Oventus Medical Limited
Annual Report
2019
Annual Report 2019
Oventus Medical Limited
O2Vent® was designed to treat the
‘many faces’ of sleep disordered
breathing and represents
obstructive sleep apnoea (OSA) as
a non-discriminatory condition.
These are the faces of our business
and why we innovate.
Contents
1
3
4
7
8
8
9
Overview
Key Milestones
Chairman’s and CEO’s Address
Products in Market
Products at Development Stage
Product Innovations
Business Strategy and Operations
13 Oventus USA Team
14 Board and Management
16 Medical Technology Advisory Board
18 Directors’ Report
31 Auditor’s Independence Declaration
32 Consolidated Statement of Comprehensive Income
33 Consolidated Statement of Financial Position
34 Consolidated Statement of Changes in Equity
35 Consolidated Statement of Cash Flows
36 Notes to the Financial Statements
55 Directors’ Declaration
56
Independent Auditor’s Report
61 Shareholder Information
63 Corporate Directory
Overview
FY2019 At A Glance
Who We Are:
Oventus is a Brisbane-based medical device company that is commercialising a unique platform for
the treatment of obstructive sleep apnoea (OSA) and snoring. Our focus is on those patients that are not
currently being treated or cannot be treated effectively with existing treatment modalities, such as the
current standard of care, Continuous Positive Airway Pressure (CPAP) or standard oral devices.
What We Do:
Our Products – Oventus O2Vent® devices and accessories
Our products provide a discreet and comfortable alternative to CPAP for the treatment of OSA.
Unlike other oral appliances or CPAP interfaces, the Oventus O2Vent® device manages the entire upper airway via a unique
and patented built-in air channel. O2Vent® devices allow for airflow to the back of the mouth while maintaining an oral seal
and stable jaw position, bypassing multiple obstructions from the nose, soft palate and tongue. The devices reduce airway
collapsibility and manage mouth breathing while keeping the airway stable.
O2Vent®
O2Vent® devices are particularly designed for the many people that suffer from nasal obstruction. They allow nasal breathing
when the nose is unobstructed, but when obstruction is present, breathing is supplemented via the airway in the appliance.
Unmask your
sleep potential.
O2Vent® Optima is the only oral device treating the entire upper airway!
How O2Vent® works
Here’s how O2Vent® works:
3
Air travels
through the
channel and is
The O2Vent®
delivered to the
advances and
back of the throat
stabilises the
lower jaw,
brings the
tongue forward
and opens the
airway
1
2
Air can be drawn into the
O2Vent® if there is a nasal
Air goes in through
the duckbill on
inhalation and out
on exhalation
or soft palate blockage
The device is adjustable,
simultaneously bringing
the lower jaw forward
and stabilising the airway
Air passes
through to
the back of
the throat
The duckbill acts as a “second nose”. It is especially beneficial for patients with nasal
blockages that force them to mouth breathe. An open mouth is undesirable when sleeping,
as an open jaw can cause breathing obstruction in the throat.
The O2Vent® airway channel enables
the device to the back of the throat,
bypassing common sites of obstruction
such as the nose, tongue and soft palate.
1
Ask your doctor NOW
about O2Vent®
OM201AUS_Mar 2019
O2Vent.com
Overview
continued
ExVentTM
The ExVentTM is a valve accessory that fits into
the open airway of the O2Vent® Optima device,
to augment traditional oral appliance therapy
by stabilising the airway. The ExVentTM valve
contains air vents that open fully on inhalation
for unobstructed airflow. The valve closes on
exhalation, directing the air through the vents,
creating the mild resistance or airway support
required to keep the airway stable (known as
PEEP, positive end expiratory pressure).
Oventus Bite Fork
The Oventus Bite Fork is a single use disposable
bite registration tool that was developed to assist
dentists with recording the required 5mm vertical
bite clearance for ordering O2Vent® devices. This
clearance is essential to allow for the proprietary
airway. The flexible nylon lattice design is
available in two variants, single sided to record
the protrusive bite using a bite measurement tool
or double sided to record an “edge to edge” bite.
Each variant is available in two arch sizes.
ExVentTM
Breathe in
Breathe out
Oventus Bite Fork
Our Clinical Delivery Model: ‘lab in lab’
The ‘lab in lab’ model is a collaborative sleep physician/dental strategy that streamlines patients’ access to treatment. Under
the model, Oventus employs its unique treatment platform and digital workflow to act as the conduit facilitating collaboration
between various sleep physicians and dentists.
The model overcomes the fact that participation by both sleep physicians and dentists is required when it comes to managing
OSA, but the two groups have traditionally operated separately due to their different areas of practice. Collaboration is needed
because sleep physicians must prescribe an oral appliance under law, and a dentist scans and fits the device. The patient is
followed up by the dentist to ensure comfort and fit of a device, and also by the physician to manage treatment of the OSA.
The ‘lab in lab’ clinical delivery model ensures both groups participate effectively in this process, enabling them to provide
end-to-end treatment solutions to patients. It provides a seamless approach for patients to access the Oventus sleep treatment
platform, irrespective of where the patient sought their treatment.
2
Annual Report 2019 Oventus Medical LimitedBite Fork SingleBite Fork Double Key Milestones
During FY2019
September 2018
Medical Technology
Advisory Board Appointed
October 2018
New clinical data shows that
Oventus’ devices successfully
treat more than 75% of OSA
patients
January 2019
O2Vent® Optima oral device
launched in Australia
February 2019
O2Vent® Optima oral device
launched in Canada
May 2019
O2Vent® adopted by regional
sleep group, SleepCues,
and Lane Dental, the largest
Dental Group in North
Carolina
June 2019
Positive clinical data on
O2Vent® and ExVent™
efficacy published in
scientific journal, SLEEP®
First material agreements
secured with Canadian
sleep medicine groups in
Canada for O2Vent® Sleep
Treatment Platform
Post Financial Year end
July 2019
First agreements with
American sleep medicine
groups for adoption of
O2Vent® Sleep Treatment
Platform through the ‘lab
in lab’ model
Material agreements
secured to enable
widespread adoption of ‘lab
in lab’ model
Placement to institutional
investors raises $7m
August 2019
Entitlement offer raises $2.3m
taking total funds raised
to $9.3m
Further material agreements
secured with US sleep
groups, Delaware Sleep
Disorder Centres and
Reliable Respiratory
September 2019
O2Vent® Optima oral device
secures FDA clearance
October 2019
O2Vent® Optima launches
in the US
First ‘lab in lab’ sites
operational and first patients
scheduled in Canada + US
3
Chairman’s and CEO’s Address
Left: Dr Mel Bridges, Chairman
Right: Dr Chris Hart, Managing Director, CEO
We are delighted to
present Oventus Medical’s
(ASX: OVN) Annual Report
for the 2019 financial year.
The past year has
seen the Company
make significant
progress with efforts
to commercialise
its new treatment
platform for
Obstructive Sleep
Apnoea (OSA).
This year saw the launch of our
collaborative ‘lab in lab’ clinical
delivery model, which has been key
to enabling the early adoption of our
Sleep Treatment Platform across both
sleep and dental channels. At the
same time, we successfully launched
our newest product in the O2Vent® oral
device range – the O2Vent® Optima
– in the key markets of Australia and
Canada. Post reporting period, the
device was also launched in the US
market, following clearance by the
US Food and Drug Administration
(FDA). This was a significant milestone
and our final step for key regulatory
clearance for the O2Vent® Optima.
Our commercial progress was
underlined by new positive clinical
data which reinforced the findings
from earlier clinical studies, further
demonstrating that the Oventus
Sleep Treatment Platform delivers
significantly improved treatment
outcomes for OSA sufferers. This data
was recognised in several prominent
clinical conferences throughout the
reporting period, and in June 2019,
was published in SLEEP®, the official
journal of the Sleep Research Society.
Showcasing data through these
channels is a core part of our strategy
to highlight the benefits of our
Sleep Treatment Platform within the
sleep community.
4
We are focused on filling what remains
a significant treatment void in the
large and growing OSA market. Whilst
Continuous Positive Airway Pressure
(CPAP) has been the leading form
of treatment for sleep apnoea over
the last 30 years and has drastically
improved the lives of millions around
the world, many patients nevertheless
cease treatment or never use the
equipment due to the cumbersome
set up of the machine and the
discomfort of air pressure. In addition,
for those patients who breathe with
their mouths open, the treatment
rarely works. The global need for
our Sleep Treatment Platform has
only strengthened during the year
in a market which has been growing
at a CAGR of 15-20% per annum.
There are two distinct industry
initiatives that are promoting the
adoption of oral appliance therapy
(OAT). The first is reflected in a
recent position paper that the
American Academy of Dental Sleep
Medicine (AADSM) posted following
a taskforce and expert work group
series of meetings, where the goal
was to review evidence in favour
of OAT reimbursement. The paper
stated the AADSM’s position that
health insurance ‘payers’ should
cover oral appliance therapy (OAT),
provided by a qualified dentist after
a physician has determined that the
patient is intolerant to Continuous
Positive Airway Pressure (CPAP).
Annual Report 2019 Oventus Medical Limited Chairman and CEO’s Address
continued
It is likely that more payers will recognise the benefits
of OAT and this will lead to an ease of reimbursement
and OAT uptake.
The second healthcare initiative gaining recognition
and support from both Providers and Payers alike is
that they favour offering ‘patient preference’. Studies are
demonstrating that when an individual is provided a
treatment choice, their adherence dramatically improves.
In the near future, patients may be given the option to select
CPAP or OAT when medically appropriate. Coupled with the
AADSM position statement on reimbursement when CPAP
fails, it is likely that adoption of OAT will increase for both
new and failed CPAP treatment candidates.
The ‘lab in lab’ model
The ‘lab in lab’ model we introduced this financial year
complements identified market trends and initiatives, by
providing a paradigm of care that is collaborative. The
model de-fragments and streamlines the patient journey.
The sleep physician and dentist collaborate in the care
of the patient, promoting choice, early intervention and
support throughout their treatment journey. Oventus
combines its unique treatment platform and digital
workflow to act as the conduit between various sleep
channel providers (sleep physicians) and dentists.
In June, we announced agreements with two Canadian
sleep medicine groups for adoption of the Platform which
covered 7 clinical delivery sites. The primary supply
agreements are tied to quotas of predictable volumes.
Post financial year end, we signed further material
agreements with US channel stakeholders to enable
widespread adoption of the technology in sleep and dental
channels. Oventus signed an agreement with Carestream
Dental, a supplier of digital scanning technology to supply
high quality and well-priced scanning technology for
Oventus’ customers and to open up their installed customer
base of over 15,000 scanner installations in North America.
In combination with Carestream Dental’s network of
scanners in North America, we also partnered with VirtuOx,
a respiratory testing provider with diagnostics, monitoring
services and telemedicine capabilities, that will enable
end to end management of the patients’ sleep apnoea
under the clinical management of sleep physicians. In
addition, an agreement with Lyon Dental, a provider of
practice management and reimbursement solutions, will
ensure that patients can access reimbursement for Oventus
technology whether they are in the sleep or dental channel.
Product launches and adoption in key markets
Oventus is at a key point in its history. With regulatory
approvals in place, strong data and a team experienced
in sleep medicine, we have reduced our historic focus on
research and development and turned our efforts to rapidly
commercialising the O2Vent® technology. Importantly,
during and after the reporting period, we secured a number
of material agreements for the adoption of the Company’s
O2Vent® Sleep Treatment Platform across North America.
In July, we signed our first material contract with a US sleep
group with locations across the Southwest. These locations
have significant patient throughput. Due to the large volume
of patients at each location, device orders are expected to
ramp up quickly once the locations are fully operational
and in light of the Company achieving US Food and Drug
Administration (FDA) clearance in September.
In August we signed two further material agreements
with US sleep medicine groups ahead of receiving FDA
clearance. The locations will adopt the Company’s O2Vent®
Sleep Treatment Platform and implement the ‘lab in lab’
business model with a total of 10 clinical delivery sites
across the Northeast.
In September, we received FDA regulatory clearance for
the O2Vent® Optima oral device, enabling our Company
to commence sales of the device in the US market and
officially launch the material US agreements above.
The FDA clearance followed the launch of the O2Vent®
Optima in Australia and Canada earlier in the calendar
year and the successful completion of controlled market
releases, with early results demonstrating strong patient
acceptance.
The Oventus Sleep Treatment Platform bridges the gap
between CPAP and traditional oral appliance therapy,
meeting the needs of patients suffering symptoms
associated with obstructive sleep apnoea. The Oventus
O2Vent® devices manage the entire upper airway and
allow for airflow to the back of the throat while maintaining
an oral seal and stable jaw position, bypassing multiple
obstructions from the nose, soft palate and tongue. Our
devices are designed for any patient that is deemed
appropriate for oral appliance therapy, but especially
beneficial for the many people that suffer mouth breathing
due to nasal congestion, restricted or obstructive
nasal breathing.
The Oventus Sleep Treatment Platform encompasses the
O2Vent® oral therapeutic device, and the unique valve
accessories, ExVentTM and O2Vent® OnePAPTM, with the
latter product not yet in market.
5
Chairman and CEO’s Address
continued
Positive clinical data
Our commercial success during the year was underpinned
by new positive clinical data which showed that our Airway
Technology alone, or in combination with ExVentTM valve
technology, dramatically improves treatment outcomes
for sufferers of obstructive sleep apnoea.
Team and advisors
Our Medical Technology Advisory Board remained very
active throughout the reporting period. We have benefitted
from the expertise of a strong and dedicated group of
sleep physicians, attorneys and marketing advisors. Their
accumulative experience has provided direction and
support spanning business models, patient protocols and
study design, and has been paramount in gaining market
credibility and recognition.
This expert leadership has augmented our own strong
team, which was rounded out further with additional North
American appointments during the period to support our
commercial roll out.
Financial strength
Post reporting period, we announced the completion
of a placement to new and existing institutional and
sophisticated investors, and the successful close of an
entitlement offer to existing shareholders. Combined,
the offers raised $9.3 million.
These funds will be critical as we scale up our team and
resources to support the fast-growing demand for our
Sleep Treatment Platform across North America. We
were humbled by the amount of support that there was
for Oventus through the capital raise and thank all those
investors who participated.
Outlook
With key regulatory clearances now in place and a robust
cash balance following the recent capital raising, we are
in a strong position to scale sales substantially across our
key markets of Australia, Canada and the US. We expect to
secure further agreements across these markets over the
next 12-24 months, with a view to significant scaling through
to the end of CY2020.
This is an exciting time for Oventus and we again thank
shareholders for their ongoing support. We look forward
to regularly reporting on progress as we drive forward our
commercialisation efforts.
Yours sincerely,
Dr Mel Bridges
Chairman
Dr Chris Hart
Chief Executive Officer
and Managing Director
6
Annual Report 2019 Oventus Medical Limited Products in Market
O2Vent® Optima
The O2Vent® Optima is an oral device for patients diagnosed with obstructive sleep apnoea (OSA) and who are
Unmask your
seeking alternatives to CPAP therapy. It is a custom fit mouthpiece (oral appliance) that is small, discreet and
comfortable. This new modality of sleep apnoea treatment has taken traditional oral appliances to the next level.
sleep potential.
O2Vent®
Unlike other oral appliances that only advance the jaw forward, the O2Vent® Optima is designed with a unique
airway channel that bypasses common areas of obstruction such as the nose, tongue and upper airway. This
product was specifically crafted to meet the unmet needs of individuals diagnosed with sleep apnoea and who
have difficulty using CPAP. O2Vent® Optima is a simple and effective alternative to CPAP treatment.
How O2Vent® works
How O2Vent® works
3
The O2Vent®
advances and
stabilises the
lower jaw,
brings the
tongue forward
and opens the
airway
ExVentTM
Air can be drawn into the
O2Vent® if there is a nasal
or soft palate blockage
1
2
Air passes
through to
the back of
the throat
The O2Vent® airway channel enables
ExVentTM is an optional valve accessory which is inserted into the front oral airway of the O2Vent® Optima. It is
designed to enhance the effects of oral appliance therapy, used for the treatment of snoring and mild to moderate
sleep apnoea. ExVentTM valves have air vents that open and close as you breathe. When you breathe out, the valve
closes, prolonging your outward breath. This increases the level of upper airway support (referred to as positive end
expiratory pressure or PEEP).
Ask your doctor NOW
the device to the back of the throat,
about O2Vent®
bypassing common sites of obstruction
The ExVentTM is available in three strengths for improved airway support and is currently in market within Australia
and Canada. It is yet to proceed through the FDA application process in the US.
such as the nose, tongue and soft palate.
Low
Medium
High
OM201AUS_Mar 2019
O2Vent.com
7
Products at Development Stage
O2Vent® ONEPAP™
The O2Vent® ONEPAP™ is a titratable
oro-nasal valve accessory for
O2Vent® devices. Clinical trials have
shown that the O2Vent® ONEPAP™
further increases efficacy of the
O2Vent® for patients suffering from
hard-to-treat OSA. It regulates
nasal and mouth exhalation
simultaneously, which effectively
keeps the patient’s airway open
longer, enabling better breathing.
Product Innovations
O2Vent® Connect™
The O2Vent® Connect™ is an add-
on accessory for the O2Vent® which
connects to a CPAP machine. Clinical
trials have shown the O2Vent®
Connect™ further increases the efficacy
of the O2Vent® in patients suffering
from more severe OSA. It allows
patients to use their CPAP machines
without the need for a mask or straps
and also enables CPAP to be delivered
at much lower pressures, making it
more tolerable.
8
Annual Report 2019 Oventus Medical Limited Business Strategy and Operations
1. Strategic shift to ‘lab in lab’ model
2. Educating physicians
3. Educating consumers
4. Publication and presentation of clinical data
5. Capital raising completed to maintain a strong balance sheet and support sales growth
1. Strategic shift to ‘lab in lab’ model
During the year we introduced our new ‘lab in lab’ model which is designed to simplify the patient experience and build
value for all stakeholders.
The main features of the model are:
– It provides support, training and the resources required to manage a professional dental-sleep medicine collaborative
care location
– It utilises Oventus’ O2Vent® Sleep Treatment Platform and digital solutions, streamlining workflows and simplifying the
patient journey
– It requires minimal capital expenditure with the supply of a desktop scanner and web-based Electronic Medical
Records (EMR)
The model overcomes the fact that participation by both sleep physicians and dentists is required when it comes to
managing OSA. The two groups have traditionally operated separately due to their different areas of practice.
Our approach creates a conduit where both the Sleep Channel and Dentist can care for a patient at a point of service
already established, providing sleep physician or dentist support where required and enhancing the flow of information to
overcome this segregation.
Collaboration between the channels is needed because sleep physicians must prescribe an oral appliance under law, and
a dentist scans and fits the device. The patient is followed up by the dentist to ensure comfort and fit of a device, and also
by the physician to manage treatment of the OSA.
The ‘lab in lab’ collaborative clinical model ensures both groups participate effectively in this process, enabling them to
provide end-to-end treatment solutions to patients. It also provides a seamless treatment platform for patients to access
Oventus Airway Technology, irrespective of where the patient sought their treatment.
The demand for this model is large and growing quickly with the first material agreements in Canada and the US signed
during the financial year and more signed and announced post year end. There is a large and growing pipeline of sleep
groups in discussion and negotiations to adopt Oventus technology and the ‘lab in lab’ clinical delivery model. Many
of these are expected to be finalised and announced in FY2020 and beyond. The fact that many of these agreements
were executed before the O2Vent® Optima received FDA clearance is testament to the technology and the clinical
delivery model.
What is driving adoption of the ‘lab in lab ’model?
– It can increase revenue and profit for both the dentist and sleep groups and improve clinical outcomes for patients
– Sleep networks prefer prescribing an Oventus device over traditional treatments due to improved treatment outcomes
and improved profitability
– Dentists prefer working with Oventus due to more predictable treatment outcomes, sleep channel support for the
patient journey and improved profitability
To support the introduction of the ‘lab in lab’ model and our US sales strategy, we established a small office in Irvine,
California to house our US head office and supporting infrastructure. We also set up the AwakeXpress consumer website
to facilitate the customer experience. Through the site, consumers can educate themselves on Oventus products, find out
if the O2Vent® Optima is right for them and also find an accredited provider.
9
Business Strategy and Operations
continued
The traditional patient journey is lengthy and problematic:
Patient referred
to a sleep
physician
New mask
dispensed via
DME distributor
Follow up with
sleep physician
at 60 and
90 days
Patient not complaint
or abandoned therapy
CPAP picked up
by DME
Historically,
treatment delays
occur due to a
lack of received
documentation/
reports that
accompany
referrals, either
to or from the
clinician
Sleep test
performed
at home or
in the lab
Most patients not
yet compliant
Patient coached
Order placed for
new mask
Patient may
be suggested
oral appliance
therapy (OAT)
Patient may
have to locate a
trained dentist
themselves
Follow up
consultation
30 day CPAP
follow up with
sleep physician
Oral appliance
delivered
Oral appliance
is titrated over
time to optimal
treatment
CPAP ordered
35% refuse PAP
treatment
CPAP dispensed
via Durable
Medical
Equipment (DME)
distributor*
Dental Follow Up
Referral back to
Sleep Facility
* Durable Medical Equipment (DME) Distributor
Patient needs to be
compliant at 90 days for the
DME to get paid (4 hours
per night, 70% of time for
30 consecutive days)
Along every clinical touch-point, the patient’s notes, progress and recommendations must be documented. These notes,
prescription, sleep study and follow up details must be available to the dentist prior to scheduling appointments for oral
appliance consideration. The dentist must also report when they believe optimal titration is achieved.
‘Lab in lab’ digital workflow
The ‘lab in lab’ model is a collaborative care approach to address what is often a difficult and fragmented pathway for
patients, as well as for the sleep physician and dentist. With a digital workflow and a sophisticated patient management
platform, the two professional entities are digitally connected to enable this collaborative approach, even when they
operate in separate environments. The digital workflow and web-based platform manages both dental and medical patient
records, including prescriptions, patient notes, oral scans and sleep study results. All data is stored and operates within a
secured environment that complies with US Health Insurance Portability and Accountability Act (HIPAA) standards. This
patient management platform also offers a billing service module and enables shared capabilities for patient scheduling.
1
2
3
Sleep physician
assessment completed/
Patient notes, sleep
study & prescription
entered into EMR*/
Patient appointment
scheduled
Dentist accesses
prescription/
Patient has initial visit
and scan/
Device ordered/
Data/notes entered in EMR
Patient appointment
scheduled
Dentist completes
device fitting & notes/
Schedules patient
follow up/
Follow up continues to
reach optimal titration/
Patient scheduled with
sleep doctor
Clinical providers
continue patient care
and follow up per
medical necessity. Both
the patient and the
clinicians’ benefit from
a more streamlined,
efficient patient
management solution
This model significantly improves what until now has been a highly fragmented clinical experience for patients.
* Electronic Medical Record (EMR)
10
Annual Report 2019 Oventus Medical Limited Business Strategy and Operations
continued
2. Educating physicians
During the financial year, our ‘lab in lab’ model and US
sales and marketing efforts were supported by data
generated from a robust clinical trial program and clinician
education campaign, with Oventus taking part in several
prominent industry conferences and conducting multiple
“Discovery, Dine & Learn” sessions which engaged an
increasing number of dentists and sleep physicians who
are now educated and trained to prescribe and order
Oventus products. In many instances, Oventus technology
is now being offered alongside CPAP as a viable treatment
alternative. While the adoption of the technology is still
in its early stages, progress has been gathering pace
with a pipeline of sleep groups and facilities currently
being onboarded with the technology and the clinical
delivery model.
3. Educating consumers
Oventus is in the early stages of launching
AwakeXpress.com - a patient engagement tool and
gateway to further their self awareness around their OSA
symptoms and journey. It provides options to explore why
they may be struggling or experiencing CPAP intolerance
and offers an alternative treatment option. It is founded
on the belief “if you sleep better, you live better”. When a
person suffers with OSA, sleep becomes a nightmare for
them as they are not getting a good night’s rest. It also
affects others in the household who are interrupted by
loud snoring, gasping and sometimes choking.
Of those diagnosed with OSA, 85% are prescribed a CPAP
device. However, more than half of these individuals are
unable to adjust to this treatment. For many, this is due to
mouth breathing which occurs mainly due to the inability
to breathe through the nose.
AwakeXpress not only provides the support and
understanding a struggling patient needs but also
explains why they may be struggling or experience CPAP
intolerance. We introduce a simple patient screening
tool called the ‘NOSE’ questionnaire, which helps the
visitor identify their level of nasal issues and if they are a
candidate for the O2Vent®. The individual receives a score
and an opportunity to find a sleep/dental provider for
appropriate treatment for their OSA.
AwakeXpress supports the collaboration of the
sleep physician and the dental practitioner.
AwakeXpress offers a digital network of accredited sleep
physicians and trained dental sleep practitioners, to provide
them referrals from patients seeking treatment alternatives.
The strategy for building this digital network focuses on:
– engaging with struggling or CPAP intolerant patients
to offer hope via our innovative treatment alternative
– highlighting to potential patients the role mouth
breathing/nasal obstruction plays in CPAP non-
compliance
– working across social media to funnel patient referrals
from direct-to-consumer marketing campaigns into the
optimised patient portal: AwakeXpress.com. This referral
program benefits both providers and patients
– offering patients easy access and discount incentives
to schedule appointments.
Oventus is in the process of populating labs and Carestream
dental scanning providers into the AwakeXpress ‘Find a
Provider’ page and we expect the provider finder to be
fully operational by end of CY2019. We will continue to
add providers to the site as they are onboarded to deliver
Oventus products.
4. Publication and presentation of clinical data
A key part of the strategy this financial year has been the
presentation of our clinical data at key industry conferences
and the presentation of that data in key scientific journals.
Clinical data summary
Clinical work across multiple trials, through which over 170
patients were treated, showed that the O2Vent® devices in
combination with Oventus accessories successfully treat
more than 75% of patients without the need for CPAP.
In keeping with earlier studies, the most recent data
showed that patients with nasal obstruction who would
normally struggle with treatment were found to benefit
owing to the Oventus O2Vent®’s Airway Technology and that
patients that had failed prior lines of therapy were shown to
benefit from Oventus Airway Technology. The addition of
the ExVentTM valve to the O2Vent® airway duck bill delivered
a 30% increase in efficacy. ExVentTM acts as a micro-CPAP,
to naturally improve airflow and airway stability.
Presentation of clinical data
In September 2018, positive clinical data on Oventus’
sleep treatment platform was presented at the European
Respiratory Society (ERS) Congress in Paris, France – the
largest meeting of respiratory professionals in the world,
with more than 22,000 delegates in regular attendance.
The presentation by Professor Danny Eckert and Benjamin
Tong of Neuroscience Research Australia (NeuRA)
summarised data released by Oventus in May 2018 from
two arms of the Company’s ongoing “NeuRA study”i.
i
About the NeuRA study and the Australian Federal Government-funded CRC-P project. The NeuRA study is being conducted as part of the $2.95m Australian
Federal Government-funded Cooperative Research Centres Programme (CRC-P) project, entitled, "Targeted therapy for sleep apnoea: A novel personalised
approach". The project aims to improve the efficacy, compliance and monitoring of sleep apnoea therapy using a tailored suite of treatments to suit the needs
of the individual patient. The range of therapies to be used, singularly or in combination, include oral appliances (with mandibular advancement and an
airway) -with or without a positive airway pressure machine (with reduced pressure and air flow), supplemental oxygen delivery and/or a sleep consolidation
aid. Oventus Medical is the lead participant together with Medical Monitoring Solutions Pty Ltd, Neuroscience Research Australia (NeuRA), Western Sydney
University (WSU) and the CSIRO.
11
Business Strategy and Operations
continued
The data showed the ability of Oventus Airway Technology to treat patients with nasal obstruction with Oventus’ O2Vent® as
a stand-alone oral appliance and that through Oventus’ Sleep Treatment Platform, patients requiring CPAP can be treated at
lower pressures and without the need for a full face mask.
Professor Eckert’s contributions were recognised at the American Association of Dental Sleep Medicine (AADSM) conference
in June 2019, where he was awarded the prestigious Pierre Robin Award for exceptional initiative and results in the dental
sleep field. Danny’s accomplishments are well deserved and inspire the Oventus team to continue our path of innovation.
Also in June, a peer-reviewed paper on Oventus’ clinical data was published in the scientific and medical journal, SLEEP®.
The paper demonstrated how Oventus’ O2Vent® mandibular advancement splint (MAS), used in combination with valves such
as the ExVentTM and O2Vent® OnePAPTM, reduces the severity of (OSA) to therapeutic levels for a substantial proportion of
incomplete/non-responder patients, compared to MAS therapy alone.
Early adoption of the Oventus Sleep Treatment Platform is being driven by Oventus’ research work and growing clinical
evidence that is demonstrating that the O2Vent® technology can deliver greater efficacious treatment outcomes when
compared to current commercially available oral appliances. Sleep physicians are acknowledging that Oventus has brought
to market the most innovative, non-invasive treatment for sleep apnoea that they have seen in decades.
Cumulative Success* Rates Using Oventus Airway Technology
MAD = 56% Treatment success**1
Oventus O2Vent® = 63% Treatment success1
Oventus O2Vent® + ExVentTM = 80% Treatment Success2
Oventus O2Vent® + ONEPAPTM = 85% Treatment Success2
Oventus O2Vent® + ConnectTM = 100% Treatment Success3
1.
2.
3.
Karen McCloy, Damian Lavery, Julia Moldavtsev, Airway open-airway closed: The effect of
mandibular advancement therapy for obstructive sleep apnoea with and without a novel in-built
airway. Abstract Submitted ASA Brisbane 2018
Victor Lai, Benjamin Tong, Carolin Tran, Andrea Ricciardiello, Michelle Donegan, Nicholas
Murray, Jayne Carberry and Danny Eckert. Combination therapy with mandibular advancement
and expiratory positive airway pressure valves reduces OSA severity. Sleep, vol 42, no. 8, Aug
2019, zsz119
Amatoury J, Tong B, Nguyen C, Szollosi I, Eckert DJ. The role of a novel oral appliance therapy
device on pharyngeal pressure swings and CPAP requirements during sleep in obstructive
sleep apnea: A pilot study. Abstract Supplement AADSM Boston 2017
** Where treatment success is defined as % of users in whom the AHI was reduced to ≤ 10
Cumulative Treatment
Success using Oventus
Airway Technology (AHI≤10)
100
80
60
40
20
0
MAD
O2Vent® O2Vent®
+ ExVent
O2Vent®
+ ONEPAP
O2Vent®
+ Connect
Capital raising completed to maintain a strong balance sheet and support sales growth
5.
Just post the end of the financial year, we announced the completion of a placement to new and existing institutional and
sophisticated investors, and the successful close of an entitlement offer to existing shareholders. Combined, the offers
raised $9.3 million.
These funds ensure Oventus maintains a robust balance sheet and will support the continued rollout of the ‘lab in lab’
model and as we scale up our team and resources to support the fast-growing demand for our Sleep Treatment Platform
across North America.
12
Annual Report 2019 Oventus Medical Limited Oventus USA Team
We continue to add key support roles to our USA and Canadian team as
we grow. We currently have a highly skilled and experienced team of 11
across the areas of sales, corporate development, marketing, operations,
regulatory, education, training, IT, clinical and customer support. We expect
to add additional roles as we roll out the ‘lab in lab’ model and as key
milestones are met. Some of the team include:
Robin Randolph
Peggy Powers
Robyn Woidtke
Masoud Vahidi
Brian Ueda
Clinical Educator
Experienced clinical
educator and authority
in the sleep and
respiratory industry.
Registered Respiratory
Therapist for 20+ years.
Highly skilled in the
design and delivery
of comprehensive
training programs for
health care providers.
Frequent presenter/
educator.
Sr. Vice President
Sales, Marketing,
Operations,
North America
Accomplished
Marketing and Sales
executive with 30+
years in the Sleep
Industry. In-depth North
America medical device
commercialisation
experience; product
management,
clinical education,
reimbursement,
and sales. Sleep
Centre operations
management
experience.
Director, Clinical and
Regulatory Affairs
MSN, RN,
undergrad degree
in Clinical Research
Administration. 30+
years in the field of
sleep health, 20+
years in the medical
device (sleep) industry
including clinical
research, marketing,
education and
regulatory activities,
using a consistent
patient focused
approach across all
aspects of the product
life cycle.
VP Operations,
North America
Operations focused
with 15+ years’
experience in upstream
and downstream
marketing of medical
devices for sleep
apnoea, COPD and
dental restoratives
products. Former Senior
Marketing Manager at
KaVo Kerr.
Marketing
Operations Manager
Skillful marketing
manager with an
innate ability to take
complex campaigns
and execute them
with tactical precision.
Highly versatile
with experience in
events, campaign
management,
advertising, social
media, graphic design,
photography and video
production.
13
Board and Management
Oventus Medical Limited is led by an experienced and professional Board
of Directors and Management team, all of whom bring a breadth and depth
of professional experience and commercial acumen to the business.
Dr Mel Bridges
Dr Chris Hart
Mr Neil Anderson
Ms Sue MacLeman
Chairman and Non-
Executive Director
Mel has more than 35 years’
experience founding and
building international life
science, diagnostic and
medical device companies
and commercialising a
wide range of Australian
technology. He is responsible
for numerous commercial
and M&A transactions and
liquidity events, including
listings on the ASX. Mel has
received national and state
business awards including the
2005 AusBiotech Chairman’s
Industry Medal and 2004
Queensland Entrepreneur of
the Year. Mel has founded and
developed medical device
and diagnostic companies,
including Pacific Diagnostics
(acquired by Baxter), PanBio
Ltd (acquired by Inverness
Medical), and ImpediMed
Ltd (ASX: IPD). Mel acted as
director of ASX-100 company
ALS Ltd until July 2019.
14
Non-Executive Director
Sue MacLeman has more
than 30 years’ experience
as a pharmaceutical,
biotechnology and medical
technology executive
having held senior roles
in corporate, medical,
commercial and business
development. Sue has also
served as CEO and Board
member of several ASX- and
NASDAQ-listed companies
in the pharmaceutical sector
and is currently Chair of
MTPConnect (MTPII-GC Ltd),
Chair of Anatara Lifesciences
Ltd (ASX:ANR), Chair of Novita
Healthcare Ltd (ASX:NHL),
Non-Executive Director of
Palla Pharma Ltd (was TPI
Enterprises) (ASX:PAL), Non-
Executive Director of Oventus
Medical Ltd (ASX:OVN) and
Non-Executive Director of
veski. Sue is also appointed
to several academic and
government advisory
committees. Her broad
commercial experience is
underpinned by graduate
qualifications in pharmacy and
post graduate qualifications
in commercial law, corporate
governance, business
administration and marketing.
Founder, Managing
Director and Chief
Executive Officer
Chris is the founder of the
Company and inventor of the
O2Vent® design concept. Chris
is overseeing the launch of the
O2Vent® Optima to patients
and through both clinicians
and sleep labs. He heads
the management team as it
rolls out the Oventus ‘Sleep
Treatment Platform’ and ‘lab
in lab’ model across Australia,
the United States and Canada.
Chris is also heavily involved
with training and presenting
to the dental and sleep sector.
Chris graduated from the
University of Queensland
in 1998 with a Bachelor of
Dental Science with Honours
and a Bachelor of Science in
Biochemistry. He has studied
at Cambridge University
where he graduated with
a Master of Philosophy in
Biomedical Science in 1999.
Prior to establishing Oventus,
Chris owned and managed
a multi-site national dental
practice, training institute and
management consultancy
which he sold to private equity
investors.
Chris also acts as an adviser
to various bodies within the
dental industry, as well as
the health care sector more
broadly on the commercial
aspects of health care
delivery.
Chief Technical Officer
An experienced company
executive and biomaterial
scientist, Neil started working
with Dr Chris Hart in 2013, to
develop and commercialise
the O2Vent® and bring it
to market. Neil has been
responsible for managing the
collaboration process with the
CSIRO to develop a remotely-
managed computer aided
detection (CAD) imaging and
3D printing manufacturing
platform, as well as the patent
portfolio, quality systems and
regulatory clearances for the
product to date.
Neil has more than 30 years’
experience in commercialising
medical devices and
managing the process from
conception to market release
including applied research,
developing prototypes and
testing, product development,
manufacturing, regulatory
submissions and clinical trials.
Prior to taking on his role
with Oventus, Neil founded
and held the role of Chief
Executive Officer of CathRx
for 10 years. In this role, Neil
managed the process from
the invention of the company’s
technology through to
commercialising a range of
products leading to sales in
Europe.
Neil has a Bachelor of Applied
Science (Hons) and a Diploma
of Management and is a
Graduate of the Institute of
Company Directors (GAICD).
Annual Report 2019 Oventus Medical Limited Sharad Joshi
Mr Stephen Denaro
Mr Dan Parry
Ms Robin Randolph
Company Secretary
Steve has extensive
experience in mergers
and acquisitions, business
valuations, accountancy
and income tax compliance
services, as well as board
corporate governance. Steve
provides company secretary
services for a number
of biotech and software
companies. Steve is also a
member of the Institute of
Chartered Accountants in
Australia, and the Australian
Institute of Company Directors.
Non-Executive Director
Based in Boston, Sharad has
been active in the medical
technology industry for more
than 30 years and has held
senior positions for the past
10 years including as a global
entrepreneurial medical
devices CEO with experience
in launching medical devices,
a strong track record of driving
rapid global growth and laying
the strategic foundations for
sustained success through
strategic and biomedical
product innovation. Sharad
brings deep expertise in
the North American and
global markets in product
development, marketing
and sales, most recently as
CEO of US-headquartered
Microline Surgical (a wholly
owned subsidiary of Tokyo
Stock Exchange listed
HOYA Corporation) where
he was responsible for
executing growth strategy
and market building, selling
into 60 countries. He holds
qualifications in mechanical
engineering and subsequently
specialised in the biomedical
space and also holds an MBA.
Chief Financial and
Operations Officer
Dan Parry joined Oventus in
December 2017 with more
than 20 years’ experience as
CFO and Company Secretary
in the life science, technology
and medical service sectors.
Dan has held senior finance
roles with companies in the
US, UK and Australia, ranging
from venture-backed start-ups
to NASDAQ listed companies
including Astellas, Synergen,
Cortech, Heska, Accera and
Implicit Bioscience Ltd. His
experience also includes
corporate finance and internal
audit roles with a Fortune
100 company and six years in
public accounting where Dan
qualified as a CPA in the US.
In these roles, Dan has
managed finance, accounting,
human resources, information
technology, facilities, legal
and compliance functions
and mergers and acquisitions.
Dan is professionally qualified
as a Chartered Accountant in
Australia and as a CPA in the
US, with an MBA from the J.L.
Kellogg Graduate School of
Management in Chicago.
Sr. Vice President Sales,
Marketing, Operations,
North America
Robin’s sleep background
originated from being an early
adopter of the establishment
of sleep centres in the US.
Her experience included
management of the clinical,
operational and marketing
aspects of the business.
Robin Randolph is an
accomplished marketing
and sales executive with
over 30 years’ experience in
the sleep industry, including
past ownership of US sleep
centres.
Robin joined Oventus Medical
in April 2018 as Vice President
of Marketing and Operations,
North America. Robin’s vast
experience spans medical
device commercialisation,
product management, clinical
education, reimbursement
and sleep centre operations
management.
Robin has held senior
management roles in
these areas for both
ResMed and Fisher &
Paykel Healthcare. She is
passionate about education
for patient management of
sleep disorders, including
obstructive sleep apnoea,
sharing her in-depth industry
knowledge and promoting the
advantages of the Oventus
Airway Technology.
15
Medical Technology Advisory Board
To guide the launch and commercialisation of the Oventus ‘Sleep Treatment Platform’ to
US Sleep Professionals and to further validate our product development work, Oventus
appointed a Medical Technology Advisory Board (MTAB) in September 2018.
Lee A. Surkin
MD, FCCP
Richard K. Bogan
MD, FCCP, FAASM
Jerrold A. Kram
MD, FCCP, FAASM
Mark Hickey
MD
Associate Clinical
Professor, Chief Medical
Officer, Director
Richard K. Bogan is Associate
Clinical Professor at the
University of South Carolina
School of Medicine in
Columbia, SC and Medical
University of SC in Charleston,
SC. He is a founder, the Chief
Medical Officer and a Director
of SleepMed Inc., the largest
sleep diagnostic company in
the U.S.
Dr. Bogan received his
medical degree from the
Medical University of South
Carolina in Charleston, SC.
He completed his Internal
Medicine residency at
the University of Alabama
Hospitals and Clinics and
his Pulmonary, Critical Care
fellowship at the University of
Alabama School of Medicine,
both in Birmingham, Alabama.
Dr. Bogan is board certified in
sleep medicine, pulmonary
medicine and internal
medicine with previous
certification in critical care.
He has served as the medical
director for several hospital
departments and on business,
community, and civic boards.
He is dedicated to creating
standards of excellence in
sleep disease management.
Chief Medical Officer
of N3Sleep
A private practitioner in
cardiology, sleep medicine
and obesity medicine, Dr
Surkin is one of a small
group of physicians to be
triple board certified in
cardiology, sleep medicine
and nuclear cardiology.
His professional career has
evolved from practicing
cardiology exclusively to a
unique practice model that
emphasises a comprehensive
wellness approach by
incorporating sleep,
cardiovascular and bariatric
medicine.
In 2009, Dr. Surkin created
Carolina Sleep – the only
dedicated, full-service sleep
medicine practice in eastern
NC, offering in-centre and
home sleep testing. He also
created a cardiovascular and
sleep healthcare model using
a multi-faceted diagnostic
and treatment approach that
is enhanced by a network of
relationships with physicians,
dentists, respiratory therapists,
sleep technologists and
public officials who recognise
the important role that sleep
medicine has in our daily life.
In 2012, Dr. Surkin founded
the American Academy
of Cardiovascular Sleep
Medicine. In 2014, he founded
the Carolina Clinic for Health
and Wellness.
16
Medical Director of the
California Center for
Sleep Disorders (with
8 locations)
Dr. Jerry Kram is board
certified in internal medicine,
pulmonary medicine and
sleep medicine. He has
lectured extensively on sleep
and has conducted many
clinical trials of treatments
for various sleep disorders
and published articles and
chapters on this topic.
He is on the faculty of the
School of Sleep Medicine at
Samuel Merritt University and
a member of the Board of the
National Sleep Foundation.
Founder, Colorado Sleep
Institute
Dr Hickey founded the
Colorado Sleep Institute
(formerly Rem Sleep Medicine
PC) in 2010, which provides
comprehensive care for
the full spectrum of sleep
disorders. He is a Mayo-
trained Neurologist and is both
fellowship-trained and board
certified in Sleep Medicine.
After graduating from the
University of South Florida
College of Medicine Dr. Hickey
pursued a residency in adult
Neurology at Mayo Clinic
Arizona, then a fellowship in
Sleep Medicine at Louisiana
State University Health
Sciences Center.
Dr. Hickey was an Assistant
Professor of Sleep Medicine in
the Department of Neurology
at Louisiana State University
Health Sciences Center prior
to founding the Colorado
Sleep Institute.
At the American Academy of
Sleep Medicine, Dr. Hickey
serves as a Welltrinsic Board
member. At the Boulder
Valley Individual Practice
Association, he is both a Board
and Credentials Committee
member. At the Boulder Valley
Care Network, he serves as a
Board member. He is an active
member of the Colorado
Medical Society and Boulder
County Medical Society.
Annual Report 2019 Oventus Medical Limited Reporting to CEO, Dr Chris Hart, the MTAB comprises a US-based consultative advisory body of highly
experienced leaders and international experts in sleep medicine. This advisory body provide input
and guidance into Oventus’ clinical, developmental and commercial strategy, focused on introducing
Oventus’ products to the sleep channel in the USA. Members of the MTAB have been appointed with
a three year term, renewable by mutual agreement.
The MTAB is composed of the following leading sleep physicians and advisors:
Mark A. Rasmus
MD
Medical Director, Idaho
Sleep Health
Dr. Rasmus obtained his
Bachelor’s degree from
Dartmouth College and his
medical degree from St.
George’s University School
of Medicine. He completed
a combined residency
in internal medicine and
paediatrics through Albany
Medical Center in New York,
followed by a pulmonary/
critical care fellowship at the
University of Utah and a sleep
medicine fellowship at LDS
Hospital in Salt Lake City,
Utah. Dr. Rasmus has been
board certified in paediatrics,
internal medicine, pulmonary
medicine, critical care and
sleep medicine.
Dedicated to public education
on sleep matters, Dr. Rasmus
has appeared on television,
speaks to community
groups and physicians, has
conducted clinical research
and published articles in sleep
disordered breathing and
CPAP humidification.
Dr. Rasmus is a member of the
American Academy of Sleep
Medicine and the American
College of Chest Physicians.
Daniel B. Brown
Myra G. Brown
Partner, Healthcare
and Corporate Practice
Groups, Taylor English
Duma LLP Atlanta,
Georgia.
Dan is an accomplished
corporate and healthcare
attorney who regularly advises
clients on the legal and
regulatory aspects associated
with the operation and sale of
health care businesses.
He represents a variety of
sleep medicine providers,
durable medical equipment
suppliers, medical device
manufacturers, physician
groups, health care
franchisors and health
systems on structuring health
care business operations
and maintaining regulatory
compliance with the Stark
laws, Anti-Kickback Laws
and HIPAA.
Dan served as Treasurer and
a member of the Executive
Committee of the National
Sleep Foundation. He is on
the Faculty of the Atlanta
School of Sleep Medicine
and Technology.
President, MBrownGroup
LLC
Myra has more than 30 years
of experience managing,
consulting, directing and
developing business
opportunities for health
care companies, device
manufacturers, health insurers,
entrepreneurs, and individual
health care providers. She
has an MBA in Healthcare
Administration from the
Wharton School, University
of Pennsylvania, and began
her career with Hospital
Corporation of America (HCA).
She later served as the Chief
Operating Officer of The Bill
Wilkerson Center of Vanderbilt
University.
In Myra’s consulting
practice, she develops
strategic business, branding
and marketing plans for
companies ranging from
new business start-ups to
multinational entities. For the
past 12 years, she has focused
on the consumer sleep
market.
Pedro J. Cuartas
DDS
Clinical Director of South
LA Dental Sleep Medicine
CEO, Dental Sleep
Services, LLC
Dr. Cuartas was born and
raised in New Orleans, LA.
In 1996, he received his B.S.
degree from Loyola University
and graduated from Louisiana
State University School of
Dentistry in 2000. In addition
to his general dental practice,
he has also developed a
special interest in obstructive
sleep apnoea (OSA), TMJ,
orthodontics, and implant
dentistry.
He is the Dental Director
for South LA Dental Sleep
Medicine, which is accredited
as a Dental Sleep Medicine
Facility by the American
Academy of Dental Sleep
Medicine.
Dr. Cuartas began his
professional involvement
with Dental Sleep Medicine
in 2007, and recently created
Dental Sleep Services, LLC.
This business out-reach
helps physicians incorporate
a proactive approach to
screening for sleep breathing
disorders and home
sleep testing services for
Obstructive Sleep Apnoea into
their practices. The goal is to
generate greater awareness of
OSA in the community.
17
Directors’ Report
The directors present their report, together with the
financial statements, on the consolidated entity consisting
of Oventus Medical Limited (‘the Company’) and the entities
it controlled (‘the Consolidated Entity’; ‘the Group’) at the
end of the year ended 30 June 2019.
Directors and company secretary
The names of the Directors of the Company during the year
and up to the date of this report are noted below. Directors
were in office for the entire period unless otherwise stated:
Dr Mel Bridges
Chairman
Dr Chris Hart
Executive Director
Mr Neil Anderson
Executive Director
Ms Sue MacLeman Non-Executive Director
Mr Sharad Joshi
Non-Executive Director
(appointed 17 December 2018)
Mr Stephen Denaro Company Secretary
Principal activities
Oventus (ASX: OVN) is a Brisbane, Australia-based
medical device company that has commercialised and
brought to market a new platform for the treatment of
obstructive sleep apnoea (OSA) and snoring. The Oventus
Sleep Treatment Platform enhances treatment outcomes
delivered by conventional oral appliance therapy and
Continuous Positive Airway Pressure (CPAP) therapy,
through increased efficacy and greater adherence by
patients when compared with these older treatment
methods.
During the year, Oventus was principally focused on
commercialisation and distribution of its Sleep Treatment
Platform, including its ‘Airway Technology’ in the key
geographies of Australia, Canada and the US. In addition,
the Company was focused on enabling adoption of
its products through its recently launched ‘lab in lab’
business model and to execute on a strategy to deliver
the shortest pathway to reach cash flow break even.
Review of operations
The loss for the Consolidated Entity after providing
for income tax amounted to $7,848,255 (2018: loss of
$5,870,547). The Consolidated Entity earned $331,837 in
revenue for the year ended 30 June 2019 (2018: revenue of
$271,332) and incurred operating expenses of $8,486,805
for the year ended 30 June 2019 (2018: $6,424,042).
Development expenditures of $1,318,854 incurred during
the year ended 30 June 2019 (2018: $1,737,286) were
capitalised in the consolidated statement of financial
position. The Consolidated Entity received $1,039,988 from
the Australian Federal Government in November 2018
as a credit rebate for the Company’s 2018 financial year
R&D spend.
18
‘lab in lab’ model
This new business model puts patients at the centre of
care and is designed to simplify the patient experience and
build value for all stakeholders, including dentists and sleep
physicians. It ensures both dentists and sleep physicians
participate effectively in providing end-to-end treatment
solutions and provides a seamless treatment platform for
patients to access Oventus Airway Technology, irrespective
of their point of care.
Demand for the model within the sleep channel is large
and growing quickly with Oventus signing a number of
agreements during the financial year. In June, the Company
announced that it had signed an agreement with the first
sleep groups in Canada who will sell O2Vent® Optima
and ExVent™ across 7 clinical delivery sites, while in May
a large dental corporate and collaborative sleep group
in the Carolinas agreed to introduce the Sleep Treatment
Platform into their treatment protocols. Post the year end,
first agreements were announced in the US under the ‘lab
in lab’ model for the O2Vent® Optima.
To underpin the broad adoption of the new ‘lab in lab’
business model, synergistic agreements were also signed
in July with VirtuOx, Carestream Dental and Lyon Dental.
These agreements enable patients to receive devices
from the Oventus Sleep Treatment Platform regardless of
whether they start their patient journey within the dental
channel, or sleep channel. They remove a number of
barriers to the delivery of seamless patient care which
have been in place for many years.
In parallel, considerable effort has been put into a
restructure of Oventus’ operations to reduce fixed costs
and eliminate inefficiencies. This reduction in fixed costs has
allowed for a significant investment into a North American
go-to-market campaign and development of the lab in lab
business model.
Distribution, sales and marketing
During the year, the Company’s distribution partnership with
leading dental prosthetics group, Modern Dental, became
non-exclusive, allowing Oventus the ability to distribute to
national sleep groups and sleep hybrids directly.
To help drive referrals through both channels, Oventus is
focused on stakeholder education, generating clinical data
and product marketing. A significant earned media and
social media campaign was launched during the financial
year to funnel struggling and CPAP-failed patients into
a network finder, where they could receive education,
direction and locate local providers that are trained and
aligned with the Oventus product line.
The investment in the sleep channel is being spearheaded
by a newly formed, but very experienced and well
credentialled US sales team headed by Robin Randolph.
Robin is an executive with over 30 years’ experience
in the sleep industry with in-depth North American
medical device commercialisation experience, having
held significant senior management positions at ResMed
and Fisher & Paykel.
Directors’ ReportAnnual Report 2019 Oventus Medical LimitedFor the year ended 30 June 2019 The US team is building relationships with national sleep
groups and physician networks who know those patients
currently outside of care for OSA, due to their refusal of, or
inability to tolerate CPAP.
Central to the success of this approach has been the
development and implementation of several business
models that enable these national sleep groups to deliver
Oventus Airway Technology within their own facilities,
resulting in the launch of the ‘lab in lab’ business model.
To facilitate early sales with these groups and to streamline
process for improved customer experience and reduced
delivery times, the Company has set up online order
entry, along with direct distribution, customer care and
outsourced manufacturing in the US. This will enable
Oventus to provide customers with US manufactured
O2Vent® T and W oral devices until 510(k) US Food and
Drug Administration (FDA) regulatory clearance for O2Vent®
Optima is granted, which is expected in 2H CY2019. O2Vent®
Optima will spearhead Oventus’ entry into the sleep market
and is expected to be the Company’s lead sales generator.
Throughout the last financial year, there has also been
increased focus on training sleep physicians and dentists
in the clinical application of Oventus Airway Technology.
This has occurred using a mix of online learning platforms,
presentation of data at clinical meetings and industry
conferences, as well as face-to-face training in clinics
and at structured courses.
Oventus’ sales pipeline is being driven by growing
awareness from clinicians that the O2Vent® technology
can deliver treatment outcomes comparable to the current
standard of care – CPAP – for the majority of patients in
a non-invasive manner.
The Company expects to secure further agreements across
its key target markets in the US, Canada and Australia over
the next 12-24 months, with a view to significant scaling
toward the back end of CY2019 and CY2020. Negotiations
are ongoing with multiple groups.
Product development
The majority of product development is now complete,
following a successful market release of the (Australian
Therapeutic Goods Administration registered) O2Vent®
Optima in Australia in January and Canada in February.
Remaining product development is funded substantially
through Australian federal government grants (Cooperative
Research Centre Program [CRC-P]). The ExVent™ positive
end expiratory pressure (PEEP) valve was launched
alongside the O2Vent® Optima nylon appliance range
in Australia and Canada in June 2019.
The ExVent™ integrates into the ‘duckbill’ in the airway of
the O2Vent® oral appliances, further enhancing efficacy
in the majority of patients – a key innovation in Oventus’
personalised treatment platform. This accessory controls
exhalation for patients – generating positive air pressure on
exhalation, creating a micro CPAP-type effect, without the
need for an air pump, motors or electricity.
The O2Vent® Optima nylon appliance is targeted for release
in the US in 2H CY2019. ExVent™ is expected to be launched
in the US in CY2020.
The O2Vent® ONEPAP™ appliance (incorporating a titratable
PEEP valve and nasal pillows) is currently in late-stage
development and clinical trials as part of Oventus’ CRC-P
funded study with Neuroscience Research Australia
(NeuRA). ONEPAP™ is an exciting extension of Oventus
Airway Technology with the potential to elevate the efficacy
of oral appliance therapy to that of CPAP for many patients.
The previously announced O2Vent® Connect™ CPAP
connection remains in late-stage development and
is currently the focus of partnering discussions with
manufacturers of CPAP and mask equipment. It will connect
the Oventus O2Vent® device to CPAP, enabling CPAP to be
delivered at lower pressures, without the need for a full-
face mask.
As a result of the launch of these new devices, Oventus will
be able to treat an increasing number of patients suffering
from OSA with minimal intervention, offering a patient
centric approach to CPAP medicine and the first highly
efficacious, viable alternative to CPAP for many years.
Clinical trial results
A number of clinical trial results were announced during the
financial year and presented at sleep industry conferences,
highlighting the improved efficacy and growing body of
evidence, of Oventus’ Airway Technology.
Results were reported for the OVEN-005 ‘Sydney NeuRA’
trial at the European Respiratory Society (ERS) International
Congress in September 2018 in Paris, France. Two abstracts
were presented, highlighting Oventus’ ability to improve
treatment outcomes over existing therapies and deliver
a more personalised treatment outcome to patients,
depending upon the severity of their disease, using a range
of Oventus’ treatment options.
Data has now been collected and analysed across 171
patients suffering from OSA over four clinical studies, all
consistently showing strong clinical efficacy of the O2Vent®
oral appliance, validating Oventus Airway Technology for
use in both oral appliances and as a CPAP interface.
Clinical work across multiple trials shows Oventus’ devices
successfully treat more than 75% of patients without the
need for CPAP, the current standard of care treatment for
OSA.
The OVEN-005 ‘Sydney NeuRA’ trial remains ongoing
as part of the CRC-P announced in February 2017, which
is funded through a $2.95 million grant over a three-
year period from the Australian Federal Government’s
Department of Industry, Innovation and Science. The
ongoing study, which includes a number of cohorts, will
also focus on building further clinical evidence during
financial year 2020.
19
Directors’ ReportFor the year ended 30 June 2019 Operational focus and cost reduction
During the financial year, Oventus further reduced R&D
spend and fixed costs. Resources were diverted into sales
and marketing channels as the company moves from an
R&D to a sales focus and enables Oventus to focus on
its core value proposition of driving innovation in airway
management while retaining a tight cost control.
Initiatives included reducing operating overheads by closing
the Company’s Melbourne manufacturing facility and by
fully outsourcing manufacturing of its titanium O2Vent®
appliance in a strategic move to become a virtual device
manufacturer. The O2Vent® Optima nylon range, which has
been launched in Australia and Canada, has also been fully
outsourced.
Staff functions were restructured and are now sales
and marketing focused in Oventus’ Brisbane office and
newly established small US office. Dr Chris Hart relocated
temporarily to the US in late July 2019 to spearhead the
rollout of Oventus’ ‘lab in lab’ business model.
Research and Development (R&D) and product
innovation
Research and development expenditures for the year
ended 30 June 2019 totalled $2,374,711, including $1,318,854
of development costs capitalised in the consolidated
statement of financial position and a provision for
indirect costs.
Oventus continued to conduct research and development
(R&D) activities to support product and clinical development
activities, in tandem with the market launch into overseas
jurisdictions which represent large market opportunities
for the Company’s innovative product range. The run rate
of R&D activities throughout the period was however
significantly reduced with only one program remaining,
the fully externally funded CRC-P.
Oventus is the lead participant and is pleased to work with
four other participants, CSIRO, Medical Monitoring Solutions
Pty Ltd, Neuroscience Research Australia (NeuRA), and
Western Sydney University (WSU). The focus of the CRC-P
is to develop on a personalised approach to the treatment
of OSA. The O2Vent® Optima nylon appliance, the ExVent™
and ONEPAP™ PEEP valves are key R&D outcomes over
the last year.
In addition, several product and process improvements
were implemented during the reporting period. These
included introductions of, and enhancement to 3D
modelling software for increased device customisation;
processing efficiencies and improved patient comfort;
redesign of the shape of the currently marketed O2Vent® T
and O2Vent® W (Australia, Canada and the US) for increased
strength and resilience; and upgrades to the device adjuster
assembly for improved patient usability. The 3D printing and
polishing of titanium parts was also outsourced.
Outsourced manufacturing of the new nylon device, the
O2Vent® Optima, was initially set up in Australia with further
outsourced manufacturing capability more recently set up
in the US.
20
Operational staff appointments
Oventus invested heavily in building out its operational,
sales and marketing capability in North America to support
the implementation of dental distribution arrangements and
the introduction of products into the sleep channel.
During the financial year, a number of key staff were
recruited in the US to drive marketing and sales who bring
with them long standing relationships through prior roles
in industry, as part of our go-to-market strategy. The team
is headed by Robin Randolph, Senior Vice President, Sales
and Marketing.
Financial position and results
The Company’s cash position was $3.0 million as at 30 June
2019.
The loss for the Consolidated Entity after providing
for income tax amounted to $7,848,255 (2018: loss of
$5,870,547). The Consolidated Entity earned $331,837 in
revenue for the year ended 30 June 2019 (2018: revenue of
$271,332) and incurred operating expenses of $8,486,805
for the year ended 30 June 2019 (2018: $6,424,042). The
increase in operating expenditures related primarily to
building out the operational, sales and marketing capability
in North America and the introduction of products into the
sleep channel. The Company also incurred restructure
charges in the half year in connection with the reduction of
fixed operating costs and outsourcing of certain operating
activities. Development expenditures of $1,318,854 incurred
during the year ended 30 June 2019 (2018: $1,737,286)
were capitalised in the consolidated statement of financial
position. The Consolidated Entity received $1,039,988
from the Australian Federal Government in November
2018 as a credit rebate for the Company’s 2018 financial
year R&D spend and a total of $152,174 in Export Market
Development Grants (EMDG).
Dividends
There were no dividends to shareholders paid,
recommended or declared during the current or previous
financial period.
Board and executive management changes
A change to the management team in late August 2018 saw
Dr Chris Hart assume the role of Managing Director and
Chief Executive Officer, formerly holding the role of Clinical
Director and Executive Director. Neil Anderson assumed
the role of Chief Technical Officer, formerly holding the role
of Chief Executive Officer and Executive Director. These
changes reflect Chris spearheading the Company’s move
into the lucrative US sleep market.
At the Board level, Mr Sharad Joshi joined the Oventus
Board as Non-Executive Director in late September 2018.
He brings extensive experience in the medial technology
sector and has a biomedical engineering background and
strong experience in launching medical devices in the
North American market.
Directors’ ReportAnnual Report 2019 Oventus Medical LimitedFor the year ended 30 June 2019 A US-based Medical Technology Advisory Board (MTAB) was established in September 2018 to guide commercialisation
of Oventus’ Sleep Treatment Platform. The MTAB comprises highly experienced leaders and international experts in sleep
medicine and has been active facilitating the introduction of Oventus Airway Technology as a new treatment option to US
sleep physicians.
Significant changes in the state of affairs
Other than as stated above and in the accompanying financial report, there were no significant changes in the state of affairs
of the Consolidated Entity during the reporting period.
The Company’s capital raising activities for the prior two fiscal years are shown in the table below.
Equity – share capital
Opening Balance
Ordinary shares issued:
9 August 2017
21 December 2017
Share issue costs
At reporting date
30 June
2019
Number of
Shares
#
30 June
2019
Value of
Shares
$
30 June
2018
Number of
Shares
#
30 June
2018
Value of
Shares
$
105,939,212
29,640,394
90,000,000
21,729,732
–
–
–
–
–
–
2,139,265
770,135
13,799,947
7,589,971
–
(449,444)
105,939,212
29,640,394
105,939,212
29,640,394
Significant matters subsequent to the period
On 26 July 2019, Oventus announced a capital raising in which it had received firm commitments for $7 million in a two-
tranche Placement and launched a fully underwritten $2.3 million Entitlement Offer to existing shareholders. On 1 August 2019,
the Company issued 15,757,491 shares at $0.38 per share in connection with closing the first tranche of the Placement, with
proceeds from the issuance of shares on this first tranche totalling $5,566,920 (net of issuance costs of $397,421). The funds
raised will underpin adoption of Oventus’ ‘lab in lab’ business model in the sleep and dental channels.
Oventus signed its first agreement on 15 July 2019 with a sleep group in US for the Oventus O2Vent® Sleep Treatment Platform
which treats OSA and signed synergistic agreements on 16 July 2019 with VirtuOx, Carestream Dental and Lyon Dental, to
underpin broad adoption of the ‘lab in lab’ business model.
In addition, Oventus signed further material agreements in August 2019 with two US sleep groups to supply dental sleep
medicine solutions across a total of 10 facilities.
Expected future developments
Looking ahead, Oventus expects to make significant progress in generating sales of the O2Vent® range. Key developments
expected across the coming two quarters include:
– Uptake and acceptance of the O2Vent® range of products by patients and clinicians through Oventus’ distribution under
the ‘lab in lab’ business model, supported by successful marketing and training activities to drive adoption;
– Additional partnerships for clinical delivery and distribution in various geographies;
– Successful launch of new products in the US market subject to FDA approval;
– Additional clinical evidence/clinical trial results which highlight the benefit of the ‘Oventus Airway Technology’ for a range
of patients relating to the ongoing CRC-P NeuRA government funded trial. Further, a clinical trial for the ExVent™ add-on
is expected to be initiated to support the FDA approval process in the US market; and
– Further enhancement and outsourcing of the manufacturing process to scale manufacturing to meet demand and
minimise costs.
Environmental regulations
The Company’s operations are not regulated by any significant environmental regulations under a law of the Commonwealth
Government or of a State or Territory Government.
21
Directors’ ReportFor the year ended 30 June 2019
Information on directors and company secretary
Mel Bridges
(Chairman) (Non-Executive Director)
Qualifications
Experience
Bachelor Degree of Science (Chemistry), Honorary Doctorate from Queensland University
of Technology and Fellow of the Australian Institute of Company Directors.
Mel has over 35 years’ experience founding and building international lifescience, diagnostic and
medical device companies and commercialising a wide range of Australian technology. He is
responsible for numerous commercial and M&A transactions and liquidity events, including
listings on the ASX.
Mel has received national and state business awards including the 2005 AusBiotech Chairman’s
Industry Medal and 2004 Queensland Entrepreneur of the Year. Mel has founded and developed
medical device and diagnostic companies, including Pacific Diagnostics (acquired by Baxter),
PanBio Ltd (acquired by Inverness Medical), and ImpediMed Ltd (ASX: IPD).
Other current directorships Mel is currently a director of ASX 100 Company ALS Ltd
Former directorships
(last 3 years)
Mel was director of Tissue Therapies Ltd (March 2009 to December 2015), Benitec BioPharma
Limited (October 2007 to June 2014) and Anatara Lifesciences Ltd (until May 2018).
Special responsibilities
Mel is the chair of the Remuneration Committee and serves on the Audit and Risk Management
Committee.
Interest in shares
2,738,831 ordinary shares
Interest in options
200,732 options
Sue MacLeman
(Non-Executive Director)
Qualifications
Experience
Other current directorships
Bachelor of Pharmacy from the University of Queensland, Masters of Marketing at
Melbourne University (Melbourne Business School), a Masters of Law degree (Deakin
University), a Fellowship with the ACPP and is a Fellow/Graduate of AICD.
Sue MacLeman has more than 30 years’ experience as a pharmaceutical, biotechnology and
medical technology executive with senior roles in corporate, medical, commercial and business
development. Sue has also served as CEO and Board member of several ASX and NASDAQ
listed companies in the sector. Sue is also appointed to a number of academic and government
advisory committees.
Sue is currently the Chair and Non Executive Director of MTPConnect (Medical Technology and
Pharmaceuticals Industry Innovation Growth Centre MTPCII-GC Ltd), Chair and Non Executive
Director at Anatara Life Sciences Ltd (ASX:ANR), Non-Executive Director at Palla Pharma Limited
(ASX:PAL), and Chair and Non Executive Director of Novita Healthcare Ltd (ASX:NHL).
Former directorships:
RHS Ltd (August 2014 – June 2018)
Special responsibilities
Sue is the chair of the Audit and Risk Management Committee and serves on the Remuneration
Committee.
Interest in shares
39,495 ordinary shares
Interest in options
200,732 options
Sharad Joshi
(Non-Executive Director) – Appointed 17 December 2018
Qualifications
Experience
Bachelor of Mechanical Engineering, & Pre-Med with Biology minor from Northeastern
University in Boston, Massachusetts, Master of Business Administration, cum laude, from
Babson College Olin School of Business, Wellesley, Massachusetts.
Sharad has been active in the medical technology industry for over 30 years, held senior
positions for the past 10 years including global entrepreneurial medical devices CEO with
experience in launching medical devices and is currently the President and Chief Executive
Officer of BioDirection, Inc in Southborough Massachusetts.
Other current directorships Member of the Massachusetts Medical Board
Former directorships
(last 3 years):
Massachusetts Medical Device Association
Interest in shares
201,139 ordinary shares
Interest in options
None
22
Directors’ ReportAnnual Report 2019 Oventus Medical LimitedFor the year ended 30 June 2019 Chris Hart
Qualifications
Experience
(Executive Director) (Founder) (Managing Director and Chief Executive Officer
from 30 August 2018) (Clinical Director up to 29 August 2018)
Bachelor of Dental Science with Honours, Bachelor of Science in Biochemistry, Master of
Philosophy in Biomedical Science.
Prior to establishing Oventus, Chris owned and managed a multi-site national dental practice,
training institute and management consultancy which he sold to private equity investors.
Chris also acts as an adviser to various bodies within the dental industry as well as the health
care sector more broadly on the commercial aspects of health care delivery.
Other current directorships None
Former directorships
(last 3 years):
None
Interest in shares
26,542,513 ordinary shares
Interest in options
401,464 options
Neil Anderson
Qualifications
Experience
(Executive Director) (Chief Technical Officer from 30 August 2018)
(Managing Director and Chief Executive Officer up to 29 August 2018)
Bachelor of Applied Science (Hons), Diploma of Management, Graduate of the Institute
of Company Directors (GAICD).
Neil has 30 years’ experience in commercialising medical devices and managing the process
from conception to market release including applied research, developing prototypes and
testing, product development, manufacturing, regulatory submissions and clinical trials.
Prior to taking on the role with Oventus, Neil founded and held the role of chief executive
officer of CathRx for 10 years. In this role, Neil managed the process from the invention of
the company’s technology through to commercialising a range of products leading to sales
in Europe.
Other current directorships None
Former directorships
(last 3 years):
None
Interest in shares
5,837,365 ordinary shares
Interest in options
401,464 options
Stephen Denaro
(Company Secretary)
Qualifications
Experience
Bachelor of Business, Chartered Accountant, a Member of AICD and a Graduate Diploma
in Applied Corporate Governance.
Steve has extensive experience in mergers and acquisitions, business valuations, accountancy
and income tax compliance services, as well as board corporate governance. Steve provides
company secretary services for a number of biotech and software companies. Steve is also a
member of the Institute of Chartered Accountants in Australia, and the Australian Institute of
Company Directors.
Interest in shares
154,395 ordinary shares
Interest in options
125,366 options
23
Directors’ ReportFor the year ended 30 June 2019 Meetings of directors
During the financial year, 12 meetings of directors were held. Attendances were:
2019
Mel Bridges (Chairman)
Neil Anderson
Chris Hart
Sue MacLeman
Sharad Joshi
Full Board
Number eligible
to attend
Number attended
12
12
12
12
6
12
12
11
12
6
Meetings of remuneration committee and audit and risk management committee
During the financial year, 1 meeting of the Remuneration and Nomination Committee were held and 2 meetings of the Audit
and Risk Management Committee was held. Attendances were:
Mel Bridges (Chairman)
Sue MacLeman
Sharad Joshi
Remuneration and Nomination
Audit and Risk Management
Number eligible
to attend
Number
attended
Number eligible
to attend
Number
attended
1
1
0
1
1
0
2
2
1
2
2
1
24
Directors’ ReportAnnual Report 2019 Oventus Medical LimitedFor the year ended 30 June 2019 Remuneration report (audited)
Key management personnel (KMP) covered in
this report
The following persons were directors of Oventus Medical
Limited during the financial year:
– Mel Bridges (Chairman) (Non-Executive Director)
– Chris Hart (Executive Director) (Founder)
– Neil Anderson (Executive Director)
– Sue MacLeman (Non-Executive Director)
– Sharad Joshi (Non-Executive Director appointed
17 December 2018)
Other key management personnel
The following persons also had the authority and
responsibility for planning, directing and controlling the
major activities of the Group, directly or indirectly, during
the financial year:
– Daniel Parry (Chief Financial and Operations Officer)
– Robin Randolph (Vice President of U.S. Marketing
and Operations)
– Stephen Denaro (Company Secretary)
Remuneration policy and link to performance
The Group’s remuneration policy adopted has been
designed to:
a. Align with shareholder and business objectives and
expectations;
b. Attract and retain suitably qualified and experienced
people;
c. Provide a level and composition of remuneration that
is reasonable, fair and aligned to market;
d. Encourage directors and executives to pursue the long
term growth and success of the Company, balanced
against the need to also achieve critical short term
business objectives;
e. Align corporate and individual performance;
f. Be internally consistent;
g. Be transparent with respect to setting performance
goals and the measurement of performance against
those goals; and
h. Align with regional and industry standards and
regulatory requirements.
The remuneration policy links to the Group’s long-term
performance by providing incentives to key management
personnel based upon milestones which need to be met
in the short to medium term which but which are essential
requirements for the Group’s long term performance. The
issue of options to key personnel aligns their compensation
to increases in share prices and, accordingly, increases in
shareholder wealth. The remuneration policy is not based
on earnings as this is not seen as the appropriate indicator
of performance for key management personnel at this
stage of the Group’s life cycle.
Elements of remuneration
Remuneration packages may consist of fixed remuneration,
short-term incentives and long term equity-based benefits.
Remuneration packages can be tailored to an
individual’s requirements to maximize available salary
packaging options.
Total fixed remuneration consist of base salary, non-cash
benefits provided inclusive of FBT (Fringe Benefit Tax) costs,
as well as employer contributions to superannuation.
Short-term incentives consist of cash bonuses payable
under the Company’s Employee Incentive Plan, and are
paid on the basis of an individual’s performance and
contributions during the year.
The Employee Incentive Plan is managed by the
Remuneration and Nomination Committee, which sets and
reviews relevant performance targets against which an
individual’s and the Company’s short-term performance
are measured.
Long-term benefits are provided by way of equity based
incentives under the Company’s Employee Option Plan,
and are granted based on an assessment made by the
Remuneration and Nomination Committee taking account
of an individual’s position, service and market-based
assessment and an individual’s capacity to influence
corporate value.
The Employee Option Plan is managed by the
Remuneration and Nomination Committee who
recommends grants to individuals and the terms and
performance criteria applicable.
Responsibilities of Remuneration and Nomination
Committee
1.
The Remuneration and Nomination Committee is
responsible for determining appropriate levels and
structure of remuneration for executives.
2.
3.
The Remuneration and Nomination Committee is
responsible for approving performance metrics for
executives and measuring performance against
those metrics.
The Remuneration and Nomination Committee will
review the remuneration of executives annually,
taking account of market movements, comparative
remuneration information and individual performance.
25
Directors’ ReportFor the year ended 30 June 2019 Remuneration expenses for KMP
Short-term benefits
Post-
employment
benefits
Share-based
payments
Cash salary
& fees
$
Bonus
Other
Benefits
$
Termination
benefits
$
Super
$
Equity-
settled
$
Total
$
For the year ended 30 June 2019
Non-executive directors
Mel Bridges
Sue MacLeman
Sharad Joshi (from 17 Dec 2018)
Executive directors
Chris Hart
Neil Anderson
Total for directors
Other key management personnel
Stephen Denaro
Daniel Parry
Robin Randolph
Total for other KMP
For the year ended 30 June 2018
Non-executive directors
Mel Bridges
Sue MacLeman
Executive directors
Neil Anderson
Chris Hart
73,059
50,228
41,241
398,988
231,668
795,185
22,913
225,000
249,188
497,102
73,059
50,228
–
–
–
–
–
–
–
–
–
–
–
301,370
301,370
80,000
80,000
Total for directors
726,027
160,000
Other key management personnel
Stephen Denaro
Daniel Parry
(from 5 December 2017)
Robin Randolph
(from 1 April 2018)
Total for other KMP
25,000
105,577
55,921
186,498
–
–
–
–
–
–
–
–
–
–
–
39,013
39,013
–
–
–
–
–
–
–
5,766
5,766
6,941
4,772
–
37,904
22,002
71,619
–
21,375
–
21,375
6,941
4,772
25,000
36,230
72,943
–
10,030
–
10,030
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
5,855
5,855
–
85,855
60,855
41,241
11,710
11,710
448,603
265,381
35,131
901,934
3,657
21,187
26,570
267,562
11,903
300,104
36,747
594,236
7,215
7,215
87,215
62,215
14,430
420,800
14,430
432,030
43,290
1,002,260
3,608
28,608
6,793
122,400
–
61,687
10,401
212,694
26
Directors’ ReportAnnual Report 2019 Oventus Medical LimitedFor the year ended 30 June 2019 The number of options held as at end of reporting period for KMP are as follows:
Directors
Chris Hart
Mel Bridges
Neil Anderson
Sue MacLeman
Other KMP
Dan Parry
Robin Randolph
Steve Denaro
Opening
Balance
Movement
Closing
Balance
(30 June 2019)
Vested as of
30 June 2019
Vested &
Exercisable
as of
30 June 2019
401,464
200,732
401,464
200,732
200,000
200,000
100,366
–
–
–
–
401,464
200,732
401,464
200,732
401,464
200,732
401,464
200,732
401,464
200,732
401,464
200,732
100,000
300,000
100,000
300,000
133,332
66,666
133,332
66,666
25,000
125,366
100,366
100,366
Contractual arrangements for executive KMP
Remuneration and employment terms for executive directors and other key management personnel are detailed in the
employment agreements. The employment agreements do not have a fixed term. The Group may terminate the contracts
immediately if the executive engages in serious misconduct, wilfully disobeys a lawful and reasonable direction or becomes
bankrupt. Otherwise, the Group or the executive may terminate the contracts by giving three months’ notice.
Non-executive director arrangements
The Board’s policy is to remunerate non-executive Directors at market rates for comparable companies for the time,
commitment and responsibilities undertaken by non-executive Directors.
Remuneration payable to non-executive Directors consists of fixed fees payable within the aggregate director fees approved
by shareholders. In addition, statutory employer superannuation contributions are payable where relevant, as are non-cash
benefits in lieu of fees.
Base fixed fees payable to non-executive Directors take account of work undertaken on Board committees. Additional fixed
fees will be paid to directors who chair a Board committee.
In addition, non-executive Directors may participate under the terms of the Company’s Employee Option Plan, subject to the
relevant approval of shareholders.
Other than by way of payment of statutory employer superannuation contributions, retirement benefits are not granted to
non-executive Directors.
The Remuneration and Nomination Committee reviews the remuneration of non-executive Directors annually. If considered
necessary, the Remuneration and Nomination Committee will recommend that shareholders be asked to consider, and if
considered appropriate, to approve any increase in the aggregate non-executive Director fees. The total amount of fixed fees
paid to non-executive Directors must not exceed the maximum amount authorised by shareholders from time to time. As at
30 June 2019, the Consolidated Entity was a listed entity and the requirement to have non-executive director remuneration
authorised is subject to approval at the Company’s annual general meeting.
Where relevant, the Remuneration and Nomination Committee will seek advice from independent third parties to bench mark
non-executive Director remuneration against relevant market practice.
End of remuneration report
27
Directors’ ReportFor the year ended 30 June 2019 Shares under option
Unissued ordinary shares
Unissued ordinary shares of Oventus Medical Limited under option at the date of this report are as follows:
Expiry date
23 February 2021
1 December 2021
12 December 2022
24 February 2022
18 December 2022
2 July 2023
8 August 2023
15 January 2024
22 May 2024
Exercise
price
Number
under option
$0.578
2,274,954
$1.055
$0.961
$0.940
$1.016
$0.480
$0.424
$0.423
$0.403
300,000
600,000
49,998
200,000
450,000
380,000
225,000
100,000
Key Management Personnel Options
The number of options that have vested as of the reporting period 30 June 2019 are as follows:
Exercise
Price
Issue Date
FV per Option
@ Grant Date
Closing
Balance
Vested as of
30 June 2019
Chris Hart
Unlisted options - Vesting 17/2/17 Expiring 23/2/21
$0.578
31-May-16
Unlisted options - Vesting 17/2/18 Expiring 23/2/21
$0.578
31-May-16
Unlisted options - Vesting 17/2/19 Expiring 23/2/21
$0.578
31-May-16
Mel Bridges
Unlisted options - Vesting 17/2/17 Expiring 23/2/21
$0.578
31-May-16
Unlisted options - Vesting 17/2/18 Expiring 23/2/21
$0.578
31-May-16
Unlisted options - Vesting 17/2/19 Expiring 23/2/21
$0.578
31-May-16
Neil Anderson
Unlisted options - Vesting 17/2/17 Expiring 23/2/21
$0.578
31-May-16
Unlisted options - Vesting 17/2/18 Expiring 23/2/21
$0.578
31-May-16
Unlisted options - Vesting 17/2/19 Expiring 23/2/21
$0.578
31-May-16
Sue MacLeman
Unlisted options - Vesting 17/2/17 Expiring 23/2/21
$0.578
31-May-16
Unlisted options - Vesting 17/2/18 Expiring 23/2/21
$0.578
31-May-16
Unlisted options - Vesting 17/2/19 Expiring 23/2/21
$0.578
31-May-16
$0.133
$0.133
$0.133
$0.133
$0.133
$0.133
$0.133
$0.133
$0.133
$0.133
$0.133
$0.133
133,807
133,807
133,850
401,464
66,903
66,903
66,926
133,807
133,807
133,850
401,464
66,903
66,903
66,926
200,732
200,732
133,807
133,807
133,850
401,464
66,903
66,903
66,926
133,807
133,807
133,850
401,464
66,903
66,903
66,926
200,732
200,732
28
Directors’ ReportAnnual Report 2019 Oventus Medical LimitedFor the year ended 30 June 2019 Exercise
Price
Issue Date
FV per Option
@ Grant Date
Closing
Balance
Vested as of
30 June 2019
Dan Parry
Unlisted options - Vesting 05/12/18 Expiring 18/12/22
$1.016
19-Dec-17
Unlisted options - Vesting 05/12/19 Expiring 18/12/22
$1.016
19-Dec-17
Unlisted options - Vesting 12/12/20 Expiring 18/12/22
$1.016
19-Dec-17
Unlisted options - Vesting 16/01/20 Expiring 15/01/24
$0.423
16-Jan-19
Unlisted options - Vesting 16/01/21 Expiring 15/01/24
$0.423
16-Jan-19
Unlisted options - Vesting 16/01/22 Expiring 15/01/24
$0.423
16-Jan-19
Robin Randolph
Unlisted options - Vesting 17/05/19 Expiring 2/07/23
Unlisted options - Vesting 17/05/20 Expiring 2/07/23
Unlisted options - Vesting 24/05/21 Expiring 2/07/23
$0.480
$0.480
$0.480
03-Jul-18
03-Jul-18
03-Jul-18
Unlisted options - Vesting 16/01/20 Expiring 15/01/24
$0.423
16-Jan-19
Unlisted options - Vesting 16/01/21 Expiring 15/01/24
$0.423
16-Jan-19
Unlisted options - Vesting 16/01/22 Expiring 15/01/24
$0.423
16-Jan-19
Steve Denaro
Unlisted options - Vesting 17/2/17 Expiring 23/2/21
$0.578
31-May-16
Unlisted options - Vesting 17/2/18 Expiring 23/2/21
$0.578
31-May-16
Unlisted options - Vesting 17/2/19 Expiring 23/2/21
$0.578
31-May-16
Unlisted options - Vesting 16/01/20 Expiring 15/01/24
$0.423
16-Jan-19
Unlisted options - Vesting 16/01/21 Expiring 15/01/24
$0.423
16-Jan-19
Unlisted options - Vesting 16/01/22 Expiring 15/01/24
$0.423
16-Jan-19
$0.312
$0.312
$0.312
$0.155
$0.155
$0.155
$0.149
$0.149
$0.149
$0.155
$0.155
$0.155
$0.133
$0.133
$0.133
$0.155
$0.155
$0.155
99,996
99,996
66,668
0
0
33,340
66,666
0
0
0
0
0
300,000
66,666
66,666
66,666
66,668
33,330
33,330
33,340
66,666
0
0
0
0
0
300,000
66,666
33,451
33,451
33,464
8,330
8,330
8,340
33,451
33,451
33,464
0
0
0
125,366
100,366
No option holder has any right under the options to participate in any other share issue of the company or any other entity.
Insurance of officers and indemnities
The Company maintains and pays premiums in respect of directors’ and officers’ insurance. Premiums paid in respect of
insurance amounted to $152,690.
The liabilities insured are legal costs that may be incurred in defending civil or criminal proceedings that may be brought
against the officers in their capacity as officers of entities in the Group, and any other payments arising from liabilities incurred
by the officers in connection with such proceedings. This does not include such liabilities that arise from conduct involving
a wilful breach of duty by the officers or the improper use by the officers of their position or of information to gain advantage
for themselves or someone else or to cause detriment to the company. It is not possible to apportion the premium between
amounts relating to the insurance against legal costs and those relating to other liabilities.
Proceedings on behalf of the Company
No person has applied for leave of Court to bring proceedings on behalf of the Company or 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 any part of those
proceedings.
The Company was not a party to any such proceedings during the period.
29
Directors’ ReportFor the year ended 30 June 2019 Corporate Governance
In recognising the need for the highest standards of
corporate behaviour and accountability, the directors of
Oventus Medical Limited support and have adhered to key
principles of corporate governance.
Please refer to the Corporate Governance Statement of
Oventus Medical Limited on website www.oventus.com.au
via the tab headed “Investor Centre” for more information.
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 17 to the financial statements.
There were no non-audit services provided by the auditor (or
by another person or firm on the auditors behalf) during the
financial year.
Auditor’s independence declaration
The auditor’s independence declaration is set out on the
following page and forms part of the Directors’ Report for the
year ended 30 June 2019.
This report is made in accordance with a resolution of
directors.
Mel Bridges
Director
Brisbane
23rd August 2019
30
Directors’ ReportAnnual Report 2019 Oventus Medical LimitedFor the year ended 30 June 2019 Auditor’s Independence Declaration
AUDITOR’S INDEPENDENCE DECLARATION
UNDER SECTION 307C OF THE CORPORATIONS ACT 2001
TO THE DIRECTORS OF OVENTUS MEDICAL LIMITED AND CONTROLLED ENTITIES
I declare that, to the best of my knowledge and belief, during the year ended 30 June 2019, there have been
no contraventions of:
(a)
the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
(b)
any applicable code of professional conduct in relation to the audit.
PKF BRISBANE
CAMERON BRADLEY
PARTNER
DATED THIS 23 AUGUST 2019
BRISBANE
20
31
Consolidated Statement of Comprehensive Income
Note
30 June 2019
$
30 June 2018
$
331,837
271,322
3,932,302
2,790,306
158,239
768,453
471,585
722,350
670,926
383,463
362,047
282,016
389,202
346,222
177,700
757,636
512,354
422,854
406,245
387,840
319,996
204,877
269,057
175,177
8,486,805
6,424,042
(8,154,968)
(6,152,720)
154,539
152,174
306,713
191,157
91,016
282,173
(7,848,255)
(5,870,547)
13
–
–
(7,848,255)
(5,870,547)
(116,147)
3,895
(7,964,402)
(5,866,652)
(7.41)
(7.41)
(5.92)
(5.92)
Revenue
Less: Expenses
Staff Costs
Manufacturing costs - Pilot phase
Depreciation and amortisation
Administration
Travel
Sales & Marketing
Information technology costs
IP Audit Legal & Consulting
Insurance
Clinical Studies Research & Regulatory
Office & Lab
Total expenses
Other income (expenses)
Interest income
Other income
Loss before income tax expense
Income tax expense
Loss for the year attributable to members of the company
Other comprehensive income:
Items that will be reclassified subsequently to profit or loss
when specific conditions are met:
Exchange differences on translating foreign operations
Total comprehensive loss attributable to members of the company
Earnings per share for profit/(loss) from continuing operations:
22
Basic earnings per share
Diluted earnings per share
The above Consolidated Statement of Comprehensive Income should be read in conjunction with the accompanying notes.
32
For the year ended 30 June 2019Annual Report 2019 Oventus Medical Limited
Consolidated Statement of Financial Position
Current assets
Cash and cash equivalents
Trade and other receivables
Other current assets
Total current assets
Non-current assets
Property, plant and equipment
Intangible assets
Deposits
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Other current liabilities
Total current liabilities
Non-current liabilities
Other liabilities
Total non-current liabilities
Total liabilities
Net assets
Equity
Share capital
Share based payment reserve
Translation reserve
Accumulated losses
Total equity
Note
30 June 2019
$
30 June 2018
$
3
4
5
6
7
8
9
9
10
11
12
2,998,563
9,894,959
79,068
562,207
1,363,614
1,372,217
4,441,245
11,829,383
699,398
702,089
3,744,100
3,211,947
74,732
69,094
4,518,230
3,983,130
8,959,475
15,812,513
1,391,918
135,016
1,526,934
561,475
120,768
682,243
75,936
75,936
–
–
1,602,870
682,243
7,356,605
15,130,270
29,640,394
29,640,394
500,212
309,476
(112,252)
3,895
(22,671,750)
(14,823,495)
7,356,605
15,130,270
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
33
As at 30 June 2019 Consolidated Statement of Changes in Equity
Contributed
Equity
$
Share Based
Payments
Reserve
$
21,729,732
201,311
–
–
–
197,228
–
–
7,910,662
–
–
–
Translation
Reserve
$
Accumulated
Losses
$
Total
$
(9,042,011)
12,889,032
(5,870,547)
(5,870,547)
–
–
(5,870,547)
(5,870,547)
–
–
–
–
–
–
3,895
(89,063)
–
89,063
–
–
–
7,910,662
197,228
3,895
–
Balance at 1 July 2017
Loss for the year
Other comprehensive income
Total comprehensive income for the year
Transactions with owners in their capacity
as owners:
Contributions of equity, net of transaction
costs and tax
Share based payments
Exchange differences on translating foreign
operations
Transfer
Total transactions with owners
in their capacity as owners:
7,910,662
108,165
3,895
89,063
8,111,785
Balance at 30 June 2018
29,640,394
309,476
3,895
(14,823,495)
15,130,270
Balance at 1 July 2018
Loss for the year
Other comprehensive income
Total comprehensive income for the year
Transactions with owners in their capacity
as owners:
Contributions of equity, net of transaction costs
and tax
Share based payments
Exchange differences on translating foreign
operations
Total transactions with owners
in their capacity as owners:
29,640,394
309,476
3,895
(14,823,495)
15,130,270
–
–
–
–
–
–
–
–
–
–
–
–
–
190,736
–
–
–
–
–
–
–
(116,147)
190,736
(116,147)
(7,848,255)
(7,848,255)
–
–
(7,848,255)
(7,848,255)
–
–
–
–
–
–
–
190,736
(116,147)
74,589
Balance at 30 June 2019
29,640,394
500,212
(112,252)
(22,671,750)
7,356,605
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
34
For the year ended 30 June 2019Annual Report 2019 Oventus Medical Limited Consolidated Statement of Cash Flows
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Interest received
R&D grants and concessions received
Interest and other finance costs paid
Note
30 June 2019
$
30 June 2018
$
348,000
292,476
(6,644,951)
(6,124,361)
192,649
1,192,162
–
210,603
986,233
–
Net cash outflow from operating activities
21
(4,912,140)
(4,635,049)
Cash flows from investing activities
Payments for property, plant and equipment
Payments for intangible assets
Proceeds from (payments for) term-deposits
Net cash outflow from investing activities
Cash flows from financing activities
Proceeds from issue of shares, net of transaction costs
10
Net cash inflow from financing activities
Net increase (decrease) in cash held
Cash and cash equivalents at the beginning of the financial period
Effects of exchange rate changes on cash and cash equivalents
Cash and cash equivalents at the end of the financial year
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
(66,836)
(66,836)
(1,874,861)
(1,954,802)
(5,638)
22,424
(1,877,808)
(1,999,214)
–
–
7,910,662
7,910,662
(6,789,948)
1,276,399
9,894,959
8,648,099
(106,449)
(29,539)
2,998,563
9,894,959
35
For the year ended 30 June 2019
Notes to the Financial Statements
For the year ended 30 June 2019
1. 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, revised or amending Accounting Standards and
Interpretations adopted
The Group has adopted all of the new, revised or amending
Accounting Standards and Interpretations issued by the
Australian Accounting Standards Board (‘AASB’) that are
mandatory for the current reporting period. Any new, revised
or amending Accounting Standards or Interpretations that are
not yet mandatory have not been early adopted.
All intercompany balances and transactions between entities
in the Group, including any unrealised profits or losses, have
been eliminated on consolidation. Accounting policies of
controlled entities are consistent with the policies adopted
by the parent unless otherwise stated below.
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.
A list of controlled entities is at Note 19.
The adoption of these Accounting Standards and
Interpretations did not have any significant impact on the
financial performance or position of the Group.
Comparative information
Where necessary, comparative figures have been adjusted
to conform to changes in presentation in the current year.
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
These financial statements have been prepared under the
historical cost convention on an accrual basis of accounting
and a going concern assumption.
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 Group’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 2.
Parent entity information
In accordance with the Corporations Act 2001, these
financial statements present the results of the Group only.
Supplementary information about the parent entity is
disclosed in Note 18.
Principles of consolidation
The Statement of Comprehensive Income and Statement of
Financial Position as at 30 June 2019 incorporate the assets,
liabilities and results of the Company and its controlled
entities. A subsidiary is any entity over which the Company
has the power to govern the financial and operating
policies, generally accompanying a shareholding of more
than one half of the voting rights.
Segment reporting
The Group is a medical device developer operating within
a sole industry, being the development of oral appliances
for sleep disorders. The Group operates predominantly
in Australia and has established sales and marketing
operations in the United States of America in January 2017.
For management purposes, the Group has two operating
segments: Australia and United States of America.
Unless stated otherwise, all amounts reported to the Board
of Directors, being the chief operating decision makers
with respect to operating segments, are determined in
accordance with accounting policies that are consistent
with those adopted in the annual financial statements of
the Group.
Revenue recognition
The Group has applied AASB 15: Revenue from Contracts
with Customers using the cumulative effective method.
Therefore, the comparative information has not been
restated and continues to be presented under AASB 118
Revenue.
Revenue from contracts with customers is measured at
the transaction price specified in the contract and is net of
amounts expected to be refunded to the customer such
as rebates. The entity is an agent for revenue recognition
purposes with regard to contracts with distributors and
records revenue at net amount of distributor fees. There
are no contracts with customers that have significant
financing components.
The Group manufactures and sells devices for the
treatment of obstructive sleep apnoea. Revenue is
recognised when control of the products has transferred
to the distributor / customer. For such transactions, this
is when the products are delivered to the distributors /
customers. Volume discounts can be provided with the
sale of these items, depending on the volume of aggregate
sales made to eligible distributors / customers. Revenue
from these sales is based on the price stipulated in the
contract, recognition of revenue and distribution discounts
are calculated on a monthly basis.
36
Annual Report 2019 Oventus Medical Limited As stipulated in the contract with Modern Dental in the US
under section 4.7, title in each product does not pass to the
distributor until Oventus has delivered the product. Until
title passes to the distributor, ownership of each product
remains with Oventus and the distributor holds each
product as bailee and fiduciary for Oventus. The risk in each
product will pass to the distributor on the date the product
is dispatched for delivery by Oventus. Furthermore, under
schedule 2 of the same contract, the distributor is entitled
to a standard variable royalty tiered on a percentage by
which gross sales price exceeds recommended price.
Revenue is then only recognised to the extent that there is
a high probability that a significant reversal of revenue will
not occur.
A receivable is recognised when the goods are delivered.
The Group’s right to consideration is deemed unconditional
at this time, as only the passage of time is required before
payment of that consideration is due. There is no significant
financing component because sales (which include those
with volume discounts) are made within a credit term of
30 days.
All revenue is stated net of the amount of goods and
services tax (GST).
Government grants
Grants from government, including Australian Research and
Development Tax Incentive (RDTI), are recognised at their
fair value where there is a reasonable assurance that the
grant will be received, and the Company will comply with
all attached conditions.
Where a grant is received relating to research and
development costs that have been expensed, the grant
is recognised as other income when the grant becomes
receivable. When the grant relates to an asset, the cost of
the asset is shown net of the grant or receivable.
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.
Manufacturing costs - Pilot phase
Manufacturing costs incurred during the pilot phase of
manufacturing have been expensed as incurred. When
the Group expands its manufacturing and distribution,
expected in the year ended 30 June 2020, it will commence
recognising cost of sales. All costs directly associated with
generating revenue, including direct materials and labour
and indirect costs will be allocated to cost of goods for sale.
There is a delay in the cost of goods sold recognition from
the expected timing of 30 June 2019 as volume still has
not increased.
Inventories
Raw materials and stores, work in progress and finished
goods are stated at the lower of cost and net realisable
value. Cost comprises direct materials, direct labour and
an appropriate proportion of variable and fixed overhead
expenditure. Costs are assigned to individual items of
inventory on the basis of weighted average costs. Costs
of purchased inventory are determined after deducting
rebates and discounts. 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.
Expenses
All expenses are recognised in the Statement of
Comprehensive Income on an accrual basis. Amounts
disclosed as expenses are net of taxes paid except
where the amount of goods and services tax incurred
is not recoverable from the taxation authority. In these
circumstances, the tax is recognised as part of the expense.
Current and non-current classification
Assets and liabilities are presented in the statement
of financial position based on current and non-current
classification.
37
Notes to the Financial Statementscontinued 1. Significant accounting policies (continued)
Current and non-current classification (continued)
An asset is classified as current when: it is either expected
to be realised or intended to be sold or consumed in
the Group’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 Group’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 include cash on hand and at
banks, short-term deposits with an original maturity of
three months or less held at call with financial institutions,
and bank overdrafts. Bank overdrafts are shown within
borrowings in current liabilities in the Statement of Financial
Position.
Trade and other receivables
Trade receivables are recognised initially at fair value and
subsequently shown net of provision for bad debts. Trade
receivables are generally due for settlement within 30 days.
They are presented as current assets unless collection is
not expected for more than 12 months after the reporting
date. Impairment loss for trade receivables is now
accounted for under AASB 9 Financial Instruments.
Plant and equipment
Each class of plant and equipment is carried at cost or fair
value less, where applicable, any accumulated depreciation
and any accumulated impairment losses.
Plant and equipment is measured on a cost basis.
Depreciation
The depreciable amount of all property, plant and
equipment is depreciated over their estimated useful lives
commencing from the time the asset is held ready for use.
Land and the land component of any class of property,
plant and equipment is not depreciated.
Class of fixed asset
Depreciation rates
Office equipment
Computer equipment
Sleep and production equipment
Assets under joint arrangement
20%
33%
20-33%
12.5%
38
Interests in Joint Arrangements
Joint operations represent arrangements whereby joint
operators maintain direct interests in each asset and
exposure to each liability of the arrangement. The Group’s
interests in the assets, liabilities, revenue and expenses of
joint operations are included in the respective line items of
the consolidated financial statements.
Gains and losses resulting from sales to a joint operation
are recognised to the extent of the other parties’ interests.
When the Group makes purchases from a joint operation,
it does not recognise its share of the gains and losses from
the joint arrangement until it resells those goods/assets to
a third party.
Intangible assets
Patents, trademarks and licences
Patents, trademarks and licences are recognised at
cost less accumulated amortisation and accumulated
impairment losses. Amortisation is recognised on a straight-
line basis over their estimated useful lives. The estimated
useful life and amortisation method are reviewed at the end
of each reporting period, with the effect of any changes
in estimate being accounted for on a prospective basis.
The Group’s estimate of the useful lives of its patents,
trademarks and licenses is 20 years.
Research and development expenditure
Expenditure on research activities is recognised as an
expense when incurred.
An internally generated intangible asset arising from
development (or from the development phase of an internal
project) is recognised if, and only if, all of the following have
been demonstrated:
– the technical feasibility of completing the intangible
asset so that it will be available for use or sale;
– the intention to complete the intangible asset and use
or sell it;
– the ability to use or sell the intangible asset;
– how the intangible asset will generate probable future
economic benefits;
– the availability of adequate technical, financial and other
resources to complete the development and to use
– the ability to measure reliably the expenditure
attributable to the intangible asset during its
development.
The amount initially recognised for internally generated
intangible assets is the sum of the expenditure incurred
from the date when the intangible asset first meets
the recognition criteria listed above. Any research and
development tax offsets or grants received relating
to development costs are deducted from the total
development cost. Where no internally generated
intangible asset can be recognised, development
expenditure is recognised in profit or loss in the period in
which it is incurred.
Subsequent to initial recognition, internally generated
intangible assets are reported at cost less accumulated
amortisation and accumulated impairment losses.
Notes to the Financial StatementscontinuedAnnual Report 2019 Oventus Medical Limited Amortisation is recognised on a straight line basis over the
estimated useful life of 5 years. The estimated useful life
and amortisation method are reviewed at the end of each
reporting period, with the effect of any changes in estimate
being accounted for on a prospective basis.
Financial instruments
Initial recognition and measurement
Financial assets and financial liabilities are recognised when
the Group becomes a party to the contractual provisions
to the instrument. For financial assets, this is the date that
the Group commits itself to either the purchase or sale of
the asset.
Trade receivables are initially measured at the transaction
price if the trade receivables do not contain a significant
financing component or if the practical expedient was
applied.
Classification and subsequent measurement
Financial liabilities
There has been no impact on the accounting for the Group’s
financial liabilities which continue to be classified and
measured at amortised cost using the effective interest
method.
Financial assets
Financial assets are subsequently measured at either:
– Amortised cost
– Fair value through other comprehensive income; or
– Fair value through profit or loss
Measurement is on the basis of two primary criteria:
– the contractual cash flow characteristics of the financial
asset; and
– the business model for managing the financial assets
A financial asset that meets the following conditions is
subsequently measured at amortised cost:
– the financial asset is managed solely to collect
contractual cash flows; and
– the contractual terms within the financial asset give
rise to cash flows that are solely payments of principal
and interest on the principal amount outstanding on
specified dates
Cash, funds on deposit and trade receivables are measured
at amortised cost.
Derecognition
Financial liabilities
A liability is derecognised when it is extinguished (ie when
the obligation in the contract is discharged, cancelled or
expires). An exchange of an existing financial liability for a
new one with substantially modified terms, or a substantial
modification to the terms of a financial liability is treated as
an extinguishment of the existing liability and recognition of
a new financial liability.
The difference between the carrying amount of the financial
liability derecognised and the consideration paid and
payable, including any non-cash assets transferred or
liabilities assumed, is recognised in profit or loss.
Financial assets
A financial asset is derecognised when the holder’s
contractual rights to its cash flows expires, or the asset is
transferred in such a way that all the risks and rewards of
ownership are substantially transferred.
Impairment
The Group recognises a loss allowance for expected credit
losses.
The Group’s financial assets that are subject to AASB 9’s
new expected credit loss model include:
– Trade and other receivables
The Group applies the simplified approach to measuring
expected credit losses for trade receivables where the
lifetime expected credit loss is recognised. To measure
the expected credit losses, the trade receivables have
been grouped by days past due and default rates have
been applied to each group. The default rates have been
estimated based on historical rates over a 4 year period.
On adoption of AASB 9, the resulting expected credit loss
calculated under this method was compared to the existing
provision recognised under AASB 139. As this did not
result in a material difference, no adjustment was made on
adoption of the standard.
Trade and other payables
Trade payables represent liabilities for goods and services
provided to the Group prior to the end of financial period,
which are unsecured and are usually paid within 30 days
of recognition. Trade and other payables are presented
as current liabilities unless payment is not due within
12 months from reporting date. They are recognised initially
at their fair value and subsequently measured at amortised
cost using the effective interest method.
Impairment of non-financial assets
Goodwill, intangible assets not yet ready for use and
intangible assets that have an indefinite useful life are not
subject to amortisation and are therefore tested annually
for impairment, or more frequently if events or changes in
circumstances indicate that they might be impaired.
An impairment loss is recognised where the carrying
amount of the asset exceeds its recoverable amount. The
recoverable amount of an asset is defined as the higher of
its fair value less costs to sell and value in use.
For an asset measured at cost, an impairment loss is
recognised in profit or loss where the carrying amount of
the asset exceeds its recoverable amount.
Reversal of impairment loss for an asset measured at cost
other than goodwill is recognised immediately in profit
or loss.
39
Notes to the Financial Statementscontinued 1. Significant accounting policies (continued)
Provisions
A provision is recognised in the statement of financial
position when the Group has a present legal or constructive
obligation as a result of a past event, and it is probable that
an outflow of economic benefits will be required to settle
the obligation, and the amount has been reliably estimated.
Leases
Leases are classified at their inception as either operating
or finance leases based on the economic substance of the
agreement so as to reflect the risks and benefits incidental
to ownership.
Operating Leases
Lease payments for operating leases, where substantially
all the risks and benefits remain with the lessor, are
recognised as an expense on a straight-line basis over the
term of the lease.
Lease incentives received under operating leases are
recognised as a liability and amortised on a straight-line
basis over the life of the lease term.
Employee entitlements
Liabilities for salaries including annual leave expected
to be settled within 12 months of the reporting date are
recognised in current employee entitlements in respect
of employee services up to the reporting date, and are
measured at the amounts expected to be paid when the
liabilities are settled.
The liability for long service leave is based on current
salary levels, years of completed service and the estimated
probability that the employee will remain with the Group.
Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the
amount of associated GST, unless the GST incurred is not
recoverable from the taxation authority. In this case it is
recognised as a part of the cost of acquisition of the asset or
as part of the expense.
Receivables and payables are stated inclusive of the
amount of GST receivable or payable. The net amount of
GST recoverable from, or payable to, the taxation authority
is included with other receivables or payables in the
balance sheet.
Cash flows are presented on a gross basis. The GST
components of cash flows arising from investing or
financing activities which are recoverable from, or payable
to the taxation authority, are presented as operating cash
flows.
Contributed equity
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.
Share-based payment transactions
The Group measures the cost of equity-settled transactions
with employees by reference to the fair value of the equity
instruments at the date at which they are granted. The fair
value is determined by using the 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.
The annualised volatility was computed based on the daily
standard deviation of the stock multiplied by the square
root of 252 trading days in the financial year.
New standards and interpretations not yet adopted
Certain new accounting standards and interpretations have
been published that are not mandatory for 30 June 2019
reporting periods and have not been early adopted by the
Group. The Group’s assessment of the impact of these new
standards and interpretations is set out below.
AASB 16 Leases
The Group has chosen not to early-adopt AASB 16.
However, the Group has conducted a preliminary
assessment of the impact of this new Standard, as follows.
A core change resulting from applying AASB 16 is that most
leases will be recognised on the balance sheet by lessees as
the standard no longer differentiates between operating and
finance leases. An asset and a financial liability are recognised
in accordance to this new Standard. There are, however,
two exceptions allowed: short-term and low-value leases.
The accounting for the Group’s operating leases will be
primarily affected by this new Standard.
AASB 16 will be applied by the Group from its mandatory
adoption date of 1 July 2019. The comparative amounts
for the year prior to first adoption will not be restated, as
the Group has chosen to apply AASB 16 retrospectively
with cumulative effect. While the right-of-use assets for
property leases will be measured on transition as if the new
rules had always been applied, all other right-of-use assets
will be measured at the amount of the lease liability on
adoption (after adjustments for any prepaid or accrued lease
expenses).
The Group’s non-cancellable operating lease commitments
amount to $375,208 as at the reporting date. Of this amount,
approximately $239,332 are short-term leases and $135,876
of low-value leases will be recognised as expense in profit
or loss on a straight-line basis.
As of the date of this report, the Group’s operating leases
are the property rental in 1 Swann Road, Taringa, QLD 4068,
Australia (expiring on 1 October 2020) and the CEO’s residential
lease in 27341 Lost Colt Drive, Laguna Hills, CA 92653, USA
(short-term lease for 12 months). Please also refer to Note 24 –
significant agreements and commitments for expenditure.
40
Notes to the Financial StatementscontinuedAnnual Report 2019 Oventus Medical Limited Critical accounting judgements, estimates and assumptions
2.
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.
Estimation of useful lives of assets
The Group determines the estimated useful lives and related depreciation and amortisation charges for its property, plant
and equipment and finite life intangible assets. The useful lives could change significantly as a result of technical innovations
or some other event. The depreciation and amortisation charge will increase where the useful lives are less than previously
estimated lives, or technically obsolete or non-strategic assets that have been abandoned or sold will be written off or written
down.
Development costs
The Group capitalises development costs for a project in accordance with the accounting policy as per Note 1. Initial
capitalisation of costs is based on management’s judgement that technological and economic feasibility is confirmed, usually
when a product development project has reached a defined milestone according to an established project management
model. In determining the amounts to be capitalised, management makes assumptions regarding the expected future
cash generation of the project and the expected period of benefits. At 30 June 2019, the carrying amount of capitalised
development costs was $2,688,803 (2018: $2,464,345).
Going concern
The financial statements have been prepared on a going concern basis that presumes the realisation of assets and the
discharge of liabilities in the normal course of operations for the foreseeable future.
The ability of the Group to continue on a going concern basis is dependent upon the following:
– The successful development of the Group’s product
– FDA approval in the USA
– Success in achieving budgeted sales and positive cash flow from operations, and
– The ability to raise further capital as required.
During the year, the Group made a loss before tax of $ 7,848,255 (2018: loss of $5,870,547) and has accumulated losses of
$22,671,745. However, as at 30 June 2019, the current assets exceed its current liabilities by $2,914,309 and on 26 July 2019, the
Group raised $5,566,920, net of $397,421 issuance costs. Thus, the directors have a reasonable expectation that the Group has
adequate resources to continue in operational existence in the foreseeable future. However, additional capital raising may be
required in the future to meet expansionary and long-term goals.
3. Cash and cash equivalents
Cash on hand
Cash at bank
Short-term deposits
30 June
2019
$
30 June
2018
$
308
62
1,498,255
794,897
1,500,000
9,100,000
2,998,563
9,894,959
41
Notes to the Financial Statementscontinued
4. Trade and other receivables
Trade receivables
Receivable from CSIRO
GST receivable
Other receivables
Less allowance for doubtful debts
Trade and other receivables
Not Past Due
Past Due 0-30 Days
Past Due 90 Days and over
Past Due 61-90 Days
30 June
2019
$
30 June
2018
$
70,250
86,413
–
440,000
33,881
4,940
109,071
30,003
79,068
4,747
43,050
574,210
12,003
562,207
30 June
2019
$
36,932
6,411
20,740
6,167
70,250
As at 30 June 2019, trade receivables of $30,003 (2018: 12,003) were past due and considered impaired.
The receivable from CSIRO of $440,000 (inclusive of GST) as at 30 June 2018 was collected from CSIRO on 25 July 2018.
5. Other current assets
Prepayments
Accrued research & development tax credit
Inventory
Rental bond paid
Other assets
30 June
2019
$
30 June
2018
$
95,636
128,819
1,032,999
1,094,275
93,545
93,233
–
–
141,434
55,890
1,363,614
1,372,217
42
Notes to the Financial StatementscontinuedAnnual Report 2019 Oventus Medical Limited Year ended 30 June 2018
Opening net book amount
Additions
Reclassification
Disposals - cost
Depreciation charge
Closing net book amount
At 30 June 2018
Cost
Accumulated depreciation
Net book amount
Year ended 30 June 2019
Opening net book amount
Additions
Reclassification
Disposals - cost
Disposals - accumulated depreciation
Depreciation charge
Closing net book amount
At 30 June 2019
Cost
Accumulated depreciation
Net book amount
6. Property, plant and equipment
On 21 June 2018, the Group entered into an Equipment Ownership & Management Agreement with CSIRO with headquarters
in Canberra, ACT 2601 wherein both parties agreed to share equally in the ownership and maintenance of the Arcam
Equipment (the Equipment) in the period from 1 July 2018 to 30 June 2026. The transaction was accounted for as a joint
operation in accordance with AASB 11, Joint arrangements. Accordingly, the Group’s share in the Equipment has been
disclosed separately as “Assets Under Joint Arrangement”.
Disposals - accumulated depreciation
2,465
497,437
23,025
Computer
and office
furniture and
equipment
$
32,586
29,462
Sleep and
production
equipment
$
Leasehold
improvement
$
Assets
Under Joint
Arrangement
$
Total
$
1,127,763
153,941
37,374
–
(311,369)
–
–
(2,465)
(808,806)
(40,640)
–
–
1,314,290
66,836
311,369
–
–
–
–
(851,911)
522,927
(350,053)
(13,793)
(286,171)
(50,089)
48,255
256,228
86,237
311,369
702,089
78,441
410,516
230,883
311,369
1,031,209
(30,186)
(154,288)
(144,646)
–
(329,120)
48,255
256,228
86,237
311,369
702,089
48,255
23,089
–
–
256,228
133,313
–
(14,279)
7,820
86,237
311,369
702,089
–
–
–
–
–
–
–
–
156,402
–
(14,279)
7,820
(21,137)
(63,502)
(28,743)
(39,252)
(152,634)
50,207
319,580
57,494
272,117
699,398
101,530
529,550
230,883
311,369
1,173,332
(51,323)
(209,970)
(173,389)
(39,252)
(473,934)
50,207
319,580
57,494
272,117
699,398
43
Notes to the Financial Statementscontinued 7.
Intangible assets
Year ended 30 June 2018
Opening net book amount
Additions
Disposals
Tax concession received or receivable
Amortisation expense
Closing net book amount
At 30 June 2018
Cost
Accumulated amortisation
Net book amount
Year ended 30 June 2019
Opening net book amount
Additions
Disposals
Tax concession received or receivable
Amortisation expense
Closing net book amount
At 30 June 2019
Cost
Accumulated amortisation
Net book amount
Patents,
trademarks
and licences
$
Software
$
Development
costs
$
Total
$
369,990
202,979
1,847,478
2,420,447
302,741
(65)
65
–
–
–
1,737,286
2,040,027
–
–
(755,719)
(755,719)
(28,422)
(99,686)
(364,700)
(492,808)
644,309
103,293
2,464,345
3,211,947
703,927
301,358
3,050,024
4,055,309
(59,618)
(198,065)
(585,679)
(843,362)
644,309
103,293
2,464,345
3,211,947
644,309
103,293
2,464,345
3,211,947
348,519
54,854
1,318,854
1,722,227
–
–
–
–
–
–
(574,255)
(574,314)
(49,851)
(45,827)
(520,141)
(615,819)
942,977
112,320
2,688,803
3,744,100
1,052,446
356,212
3,794,623
5,203,281
(109,469)
(243,892)
(1,105,820)
(1,459,181)
942,977
112,320
2,688,803
3,744,100
Development costs are shown net of amounts received or receivable subject to the research and development tax
concession.
8. Trade and other payables
Trade creditors
PAYG Withholding payable
Employee benefits payable
Other creditors
44
30 June
2019
$
730,794
170,768
18,747
471,610
1,391,918
30 June
2018
$
232,630
64,419
18,091
246,335
561,475
Notes to the Financial StatementscontinuedAnnual Report 2019 Oventus Medical Limited
9. Other liabilities
Current
Employee benefits - annual leave
Deferred lease incentive
Non-current
Employee benefits - long service leave
10. Equity - Share capital
Opening Balance
Shares issued:
9 August 2017
21 December 2017
Share issue costs
At reporting date
30 June
2019
$
30 June
2018
$
135,016
106,486
–
14,282
135,016
120,768
75,936
75,936
–
–
30 June
2019
Number of
Shares
#
30 June
2019
Value of
Shares
$
30 June
2018
Number of
Shares
#
30 June
2018
Value of
Shares
$
105,939,212
29,640,394
90,000,000
21,729,732
–
–
–
–
–
–
2,139,265
770,135
13,799,947
7,589,971
–
(449,444)
105,939,212
29,640,394
105,939,212
29,640,394
Rights of each type of share
Ordinary shares participate in dividends and the proceeds on winding up of the parent entity in proportion to the number of
shares held.
At shareholders meetings each ordinary share is entitled to one vote when a poll is called, otherwise each shareholder has
one vote on a show of hands.
11. Equity - Share based payment reserve
Share based payment reserve at beginning of year
Share based payment expense
Transfer to accumulated losses
Share based payment reserve at end of year
30 June
2019
$
309,476
190,736
30 June
2018
$
201,311
197,228
–
(89,063)
500,212
309,476
The share-based payment reserve is used to recognise the value of equity-settled share based payments provided to
employees, including key management personnel, as part of their remuneration. Refer to Note 23 for further details.
45
Notes to the Financial Statementscontinued 12. Accumulated losses
Accumulated losses at beginning of year
Transfer from share based payments reserve
Loss for the period
Accumulated losses at end of year
13. Income tax expense
Current tax
Adjustment recognised for prior periods
Aggregate income tax expense
30 June
2019
$
30 June
2018
$
(14,823,495)
(9,042,011)
–
89,063
(7,848,255)
(5,870,547)
(22,671,750)
(14,823,495)
30 June
2019
$
30 June
2018
$
–
–
–
–
–
–
Numerical reconciliation of income tax expense and tax at the statutory rate
Loss before income tax expense from continuing operations
(7,848,255)
(6,510,114)
Profit before income tax expense from discontinued operations
Tax at the statutory tax rate of 27.5%
(2,158,270)
(1,790,281)
Tax effect amounts which are not deductible in calculating taxable income:
Non-assessable or deductible items
Research and development concession
Unused tax losses for which no deferred tax asset has been recognised
Income tax expense
(21,681)
57,558
(742,639)
(876,160)
(2,922,590)
(2,608,883)
2,922,590
2,608,883
–
–
14. Financial instruments
The Group’s activities expose it to a variety of financial risks: market risk (which includes foreign currency risk), interest rate risk,
credit risk and liquidity risk. The Group uses different methods to measure different types of risk to which it is exposed. These
methods include sensitivity analysis in the case of interest rates and foreign exchange risk and aging analysis for credit risk.
Risk management is carried out by the chief executive officer under policies approved by the directors. These policies include
identification and analysis of risks and appropriate procedures to address these and report to the board of directors annually
as to the effectiveness of the Group’s management of its key business risks.
Market risk
Market risk is the risk that changes in market prices, such as interest rates and foreign exchange rates will affect the Group’s
income.
Foreign currency risk
The Group is exposed to foreign exchange fluctuations in relation to expenditure denominated in foreign currencies.
46
Notes to the Financial StatementscontinuedAnnual Report 2019 Oventus Medical Limited Interest rate risk
The Group’s main interest rate risk arises from cash and cash equivalents.
The Group has reviewed its sensitivity to foreign currency and interest rate risks and determined that this is not material.
As at the reporting date, the Group had the following cash and cash equivalents:
Consolidated
Cash on hand
Short term deposits
Cash at bank
Deposits
30 June 2019
30 June 2018
Weighted
average
interest rate
%
Weighted
average
interest rate
%
Balance
$
Balance
$
nil
308
nil
62
2.35%
1,500,000
2.40%
9,100,000
nil
1,498,255
nil
794,897
2.35%
74,732
2.77%
69,094
Net exposure to cash flow interest rate risk
3,073,295
9,964,053
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group.
The management assess the credit quality of its customers taking into account their financial position and past experience.
The maximum exposure to credit risk at the reporting date to recognised financial assets is the carrying amount, net of
any provisions for impairment of those assets, as disclosed in the statement of financial position and notes to the financial
statements. The Group does not hold any collateral.
Financial assets
Set out below is an overview of financial assets, other than cash and short-term deposits, held by the Group as at 30 June 2019
and 2018:
Financial assets at amortised cost:
Trade and other receivables
Total
30 June
2019
$
30 June
2018
$
109,071
109,071
574,210
574,210
Remaining contractual maturities
The following tables detail the Group’s remaining contractual maturity for its financial 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.
Non-derivatives
Non-interest bearing
Trade and other payables
Total non-derivatives
* Weighted average interest rate
30 June 2019
30 June 2018
Weighted
average
interest rate
%
1 year or less
$
Weighted
average
interest rate
%
1 year or less
$
nil
1,391,198
nil
1,391,198
561,475
561,475
Fair value of financial instruments
Unless otherwise stated, the carrying amounts of financial instruments reflect their fair value.
47
Notes to the Financial Statementscontinued
15. Related party transactions
(a) Product sales
No related party transactions were recorded for the financial reporting year. In 2018, the Group made sales of $17,419 to
Breathing Assist Solutions Pty Ltd (BAS), a company controlled by Dr. Christopher Hart and owned by entities associated with
Christopher Hart and Neil Anderson. At 30 June 2019, amounts owed by BAS is Nil (2018: nil).
(b) Clinical trial costs recharge
No related party transactions were recorded for the financial reporting year. In 2018, the Group reimbursed BAS for clinical trial
work conducted during the year amounting to $131,636. At 30 June 2019, the amount owed to BAS is Nil (2018: $639).
16. Key management personnel
Directors
The following persons were directors of Oventus Medical Limited during the financial year:
– Mel Bridges (Chairman) (Non-Executive Director)
– Christopher Hart (Executive Director) (Founder) (Managing Director and Chief Executive Officer from 30 August 2018)
(Clinical Director up to 29 August 2018)
– Neil Anderson (Executive Director) (Chief Technical Officer from 30 August 2018) (Managing Director and Chief Executive
Officer up to 29 August 2018)
– Sue MacLeman (Non-Executive Director)
– Sharad Joshi (Non-executive Director from November 2018)
Other key management personnel
The following persons also had the authority and responsibility for planning, directing and controlling the major activities of
the Group, directly or indirectly, during the financial year:
– Daniel Parry (Chief Financial and Operations Officer from 5 December 2017)
– Robin Randolph (Vice President of U.S. Marketing and Operations from 1 April 2018)
– Stephen Denaro (Company Secretary)
Compensation
Refer to the remuneration report contained in the directors’ report for details of the remuneration paid or payable to each
member of the Group’s key management personnel (KMP) for the year ended 30 June 2019.
The totals of remuneration paid to KMP of the Company and the Group during the year are as follows:
Short-term employee benefits
Post-employment benefits
Share-based payments
Termination payments
30 June
2019
$
30 June
2018
$
1,319,254
1,025,967
132,007
71,878
–
82,973
53,691
–
1,558,676
1,162,630
Short-term employee benefits
These amounts include fees and benefits paid to the non-executive Chair and non-executive directors as well as all salary,
paid leave benefits, fringe benefits and cash bonuses awarded to executive directors and other KMP.
Post-employment benefits
These amounts are the current-year’s estimated costs of providing for the Group’s defined benefits scheme post-retirement,
superannuation contributions made during the year and post-employment life insurance benefits.
Other long-term benefits
These amounts represent long service leave benefits accruing during the year, long-term disability benefits and deferred
bonus payments.
Share-based payments
These amounts represent the expense related to the participation of KMP in equity-settled benefit schemes as measured by
the fair value of the options, rights and shares granted on grant date.
Further information in relation to KMP remuneration can be found in the directors’ report.
48
Notes to the Financial StatementscontinuedAnnual Report 2019 Oventus Medical Limited
17. Remuneration of auditors
During the financial year the following fees were paid or payable for services provided by PKF Brisbane Audit the auditor of
the Group:
Audit services - PKF Brisbane Audit
Audit or review of the financial statements
18. Parent entity information
Set out below is the supplementary information about the parent entity.
Statement of profit or loss and other comprehensive income
Loss after income tax
Total comprehensive income
Statement of financial position
Total current assets
Total assets
Total current liabilities
Total liabilities
Equity
Issued capital
Accumulated losses
Total equity
30 June
2019
$
30 June
2018
$
47,400
45,000
30 June
2019
$
30 June
2018
$
(374,510)
(786,462)
(374,510)
(786,462)
2,394,551
9,926,259
27,628,347
28,051,538
69,614
69,614
118,295
118,295
29,640,394
29,640,394
(2,081,661)
(1,707,151)
27,558,733
27,933,243
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 2019 and 2018.
Contingent liabilities
The parent entity had no contingent liabilities as at 30 June 2019 and 2018.
Capital commitments - Property, plant and equipment
The parent entity had no capital commitments for property, plant and equipment at as 30 June 2019 and 2018.
Significant accounting policies
The accounting policies of the parent entity are consistent with those of the Group, as disclosed in Note 1, except for the
following:
– Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity.
– Dividends received from subsidiaries are recognised as other income by the parent entity.
49
Notes to the Financial Statementscontinued
19. Interest in subsidiaries
The consolidated financial statements include the financial statements of Oventus Medical Limited and subsidiaries listed in
the following table:
Name
Country of Incorporation
Oventus Manufacturing Pty Ltd
Oventus CRM Pty Ltd
Australia
Australia
Oventus Medical USA, Inc.
United States
Equity Interest
2019
100%
100%
100%
2018
100%
100%
100%
Oventus Medical USA, Inc. was incorporated as a wholly owned subsidiary of the Company on 13 January 2017 in the state of
Delaware. O2Vent® was officially launched at G’day USA event in San Francisco on 21 January 2017. The purpose of this entity
is to market and distribute the Group’s devices in the USA.
The principal activities of the remaining subsidiaries are:
– Oventus Manufacturing Pty Ltd - operating entity responsible for the development and manufacture of the Group’s
devices.
– Oventus CRM Pty Ltd - holds patient and clinical data
20. Subsequent events
On 26 July 2019 Oventus announced a capital raising in which it had received firm commitments for $7 million in a two-tranche
Placement and launched a fully underwritten $2.3 million Entitlement Offer to existing shareholders. On 1 August 2019 the
Company issued 15,757,491 shares at $0.38 per share in connection with closing the first tranche of the Placement. Proceeds
from the issuance of shares totalled $5,566,920, net of issuance costs of $397,421. The funds raised will underpin adoption of
Oventus’ ‘lab in lab’ business model in the sleep and dental channels.
Oventus signed its first agreement on 15 July with a sleep group in US for the Oventus O2Vent® Sleep Treatment Platform
which treats OSA and signed synergistic agreements on 16 July with VirtuOx, Carestream Dental and Lyon Dental, to underpin
broad adoption of the ‘lab in lab’ business model.
In addition, Oventus signed further material agreements in August 2019 with two US sleep groups to supply dental sleep
medicine solutions across a total of 10 facilities.
50
Notes to the Financial StatementscontinuedAnnual Report 2019 Oventus Medical Limited 21. Reconciliation of loss after income tax to net cash from operating activities
Loss after income tax expense for the year
Adjustments for:
Depreciation and amortisation
Net loss (gain) on disposal of assets
Share-based payments
Research and development tax concession
Foreign exchange fluctuations
Change in operating assets and liabilities:
(Increase) / decrease in trade and other receivables
(Increase) in other assets
Increase / (decrease) in trade and other payables
Increase in employee benefits
Decrease in other liabilities
Net cash outflow from operating activities
22. Loss per share
Loss per share from continuing operations
Loss after income tax
Loss after income tax attributable to the owners of Oventus Medical Limited
30 June
2019
$
30 June
2018
$
(7,848,255)
(5,870,547)
768,453
757,636
–
(71,016)
190,736
574,255
(9,698)
197,228
755,719
33,434
483,139
257,885
8,603
(146,832)
830,443
(527,568)
–
–
90,184
(20,988)
(4,912,140)
(4,635,049)
30 June
2019
$
30 June
2018
$
(7,848,255)
(5,870,547)
(7,848,255)
(5,870,547)
Numbers
Weighted average number of ordinary shares used in calculating basic loss per share
105,939,212
99,126,167
Adjustments for calculation of diluted loss per share:
Options over ordinary shares
–
–
Weighted average number of ordinary shares used in calculating diluted loss per share
105,939,212
99,126,167
Basic loss per share
Diluted loss per share
Cents
Cents
(7.41)
(7.41)
(5.92)
(5.92)
51
Notes to the Financial Statementscontinued 23. Share-based payments
Share options
Share options are issued to eligible participants under the Company’s Employee Share Option Plan. The Company has options
outstanding of 4,579,952 as at 30 June 2019 (2018: 3,424,952).
The offer has a three-year vesting period with an expiry of five years and is equity-settled.
Set out below are summaries of options granted under the plan:
Fair Value
per option
at grant
date
Balance at
the start
of
the year
Exercise
price
Expired/
forfeited/
other
Granted
Exercised
Vested at
the end of
the year
Balance at
the end of
the year
Grant date
Expiry date
As at 30 June
2019
24/02/2016
23/02/2021
$0.13
$0.58 2,274,954
14/04/2016
14/04/2021 cancelled
$0.73
–
1/12/2016
1/12/2021
$0.42
$1.06
300,000
23/05/2017
12/12/2022
25/02/2017
24/02/2022
18/12/2017
18/12/2022
3/07/2018
2/07/2023
9/10/2018
8/08/2023
16/01/2019
15/01/2024
21/05/2019
22/05/2024
$0.11
$0.12
$0.31
$0.15
$0.14
$0.16
$0.12
$0.96
600,000
$0.94
49,998
$1.02
200,000
$0.48
$0.42
$0.42
$0.40
–
–
–
–
850,000
(400,000)
380,000
225,000
100,000
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
– 2,274,954 2,274,954
–
–
–
–
–
–
–
–
–
–
–
199,980
300,000
399,998
600,000
–
49,998
66,666
200,000
149,996
450,000
380,000
225,000
100,000
3,424,952 1,555,000
(400,000)
– 3,091,594 4,579,952
As at 30 June
2018
24/02/2016
23/02/2021
$0.13
$0.58 2,709,882
14/04/2016
14/04/2021 cancelled
$0.73
401,464
–
–
–
–
–
(434,928)
(401,464)
(150,000)
(100,000)
(100,002)
$1.06
450,000
$0.96
700,000
$0.94
150,000
$1.02
200,000
4,411,346
200,000 (1,186,394)
–
–
–
–
–
–
–
1,538,764
2,274,954
–
–
99,990
300,000
199,999
600,000
–
–
49,998
200,000
1,838,753
3,424,952
1/12/2016
1/12/2021
23/05/2017
12/12/2022
25/02/2017
24/02/2022
18/12/2017
18/12/2022
$0.42
$0.11
$0.12
$0.31
52
Notes to the Financial StatementscontinuedAnnual Report 2019 Oventus Medical Limited 24. Significant agreements and commitments for expenditure
(a) Operating Lease Commitments
Not later than 1 year
Later than 1 but not later than 5
Taringa lease
Melbourne lease
Residential lease for CEO in the US
30 June 2019
30 June 2018
239,332
135,876
375,208
63,195
–
63,195
30 June 2019
30 June 2018
1 Year
> 1 Year
1 Year
> 1 Year
45,292
135,876
41,875
21,320
194,040
239,332
135,876
63,195
–
–
–
The Taringa office property lease is a non-cancellable lease with a 2-year term beginning on 01 November 2018 and expiring
on 31 Oct 2020. The minimum lease payments shall be increased by a fixed rate of 3% per annum.
The residential lease for Dr. Chris Hart in the US is only for a period of 12 months from June 2019 to June 2020 with a
contracted amount of USD$132,000.
(b) Other Commitments
Cooperative Research Centre Project
(CRC Project) commitment
30 June 2019
30 June 2018
624,740
624,740
583,615
583,615
This is the remaining amount of payable by Oventus (lead participant) to the CRC project (Targeted Therapy for Sleep Apnoea:
A Novel Personalised Approach) as per contract. The other parties to the project are Medical Monitoring Solutions Pty Ltd,
Commonwealth Scientific and Industrial Research Organisation, Western Sydney University, Neuroscience Research Australia
and Flinders University.
Contingent provisions within the licence agreement require that the licence and services fees shall be increased by the
consumer price index (CPI) per annum.
53
Notes to the Financial Statementscontinued 25. Segment reporting
Management currently identifies the Group’s two regions as its operating segments (see Note 1). These operating segments
are monitored by the Group’s chief operating decision maker and strategic decisions are made on the basis of adjusted
segment operating results.
Segment information for the reporting period follows:
30 June 2019
United States
(12 months)
$
Australia
$
30 June 2018
Total
$
Australia
$
United States
$
Total
$
Segment revenue
Staff costs
256,326
75,511
331,837
210,128
61,194
271,322
(2,626,196)
(1,306,106)
(3,932,302)
(2,411,331)
(378,975)
(2,790,306)
Manufacturing costs - Pilot phase
(114,669)
(43,570)
(158,239)
(137,622)
(40,078)
(177,700)
Sales and marketing
Other expenses
(261,203)
(409,723)
(670,926)
(356,190)
(50,055)
(406,245)
(2,885,621)
(839,717)
(3,725,338)
(2,512,753)
(537,038)
(3,049,791)
Segment operating loss
(5,631,362)
(2,523,606)
(8,154,968)
(5,207,768)
(944,952)
(6,152,720)
Segment assets
Segment liabilities
8,302,828
656,646
8,959,475
15,764,805
47,708
15,812,513
747,162
855,708
1,602,870
645,979
36,264
682,243
Unallocated items:
Interest income and other income are not allocated to operating segments as they are not considered part of the core
operations of any segments.
54
Notes to the Financial StatementscontinuedAnnual Report 2019 Oventus Medical Limited Directors’ Declaration
The directors have determined that the company is not a reporting entity and that this special purpose financial report should
be prepared in accordance with the accounting policies outlined in Note 1 to the financial statements.
– the financial statements and notes, as set out on pages 32 to 54 present fairly the company’s financial position as at
30 June 2019 and its performance for the year ended on that date in accordance with the accounting policies described
in Note 1 to the financial statements; and
– in the directors’ opinion there are reasonable grounds to believe that the company will be able to pay its debts as and
when they become due and payable.
This declaration is made in accordance with a resolution of the Board of Directors.
On behalf of the directors
Mel Bridges
Director
Brisbane
23rd August 2019
55
For the year ended 30 June 2019 Independent Auditor’s Report
To the Members
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF OVENTUS MEDICAL LIMITED
Report on the Financial Report
Opinion
We have audited the accompanying financial report of Oventus Medical Limited (the company), which comprises
the consolidated statement of financial position as at 30 June 2019, the consolidated statement of profit or loss
and other comprehensive income, the consolidated statement of changes in equity and the consolidated
statement of cash flows for the year then ended, notes comprising a summary of significant accounting policies
and other explanatory information, and the directors’ declaration of the company and the consolidated entity
comprising the company and the entities it controlled at the year’s end or from time to time during the financial
year.
In our opinion, the financial report of Oventus Medical Limited is in accordance with the Corporations Act 2001,
including:
i)
Giving a true and fair view of the consolidated entity’s financial position as at 30 June 2019 and
of its performance for the year ended on that date; and
ii)
Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Those standards require that we
comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain
reasonable assurance about whether the financial report is free from material misstatement. Our responsibilities
under those standards are further described in the Auditor’s Responsibility section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Independence
We are independent of the consolidated entity in accordance with the Corporations Act 2001 and the ethical
requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for
Professional Accountants (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.
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. This matter was 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 this matter.
For each matter below, our description of how our audit addressed the matter is provided in that context.
53
56
Annual Report 2019 Oventus Medical Limited
1. Capitalisation and Valuation of Internal Development Costs
Why significant
How our audit addressed the key audit matter
The Consolidated entity’s intangible assets as at 30
June 2019 include capitalised development costs with a
carrying value of $2,688,803 (2018: $2,464,345), as
disclosed in Note 7.
The Consolidated entity’s accounting policy in respect of
development costs are outlined in Note 1 and Note 2.
Capitalised development costs are significant to the
audit due to the amount of expenditure being capitalised
and the specific criteria that have to be met for
capitalisation.
We note significant judgement is required:
•
in determining the treatment of development
expenditure in accordance with AASB 138, and
the Consolidated entity’s accounting policy. In
particular:
o whether project costs in the design
and development of a potential
product meet
recognition
the
conditions for an asset
is
o
o whether a product development
and
technically
project
economically feasible
in making assumptions regarding the
expected future cash generation of
the project, discount rates to be
applied and the expected period of
benefits.
•
•
determining
in determining that capitalised development
costs have useful lives of 5 years which
determines the amortisation rate
in
and
circumstances indicate that development costs
capitalised should be tested for impairment in
accordance with Australian Accounting
Standard AASB 136 Impairment of Assets.
whether
facts
Our work included, but was not limited to, the following
procedures:
•
•
•
testing, on a sample basis, development expenditure
incurred during the year for compliance with AASB
138 and the Consolidated entity’s accounting policy;
and
review the reasonableness of estimated useful life
and amortisation method and check on a sample
basis whether they are properly calculated and
disclosed in the financial statements
to assess whether there are indicators of impairment:
o obtaining and assessing evidence of external
changes within the Consolidated entity’s market
or internal changes such as the sales
performance of existing products
o holding discussions with the directors and
management as to the status of project
developments as well as assessing if there was
evidence that a product has been discontinued
o obtaining and assessing evidence of the
Consolidated entity’s future intention for the
products, including reviewing future budgeted
expenditure and sales forecasts
• assessing the appropriateness of the related
disclosures in Notes 1, 2 and 7.
54
57
Independent Auditor’s Reportcontinued
continued
Other Information
Other information is financial and non-financial information in the annual report of the Consolidated entity which
is provided in addition to the Financial Report and the Auditor’s Report. The directors are responsible for Other
Information in the annual report.
The Other Information we obtained prior to the date of this Auditor’s Report was the Director’s report. The
remaining Other Information is expected to be made available to us after the date of the Auditor’s Report.
Our opinion on the Financial Report does not cover the Other Information and, accordingly, the auditor does not
and will not express an audit opinion or any form of assurance conclusion thereon, with the exception of the
Remuneration Report.
In connection with our audit of the Financial Report, our responsibility is to read the Other Information. In doing
so, we 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.
We are required to report if we conclude that there is a material misstatement of this Other Information in the
Financial Report and based on the work we have performed on the Other Information that we obtained prior the
date of this Auditor’s Report we have nothing to report.
Directors’ Responsibilities 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 Note 1, the Directors also
state, in accordance with Australian Accounting Standard AASB 101 Presentation of Financial Statements, that
the financial report complies with International Financial Reporting Standards.
In preparing the financial report, the Directors are responsible for assessing the consolidated entity’s ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using a going concern
basis of accounting unless the Directors either intend to liquidate the consolidated entity or to cease operations,
or have no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our responsibility is to express an opinion on the financial report based on our audit. 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 and 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 Australian Auditing
Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error
and are considered material if, individual or in aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of this financial report.
As part of an audit in accordance with Australian Auditing Standards, we exercise professional judgement and
maintain professional scepticism throughout the audit.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
financial report.
55
58
Independent Auditor’s ReportcontinuedAnnual Report 2019 Oventus Medical Limited
The procedures selected depend on the auditor’s judgement, including assessment of the risks of material
misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the entity’s preparation of the financial report that gives a true and fair view
in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the entity’s internal control.
The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error,
as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal
control.
An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of
accounting estimates made by the Directors, as well as evaluating the overall presentation of the financial report.
We conclude on the appropriateness of the Directors’ use of the going concern basis of accounting and, based
on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast
significant doubt on the consolidated entity’s ability to continue as a going concern. If we conclude that a material
uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial
report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit
evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the
consolidated entity to cease to continue as a going concern.
We evaluate the overall presentation, structure and content of the financial report, including the disclosures, and
whether the financial report represents the underlying transactions and events in a manner that achieves fair
presentation.
We obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the consolidated entity to express an opinion on the financial report. We are responsible for the
direction, supervision and performance of the audit. We remain solely responsible for our audit opinion.
We communicate with the Directors regarding, among other matters, the planned scope and timing of the audit
and significant audit findings, including any significant deficiencies in internal control that we identify during our
audit.
The Auditing Standards require that we comply with relevant ethical requirements relating to audit engagements.
We also provide the Directors with a statement that we have complied with relevant ethical requirements regarding
independence, and to communicate with them all relationships and other matters that may reasonably be thought
to bear on our independence, and where applicable, related safeguards.
From the matters communicated with the Directors, we determine those matters that were of most significance in
the audit of the financial report of the current period and are therefore key audit matters. We describe these
matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in
extremely rare circumstances, we determine that a matter should not be communicated in our report because the
adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such
communication.
Report on the Remuneration Report
We have audited the Remuneration Report included in the directors’ report for the year ended 30 June 2019.
56
59
Independent Auditor’s Reportcontinued
Opinion
In our opinion, the Remuneration Report of Oventus Medical Limited for the year ended 30 June 2019, 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.
PKF BRISBANE AUDIT
CAMERON BRADLEY
PARTNER
23 AUGUST 2019
BRISBANE
57
60
Independent Auditor’s ReportcontinuedAnnual Report 2019 Oventus Medical Limited
Shareholder Information
The shareholder information set out below was applicable as at 19 September 2019.
Distribution of equitable securities
Analysis of number of equitable security holders by size of holding:
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 and over
Total
Substantial holders
Substantial holders in the company are set out below:
Christopher Hart
Thorney Group
Neil Anderson
Unquoted equity securities
Employee options
Number of
holders of
ordinary
shares
Units
% of total
shares issued
111
272
216
635
62,651
791,515
1,731,672
21,076,061
161
106,867,818
0.05
0.61
1.33
16.15
81.87
1,395
130,529,717
100.00
Ordinary Shares
Number
held
% of total
shares issued
26,126,513
19,924,068
5,598,477
20.02
15.26
4.29
2019
Number
4,579,952
Voting rights
The voting rights attached to ordinary shares and options are set out below:
Ordinary shares
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each share
shall have one vote.
Options
There are no voting rights attached to options. Upon exercise of the option, the issued shares will confer full voting rights.
Warrants
There are no voting rights attached to warrants. Upon conversion of the warrant, the issued shares will confer full voting rights.
There are no other classes of equity securities.
61
For the year ended 30 June 2019 Ordinary Shares
Number
held
% of total
shares issued
2 6 , 1 2 6 , 5 1 3
13,990,305
5,598,477
5,301,894
3,732,390
2,151,434
1,944,130
1,886,195
1,805,000
1,470,245
20.02
10.72
4.29
4.06
2.86
1.65
1.49
1.45
1.38
1.13
1.12
0.99
0.91
0.87
0.84
0.77
0.69
0.62
0.62
0.58
continued
Equity security holders
Twenty largest quoted equity security holders
The names of the twenty largest security holders of quoted equity securities are listed below:
Name
CHRISTOPHER PATRICK HART
UBS NOMINEES PTY LTD
NEIL LAWRENCE ANDERSON
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
MOBIUS MEDICAL INVESTMENTS PTY LTD
NEW HIGHLAND PTY LTD
MR ANTHONY JOHN HUNTLEY
CERALIUS PTY LTD
SARGON CT PTY LTD
PARMA CORPORATION PTY LTD
MR GREGORY WAYNE BROWN + MRS STEFANIE BROWN
1,457,131
DIXSON TRUST PTY LTD
BOND STREET CUSTODIANS LIMITED
BOND STREET CUSTODIANS LIMITED
MURROON PTY LTD
MR IAN DAVIES
GOEN INVESTMENTS PTY LTD
WAISLITZ CHARITABLE CORPORATION PTY LTD
PICHERIT'S FARM PTY LTD
BOND STREET CUSTODIANS LIMITED
1,297,275
1,184,400
1,137,913
1,098,714
1,000,103
900,500
815,694
802,868
760,000
Total
74,461,181
57.05
62
Shareholder InformationAnnual Report 2019 Oventus Medical Limited Corporate Directory
Directors
Mel Bridges
Chris Hart
Chairman
(Executive Director) (Founder) (Managing Director and Chief Executive Officer from 30 August 2018)
(Clinical Director up to 29 August 2018)
Neil Anderson
(Executive Director) (Chief Technical Officer from 30 August 2018) (Managing Director and Chief Executive
Officer up to 29 August 2018)
Sue MacLeman Non-Executive Director
Sharad Joshi
Non-Executive Director (appointed 17 December 2018)
Company Secretary
Stephen Denaro
Notice of Annual General Meeting
The Annual General Meeting of Oventus Medical Limited will be held on 22 November 2019, 11 am, at Thomson Geer Lawyers,
Level 28, Waterfront Place, 1 Eagle Street, Brisbane QLD 4000.
Legal Advisors
Thomson Geer Lawyers
Level 28, Waterfront Place, 1 Eagle Street, Brisbane QLD 4000
Registered office
Suite 1, 1 Swann Road
Indooroopilly QLD 4068
Telephone: 1300 533 159
Principal place of business
Suite 1, 1 Swann Road, Indooroopilly QLD 4068
Share register
Computershare Investor Services Pty Limited
Level 1, 200 Mary Street
Brisbane QLD 4000
Telephone: 1300 787 272
Auditor
PKF Brisbane Audit
Level 6, 10 Eagle Street
Brisbane QLD 4000
Stock exchange listing
Oventus Medical Limited shares are listed on the Australian Securities Exchange (ASX code: OVN)
Website
www.o2vent.com
Corporate Governance Statement
The Corporate Governance Statement of Oventus Medical Limited is available from our website www.o2vent.com via the tab
headed “Investor Centre”.
63
O2Vent.com