully sold to a pan-Asian operator.
Other current directorships:
None
Former directorships (last 3 years): None
Special responsibilities:
Chair of the Remuneration & Nomination Committee and member of the Audit & Risk
Committee.
4,000,000 fully paid ordinary shares
None
Interests in shares:
Interests in options:
12
Optiscan Imaging Limited
Directors' report
30 June 2023
Name:
Title:
Qualifications:
Experience and expertise:
Mr Sean Gardiner
Non-executive Director (appointed 14 June 2022)
B. Com
Sean is a Managing Director and Head of Private Investments at the Clermont Group.
Prior to joining Clermont, Sean worked at Morgan Stanley, where he spent 20 years in
equity research across three locations and in seven different roles. In 2000, he joined
the London office covering European Technology and Conglomerate stocks before, in
2005, moving to lead the EEMEA Telecom Services team. In early 2008, Sean
transferred to Dubai to setup and manage the MENA Equity Research team. Sean
relocated to Singapore in 2010 to oversee and manage the broader Asian research
product as well as roll out ASEAN Real Estate coverage. In 2016, he was promoted to
Head of ASEAN Research and ASEAN Equity Strategist. Prior to Morgan Stanley,
Sean served his Chartered Accountancy articles in South Africa and he has a B.Com
(PGDA) from the University of Cape Town.
None
Other current directorships:
Former directorships (last 3 years): Energy World Corporation Ltd (ASX:EWC) (Appointed 8 March 2022 and resigned
Special responsibilities:
Interests in shares:
Interests in options:
2 May 2023)
None
None
None
Other current directorships' quoted above are current directorships for listed entities only and excludes directorships of all
other types of entities, unless otherwise stated.
'Former directorships (last 3 years)' quoted above are directorships held in the last 3 years for listed entities only and
excludes directorships of all other types of entities, unless otherwise stated.
Company secretary
Mr Justin Mouchacca, CA
Mr Mouchacca is a qualified Chartered Accountant with over 15 years’ experience in public company responsibilities
including statutory, corporate governance and financial reporting requirements. He graduated from RMIT University in 2008
with a Bachelor of Business majoring in Accounting. Mr Mouchacca completed the Chartered Accountants Program in 2011
and has been appointed Company Secretary and Financial Officer for a number of entities listed on the ASX and unlisted
public companies. He specialises in the preparation of listing companies on stock exchanges, Corporations Act legislation,
corporate governance policies, statutory report writing requirements, shareholder meeting requirements and assistance in
the preparation of prospectuses, information memorandums and other disclosure documents.
Meetings of directors
The number of meetings of the company's Board of Directors ('the Board') and of each Board committee held during the
year ended 30 June 2023, and the number of meetings attended by each director were:
Robert Cooke
Camile Farah
Karen Borg
Ron Song
Sean Gardiner
Full Board
Attended
9
9
9
9
9
Held
9
9
9
9
9
Audit & Risk Committee
Attended
2
-
2
2
2
Held
2
-
2
2
2
Remuneration & Nomination
Committee
Attended
1
-
1
1
1
Held
1
-
1
1
1
Held: represents the number of meetings held during the time the director held office or was a member of the relevant
committee.
13
Optiscan Imaging Limited
Directors' report
30 June 2023
Remuneration report (audited)
The remuneration report details the key management personnel remuneration arrangements for the consolidated entity, in
accordance with the requirements of the Corporations Act 2001 and its Regulations.
Key management personnel are those persons having authority and responsibility for planning, directing and controlling the
activities of the entity, directly or indirectly, including all directors.
The remuneration report is set out under the following main headings:
●
●
●
●
●
●
Principles used to determine the nature and amount of remuneration
Details of remuneration
Service agreements
Share-based compensation
Additional information
Additional disclosures relating to key management personnel
Principles used to determine the nature and amount of remuneration
The objective of the consolidated entity's executive reward framework is to ensure reward for performance is competitive
and appropriate for the results delivered. The framework aligns executive reward with the achievement of strategic objectives
and the creation of value for shareholders, and it is considered to conform to the market best practice for the delivery of
reward. The Board of Directors ('the Board') ensures that executive reward satisfies the following key criteria for good reward
governance practices:
●
●
●
●
competitiveness and reasonableness
acceptability to shareholders
performance linkage / alignment of executive compensation
transparency
The Board is responsible for determining and reviewing remuneration arrangements for its directors and executives. The
performance of the consolidated entity depends on the quality of its directors and executives. The remuneration philosophy
is to attract, motivate and retain high performance and high quality personnel.
The reward framework is designed to align executive reward to shareholders' interests. The Board has considered that it
should seek to enhance shareholders' interests by:
●
●
●
having profit as a core component of plan design
focusing on sustained growth in shareholder wealth, consisting of dividends and growth in share price, and
delivering constant or increasing return on assets as well as focusing the executive on key non-financial drivers of
value
attracting and retaining high calibre executives
Additionally, the reward framework should seek to enhance executives' interests by:
●
●
●
rewarding capability and experience
reflecting competitive reward for contribution to growth in shareholder wealth
providing a clear structure for earning rewards
In accordance with best practice corporate governance, the structure of non-executive director and executive director
remuneration is separate.
Non-executive directors remuneration
The Constitution of the Company and the ASX Listing Rules establish an aggregate or maximum level of remuneration
available to non-executive directors, to be divided amongst the directors as agreed. The aggregate amount approved by
shareholders to be available for remuneration of non-executive directors is $400,000 per annum.
14
Optiscan Imaging Limited
Directors' report
30 June 2023
The Board has determined that non-executive directors shall receive only fixed remuneration by way of payment of fees.
There is no variable, short term incentive remuneration for non-executive directors, nor is there any entitlement to retiring
allowances or payments other than the statutory superannuation required by law.
Non-executive directors receive an annual fee for all services provided to the Company, including being a director of the
Company and any of its subsidiaries, and for serving on board sub committees in accordance with the requirements of the
Corporate Governance Policy.
Non-executive directors are encouraged to hold shares in the Company which have been purchased on market or through
placements where participation by the directors has been approved by shareholders in general meeting. It is considered
good governance for the directors to have a personal financial stake in the Company.
Executive remuneration
The Remuneration Committee is responsible for establishing the structure and amount of remuneration.
The executive remuneration and reward framework has four components:
●
●
●
●
base pay and non-monetary benefits
short-term performance incentives
share-based payments
other remuneration such as superannuation and long service leave
The combination of these comprises the executive's total remuneration.
The level of fixed remuneration is set so as to provide a base level of remuneration, which is both appropriate to the position
and competitive in the market.
Fixed remuneration is reviewed as required by the Remuneration Committee, and the process consists of a review of
Company and individual performance, and comparative remuneration in the market. All employees are provided with the
opportunity to receive their fixed remuneration in both cash and benefits, subject to there being no change in overall cost to
the Company. Compulsory superannuation contributions are included in the determination of fixed remuneration.
Variable Remuneration
The objectives and structure of the Group’s policy on Variable Remuneration is set out below.
Variable Remuneration - Short Term Incentive (STI)
The objective of the STI program is to link the achievement of the Group’s operational targets with the remuneration received
by key management personnel with prime responsibility for meeting those targets. The total potential STI available is set at
a level so as to provide sufficient incentive to the key management personnel to achieve the operational targets and such
that the cost to the Company is reasonable in the circumstances.
Actual STI payments granted to key management personnel depend on the extent to which specific operating targets set at
the beginning of the financial year are met. The operational targets consist of a number of Key Performance Indicators (KPI’s)
covering both financial and non-financial measures of performance. Typically included are such measures as achievement
of budgeted financial outcomes and key milestones, for example, demonstrating clinical efficacy, achieving quality
accreditation, obtaining regulatory clearance or measures such as control of expenditure or achievement of sales targets.
The Board or Remuneration Committee establishes clear performance benchmarks, which must be met in order to trigger
payments under the short term incentive scheme.
15
Optiscan Imaging Limited
Directors' report
30 June 2023
The aggregate amount of annual STI payments available for key management personnel and other executives is subject to
the approval of the Remuneration Committee. Payments made are usually delivered as a cash bonus.
Variable Remuneration - Long Term Incentive (LTI)
Long term incentives are delivered to executives and employees by way of grant of options under either at the Board's
discretion or through an Employee Share Option Plan (whichever is relevant or has been adopted at the time).
The objective of the long term incentive plan is to reward executives and employees in a manner which aligns this element
of remuneration with the creation of shareholder wealth.
The Board is responsible for the allocation of options, and determines the quantum of grants by reference to group and
individual performance against targets.
Incentives and company performance
The link between incentive structure and company performance is an important aspect of remuneration philosophy. The
purpose of the remuneration policies of the Group is to create an effective and transparent link between the incentives
provided and the performance of the Group.
The Group is in the process of transition from a business predominantly engaged in research and development (“R&D”) to
one increasingly focused on commercialisation of its technology. Whilst substantial progress has been made, the transition
from loss making R&D activities to profit making trading has not yet been completed. As a consequence, performance to
date cannot appropriately be determined with conventional financial measurement tools. As the group has expensed all R&D
expenditure incurred to date, losses have been reported so conventional earnings measures such as profit growth, EPS or
dividend yield and payout are not applicable.
In view of the limited relevance of financial measurement tools, the Board of Directors has determined that the performance
of the group is best reviewed in the context of achievement of key milestones. During the period, no additional STI or LTI
remuneration was awarded based on milestones.
Employment contracts
All staff including executives are engaged under rolling employment agreements. The contracts continue indefinitely subject
to satisfactory performance, and provide one month's notice. Under the terms of the agreements:
●
●
●
The Company may terminate the employment agreement by providing the requisite period of written notice or
by providing payment in lieu of notice, based on the fixed component of remuneration. Any unvested options
at the expiry of the notice period will be forfeited.
On resignation any unvested options are forfeited.
The Company may terminate the agreement at any time without notice if serious misconduct has occurred, in
which case the executive is only entitled to that portion of remuneration that is fixed, and only up to the date
of termination.
Voting and comments made at the Company's 24 November 2022 Annual General Meeting ('AGM')
At the 2022 AGM, 99.78% of the votes received supported the adoption of the remuneration report for the year ended 30
June 2022. The Company did not receive any specific feedback at the AGM regarding its remuneration practices.
16
Optiscan Imaging Limited
Directors' report
30 June 2023
Details of remuneration
Amounts of remuneration
Details of the remuneration of key management personnel of the consolidated entity are set out in the following tables.
The key management personnel of the consolidated entity consisted of the following directors of Optiscan Imaging Limited:
●
●
●
●
●
●
●
●
Mr Robert Cooke - Non-executive Chairman
Prof Camile Farah - CEO & Managing Director
Ms Karen Borg - Non-executive Director
Mr Ron Song - Non-executive Director
Mr Sean Gardiner - Non-executive Director
Mr Darren Lurie - Managing Director (resigned 13 December 2021)
Dr Philip Currie - Non-executive Director (retired 20 January 2022)
Mr Graeme Mutton - Non-executive Director (resigned 30 July 2021)
Short term benefits
STI
Post-
employment
benefits
Long-term
benefits
Share-based
payments
2023
Cash salary Incentives Annual leave Superannuation Long service Equity-settled
Total
and fees
$
bonuses
$
expense
$
$
leave
$
options
$
$
Non-Executive Directors:
Robert Cooke
Ron Song
Karen Borg
90,909
50,000
50,000
-
-
-
-
-
-
Executive Directors:
Camile Farah
Darren Lurie*
385,000
-
575,909
103,950
65,000
168,950
27,228
-
27,228
9,545
5,250
5,250
51,859
-
71,904
*
Mr Lurie resigned as Managing Director on 13 December 2021
-
-
-
530
-
530
-
-
2,149
100,454
55,250
57,399
231,694
-
233,843
800,261
65,000
1,078,364
17
Optiscan Imaging Limited
Directors' report
30 June 2023
Short term benefits
STI
Post-
employment
benefits
Long-term
benefits
Share-based
payments
2022
Cash salary Incentives Annual leave Superannuation Long service Equity-settled
Total
and fees
$
bonuses
$
expense
$
$
leave
$
options
$
$
Non-Executive Directors:
Robert Cooke
Philip Currie**
Ron Song
Karen Borg
Graeme Mutton***
90,909
23,333
43,333
43,333
3,333
-
-
-
-
-
-
-
-
-
-
Executive Directors:
Camile Farah
Darren Lurie*
247,486
233,954
685,681
-
65,000
65,000
14,847
-
14,847
9,091
2,333
4,333
4,333
333
23,012
16,769
60,204
*
**
***
Mr Lurie resigned as Managing Director on 13 December 2021
Mr Currie retired 20 January 2022
Mr Mutton resigned 30 July 2021
-
-
-
-
-
32
-
32
152,009
-
100,991
-
252,009
25,666
47,666
148,657
3,666
123,589
-
376,589
408,966
315,723
1,202,353
The proportion of remuneration linked to performance in STI or LTI and the fixed remuneration proportion are as follows:
Fixed remuneration
2023
2022
At risk - STI
At risk - LTI
2023
2022
2023
2022
Non-Executive Directors:
Robert Cooke
Philip Currie**
Ron Song
Karen Borg
Graeme Mutton***
Executive Directors:
Camile Farah
Darren Lurie*
100%
-
100%
96%
-
58%
-
40%
100%
100%
32%
100%
69%
100%
-
-
-
-
-
13%
-
-
-
-
-
-
-
-
-
-
-
4%
-
29%
-
60%
-
-
68%
-
31%
-
18
Optiscan Imaging Limited
Directors' report
30 June 2023
Service agreements
Remuneration and other terms of employment for key management personnel are formalised in service agreements. Details
of these agreements are as follows:
Name:
Title:
Agreement commenced:
Term of agreement:
Details:
Dr Camile Farah
Managing Director
13th December 2021
No fixed term.
Fixed remuneration of $385,000 per annum plus superannuation of the greater of 10%
or the statutory minimum.
The Managing Director may terminate the Agreement by providing 6 months' notice in
writing. The Company may terminate the Agreement by providing 12 months' notice in
writing.
Key management personnel have no entitlement to termination payments in the event of removal for misconduct.
Share-based compensation
Issue of shares
There were no shares issued to directors and other key management personnel as part of compensation during the year
ended 30 June 2023 (2022: Nil).
Options
On 19 April 2021 upon Robert Cooke's appointment as Non-executive Director, Robert has been issued 2,000,000 unlisted
options. These options vest equally over the first year following the issue date and there are no other vesting conditions.
On 9 August 2021 the Company issued 1,000,000 unlisted options to Ms Karen Borg in accordance with her appointment to
the Board of the Company. These options vest equally over the first year following the issue date and there are no other
vesting conditions. These options vest equally over the first year following the issue date and there are no other vesting
conditions.
On 9 March 2022 , the Company issued a total of 12,000,000 unlisted options to the Managing Director following receipt of
shareholder approval at the Company’s 2021 annual general meeting of holders. The options have an exercise price of
$0.1925 (19.25 cents) per option, with 3,000,000 options being exercisable by 9 March 2025 and 9,000,000 options being
exercisable by 9 March 2027. All of the options are subject to certain vesting conditions. Refer to vesting conditions noted
below. The options were issued with the following vesting conditions:
●
●
●
●
●
1,000,000 options vest on 5pm EST on 12 December 2022 subject to continued employment as Managing
Director and CEO;
2,000,000 options vest on 5pm EST on 12 December 2023 subject to continued employment as Managing
Director and CEO;
3,000,000 options vest after the Company’s volume weighted average share price is greater than or equal to
$1.00 per share for a consecutive period of 15 trading days within 5 years following the date of issue;
3,000,000 options vest after the Company’s volume weighted average share price is greater than or equal to
$1.50 per share for a consecutive period of 15 trading days within 5 years following the date of issue;
3,000,000 options vest after the Company’s volume weighted average share price is greater than or equal to
$2.00 per share for a consecutive period of 15 trading days within 5 years following the date of issue.
19
Optiscan Imaging Limited
Directors' report
30 June 2023
The terms and conditions of each grant of options over ordinary shares affecting remuneration of directors and other key
management personnel in this financial year or future reporting years are as follows:
Vesting date and
Grant date exercisable date
19-Apr-21 19-Jul-21
19-Apr-21 19-Oct-21
19-Apr-21 19-Jan-22
19-Apr-21 19-Apr-22
29-Oct-21
29-Jul-21
29-Jan-22
29-Jul-21
29-Apr-22
29-Jul-21
29-Jul-22
29-Jul-21
12-Dec-22
20-Jan-22
12-Dec-23
20-Jan-22
Subject to share price hurdle
20-Jan-22
Subject to share price hurdle
20-Jan-22
Subject to share price hurdle
20-Jan-22
Expiry date
Exercise price
19-Apr-23
19-Apr-23
19-Apr-23
19-Apr-23
29-Jul-23
29-Jul-23
29-Jul-23
29-Jul-23
9-Mar-25
9-Mar-25
9-Mar-27
9-Mar-27
9-Mar-27
$0.275
$0.275
$0.275
$0.275
$0.209
$0.209
$0.209
$0.209
$0.1925
$0.1925
$0.1925
$0.1925
$0.1925
Fair value
per option
at grant date
$0.130
$0.130
$0.130
$0.130
$0.103
$0.103
$0.103
$0.103
$0.067
$0.076
$0.081
$0.068
$0.058
Name
Robert Cooke
Robert Cooke
Robert Cooke
Robert Cooke
Karen Borg
Karen Borg
Karen Borg
Karen Borg
Camile Farah
Camile Farah
Camile Farah*
Camile Farah**
Camile Farah ****
Number of Grant date
options
granted
Vesting date,
Versting Price, and
Exercisable date
Expiry date
Exercise price Fair value per
option at
grant date
500,000 19-Apr-21
500,000 19-Apr-21
500,000 19-Apr-21
500,000 19-Apr-21
29-Jul-21
250,000
29-Jul-21
250,000
29-Jul-21
250,000
29-Jul-21
250,000
20-Jan-22
1,000,000
20-Jan-22
2,000,000
20-Jan-22
3,000,000
20-Jan-22
3,000,000
20-Jan-22
3,000,000
19-Jul-21
19-Oct-21
19-Jan-22
19-Apr-22
29-Oct-21
29-Jan-22
29-Apr-22
29-Jul-22
12-Dec-22
12-Dec-23
15 day VWAP - $1.00
15 day VWAP - $1.50
15 day VWAP - $2.00
19-Apr-23
19-Apr-23
19-Apr-23
19-Apr-23
29-Jul-23
29-Jul-23
29-Jul-23
29-Jul-23
9-Mar-25
9-Mar-25
9-Mar-27
9-Mar-27
9-Mar-27
$0.275
$0.275
$0.275
$0.275
$0.201
$0.201
$0.201
$0.201
$0.1925
$0.1925
$0.1925
$0.1925
$0.1925
$0.130
$0.130
$0.130
$0.130
$0.103
$0.103
$0.103
$0.103
$0.067
$0.076
$0.081
$0.068
$0.058
*
**
***
Options vest after the Company’s volume weighted average share price is greater than or equal to $1.00 per
share for a consecutive period of 15 trading days within 5 years following the date of issue.
Options vest after the Company’s volume weighted average share price is greater than or equal to $1.50 per
share for a consecutive period of 15 trading days within 5 years following the date of issue.
Options vest after the Company’s volume weighted average share price is greater than or equal to $2.00 per
share for a consecutive period of 15 trading days within 5 years following the date of issue.
Options granted carry no dividend or voting rights.
20
Optiscan Imaging Limited
Directors' report
30 June 2023
The number of options over ordinary shares granted to and vested by directors and other key management personnel as
part of compensation during the year ended 30 June 2023 are set out below:
Name
Robert Cooke
Karen Borg
Camile Farah
Number of
options
granted
during the
year 2023
Number of
options
granted
during the
year 2022
Number of
options
vested
during the
year 2023
Number of
options
vested
during the
year 2022
-
-
-
-
1,000,000
12,000,000
-
250,000
1,000,000
2,000,000
750,000
-
Details of options over ordinary shares granted, vested and lapsed for directors and other key management personnel as
part of compensation during the years ended 30 June 2022 and 30 June 2023 are set out below:
Name
Grant date
Vesting
date
Number of
options
granted
Value of
options
granted
Value of
options
vested
Number of
options
lapsed
Value of
options
lapsed
Robert Cooke
Robert Cooke
Robert Cooke
Robert Cooke
Karen Borg
Karen Borg
Karen Borg
Karen Borg
Camile Farah
Camile Farah
Camile Farah
Camile Farah
Camile Farah
19-Apr-21 19-Jul-21
19-Apr-21 19-Oct-21
19-Apr-21 19-Jan-22
19-Apr-21 19-Apr-22
29-Jul-21
29-Jul-21
29-Jul-21
29-Jul-21
20-Jan-22
20-Jan-22
20-Jan-22 Various
20-Jan-22 Various
20-Jan-22 Various
29-Jul-23
29-Jul-23
29-Jul-23
29-Jul-23
12-Dec-22
12-Dec-23
500,000
500,000
500,000
500,000
250,000
250,000
250,000
250,000
1,000,000
2,000,000
3,000,000
3,000,000
3,000,000
67,145
67,145
67,145
67,145
25,785
25,785
25,785
25,785
67,000
152,000
243,000
204,000
174,000
67,145
67,145
67,145
67,145
25,785
25,785
25,785
25,785
67,000
-
-
-
-
(500,000)
(500,000)
(500,000)
(500,000)
-
-
-
-
-
-
-
-
-
(67,145)
(67,145)
(67,145)
(67,145)
-
-
-
-
-
-
-
-
-
Additional information
The earnings of the consolidated entity for the five years to 30 June 2023 are summarised below:
2023
$
2022
$
2021
$
2020
$
2019
$
Revenue
Net profit/(loss) before tax
Net profit/(loss) after tax
1,680,180
(4,351,500)
(4,351,500)
1,013,039
(4,233,037)
(4,233,037)
889,526
(2,126,695)
(2,126,695)
1,190,712
(1,765,353)
(1,765,353)
1,041,679
(2,344,119)
(2,344,119)
21
Optiscan Imaging Limited
Directors' report
30 June 2023
The factors that are considered to affect total shareholders return ('TSR') are summarised below:
2023
2022
2021
2020
2019
Share price at financial year start ($)
Share price at financial year end ($)
Basic earnings per share (cents per share)
0.11
0.08
(0.70)
0.23
0.11
(0.68)
0.03
0.23
(0.38)
0.06
0.03
(0.37)
0.06
0.06
(0.54)
Additional disclosures relating to key management personnel (KMP)
Shareholding
The number of shares in the Company held during the financial year by each director and other members of key management
personnel of the consolidated entity, including their personally related parties, is set out below:
Ordinary shares
Robert Cooke
Camile Farah
Ron Song
Karen Borg
Balance at
the start of
the year
Holdings at
date of
appointment
as KMP
-
524,985
3,000,000
-
3,524,985
-
-
-
-
-
Additions
217,500
6,000,000
-
99,716
6,317,216
Disposals/
Holdings at
date of
cessation
as KMP
Balance at
the end of
the year
217,500
6,524,985
3,000,000
99,716
9,842,201
-
-
-
-
-
Option holding
The number of options over ordinary shares in the Company held during the financial year by each director and other
members of key management personnel of the consolidated entity, including their personally related parties, is set out below:
Options over ordinary shares
Robert Cooke
Karen Borg
Camile Farah
Lapsed/
Holdings at
date of
cessation
as KMP
Balance at
the end of
the year
Granted
Exercised
-
-
-
-
-
-
-
-
(2,000,000)
-
-
(2,000,000)
-
1,000,000
12,000,000
13,000,000
Balance at
the start of
the year
2,000,000
1,000,000
12,000,000
15,000,000
Other transactions with key management personnel (KMP) and their related parties
Information about transactions with KMP and their related parties are disclosed in Note 29 Related party transactions. This
includes transactions with director KMP such as Prof Camile where the Company purchased IP through issuing of shares.
There were no transactions with non-director KMP and their related entities during the years ended 30 June 2022 and
30 June 2023, with the exception of remuneration-related transactions disclosed in this remuneration report.
This concludes the remuneration report, which has been audited.
22
Optiscan Imaging Limited
Directors' report
30 June 2023
Shares under option
Unissued ordinary shares of Optiscan Imaging Limited under option at the date of this report are as follows:
Grant date
Expiry date
30-Nov-18
19-Jul-21
20-Jan-22
20-Jan-22
30-Nov-23
19-Jul-23
9-Mar-25
9-Mar-27
Exercise
price
$0.08
$0.209
$0.1925
$0.1925
Number
under option
800,000
1,000,000
3,000,000
9,000,000
13,800,000
No person entitled to exercise the options had or has any right by virtue of the option to participate in any share issue of
the Company or of any other body corporate.
Shares issued on the exercise of options
The following ordinary shares of Optiscan Imaging Limited were issued during the year ended 30 June 2023 and up to the
date of this report on the exercise of options granted:
Date options granted
20-Dec-18
20-Dec-18
20-Dec-18
Number of
Exercise price shares issued
$0.05
$0.065
$0.08
400,000
400,000
100,000
900,000
Indemnity and insurance of officers
The Company has indemnified the directors and executives of the Company for costs incurred, in their capacity as a director
or executive, for which they may be held personally liable, except where there is a lack of good faith.
During the financial year, the Company paid a premium in respect of a contract to insure the directors and executives of the
company against a liability to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits
disclosure of the nature of the liability and the amount of the premium.
Indemnity and insurance of auditor
The Company has not, during or since the end of the financial year, indemnified or agreed to indemnify the auditor of the
company or any related entity against a liability incurred by the auditor.
During the financial year, the Company has not paid a premium in respect of a contract to insure the auditor of the company
or any related entity.
Proceedings on behalf of the Company
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf
of the Company, or to intervene in any proceedings to which the company is a party for the purpose of taking responsibility
on behalf of the Company for all or part of those proceedings.
23
Optiscan Imaging Limited
Directors' report
30 June 2023
Non-audit services
Details of the amounts paid or payable to the auditor for non-audit services provided during the financial year by the auditor
are outlined in note 26 to the financial statements.
The directors are satisfied that the provision of non-audit services during the financial year, by the auditor (or by another
person or firm on the auditor's behalf), is compatible with the general standard of independence for auditors imposed by the
Corporations Act 2001.
The directors are of the opinion that the services as disclosed in note 26 to the financial statements do not compromise the
external auditor's independence requirements of the Corporations Act 2001 for the following reasons:
●
●
all non-audit services have been reviewed and approved to ensure that they do not impact the integrity
and objectivity of the auditor; and
none of the services undermine the general principles relating to auditor independence as set out in APES 110
Code of Ethics for Professional Accountants issued by the Accounting Professional and Ethical Standards Board,
including reviewing or auditing the auditor's own work, acting in a management or decision-making capacity for
the Company, acting as advocate for the Company or jointly sharing economic risks and rewards.
Officers of the Company who are former partners of Grant Thornton Audit Pty Ltd
There are no officers of the Company who are former partners of Grant Thornton Audit Pty Ltd.
Auditor's independence declaration
A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out
immediately after this directors' report.
Auditor
Grant Thornton Audit Pty Ltd continues in office in accordance with section 327 of the Corporations Act 2001.
This report is made in accordance with a resolution of directors, pursuant to section 298(2)(a) of the Corporations Act 2001.
On behalf of the directors
___________________________
Robert Cooke
Non-executive Chairman
30 August 2023
24
Grant Thornton Audit Pty Ltd
Cairns Corporate Tower
Level 13
15 Lake Street
PO Box 7200
Cairns QLD 4870
T +61 7 4046 8888
Auditor’s Independence Declaration
To the Directors of Optiscan Imaging Limited
In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the audit
of Optiscan Imaging Limited for the year ended 30 June 2023, I declare that, to the best of my knowledge and
belief, there have been:
a no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the
audit; and
b no contraventions of any applicable code of professional conduct in relation to the audit.
Grant Thornton Audit Pty Ltd
Chartered Accountants
S L Cram
Partner – Audit & Assurance
Cairns, 30 August 2023
www.grantthornton.com.au
ACN-130 913 594
Grant Thornton Audit Pty Ltd ACN 130 913 594 a subsidiary or related entity of Grant Thornton Australia Limited ABN 41 127 556 389 ACN 127 556 389.
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or
refers to one or more member firms, as the context requires. Grant Thornton Australia Limited is a member firm of Grant Thornton International Ltd (GTIL).
GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member
firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one
another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127
556 389 ACN 127 556 389 and its Australian subsidiaries and related entities. Liability limited by a scheme approved under Professional Standards
Legislation.
25
w
Optiscan Imaging Limited
Consolidated statement of profit or loss and other comprehensive income
For the year ended 30 June 2023
Revenue
Cost of sales
Gross profit
Other income
Expenses
Research & development and intellectual property expenses
Share-based payment expenses
Depreciation expense
Administration and general expenses
Finance costs
Loss before income tax expense
Income tax expense
Note
5
7
6
7
7
7
8
2023
$
1,680,180
(552,713)
1,127,467
968,813
(2,437,121)
(233,842)
(378,812)
(3,365,711)
(32,294)
(4,351,500)
-
2022
$
1,013,039
(175,071)
837,968
1,267,208
(2,165,035)
(376,590)
(240,554)
(3,523,876)
(32,158)
(4,233,037)
-
Loss after income tax expense for the year attributable
to the owners of Optiscan Imaging Limited
(4,351,500)
(4,233,037)
Other comprehensive income for the year, net of tax
-
-
Total comprehensive income for the year attributable
to the owners of Optiscan Imaging Limited
(4,351,500)
(4,233,037)
Basic earnings per share
Diluted earnings per share
34
34
(0.70)
(0.70)
(0.68)
(0.68)
Cents
Cents
The above statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes
26
Optiscan Imaging Limited
Consolidated statement of financial position
As at 30 June 2023
Note
2023
$
875,371
975,926
1,437,471
357,472
3,646,240
267,152
450,000
308,579
-
1,025,731
4,671,971
776,359
192,101
39,587
415,145
1,423,192
180,600
23,743
204,343
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Other
Total current assets
Non-current assets
Property, plant and equipment
Intangibles
Right-of-use assets
Other
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Lease liabilities
Loans
Provisions
Total current liabilities
Non-current liabilities
Lease liabilities
Provisions
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Accumulated losses
Total equity
9
10
11
12
13
14
15
16
17
18
19
20
18
20
21
22
1,627,535
1,391,693
3,044,436
6,592,409
71,863,358
2,123,152
(70,942,074)
71,256,070
2,229,978
(66,893,639)
3,044,436
6,592,409
2022
$
4,529,208
1,412,957
1,269,139
111,204
7,322,508
139,393
-
469,576
52,625
661,594
7,984,102
413,748
177,036
22,193
387,410
1,000,387
372,702
18,604
391,306
The above statement of financial position should be read in conjunction with the accompanying notes
27
Optiscan Imaging Limited
Consolidated statement of changes in equity
For the year ended 30 June 2023
Consolidated
Issued
capital
$
Foreign
currency
Share based
translation payments Accumulated
reserve
$
reserve
$
losses
$
Total equity
$
Balance at 1 July 2021
70,942,231
(4,435)
1,939,912
(62,660,602)
10,217,106
Loss after income tax expense for the year
Other comprehensive income for the year,
net of tax
Total comprehensive income for the year
-
-
-
Transactions with owners in their capacity
as owners:
Contributions of equity, net of transaction costs
Share-based payments
Exercise of options
231,750
-
82,089
-
-
-
-
-
-
-
-
-
(4,233,037)
(4,233,037)
-
-
(4,233,037)
(4,233,037)
-
376,590
(82,089)
-
-
-
231,750
376,590
-
Balance at 30 June 2022
71,256,070
(4,435)
2,234,413
(66,893,639)
6,592,409
Consolidated
Issued
capital
$
Foreign
currency
Share based
translation payments Accumulated
reserve
$
reserve
$
losses
$
Total equity
$
Balance at 1 July 2022
71,256,070
(4,435)
2,234,413
(66,893,639)
6,592,409
Loss after income tax expense for the year
Other comprehensive income for the year,
net of tax
Total comprehensive income for the year
-
-
-
Transactions with owners in their capacity
as owners:
Contributions of equity, net of transaction costs
(note 21)
Share-based payments (note 35)
Exercise of options (note 22)
Lapsed options (note 22)
(14,904)
600,000
22,192
-
-
-
-
-
-
-
-
-
-
-
(4,351,500)
(4,351,500)
-
-
(4,351,500)
(4,351,500)
220,842
(22,192)
(305,476)
-
-
303,065
(14,904)
820,842
-
(2,411)
Balance at 30 June 2023
71,863,358
(4,435)
2,127,587
(70,942,074)
3,044,436
The above statement of changes in equity should be read in conjunction with the accompanying notes
28
Optiscan Imaging Limited
Consolidated statement of cash flows
For the year ended 30 June 2023
Cash flows from operating activities
Receipts from customers (inclusive of GST)
Payments to suppliers and employees (inclusive of GST)
Interest received
Receipt of research and development tax incentive
Receipt of government grants
Note
2023
$
1,814,637
(6,102,504)
31,140
904,130
200,103
Net cash used in operating activities
33
(3,152,494)
Cash flows from investing activities
Payments for property, plant and equipment
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issue of shares
Share issue transaction costs
Interest and other finance costs paid
Proceeds from borrowings
Repayment of borrowings
Repayment of lease liabilities
Net cash (used in) / generated from financing activities
Net (decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Cash and cash equivalents at the end of the financial year
21
(126,860)
(126,860)
41,000
-
-
-
(188,184)
(227,298)
(374,482)
(3,653,837)
4,529,208
875,371
2022
$
930,317
(5,928,887)
20,992
770,283
373,717
(3,833,578)
(124,136)
(124,136)
244,750
-
-
-
-
(200,155)
44,595
(3,913,119)
8,442,327
4,529,208
The above statement of cash flows should be read in conjunction with the accompanying notes
29
Optiscan Imaging Limited
Notes to the financial statements
30 June 2023
Note 1. General information
The consolidated general purpose financial statements of the Group have been prepared in accordance with the
requirements of the Corporations Act 2001, Australian Accounting Standards and other authoritative pronouncements of the
Australian Accounting Standards Board (AASB). Compliance with Australian Accounting Standards results in full compliance
with the International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board
(IASB). Optiscan Imaging Limited is a for-profit entity and the financial statements are prepared on accruals basis under the
historical cost convention.
The financial statements cover Optiscan Imaging Limited as a consolidated entity consisting of Optiscan Imaging Limited
and the entities it controlled at the end of, or during, the year. The financial statements are presented in Australian dollars,
rounded to the nearest dollar, which is Optiscan Imaging Limited's functional and presentation currency.
Optiscan Imaging Limited is a listed public company limited by shares, incorporated and domiciled in Australia. Its registered
office and principal place of business is:
16 Miles Street
Mulgrave, Victoria, 3170
A description of the nature of the consolidated entity's operations and its principal activities are included in the directors'
report, which is not part of the financial statements.
The financial statements were authorised for issue, in accordance with a resolution of directors, on 30 August 2023. The
directors have the power to amend and reissue the financial statements.
Note 2. Significant accounting policies
The principal accounting policies adopted in the preparation of the financial statements are set out below. These policies
have been consistently applied to all the years presented, unless otherwise stated.
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.
The adoption of these Accounting Standards and Interpretations did not have any significant impact on the financial
performance or position of the consolidated entity.
Going concern
The financial report has been prepared on the going concern basis, which contemplates continuity of normal business
activities and realisation of assets and liabilities in the ordinary course of business. The going concern of the consolidated
entity is dependent upon it maintaining sufficient funds for its operations and commitments.
During the reporting period, the Company launched a partially underwritten renounceable entitlement offer to raise $16.7m
to fund its strategic portfolio expansion. The Offer involved the issuance of up to 208,735,201 shares at issue price of $0.08
per share, with the objective of raising up to $16,698,816. The Offer concluded in July 2023 where the Company
successfully raised $16.7m.
30
Optiscan Imaging Limited
Notes to the financial statements
30 June 2023
Note 2. Significant accounting policies (continued)
The funds raised under the Offer will be used to further the Company’s research and development (R&D) projects specifically
for both rigid and flexible surgical applications, to develop improved image capture, AI and telepathology capabilities, to
undertake clinical studies to satisfy the FDA in relation to premarket notification applications for new addressable markets,
to increase the commercial exposure of the Company specifically in the US, and for general working capital purposes.
Based on current budget assumptions, the directors are of the opinion that the Company will have adequate funds to
ensure its continued viability and to operate as a going concern and therefore it is appropriate to prepare the financial
statements on a going concern basis.
Basis of preparation
These general purpose financial statements have been prepared in accordance with Australian Accounting Standards and
Interpretations issued by the Australian Accounting Standards Board ('AASB') and the Corporations Act 2001, as appropriate
for for-profit oriented entities. These financial statements also comply with International Financial Reporting Standards as
issued by the International Accounting Standards Board ('IASB').
Historical cost convention
The financial statements have been prepared under the historical cost convention.
Critical accounting estimates
The preparation of the financial statements requires the use of certain critical accounting estimates. It also requires
Management to exercise its judgement in the process of applying the consolidated entity’s accounting policies. The areas
involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the
financial statements, are disclosed in note 3.
Parent entity information
In accordance with the Corporations Act 2001, these financial statements present the results of the consolidated entity only.
Supplementary information about the parent entity is disclosed in note 30.
Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Optiscan Imaging Limited
('company' or 'parent entity') as at 30 June 2023 and the results of all subsidiaries for the year then ended. Optiscan Imaging
Limited and its subsidiaries together are referred to in these financial statements as the 'consolidated entity' or 'Group'.
Subsidiaries are all those entities over which the consolidated entity has control. The consolidated entity controls an entity
when the consolidated entity is exposed to, or has rights to, variable returns from its involvement with the entity and has the
ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from
the date on which control is transferred to the consolidated entity. They are de-consolidated from the date that control
ceases.
Intercompany transactions, balances and unrealised gains on transactions between entities in the consolidated entity are
eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset
transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies
adopted by the consolidated entity.
The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change in ownership interest,
without the loss of control, is accounted for as an equity transaction, where the difference between the consideration
transferred and the book value of the share of the non-controlling interest acquired is recognised directly in equity
attributable to the parent.
31
Optiscan Imaging Limited
Notes to the financial statements
30 June 2023
Note 2. Significant accounting policies (continued)
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.
Operating segments
Operating segments are presented using the 'management approach', where the information presented is on the same basis
as the internal reports provided to the Chief Operating Decision Makers (‘CODM’). The CODM is responsible for the
allocation of resources to operating segments and assessing their performance.
Foreign currency translation
The financial statements are presented in Australian dollars, which is the consolidated entity's functional and presentation
currency.
Foreign currency transactions
Foreign currency transactions are translated into Australian dollars using the exchange rates prevailing at the dates of the
transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation
at financial year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in
profit or loss.
Foreign operations
The assets and liabilities of foreign operations are translated into Australian dollars using the exchange rates at the reporting
date. The revenues and expenses of foreign operations are translated into Australian dollars using the average exchange
rates, which approximate the rates at the dates of the transactions, for the period. All resulting foreign exchange differences
are recognised in other comprehensive income through the foreign currency reserve in equity.
The foreign currency reserve is recognised in profit or loss when the foreign operation or net investment is disposed of.
Revenue recognition
The consolidated entity recognises revenue as follows:
Revenue from contracts with customers
The consolidated entity predominantly derives revenue from the sale of goods and services to customers on normal credit
terms. The performance obligations of these contracts are the delivery of the product or service, as the case may be, at
which point revenue from the sale of goods or services is recognised. Provision of services is carried on an individual contract
basis and relevant revenue is recognised over time as and when the completed service is delivered.
The consolidated entity's future obligations to transfer goods or services to a customer for which the Group has received
consideration from the customer is recognised as a contract liability, and reports these amounts as such in its statement of
financial position, until such time as the performance obligations are satisfied. If the Group satisfies a performance obligation
before it receives the consideration, the Group recognises either a contract asset or a receivable in its statement of financial
position, depending on whether something other than the passage of time is required before the consideration is due.
Sale of goods - medical devices
Revenue from the sale of goods is recognised at the point in time when the customer obtains control of the goods, which is
generally at the time of delivery. Delivery occurs when the goods have been shipped to the specified location, the risks
of obsolescence and loss have been transferred to the customer and parties have accepted the goods in accordance with the
sales contract. Revenue from these sales is recognised based on the price specified in the contract, net of any miscellaneous
charges or discounts if applicable.
32
Optiscan Imaging Limited
Notes to the financial statements
30 June 2023
Note 2. Significant accounting policies (continued)
Rendering of services
Revenue from a contract to provide services is recognised over time as the services are rendered based on either a fixed
price or an hourly rate. The provision of services varies but some relate to service contracts for repair of medical devices
previously sold that is out of the warranty period and process policies which are requested from customers.
Interest
Interest revenue is recognised as interest accrues using the effective interest method. This is a method of calculating the
amortised cost of a financial asset and allocating the interest income over the relevant period using the effective interest rate,
which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the
net carrying amount of the financial asset.
Other revenue
Other revenue is recognised when it is received or when the right to receive payment is established.
Grant income
When the grant relates to an expense item, it is recognised as income over the periods necessary to match the grant on a
systematic basis to the costs that it is intended to compensate. Where expenditure has been incurred that gives rise to an
entitlement under a grant agreement, the grant income is accrued. Revenue is recognised only to the extent that there is
reasonable assurance that the grant will be received and conditions attached will be complied with.
Income tax
The income tax expense or benefit for the period is the tax payable on that period's taxable income based on the applicable
income tax rate for each jurisdiction, adjusted by the changes in deferred tax assets and liabilities attributable to temporary
differences, unused tax losses and the adjustment recognised for prior periods, where applicable.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to be applied when the
assets are recovered or liabilities are settled, based on those tax rates that are enacted or substantively enacted, except for:
●
●
When the deferred income tax asset or liability arises from the initial recognition of goodwill or an asset or
liability in a transaction that is not a business combination and that, at the time of the transaction, affects
neither the accounting nor taxable profits; or
When the taxable temporary difference is associated with interests in subsidiaries, associates or joint ventures,
and the timing of the reversal can be controlled and it is probable that the temporary difference will not reverse
in the foreseeable future.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that
future taxable amounts will be available to utilise those temporary differences and losses.
The carrying amount of recognised and unrecognised deferred tax assets are reviewed at each reporting date. Deferred tax
assets recognised are reduced to the extent that it is no longer probable that future taxable profits will be available for the
carrying amount to be recovered. Previously unrecognised deferred tax assets are recognised to the extent that it is probable
that there are future taxable profits available to recover the asset.
Deferred tax assets and liabilities are offset only where there is a legally enforceable right to offset current tax assets against
current tax liabilities and deferred tax assets against deferred tax liabilities; and they relate to the same taxable authority on
either the same taxable entity or different taxable entities which intend to settle simultaneously.
33
Optiscan Imaging Limited
Notes to the financial statements
30 June 2023
Note 2. Significant accounting policies (continued)
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.
Cash and cash equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly
liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and
which are subject to an insignificant risk of changes in value.
Trade and other receivables
Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective
interest method, less any allowance for expected credit losses. Trade receivables are generally due for settlement within 30
days.
The consolidated entity makes use of a simplified approach in accounting for trade and other receivables and records any
required loss allowance at the amount equal to the expected lifetime credit losses. In using this practical expedient, the
consolidated entity uses its historical experience, external indicators and forward-looking information to calculate the
expected credit losses using a provision matrix.
Inventories
Raw materials, work in progress and finished goods are stated at the lower of cost and net realisable value on a 'first in first
out' basis. Cost comprises direct materials and delivery costs, direct labour, import duties and other taxes, an appropriate
proportion of variable and fixed overhead expenditure based on normal operating capacity, and, where applicable, transfers
from cash flow hedging reserves in equity. Costs of purchased inventory are determined after deducting rebates and
discounts received or receivable.
Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion
and the estimated costs necessary to make the sale.
Property, plant and equipment
Plant and equipment is stated at historical cost less accumulated depreciation and impairment. Historical cost includes
expenditure that is directly attributable to the acquisition of the items.
34
Optiscan Imaging Limited
Notes to the financial statements
30 June 2023
Note 2. Significant accounting policies (continued)
Depreciation is calculated on a straight-line basis over the estimated useful life of the assets. The depreciation rates applied
to the main classes of plant and equipment are:
Plant and equipment
Production equipment
R&D equipment
20% - 40%
20%
20% - 40%
The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each reporting date.
An item of property, plant and equipment is derecognised upon disposal or when there is no future economic benefit to the
consolidated entity. Gains and losses between the carrying amount and the disposal proceeds are taken to profit or loss.
Intangibles
Expenditure on intangible items is recognised as an intangible asset when it can be demonstrated that the expenditure will
provide future economic benefits to the Company, either in the form of expected future cash inflows or the expenditures
are necessary for the Company to obtain future economic benefits from existing assets, and those benefits will be derived over
more than one reporting period.
Intangible assets that are determined to have finite useful economic lives are initially recognised at cost and subsequently
amortised on a straight-line basis over their estimated useful economic life.
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 consolidated entity has elected not to recognise a right-of-use asset and corresponding lease liability for short-term
leases with terms of 12 months or less and leases of low-value assets. Lease payments on these assets are expensed to
profit or loss as incurred.
Trade and other payables
These amounts represent liabilities for goods and services provided to the consolidated entity prior to the end of the financial
year and which are unpaid. Due to their short-term nature they are measured at amortised cost and are not discounted. The
amounts are unsecured and are usually paid within 30 days of recognition.
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
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
35
Optiscan Imaging Limited
Notes to the financial statements
30 June 2023
Note 2. Significant accounting policies (continued)
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.
Employee benefits
Short-term employee benefits
Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service leave expected to be
Settled wholly within 12 months of the reporting date are measured at the amounts expected to be paid when the liabilities
are settled.
Other long-term employee benefits
The liability for long service leave not expected to be settled within 12 months of the reporting date are measured at the
present value of expected future payments to be made in respect of services provided by employees up to the reporting
date using the projected unit credit method. Consideration is given to expected future wage and salary levels, experience of
employee departures and periods of service. Expected future payments are discounted using market yields at the reporting
date on high quality corporate bonds with terms to maturity and currency that match, as closely as possible, the estimated
future cash outflows.
Defined contribution superannuation expense
Contributions to defined contribution superannuation plans are expensed in the period in which they are incurred.
Share-based payments
Equity-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 Bionomial, Trinomial 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.
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.
36
Optiscan Imaging Limited
Notes to the financial statements
30 June 2023
Note 2. Significant accounting policies (continued)
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.
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.
Issued capital
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax,
from the proceeds.
Performance Shares are booked in the reserve and reallocated to issued capital upon vesting.
Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to the owners of Optiscan Imaging Limited, excluding
any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding
during the financial year, adjusted for bonus elements in ordinary shares issued during the financial year.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the
after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted
average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares.
Goods and Services Tax ('GST') and other similar taxes
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not
recoverable from the tax authority. In this case it is recognised as part of the cost of the acquisition of the asset or as part of
the expense.
37
Optiscan Imaging Limited
Notes to the financial statements
30 June 2023
Note 2. Significant accounting policies (continued)
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST
recoverable from, or payable to, the tax authority is included in other receivables or other payables in the statement of
financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities
which are recoverable from, or payable to the tax authority, are presented as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the tax authority.
Impairment
All intangible assets are tested annually for impairment, or more frequently if events or changes in circumstances indicate
that they might be impaired. Other assets are tested for impairment whenever events or changes in circumstances indicate
that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s
carrying amount exceeds its recoverable amount.
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.
Note 3. Critical accounting judgements, estimates and assumptions
The preparation of the financial statements requires management to make judgements, estimates and assumptions that
affect the reported amounts in the financial statements. Management continually evaluates its judgements and estimates in
relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its judgements, estimates and
assumptions on historical experience and on other various factors, including expectations of future events, management
believes to be reasonable under the circumstances. The resulting accounting judgements and estimates will seldom equal
the related actual results. The judgements, estimates and assumptions that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities (refer to the respective notes) within the next financial year are
discussed below.
Share-based payment transactions
The consolidated entity measures the cost of equity-settled transactions with employees by reference to the fair value of the
equity instruments at the date at which they are granted. The fair value is determined by using either the Binomial or Black-
Scholes model taking into account the terms and conditions upon which the instruments were granted. The accounting
estimates and assumptions relating to equity-settled share-based payments would have no impact on the carrying amounts
of assets and liabilities within the next annual reporting period but may impact profit or loss and equity. Refer Note 35.
Capitalisation of labour costs into inventory
The carrying value of inventories includes an allocation of capitalised labour costs relevant to the production of those
Inventories. In determining the amount of labour to be capitalised, management makes assumptions regarding the nature
and quantum of the activities undertaken by personnel involved in the production and assembly of inventory.
38
Optiscan Imaging Limited
Notes to the financial statements
30 June 2023
Note 3. Critical accounting judgements, estimates and assumptions (continued)
Provision for impairment of inventories
The provision for impairment of inventories assessment requires a degree of estimation and judgement. The level of the
provision is assessed by taking into account the recent sales experience, the ageing of inventories and other factors that
affect inventory obsolescence.
Intangibles
i. Initial recognition
Externally acquired intangible assets that are determined to have finite useful economic lives are initially recognised at cost
and subsequently amortised on a straight-line basis over their estimated useful economic life. With regards to measurement of
the ‘cost’ of the IP acquired by the Company under AASB 2 Share-based Payment, the accounting may differ subject to,
among other things, whether the entity can estimate reliably the fair value of the goods or services received. As presented in
the Annual General Meeting, the IP has been valued independently and given the large range in valuation, the valuation
estimate is unreliable for the purpose of fair value calculation. As such, consistent with the requirements in AASB 2, if the
acquisition-date fair value of the IP cannot be estimated reliably, the requirement would be to measure the fair value of the IP
by reference to the fair value of the equity instruments granted. In this case, it would be the fair value of the six million
shares issued.
ii. Indications of impairment
The Company conducts periodic assessments to test whether there are impairment indicators associated with Intangibles.
Based on AASB 136 Impairment of Assets, internal and external sources of information are analysed for any indication of
impairment where the carrying amount of the intangible asset exceeds the recoverable amount.
R&D tax incentive
Research and development tax incentive income is recognised at fair value when there is reasonable assurance that the
income will be received. The expected future R&D tax incentive, for qualifying R&D expenditure for the current financial year,
has been accrued and is also recognised on the statement of financial position. It has been established that the conditions
of this future R&D incentive have been met and that the expected amount of the incentive can be reliably measured.
Note 4. Operating segments
Identification of reportable operating segments
The Group operated predominantly in the confocal microscope industry. The Group's sales comprise sales of goods within
that segment. AASB 8 requires operating segments to be identified on the basis of internal reports about the components of
the Group that are regularly reviewed by the chief operating decision maker in order to allocate resources to the segment
and to assess its performance. The board reviews the Group as a whole in the business segment of confocal microscopes.
The majority of sales revenues are attributed to Germany, being 77% (2022: 63%), and other overseas markets 23%
(2022: 37%). There was one other customer that contributed revenues greater than 10%, which amounted to $377,984
during the financial year (2022 two customers: $660,157).
All non-current assets are located in Australia.
39
Optiscan Imaging Limited
Notes to the financial statements
30 June 2023
Note 5. Revenue
Sales revenue
1,680,180
1,013,039
2023
$
2022
$
Disaggregation of revenue
The disaggregation of revenue from contracts with customers is as follows:
Major product lines
Sale of goods (goods transferred at a point in time)
Services provided (services provided at a point in time)
Geographical regions
Australia
Germany
Norway
Sweden
United States
Note 6. Other income
Government grants - R&D tax incentive
BioMedTech Horizons program grant
Entrepreneurs' Program - Growth Grant
Interest income
Net foreign exhange gain
Other income
1,624,931
55,249
1,680,180
3,790
1,293,978
4,428
-
377,984
1,680,180
2023
$
737,570
180,103
20,000
31,140
-
968,813
991,157
21,882
1,013,039
355,000
636,157
-
21,882
-
1,013,039
2022
$
941,790
294,205
-
20,992
10,221
1,267,208
The refundable R&D tax offset is accounted for under AASB 120 Accounting for Government Grants and Disclosure of
Government Assistance.
The R&D Tax Incentive program provides tax offsets for expenditure on eligible R&D activities. Optiscan, having expected
aggregated annual turnover of under $20 million, is entitled to a refundable R&D credit of 43.5% on the eligible R&D
expenditure incurred on eligible R&D activities.
The Company received grant income during the current and previous financial year through the BioMedTech Horizons
Program, which is an initiative of the Medical Research Future Fund, operated by MTP Connect. It is designed to foster
innovative collaborative health technology development, and stimulate collaboration across disciplines and between the
research, industry, and technology sectors to maximise entrepreneurship and idea potential.
The Company also received grant income from the Australian government through the Entrepreneurs' Growth program, that
was designed to enable business to grow and become more competitive in global markets.
40
Optiscan Imaging Limited
Notes to the financial statements
30 June 2023
Note 7. Expenses
2023
$
2022
$
Loss before income tax includes the following specific expenses:
Cost of sales
552,713
175,071
The implementation of the new ERP software (M1) in 2023 has enhanced reporting capabilities surrounding Cost of Sales
(COS). This should be noted as some of the COS components may have changed, which happens with new ERP
implementations.
Depreciation
Plant and equipment
Buildings right-of-use assets
Intangibles amortisation
Total depreciation
Superannuation expense
Share-based payments expense
67,815
160,997
150,000
378,812
291,868
233,842
87,673
152,881
-
240,554
217,300
376,590
Employee benefits expense excluding superannuation
2,713,878
2,499,173
Note 8. Income tax expense
Numerical reconciliation of income tax expense and tax at the statutory rate
Loss before income tax expense
Tax at the statutory tax rate of 25%
2023
$
(4,351,500)
(1,087,875)
Tax effect amounts which are not deductible/(taxable) in calculating taxable income:
Share-based payments
R&D Grant Clawback
Non assessable gains
R&D Tax Incentive deductions foregone for tax offset
Expenditure not allowable for income tax purposes
Deferred tax assets/(liabilities) estimate not recognised
Income tax expense
Tax losses not recognised
Unused tax losses for which no deferred tax asset has been recognised
Potential tax benefit @ 25%
58,461
-
(184,392)
423,891
865
789,051
-
52,489,004
13,122,251
2022
$
(4,233,037)
(1,058,259)
94,147
363,409
(273,309)
971,674
5,394
(103,056)
-
49,332,800
12,333,200
The above potential tax benefit for tax losses has not been recognised in the statement of financial position. These tax losses
can only be utilised in the future if the continuity of ownership test is passed, or failing that, the same business test is passed.
41
Optiscan Imaging Limited
Notes to the financial statements
30 June 2023
Note 9. Current assets - cash and cash equivalents
Cash on hand
875,371
4,529,208
2023
$
2022
$
Note 10. Current assets - trade and other receivables
Trade receivables
R&D Tax incentive grant receivable
GST refund receivable
Trade and other receivables
2023
$
163,368
737,570
74,988
812,558
975,926
2022
$
390,879
941,790
80,288
1,022,078
1,412,957
No expected credit loss provision (ECL) has been recorded upon review of all trade and other receivables, as the risk and
materiality to the financial statements are low.
Note 11. Current assets - inventories
As stated at the lower of cost or net realisable value:
Raw materials and work in progress
Finished goods
Cost of sales reflects the value of inventory sold in the period.
No inventory items were impaired at 30 June 2023 (2022: Nil).
Note 12. Current assets - other
Prepayments
Security deposits
2023
$
1,051,119
386,352
1,437,471
2023
$
303,863
53,609
357,472
2022
$
768,265
500,874
1,269,139
2022
$
111,204
-
111,204
42
Optiscan Imaging Limited
Notes to the financial statements
30 June 2023
Note 13. Non-current assets - property, plant and equipment
Plant and equipment - at cost
Less: Accumulated depreciation
Production equipment - at cost
Less: Accumulated depreciation
R&D equipment - at cost
Less: Accumulated depreciation
2023
$
744,073
(564,496)
179,577
47,039
(2,136)
44,903
53,524
(10,852)
42,672
267,152
2022
$
637,008
(498,912)
138,096
2,055
(758)
1,297
10,000
(10,000)
-
139,393
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out
below:
Balance at 1 July 2021
Additions
Depreciation expense
Balance at 30 June 2022
Additions
Depreciation expense
Balance at 30 June 2023
Plant and
equipment
$
101,254
124,136
(87,294)
138,096
107,065
(65,584)
Production
equipment
$
R&D
equipment
$
1,676
-
(379)
1,297
44,984
(1,378)
-
-
-
-
43,524
(852)
Total
$
102,930
124,136
(87,673)
139,393
195,573
(67,815)
179,577
44,903
42,672
267,152
43
Optiscan Imaging Limited
Notes to the financial statements
30 June 2023
Note 14. Non-current assets - intangibles
Cost
Balance at 1 July
Acquired separately
Balance at 30 June
Accumulated amortisation
Balance at 1 July
Amortisation expense
Impairment losses
Balance at 30 June
Net carrying amount
At 1 July
At 30 June
2023
$
-
600,000
600,000
-
(150,000)
-
(150,000)
-
450,000
2022
$
-
-
-
-
-
-
-
-
-
The Company acquired Intellectual Property (IP) in the form clinical and histopathological datasets from Professor Camile
for the consideration of six million fully paid ordinary shares in the Company. These IP will be used, among other things,
to conduct further research to test and validate the InVivage® system.
The IP's useful life is determined to be finite at 2 years. Subsequent to initial recognition, the IP will be measured at cost less
accumulated amortisation and impairment losses (if any). There were no indications of impairment at reporting date.
Refer to note 3 for further information on critical accounting judgements, estimates and assumptions.
Note 15. Non-current assets - right-of-use assets
2023
$
2022
$
Land and buildings - right-of-use
308,579
469,576
The consolidated entity leases land and buildings for its offices and manufacturing under agreements of between 1 to 5 years.
The amount disclosed is for the head office on 16 Miles Street, Mulgrave Victoria 3170. The office lease runs for another 2
years until May 2025.
44
Optiscan Imaging Limited
Notes to the financial statements
30 June 2023
Note 15. Non-current assets - right-of-use assets (continued)
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out
below:
Balance at 1 July 2021
Revaluation increments
Depreciation expense
Balance at 30 June 2022
Additions
Depreciation expense
Balance at 30 June 2023
Land and
buildings
$
572,238
50,219
(152,881)
469,576
-
(160,997)
Total
$
572,238
50,219
(152,881)
469,576
-
(160,997)
308,579
308,579
Note 16. Non-current assets - other
2023
$
2022
$
Security deposits
-
52,625
Note 17. Current liabilities - trade and other payables
Trade payables
Accrued expenses
Other creditors
Refer to note 24 for further information on financial instruments.
2023
$
524,475
180,702
71,183
776,359
2022
$
279,918
133,830
-
413,748
45
Optiscan Imaging Limited
Notes to the financial statements
30 June 2023
Note 18. Lease liabilities
Current liability
Lease liabilities
Non-current liability
Lease liabilities
2023
$
2022
$
192,101
177,036
180,600
372,702
The amount disclosed is for the head office on 16 Miles Street, Mulgrave Victoria 3170. The office lease runs for another 2
years until May 2025. Refer to note 24 for further information on financial instruments.
Note 19. Current liabilities - loans
Loans
2023
$
2022
$
39,587
22,193
The loan was from a commercial financial provider for insurance premium funding. No security or covenants were required
for the loan.
Note 20. Provisions
Current liability
Annual leave
Long service leave
Non-current liability
Long service leave
2023
$
208,269
206,876
415,145
2022
$
162,997
224,413
387,410
23,743
18,604
Note 21. Equity - issued capital
2023
Shares
2022
Shares
2023
$
2022
$
Ordinary shares - fully paid
626,305,602
619,405,602
71,863,358
71,256,070
46
Optiscan Imaging Limited
Notes to the financial statements
30 June 2023
Note 21. Equity - issued capital (continued)
Movements in issued capital
Details
Balance
Shares issued on exercise of options
Shares issued on exercise of options
Shares issued on exercise of options
Shares issued on exercise of options
Shares issued on exercise of options
Shares issued on exercise of options
Shares issued on exercise of options
Transfer from share based payments reserve
Balance
Shares issued on exercise of options
Shares issued on exercise of options
Shares issued on exercise of options
Shares issued to acquire intellectual property
Shares issued on exercise of options
Shares issued on exercise of options
Transfer from share based payments reserve
Capital raising costs
Date
1-Jul-21
16-Jul-21
9-Aug-21
15-Sep-21
15-Sep-21
15-Sep-21
15-Dec-21
1-Jun-22
30-Jun-22
1-Jul-22
8-Dec-22
8-Dec-22
8-Dec-22
11-Jan-23
7-Jun-23
Shares
Issue price
$
616,260,602
400,000
250,000
500,000
300,000
475,000
1,000,000
220,000
-
619,405,602
200,000
400,000
100,000
6,000,000
100,000
100,000
-
$0.05
$0.15
$0.08
$0.065
$0.05
$0.08
$0.05
-
$0.065
$0.05
$0.065
$0.10
$0.08
$0.065
-
70,942,231
20,000
37,500
40,000
19,500
23,750
80,000
11,000
82,089
71,256,070
13,000
20,000
6,500
600,000
8,000
6,500
22,192
(68,904)
71,863,358
Balance
30 June 2023
626,305,602
Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the company in
proportion to the number of and amounts paid on the shares held. The fully paid ordinary shares have no par value and the
company does not have a limited amount of authorised capital.
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each share
shall have one vote.
Share buy-back
There is no current on-market share buy-back.
Capital risk management
The consolidated entity's objectives when managing capital is to safeguard its ability to continue as a going concern, so that
it can provide returns for shareholders and benefits for other stakeholders and to maintain an optimum capital structure to
reduce the cost of capital.
Capital is regarded as total equity, as recognised in the statement of financial position, plus net debt. Net debt is calculated
as total borrowings less cash and cash equivalents.
In order to maintain or adjust the capital structure, the consolidated entity may adjust the amount of dividends paid to
shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.
47
Optiscan Imaging Limited
Notes to the financial statements
30 June 2023
Note 21. Equity - issued capital (continued)
The consolidated entity would look to raise capital when an opportunity to invest in a business/company or research and
development (R&D) project was seen as value adding relative to the current company's share price at the time of the
investment.
As such, the company raised capital in July 2023 primarily to undertake various R&D projects that will ultimately add value
to the company. For further details on the capital raise, refer to note 32 for events after the reporting period.
The capital risk management policy remains unchanged from the 30 June 2022 Annual Report.
Note 22. Equity - reserves
Foreign currency reserve
Share-based payments reserve
2023
$
(4,435)
2,127,587
2,123,152
2022
$
(4,435)
2,234,413
2,229,978
Foreign currency reserve
The reserve is used to recognise exchange differences arising from the translation of the financial statements of foreign
operations to Australian dollars. It is also used to recognise gains and losses on hedges of the net investments in foreign
operations.
Share-based payments reserve
The reserve is used to recognise the value of equity benefits provided to employees and directors as part of their
remuneration, and other parties as part of their compensation for services.
Movements in reserves
Movements in each class of reserve during the current and previous financial year are set out below:
Balance at 1 July 2021
Share based payments expense
Transfer from share based payments reserve on exercise of options
Balance at 30 June 2022
Share based payments expense
Transfer from share based payments reserve on exercise of options
Lapsed options
Foreign
currency
transaction
reserve
$
(4,435)
-
-
(4,435)
-
-
-
Share based
payments
reserve
$
1,939,912
376,590
(82,089)
2,234,413
220,842
(22,192)
(305,476)
Total
$
1,935,477
376,590
(82,089)
2,229,978
220,842
(22,192)
(305,476)
Balance at 30 June 2023
(4,435)
2,127,587
2,123,152
48
Optiscan Imaging Limited
Notes to the financial statements
30 June 2023
Note 23. Equity - dividends
There were no dividends paid, recommended or declared during the current financial year (2022: nil).
Note 24. Financial instruments
Financial risk management objectives
The Group's principal financial instruments comprise receivables, payables, cash and short-term deposits, loans and, from
time to time, convertible notes and derivatives.
In the context of the Group’s overall risk profile, financial instruments do not represent the most significant exposure.
Commercial risk associated with our business partnerships, technology risk around future development and market risk
relating to adoption of the technology will have considerably more impact on our risk profile than the risks relating to financial
instruments.
The Group monitors its exposure to key financial risks, principally currency and liquidity risk, with the objective of achieving
the Group's financial targets whilst protecting future financial security.
The Group enters into derivative transactions from time to time, mainly forward currency contracts. The purpose is to
manage the currency risks arising from the Group's operations. These derivatives provide economic hedges, but do not
qualify for hedge accounting and are based on limits set by the Board. It is, and has been throughout the period under
review, the Group’s policy that no trading in financial instruments shall be undertaken.
The main risks arising from the Group's financial instruments are foreign currency risk, liquidity risk, interest rate risk and
credit risk. The Group uses different methods to measure and manage different types of risks to which it is exposed. These
include monitoring levels of exposure to interest rate and foreign exchange risk and assessments of market forecasts for
interest and foreign exchange rates. Liquidity risk is monitored through the development of future rolling cash flow forecasts
and regular internal reporting. There is a lesser degree of risk management in relation to interest rate risk and credit risk, as
these are considered to have less capacity to materially impact the Group’s financial position at the present time.
The Board reviews and agrees policies for managing each of these risks as summarised below. Primary responsibility for
identification and control of financial risks rests with the Board. It reviews and agrees policies for managing each of the risks,
including the use of derivatives, hedging cover of foreign currency, credit allowances, and future cash flow forecast
projections.
Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of
measurement and the basis on which income and expenses are recognised, in respect of each class of financial asset,
financial liability and equity instrument are disclosed in note 2 to the financial statements.
Market risk
Foreign currency risk
As nearly all of the Group’s sales revenue and accounts receivable, as well as some expenses and inventory purchases, are
denominated in United States Dollars and Euro, the Group's statement of financial position can be affected by significant
movements in these exchange rates. At 30 June 2023, there were no economic hedges in place in respect of net foreign
currency exposures, as there were no bank facilities in place.
At 30 June 2023, had the Australian Dollar moved by the same amount illustrated in the table below, with all other variables
held constant, post-tax loss and equity would have been affected as follows:
49
Optiscan Imaging Limited
Notes to the financial statements
30 June 2023
Note 24. Financial instruments (continued)
2023
% change
Effect on
profit before
tax
Effect on
equity
% change
AUD strengthened
AUD weakened
Effect on
profit before
tax
Effect on
equity
Trade receivables
10%
16,337
16,337
10%
(16,337)
(16,337)
2022
% change
Effect on
profit before
tax
Effect on
equity
% change
AUD strengthened
AUD weakened
Effect on
profit before
tax
Effect on
equity
Trade receivables
10%
39,088
39,088
10%
(39,088)
(39,088)
Price risk
The consolidated entity is not exposed to any significant price risk.
Interest rate risk
The Group's exposure to market interest rates relates primarily to the Group's cash and cash equivalents. The impact of
movements in interest rates is not material in the context of the Group’s operations or trading results.
Credit risk
Credit risk arises from the financial assets of the Group, which comprise cash and cash equivalents and trade and other
receivables. The Group's exposure to credit risk arises from potential default of the counter party, with a maximum exposure
equal to the carrying amount of these instruments. Exposure at balance date is addressed in each applicable note. The
Group does not hold any credit derivatives to offset its credit exposure. The Group trades only with recognised, creditworthy
third parties, and as such collateral is not requested nor is it the Group's policy to securitise its trade and other receivables.
It is the Group's policy that all customers who wish to trade on credit terms are subject to credit verification procedures
including an assessment of their independent credit rating, financial position, past experience and industry reputation. Risk
limits are set for each individual customer, and are regularly monitored. In addition, receivable balances are monitored on an
ongoing basis with the result that the Group's exposure to bad debts is not significant. With respect to credit risk arising
from the other financial assets of the Group, which comprise cash and cash equivalents, the Group’s exposure to credit risk
arises from the possibility of default of the counter party. This is considered unlikely as the Group places cash and cash
equivalents only with recognised Australian trading banks.
The consolidated entity has adopted a lifetime expected loss allowance in estimating expected credit losses to trade
receivables through the use of a provisions matrix using fixed rates of credit loss provisioning. These provisions are
considered representative across all customers of the consolidated entity based on recent sales experience, historical
collection rates and forward-looking information that is available.
Generally, trade receivables are written off when there is no reasonable expectation of recovery. Indicators of this include
the failure of a debtor to engage in a repayment plan, no active enforcement activity and a failure to make contractual
payments for a period greater than 1 year.
50
Optiscan Imaging Limited
Notes to the financial statements
30 June 2023
Note 24. Financial instruments (continued)
Liquidity risk
The Group's objective is to maintain adequate funding of its activities. Capital management is a process of monitoring cash
reserves and forecast cash requirements, and there are no externally imposed capital requirements.
The contractual maturities of the Group's and parent entity's financial assets and liabilities set out in the table are equivalent
to the maturity analysis of financial assets and liability based on management's expectation. The amounts disclosed in the
financial statements reflect the expected maturity of assets and liabilities.
Trade payables and other financial liabilities mainly originate from investments in working capital, principally inventories.
These liabilities and relevant assets are considered in the Group's overall liquidity risk, which is monitored through review of
forecasts of liquidity reserves on the basis of expected cash flow.
The Group’s activities are funded from its cash reserves.
Fair value of financial assets and liabilities
The methods for estimating fair value are outlined in the relevant notes to the financial statements, and unless specifically
stated, carrying value approximates fair value for all financial instruments.
The fair value of financial assets and liabilities is included at the amount at which the instrument could be exchanged in a
current transaction between willing parties, other than in a forced or liquidation transaction. Management has assessed that
the fair value of cash and short-term deposits, trade receivables, and trade payables approximate their carrying amount due
to the short term nature of the instruments.
Remaining contractual maturities
The following tables detail the consolidated entity's remaining contractual maturity for its financial instrument liabilities. The
tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which
the financial liabilities are required to be paid. The tables include both interest and principal cash flows disclosed as remaining
contractual maturities and therefore these totals may differ from their carrying amount in the statement of financial position.
2023
Non-derivatives
Trade payables*
Accruals*
Loans
Lease liabilities
Other payables
1 year or less
$
Between 1
and 2 years
$
Between 2
and 5 years Over 5 years
$
$
Remaining
contractual
maturities
$
524,475
180,702
39,587
192,101
71,183
-
-
-
180,600
-
-
-
-
-
-
-
-
-
-
-
-
-
524,475
180,702
39,587
372,701
71,183
1,188,648
Total non-derivatives
1,008,048
180,600
* These balance are non-interest bearing.
51
Optiscan Imaging Limited
Notes to the financial statements
30 June 2023
Note 24. Financial instruments (continued)
2022
Non-derivatives
Trade payables*
Accruals*
Loans
Lease liabilities
Other payables
1 year or less
$
Between 1
and 2 years
$
Between 2
and 5 years Over 5 years
$
$
Remaining
contractual
maturities
$
279,918
133,830
22,193
177,036
-
-
-
-
192,101
-
-
-
-
180,600
-
-
-
-
-
-
-
279,918
133,830
22,193
549,738
-
985,679
Total non-derivatives
612,977
192,101
180,600
* These balance are non-interest bearing.
The cash flows in the maturity analysis above are not expected to occur significantly earlier than contractually disclosed
above.
Note 25. Key management personnel disclosures
Directors
The following persons were directors of Optiscan Imaging Limited during the financial year:
Mr Robert Cooke
Prof Camile Farah
Mr Ron Song
Ms Karen Borg
Mr Sean Gardiner
Non-executive Chairman
CEO & Managing Director
Non-executive Director
Non-executive Director
Non-executive Director
Compensation
The aggregate compensation made to directors and other members of key management personnel of the consolidated entity
is set out below:
Short-term employee benefits
Post-employment benefits
Share-based payments
2023
$
772,087
72,435
233,842
2022
$
765,528
60,236
376,589
1,078,364
1,202,353
52
Optiscan Imaging Limited
Notes to the financial statements
30 June 2023
Note 26. Remuneration of auditors
During the financial year the following fees were paid or payable for services provided by Grant Thornton Audit Pty Ltd, the
auditor of the company:
Audit services - Grant Thornton Audit Pty Ltd
Audit or review of the financial statements
Other services - Grant Thornton Audit Pty Ltd
R&D tax services
Other professional services
2023
$
119,560
15,310
5,156
20,466
140,026
2022
$
71,000
11,000
6,000
17,000
88,000
Note 27. Contingent liabilities
The group has contingent liabilities in relation to bank guarantees on issue at balance date amounting to $52,625 (2022:
$52,625).
Note 28. Commitments
At 30 June 2023 there were no material capital commitments outstanding (2022: Nil).
Note 29. Related party transactions
Parent entity
Optiscan Imaging Limited is the parent entity
Subsidiaries
Interests in subsidiaries are set out in note 31.
Key management personnel
Disclosures relating to key management personnel are set out in note 25 and the remuneration report included in the
directors' report.
Transactions with Subsidiaries
Optiscan Pty Ltd
Inter-company transactions during the financial year between the parent entity, Optiscan Imaging Limited and subsidiary,
Optiscan Pty Ltd amounted to $3,750,945 (2022: $4,360,000). Outstanding balances at year-end of $60,724,847
(2022: $56,973,903) are unsecured, interest free and settlement occurs in cash. The balances are classified non-current by the
parent entity.
53
Optiscan Imaging Limited
Notes to the financial statements
30 June 2023
Note 29. Related party transactions (continued)
Transactions between Subsidiaries
Optiscan Imaging, Inc.
Inter-company transactions during the financial year between subsidiaries, Optiscan Pty Ltd and Optiscan Imaging, Inc.,
amounted to $52,238 (2022: Nil). Outstanding balances at year-end are unsecured, interest free and settlement occurs in
cash. The balances are classified non-current by the subsidiaries.
Transactions with Directors
The Company acquired Intellectual Property (IP) in the form clinical and histopathological datasets from Professor Camile Farah
for the consideration of six million fully paid ordinary shares in the Company. Refer to note 14 for further information on
on the IP that has been recorded as intangibles.
Receivable from and payable to related parties
There were no trade receivables from or trade payables to related entities at the current and previous reporting period.
Loans to/from related parties
There were no loans provided during the current and previous financial years.
Terms and conditions
All transactions were made on normal commercial terms and conditions and at commercial rates.
Note 30. Parent entity information
Set out below is the supplementary information about the parent entity.
Statement of profit or loss and other comprehensive income
Loss after income tax
Total comprehensive income
Statement of financial position
Total current assets
Total assets
Total current liabilities
Total liabilities
2023
$
(355,269)
(355,269)
2023
$
494,802
944,802
-
-
2022
$
(358,228)
(358,228)
2022
$
4,245,228
4,245,228
(13,000)
(13,000)
54
Optiscan Imaging Limited
Notes to the financial statements
30 June 2023
Note 30. Parent entity information (continued)
Equity
Issued capital
Share-based payments reserve
Accumulated losses
2023
$
71,953,013
2,127,587
(73,135,798)
2022
$
71,726,470
2,234,413
(69,728,655)
944,802
4,232,228
Guarantees entered into by the parent entity in relation to the debts of its subsidiaries
The parent entity had no guarantees in relation to the debts of its subsidiaries as at 30 June 2023 and 30 June 2022.
Contingent liabilities
The parent entity had no contingent liabilities as at 30 June 2023 and 30 June 2022.
Capital commitments - Property, plant and equipment
The parent entity had no capital commitments for property, plant and equipment as at 30 June 2023 and 30 June 2022.
Significant accounting policies
The accounting policies of the parent entity are consistent with those of the consolidated entity, as disclosed in note 2,
except for the following:
●
●
Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity.
Dividends received from subsidiaries are recognised as other income by the parent entity and its receipt may be
an indicator of an impairment of the investment.
Note 31. Interests in subsidiaries
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiary in accordance
with the accounting policy described in note 2:
Name
Principal place of business /
Country of incorporation
Optiscan Pty Ltd
Australia
Optiscan Imaging, Inc.
United States
Ownership interest
2023
100%
100%
2022
100%
-
Optiscan Imaging, Inc. was established during the financial year as part of the Company's strategy to have a direct market
model within the US.
Note 32. Events after the reporting period
The Company successfully completed its pro rata entitlement offer by issuing 208.7m shares that raised $16.7m following the
financial year end in July 2023. This was based on the offer of one fully paid ordinary share for every three shares as
announced to ASX on 30 May 2023. Eligible shareholders were able to purchase their entitlements at an issue price of $0.08
per share. The offer was partially underwritten by both its substantial shareholders Peter Investments Pty Ltd and
Orchid Capital Investment Ptd. Ltd.
55
Optiscan Imaging Limited
Notes to the financial statements
30 June 2023
Note 32. Events after the reporting period (continued)
The main purpose of the capital raise was to undertake R&D projects for rigid and flexible surgical applications, improve core
image capture capability, and advance Artificial Intelligence (AI) and Telepathology service solutions alongside the development
of new clinical devices.
Other than the capital raise, no other matter or circumstance has arisen since 30 June 2023 that has significantly affected
or may significantly affect the consolidated entity's operations, the results of those operations, or the consolidated entity's
state of affairs in future financial years.
Note 33. Reconciliation of loss after income tax to net cash used in operating activities
2023
$
2022
$
Loss after income tax expense for the year
(4,351,500)
(4,233,037)
Adjustments for:
Share-based payments
Finance costs
Depreciation
Other non-cash expense
Change in operating assets and liabilities:
Decrease/(increase) in trade and other receivables
Increase in inventories
Decrease/(increase) in prepayments
Increase/(decrease) in trade and other payables
Increase in other provisions
233,842
32,294
378,812
58,339
437,031
(168,332)
(192,659)
374,751
32,873
376,590
30,586
240,554
-
(168,933)
(108,348)
10,519
(69,687)
88,178
Net cash used in operating activities
(3,164,549)
(3,833,578)
Note 34. Earnings per share
2023
$
2022
$
Loss after income tax attributable to the owners of Optiscan Imaging Limited
(4,351,500)
(4,233,037)
Weighted average number of ordinary shares used in calculating basic
earnings per share
Number
Number
623,290,807
618,428,903
Weighted average number of ordinary shares used in calculating diluted
earnings per share
623,290,807
618,428,903
Basic earnings per share
Diluted earnings per share
Cents
Cents
(0.70)
(0.70)
(0.68)
(0.68)
56
Optiscan Imaging Limited
Notes to the financial statements
30 June 2023
Note 35. Share-based payments
Employee Share-Based Payment Plans
The Company provides benefits to nominated employees and non-executive directors in the form of share-based payment
transactions, whereby employees and non-executive directors render services in exchange for shares or rights over shares.
For the financial year 2023, no new share-based payment scheme in exchange for services was issued. However, the Company
did issue 6mil ordinary shares to Prof. Camile Farah to acquire Intellectual Property (IP) in the form clinical and
histopathological datasets. As IP is considered 'goods' and ordinary shares have been issued (instead of options), this is
a completely different arrangement compared with the employee share-based payment plan as detailed below from previous
years.
At the company’s 2021 Annual General Meeting held on 20 January 2022, shareholders approved the grant of 12,000,000
unlisted options to the Company's Managing Director, Prof. Camile Farah, The were issued on 9 March 2022 with an exercise
price of $0.1925 (19.25 cents) per option, and 3,000,000 options being exercisable by 9 March 2025 and 9,000,000 options
being exercisable by 9 March 2027. All of the options are subject to certain vesting conditions.
In the 2022 financial year, the Company issued 1,000,000 unlisted options to Non-executive Director, Ms Karen Borg,
exercisable at $0.209 (20.9 cents) per option on or before 29 July 2023.
Set out below are summaries of options granted under the plan:
2023
Grant date Expiry date
20-Dec-18 30-Nov-22
20-Dec-18 31-May-23
20-Dec-18 30-Nov-23
19-Apr-23
19-Apr-21
29-Jul-23
29-Jul-21
9-Mar-25
20-Jan-22
9-Mar-27
20-Jan-22
Exercise
Price
Balance at
the start
of the year
Granted
Exercised
Expired/
forfeited/
other
Balance at
the end
of the year
$0.05
$0.08
900,000
$0.065 1,400,000
900,000
$0.275 2,000,000
$0.209 1,000,000
3,000,000
9,000,000
$0.1925
$0.1925
18,200,000
-
-
-
-
-
-
-
-
(400,000)
(400,000)
(100,000)
-
-
-
-
(500,000)
(1,000,000)
-
(2,000,000)
-
-
-
-
-
800,000
-
1,000,000
3,000,000
9,000,000
(900,000)
(3,500,000)
13,800,000
57
Optiscan Imaging Limited
Notes to the financial statements
30 June 2023
Note 35. Share-based payments (continued)
2022
Grant date Expiry date
30-Nov-18 31-May-23
20-Dec-18 31-May-22
20-Dec-18 30-Nov-22
20-Dec-18 31-May-23
20-Dec-18 30-Nov-23
19-Apr-23
19-Apr-21
29-Jul-23
29-Jul-21
9-Mar-25
20-Jan-22
9-Mar-27
20-Jan-22
Exercise
Price
Balance at
the start
of the year
$0.08 1,000,000
$0.05
800,000
$0.05 1,275,000
$0.065 1,700,000
$0.08 1,400,000
$0.275 2,000,000
-
$0.209
-
$0.1925
-
$0.1925
Granted
Exercised
-
-
-
-
-
-
1,000,000
3,000,000
9,000,000
(1,000,000)
(720,000)
(375,000)
(300,000)
(500,000)
-
-
-
-
Expired/
forfeited/
other
Balance at
the end
of the year
-
(80,000)
-
-
-
-
-
-
-
-
-
900,000
1,400,000
900,000
2,000,000
1,000,000
3,000,000
9,000,000
8,175,000
13,000,000
(2,895,000)
(80,000)
18,200,000
Set out below are the options exercisable at the end of the financial year:
Grant date Expiry date
20-Dec-18 30-Nov-22
20-Dec-18 31-May-23
20-Dec-18 30-Nov-23
19-Apr-23
19-Apr-21
29-Jul-23
29-Jul-21
9-Mar-25
20-Jan-22
9-Mar-27
20-Jan-22
2023
Number
2022
Number
-
-
800,000
-
1,000,000
3,000,000
9,000,000
900,000
1,400,000
900,000
2,000,000
1,000,000
3,000,000
9,000,000
13,800,000
18,200,000
The weighted average exercise price during the financial year was $0.06.
The 1,000,000 options granted to Ms Karen Borg in 2022 were valued using the Black and Scholes Model. The options
issued to Ms Borg vest equally of four quarters from the issue date and subject to Ms Borg being appointed a Director
at that point in time of vesting.
The 12,000,000 options granted to Prof. Camile Farah in 2022 were valued using the Binomial (STI options) and Trinomial
(LTI options) valuation methods as they are subject to certain market based vesting conditions as outlined below:
●
●
1,000,000 options vest on 5pm EST on 12 December 2022 subject to continued employment as Managing
Director and CEO (STI Option);
2,000,000 options vest on 5pm EST on 12 December 2023 subject to continued employment as Managing
Director and CEO (STI Option);
58
Optiscan Imaging Limited
Notes to the financial statements
30 June 2023
Note 35. Share-based payments (continued)
●
●
●
3,000,000 options vest after the Company’s volume weighted average share price is greater than or equal to
$1.00 per share for a consecutive period of 15 trading days within 5 years following the date of issue (LTI option);
3,000,000 options vest after the Company’s volume weighted average share price is greater than or equal to
$1.50 per share for a consecutive period of 15 trading days within 5 years following the date of issue (LTI option);
3,000,000 options vest after the Company’s volume weighted average share price is greater than or equal to
$2.00 per share for a consecutive period of 15 trading days within 5 years following the date of issue (LTI option).
No new options were granted in 2023. The table below shows the valuation model inputs used to determine the fair value
of options granted last financial year.
Grant date Expiry date
9-Aug-21
20-Jan-22
20-Jan-22
20-Jan-22
20-Jan-22
20-Jan-22
29-Jul-23
9-Mar-25
9-Mar-25
9-Mar-27
9-Mar-27
9-Mar-27
Share price
at grant
date
Exercise
price
Expected
volatility
Dividend
yield
Risk-free
interest rate
Fair value
at grant date
$0.19
$0.18
$0.18
$0.18
$0.18
$0.18
$0.209
$0.1925
$0.1925
$0.1925
$0.1925
$0.1925
109.67%
75.00%
75.00%
75.00%
75.00%
75.00%
-
-
-
-
-
-
0.43%
1.39%
1.39%
1.67%
1.67%
1.67%
$0.103
$0.067
$0.076
$0.081
$0.068
$0.058
59
Optiscan Imaging Limited
Directors' declaration
30 June 2023
In the directors' opinion:
●
●
●
●
the attached financial statements and notes comply with the Corporations Act 2001, the Accounting Standards,
the Corporations Regulations 2001 and other mandatory professional reporting requirements;
the attached financial statements and notes comply with International Financial Reporting Standards as issued by
the International Accounting Standards Board as described in note 2 to the financial statements;
the attached financial statements and notes give a true and fair view of the consolidated entity's financial
position as at 30 June 2023 and of its performance for the financial year ended on that date; and
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they
become due and payable.
The directors have been given the declarations required by section 295A of the Corporations Act 2001.
Signed in accordance with a resolution of directors made pursuant to section 295(5)(a) of the Corporations Act 2001.
On behalf of the directors
Robert Cooke
Non-executive Chairman
30 August 2023
60
Grant Thornton Audit Pty Ltd
Cairns Corporate Tower
Level 13
15 Lake Street
PO Box 7200
Cairns QLD 4870
T +61 7 4046 8888
Independent Auditor’s Report
To the Members of Optiscan Imaging Limited
Report on the audit of the financial report
Opinion
We have audited the financial report of Optiscan Imaging Limited (the Company) and its subsidiaries (the
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, consolidated statement of
changes in equity and consolidated statement of cash flows for the year then ended, and notes to the
consolidated 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:
a giving a true and fair view of the Group’s financial position as at 30 June 2023 and of its performance for
the year ended on that date; and
b complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor’s responsibilities for the audit of the financial report section of
our report. We are independent of the Group in accordance with the auditor independence requirements of
the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical
Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence
Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled
our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of
the financial report of the current period. These matters were addressed in the context of our audit of the financial
report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these
matters.
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Key audit matter
How our audit addressed the key audit matter
R&D tax incentive – Notes 6 and 10
Under the research and development (R&D) tax
incentive scheme, the refundable R&D tax offset is the
Group’s corporate tax rate plus an 18.5% premium. A
registration of R&D Activities Application is filed with
AusIndustry in the following financial year and, based
on this filing, the Group receives the incentive in cash.
Management performed a detailed review of the
Company’s total R&D expenditure to determine the
potential claim under the R&D tax incentive legislation.
For the year ended 30 June 2023, the R&D amount
claimed is $737,570.
The process of calculating the R&D tax rebate and
receivable balance requires judgement and specialised
knowledge in identifying eligible expenditure, which
gives rise to anticipated R&D tax incentives. Balances
in relation to R&D tax incentives are therefore
considered to be a key audit matter.
Intellectual Property – Notes 7, 14, 29
During the year, Optiscan Imaging Limited acquired
intellectual property (‘IP’) in the form of clinical and
histopathological datasets from Professor Camile
Farah, for the consideration of 6,000,000 fully paid
ordinary shares in the Company.
Recognition of the IP as an intangible asset requires
judgement, including consideration of the recognition
criteria within AASB 138 Intangible Assets.
This is a key audit matter due to the material nature of
the transaction, and the degree of judgement required
in valuing and accounting for the IP acquired as an
Our procedures included, amongst others:
• Obtaining the 30 June 2023 R&D rebate calculations
prepared by management and performing the
following procedures:
− Assessing the qualifications of management,
including their ability to perform the calculation;
− Developing an understanding of the model,
identifying and assessing the key assumptions in
the calculation;
− Testing included expenditure for reasonableness
against the eligibility criteria; and
− Testing the mathematical accuracy of the
accrual.
• Comparing the estimates made in previous years to
the amount of cash received after lodgement of the
R&D tax claim;
• Comparing the nature of the R&D expenditure
included in the current year estimate to the prior
year estimate;
• Assessing the eligible expenditure used to calculate
the estimate to the expenditure recorded in the
general ledger;
•
Inspecting copies of relevant correspondence with
AusIndustry and the ATO related to the claims;
• Utilising an internal R&D specialist to consider the
nature of the expenses against the eligibility criteria
of the R&D tax incentive scheme to assess whether
the expenses included in the estimate were likely to
meet the eligibility criteria; and
• Evaluating the disclosures in the financial
statements for appropriateness and consistency with
accounting standards.
Our procedures included, amongst others:
• Assessing, in consultation with our internal technical
accounting support team, whether the valuation
method applied in initial recognition of the intangible
asset, as well as capitalisation as an intangible
asset, is appropriate against relevant accounting
standards;
• Assessing the reasonableness of management’s
assessment of the intangible asset as having a finite
useful life and the resulting amortisation period;
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Grant Thornton Audit Pty Ltd
intangible asset (including determining the appropriate
measurement valuation model to recognise the
intangible asset).
• Obtaining and reviewing management’s assessment
of impairment indicators, and challenging the
assessment by considering other information to
evaluate the reasonableness of management’s
position;
• Recalculating the amortisation charge and
assessing for appropriateness against relevant
accounting standards; and
• Assessing the adequacy of the Group’s disclosures
with respect to the recognition of the intellectual
property acquired in line with AASB 138 Intangible
Assets.
Information other than the financial report and auditor’s report thereon
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 our
auditor’s report thereon.
Our opinion on the financial report does not cover the other information and we do not express any form of
assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent with the financial report or our knowledge
obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the financial report
The Directors of the Company are responsible for the preparation of the financial report that gives a true and fair
view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal
control as the Directors determine is necessary to enable the preparation of the financial report that gives a true
and fair view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the Directors are responsible for assessing the Group’s ability 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_2020.pdf.This
description forms part of our auditor’s report.
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Grant Thornton Audit Pty Ltd
Report on the remuneration report
Opinion on the remuneration report
We have audited the Remuneration Report included in pages 14 to 22 of the Directors’ report for the year
ended 30 June 2023.
In our opinion, the Remuneration Report of Optiscan Imaging 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.
Grant Thornton Audit Pty Ltd
Chartered Accountants
S L Cram
Partner – Audit & Assurance
Cairns, 30 August 2023
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Optiscan Imaging Limited
Shareholder information
30 June 2023
The shareholder information set out below was applicable as at 15 August 2023.
Corporate Governance Statement
Refer to the Company's Corporate Governance statement at: https://www.optiscan.com/about-us/compliance
Distribution of equitable securities
Analysis of number of equitable security holders by size of holding:
Ordinary shares
Number
of holders
% of total
shares
issued
726
1,015
429
988
467
3,625
1,855
0.06
0.34
0.41
4.20
94.99
100.00
-
Options over ordinary
shares
Number
of holders
% of total
shares
issued
-
-
-
-
5
5
-
-
-
-
-
100.00
100.00
-
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and over
Holding less than a marketable parcel
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Optiscan Imaging Limited
Shareholder information
30 June 2023
Equity security holders
Twenty largest quoted equity security holders
The names of the twenty largest security holders of quoted equity securities are listed below:
Peters Investments Pty Ltd
HSBC Custody Nominees (Australia) Limited
Ibsen Pty Ltd (Narula Family Set No.3 A/C)
Citicorp Nominees Pty Limited
Harech Pty Ltd (Porter Super Fund A/C)
BNP Paribas Noms Pty Ltd (DRP)
Mr Chris Graham + Mrs Diane Graham (C & D Graham S/F A/C)
BNP Paribas Noms Pty Ltd Hub24 Custodial Serv Ltd (DRP A/C)
Dixson Trust Pty Limited
Camile Farah + Marie Martias (Farah + Martias Family A/C)
Sash Pty Ltd (Knezevic Super Fund A/C)
Kebin Nominees Pty Ltd
Ibsen Pty Ltd (Ibsen Superfund A/C)
Mr Alfred J Winklemeier + Mrs Christine E Winklemier
Mr Kah C Lee
Semblance Pty Ltd (Graeme Mutton Retire S/Fund)
D &K Corps Retirement Pty Ltd (D & K Corps Family A/C)
Mr Christopher J Martin
Mr Wally Knezevic
Mr Graeme L Mutton
Unquoted equity securities
Options over ordinary shares issued
Substantial holders
Substantial holders in the company are set out below:
Peters Investments Pty Ltd
Orchid Capital Investments Pte Ltd
Ibsen Pty Ltd
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Ordinary shares
Number
held
205,567,445
158,872,000
38,500,000
36,026,006
18,934,491
18,146,343
13,200,000
9,790,390
8,474,270
8,000,000
6,837,964
6,005,479
5,000,000
4,700,000
4,688,888
4,470,635
4,214,816
4,209,448
4,134,260
3,490,000
563,262,435
% of total
shares
issued
24.62
19.03
4.61
4.31
2.27
2.17
1.58
1.17
1.01
0.96
0.82
0.72
0.60
0.56
0.56
0.54
0.50
0.50
0.50
0.42
67.45
Number
on issue
Number
of holders
12,800,000
5
Ordinary shares
Number
held
205,567,445
155,109,996
43,500,000
% of total
shares
issued
24.62
18.58
5.21
Optiscan Imaging Limited
Shareholder information
30 June 2023
Voting rights
The voting rights attached to ordinary shares are set out below:
Ordinary shares
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each share
shall have one vote.
There are no other classes of equity securities.
On-market buy-back
There is no current on-market buy-back.
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