ANNUAL
REPORT
JUNE 2020
ENDING
YEAR
“Better pain identification
and better medication
management means a better
quality of life for people
receiving aged care.” –
Aged Care Minister Ken Wyatt.
29/4/19
Chairman’s Letter
Dear Shareholders,
During the 2020 Financial Year, PainChek® like most businesses was adversely impacted by the COVID-19 pandemic. Our initial target
markets of residential aged care in Australia and the UK were significantly impacted from March 2020 onwards, as the sector went into
lockdown, impacting our ability to sell to and implement new customers domestically and internationally. It is a credit to the management
team that we were able to adjust to a digital sales and delivery model utilising the benefits of a digital technology and deliver strong
growth in contracted and implemented bed licences, which were up 481% and 412% respectively on the prior year.
The Company now has around 25 per cent of the aged care market in Australia under two or three-year agreements at 30 June 2020 and
is targeting 75 per cent market penetration in Australia by June 2021 – approximately 160,000 beds of which approximately 100,000 are
expected to be occupied by dementia or cognitively impaired residents. This growth was supported by the Australian Federal Government
grant to PainChek® and their agreement, due to the impact of COVID-19, to extend the grant period through to May 2021.
Our first product, the PainChek® adult dementia App, continues to be well received in residential aged care and is clearly unique. We have
successfully integrated it into the leading clinical care systems in Australia and the UK. During FY2021 we plan to introduce it into the
Home Care sector for elderly people living with dementia and cognitive impairment subject to successful trials which are underway.
The COVID-19 pandemic also prevented us from commencing clinical trials for our adult dementia App in the USA, and our new infants
App in Australia. In both cases we have done much of the planning required to commence trials when circumstances allow and
commenced an alternate clinical research approach for the infants App in order to achieve the CE and TGA regulatory clearance goal in
2021. In the USA we are awaiting FDA clearance for our pre-submission Application on the proposed trials for the dementia App.
Our growth was achieved by the existing small team as we delayed plans to expand operations and contained costs. We are well placed to
continue international expansion and expand the team when circumstances permit, as subsequent to the year-end we raised an additional
$10m in equity capital.
Our share price performance was disappointing falling from $0.20 on 1st July 2019 to $11.5 cents at 30 June 2020. We believe we will
improve our share price by continuing to execute on our existing identified opportunities in Australia as well as penetrate international
markets. On behalf of the Board of Directors, I would like to thank all of our shareholders for continuing to support the Company.
Yours sincerely,
John Murray
Chairman
PainChek Limited (ASX: PCK)
ABN 21 146 035 127
Suite 401, 35 Lime Street,
Sydney, NSW, 2000
Registered Office:
Suite 8, 110 Hay Street
Subiaco WA 6008
info@paincheck.com
PAINCHEK LIMITED | 3
Review of Operations
Initial market opportunity
PainChek’s® mission is to give a voice to people who cannot
verbalise their pain. The PainChek® App uses cameras
in
smartphones and tablets to capture a brief video of a person that is
analysed in real time for facial micro-expressions that indicate pain.
These objective measures are combined with a behavioral checklist
to assess pain severity scores for adults who cannot verbalise their
pain or for a child who is yet to learn to speak.
The all-digital assessment tool eliminates paperwork, automatically
logs pain scores over time and integrates into clinical care systems.
It helps care homes meet accreditation standards and protects
income and revenues.
The PainChek® Adult App has been TGA and CE mark cleared for use
as a Class I medical device. The science behind PainChek® is
validated by five peer-reviewed scientific publications in leading
journals. PainChek® has received a Class 1 CE Mark and TGA
clearances, with FDA review in process. The Company is currently
going through an FDA De Novo application for approval of the
PainChek® Adult App to clearthe way for launch in the US market.
Mission, Capability & Values
Our customers are our
focus in everything we do.
Pain assessments are subjective and difficult in the best of
circumstance. They are profoundly challenging in two extreme
groups: those with dementia and other cognitive impairments who
have lost their ability to reliably report their pain levels, and
pre-verbal children. For these people, pain is often missed or
misdiagnosed.
Around the world there are an estimated 50 million people with
dementia, a number that is estimated to grow to 75 million by 2025.
On average there are three carers for each person with dementia,
and these carers are the primary users of the PainChek® Adult App.
Worldwide there are estimated to be 6.96 million aged care beds,
with 43.5 million individuals estimated to be living with dementia
at home.
There are another 400 million children aged 0 to 3-year-olds
worldwide, and each year an estimated 50 million people become
parents for the first time. Annually, 100 million children are born in
or pass through hospitals each year. Parents and practitioners
can have difficulty discerning whether these pre-verbal children are
in genuine pain or just crying from discomfort or hunger.
Traditionally, pain assessments are conducted by manual pen and
paper methods, making it a process ready for disruption. By
using video and artificial intelligence to automate facial expression
assessment, PainChek® reduces subjectivity.
We strive to innovate around the
design and delivery of excellent
products and services to our customers.
The all-digital nature of the PainChek® app can eliminate
duplication of paperwork, integrate automatically into medical
records and automatically logs pain scores over time.
We establish trust and deal with integrity
in interactions with our customers,
suppliers, partners and people.
The data collected using PainChek® is available to RAC managers
and staff through the PainChek® portal, providing a clear snapshot
of the status of its residents and their pain situation at any given
point in time.
Customer
First
Continuous
Innovation
Trust and
Integrity
Personal
Accountability
Our people take pride and personal
accountability in their work.
Collaborative
Teamwork
We work in teams and value the
contribution of each other in
achieving common goals.
4 | PAINCHEK LIMITED
Australian sales
Australia has been used as an important proving ground for PainChek® and has generated substantial and growing
adoption of the technology. Particularly during the past 12 months the Company has achieved rapid growth, building on its Software
as a Service business model. Contracted clients grew 547 per cent, going from 32 to 207. The number of contracted aged care facilities
increased 509 per cent, from 142 to 722. The number of total approved beds increased 481 per cent, from 10,590 to 61,571.
RESIDENTIAL AGED CARE CLIENTS
AND FACILITIES CONTRACTED
800
700
600
500
400
300
200
100
142
160
98
32
38
722
588
380
175
207
Jun-19
Sep-19
Dec-19
Mar-19
June-20
Total Contracted Clients
Contracted RAC Facilities
Major clients acquired during the year include Aegis Aged Care
Group, Juniper (Uniting WA), Ozcare, Infinte Aged Care, Royal
Freemasons, RSL Lifecare and Baptistcare NSW & ACT.
Assessments conducted
under COVID-19
The Company had approximately 27 per cent of the aged care
market in Australia under two or three-year agreements at
30 June 2020, and is targeting 75 per cent market penetration in
Australia by June 2021 – approximately 160,000 beds of which
approximately 100,000 are expected to be occupied by dementia
or cognitively impaired residents.
The 61,571 total beds now under license translate to $2.66
million in normalised contracted Annualized Recurring Revenue
(ARR) in Year 2 of client contracts, on the assumption that the
clients do not terminate their contracts after the initial 12-month
grant period.
In recognition of the importance of caring for vulnerable citizens
with dementia, in April 2019 the Federal Government agreed to
pay $5 million for a national trial of PainChek® in the Australian
residential aged care market.
“Better pain identification and better medication management
means a better quality of life for people receiving aged care.” |
– Aged Care Minister Ken Wyatt.
In December 2019, PainChek® received its first revenue from the
support program, receiving an upfront payment of
$500,000 from the Department of Health. It later received two
payments of $1.25 million each, in March 2020 and June 2020,
with the first of these recognised as revenue in FY2020 for hitting
license targets.
Due to the impact of COVID-19, the original grant term of one
year has been extended by another seven months, to 31
impairment
If 100,000 dementia/cognitive
May 2021.
related licenses are not activated by then, a pro-rata amount
based on the number of such licenses issued will be paid.
As of 30 June 2020, there had been more than 135,000 PainChek®
assessments conducted, up from 40,000 as of July 2019. There
have been 34,000 assessments per quarter, and the trend is
increasing.Regular pain assessments are of even greater
importance for the vulnerable during COVID-19, as chronic pain may
be associated with an impaired immune system.
The PainChek® design is unique and its availability is timely given
the COVID-19 challenges, allowing carers to safely and rapidly
conduct a pain assessment that complies with social distancing
requirements and infection control procedures, minimising the risk
for patients, residents and their carers.
“PainChek® has transformed the way we monitor and treat pain
with those residents living with dementia. Under the restrictions
required for COVID-19, PainChek ® has been even more beneficial.
As a non-contact digital healthcare solution supportive of our social
distancing requirements, we have continued to use PainChek ®
to safely assess our residents living with dementia and cognitive
impairment.” – Jim Murray, Facility Manager, Allambie Heights
Village.
PainChek® remote digital delivery capability allows for full business
continuity during COVID-19.
COVID-19 has significantly impacted the normal routines of
hospitals and the residential aged care sector, with facilities going
into lockdown mode to focus on protecting their vulnerable
residents during the pandemic.
The Company has successfully pivoted to using its remote digital
capability to continue to deliver PainChek® to clients around the
world. The digital capability allows the Company to sell, install, train
and provide technical support to the PainChek® App to all
residential aged care facilities, even during lockdown. This is a key
capability which can be leveraged on a global basis as the Company
extends further into international markets.
PAINCHEK LIMITED | 5
We are seeking to confirm that these studies will provide FDA with
all the necessary data to support a successful PainChek® Adult de
novo US clearance application.
Commencement of all clinical trials in the USA has been delayed
because of COVID-19. The Company remains in close contact with
the relevant trial partners and is ready to progress once the
situation improves.
While the UK market expansion has also been impacted due to the
current global pandemic, PainChek® UK received its first orders in
December, from aged care Person Centred Software UK.
The PainChek® UK team has taken the opportunity to build
a revised marketing strategy to support aged care during the
pandemic and accelerate sales as aged care facilities can re-
commence with new projects. The team successfully created and
led a number of sector webinars to raise awareness across
residential aged care.
In November 2019, PainChek® signed its first license agreement in
New Zealand, with Enliven (Presbyterian Support Southland), to
integrate across the five Enliven aged care homes in the South
Island. The agreement followed a successful trial at Enliven’s
Peacehaven Village home.
“With this app, we can unobtrusively carry out a clinical pain
assessment in just a few minutes and even in circumstances when
a patient is resting. You know it’s a win-win situation when you’re
embracing new technology which helps deliver timely and better
client care, and it’s also providing your staff, as carers, with an easier
and improved work environment.” – Carol Riddle, Peacehaven
Manager.
PainChek® remote digital delivery
capability allows for full business
continuity during COVID-19
This digital capability also leverages the PainChek® e-learning
platforms, providing education to the clients and allowing
them to continue with their work without face to face interaction.
As of 30 June 2020:
192 providers managing 612
facilities have been given access
to PainChek® and training
1,338 staff have
been trained
144 on-line workshops which
have trained 932 staff
406 staff have completed the
PainChek® e-learning platform
Based on the PainChek® “train-the-trainer”
approach, a total of 3,875 staff are now
registered to use PainChek®.
“With the advent of COVID-19, IRT Group rapidly changed its
rollout approach to PainChek®, adopting a remote training
approach and running in excess of 72 video conferencing
sessions across its 21 residential aged care centres. The
PainChek® app has allowed IRT to provide employees with an
innovative pain assessment and management tool that enables
them to practice safe distancing whilst assessing and managing
resident pain.” – Alex Reed, Strategic Projects Manager, Aged
Care Centres at Illawarra Retirement Trust (IRT)
Global growth
In June, PainChek® submitted for regulatory clearance with
Canada Health to enter Canadian markets as a Class 1 regulatory
cleared device. Canada Health has a 120-day review timeframe
for PainChek’s® application, which could allow PainChek® to
enter the Canadian market as a cleared regulatory device as
early as fourth quarter of calendar 2020.
The Canadian opportunity is considerable, consisting of 250,000
aged care beds and strong government funding for health care.
Entry into Canada will serve as a beachhead in North America in
preparation for US FDA De Novo clearance targeted in 2021 and
launch in 2022.
In the United States, the Company has submitted a Supplement to
its initial Pre-submission Application to the FDA seeking their
feedback on the planned human factors validation testing and
clinical trials protocols developed by our research partners,
Healthcare Human Factors and Donawa Lifesciences.
6 | PAINCHEK LIMITED
Home care market
PainChek® has recently started a number of pilot trial sites with
the PainChek® “Shared Care” App in the Australian Home Care
market. This includes a pilot in Victoria with a large international
broker of home care services and with two of our existing aged
care clients, both of whom are amongst the top 20 largest Home
Care providers.
The Company has formed a working team to manage these pilots
and build a sustainable market entry strategy, with the intention
of entering the Australian market in the fourth quarter of 2020
and overseas in 2021. A recent KPMG report confirmed
the government funded Home Care market to be valued at
$2.1 billion.
Intellectual property
Over the course of the year PainChek® strengthened its
intellectual property portfolio, securing patents in Australia, the
United States and Japan for its pain assessment app. A patent in
China was granted in August 2020. Patent applications have
been submitted in Europe and the United Kingdom.
PainChek® also completed the registration of its trademark in
the USA and the European Union. Protecting intellectual
property is a crucial step forward for growing the PainChek®
brand internationally.
PainChek® Infant app
PainChek® has leveraged the same facial recognition technology
from its app to measure pain in people with dementia and
cognitive impairments, to create a trial app for use on babies and
toddlers.
A research agreement is in place with Melbourne’s Murdoch
Children’s Research Institute to conduct a clinical trial of
a PainChek® Infant App on 100 infants undergoing painful
procedures.
Considerable preparatory work has been done to set up for this
including ethics approvals, trial protocols and the development
of the trial Infant App.
However, with the developments related to the COVID-19 crisis
in Melbourne, this trial is on hold. Once restrictions on non-
COVID-related research are lifted the study will resume.
In the interim, PainChek® is pursuing other methods and
partners to evaluate the performance of the PainChek® Infant
App without relying on live trials with the goal of achieving TGA
and CE mark regulatory clearance during calendar 2021.
Philips Healthcare collaboration
PainChek® was selected from more than 2,000 start-ups to work
with Phillips Healthcare’s global collaboration program with
early stage companies. The HealthWorks programme is designed
to identify best in class new healthcare technologies that fit with
the Philips’ business and strategy.
The Company has been working with Philips to use PainChek®
facial pain indicators along with other classic patient vital
signs measures to assess the risk of delirium for a patient in
hospital care.
The parties have also been communicating around how
PainChek’s® pain assessment technology fits into the Philips global
pain management strategy, following the Philips HealthWorks
Global Breakthrough sessions in Eindhoven, the Netherlands, in
December 2019.
The parties are aiming to progress and finalise these collaborations,
so they are ready to jointly execute immediately following the
easing of COVID-19 restrictions.
Summary
While COVID-19 impacted the Company’s research programmes
and international expansion in the second half of the year, the
Company successfully pivoted to continue to deliver its product and
services and maintain solid growth.
PainChek® has become the most licensed digital clinical tool across
Australian Residential Aged Care and the Company now plans on
expanding into the Home Care sector.
The upcoming goals for the year include continued market
penetration with our dementia App into aged care in Australia and
the UK and developing our market entry strategy into aged care in
continental Europe where we have regulatory clearance. We will
also expand into the Canadian aged care sector subject to
regulatory approval. We aim to significantly progress our path to
the aged care market in the USA through conducting successful
clinical trials we have planned for the FDA clearance process. In
Australia we aim to expand use of our dementia App into home
aged care if our pilots are successful. Finally, we aim to conduct
successful trials and obtain regulatory clearance in Australia for our
infant App.
The company continues to gain recognition internationally and will
continue to work with partners such as Phillips Healthcare to enter
new geographic markets and new healthcare segments.
PAINCHEK LIMITED | 7
PainChek Limited
ABN 21 146 035 127
Financial Report for the
year ended 30 June 2020
8 | PAINCHEK LIMITED
Corporate directory
BOARD OF DIRECTORS
Mr John Murray
Mr Philip Daffas
Mr Adam Davey
Mr Ross Harricks
COMPANY SECRETARY
Mr Ian Hobson
Non-Executive Chairman
Managing Director
Non-Executive Director
Non-Executive Director
PRINCIPAL PLACE OF BUSINESS
Suite 401, 35 Lime Street
Sydney NSW 2000
REGISTERED OFFICE
Suite 8, 110 Hay Street
Subiaco, Western Australia 6008
Tel:+61 8 9388 8290
POSTAL ADDRESS
PO Box 226
Subiaco, Western Australia 6904
WEBSITE
Website: www.painchek.com
AUDITOR
BDO Audit Pty Ltd
SHARE REGISTRY
Boardroom Pty Ltd
Grosvenor Place
Level 12, 225 George Street
Sydney, NSW 2000
Tel: +61 2 9290 9600
Fax: +61 2 9290 9655
STOCK EXCHANGE
Australian Securities Exchange
20 Bridge Street
Sydney, NSW 2000
ASX CODE
PCK
PAINCHEK LIMITED | 9
Annual Financial Report for the
year ended 30 June 2020
Contents
Directors’ report
Auditor’s independence declaration
Consolidated statement of profit or loss and other comprehensive income
Consolidated statement of financial position
Consolidated statement of changes in equity
Consolidated statement of cash flows
Notes to the financial statements
Directors’ declaration
Independent auditor’s review report
11
28
29
30
31
32
33
58
59
10 | PAINCHEK LIMITED
Directors’ report
The directors of PainChek Limited (“PainChek” or “the Company”) submit herewith the financial report of
the Company and its subsidiary (“Group” or “Consolidated Entity”) for the year ended 30 June 2020. In
order to comply with the provisions of the Corporations Act 2001, the directors report as follows:
Names of Directors
The names of the directors of the Company during or since the end of the year are noted below. Directors
were in office for the entire period unless otherwise stated:
Mr John Murray (appointed 30 September 2016) LLB (Hons), CA, MAICD – Non-executive Chairman
Mr Murray has 25 years’ experience in private equity and venture capital and was a co-founder and
Managing Partner of Technology Venture Partners; one of the original and leading venture capital firms in
Australia. Mr Murray is a past chairman of the Australian Venture Capital Association. Mr Murray has
considerable experience as an investor and a non-executive director of high growth, technology- based
companies. He possesses a broad understanding of global trends in technology and its impact on a variety
of industries. He is a past Chairman of a private, residential aged care business in Australia. Mr Murray also
brings 12 years’ experience in executive roles in corporate banking, accounting and IT services industries.
Mr Murray has been on the Board of a number of successful technology rollouts and exits including online
travel play Viator, which was acquired by TripAdvisor for approximately US$200 million in 2014. He is a
chartered accountant with an Honour degree in Law and is a member of the Australian Institute of
Company Directors. Mr Murray is a director of UK AIM listed company Seeing Machines Ltd and was
Chairman of ASX listed company Flamingo AI Limited until October 2019, but otherwise has not been a
director of an ASX listed company in the past 3 years.
Mr Philip Daffas (appointed 30 September 2016) BSc, Dip EENG, MBA, GAICD – Managing Director
Philip is a highly accomplished global business leader and people manager with an international career
spanning more than 25 years with leading blue-chip healthcare corporates and novel technology start-up
companies. Philip has held senior global business leader positions in Europe, US and Australia. He has been
instrumental in building businesses, growing market share and developing extensive high-level customer
and industry relationships in each sector on a global basis.
Philip’s earlier experience was gained in Europe with market leaders such as IVAC infusion systems and
Shiley cardiopulmonary products. He subsequently joined Boehringer Mannheim, initially in the UK
managing their diagnostics business and subsequently was promoted to a Global Marketing role in the
Diabetes Care business cased in Mannheim, Germany.
In 1997 Philip joined Cochlear in the UK as the European Sales and Marketing Manager and subsequently
was promoted in 2000 to the VP Global Marketing role based in Sydney, Australia. Other roles in Australia
have included General Manager with Roche Diagnostics, Managing Director at Bio-Rad Laboratories and
CEO of Applied Physiology, an Australian software start up company in the intensive care monitoring
sector. Graduated in the UK with a BSc and Diploma in Electronic Engineering, Philip also has an MBA and
is a Graduate of the Australian Institute of Company Directors (GAICD). Mr Daffas has not been a director
of an ASX listed company in the past 3 years.
Mr Ross Harricks (appointed 30 September 2016) BE, MBA – Non-executive Director
Mr Harricks’ experience in the commercialisation of medical products spans over forty years and over three
continents. His experience includes the marketing and commercialising of the computed technology
scanner (CT or CAT scanner) in Australia, where he headed up the EMI Electronics Group as General
Manager. His remit included developing EMI’s medical business in this region.
PAINCHEK LIMITED | 11
In 1983, Mr Harricks joined the Nucleus Group as Group Marketing Executive, and later became President
the two Nucleus Group subsidiaries in United States marketing medical equipment and scientific and
engineering computing products. In 1989 in the US, Mr Harricks was the CEO of a venture capital-backed
start-up company developing specialist scientific and medical lasers.
In Australia Mr Harricks has been a director of ResMed Limited and cofounder of AtCor Medical where he
completed an Australian initial public offering in 2005 leading the company until 2007. He was a director
of VentraCor from 2005 to 2009. Other than Painchek, Mr Harricks has not been a director of an ASX listed
company in the past 3 years.
Mr Harricks works with Australian medical and technology companies assisting in commercialisation of
their products into the US and EU markets. His unique expertise and experience includes strategic advising
on the best path to early international market endorsement and adoption, and on providing hands-on help
with implementation in the American and European markets.
Mr Adam Davey (appointed 30 September 2014) – Non-executive Director
Mr Davey’s expertise spans over 25 years and includes capital raising (both private and public), mergers
and acquisition, ASX listings, asset sales and purchases, transaction due diligence and director duties. Mr
Davey is a Director of Wealth Management at Canaccord Genuity Patersons Limited. Mr Davey has been
involved in significantly growing businesses in both the industrial and mining sector. This has been achieved
through holding various roles within different organisations, including chairman, managing director, non-
executive director, major shareholder and corporate adviser to the board.
Mr Davey is a non-executive director of Ensurance Limited and the Agency Group Australia Ltd. Otherwise,
Mr Davey has not been a director of an ASX listed company in the past 3 years.
Company Secretary (appointed 30 September 2016) B.BUS FCA ACIS MAICD
Mr Ian Hobson was appointed to the positions of Company Secretary and Chief Financial Officer on 30
September 2016.
A Fellow Chartered Accountant and Chartered Secretary, Mr Hobson has more than 30 years’ experience
in the areas of corporate finance, governance, corporate accounting, company secretarial and
restructuring advice. Mr Hobson was a director of PricewaterhouseCoopers and Ferrier Hodgson Chartered
Accountants before specializing in providing company secretarial and corporate accounting services to
listed entities.
OPERATIONS REPORT
Principal Activities
The principal activity of the Company is the development and commercialisation of mobile medical device
applications, that automate intelligent pain assessment of individuals who are unable to communicate
their pain with carers.
Financial and operational review
The loss of the Group for the year ended 30 June 2020, after accounting for income tax benefit, amounted
to $12,392,659 (2019: $3,262,418). The year ended 30 June 2020 operating results are attributed to the
following:
• Research & Development expense of $2,270,461 (30 June 2019: $1,894,536);
• Share based payments in respect of options issued to Directors and employees of $8,907,808
(non- cash) (30 June 2019: $112,911 (non-cash)); and
• Corporate and administration expenses of $2,584,273 (30 June 2019: $1,486,446).
12 | PAINCHEK LIMITED
In addition, the statement of financial position as at 30 June 2020 was impacted by:
• Proceeds from capital raising of $1,000,000; and
• Proceeds from the exercise of 121,967,121 options which raised $2,561,704.
Review of operations
The PainChek® technology uses cameras in smartphones and tablets to capture a brief video of the person,
which is analysed in real time using facial recognition software to detect the presence of facial micro-
expressions that are indicative of the presence of pain. The PainChek® technology has been TGA and CE
Mark cleared for use as a class 1 medical device to assess pain in people who are unable to verbalise, such
people with dementia.
The PainChek® Adult App has been clinically proven and regulatory cleared, and in April 2019 the Federal
Government announced it would invest $5M to facilitate the implementation of the PainChek® app in
Australian residential aged care centers (RAC’s). More than 150,000 clinical pain assessments have been
conducted in Australian aged care, with an increasing number of case study reports confirming the clinical
and cost benefit.
There are now more than 61,000 beds in 722 RAC facilities that have been contracted with annual
subscription agreements in Australia and annual recurring revenue (ARR) exceeding $2.6 million when
implemented. This varies to the revenue recognised in the income statement in accordance with the
Group’s accounting policy for Reveue set out on page 29. ARR is projected to accelerate with the
government funding initiative and international expansion.
At 30 June 2020 there were 24,435 active licensed beds in RACs, up from 4,725 beds at 30 June 2019. There
was a backlog of over 35,000 contracted beds at 30 June 2020 planned to be implemented after the year
end.
We have entered international markets in the UK through the establishment of our fully owned subsidiary
PainChek UK and a distribution partnership with PCS UK. New sales have commenced in New Zealand and
Singapore and we continue to finalize other international agreements to address the large market
opportunities and the 50 million people living with dementia globally.
While COVID 19 has significantly impacted the PainChek® Adult App FDA studies, we have completed the
clinical protocols and established a range of clinical partners to commence the US based clinical work once
as soon as it is possible. In addition, as the Children’s clinical study work with the Murdoch Children’s
Research Institute has been delayed, we have commenced with an alternate clinical study approach for
the Children’s App. The Children’s App serves an even larger market, where globally there are more than
400 million children between the aged of 0-3 years.
These achievements are a reflection of the transformational impact PainChek App has on pain
management and the provision of better medication treatment for residents living with dementia and
other communication difficulties.
Likely Developments and Overview of Group Strategy
The Company will continue with the commercialisation of the PainChek® technology in Australia and the
UK as the priorities and continue to assess global opportunities. We have applied for regulatory clearance
in Canada to allow for a 2021 entry into the Canadian market. We continue to receiving overseas interest
including UK, Germany, US and Asia, which will support our international market expansion strategy.
PAINCHEK LIMITED | 13
Our collaboration with Philips Healthcare was established in 2019 and both parties are entering into a
research collaboration in Europe and assessing a range of the global technology collaboration
opportunities in the hospital sector. The business market segments being pursued by the Company include
RAC Operators, Health Care Professionals, Home Care Operators and Direct to Home Carers. In parallel,
we are developinga strategy for the consumer version of the Painchek® Adult. This will be commercialised
initially through a “shared care” model that allows healthcare professionals to provide access to PainChek®
for family and friends caring for dementia patients in the home to use. We have finalised the agreed
additional clinical validation work required for the de novo regulatory application with FDA for approval of
our PainChek® Adult App in the US market. This work is budgeted, and we continue to project FDA
clearance for the PainChek® Adult App during 2021.
The adapted PainChek kids PainFaces clinical study provides for the use of video analysis to asses clinical
pain levels. The results and learnings from the research will support applications for regulatory approval
of PainChek® Infant’s App with the Therapeutics Goods Administration (TGA), CE Mark, Europe in 2021
and the Food and Drug Administration (FDA) in the USA in 2022. This will be in addition to any outcomes
derived from planned clinical studies with Murdoch Children’s Research Institute during 2021.
Subsequent events
On 11 August 2020, the group announced a capital raising of $10,000,000 (before costs) by way a
placement of 90,909 091 fully paid ordinary shares at $0.11 per share. The funds were received and the
shares allotted on 17 August 2020. Otherwise, no matters or circumstances have arisen since the end of
the year which significantly affected or could significantly affect the operations of the Group, the results
of those operations, or the state of affairs of the Group in future financial years.
REMUNERATION REPORT (AUDITED)
Remuneration Policy
The remuneration policy of the Group has been designed to align director objectives with shareholder and
business objectives by providing a fixed remuneration component which is assessed on an annual basis in
line with market rates. The Board of the Company believes the remuneration policy to be appropriate and
effective in its ability to attract and retain the best Directors to run and manage the Company, as well as
create goal congruence between Directors and shareholders.
The Board’s policy for determining the nature and amount of remuneration for board members is as
follows:
• The remuneration policy, setting the terms and conditions for the executive Directors and other senior
•
staff members, was developed and approved by the Board.
In determining competitive remuneration rates, the Board considers local and international trends
among comparative companies and the industry generally so that executive remuneration is in line with
market practice and is reasonable in the context of Australian executive reward practices.
• All executives receive a base salary (which is based on factors such as length of service and experience),
superannuation and fringe benefits.
Performance Based Remuneration
The Company is a technology development entity and therefore speculative in terms of performance.
Consistent with attracting and retaining talented executives, Directors and senior executives are paid
market rates associated with individuals in similar positions within the same industry. Options, equity-
based performance incentives and cash bonus’ have been and may be further issued to provide a
performance- linked incentive component in the remuneration package for the Directors and for the future
performance by the Directors and key management personnel in managing the operations and strategic
direction of the
14 | PAINCHEK LIMITED
Company. All remuneration paid to Directors is valued at the cost to the Company and expensed. Options
are valued using an appropriate valuation methodology. For details of Directors’ and executives’ interests
in options and performance rights at year end, refer to section (d) of this remuneration report.
Short term incentive
Generally paid in cash and structured, with a focus on delivery of specific short-term objectives aligned with
the company’s strategies and goals and the Executives role in meeting these targets.
Remuneration Consultant
In August 2019, the Company engaged Eagan Associates Pty Ltd (“Eagan”) to undertake a remuneration
review of the executive director and non-executive directors salary and fees. Eagan received a fee of $14,700
to undertake the review and provide remuneration recommendations which are set out below. No other
advice has been sought from Eagan.
Non-executive chairman John Murray sought a proposal from Eagan and was the sole contact, therefore
ensuring as much as possible that Eagan’s recommendations were free from undue influence from KMP to
whom the recommendations relate. The Board is satisfied that Eagan’s remuneration recommendation was
made free from undue influence by the KMP to whom the recommendations relate given only the non-
executive chairman had made contact, Eagan does not provide any other consulting services to the Group
and does not have any prior or continuing relationship or association with the company or any members of
the KMP.
Company Performance, Shareholder Wealth and Directors’ and Executives’ Remuneration
The remuneration policy has been tailored to align the strategic goals of the Company to create value for
shareholders, Directors and executives. The Company believes the policy has been effective in in aligning
the interests of the Company’s key management personnel with the interests of its shareholders. For details
of Directors’ and executives' interests in equity securities at year end, refer to section (c) of this
remuneration report.
2018
2019
2020
2017
(formerly ePAT
Technologies
Limited)
Share price at 30 June
$0.025
$0.056
$0.20
$0.115
Loss for the year (continuing and
discontinued operations)
Loss for the year (continuing
operations)
EPS for the year (continuing and
discontinued operations)
EPS for the year (continuing
operations)
($8,473,802)
($4,810,532)
($3,262,418)
($12,392,659)
($8,473,802)
($4,810,532)
($3,262,418)
($12,392,659)
(1.63) cents
(0.6) cents
(0.4) cents
(1.3) cents
(1.63) cents
(0.6) cents
(0.4) cents
(1.3) cents
Fixed remuneration is not linked to group performance. It is set with reference to the individual’s
role, responsibilities and performance and remuneration levels for similar positions in the market.
No dividends were paid by the Company nor was there any return of capital over the past 5 years.
PAINCHEK LIMITED | 15
Performance Income as a Proportion of total compensation
Eagan’s report recommended that the Company’s non-executive director remuneration be
supplemented with the following annual grant of Performance Rights for the financial years ended 30
June 2020, 2021 and 2022 as follows:
New Performance
Rights
Director
John Murray
Adam Davey
Ross Harricks
Current Fee
$
$
$
$ 160,000
80,000 $
40,000 $
40,000 $
$
Total New Remuneration
120,000
60,000
60,000
240,000
40,000 $
20,000 $
20,000 $
80,000 $
% Increase
50%
50%
50%
50%
Non-executive director performance rights have no performance conditions as they are provided to
supplement fixed director fees. The performance rights vest at 30 June of each subsequent year provided
the director remains a director of the Company at that date.
The notional value of performance rights as set out in the AGM Notice will differ to the value required to
be recognised for accounting purposes in accordance with AASB 2 Share Based Payments.
Remuneration Consultant Benchmarks
The median total statutory remuneration of $120,000 for the Chairman represents 120% of the median
total statutory remuneration of $100,000 benchmark in the Health and IT sector for companies with a
market capitalisation of between $50 million and $200 million.
The median total statutory remuneration of $60,000 for a non-executive director represents 99% of the
median total statutory remuneration of $60,857 benchmark in the Health and IT sector for companies
with a market capitalisation of between $50 million and $200 million. At the 2019 Annual general
meeting, shareholders approved the issue of Performance Rights to the non-executive directors on the
following principles and terms:
a. each non-executive director will in each end of financial year on 30 June 2020, 2021 and 2022 receive
1/3 of their total annual remuneration in Performance Rights;
b. the number of Performance Rights issued for a year will be calculated based on the VWAP of the
Company’s ordinary shares calculated 5 days either side of and including the date of announcement
of the company’s annual statutory results for the financial year;
c. Performance Rights will vest at 30 June each subsequent year - being the end of the financial year
subject to the director remaining a director of the Company at that date;
d. each Performance Right has the conditional right to acquire one Share;
e. the Performance rights are issued for Nil consideration;
f.
g. the Performance Rights are subject to the terms and conditions of the LTI Plan; and
h. the below table summarises the position:
the Performance Rights expire 3 months after the vesting date;
Remuneration
for year
ended 30 June
Share price
calculation
date
(estimated)
Grant date
Vesting date
Likely date that
Performance
Rights will
convert to shares
Expiry Date of
Performance Rights
if not converted to
shares
2020
2021
2022
5/09/2019
20/11/2019
30/06/2020
30/07/2020
5/09/2020
20/11/2019
30/06/2021
30/07/2021
5/09/2021
20/11/2019
30/06/2022
30/07/2022
30/09/2020
30/09/2021
30/09/2022
16 | PAINCHEK LIMITED
CEO remuneration review
The Eagan report recommended that the Company’s CEO remuneration be supplemented with an annual
grant of $200,000 worth of Performance Rights for the financial years ended 30 June 2020, 2021 and 2022.
The Company entered into a new agreement with Philip Daffas to increase his fixed and variable cash
remuneration to a maximum of $400,000 per annum which together with the proposed $200,000 grant of
Performance Rights, will result in total statutory remuneration of $600,000 for FY20. The notional value of
performance rights as set out in the AGM Notice will differ to the value required to be recognised for
accounting purposes in accordance with AASB 2 Share Based Payments.
In FY19 total statutory remuneration paid to Philip Daffas was $337,500 (there was no LTI component of
his statutory remuneration in FY19 as the original 2016 options were expensed in FY17 and FY18).
The total statutory remuneration of $600,000 for Philip Daffas represents 124% of the median total
statutory remuneration of $483,812 benchmark in the Health and IT sector for companies with a market
capitalisation of between $50 million and $200 million.
The Company received Shareholder approval at the 2019 AGM for the issue of Performance Rights to Philip
Daffas to the value of $600,000 over the next 3 years with an annual limit of $200,000 for Philip Daffas or
his nominee(s) to acquire one Share for each Performance Right held pursuant to the LTI Plan and as part
of Philip Daffas' remuneration.
The Performance Rights issued for a year will be issued at the VWAP of the Company’s ordinary shares
calculated 5 days either side of and including the date of announcement of the company’s annual statutory
results for the financial year preceding the financial year of the grant of the Performance Rights (Award
Issue Price).
Vesting of the Performance Rights is conditional on the following:
a) 50% of the annual grant of $200,000 worth of Performance Rights will vest two years after the
commencement of each vesting period on 1 October of the year of grant, subject to the
Company's Share price achieving a compounded annual increase in Share price of 15% p.a.
(Award Target Price) from the relevant Award Issue Price and provided that Philip Daffas remains
employed by the Company at that date (unless he is a Good Leaver as defined in the LTI Plan in
which case he retains the relevant pro rata portion of the grant subject to the increase in Share
price vesting condition); and
b) 50% of the annual grant of $200,000 worth of Performance Rights will vest three years after the
commencement of each vesting period on 1 October of the year of grant, subject to the
Company's Share price achieving a compounded annual increase in Share price of 15% p.a. from
the relevant Award Issue Price and provided that Philip Daffas remains employed by the
Company on that date (unless he is a Good Leaver as defined in the LTI Plan in which case he
retains the relevant pro rata portion of the grant subject to the increase in Share price vesting
condition).
The Award Target Price will be calculated based on the 10 days VWAP leading up to and including the
relevant vesting date.
PAINCHEK LIMITED | 17
The following table summarises the above terms:
Remuneration
for year ended
30 June
Share Price
Calculation
date
(estimated)
Grant date
Vesting date
assuming
share price
hurdle is met
Likely date that
Performance
Rights will
convert to
shares
Expiry Date of
Performance
Rights if not
converted to
shares
2020
5/09/2019
20/11/2019
2021
5/09/2020
20/11/2019
2022
5/09/2021
20/11/2019
50% on
1/10/2021;
50% on
1/10/2022
50% on
1/10/2022;
50% on
1/10/2023
50% on
1/10/2023;
50% on
1/10/2024
50% on
30/10/2021;
50% on
30/10/2022
50% on
30/10/2022;
50% on
30/10/2023
50% on
30/10/2023;
50% on
30/10/2024
50% on
1/1/2022;
50% on
1/1/2023
50% on
1/1/2023;
50% on
1/1/2024
50% on
1/1/2024;
50% on
1/1/2025
Director 2016 options – variation of vesting terms
At the 2019 Annual General Meeting, shareholders approved the variation of 1/3 of the directors’ 2016
option terms so that the options vested and were immediately exercisable.
At the 2016 annual general meeting, shareholders approved the issue of 90,188,155 Options (subject to
vesting conditions) to directors exercisable at 2 cents per share and expiring on 24 November 2019. Two
thirds (2/3) of the 2016 Options had vested whilst the remaining one third (1/3) vest once the Company
generates cumulative revenue of $1 million.
The number of 2016 Options applicable to each director is set out as follows:
Name
Position
Number of
Options
Vested
Unvested
Value
$
Mr John
Murray
Mr Adam
Davey
Mr Ross
Harricks
Mr Philip
Daffas
TOTAL
Non-executive
Chairman
Non-executive
Director
Non-executive
Director
24,599,497
16,399,665
8,199,832
2,213,955
12,299,748
8,199,832
4,099,916
1,106,977
12,299,748
8,199,832
4,099,916
1,106,977
Managing Director
40,999,162
27,332,775
13,666,387
3,689,925
90,198,155
60,132,104
30,066,051
$8,117,834
The original vesting condition for 30,066,051 unvested options is that the Company generates
“cumulative revenue of $1,000,000” by the expiry date of 24 November 2019.
On 20 November 2019, shareholders approved modification of the vesting condition of 30,066,051
unvested 2016 Options to the Directors to achieving signed customer contracts with total annualised
contracted revenue of at least $1 million by 24 November 2019. Annualised contracted revenue will be
calculated based on MRR for contracts with at least a 12 month term, and on the assumption that a
contract is fully implemented in accordance with the contract terms and rolled out across all the RAC
facilities and beds covered under the contract.
18 | PAINCHEK LIMITED
Financial impact of the modification of vesting condition of Unvested 2016 Options
The Company incurred an additional non-cash, share based payment expense in FY2020 arising from
Shareholder approval to modification of the terms of the unvested 30,066,051 Options. The amount of this
expense is the increase in fair value of the unvested Options arising from the modification. This increase
in fair value was calculated on the difference between the market value of the Company’s shares on the
date of approval and the exercise price of 2 cents per Share Option, and the adjusted probability of
achieving the modified condition of vesting. If at the date of Shareholder approval, the original condition
was not met the unvested Share Options would have a nil fair value. If at the date of approval, the Company
has however achieved the modified condition of vesting there will be a 100% probability of achieving the
modified vesting condition. The unvested Share Options had a fair value of $8.1m resulting in a non-cash,
share based payment expense of $8.1 million.
Remuneration Policy of Key Management Personnel
The objective of the Company’s executive reward framework is set to attract and retain the most
qualified and experienced Directors and senior executives. The Board ensures that executive reward
satisfies the following key criteria for good reward governance practices:
• Competitiveness
• Acceptability to shareholders
• Performance linkage
• Capital management
Non-executive Directors
The Board’s policy is to remunerate non-executive Directors at market rates for comparable companies
for time, commitment and responsibilities. The Board determines payments to the non-executive
Directors and reviews their remuneration annually based on market practice, duties and accountability.
The maximum aggregate amount of fees that can be paid to non-executive Directors is subject to approval
by shareholders at the Annual General Meeting and is currently set at $400,000 as approved by
shareholders at the 2019 AGM. Fees for non-executive Directors are not linked to the performance of the
Company.
Directors’ Fees
A Director may be paid fees or other amounts as the Directors determine where a Director performs
special duties or otherwise performs services outside the scope of the ordinary duties of a Director. A
Director may also be reimbursed for reasonable out of pocket expenses incurred as a result of their
Directorship or any special duties.
Service Agreements
Philip Daffas, Managing Director (appointed 30 September 2016)
The Company entered into an Executive Services Agreement (“Agreement”) with Mr Philip Daffas pursuant
to which Mr Daffas was appointed as Managing Director of the Company as at 30 September 2016 which
was varied on 8 October 2019. The key terms of the Agreement are:
• A salary of $250,000 per annum inclusive of superannuation;
• A short term incentive of up to $150,000 per annum at the boards discretion;
• An invitation to apply in respect of each of FY2020, FY2021 and FY2022 for an award of the number of
performance rights equivalent to $200,000 divided by the volume weighted average price (VWAP) of
PainChek Ltd shares, calculated 5 days either side of and including the date of announcement of the
Company’s annual statutory results for the financial year preceding the the financial year of the Award.
PAINCHEK LIMITED | 19
The Agreement may be terminated by either party at any time on the giving of not less than three (3)
months’ notice in writing.
Ian Hobson, Company Secretary and Chief Financial Officer (appointed 30 September 2016)
The Company entered into a Consultancy Agreement (“Agreement”) with Churchill Services Pty Ltd
pursuant to which Mr Hobson was engaged to provide Company Secretarial and Chief Financial Officer
services to the Company effective from 30 September 2016. Churchill Services Pty Ltd is to receive $200
per hour, exclusive of GST, for services provided by Mr Hobson. The agreement may be terminated by
either party at any time with no notice period.
Retirement Benefits
Other retirement benefits may be provided directly by the Company if approved by shareholders.
However, no retirement benefits other than statutory superannuation are currently paid.
DIRECTORS’ AND EXECUTIVE OFFICERS’ EMOLUMENTS
(a) Details of Key Management Personnel
Directors
Mr John Murray Non-Executive Chairman
Mr Philip Daffas Managing Director
Mr Adam Davey Non-Executive Director
Mr Ross Harricks Non-Executive Director
Other Key Management Personnel
Ian Hobson
Chief Financial Officer and Company Secretary
Except as detailed in Notes (b) – (d) to the Remuneration Report, no key management personnel have
received or become entitled to receive, during or since the financial year, a benefit because of a contract
made by the Company or a related body corporate with key management personnel, a firm of which a
member of key management personnel is a member or an entity in which a member of key management
has a substantial financial interest.
20 | PAINCHEK LIMITED
(b)
Compensation of Key Management Personnel
Remuneration Policy
The Board of Directors, comprising a majority of Non-Executive Directors, is responsible for determining
and reviewing compensation arrangements for the key management personnel. The Board will assess the
appropriateness of the nature and amount of emoluments of such officers on a periodic basis by
reference to relevant employment market conditions with the overall objective of ensuring maximum
stakeholder benefit from the retention of a high-quality Board and executive team. Remuneration of
Directors is set out below.
The value of remuneration received, or receivable, by key management personnel for the financial year to
30 June 2020 is as follows:
2020
Primary
Equity Compensation
Post-employment
Performance
related %
Base Salary
and Fees
$
Cash
Bonus
$
Value of
Options (d)
$
Performance
Rights (e)
$
Superannuation
Contributions
$
Total
$
Directors
John Murray
Philip Daffas
Ross Harricks
Adam Davey
69,406
318,570
34,703
38,000
Total Directors
460,679
Ian Hobson
Total
142,720
603,399
-
-
-
-
-
-
-
2,213,955
3,689,925
1,106,977
1,106,977
78,258
88,688
39,129
39,129
6,594
2,368,213
25,000
3,297
4,122,183
1,184,106
-
1,184,106
8,117,834
245,204
34,891
8,858,608
97%
92%
97%
97%
94%
-
-
-
142,720
-
8,117,834
245,204
34,891
9,001,328
93%
2019
Directors
John Murray
Philip Daffas
Ross Harricks
Adam Davey
Total Directors
Ian Hobson
Total
Primary
Equity Compensation Post-employment
Performance
related %
Base Salary
and Fees
$
Cash
Bonus
$
Value of
Options (d)
$
Performance
Rights (e)
$
Superannuation
Contributions
$
Total
$
73,059
205,479
36,530
40,000
355,068
122,825
477,893
-
149,030*
-
-
149,030
-
149,030
-
-
-
-
-
-
-
-
-
-
-
-
-
-
6,941
22,991
3,470
-
33,402
-
33,402
80,000
377,500
40,000
40,000
537,500
122,825
660,325
-
39%
-
-
28%
-
23%
*A short term incentive performance bonus of $40,000 including superannuation was paid to Mr Daffas for the 9 months ended 30 June 2018.
A further short term performance bonus of $112,500 including superannuation was agreed to be paid to Mr Daffas for the year ended 30 June
2019 based on Mr Dafas achieving certain internal KPI’s.
PAINCHEK LIMITED | 21
c) Shares Held by Key Management Personnel
2020
Balance
At 1 July
2019
Options
exercised
Bought &
(Sold)
Shares issued
in lieu of cash
Other
Balance at 30
June 2020
Directors
John Murray
Philip Daffas
Ross Harricks
Adam Davey
-
-
-
3,540,764
3,540,764
24,599,497
40,999,162
12,299,748
12,299,748
90,198,155
(12,299,749)
(20,499,581)
(6,149,874)
(6,149,874)
(45,099,078)
Other key management personnel
Ian Hobson
-
3,540,764
-
90,198,155
-
45,099,078
Share
Consolidation
-
-
-
-
-
-
-
Bought &
(Sold)
Shares issued
in lieu of cash*
Other+
2019
Directors
John Murray
Philip Daffas
Ross Harricks
Adam Davey
Balance
at
1 July
2018
-
-
-
3,540,764
3,540,764
Other key management personnel
Ian Hobson
-
3,540,764
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
12,299,748
20,499,581
6,149,874
9,690,638
48,639,841
-
48,639,841
Balance at
30 June 2019
-
-
-
3,540,764
3,540,764
-
3,540,764
d) Options Held by Key Management Personnel
2020
Balance at
1 July 2019
Received as
Remuneration
Exercise of
Options
Other
Balance at 30
June 2020
Vested and
exercisable
Unvested
Directors
John Murray
Philip Daffas
Ross Harricks
Adam Davey
24,599,497
40,999,162
12,299,748
12,299,748
90,198,155
Other key management personnel
Ian Hobson
-
90,198,155
-
-
-
-
-
-
-
(24,599,497)
(40,999,162)
(12,299,748)
(12,299,748)
(90,198,155)
-
-
-
-
-
-
(90,198,155)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2019
Balance at
1 July 2018
Received as
Remuneration
Exercise of
Options
Other
+
Balance at 30
June 2019
Vested and
Exercisable
Unvested
Directors
John Murray
Philip Daffas
Ross Harricks
Adam Davey
24,599,497
40,999,162
12,299,748
12,299,748
90,198,155
Other key management personnel
Ian Hobson
-
90,198,155
-
-
-
-
-
-
-
22 | PAINCHEK LIMITED
-
-
-
-
-
-
-
-
-
-
-
-
-
-
24,599,497
40,999,162
12,299,748
12,299,748
90,198,155
16,399,665
27,332,775
8,199,832
8,199,832
60,132,104
8,199,832
13,666,387
4,099,916
4,099,916
30,066,051
-
90,198,155
-
60,132,104
-
30,066,051
e) Performance Rights Held by Key Management Personnel
2020
Directors
John Murray
Philip Daffas
Ross Harricks
Adam Davey
Other key
management
personnel
Ian Hobson
Balance at
1 July 2019
Received as
Remuneration
Conversion
to shares
Other
Balance at 30
June 2020
Vested and
Exercisable
Unvested
-
-
-
-
-
-
-
186,654
933,270
93,327
93,327
1,306,578
-
1,306,578
-
-
-
-
-
-
-
-
-
-
-
-
-
-
186,654
933,270
93,327
93,327
1,306,578
186,654
-
93,327
93,327
373,308
-
933,270
-
-
933,270
-
1,306,578
-
373,308
-
933,270
2019
There were nil performance rights held by KMP in FY19
Share, Performance Rights and Option Holdings
All equity dealings with Directors have been entered into with terms and conditions no more favourable
than those that the entity would have adopted if dealing at arm’s length.
f) Compensation Options and Performance Rights
Options
During and since the financial year ended 30 June 2020, Nil options were granted by the Company to
Directors or Key Management Personnel (2019: Nil) and 90,198,155 options (2019: Nil) were exercised by
Directors or Key Management Personnel.
Performance rights
During and since the financial year ended 30 June 2020, 1,306,578 performance rights were granted by
the Company to Directors in lieu of cash remuneration following shareholder approval on 20 November
2019 (2019: Nil) for financial year ended 30 June 2020. 373,308 of these performance rights (2019: Nil)
were exercised by Directors in July 2020. In addition, performance rights with a face value of $560,000
were granted for financial years 30 June 2021 and 30 June 2022 subject to various vesting conditions
referred to in the section above under “Remuneration Consultant Benchmarks”.
CEO performance rights
The fair value at the date of grant of performance shares issued to the CEO is determined using a Monte-
Carlo option pricing model that takes into account the exercise price, the underlying share price at the
time of issue, the term of the performance right, the underlying share’s expected volatility, expected
dividends and the risk free interest rate for the expected life of the instrument.
PAINCHEK LIMITED | 23
The value of the performance rights were calculated using the inputs shown below:
Tranche 1A
Tranche
1B
Tranche
2A
Tranche
2B
Tranche
3A
Tranche
3B
20 November
2019
20 November
2019
20 November
2019
20 November
2019
20 November
2019
20 November
2019
Nil
Nil
Nil
Nil
Nil
Nil
Refer section “CEO remuneration review” above for vesting conditions and vesting dates
$0.29
$0.29
$0.29
$0.29
$0.29
$0.29
1 January
2022
1 January
2023
1 January
2023
1 January
2024
1 January
2024
1 January
2025
2.12
3.12
3.12
4.12
4.12
5.12
100%
100%
100%
100%
100%
100%
Nil
Nil
Nil
Nil
Nil
Nil
0.80%
0.80%
0.80%
0.80%
0.80%
0.80%
Monte-Carlo
Simulation
Monte- Carlo
Simulation
Monte- Carlo
Simulation
Monte- Carlo
Simulation
Monte- Carlo
Simulation
Monte- Carlo
Simulation
$0.1979
$0.1980
$0.1711
$0.1773
$0.1763
$0.1536
Grant date
Exercise price
Vesting
conditions &
vesting dates
Share price at
date of grant
Expiry date
Life of the
instruments
(years)
Underlying share
price volatility
Expected
dividends
Risk free
interest rate
Pricing model
Fair value per
instrument
Non-executive director performance rights
The fair value at the date of grant of performance rights issued to the non-executive directors was
calculated based on the share price at the date of issue ($0.29) (tranche 1), the value of the award specified
in applicable years 2021 (tranche 2) and 2022 (tranche 3) over the vesting period.
The value of the performance rights were calculated using the inputs shown below:
Grant date
Exercise price
Vesting date
Share price at date of grant
Expiry date
Tranche 1
20 November 2019
Nil
30 June 2020
$0.29
30 September 2020
Tranche 2
20 November 2019
Nil
30 June 2021
$0.29
30 September 2021
Tranche
20 November 2019
Nil
30 June 2022
$0.29
30 September 2022
g) Short term employee benefits
These amounts include director and consulting fees paid to non-executive directors as well as salary and
paid leave benefits awarded to executive directors.
h) Post-employment benefits
These amounts are superannuation contributions made during the year.
24 | PAINCHEK LIMITED
Transactions with Directors and Director related entities
There were no transactions with Directors or Director related entities during the year.
Loans to Key Management Personnel
There was no loans to KMP during the year.
End of Remuneration Report
ENVIRONMENTAL REGULATIONS AND PROCEEDINGS
The Group’s operations are not subject to any significant environmental regulations where it operates.
MEETINGS OF DIRECTORS
The number of Directors’ meetings held during the financial year each director held office and the
number of meetings attended by each director are:
Director
John Murray
Philip Daffas
Ross Harricks
Adam Davey
Directors Meetings
Meetings
Attended
12
12
12
12
Number Eligible
to Attend
12
12
12
12
The full Board currently fulfils the duties of the Remuneration Committee and the Audit Committee.
OPTIONS
At the date of this report, the following options over new ordinary shares in the Company were on issue.
Type
Date of Expiry
Unlisted Options
Unlisted Options
Unlisted Options
Unlisted Options
Unlisted Options
Unlisted Options
3 October 2021
22 July 2022
9 November 2023
30 June 2022
31 March 2024
26 September 2024
Exercise
Price
$0.36
$0.726
$0.032
$0.25
$0.21
$0.11
Number under Option
5,000,000
3,000,000
4,000,000
14,241,379
3,000,000
3,000,000
121,967,121 ordinary shares were issued as a result of the exercise of options during or since the
financial year ended 30 June 2020.
PERFORMANCE RIGHTS
At the date of this report, the following performance rights, convertible for Nil consideration at a ratio of
1:1 into new ordinary shares in the Company were on issue.
PAINCHEK LIMITED | 25
Granted to
Non-executive
directors
Non-executive
directors
Non-executive
directors
CEO
CEO
CEO
CEO
CEO
CEO
Date Right
granted
Expiry date
Issue price
of shares
Value of
performance
rights approved
at the AGM
No.of
performance
rights under
plan
20/11/2019
30/09/2020
$0.29
$108,259
373,308
20/11/2019
30/09/2021
20/11/2019
30/09/2022
20/11/2019
01/01/2022
20/11/2019
01/01/2023
20/11/2019
01/01/2023
20/11/2019
01/01/2024
20/11/2019
01/01/2024
20/11/2019
01/01/2025
$0.29
$0.29
$0.29
$0.29
$0.29
$0.29
$0.29
$0.29
$78,928
$78,302
$92,833
$92,779
$58,904
$59,421
$60,300
$56,014
*
*
466,635
466,635
*
*
*
*
1,306,578
*Number of rights for FY2021 and FY2022 to be determined at future date, equivalent to value of performance rights approved at the
AGM divided by the volume weighted average price (VWAP) of PainChek Ltd shares, calculated 5 days either side of and including the date
of announcement of the Company’s annual statutory results for the financial year preceding the the financial year of the Award.
373,308 ordinary shares were issued as a result of the conversion of performance rights since the
financial year ended 30 June 2020.
EQUITY HOLDINGS
The relevant interests of each director in the Company’s share capital, options and performance rights at
the date of this report are as follows:
Directors
John Murray
Adam Davey
Philip Daffas
Ross Harricks
Total
Number of
Shares
12,486,402
9,783,965
20,499,581
6,243,201
48,639,841
Number of
Options
-
-
-
-
-
Number of
Performance Rights
-
-
933,270
-
933,270
INSURANCE OF OFFICERS
To the extent permitted by law, the Company has indemnified (fully insured) each director and the
secretary of the Company. The liabilities insured include costs and expenses that may be incurred in
defending civil or criminal proceedings (that may be brought) against the officers in their capacity as
officers of the Company or a related body, and any other payments arising from liabilities incurred by the
officers in connection with such proceedings, other than where such liabilities arise out of conduct
involving a willful 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. The company has not insured against or indemnified its auditor.
PROCEEDINGS ON BEHALF OF THE GROUP
The Group is not aware that any person has applied to the court under section 237 of the Corporations Act
2001 for leave to bring proceedings on behalf of the Group, or to intervene in any proceedings in which the
Group is a party, for the purpose of taking responsibility on behalf of the Group for all or part of those
proceedings.
26 | PAINCHEK LIMITED
No proceedings have been brought or intervened in on behalf of the Group with leave of the court under
section 237 of the Corporations Act 2001.
NON-AUDIT SERVICES
The Group may decide to employ the auditor on assignments additional to their statutory audit duties
where the auditor’s expertise and experience with the Group and/or the Group are important.
The Board of Directors has considered the position and is satisfied that the provision of the non-audit
services is compatible with the general standard of independence for auditors imposed by the
Corporations Act 2001. The directors are satisfied that the provision of non-audit services by the auditor,
as set out below, did not compromise the auditor independence requirements of the Corporations Act
2001 for the following reasons:
•
all non-audit services have been reviewed to ensure they do not impact the impartiality and
objectivity of the auditor;
none of the services undermine the general principles relating to auditor independence as set out
in APES 110 Code of Ethics for Professional Accountants.
•
Details of the amounts paid or payable to the auditor, BDO Audit Pty Ltd for audit services provided
during the year are set out in note 20 to the financial report.
Non-audit services
BDO Audit Pty Ltd
Tax advice services
Tax compliance services
Total remuneration for non-audit services
2020
$
2019
$
-
-
-
-
-
-
Auditor’s independence declaration
The auditor’s independence declaration is included on page 18 of this report.
Signed in accordance with a resolution of directors.
John Murray
Chairman
28 August 2020, Sydney, NSW
PAINCHEK LIMITED | 27
Auditor’s independence declaration
Tel: +61 7 3237 5999
Fax: +61 7 3221 9227
www.bdo.com.au
Level 10, 12 Creek St
Brisbane QLD 4000
GPO Box 457 Brisbane QLD 4001
Australia
DECLARATION OF INDEPENDENCE BY C R JENKINS TO THE DIRECTORS OF PAINCHEK LIMITED
As lead auditor of PainChek Limited for the year ended 30 June 2020, I declare that, to the best of my
knowledge and belief, there have been:
1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
2. No contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of PainChek Limited and the entities it controlled during the year.
C R Jenkins
Director
BDO Audit Pty Ltd
Brisbane, 28 August 2020
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO
Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members
of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent
member firms. Liability limited by a scheme approved under Professional Standards Legislation.
28 | PAINCHEK LIMITED
Consolidated statement of profit or loss and other
comprehensive income for the year ended 30 June 2020
Revenue
Other income – R&D Grant & other rebates
Other income – Government Grant
Cost of sales
Research and development expenses
Marketing and business development expenses
Corporate administration expenses
Share based payment expenses
Loss before income tax
Income tax benefit
Loss for the period attributable to Owners of PainChek Limited
Consolidated Consolidated
30 June 2020
$
30 June 2019
$
Note
3
4
5
6
15
7
297,175
848,835
1,750,000
(265,173)
(2,270,461)
(1,260,954)
(2,584,273)
(8,907,808)
(12,392,659)
215,464
745,258
-
-
(1,894,536)
(729,247)
(1,486,446)
(112,911)
(3,262,418)
-
(12,392,659)
-
(3,262,418)
Other comprehensive income, net of income tax
Items that will not be reclassified subsequently to profit or loss
Exchange differences relating to translation of foreign operations
Other comprehensive income for the period, net of income tax
Total comprehensive loss for the period
Loss and total comprehensive loss attributable to:
Owners of PainChek Limited
-
(13,622)
-
(12,406,281)
-
-
-
(3,262,418)
(12,406,281)
(3,262,418)
Loss per share:
Basic and diluted (cents per share)
8
(1.3)
(0.4)
Notes to the financial statements are included on pages 23 to 47.
PAINCHEK LIMITED | 29
Consolidated statement of financial position as at 30 June 2020
Current assets
Cash and cash equivalents
Trade and other receivables
Total current assets
Non-current assets
Property, plant and equipment
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Provisions
Total current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Accumulated losses
Total equity
Note
19
9
10
11
12
14
15
Consolidated
30 June 2020
$
Consolidated
30 June 2019
$
6,120,090
77,599
6,197,689
4,562,476
171,169
4,733,645
17,952
17,952
6,215,641
15,716
15,716
4,749,361
1,971,631
115,553
2,087,184
2,087,184
4,128,457
565,192
63,247
628,439
628,439
4,120,922
21,261,767
12,095,111
(29,228,421)
4,128,457
17,755,759
3,200,925
(16,835,762)
4,120,922
Notes to the financial statements are included on pages 23 to 47.
30 | PAINCHEK LIMITED
Consolidated statement of changes in
equity for the year ended 30 June 2020
Company
Consolidated
Balance at 1 July 2018
Loss for the year
Other comprehensive income
Total comprehensive loss for the period
Transactions with owners in their
capacity as owners:
Issue of ordinary shares (refer to note 14)
options (refer to note 14)
Share issue costs (refer to note 14)
(refer to note 15)
Balance at 30 June 2019
Consolidated
Balance at 1 July 2019
Loss for the year
Other comprehensive income
Total comprehensive loss for the period
Transactions with owners in their
capacity as owners:
Issue of ordinary shares (refer to note 14)
options (refer to note 14)
Share issue costs (refer to note 14)
(refer to note 15)
Balance at 30 June 2020
Issued
capital
$
Reserves
$
Accumulated
losses
$
Total
$
Note
13,710,033
3,088,014
(13,573,344)
-
-
-
3,150,000
1,064,500
(168,774)
-
-
-
-
-
-
(3,262,418)
-
(3,262,418)
-
-
-
-
17,755,759
112,911
3,200,925
-
(16,835,762)
3,224,703
(3,262,418)
-
(3,262,418)
3,150,000
1,064,500
(168,774)
112,911
4,120,922
17,755,759
3,200,925
(16,835,762)
4,120,922
-
-
(13,622)
-
(12,392,659)
-
(12,392,659)
(12,392,659)
(13,622)
(12,406,281)
1,000,000
2,561,705
(55,697)
-
-
-
-
8,907,808
-
-
-
-
21,261,767
12,095,111
(29,228,421)
1,000,000
2,561,705
(55,697)
8,907,808
4,128,457
Notes to the financial statements are included on pages 23 to 47.
PAINCHEK LIMITED | 31
Consolidated statement of cash flows for
the year ended 30 June 2020
Cash flows from operating activities
Receipts from customers
Receipt from government grant
Payments to suppliers and employees
Interest received
Rebates and grants received
Net cash used in operating activities
Cash flows from investing activities
Payments for property, plant and equipment
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issue of shares
(Payment) of share issue costs
Net cash (used in)/provided by financing activities
Consolidated
Consolidated
Year ended
Note
30 June 2020
$
30 June 2019
$
374,164
3,000,000
(6,149,850)
40,162
848,835
(1,886,689)
98,546
-
(4,005,322)
86,622
745,258
(3,074,896)
19.1
(45,561)
(45,561)
(14,501)
(14,501)
14
14
3,561,705
(55,696)
3,506,009
4,214,500
(168,774)
4,045,726
Net increase / (decrease) in cash and cash equivalents
1,573,759
956,329
Cash and cash equivalents at the beginning of the period
Effect of FX on cash balances
Cash and cash equivalents at the end of the period
4,562,476
(16,145)
6,120,090
3,606,147
-
4,562,476
19
Notes to the financial statements are included on pages 23 to 47.
32 | PAINCHEK LIMITED
Notes to the financial statements for
the year ended 30 June 2020
1. Significant accounting policies
Basis of preparation
PainChek Ltd (the “Group”) is a listed public company, incorporated and domiciled in Australia. The
group’s principal activities are development and commercialization of mobile medical device
applications that provide pain assessment for individuals that are unable to communicate with their
carers.
The financial report is presented in Australian dollars.
The financial report is a general purpose financial report, which has been prepared in accordance with
the Corporations Act 2001, Australian Accounting Standards and Interpretations, and complies with
other requirements of the law.
The financial information has been prepared on the accruals basis and is based on historical costs and
does not take into account changing money values. Cost is based on the fair values of the
consideration given in exchange for assets.
Statement of Compliance
The financial report was authorised for issue on 28 August 2020.
The financial report complies with Australian Accounting Standards, which include Australian
equivalents to International Financial Reporting Standards (“AIFRS”). Compliance with AIFRS ensures
that the financial report, comprising the financial statements and notes thereto, complies with
International Financial Reporting Standards (“IFRS”).
Standards and Interpretations on issue not yet adopted
There are no new accounting standards and interpretations have been published that are not
mandatory for 30 June 2020 reporting periods and have not been early adopted by the Group.
Going concern basis
As disclosed in the financial statements, the consolidated entity has net operating cash outflows for
the year of $1,886,689 (2019: $3,074,896) and as at 30 June 2020 has cash and cash equivalents of
$6,120,090 (30 June 2019: $4,562,476). The consolidated entity also generated a loss after tax of
$12,392,659 (2019: $3,262,418).The financial statements have been prepared on the going concern
basis, which contemplates continuity of normal business activities and the realisation of assets and
settlement of liabilities in the normal course of business. As such, the Group’s ability to continue to
adopt the going concern assumption will depend upon a number of matters including subsequent
successful raisings in the future of necessary funding and the the successful commercialisation of its
intellectual property in a manner that generates sufficient operating cash inflows.
On 11 August 2020 the Group completed a placement from professional and sophisticated investors
and raised $10,000,000 before costs. Accordingly, existing cash reserves and the proceeds from the
placement are considered to be adequate to fund the planned expenditure for at least 12 months
from the date of this report.
PAINCHEK LIMITED | 33
Having carefully assessed the consolidated entity’s forecasts and its ability to effectively manage
expenditures and cash flows from operations, the Directors believe that the Group will continue to
operate as a going concern for the foreseeable future.
Amendments to AASBs and the new Interpretation that are mandatorily effective for the current
reporting period
AASB 16 Leases became applicable for the current reporting period and the group had to change its
accounting policies as a result of adopting AASB 16 Leases. The impact of the adoption of this
standard and the new accounting policies are disclosed below.
AABS 16 Leases
The Company has adopted AASB 16 Leases from 1 July 2019 which resulted in changes in accounting
policies. There was no material impact on the amounts disclosed previously and as a result there has
been no restatement required as a result of reclassification or remeasurement.
As at the reporting date, the Group had one short-term lease for its premises at suite 401, 35 Lime
Street, Sydney NSW 2001 for $46,971 as disclosed in Note 6 where the practical experdient has been
adopted. Therefore, there has been no amount recognised as a right-of-use asset and lease liability
recognised on adoption of the new standard and no effect on the Group’s profit or loss and
classification of cash flows going forward.
Significant accounting policies of the Company
Set out below are the significant accounting policies that have been applied in the preparation of the
consolidated financial statements:
Fair Values
The fair values of Consolidated Entity’s financial assets and financial liabilities approximate their
carrying values due to short –term in nature. No financial assets or financial liabilities are readily
traded on organised markets in standardised form.
(a)
Principles of Consolidation
The consolidated financial statements comprise the financial statements of all subsidiaries of the
Company and the results of all subsidiaries from the date that control was obtained. The Company
controls another entity when the Company is exposed to, or has the rights to, variable returns
from its involvement with the entity and has the ability to affect those returns through its power
to direct the activities of the entity.
Subsidiaries are fully consolidated from the date on which control is fully transferred. They are
deconsolidated from the date control ceases.
The financial statement of the subsidiary is prepared for the same reporting period as the parent
company, using consistent accounting policies.
In preparing the consolidated financial statements, all intercompany balances and transactions,
income and expenses and profit and losses resulting from intra-group transactions have been
eliminated in full.
The acquisition of subsidiaries is accounted for using the acquisition method of accounting.
A change in ownership interest without a loss of control is accounted for as an equity transaction.
Non-controlling interests in the results and equity of subsidiaries are shown separately in the
financial statements. Losses incurred by the consolidated entity are attributed to the non-
controlling interests in full, even if that results in a deficit balance.
34 | PAINCHEK LIMITED
Where the consolidated entity loses control over a subsidiary, it derecognises the assets including
goodwill, liabilities and non-controlling interest in the subsidiary, together with any cumulative
translation differences in equity. The consolidated entity recognises the fair value of the
consideration received and the fair value of any investment retained together with any gains or
losses in profit or loss.
(b)
Income Tax
Current tax assets and liabilities for the current and prior periods are measured at the amount
expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used
to compute the amount are those that are enacted or substantively enacted by the balance date.
Deferred income tax is provided on all temporary differences at the balance date between the tax
bases of assets and liabilities and their carrying amounts for financial reporting purposes. Deferred
income tax liabilities are recognised for all taxable temporary differences except:
• when the deferred income tax liability arises from the initial recognition of goodwill or of 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 profit nor taxable profit or loss; or
• when the taxable temporary difference is associated with investments in subsidiaries,
associates or interests in joint ventures, and the timing of the reversal of the temporary
difference can be controlled and it is probable that the temporary difference will not reverse in
the foreseeable future.
Deferred income tax assets are recognised for all deductible temporary differences, carry- forward
of unused tax assets and unused tax losses, to the extent that it is probable that taxable profit will
be available against which the deductible temporary differences and the carry-forward of unused
tax credits and unused tax losses can be utilised, except:
• when the deferred income tax asset relating to the deductible temporary difference arises from
the initial recognition of an asset or liability in a transaction that is not a business combination
and, at the time of the transaction, affects neither the accounting profit nor taxable profit or
loss; or
• when the deductible temporary difference is associated with investments in subsidiaries,
associates or interests in joint ventures, in which case a deferred tax asset is only recognised to
the extent that it is probable that the temporary difference will reverse in the foreseeable
future and taxable profit will be available against which the temporary difference can be
utilised.
The carrying amount of deferred income tax assets is reviewed at each balance date and reduced
to the extent that it is no longer probable that sufficient taxable profit will be available to allow all
or part of the deferred income tax asset to be utilised. Unrecognised deferred income tax assets
are reassessed at each balance date and are recognised to the extent that it has become probable
that future taxable profit will allow the deferred tax asset to be recovered.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply
to the year when the asset is realised or the liability is settled, based on tax rates (and tax laws)
that have been enacted or substantively enacted at the balance date.
Income taxes relating to items recognised directly in equity are recognised in equity and not in
profit or loss. Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable
right exists to set off current tax assets against current tax liabilities and the deferred tax assets
and liabilities relate to the same taxable entity and the same taxation authority.
PAINCHEK LIMITED | 35
(c)
Impairment of non – financial Assets
The Group assesses at each balance date whether there is an indication that an asset may be
impaired.
If any such indication exists, or when annual impairment testing for an asset is required, the
Company makes an estimate of the asset’s recoverable amount. An asset’s recoverable amount is
the higher of its fair value less costs to sell and its value in use and is determined for an individual
asset, unless the asset does not generate cash inflows that are largely independent of those from
other assets or groups of assets and the asset's value in use cannot be estimated to be close to its
fair value. In such cases the asset is tested for impairment as part of the cash generating unit to
which it belongs. When the carrying amount of an asset or cash-generating unit exceeds its
recoverable amount, the asset or cash-generating unit is considered impaired and is written down
to its recoverable amount.
In assessing value in use, the estimated future cash flows are discounted to their present value
using a pre-tax discount rate that reflects current market assessments of the time value of money
and the risks specific to the asset. Impairment losses relating to continuing operations are
recognised in those expense categories consistent with the function of the impaired asset unless
the asset is carried at revalued amount (in which case the impairment loss is treated as a
revaluation decrease).
An assessment is also made at each balance date as to whether there is any indication that
previously recognised impairment losses may no longer exist or may have decreased. If such
indication exists, the recoverable amount is estimated. A previously recognised impairment loss is
reversed only if there has been a change in the estimates used to determine the asset’s
recoverable amount since the last impairment loss was recognised. If that is the case the carrying
amount of the asset is increased to its recoverable amount. That increased amount cannot exceed
the carrying amount that would have been determined, net of depreciation, had no impairment
loss been recognised for the asset in prior years. Such reversal is recognised in profit or loss unless
the asset is carried at revalued amount, in which case the reversal is treated as a revaluation
increase.
After such a reversal the depreciation charge is adjusted in future periods to allocate the asset’s
revised carrying amount, less any residual value, on a systematic basis over its remaining useful
life.
(d)
Share-based Payment Transactions
The cost of equity-settled transactions with employees is measured 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 a suitable option pricing model.
In valuing equity-settled transactions, no account is taken of any performance conditions, other
than conditions linked to the price of the shares of the Company.
The cost of equity-settled transactions is recognised, together with a corresponding increase in
equity, over the period in which the performance and/or service conditions are fulfilled, ending on
the date on which the relevant recipient of the equity becomes fully entitled to the award (the
vesting period).
The cumulative expense recognised for equity-settled transactions at each reporting date until
vesting date reflects (i) the extent to which the vesting period has expired and (ii) the Company’s
best estimate of the number of equity instruments that will ultimately vest. No adjustment is made
for the likelihood of market performance conditions being met as the effect of these conditions is
included in the determination of fair value at grant date.
36 | PAINCHEK LIMITED
The profit or loss charge or credit for a period represents the movement in cumulative expense
recognised as at the beginning and end of that period.
No expense is recognised for awards that do not ultimately vest, except for awards where vesting
is only conditional upon a market condition.
If the terms of an equity-settled award are modified, as a minimum an expense is recognised as if
the terms had not been modified. In addition, an expense is recognised for any modification that
increases the total fair value of the share-based payment arrangement, or is otherwise beneficial
to the employee, as measured at the date of modification.
If an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation,
and any expense not yet recognised for the award is recognised immediately. However, if a new
award is substituted for the cancelled award and designated as a replacement award on the date
that it is granted, the cancelled and new award are treated as if they were a modification of the
original award, as described in the previous paragraph.
(e)
Cash and cash equivalents
Cash comprises cash at bank and in hand. Cash equivalents are short term, highly liquid
investments that are readily convertible to known amounts of cash and which are subject to an
insignificant risk of changes in value. Bank overdrafts are shown within borrowings in current
liabilities in the statement of financial position.
For the purpose of the Statement of Cash Flows, cash includes on hand and other funds held at
call net of bank overdrafts.
(f)
Trade and other receivables
Trade receivables are initially recognised at fair value and subsequently measured at amortised
cost using the effective interest method, less any provision for impairment. Trade receivables are
generally due for settlement within 30 days.
The group applies the simplified approach permitted by AASB 9, which requires expected
lifetime losses to be recognised from initial recognition of the receivables. Management has
determined that assessment of expected credit loss associated with trade receivables is
immaterial.
(g)
Plant and equipment
Plant and equipment is stated at historical cost less accumulated depreciation and impairment.
Historical cost includes expenditure that is directly attributable to the acquisition of the items.
Depreciation is calculated on a straight-line basis to write off the net cost of each item of plant
and equipment over their expected useful lives as follows:
Plant and equipment
Less than 5 years
The residual values, useful lives and depreciation methods are reviewed, and adjusted if
appropriate, at each reporting date.
An item of plant and equipment is derecognised upon disposal or when there is no future
economic benefit to theGroup. Gains and losses between the carrying amount and the disposal
proceeds are taken to profit or loss.
PAINCHEK LIMITED | 37
(h)
Trade and other payables
Trade and other payables are initially recognised at fair value and subsequently measured at
amortised cost using the effective interest method These amounts represent liabilities for goods
and services provided to the Group prior to the end of the financial year and which are unpaid.
Due to their short-term nature they are measured at amortised cost and are not discounted. The
amounts are unsecured and are usually paid within 30 days of recognition.
(i)
Employee benefits
Short-term employee benefits
Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service
leave expected to be settled within 12 months of the reporting date are recognised in current
liabilities in respect of employees' services up to the reporting date and are measured at the
amounts expected to be paid when the liabilities are settled.
Other long-term employee benefits
The liability for annual leave and long service leave not expected to be settled within 12 months of
the reporting date are recognised in non-current liabilities, provided there is an unconditional right
to defer settlement of the liability. The liability is measured as the present value of expected future
payments to be made in respect of services provided by employees up to the reporting date..
Consideration is given to expect future wage and salary levels, experience of employee departures
and periods of service. Expected future payments are discounted using market yields at the
reporting date on corporatebonds with terms to maturity and currency that match, as closely as
possible, the estimated future cash outflows.
Defined contribution superannuation expense
Contributions to defined contribution superannuation plans are expensed in the period in which
they are incurred.
(j)
Issued capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new
shares or options are shown in equity as a deduction, net of tax, from the proceeds.
(k)
Earnings per share
Basic earnings per share is calculated as net profit attributable to members of the Group, adjusted
to exclude any costs of servicing equity, divided by the weighted average number of ordinary
shares, adjusted for any bonus element.
Diluted earnings per share is calculated as net profit attributable to members of the Group,
adjusted for:
•
•
costs of servicing equity;
the weighted average number of additional ordinary shares that would have been outstanding
assuming the conversion of all dilutive potential ordinary shares;
the after tax effect of dividends and interest associated with dilutive potential ordinary shares
that have been recognised as expenses; and
•
• other non-discretionary changes in revenues or expenses during the period that would result
from the dilution of potential ordinary shares divided by the weighted average number of
ordinary shares and dilutive potential ordinary shares, adjusted for any bonus element.
38 | PAINCHEK LIMITED
(l)
i)
Revenue from Contracts with Customers and Government Grants
Software subscriptions
Revenue from the sale of term (subscription) licences is recognised on a straight line basis over the
subscription term.
ii)
Training
Revenue from the provision of training services is recognised typically at a point in time when the
Company has provided training and has an enforceable right to payment for its performance
completed to date.
iii)
Software support (maintenance)
Revenue for software support is recognised on a straight line basis over the service period as
performance obligations require the company to respond to requests made by customers to
provide technical product support and unspecified updates, upgrades and enhancements on a
when-available and if-available basis.
iv)
Incremental Costs of obtaining Customer Contracts
Commissions on software subscriptions are capitalised and amortised over the term, where the
term is greater than 12 months.
v)
Contract Assets (Trade Receivables and Work in progress)
Trade receivables are amounts due from customers for goods sold or services performed in the
ordinary course of business. They are generally due for settlement within 30 days and therefore
are all classified as current. Trade receivables are recognised initially at the amount of
consideration that is unconditional unless they contain significant financing components, when
they are recognised at fair value. The Company holds the trade receivables with the objective to
collect the contractual cash flows and therefore measures them subsequently at amortised cost
using the effective interest method.
Work in progress represents costs incurred and profit recognised for services that are in progress
at balance date and the Company has an enforceable right to payment for its performance
completed to date.
vi)
Unsatisfied performance obligations
The Company continues to recognise its contract liabilities under AASB 15 in respect of any
unsatisfied performance obligations, which are disclosed as Unearned revenue in the Statement of
Financial Position.
vii)
Financing components
The Company does not recognise adjustments to transition prices or Contract balances where the
period between the transfer of promised goods or services to the customer and payment by
customer does not exceed one year.
The Company reviewed its prior year contracts and did not identify material adjustments in timing
and amounts recognised as revenue in prior years.
Government grants
viii)
Government grants are recognised where there is reasonable assurance that the grant will be
received and all attached conditions will be complied with. When the grant relates to an expense
item, it is recognised as income on a systematic basis over the periods that the related costs, for
which it is intended to compensate, are expensed. When the grant relates to an asset, it is
recognised as income in equal amounts over the expected useful life of the related asset.
PAINCHEK LIMITED | 39
(m)
Comparative Figures
When required by Accounting Standards, comparative figures have been adjusted to conform to
changes in presentation for the current financial year.
Where the Group retrospectively applies an accounting policy, makes a retrospective restatement
or reclassifies items in its financial statements, an additional (third) statement of financial position
as at the beginning of the preceding period in addition to the minimum comparative financial
statements is presented. No adjustments was made to prior year numbers.
(n)
Significant accounting judgements and key estimates
The preparation of financial statements requires management to make judgements, estimates and
assumptions that affect the application of accounting policies and the reported amounts of assets,
liabilities, income and expense. Actual results may differ from these estimates.
In preparing these statements, the key estimates made by management in applying the Company’s
accounting policies have been applied to the valuation of share-based payments, refer to note 15.
In addition, the Group has formed a view of whether the hurdles of the Government Grant are
reasonably assured of being met as detailed in notes 5 and 11.
2. Segment information
Operating segments are presented using the ‘management approach’, where information presented
is on the same basis as the internal reports provided to the Chief Operating Decision Makers (CODM).
The CODM is responsible for the allocation of resources to operating segments and assessing their
performance. The Group operates predominantly in one segment, being the sale of its pain
assessment solutions. The primary financial statements reflects this segment.
3. Revenue
Subscription revenue – recognised over time
Interest income
Total Revenue
4. Other income
ATO cash boost
Research & Development Rebates
Total Other Income
5. Other income – government grants
Government grant
Total government grants
Consolidated
Consolidated
2020
$
248,194
48,981
297,175
2020
$
135,017
80,444
215,461
Consolidated
2020
$
50,000
798,835
848,835
Consolidated
2019
$
-
745,258
745,258
Consolidated
2020
$
Consolidated
2019
$
1,750,000
1,750,000
-
-
40 | PAINCHEK LIMITED
On 29 April 2019, the Australian Government announced a one-year funded trial of the PainChek
application for Australians with dementia living in residential aged care facilities. Subsequently in
December 2019, the Australian Government signed a grant funding contract (total amounting to
$5 million) with the Company for the national trial of the PainChek application.
The intended outcome of the grant is to improve diagnosis and management of pain in people
living with dementia in residential aged care. During this period, PainChek Limited also entered
into agreements with end users acknowledging the Australian Government grant and allowing for
the first period of those agreements to be funded in accordance with the Australian Government
grant agreement.
During the year, the Group received $3,000,000 pursuant to the terms of the funding contract of
which $1,750,000 has been recognised as income and the balance of $1,250,000 has been
recognised as deferred income – see note 11.
6.
Loss for the year
Consolidated
Consolidated
Loss for the year has been arrived at after charging the
following items of expenses:
Corporate administration expenses
Salaries & oncosts
Board fees
Company secretary fees
Consultants fees
Travel
Legal and professional fees
Regulatory
Share registry fees
ASX
Audit & tax
IT & telecommunications
Other administration expenses
7.
Income taxes relating to continuing operations
7.1
Income tax recognised in profit or loss
Current tax expense/(income)
Deferred tax expense/(income)
Tax losses not recognised
Total Tax expense/(income)
2020
$
725,651
152,000
142,720
439,608
185,840
114,871
124,459
54,862
105,935
94,527
106,631
337,169
2,584,273
2019
$
379,570
160,089
122,825
140,208
138,155
79,832
44,052
23,990
78,968
106,694
63,449
148,614
1,486,446
Consolidated
Consolidated
2020
$
(1,075,247)
10,487
1,064,760
-
2019
$
(1,067,948)
40,523
1,027,425
-
PAINCHEK LIMITED | 41
The income tax expense for the year can be reconciled to the accounting loss as follows:
Loss before tax from continuing operations
Income tax expense/(revenue) calculated at 27.5%
(2019: 27.5%)
Effect of items that are not assessable/deductible in
determining taxable loss:
Non-deductible expenses
Non-assessable income
Effect of unused tax losses not recognised as deferred tax assets
Consolidated
Consolidated
2020
$
(12,392,659)
2019
$
(3,262,418)
(3,407,982)
(897,165)
2,577,648
(234,427)
1,064,761
-
74,686
(204,946)
1,027,425
-
The tax rate used for the 2020 was 27.5% and 2019 was 27.5% to calculate the reconciliations above being
the corporate tax rate payable by Australian corporate entities on taxable profits under Australian tax law
in those years.
The Company has no franking credits available for recovery in future years.
7.2
Income tax recognised directly in equity
Current tax
Share issue costs
Deferred tax
Share issue costs deductible over 5 years
7.3
Unrecognised deferred tax assets
Unused tax losses (revenue) for which no deferred tax assets
have been recognised
Temporary differences
All unused tax losses were incurred by Australian entities.
Consolidated
2020
$
Consolidated
2019
$
(55,696)
(168,774)
-
(55,696)
-
(168,774)
Consolidated
2020
$
Consolidated
2019
$
3,523,109
218,750
2,963,360
191,662
This benefit for tax losses will only be obtained if the specific entity carrying forward the tax losses derives
future assessable income of a nature and of an amount sufficient to enable the benefit from the deductions
for the losses to be realised, and the Group complies with continuity of business / same business test and
the conditions for deductibility imposed by tax legislation.
8.
Loss per share
Basic and diluted loss per share (cents per share)
Consolidated
2020
$
(1.3)
Consolidated
2019
$
(0.4)
42 | PAINCHEK LIMITED
The loss and weighted average number of ordinary shares used in the calculation of basic loss
per share are as follows:
Loss for the year attributable to the owners of the Company
Weighted average number of ordinary shares for the
purposes of basic and diluted loss per share
Consolidated
2020
$
(12,392,659)
Consolidated
2019
$
(3,262,418)
Consolidated
2020
$
Consolidated
2019
$
989,161,514
838,403,530
Options and Performance Rights on issue are considered to be anti-dilutive while the entity is
making losses.
9.
Trade and other receivables
Other receivables
Prepayments
At the reporting date, no receivables are past due.
10.
Property, plant and equipment
Carrying amounts of
Computer Equipment – at cost
Cost
Balance at 1 July 2019
Additions
Disposals
Balance at 30 June 2020
Accumulated depreciation
Balance at 1 July 2019
Depreciation expense
Disposals
Balance at 30 June 2020
Net book value
Consolidated
2020
$
69,094
8,505
77,599
Consolidated
2019
$
161,337
9,832
171,169
Consolidated
2020
$
21,036
Consolidated
2019
$
15,716
Consolidated
2020
$
20,475
45,561
-
66,036
Consolidated
2019
$
5,974
14,501
-
20,475
Consolidated
2020
$
Consolidated
2019
$
4,759
43,325
-
48,084
1,590
3,169
-
4,759
17,952
15,716
PAINCHEK LIMITED | 43
11.
Trade and other payables
Trade creditors
Deferred income
Contract liability
Accruals and other payables
Consolidated
2020
$
231,207
1,250,000
-
490,424
1,971,631
Consolidated
2019
$
202,054
-
20,000
343,138
565,192
Trade creditor payment terms are 30 days from end of month.
Dererred income comprises the Federal Government Grant received in advance ($1,250,000) and
the contract liability comprises client prepayment ($13,000).
12.
Provisions
Provision for employee entitlements
13.
Subsidiaries
Consolidated
2020
$
115,553
Company
2019
$
63,247
The consolidated financial statements include the financial statements of PainChek Limited and its
wholly owned subsidiary companies Electronic Pain Assessment Technologies (EPAT) Pty Ltd and
PainChek UK Limited.
14.
Issued capital
Fully paid Ordinary shares
Consolidated
2020
$
21,261,768
Consolidated
2019
$
17,755,759
Balance at beginning of the
reporting period
Issued pursuant to capital raising
Issued on conversion of options
Capital raising costs
Balance at end of period
Consolidated
2020
Consolidated
2019
No.
906,658,727
$
17,755,759
No.
837,634,587
$
13,710,033
6,896,552
121,967,121
-
1,035,522,400
1,000,000
2,561,704
(55,696)
21,261,767
21,724,138
47,300,000
-
906,658,727
3,150,000
1,064,500
(168,774)
17,755,759
Fully paid ordinary shares carry one vote per share and carry the right to dividends. Ordinary shares
participate in the proceeds on winding up of the Company in proportion to the number of shares held.
44 | PAINCHEK LIMITED
15. Reserves
Balance at beginning of the reporting period
Variation of 90,198,155 Director option terms
Issue of 5,000,000 Employee options
Issue of 3,000,000 Employee options
Issue of 4,000,000 Employee options
Issue of 3,000,000 Employee options
Issue of 3,000,000 Employee options
Issue of performance rights to Directors
Foreign exchange
Total reserves at end of period
Consolidated Consolidated
2020
$
3,200,925
8,117,834
14,433
25,060
146,442
334,668
24,167
245,204
(13,622)
12,095,111
2019
$
3,088,014
-
30,466
59,478
22,967
-
-
-
-
3,200,925
The purpose of this reserve is to recognise share-based payments and foreign exchange gains /
losses on foreign operations.
Issued during the period:
Options
Consolidated
2020
Consolidated
2019
No.
$
No.
$
Balance at beginning of the
reporting period
Issue of options to employees
Issue of free attaching options –
capital raising
Options expired
Variation of director vesting terms
Exercise of options
144,760,224
6,000,000
3,200,925
544,771
178,167,730
4,000,000
3,088,014
112,911
3,448,276
-
-
(121,967,121)
-
-
8,117,834
-
10,862,069
(969,575)
-
(47,300,000)
-
-
-
Balance at end of period
32,241,379
11,863,530
144,760,224
3,200,925
Performance rights
Balance at beginning of the
reporting period
Issue of director performance
rights
Balance at end of period
Consolidated
2020
Consolidated
2019
No.
$
No.
$
-
-
1,306,578
1,306,578
245,203
245,204
-
-
-
-
-
-
373,308 of these performance rights (2019: Nil) were exercised by Directors in July 2020.
933,270 of performance rights are unvested at 30 June 2020.
PAINCHEK LIMITED | 45
Foreign Exchange
Balance at beginning of the reporting period
Movement in period
Balance at end of period
15.1 Movements in share options during the year
Consolidated
30 June 2020
$
30 June 2019
$
-
(13,622)
(13,622)
-
-
-
The following reconciles the share options outstanding at the beginning and end of the year:
20 20
2019
Number of
options
Weighted
average
exercise price
Number of
options
Weighted
average
exercise price
No.
$
No.
$
Balance at beginning of the year
144,760,224
0.0454
178,167,730
Granted during the year
9,448,276
$0.1928
14,862,069
Forfeited during the year
-
-
-
Exercised during the year
(121,967,121)
0.0210
(47,300,000)
Expired during the year
-
-
(969,575)
Balance at end of year
32,241,379
0.1565
144,760,224
Exercisable at end of year
21,678,879
0.1791
106,131,672
0.0225
0.1913
-
0.0225
0.175
0.04
0.0454
Share options exercised during the year
121,967,121,share options were exercised during the year (2019: 47,300,000).
Share options outstanding at the end of the year
The share options outstanding at the end of the year had a weighted average exercise price of $0.18
and a weighted average remaining contractual life of 888 days (2019: 291)
Options on Issue
As at 30 June 2020, the following options over new ordinary shares in the Company were on
issue:
Option
series
3
4
5
6
7
8
Type
Date of Expiry
Unlisted Options
Unlisted Options
Unlisted Options
Unlisted Options
Unlisted Options
Unlisted Options
3 October 2021
22 July 2022
9 November 2023
30 June 2022
31 March 2024
26 September 2024
Exercise
Price
$0.36
$0.726
$0.032
$0.25
$0.21
$0.11
Number under
Option
5,000,000
3,000,000
4,000,000
14,241,379
3,000,000
3,000,000
46 | PAINCHEK LIMITED
The following share-based payment arrangements were in existence during and prior reporting
periods:
Option
series
Number
Grant date
Total Value
at Grant
Date ($)
Recognised
as expense
to 30 June
2020 ($)
Exercis
e Price
($)
Expiry date
Vesting
date
1
2
3
4
5
6
7
8
45,000,000
7 October
2016
522,000
-
0.025
7 October
2019
7 October
2016
90,198,155
23 November
2016
2,442,857
8,418,494
0.02
24 November
2019
Various
5,000,000
5 April 2017
138,925
135,422
0.036
3,000,000
22 January
2018
130,361
117,170
0.0726
4,000,000
9 May 2019
225,712
169,409
0.032
3 October
2021
Various
22 July
2022
Various
9 November
2023
Various
14,241,379
21 June
2019
Nil. Free
attaching
Nil
0.25
30 June
2022
N/A
3,000,000
30 September
2019
678,621
334,668
0.21
31 March
2024
Various
3,000,000
26 March
2020
160,098
24,167
0.11
26 September
2024
Various
PAINCHEK LIMITED | 47
The fair value of the options at grant date are determined using a Black Scholes pricing method that takes
into account the exercise price, the term of the option, the share price at grant date and expected volatility
of the underlying share, the expected dividend yield and the risk-free interest rate for the term of the
option. The following table lists the inputs to the model used for valuation of the unlisted options:
Option
series
Volatility
Risk free
interest
rate
Expected life
of option
(years)
Expected
dividend
yield
Exercise
price
Underlying
security price
at grant date
Expiry
date
Value per
option
(cents)
1
2
3
4
5
6
7
8
100%
1.54%
100%
1.54%
100%
1.95%
100%
1.95%
100%
1.48%
N/A
N/A
100%
1.48%
100%
0.47%
Option series:
3.0
3.0
4.5
4.5
4.5
3.0
4.5
4.5
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
$0.025
$0.02
7/10/19
1.16c
$0.02
$0.037
24/11/19
2.71c
$0.036
$0.038
3/10/21
2.78c
$0.0726
$0.062
22/7/22
4.34c
$0.032
$0.069
9/11/23
5.64c
$0.25
$0.190
30/6/22
Nil
$0.21
$0.295
31/3/24
22.5c
$0.11
$0.08
26/9/24
5.3c
1) Underwriter options
45,000,000 options were granted to the Underwriter pursuant to the Prospectus dated 25 August
2016.
2) Director options
90,198,155 options were granted to the Directors as approved by shareholders at the annual general
meeting on 23 November 2016. The options issued to directors vested over three tranches as follows:
1. One third after one year of service.
2. One third after the Company makes an announcement that Regulatory Approval to enable
commercial use of the PainChek App in Australia, the United States or Europe is received, or
the Company has announced the execution of a binding licence agreement to licence the
PainChek App to:
a. one or more residential aged care facilities facility owners managing in total in excess of
150 beds; or
b. one or more medical clinics which service in total in excess of 2,000 patients per year; or
c. a metropolitan hospital with in excess of 200 beds;
(each an “End User”);
d. or a global distribution partner with multiple End Users as existing customers.
3. One third upon the Company generating cumulative revenue of $1,000,000. Shareholders
approved the variation of this vesting condition at the AGM held on 20 November 2019.
48 | PAINCHEK LIMITED
Director options – change of tranche 3 vesting conditions
Tranches one and two had vested in prior periods. At the AGM on 20 November 2019, shareholders
approved the variation of the vesting conditions for 30,066,052 tranche 3 options. The Company has
expensed the incremental fair value of the options at the time of the modification. The incremental
fair value is the difference between the fair value of the modified equity instrument and the fair value
of the of the original instrument, both estimated as at the date of the modification and being $0.27
per option, resulting in a non-cash expense of $8,117,834 recognised during the period. The fair value
was determined by reference to the share price as at the date of modification given the value of the
option immediately pre modification was Nil.
3) Employee options
5,000,000 options were granted to an employee on 5 April 2017. 25 % of the options issued to the
employees vest after 12 months employment and balance in quarterly instalments over the next 3
years, subject to continued full time employment (i.e. Fully vested after 4.5 years employment).
4) Employee options
3,000,000 options were granted to an employee on 22 January 2018. 25 % of the options issued to
the employees vest after 12 months employment and balance in quarterly instalments over the next
3 years, subject to continued full time employment (i.e. Fully vested after 4.5 years employment).
5) Employee options
4,000,000 options were granted to employees on 9 May 2019. 25 % of the options issued to the
employees vest after 12 months employment and balance in quarterly instalments over the next 3
years, subject to continued full time employment (i.e. Fully vested after 4.5 years employment).
6) Free attaching options to capital raising
14,310,345 options were free attaching options granted to applicants of the capital raising undertaken
in June 2019. The options vested on issue .
7) Employee options
3,000,000 options were granted to an employee on 30 September 2019. 25 % of the options issued
to the employees vest after 12 months employment and balance in quarterly instalments over the
next 3 years, subject to continued full time employment (i.e. Fully vested after 4.5 years employment).
8) Employee options
3,000,000 options were granted to an employee on 26 March 2020. 25 % of the options issued to the
employees vest after 12 months employment and balance in quarterly instalments over the next 3
years, subject to continued full time employment (i.e. Fully vested after 4.5 years employment).
PAINCHEK LIMITED | 49
15.2 Performance Rights
At the 2019 Annual general meeting,shareholders approved the issue of performance rights to the non-
executive directors and the CEO as set out below. There were nil performance rights granted in FY19.
Granted to
Date granted
Expiry date
Issue price
of shares
Non exective
directors
Non exective
directors
Non exective
directors
CEO
CEO
CEO
CEO
CEO
20/11/2019
30/09/2020
20/11/2019
30/09/2021
20/11/2019
30/09/2022
20/11/2019
20/11/2019
20/11/2019
20/11/2019
20/11/2019
01/01/2022
01/01/2023
01/01/2023
01/01/2024
01/01/2024
$0.29
$0.29
$0.29
$0.29
$0.29
$0.29
$0.29
$0.29
Value of
rights
approved at
AGM
No.of
erformanc
e
rights under
plan
Amount
recognised as
expense ($)
$108,259
373,308^
$78,258
$78,928
$78,302
$92,833
$92,779
$58,904
$59,421
$60,300
$56,014
*
*
466,635^^
466,635^^
*
*
*
$39,129
$39,129
$30,399
$19,780
$12,558
$9,391
$9,530
CEO
20/11/2019
01/01/2025
$7,029
$245,203
*Number of rights for FY2021 and FY2022 to be determined at future date, equivalent to value of rights approved at the AGM divided by the
volume weighted average price (VWAP) of PainChek Ltd shares, calculated 5 days either side of and including the date of announcement of the
Company’s annual statutory results for the financial year preceding the the financial year of the Award.
^373,308 of these performance rights (2019: Nil) were exercised by Directors in July 2020.
^^ 933,270 of performance rights is unvested at 30 June 2020.
*
1,306,578
$0.29
Non- exective directors terms of performance rights:
a) each non-executive director will in each end of financial year on 30 June 2020, 2021 and 2022
receive 1/3 of their total annual remuneration in Performance Rights;
b) the number of Performance Rights issued for a year will be calculated based on the VWAP of
the Company’s ordinary shares calculated 5 days either side of and including the date of
announcement of the company’s annual statutory results for the financial year;
c) Performance Rights will vest at 30 June each subsequent year - being the end of the financial
year subject to the director remaining a director of the Company at that date;
d) each Performance Right has the conditional right to acquire one Share;
e) the Performance rights are issued for Nil consideration;
f)
g) the Performance Rights are subject to the terms and conditions of the LTI Plan; and
h) the below table summarises the position:
the Performance Rights expire 3 months after the vesting date;
Remuneration
for year
ended 30 June
Share price
calculation
date
(estimated)
Grant date
Vesting date
Likely date that
Performance
Rights will
convert to shares
Expiry Date of
Performance
Rights if not
converted to
shares
2020
2021
2022
5/09/2019
20/11/2019
30/06/2020
30/07/2020
5/09/2020
20/11/2019
30/06/2021
30/07/2021
5/09/2021
20/11/2019
30/06/2022
30/07/2022
30/09/2020
30/09/2021
30/09/2022
The fair value at the date of grant of performance rights issued to the non-executive directors was
calculated based on the share price at the date of issue ($0.29) (tranche 1), the value of the award specified
in applicable years 2021 (tranche 2) and 2022 (tranche 3) over the vesting period.
50 | PAINCHEK LIMITED
The value of the performance rights were calculated using the inputs shown below:
Grant date
Exercise price
Vesting date
Share price at date of grant
Expiry date
Tranche 1
20 November 2019
Nil
30 June 2020
$0.29
30 September 2020
Tranche 2
20 November 2019
Nil
30 June 2021
$0.29
30 September 2021
Tranche
20 November 2019
Nil
30 June 2022
$0.29
30 September 2022
373,308 of these performance rights (2019: Nil) were exercised by Directors in July 2020.
CEO terms of performance rights
The issue of Performance Rights to Philip Daffas to the value of $600,000 over the next 3 years with an
annual limit of $200,000 for Philip Daffas or his nominee(s) to acquire one Share for each Performance
Right held pursuant to the LTI Plan and as part of Philip Daffas' remuneration.
The Performance Rights issued for a year will be issued at the VWAP of the Company’s ordinary shares
calculated 5 days either side of and including the date of announcement of the company’s annual statutory
results for the financial year preceding the financial year of the grant of the Performance Rights (Award
Issue Price).
Vesting of the Performance Rights is conditional on the following:
a) 50% of the annual grant of $200,000 worth of Performance Rights will vest two years after the
commencement of each vesting period on 1 October of the year of grant, subject to the
Company's Share price achieving a compounded annual increase in Share price of 15% p.a.
(Award Target Price) from the relevant Award Issue Price and provided that Philip Daffas remains
employed by the Company at that date (unless he is a Good Leaver as defined in the LTI Plan in
which case he retains the relevant pro rata portion of the grant subject to the increase in Share
price vesting condition); and
b) 50% of the annual grant of $200,000 worth of Performance Rights will vest three years after the
commencement of each vesting period on 1 October of the year of grant, subject to the
Company's Share price achieving a compounded annual increase in Share price of 15% p.a. from
the relevant Award Issue Price and provided that Philip Daffas remains employed by the
Company on that date (unless he is a Good Leaver as defined in the LTI Plan in which case he
retains the relevant pro rata portion of the grant subject to the increase in Share price vesting
condition).
PAINCHEK LIMITED | 51
The Award Target Price will be calculated based on the 10 days VWAP leading up to and including
the relevant vesting date.The following table summarises the above terms:
Remuneration
for year
ended 30 June
Share Price
Calculation
date
(estimated)
Grant date
2020
5/09/2019
20/11/2019
2021
5/09/2020
20/11/2019
2022
5/09/2021
20/11/2019
Likely date that
Performance
Rights will
convert to
shares
50% on
30/10/2021;
50% on
30/10/2022
50% on
30/10/2022;
50% on
30/10/2023
50% on
30/10/2023;
50% on
30/10/2024
Expiry Date
of
Performance
Rights if not
converted to
shares
50% on
1/1/2022;
50% on
1/1/2023
50% on
1/1/2023;
50% on
1/1/2024
50% on
1/1/2024;
50% on
1/1/2025
Vesting date
assuming
share price
hurdle is met
50% on
1/10/2021;
50% on
1/10/2022*
50% on
1/10/2022;
50% on
1/10/2023
50% on
1/10/2023;
50% on
1/10/2024
The fair value at the date of grant of performance rights issued to the CEO is determined using a Monte-
Carlo Simulation option pricing model that takes into account the exercise price, the underlying share price
at the time of issue, the term of the performance right, the underlying share’s expected volatility, expected
dividends and the risk free interest rate for the expected life of the instrument.
The following table shows the calculation of the Performance Rights to be issued as part of Philip Daffas’
remuneration for holding office during FY20 and vesting on 1 October 2021 and 1 October 2022, if Philip
Daffas remains in office and the relevant Award Target Price is achieved on the relevant vesting date:
Annual Value of
Performance
Rights for FY20
Share price calculated
based on the VWAP 5
days (and including the
day of) either side of
FY19 statutory results
No. of
Performance
Rights
Vesting Date
$100,000
$0.2143
$100,000
$0.2143
466,636
466,635
1 October
2021
1 October
2022
Award
Target
Price
$0.2834
$0.3259
52 | PAINCHEK LIMITED
The value of the performance rights were calculated using the inputs shown below:
Tranche 1A
20
November
2019
Nil
Refer
above
$0.29
Tranche
1B
20
Novembe
r 2019
Nil
Refer
above
$0.29
Grant date
Exercise price
Vesting conditions
Share price at date of
grant
Expiry date
1 January
2022
1 January
2023
Tranche
2A
20
Novem
ber
2019
Nil
Refer
above
$0.29
1
January
2023
Tranche
2B
20
November
2019
Tranche
3A
20
November
2019
Tranche
3B
20
November
2019
Nil
Refer
above
$0.29
Nil
Refer
above
$0.29
Nil
Refer
above
$0.29
1 January
2024
1 January
2024
1 January
2025
Life of the
instruments (years)
Underlying share
price volatility
Expected dividends
Risk free interest
rate
Pricing model
Fair value per
instrument
2.12
3.12
3.12
4.12
4.12
5.12
100%
Nil
0.80%
100%
Nil
100%
Nil
100%
Nil
0.80%
0.80%
0.80%
100%
Nil
0.80%
100%
Nil
0.80%
Monte-
Carlo
Simulation
Monte-
Carlo
Simulati
on
Monte-
Carlo
Simulat
ion
Monte-
Carlo
Simulatio
n
Monte-
Carlo
Simulatio
n
Monte-
Carlo
Simulatio
n
$0.1979
$0.1980
$0.1711
$0.1773
$0.1763
$0.1536
Financial instruments
16.
16.1 Capital management
The Group manages its capital to ensure entities in the Group will be able to continue as going
concern while maximising the return to stakeholders through the optimisation of the debt and
equity balance. The Group’s overall strategy remains unchanged from 2019.
The Group is not subject to any externally imposed capital requirements.
Given the nature of the business, the Group monitors capital on the basis of current business
operations and cash flow requirements.
16.2
Categories of financial instruments
Financial assets
Cash and cash equivalents
Trade and other receivables
Financial liabilities
Trade and other payables
Consolidated
2020
$
Consolidated
2019
$
6,120,090
77,599
6,197,689
4,562,476
163,410
4,725,886
721,631
721,631
545,193
545,193
The fair value of the above financial instruments approximates their carrying values.
PAINCHEK LIMITED | 53
16.3 Financial risk management objectives
In common with all other businesses, the Group is exposed to risks that arise from its use of financial
instruments. This note describes the Group’s objectives, policies and processes for managing those
risks and the methods used to measure them. Further quantitative information in respect of those
risks is presented throughout these financial statements.
There have been no substantive changes in the Group’s exposure to financial instrument risks, its
objectives, policies and processes for managing those risks or the methods used to measure them
from previous periods unless otherwise stated in this note.
The board has overall responsibility for the determination of the Group’s risk management
objectives and policies and, whilst retaining ultimate responsibility for them, it has delegated the
authority for designing and operating processes that ensure the effective implementation of the
objectives and policies to the Group’s finance function.
The Group’s risk management policies and objectives are therefore designed to minimise the
potential impacts of these risks on the Group where such impacts may be material. The board
receives monthly financial reports through which it reviews the effectiveness of the processes put
in place and the appropriateness of the objectives and policies it sets. The overall objective of the
board is to set policies that seek to reduce risk as far as possible without unduly affecting the Group’s
competitiveness and flexibility.
16.4 Market risk
Market risk for the Group arises from the use of interest bearing financial instruments. It is the risk
that the fair value or future cash flows of a financial instrument will fluctuate because of changes in
interest rate (see 15.5 below).
16.5
Interest rate risk management
The sensitivity analyses below have been determined based on the exposure to interest rates for
both derivatives and non-derivative instruments at the end on the reporting period.
Interest rate sensitivity analysis
The sensitivity analyses below have been determined based on the exposure to interest rates for
both derivatives and non-derivative instruments at the end on the reporting period.
If interest rates had been 100 basis points higher/lower and all other variables were held constant,
the Group’s loss for the year ended 30 June 2020 would increase/decrease by $61,000 (2019:
$45,000).
16.6 Credit risk management
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting
in financial loss to the Group. The Group has adopted a policy of dealing with creditworthy
counterparties and obtaining sufficient collateral, where appropriate, as a means of mitigating the
risk of financial loss from defaults. The Group only transacts with entities that are rated the
equivalent of investment grade and above. This information is supplied by independent rating
agencies where available and, if not available, the Group uses other publicly available financial
information and its own trading records to rate its major customers. The Group’s exposure and the
credit ratings of its counterparties are continuously monitored and the aggregate value of
transactions concluded is spread amongst approved counterparties.
The credit risk on liquid funds is limited because the counterparties are banks with high credit-
ratings assigned by international credit-rating agencies.
54 | PAINCHEK LIMITED
16.7 Liquidity risk management
Ultimate responsibility for liquidity risk management rests with the board of directors, which has
established an appropriate liquidity risk management framework for the management of the
Group’s short-, medium- and long-term funding and liquidity management requirements. The Group
manages liquidity by maintaining adequate banking facilities, by continuously monitoring forecast
and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.
Contractual cash flows
Carrying
Amount
Less than
1 month
1-3
months
3-12
months
1 year to
5 years
Total
contractual
cash flows
$
$
$
$
$
$
2020
Trade and other payables
2019
Trade and other payables
721,631
721,631
545,193
545,193
-
-
-
-
-
-
721,631
545,193
17.
Key management personnel
The aggregate compensation made to directors and other members of key management personnel of the
Company is set out below:
Short-term employee benefits
Post-employment benefits
Share-based payments
18. Related party transactions
18.1 Entities under the control of the Group
Consolidated
2020
$
Consolidated
2019
$
603,399
34,891
8,363,038
9,001,328
626,923
33,402
-
660,325
Country of
Incorporation
Perecentage Owned (%)*
Parent Entity: PainChek Ltd
Australia
Electronic Pain Assessment
Technology (EPAT) Pty Ltd
Australia
PainChek UK Limited
England
2020
100%
100%
2019
100%
-
*Percentage of voting power is proportional to ownership
PAINCHEK LIMITED | 55
18.2 Key management personnel
Any person(s) having authority and responsibility for planning, directing and controlling the activities
of the entity, directly or indirectly, including any director (whether executive or otherwise) of that
entity, are considered key management personnel.
For details of disclosures relating to key management personnel, refer to note 17.
18.3 Other related party transactions
All transactions between the Group and related parties are on an arms-length basis.
19. Cash and cash equivalents
For the purposes of the statement of cash flows, cash and cash equivalents include cash on hand and
in banks, net of outstanding bank overdrafts. Cash and cash equivalents at the end of the reporting
period as shown in the statement of cash flows can be reconciled to the related items in the statement
of financial position as follows:
Cash and bank balances
6,120,090
4,562,476
Consolidated
2020
$
Consolidated
2019
$
19.1 Reconciliation of loss for the year to net cash flows from operating activities
Cash flow from operating activities
Loss for the year
Adjustments for:
Depreciation
Share based payments
Movements in working capital
(Increase)/decrease in other receivables
(Increase)/decrease in prepayments
Increase/(decrease) in trade and other payables
Increase in provisions
Net cash outflows from operating activities
Consolidated
2020
$
Consolidated
2019
$
(12,392,659)
(3,262,418)
43,026
8,907,808
92,283
1,288
1,409,261
52,306
(1,886,689)
3,169
112,911
(105,251)
(3,820)
149,280
31,233
(3,074,896)
20. Commitments and contingencies
As per the Research Services Agreement with Curtin University of Technology, amended and dated
9 April 2020, the Company has agreed to Fees, payable in equal monthly instalments in accordance
with a payment schedule. The remaining commitment is $186,190 is due in less than 12 months.
56 | PAINCHEK LIMITED
21. Remuneration of auditors
Auditor of the parent entity
Audit and review of the financial statements
Other non-audit services
The auditors of PainChek Ltd are BDO Audit Pty Ltd.
22. Events after the reporting period
Consolidated
Consolidated
2020
$
54,129
-
54,129
2019
$
36,870
-
36,870
On 11 August 2020, the group announced a capital raising of $10,000,000 (before costs) by way a
placement of 90,909 091 fully paid ordinary shares at $0.11 per share. The funds were received and
the shares allotted on 17 August 2020. Otherwise, no matters or circumstances have arisen since
the end of the year which significantly affected or could significantly affect the operations of the
Group, the results of those operations, or the state of affairs of the Group in future financial years.
23. Parent entity information
The accounting policies of the parent entity, which have been applied in determining the 2020
financial information shown below, are the same as those applied in the financial statements. Refer
to note 1 for a summary of significant accounting policies relating to the Group. The legal Parent
Entity of the Consolidated Entity is PainCheck Limited.
Financial position of PainChek Limited
Assets
Current assets
Non-current assets
Total assets
Liabilities
Current liabilities
Provisions
Non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Accumulated losses
Total equity
Financial performance
Loss for the year
24. Approval of financial statements
2020
$
2019
$
5,914,148
-
5,914,148
1,689,885
95,807
-
1,785,692
4,128,457
4,584,663
15,716
4,600,3779
352,059
63,247
-
415,306
4,185,073
30,016,473
12,147,745
(38,035,761)
4,128,457
26,510,464
3,239,937
(25,565,328)
4,185,073
(12,470,433)
(1,439,092)
The financial statements were approved by the board of directors and authorised for issue on 28
August 2020.
PAINCHEK LIMITED | 57
DIRECTORS DECLARATION
1.
The Directors of the Company declare that:
a. the accompanying financial statements and notes are in accordance with the
Corporations Act 2001 including:
i.
ii.
giving a true and fair view of the Group’s financial position as at 30 June 2020 and of
its performance for the year then ended; and
complying with Australian Accounting Standards, the Corporations Regulations
2001, professional reporting requirements and other mandatory requirements.
b. there are reasonable grounds to believe that the company will be able to pay its
debts as and when they become due and payable; and
c.
the financial statements and notes thereto are in accordance with International
Financial Reporting Standards issued by the International Accounting Standards
Board.
2.
This declaration has been made after receiving the declarations required to be made to the
Directors in accordance with Section 295A of the Corporations Act 2001 for the financial year
ended 30 June 2020.
This declaration is signed in accordance with a resolution of the Board of Directors.
John Murray Chairman
28 August 2020
58 | PAINCHEK LIMITED
Tel: +61 7 3237 5999
Fax: +61 7 3221 9227
www.bdo.com.au
Level 10, 12 Creek St
Brisbane QLD 4000
GPO Box 457 Brisbane QLD 4001 Australia
INDEPENDENT AUDITOR'S REPORT
To the members of PainChek Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of PainChek Limited (the Company) and its subsidiaries (the Group),
which comprises the consolidated statement of financial position as at 30 June 2020, the consolidated
statement of profit or loss and other comprehensive income, the consolidated statement of changes in
equity and the consolidated statement of cash flows for the year then ended, and notes to the financial
report, including a summary of significant accounting policies and the directors’ declaration. In our
opinion the accompanying financial report of the Group, is in accordance with the Corporations Act 2001,
including:
(i)
(ii)
Giving a true and fair view of the Group’s financial position as at 30 June 2020 and of its
financial performance for the year ended on that date; and
Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the Financial Report
section of our report. We are independent of the Group in accordance with the Corporations Act 2001
and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110
Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are
relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical
responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been
given to the directors of the Company, would be in the same terms if given to the directors as at the time
of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report of the current period. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide
a separate opinion on these matters.
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO
Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of
BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member
firms. Liability limited by a scheme approved under Professional Standards Legislation.
PAINCHEK LIMITED | 59
Recognition of Revenue & Other Income
Key audit matter
How the matter was addressed in our audit
Refer to Notes 3, 5, 11 and Note 1(l) of the
financial report. Recognition of Revenue and
Other Income was identified as a key audit matter
due to the significance to the financial report and
the complex nature of the agreements entered
into by the Group during the year.
• On 29 April 2019, the Australian Government
announced a one-year funded trial of the
• PainChek application for Australians with
dementia living in residential aged care facilities
and subsequently in December 2019, the
• Australian Government signed a grant funding
contract (total amounting to $5 million) with
the Group for the national trial of the PainChek
application.
Our audit procedures included, amongst others:
•
Reviewing the terms and conditions of the
agreements to determine the relevant accounting
standard to be applied to the various revenue and
income streams.
•
•
•
Assessing the accounting policy adopted for
recognition of revenue and other income and
assessing compliance with AASB 15 Revenue from
Contracts with Customers or AASB 120 Accounting for
Government Grants and Disclosure of Government
Assistance.
For a sample of transactions, vouching to supporting
documentation such as invoices and receipts and
assessing compliance against the accounting policy
adopted including the recognition of any contract
liability or deferred income.
Assessing the adequacy of the Group’s disclosures
within the financial statements.
Accounting for share-based payments
Key audit matter
How the matter was addressed in our audit
Refer to Notes 15.1, 15.2 and
Note 1(d) of the financial report.
Share based payments is a key
audit matter as the accounting
can be complex and requires
judgement and the use of
assumptions regarding their
recognition and measurement.
Our audit procedures included, amongst others:
•
Reviewing relevant supporting documentation to obtain an
understanding of the contractual nature and terms and
conditions of the share-based payments.
•
•
•
•
•
Considering the accounting requirements for modifications of
existing share based payments under AASB 2 Share Based
Payments.
Reviewing the valuation methodology adopted in valuing the
incremental cost for the modification of existing share based
payments.
Testing management's methodology for calculating the fair value
of the performance rights including assessing the valuation
inputs using internal specialists where required.
Assessing the allocation of the share-based payment
expense over management's expected vesting period.
Reviewing the disclosures to ensure they reflected both the
valuation of and the accounting for the share based
payments.
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO
Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of
BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member
firms. Liability limited by a scheme approved under Professional Standards Legislation.
60| PAINCHEK LIMITED
Other information
The directors are responsible for the other information. The other information comprises the information in the
Group’s annual report for the year ended 30 June 2020 but does not include the financial report and the auditor’s
report thereon. Our opinion on the financial report does not cover the other information and we do not express
any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in
doing so, consider whether the other information is materially inconsistent with the financial report or our
knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true and
fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such
internal control as the directors determine is necessary to enable the preparation of the financial report that
gives a true and fair view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the group to continue
as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis
of accounting unless the directors either intend to liquidate the Group or to cease operations, or has no realistic
alternative but to do so.
Auditor’s responsibilities for the audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the Auditing and
Assurance Standards Board website (http://www.auasb.gov.au/Home.aspx) at:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf This description forms part of our auditor’s
report.
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO
Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of
BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member
firms. Liability limited by a scheme approved under Professional Standards Legislation.
PAINCHEK LIMITED | 61
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 4 to 15 of the directors’ report for the year
ended 30 June 2020.
In our opinion, the Remuneration Report of PainChek Limited, for the year ended 30 June 2020, complies with
section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration
Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an
opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing
Standards.
BDO Audit Pty Ltd
C R Jenkins
Director
Brisbane, 28 August 2020
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO
Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of
BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member
firms. Liability limited by a scheme approved under Professional Standards Legislation.
62| PAINCHEK LIMITED
Additional Shareholder Information
The following additional information is current as at 21 September 2020.
CORPORATE GOVERNANCE:
The Company’s Corporate Governance Statement is available on the company’s website at
www.painchek.com/corporate-governance
SUBSTANTIAL SHAREHOLDER:
Holder Name
PETERS INVESTMENTS PTY LTD
Holding
113,000,000
% IC
10.028
ORDINARY SHARES:
Holdings Ranges
1-1,000
1,001-5,000
5,001-10,000
10,001-100,000
100,001-9,999,999,999
Totals
Holders
65
658
882
2,456
1,045
5,106
Total Units
9,656
2,313,582
6,781,375
99,322,911
1,018,377,275
1,126,804,799
%
0.000
0.210
0.600
8.810
90.380
100.000
There are 825 shareholders with less than a marketable parcel.
VOTING RIGHTS
Each fully paid ordinary share carries voting rights of one vote per share.
The top 20 holders of ordinary shares are:
Name
Balance as at 18-09-2020
%
PETERS INVESTMENTS PTY LTD
J&E CONSULTING PTY LTD
MR KRESHNIK HOTI
MR MUSTAFA ABDUL WAHED ATEE
XTREME NOMINEES PTY LTD
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
MR PHILIP DAFFAS
THORNBURY NOMINEES PTY LTD
G & G CHILCOTT PTY LTD
MR ROBERT ANTHONY HEALY
PIPERLAKE PTY LTD
NANJOP PTY LTD
CAPPER SUPERANNUATION PTY LTD
MR ALLAN GRAHAM JENZEN & MRS ELIZABETH JENZEN
MR ANDREW JOHN HOPKINS & MS ELOISE KATHLEEN JENNINGS
SANDHURST TRUSTEES LTD
MR ROBERT ANTHONY HEALY
GRAZIAN PTY LTD
DEV NOMINEES PTY LTD
Total Securities of Top 20 Holdings
Total of Securities
113,000,000 10.028%
37,003,125 3.284%
37,003,125 3.284%
37,003,125 3.284%
31,650,158 2.809%
27,329,378 2.425%
22,345,547 1.983%
20,499,581 1.819%
15,050,000 1.336%
13,927,169 1.236%
12,857,143 1.141%
12,544,766 1.113%
12,299,748 1.092%
11,674,331 1.036%
11,277,974 1.001%
10,570,791 0.938%
9,137,647 0.811%
9,000,000 0.799%
8,320,000 0.738%
7,488,725 0.665%
459,982,333 40.822%
1,126,804,799
PAINCHEK LIMITED | 63
UNQUOTED EQUITY SECURITIES
Number
Number of
Holders
Class
Holders of more than 20%
2,889,540
3,000,000
3,000,000
5,000,000
3,000,000
4,000,000
4
1
1
1
1
3
14,241,379
12
PCKAA Performance
Rights
PCKAS Options
exercisable at $0.21
expiring of 31 March
2024
PCKAD Options
exercisable at $0.11
expiring of 26
September 2024
Options exercisable
at $0.036 expiring of
3 October 2021
Options exercisable
at $0.0726 expiring
of 22 July 2022
Share options with
an exercise price of
$0.032 and an expiry
date of 23rd
November 2023.
Share options with
an exercise price of
$0.25 and an expiry
date of 30 June 2022
Phillip Daffas (2,063,957)
Issued pursuant to ESOP
Issued pursuant to ESOP
Issued pursuant to ESOP
Issued pursuant to ESOP
Issued pursuant to ESOP
Peters Investments
Pty Ltd (6,896,551)
USE OF FUNDS
The entity has used the cash and assets in a form readily convertible into cash at the
time of listing in a way that is consistent with its business objectives.
There is no current share buy-back.
64| PAINCHEK LIMITED
PainChek Limited (ASX: PCK)
ABN 21 146 035 1272
Suite 401, 35 Lime Street,
Sydney, NSW, 2000
Registered Office:
Suite 5, 95 Hay Street
Subiaco WA 6008
info@paincheck.com