ANNUAL
REPORT
2023
YEAR ENDING JUNE
Improving clinical
outcomes around
the World and
across Australia
PAINCHEK LIMITED | ABN 21 146 035 127
CORPORATE DIRECTORY
Board of Directors
Mr John Murray
Mr Philip Daffas
Mr Adam Davey
Mr Ross Harricks
Non-Executive Chairman
Managing Director
Non-Executive Director
Non-Executive Director
Ms Cynthia Payne
Non-Executive Director
Company Secretary
Ms Lisa Dadswell
Registered Office
Principal Place of Business
Suite 401, 35 Lime Street
Suite 401, 35 Lime Street
Sydney NSW 2000
Sydney NSW 2000
Website
Website: www.painchek.com
Auditor
BDO Audit Pty Ltd
Share Registry
Boardroom Pty Ltd
Grosvenor Place
Level 8, 210 Bridge Street
Sydney, NSW 2000
Tel:
Fax:
+61 2 9290 9600
+61 2 9290 9655
Stock Exchange
Australian Securities Exchange
20 Bridge Street
Sydney, NSW 2000
ASX Code
PCK
CONTENTS
Chairman’s letter
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 report
Shareholder Information
4
6
28
29
30
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32
33
55
56
60
CHAIRMAN’S LETTER
Dear Fellow Shareholders,
It is with pleasure that I present the 2023 Annual Report
for PainChek Limited (ASX:PCK) and the financial results
for the Company.
This past 12 months have been transformative for
the Company. There are now more than 1,000 aged
care facilities and 70,000 aged care beds across three
continents that have contracted annual licences for
the PainChek technology. With more than 3,000,000
pain assessments conducted as of June 30th 2023,
the Company is delivering on its goal to provide best
practice pain management applications for all people
everywhere.
The utility of our adult App is supported by the clinical
outcomes reported by Orchard Care and the Scottish
Care Inspectorate in the UK, who have reported that
use of PainChek has resulted in more appropriate use of
pain medication as well as a reduction in safeguarding
reported incidents and a reduction in falls.
Following successful pilots, we now have our first
Canadian commercial customers who have contracted
for 3 years to use PainChek and we are now looking to
expand that base in North America.
4 | PAINCHEK LIMITED
We continue to progress with our FDA deNovo application
having commenced recruiting patients for the small
cohort clinical trial in USA and targeting FDA submission
in Q4 Calendar 2023, followed by USA regulatory market
clearance in 2024.
The Company has signed partnerships in the USA with
PointClickCare, InterSystems and Ethos Labs to provide
the required capability to access 1,000,000 aged care
beds across North America, establishing the basis for
rapid sales growth and achieving long term profitability.
PainChek adult App integrates and works with aged care
management and medication management systems
covering more than 1,500,000 aged care beds across
ANZ, UK and North America. The growing customer
base in the UK, the expected FDA submission for USA
and new market opportunities in Europe reaffirms Aged
Care as a large global market opportunity.
In terms of new markets, PainChek has developed a
hospital version of PainChek® incorporating clinical
workflows and full integration with the Intersystems
TrakCare EMR, with a UK hospital now scheduled to
commence a hospital wide PainChek pilot programme
as an initial hospital market entry point.
PainChek Infant App market testing has been conducted
with parent groups and we are now scheduling an initial
“direct to parent” market introduction in Australia.
In addition, a new AI vocalisation feature has been
developed using voice monitoring to determine a cry
of pain or no pain. PainChek Infant is making infant
pain visible and audible and will be the world’s first AI
enabled pain assessment tool for infants.
I thank our hardworking team who continue to progress
the Company strategies and business growth through
their efforts.
I would also like to thank our shareholders who
participated in the recent $3.5 million Share Placement,
this funding will allow us to progress our plans for FY24.
John Murray
Chairman
30 September 2023
ChairmanPainChek Limited (ASX: PCK)
ABN 21 146 035 127
Suite 401, 35 Lime Street,
Sydney, NSW, 2000
Registered Office:
Suite 401, 35 Lime Street,
Sydney, NSW, 2000
info@painchek.com
PAINCHEK LIMITED | 5
DIRECTORS’ REPORT
The directors of PainChek Limited (“PainChek” or
“the Company”) submit herewith the financial report
of the Company and its controlled entities (“Group”
or “Consolidated Entity”) for the year ended 30 June
2023. 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.
6 | PAINCHEK LIMITED
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.
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 the Agency
Group Australia Ltd and was a director of Ensurance
Limited until 2nd July 2021. Otherwise, Mr Davey has
not been a director of an ASX listed company in the
past 3 years.
Ms Cynthia Payne (appointed 30 March 2022)
– Non Executive Director
Ms Payne brings 30 years executive
leadership
experience as well as significant board and operational
experience in residential and home aged care services
in Australia. That experience includes over 16 years as
CEO for a large private aged care Provider in NSW and
before that head of operation manager for a large Not
for Profit with home care, residential and retirement
living portfolios. She is the founder and Managing
Director of Anchor Excellence, a leading consultancy
firm in the aged care services industry in Australia that
advises boards and management on operational and
compliance best practices.
Cynthia is a board advisor to Total Constructions Pty
Ltd, a former Director of the Heart Foundation and past
Chair of Business Excellence Australia. Cynthia holds
a Bachelor of Applied Science (Nursing) with specific
interest in Dementia Care, an MBA from the University
of New England, is a Member of the Australian Institute
of Company Directors, Fellow of the Governance
Institute Australia and Certified Chair with The Board
Advisory centre.
PAINCHEK LIMITED | 7
Company Secretary
Operating Cashflow and Funding
Ms. Dadswell was appointed on 21 December 2022, she
is an experienced Company Secretary and corporate
governance professional. She is an Associate of the
Governance Institute of Australia and has an Honours
Degree in Law.
The Group recorded receipts from customers of
$2,251,294, a 74% increase over prior year reflecting the
strong customer revenue growth. The Group continues
to invest in R&D and during the year receipts from R&D
grant were $1,048,588 (2022: 1,092,671).
OPERATIONS REPORT
Financial and operational review
The loss of the Group for the year ended 30 June 2023,
after accounting for income tax benefit, amounted to
$7,574,728 (2022 $5,720,534). The year ended 30 June
2023 operating results are attributed to the following:
• Research expense of $3,817,360 (30 June 2022:
the
increased expenses
$2,460,566),
investment in upgrading the core technology and
research preparing for FDA submission;
reflect
• Share based payments in respect of options issued
to Directors and employees of $766,093 (non-cash)
(30 June 2022: $549,191 (non-cash)); and
• Corporate
and
administration
expenses of
$3,033,062 (30 June 2022: $2,665,365) increased
following
regulatory and
in
information security management systems.
investment
the
The Group raised proceeds from the issue of shares at
the start of the year, raising $2,695,910 after share issue
costs (2022: $1,745,200). On 29 July 2022 the Group
announced the completion of an Entitlement Offer, this
followed the completion of a Placement of shares on 1
July 2022 to sophisticated and professional investors.
Review of Operations
The 2023 financial year has seen PainChek increase
customer revenue from its Adult App by 99% with a
strong market share in Australia and rapid expansion in
the UK. There are more than 1,000 residential aged care
facilities across three continents that have PainChek
annual commercial licence agreements. These clients
are based in Australia, New Zealand, United Kingdom,
Ireland and Canada. The combination of the PainChek
Adult App with our integration partnerships and data
analytics have shown to support improved patient clinical
outcomes within aged care. These outcomes have been
a growth driver for PainChek as the Company continues
its strategy to become the global market leader in pain
assessment technology through its existing Adult and
Infant pain assessment products.
PAINCHEK AROUND THE WORLD…
AND ACROSS AUSTRALIA
1000+ AGED CARE FACILITIES
ACROSS 3 CONTINENTS
Canada
•
•
Initial RAC sales now in place
and implemented
Exploring additional Aged
Care and Home Care partners
for North America
Europe (EU)
•
•
Targeting RAC beds and
home care dementia
patients in EU
Exploring International
partnerships
US / FDA *
•
• Adult FDA de Novo regulatory
clearance submission in
progress – target Q4 2023
Point Click Care integration
partnership providing access to
10,000+ long term homes and
1,000,000+ beds
Ethos Labs sales distribution
agreement targeting US long
term care sector
•
UK
•
•
~ 20, 000 contracted
RAC beds across 300 RAC
facilities
10+ integration partners
providing access to
~285,000 beds
Japan
•
•
Japanese patent granted
Currently working
with PDMA for
regulatory clearance
Australia-NZ (ANZ)
•
•
~ 50, 000 contracted RAC beds across
700 RAC facilities
15+ integration partners providing
access to 180,000 beds
8 | PAINCHEK LIMITED
N.B. Highlighted countries indicate existing regulatory cleared markets with Japan and USA in progress
The PainChek® technology uses cameras in smartphones
and tablets to conduct a facial scan 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. These results
are combined with other observational assessments
conducted by the carer to provide an overall pain score
and pain severity level of the person being assessed.
The PainChek® technology has regulatory clearance in
TGA (Australia), CE Mark (Europe) UK, New Zealand,
Singapore and Canada as a class 1 medical device
to assess pain in people who are unable to reliably
verbalise, such as people living with dementia and
pre-verbal infants.
PainChek® Universal, which has the same regulatory
market clearances is a complete point-of-care solution
that combines the existing PainChek® App with the
Numerical Rating Scale (NRS) and data from PainChek®
Analytics. This enables best-practice pain management
for people living with pain in any environment — from
those who cannot verbalise pain to those who can, and
those who fluctuate between the two. This means that
PainChek is now a tool to assess and document pain for
all people within aged care, hospital, and the home care
environment.
PainChek® Analytics provides actionable insights from
the PainChek® pain assessment data which helps reduce
clinical risk, ensure pain is identified early and enable
clients to focus on providing care. Detailed analytics and
reports have been developed with insights from ~3.0
million assessments conducted with the PainChek® app.
The achievements in the 2023 financial year have
set a scalable base for continued expansion of
PainChek around the world and across Australia
from:
Established significant market share in
Australia and New Zealand Aged Care
Continuing expansion in UK aged care
First customers in Canadian aged care
Established clinical trials for FDA
clearance and market entry for USA
Continuing development of Partnerships
giving access to growth
Infant app development and consumer
market research; and
Preparation for new markets – including
the hospital and home care markets.
In Australia and New Zealand Residential Aged Care,
PainChek has partnership agreements giving access
to a potential market of 220,000 aged care beds and
clients contracts have now been signed with 25% of that
addressable market.
PAINCHEK LIMITED | 9
“This smart system (PainChek) is far faster and more
accurate than the traditional pain assessment tools,
it helps vulnerable residents and frees up our staff to
do more for our residents by automating many of our
processes.”
– from Summerset Retirement Villages
2022 Annual Report
In the UK outstanding outcomes from regular pain
monitoring is driving rapid new client growth and
PainChek has expanded its operations in the UK with
150% annual growth in the contracted beds signed with
clients in Residential Aged Care. Partnerships in the UK
give access to a potential market with 440,000 residential
aged care beds, more than double that of Australia.
“As a direct result of introducing PainChek…pain is now
being identified and treated effectively”
- Director of Quality and Care at
Orchard Care Homes, UK.
In Canada, the first customers have given positive
feedback following training and implementation in
May 2023. There are ongoing negotiations for further
commercial contracts.
US FDA (Food and Drug Administration) - PainChek has
signed an agreement for a clinical psychometric study of
its PainChek® Adult software in the United States, which
is scheduled to commence in September 2023 and it is
the last step in completing the FDA requirements. The
study will form the basis for PainChek®’s application to
the US Food and Drug Administration (FDA) for De Novo
regulatory clearance, which it expects to submit to the
FDA in Q4 CY23.
Based on a successful clinical study and standard FDA
response times to De Novo submissions, regulatory
clearance could occur for US market entry in Q1 or Q2
CY24.
The agreement for the study, to be conducted with
include
Oaknoll Christian Retirement Services, will
recruitment at clinical sites in the states of Iowa, Illinois,
and Missouri. The Clinical Research Organisation Donawa
Lifesciences will oversee the project, conduct the data
evaluation, and write the clinical report for submission
to the FDA.
North America is the world’s largest Aged Care market
with 2,000,000 resident beds. PainChek already has
regulatory clearance in Canada and will enter the US when
FDA clearance is received. In the US market PainChek has
already signed a partnership agreement with Point Click
Care Inc., which provides care management software to
over 10,000 nursing homes and 1,000,000 resident beds
in the US and Canada, a sales and marketing distribution
agreement with Ethos Labs for the US residential aged
care market and a global partnership with InterSystems
for the hospital market.
PainChek now has more than twenty
integration
partnership agreements with care management and
medication management system providers giving
PainChek access to more than 1,500,000 aged care
beds across ANZ, UK and North America. These
integration partnerships support better care delivery,
eliminate duplication of effort and optimise medication
management.
Initial outcome (Year 1)
Outcomes (2 years on)
• 100% increase in frequency
• 10% reduction of
of pain assessments
• 50% increase in number of
residents on regular pain
relief as a result of newly
identified pain
antipsychotic drug use
(46% stopped use)
• 29% reduction in use of
Benzodiazepines & PRN (46%
stopped use)
• 50% reduction in
• 44% reduction in medication
distressed behaviours
thought to be associated
with pain
• 92% reduction in quantity
of Safeguarding reported
incidents
incidents driven by
polypharmacy reduction
• 18% reduction in falls due to
promptly identifying pain
10 | PAINCHEK LIMITED
10 | PAINCHEK LIMITED
During FY23 PainChek concluded a partnership agreement
with InterSystems and developed the PainChek App for
use in hospitals. Following a successful demonstration,
technical implementation work is now underway for
a PainChek® pilot at large UK based hospital network.
The integration of PainChek with InterSystems TrakCare
EMR (Electronic Medical Record) platform provides a
novel point of care hospital pain assessment and pain
management solution. Over 400 million patient records
are managed by TrakCare providing PainChek access to
hospital customers in US, UK, Europe, the America’s and
Asia.
During the year, PainChek conducted the first stage
qualitative market research with first time parents
of children below 1 years of age in Australia for the
PainChek Infant App. The feedback was very positive
in terms of product need and potential take up of the
PainChek Infant technology for this parental group and
pricing and distribution strategy within Australia was
also tested. A second round of quantitative market
testing is to be conducted in Q1 FY24 with this same
client group to finalise the product offering, educational
elements and marketing mix. PainChek is scheduling a
first stage targeted direct to consumer market entry in
Australia during Q2 FY24.
PainChek has also successfully completed the initial
R&D on an AI based vocalization technology that can
discriminate between an infant’s cry of pain or no pain.
This vocalisation feature will be a future addition to
the current PainChek infant “face only” App and could
also be commercialized as a stand-alone technology to
integrate with other products such as baby monitors.
Likely Developments and Overview of Group Strategy
The Company’s upcoming catalysts and strategy are
focussed on the following areas:
• Continued acceleration of sales and ARR growth
within RAC sector in ANZ, UK, Canada and new EU
opportunities
•
Complete FDA studies to lodge for US FDA De Novo
clearance in Q4 2023
• Leverage existing US partnerships including Point
Click Care, InterSystems and Ethos Labs to prepare
for US market entry in 2024
• Build on existing Home Care and Disability markets
• Enter global hospital market sector with InterSystems
partnership
• Commence “direct to parent” sales and marketing
for Infant App
The Company will also be completing a technology
upgrade in 2023 and applying for ISO 27001 certification
following implementation of Information Management
Systems and processes.
Business Risks
Risk assessments across the Company’s business are
conducted on a regular basis by the management team
and reported through to the Board.
SCOTTISH CARE
Inspectorate PAINCHEK
- 1st PHASE OUTCOMES
"We welcome the use of innovation and technology to help support people
to experience the best possible care.”
“This device should enable more appropriate use of medication and
improved quality of life for care home residents. “
“In future the device may also be able to support detection of pain in young
children who are unable to adequately communicate pain.”
Spokesperson for the Scottish Care Inspectorate
Reduction in falls by 75%
in 3 months (42% over
6 months)
Reduced stress and distress
from rate of 12 incidents
to 4 in 6 months
More appropriate use of pain
medication and a reduction in the
prescribed rate of pain medication
PAINCHEK LIMITED | 11
PAINCHEK LIMITED | 11
PAINCHEK IS TARGETING FDA DE NOVO
CLEARANCE AND US LAUNCH IN 2024
NORTH AMERICAN AGED CARE
MARKET OPPORTUNITY
USA – 15,000 nursing homes with
1,700,000 beds1
Canada – 2,000 care homes with
200,000 beds2
US National Committee for Quality Assurance
driving change to move to “multidimensional”
pain assessment tools for elderly with chronic pain 3
1 https://www.cdc.gov/nchs/fastats/nursing-home-care.htm
2 https://www.cihi.ca/en/how-many-long-term-care-beds-are-there-in-canada
3 https://www.ncqa.org/wp-content/uploads/2023/02/05.-COA.pdf
PointClickCare: is the leading care
management software system
provider to nursing homes in USA
& Canada - 1,000,000+ beds
Ethos Labs: PainChek sales distribution
agreement with Ethos Labs to rapidly
penetrate US long term care market
InterSystems: Global agreement to
provide global hospital interoperability
and EMR capability – initial focus in
Europe and Asia Pacific
Successful commercialisation of Adult App in
international markets
Successful commercialisation of Infant App in
international markets
The Company has not commenced selling the Infant
App, and its success will depend on market acceptance
and adoption of the product. the Company has
received regulatory approval in European Union, United
Kingdom and Australia. In the USA the Infant App is
available for use as a Clinical Decision Support device
initially for use by Healthcare Professionals. Market
acceptance of the Company’s products will depend
on many factors, including positive clinical trial results
(where additional clinical trials are required) and the
Company’s ability to develop and market products that
are recognised and accepted as reliable, efficacious and
cost effective. Clinical evidence may be based on trials
conducted by third parties, and as such, the Company
will be partially reliant on the accuracy and efficiency of
the trials and reports produced by those third parties.
There is no guarantee that adoption of the Company’s
existing products and new products will be substantial
or sufficient to meet the Company’s sales objectives. If
sufficient market acceptance in international markets
is not achieved, the growth of the Company’s revenue
may slow or decline which will have an adverse impact
on the Company’s operating and financial performance.
The Company has commenced selling its Adult App in
Australia and certain international markets, being the
United Kingdom, New Zealand and Canada. Expansion of
the Company’s products to international markets is still
in early stages and there is no certainty of comparable
success in these jurisdictions to that of Australia. Such
success will depend on market acceptance and adoption
of the Company’s products.
Market acceptance of the Company’s products will
depend on many factors, including positive clinical trial
results (where additional clinical trials are required) and
the Company’s ability to develop and market products
that are recognised and accepted as reliable, efficacious
and cost effective. Clinical evidence may be based on
trials conducted by third parties, and as such, the
Company will be partially reliant on the accuracy and
efficiency of the trials and reports produced by those
third parties. There is no guarantee that adoption of
the Company’s existing products and new products
will be substantial or sufficient to meet the Company’s
sales objectives. If sufficient market acceptance in
international markets is not achieved, the growth of
the Company’s revenue may slow or decline which will
have an adverse impact on the Company’s operating
and financial performance. To assist with the continued
commercialisation of the Adult App in aged care, the
Company recently completed a placement of shares to
raise funds, see Subsequent Event for more details.
12 | PAINCHEK LIMITED
PAINCHEK® INFANT
Making Infant Pain Visible and Audible
1
2
3
4
5
Parent or
Caregiver hears
an Infant’s cry
PainChek® Infant
Vocalisation
technology detects
cry of pain through
Baby Monitor
integration or via
PainChek Infant App
Parent or Caregiver
intervenes and
treats accordingly
PainChek® Infant
Facial technology
measures and
monitors ongoing
pain levels
Parent or Caregiver
uses PainChek®
Infant to measure
and monitor pain
levels wherever
and whenever
Regulatory clearances
The distribution of the Company’s products is subject
to obtaining or maintaining regulatory clearances issued
by appropriate governmental authorities and regulatory
bodies. Regulatory clearances are also required to enter
new markets such as the United States. These processes
typically
involve new clinical trials and may take
extended periods of time and incur unplanned costs,
with no certainty of success.
Any delay in the receipt of regulatory approvals may
result in a delay to the intended launch date of certain
products, which will delay revenue and adversely affect
the Company’s financial performance. If the Company
is unable to obtain any of these required regulatory
clearances the Company’s ability to achieve its growth
objectives by expansion of its product offerings or
geographic expansion of sales may be materially
impaired.
Cyber security and privacy risks
The technological infrastructure that the Company has
in place may be subjected to external cyber attacks or
security breaches, which could cause the Company
to lose control of its core systems or lose data, which
could include personal information in some cases,
despite the privacy controls that the Company has in
place. If an attack or breach of this kind does occur, this
could result in a breach of law by the Company or the
breach of its contractual obligations, which may have a
material adverse effect on the Company’s business and
its reputation.
Information Security Management System protections
are in place to protect data and reduce risk of security
breaches and the Company is taking steps to gain
ISO27001 certification.
Intellectual property protection
The value of the Company’s products is dependent on
the Company’s ability to protect its intellectual property,
including by trademarks, copyright, patent and moral
rights. Any failure to adequately protect its intellectual
property rights could have an adverse impact on the
Company’s operating and financial performance. The
Company is in the process of developing and protecting
its intellectual property, and currently has granted
patents in the United States, Japan and China.
The Company is awaiting patent protection in Europe.
There is a risk that pending patent applications will
not be granted. The Company’s intellectual property
rights are dependent on legal protections. However,
these protections do not guarantee that the Company
will have commercially significant protection of its
intellectual property or that its competitive position will
be maintained. Further, actions that the Company takes
to protect its intellectual property may not be adequate
or enforceable. The prosecution of intellectual property
rights claims are costly and time consuming and their
outcome is uncertain. Failure by the Company to protect
its intellectual property rights could have an adverse
impact on the Company’s operating and financial
performance.
PAINCHEK LIMITED | 13
REMUNERATION REPORT (AUDITED)
Key Management Personnel
The report discloses the FY23 remuneration arrangements and outcomes for the people listed below, who are
the individuals within the Company who have been determined to be Key Management Personnel (KMP) in
the financial year to 30 June 2023. Key Management Personnel (KMP) are those people who have the
authority and responsibility for planning, directing and controlling the Group’s activities, either directly or
indirectly.
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 and Directors, executives and Directors 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 executive and Directors, and for the future
performance by the executives and Directors in managing the operations and strategic direction of the
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.
Dependence on technology suppliers
operating cash inflows; and
•
the ability of the consolidated entity to raise
sufficient capital as and when necessary. The
Company has a history of raising capital and there
has been significant progress made on exploiting
its intellectual property, control over discretionary
expenditure projects and conversion of customers
onto commercial terms. In September 2023 the
Company successfully completed a placement
of shares, raising $3,550,000, to be paid in two
tranches.
Subsequent events
On 14 September the Group announced the completion
of a Placement of shares to sophisticated and professional
investors. The Group raised $3,550,000 before costs
with settlement to be in two tranches:
• Tranche one (1) raising A$2.83 million comprising
105.0m New Shares, settlement on 19 September
2023.
• Tranche two (2) to raise an additional A$0.72 million
comprising 26.5m New Shares , settlement on or
about 28 November 2023, post the Company’s
Annual General Meeting. Directors of PainChek
made commitments to subscribe for circa $216,000
in the Placement, which are subject to shareholder
approval at the upcoming AGM.
The Company’s business relies on its ability to attract
and retain in-house or third party technology suppliers.
the Company has contractual agreements in place with
third parties such as Darwin Digital for support and
development of its applications and has commenced
development of its own proprietary technology to
alleviate future supplier risks. Any inability or failure
of suppliers to supply the Company with relevant
products or services may adversely affect the Company’s
operating and financial performance. Given
the
evolution of technology and future capabilities that may
be required, the Company plans to further develop in-
house technology and additional suppliers.
Dependence on key personnel
The Company currently has a small team of employees
and contractors and depends on key people for its success.
There is no certainty that key people can be retained or
additional resources recruited to execute the Company’s
business plans. There is a risk that the departure of such
personnel, or any delay in their replacement, could have
a significant negative impact on management’s ability to
operate the business and achieve financial performance
targets. The Company undertakes regular remuneration
reviews of key staff and staff development.
Funding
The ability of the consolidated entity to continue as a
going concern is principally dependent upon one or
more of the following conditions:
•
the successful commercialisation of its intellectual
property in a manner that generates sufficient
14 | PAINCHEK LIMITED
REMUNERATION REPORT (AUDITED)
Key Management Personnel
The report discloses the FY23 remuneration arrangements and outcomes for the people listed below, who are
the individuals within the Company who have been determined to be Key Management Personnel (KMP) in
the financial year to 30 June 2023. Key Management Personnel (KMP) are those people who have the
authority and responsibility for planning, directing and controlling the Group’s activities, either directly or
indirectly.
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 and Directors, executives and Directors 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 executive and Directors, and for the future
performance by the executives and Directors in managing the operations and strategic direction of the
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.
PAINCHEK LIMITED | 15
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 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.
Share price at 30 June
Loss for the year
EPS for the year
2019
$0.20
2020
2021
2022
2023
$0.115
$0.059
$0.028
$0.025
($3,262,418)
($12,392,659)
($6,063,647)
($5,720,534)
(7,275,728)
(0.4) cents
(1.3) cents
(0.5) cents
(0.5) cents
(0.6) 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.
Performance Income as a Proportion of total compensation
During the financial year a short term incentive performance bonus of $36,000 was paid to Mr Daffas for the
year ended 30 June 2022, representing 24% of KPI targets achieved. The KPIs part achieved were UK business
development, initial sales into new product markets, capital raising and retention of key staff. KPIs not
achieved were targets set for recognised revenue and contracted ARR.
The non-executive directors’ remuneration will continue to be supplemented with the following annual grant
of Performance Rights for the financial years ended 30 June 2023, 2024 and 2025 as follows:
Directors
John Murray
Adam Davey
Ross Harricks
Cynthia Payne
Total
Fee
$ 80,000
$ 40,000
$ 40,000
$ 40,000
$ 200,000
Performance
Rights
$ 40,000
$ 20,000
$ 20,000
$ 20,000
$ 100,000
Total
remuneration
$ 120,000
$ 60,000
$ 60,000
$ 60,000
$ 300,000
Non-executive director performance rights have no performance conditions as they are provided to
supplement fixed director fees. The performance rights vest at end 30 June of each subsequent year provided
the director remains a director of the Company at that date.
The notional value of performance rights approved by shareholders will differ to the value required to be
recognised for accounting purposes in accordance with AASB 2 Share Based Payments.
At the 2022 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 2023, 2024 and 2025 receive
1/3 of their total annual remuneration in Performance Rights;
16 | PAINCHEK LIMITED
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;
the Performance rights are issued for Nil consideration;
the Performance Rights expire 3 months after the vesting date;
the Performance Rights are subject to the terms and conditions of the LTI Plan; and
the below table summarises the position:
e)
f)
g)
h)
Remuneration
for year ended
Share price
calculation
date
Likely date that
Expiry Date of
Performance
Performance Rights if
Rights convert to
not converted to
30 June
(estimated)
Grant date
Vesting date
shares
shares
2023
2024
2025
7/09/2022
23/11/2022
30/06/2023
7/09/2023
23/11/2022
30/06/2024
29/09/2023
06/09/2024
6/09/2024
23/11/2022
30/06/2025
05/09/2025
30/09/2023
30/09/2024
30/09/2025
CEO remuneration review
The Company’s CEO remuneration is supplemented with an annual grant of $250,000 worth of Performance
Rights for the financial years ended 30 June 2023, 2024 and 2025.
The Company entered into an agreement on 8th October 2019 with Philip Daffas to increase his fixed and
variable cash remuneration to a maximum of $400,000 per annum which together with the proposed
$250,000 grant of Performance Rights, will result in total statutory remuneration of $650,000 for FY23. 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.
The Company received Shareholder approval at the 2022 AGM for the issue of Performance Rights to Philip
Daffas to the value of $750,000 over the 3 years ending 30 June 2025, with an annual limit of $250,000 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).
The vesting conditions are summarised:
a) The Performance Rights awarded for a year will vest over 3 years in equal annual amounts
commencing one year after the 1 October of the year of award (these represent tranches 4 to 6 of all
Performance Rights issued to Philip Daffas) subject to:
i.
The Company's Share price achieving a target Share price for each tranche of an award that is
vesting (Award Target Price);
ii.
Philip Daffas remains employed by the Company at the vesting 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
iii.
Accelerated vesting of all Performance Rights which have been awarded in the event of a
change of control transaction provided that Award Target Prices have been met (with the
compounded return calculated up until the date of change of control).
b)
the number of Performance Rights issued for a year will be calculated based on the VWAP of the
including the date of
Company’s ordinary shares calculated 5 days either side of and
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)
f)
g)
h)
the Performance rights are issued for Nil consideration;
the Performance Rights expire 3 months after the vesting date;
the Performance Rights are subject to the terms and conditions of the LTI Plan; and
the below table summarises the position:
Remuneration
for year ended
30 June
Share price
calculation
date
(estimated)
Grant date
Vesting date
Likely date that
Performance
Rights convert to
shares
Expiry Date of
Performance Rights if
not converted to
shares
2023
2024
2025
7/09/2022
23/11/2022
30/06/2023
7/09/2023
23/11/2022
30/06/2024
29/09/2023
06/09/2024
6/09/2024
23/11/2022
30/06/2025
05/09/2025
30/09/2023
30/09/2024
30/09/2025
CEO remuneration review
The Company’s CEO remuneration is supplemented with an annual grant of $250,000 worth of Performance
Rights for the financial years ended 30 June 2023, 2024 and 2025.
The Company entered into an agreement on 8th October 2019 with Philip Daffas to increase his fixed and
variable cash remuneration to a maximum of $400,000 per annum which together with the proposed
$250,000 grant of Performance Rights, will result in total statutory remuneration of $650,000 for FY23. 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.
The Company received Shareholder approval at the 2022 AGM for the issue of Performance Rights to Philip
Daffas to the value of $750,000 over the 3 years ending 30 June 2025, with an annual limit of $250,000 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).
The vesting conditions are summarised:
a) The Performance Rights awarded for a year will vest over 3 years in equal annual amounts
commencing one year after the 1 October of the year of award (these represent tranches 4 to 6 of all
Performance Rights issued to Philip Daffas) subject to:
i.
ii.
iii.
The Company's Share price achieving a target Share price for each tranche of an award that is
vesting (Award Target Price);
Philip Daffas remains employed by the Company at the vesting 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
Accelerated vesting of all Performance Rights which have been awarded in the event of a
change of control transaction provided that Award Target Prices have been met (with the
compounded return calculated up until the date of change of control).
PAINCHEK LIMITED | 17
b) The Award Target Price for the FY23 award is twice the Award Issue Price for the first annual tranche
and thereafter a compounded annual increase in Award Target Price of 20% p.a. for the second and
third tranche
c) The Award Target Price for the FY24 and FY25 Awards is a compounded annual increase in Share price
of 20% p.a. from the relevant Award Issue Price
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 FY2023, FY2024 and FY2025 for an award of the number of
performance rights equivalent to $250,000 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 financial year of the Award, with
vesting conditional on terms described above.
The Agreement may be terminated by either party at any time on the giving of not less than three (3) months’
notice in writing.
Iain McAdam, Chief Financial Officer (appointed 22 March 2021)
The Company entered into an Employment Agreement (“Agreement”) with Mr Iain McAdam pursuant to
which Mr McAdam was appointed as Chief Financial Officer of the Company as at 22 March 2021. The key
terms of the Agreement are:
18 | PAINCHEK LIMITED
• A salary of $252,284 per annum inclusive of superannuation;
• A short term incentive of up to 20% of base salary, excluding superannuation, on achievement of the
Company’s and the Employee’s annual goals and payable at the discretion of the PainChek Board;
• An offer of 6 million (1 million granted in FY23 and 5 million granted in FY22) options in accordance with the
Company’s Long Term Incentive Plan (“LTIP”), 25% vest after 12 months of the grant date and the balance in
quarterly instalments over the next 3 years, subject to continued employment and with a restriction on
disposal of underlying shares (assuming options have vested and exercised) for 2 years from the date of
The Agreement may be terminated by either party at any time on the giving of not less than three (3) months’
issue of the options.
notice in writing.
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
Position
Term
Managing Director
From 30 September 2016
Chief Financial Officer
From 22 March 2021
Chairman
From 30 September 2016
Non-Executive Director
From 30 September 2014
Non-Executive Director
From 30 September 2016
Cynthia Payne
Non-Executive Director
From 30 March 2022
Except as detailed in Notes (b) – (e) 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.
Name
Executives
Philip Daffas
Iain McAdam
John Murray
Adam Davey
Ross Harricks
Non-Executive Directors
• A salary of $252,284 per annum inclusive of superannuation;
• A short term incentive of up to 20% of base salary, excluding superannuation, on achievement of the
Company’s and the Employee’s annual goals and payable at the discretion of the PainChek Board;
• An offer of 6 million (1 million granted in FY23 and 5 million granted in FY22) options in accordance with the
Company’s Long Term Incentive Plan (“LTIP”), 25% vest after 12 months of the grant date and the balance in
quarterly instalments over the next 3 years, subject to continued employment and with a restriction on
disposal of underlying shares (assuming options have vested and exercised) for 2 years from the date of
issue of the options.
The Agreement may be terminated by either party at any time on the giving of not less than three (3) months’
notice in writing.
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
Name
Executives
Philip Daffas
Iain McAdam
Non-Executive Directors
John Murray
Adam Davey
Ross Harricks
Position
Term
Managing Director
From 30 September 2016
Chief Financial Officer
From 22 March 2021
Chairman
From 30 September 2016
Non-Executive Director
From 30 September 2014
Non-Executive Director
From 30 September 2016
Cynthia Payne
Non-Executive Director
From 30 March 2022
Except as detailed in Notes (b) – (e) 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.
PAINCHEK LIMITED | 19
c) Shares Held by Key Management Personnel
2023
Directors
John Murray
Philip Daffas
Ross Harricks
Adam Davey
Cynthia Payne
Balance at 1
July 2022
Performance
Rights Converted
Bought &
(Sold)
issued in lieu
Other
Shares
of cash
Balance at 30
June 2023
12,899,193
20,499,581
6,449,597
9,990,361
-
792,079
396,040
396,040
644,959
1,024,979
322,480
499,519
49,838,732
1,584,159
2,491,937
14,336,231
21,524,560
7,168,117
10,175,170
53,914,828
1,584,159
35,714
2,527,651
-
-
-
-
48,675
53,963,503
Balance at 1
Performance
July 2021
Rights Converted
Bought &
(Sold)
issued in lieu
Other
Shares
of cash
Balance at 30
June 2022
49,013,149
825,583
-
-
49,838,732
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
12,899,193
20,499,581
6,449,597
9,990,361
-
-
-
-
-
12,961
49,851,693
Other key management personnel
Iain McAdam
12,961
49,851,693
2022
Directors
John Murray
Philip Daffas
Ross Harricks
Adam Davey
Cynthia Payne
12,486,402
20,499,581
6,243,201
9,783,965
-
Other key management personnel
Iain McAdam
12,961
49,026,110
-
-
-
-
-
-
412,791
206,396
206,396
825,583
(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 2023 is as follows:
2023
Short Term
Employee
Benefits
Equity Compensation
Post-
employment
Performance
related %
Base
Salary
and
Fees
Cash
Bonus
Value of
Options
Performance
Rights
Superannuation
Contributions
Total
$
$
$
$
$
$
Directors
John Murray
Philip Daffas
Ross Harricks
Adam Davey
Cynthia Payne
Total Directors
80,000
226,244
40,000
40,000
40,000
-
36,000
-
-
-
426,244 36,000
Iain McAdam
228,311
25,228
Total
2022
654,555 61,228
Short Term
Employee
Benefits
-
-
-
-
-
-
63,895
145,493
31,947
31,947
31,947
305,229
63,502
63,502
-
305,229
-
23,756
-
-
-
23,756
23,973
47,729
143,895
431,493
71,947
71,947
71,947
791,229
341,014
1,132,243
44%
42%
44%
44%
44%
43%
26%
38%
Equity Compensation
Post-
employment
Performance
related %
Base
Salary
and
Fees
Cash
Bonus
Value of
Options
Performance
Rights
Superannuation
Contributions
Total
$
$
$
$
$
$
Directors
John Murray
Philip Daffas
Ross Harricks
Adam Davey
Cynthia Payne
Total Directors
80,000
227,273
-
52,500
40,000
40,000
20,000
-
-
-
407,273 52,500
-
-
-
-
-
-
14,995
108,083
7,498
7,498
-
138,074
Iain McAdam
228,311
4,281
Total
635,584 56,781
137,742
137,742
-
138,074
-
22,727
-
-
-
22,727
22,831
45,558
94,995
410,583
47,498
47,498
20,000
620,574
393,165
1,013,739
16%
39%
16%
16%
0%
22%
35%
27%
20 | PAINCHEK LIMITED
c) Shares Held by Key Management Personnel
2023
Directors
John Murray
Philip Daffas
Ross Harricks
Adam Davey
Cynthia Payne
Balance at 1
July 2022
Performance
Rights Converted
Bought &
(Sold)
Shares
issued in lieu
of cash
Other
Balance at 30
June 2023
12,899,193
20,499,581
6,449,597
9,990,361
-
49,838,732
792,079
-
396,040
396,040
-
644,959
1,024,979
322,480
499,519
1,584,159
2,491,937
14,336,231
21,524,560
7,168,117
10,175,170
53,914,828
Other key management personnel
12,961
Iain McAdam
-
49,851,693
1,584,159
35,714
2,527,651
-
-
-
-
48,675
53,963,503
Balance at 1
July 2021
Performance
Rights Converted
Bought &
(Sold)
Shares
issued in lieu
of cash
Other
Balance at 30
June 2022
2022
Directors
John Murray
Philip Daffas
Ross Harricks
Adam Davey
Cynthia Payne
12,486,402
20,499,581
6,243,201
9,783,965
-
49,013,149
Other key management personnel
12,961
Iain McAdam
49,026,110
412,791
-
206,396
206,396
-
825,583
-
825,583
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
12,899,193
20,499,581
6,449,597
9,990,361
-
49,838,732
-
-
-
-
12,961
49,851,693
PAINCHEK LIMITED | 21
The performance rights were granted for nil consideration and are not quoted on the ASX. Performance rights
granted carry no dividend or voting rights. When vested, each performance right is convertible into one
ordinary share.
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.
Grant date
23/11/2022 – Tranche 4
23/11/2022 – Tranche 5
23/11/2022 – Tranche 6
Vesting date
30/09/2023
30/09/2024
30/09/2025
Grant date fair
value
$0.03
$0.03
$0.03
The fair value at the date of grant of performance rights 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.
Grant date
Vesting date
Grant date fair
Award Target Price
value
at Vesting Date
20/11/2019 -Tranche 2B
20/11/2019 -Tranche 3A
20/11/2019 -Tranche 3B
23/11/2022 -Tranche 4A
23/11/2022 -Tranche 4B
23/11/2022 -Tranche 4C
23/11/2022 -Tranche 5A
23/11/2022 -Tranche 5B
23/11/2022 -Tranche 5C
23/11/2022 -Tranche 6A
23/11/2022 -Tranche 6B
23/11/2022 -Tranche 6C
01/10/23
01/10/23
01/10/22
01/10/23
01/10/24
01/10/25
01/10/24
01/10/25
01/10/26
01/10/25
01/10/26
01/10/27
$0.1773
$0.1763
$0.1536
$0.0085
$0.0121
$0.0142
$0.0171
$0.0183
$0.0197
$0.0149
$0.0156
$0.0165
$0.1474
$.0668
$.0768
$.0592
$.0710
$0.0852
Expiry date
01/01/2024
01/01/2024
01/01/2025
01/01/2024
01/01/2025
01/01/2026
01/01/2025
01/01/2026
01/01/2027
01/01/2026
01/01/2027
01/01/2028
d) Options Held by Key Management Personnel – Iain McAdam
e) Performance Rights Held by Key Management Personnel
The terms and conditions of each grant of options affecting remuneration in the current or a future
reporting period are as follows:
Grant Date
Options
Vesting and
exercise date
Expiry date
Exercise
price
Value per
option at
grant date
Performance
obligation
Vested
24-Mar-21
5,000,000
24-Mar-25
24-Sep-25
$0.08
$0.08
1-Sep-22
1,000,000
1-Sep-26
1-Mar-27
$0.03
$0.03
Continued
employment
Continued
employment
56.3%
0.0%
The number of options over ordinary shares in the company provided as remuneration to key
management personnel is shown below. The options carry no dividend or voting rights. When
exercisable, each option is convertible into one ordinary share of Painchek Limited.
2023
Balance at 1
July 2022
Received as
Remuneration
Exercise of
Options
Other
Balance at
30 June
2023
Vested and
exercisable
Unvested
Other key management personnel
Iain McAdam
24 March 2021
1 September
2022
5,000,000
-
-
1,000,000
5,000,000
1,000,000
-
-
-
-
-
-
5,000,000
2,812,500
2,187,500
1,000,000
-
1,000,000
6,000,000
2,812,500
3,187,500
2022
Balance at 1
July 2021
Received as
Remuneration
Exercise of
Options
Other
Balance at
30 June
2022
Vested and
exercisable
Unvested
Other key management personnel
Iain McAdam
24 March 2021
5,000,000
5,000,000
-
-
-
-
-
-
5,000,000
1,562,500
3,437,500
5,000,000
1,562,500
3,437,500
There was no exercise of options in the period.
22 | PAINCHEK LIMITED
e) Performance Rights Held by Key Management Personnel
The performance rights were granted for nil consideration and are not quoted on the ASX. Performance rights
granted carry no dividend or voting rights. When vested, each performance right is convertible into one
ordinary share.
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.
Grant date
23/11/2022 – Tranche 4
23/11/2022 – Tranche 5
23/11/2022 – Tranche 6
Vesting date
30/09/2023
30/09/2024
30/09/2025
Grant date fair
value
$0.03
$0.03
$0.03
The fair value at the date of grant of performance rights 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.
Grant date
Vesting date
Grant date fair
value
Award Target Price
at Vesting Date
20/11/2019 -Tranche 2B
20/11/2019 -Tranche 3A
20/11/2019 -Tranche 3B
23/11/2022 -Tranche 4A
23/11/2022 -Tranche 4B
23/11/2022 -Tranche 4C
23/11/2022 -Tranche 5A
23/11/2022 -Tranche 5B
23/11/2022 -Tranche 5C
23/11/2022 -Tranche 6A
23/11/2022 -Tranche 6B
23/11/2022 -Tranche 6C
01/10/23
01/10/23
01/10/22
01/10/23
01/10/24
01/10/25
01/10/24
01/10/25
01/10/26
01/10/25
01/10/26
01/10/27
$0.1773
$0.1763
$0.1536
$0.0085
$0.0121
$0.0142
$0.0171
$0.0183
$0.0197
$0.0149
$0.0156
$0.0165
$0.1474
$.0668
$.0768
$.0592
$.0710
$0.0852
Expiry date
01/01/2024
01/01/2024
01/01/2025
01/01/2024
01/01/2025
01/01/2026
01/01/2025
01/01/2026
01/01/2027
01/01/2026
01/01/2027
01/01/2028
PAINCHEK LIMITED | 23
The number of performance rights provided and granted as remuneration to key management personnel is
shown below.
2023
Directors
Philip Daffas
Tranche 1B
Tranche 2A
Tranche 2B
Tranche 3A
Tranche 3B
Tranche 4A
Tranche 4B
Tranche 4C
Tranche 5A
Tranche 5B
Tranche 5C
Tranche 6A
Tranche 6B
Tranche 6C
John Murray
Tranche 3
Tranche 4
Tranche 5
Tranche 6
Ross Harricks
Tranche 3
Tranche 4
Tranche 5
Tranche 6
Adam Davey
Tranche 3
Tranche 4
Tranche 5
Tranche 6
Cynthia Payne
Tranche 4
Tranche 5
Tranche 6
Balance at
1 July
2022
Granted
during
year
Conversion
to shares
Expired
Balance at
30 June
2023
Vested and
Exercisable
Maximum
value yet to
vest $
466,635
1,031,979
1,031,978
1,980,198
1,980,198
- 2,815,315
- 2,815,315
- 2,815,315
^
-
^
-
^
-
^
-
-
^
^
-
792,079
(792,079)
(396,040)
(396,040)
- 1,351,351
^
-
-
^
396,040
-
-
-
396,040
-
-
-
675,676
^
^
675,676
^
^
-
-
-
675,676
^
^
(466,635)
(1,031,979)
-
-
1,031,978
1,980,198
1,980,198
2,815,315
2,815,315
2,815,315
-
-
-
-
-
-
1,351,351
1,351,351
675,676
675,676
-
675,676
675,676
-
-
$ 59,422
$ 60,301
$ 56,014
$ 23,675
$ 33,689
$ 39,498
$ 46,217
$ 49,524
$ 53,254
$ 39,567
$ 41,342
$ 43,621
-
-
$38,908
$37,664
-
-
$19,454
$18,832
-
-
$19,454
$18,832
675,676
675,676
-
$19,454
$18,832
8,075,147 11,824,324
(1,584,159)
(1,498,614)
13,438,319
3,378,379
$737,554
^ The performance rights issued for a year are 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).
24 | PAINCHEK LIMITED
-
-
-
-
-
-
-
Balance at
1 July 2021
Granted
during
year
Conversion to
shares
Expired
Balance at
30 June
2022
Vested and
Exercisable
Maximum
value yet to
vest $
2022
Directors
Philip Daffas
Tranche 1A
466,635
-
-
(466,635)
-
Tranche 1B
466,635
-
-
-
$ 92,779
Tranche 2A
1,031,979
-
-
-
$ 58,904
Tranche 2B
1,031,978
-
-
-
$ 59,422
Tranche 3A
-
-
-
$ 60,301
Tranche 3B
-
-
-
$ 56,014
466,635
1,031,979
1,031,978
1,980,198
1,980,198
1,980,198
1,980,198
John Murray
Tranche 2
412,791
(412,791)
-
Tranche 3
-
792,079
-
792,079
-
Ross Harricks
Adam Davey
Cynthia Payne
Tranche 2
206,396
-
-
(206,396)
Tranche 3
-
396,040
-
396,040
-
Tranche 2
206,396
-
-
(206,396)
Tranche 3
-
396,040
-
396,040
-
-
-
-
-
-
-
-
-
-
-
- -
-
-
3,822,810
5,544,555
(825,583)
(466,635)
8,075,147
$ 327,420
f) Share, Performance Rights and Option Holdings
All shares bought and sold were based on the market share price on the date of transactions. Share based
payments were granted in accordance with the terms and conditions agreed with the key management
personnel.
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.
Transactions with Directors and Director related entities
There were no other 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
Balance at
1 July 2021
Granted
during
year
Conversion to
shares
Expired
Balance at
30 June
2022
Vested and
Exercisable
Maximum
value yet to
vest $
2022
Directors
Philip Daffas
Tranche 1A
466,635
-
Tranche 1B
466,635
-
Tranche 2A
1,031,979
-
Tranche 2B
1,031,978
-
Tranche 3A
-
Tranche 3B
-
John Murray
Tranche 2
412,791
1,980,198
1,980,198
-
(466,635)
-
-
-
-
-
-
-
-
-
-
-
466,635
1,031,979
1,031,978
1,980,198
1,980,198
-
$ 92,779
-
$ 58,904
-
$ 59,422
-
$ 60,301
-
$ 56,014
(412,791)
-
-
Tranche 3
-
792,079
-
-
792,079
Ross Harricks
Tranche 2
206,396
-
(206,396)
-
-
Tranche 3
-
396,040
-
-
396,040
Adam Davey
Tranche 2
206,396
-
(206,396)
Tranche 3
-
396,040
Cynthia Payne
-
- -
-
-
-
-
-
396,040
-
-
-
-
-
-
-
-
-
3,822,810
5,544,555
(825,583)
(466,635)
8,075,147
$ 327,420
f) Share, Performance Rights and Option Holdings
All shares bought and sold were based on the market share price on the date of transactions. Share based
payments were granted in accordance with the terms and conditions agreed with the key management
personnel.
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.
Transactions with Directors and Director related entities
There were no other 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
PAINCHEK LIMITED | 25
ENVIRONMENTAL REGULATIONS AND PROCEEDINGS
NON-AUDIT SERVICES
The Group’s operations are not subject to any significant environmental regulations where it operates.
The Group did not employ the auditor on assignments additional to their statutory audit duties.
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:
AUDITOR’S INDEPENDENCE DECLARATION
The auditor’s independence declaration is included on the following page.
Signed in accordance with a resolution of directors.
John Murray
Chairman
28 September 2023, Sydney, NSW
Director
John Murray
Philip Daffas
Ross Harricks
Adam Davey
Cynthia Payne
Directors Meetings
Meetings Attended Number Eligible to
14
14
14
14
14
Attend
14
14
14
14
14
The full Board currently fulfils the duties of the Remuneration Committee and the Audit Committee.
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
Cynthia Payne
Total
Number of Shares
Number of Options
Number of Performance
Rights
14,336,231
10,885,920
21,524,560
7,168,117
-
53,914,828
-
-
-
-
-
-
1,351,351
675,676
13,438,319
675,676
675,676
16,816,698
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.
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.
26 | PAINCHEK LIMITED
NON-AUDIT SERVICES
The Group did not employ the auditor on assignments additional to their statutory audit duties.
AUDITOR’S INDEPENDENCE DECLARATION
The auditor’s independence declaration is included on the following page.
Signed in accordance with a resolution of directors.
John Murray
Chairman
28 September 2023, Sydney, NSW
PAINCHEK LIMITED | 27
AUDITOR’S INDEPENDENCE DECLARATION
PainChek Limited
Auditor’s independence declaration
Consolidated statement of profit or loss and other
comprehensive income for the year ended 30 June 2023
Tel: +61 7 3237 5999
Fax: +61 7 3221 9227
www.bdo.com.au
Level 10, 12 Creek Street
Brisbane QLD 4000
GPO Box 457 Brisbane QLD 4001
Australia
DECLARATION OF INDEPENDENCE BY T R MANN TO THE DIRECTORS OF PAINCHEK LIMITED
As lead auditor of PainChek Limited for the year ended 30 June 2023, 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
Loss for the period attributable to Owners of PainChek
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 period.
T R Mann
Director
BDO Audit Pty Ltd
Brisbane, 28 September 2023
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
24
Revenue
Cost of sales
Other income – R&D Grant & other rebates
Other income – Government Grant
Research and development expenses
Marketing and business development expenses
Corporate administration expenses
Share based payment expenses
Loss before income tax
Income tax benefit
Consolidated
Consolidated
30 June 2023
30 June 2022
Note
$
$
1,955,864
1,058,399
122,520
(1,237,004)
(3,817,360)
(1,857,992)
(3,033,062)
(766,093)
3
4
5
6
14
7
994,148
1,102,500
750,796
(1,237,392)
(2,460,566)
(1,655,464)
(2,665,365)
(549,191)
-
(7,574,728)
(5,720,534)
(7,574,728)
(5,720,534)
Limited
loss
income tax
Other comprehensive income
Items that may be reclassified subsequently to profit or
Exchange differences on translation of foreign operations
(42,558)
5,177
Other comprehensive income for the year, net of
(42,558)
5,177
Total comprehensive income for the year
(7,617,286)
(5,715,357)
Loss and total comprehensive income attributable to:
Owners of PainChek Limited
(7,617,286)
(5,715,357)
Loss per share:
Basic and diluted (cents per share)
8
(0.59)
(0.50)
Notes to the financial statements are included on pages 29 to 50.
Consolidated statement of profit or loss and other
comprehensive income for the year ended 30 June 2023
Consolidated
Consolidated
30 June 2023
$
30 June 2022
$
Note
1,955,864
1,058,399
122,520
(1,237,004)
(3,817,360)
(1,857,992)
(3,033,062)
(766,093)
(7,574,728)
3
4
5
6
14
7
994,148
1,102,500
750,796
(1,237,392)
(2,460,566)
(1,655,464)
(2,665,365)
(549,191)
(5,720,534)
-
(7,574,728)
(5,720,534)
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
Other comprehensive income
Items that may be reclassified subsequently to profit or
loss
Exchange differences on translation of foreign operations
(42,558)
5,177
Other comprehensive income for the year, net of
income tax
(42,558)
5,177
Total comprehensive income for the year
(7,617,286)
(5,715,357)
Loss and total comprehensive income attributable to:
Owners of PainChek Limited
(7,617,286)
(5,715,357)
Loss per share:
Basic and diluted (cents per share)
8
(0.59)
(0.50)
Notes to the financial statements are included on pages 29 to 50.
Notes to the financial statements are included on pages 33 to 54.
PAINCHEK LIMITED | 29
Consolidated statement of financial position
as at 30 June 2023
Consolidated statement of changes in equity
for the year ended 30 June 2023
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
Consolidated Consolidated
30 June 2022
$
30 June 2023
$
Note
18
9
10
11
12
13
14
2,512,217
260,112
2,772,329
6,141,422
484,709
6,626,131
22,831
22,831
2,795,160
26,172
26,172
6,652,303
1,874,154
252,875
2,127,029
2,127,029
668,131
1,641,548
187,341
1,828,889
1,828,889
4,823,414
35,180,097
14,068,134
(48,580,100)
668,131
32,484,187
13,344,599
(41,005,372)
4,823,414
Notes to the financial statements are included on pages 29 to 50.
Notes to the financial statements are included on pages 33 to 54.
30 | PAINCHEK LIMITED
17
Company
Note
Issued
capital
$
Accumulated
Reserves
losses
$
$
Total
$
Consolidated
Balance at 1 July 2021
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 13)
13)
Share issue costs (refer to note
Issue of shares on exercise of
options (Refer to note 13)
Recognition of share based
payments (refer to note 14)
Balance at 30 June 2022
Consolidated
Balance at 1 July 2022
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 13)
13)
Share issue costs (refer to note
Reversal of share based
payments
Recognition of share based
payments (refer to note 14)
Balance at 30 June 2023
30,738,987 12,790,231
(35,284,838)
8,244,380
-
-
-
-
(5,720,534)
(5,720,534)
5,177
-
5,177
5,177
(5,720,534)
(5,715,357)
-
-
-
-
-
1,763,200
(198,000)
180,000
-
-
-
-
-
-
-
-
1,763,200
(198,000)
180,000
549,191
2,822,500
(126,590)
(66,102)
832,195
-
549,191
32,484,187 13,344,599
(41,005,372)
4,823,414
32,484,187 13,344,599
(41,005,372)
4,823,414
-
-
-
-
(7,574,728)
(7,574,728)
(42,558)
-
(42,558)
(42,558)
(7,574,728)
(7,617,286)
2,822,500
(126,590)
-
(66,102)
-
832,195
35,180,097 14,068,134
(48,580,100)
668,131
Notes to the financial statements are included on pages 29 to 50.
Consolidated statement of changes in equity
for the year ended 30 June 2023
Company
Note
Issued
capital
$
Reserves
$
Accumulated
losses
$
Total
$
Consolidated
Balance at 1 July 2021
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 13)
Share issue costs (refer to note
13)
Issue of shares on exercise of
options (Refer to note 13)
Recognition of share based
payments (refer to note 14)
Balance at 30 June 2022
Consolidated
Balance at 1 July 2022
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 13)
Share issue costs (refer to note
13)
Reversal of share based
payments
Recognition of share based
payments (refer to note 14)
Balance at 30 June 2023
30,738,987 12,790,231
-
5,177
-
-
(35,284,838)
(5,720,534)
-
8,244,380
(5,720,534)
5,177
-
5,177
(5,720,534)
(5,715,357)
1,763,200
(198,000)
180,000
-
-
-
-
549,191
-
-
-
-
1,763,200
(198,000)
180,000
549,191
32,484,187 13,344,599
(41,005,372)
4,823,414
32,484,187 13,344,599
-
(42,558)
-
-
(41,005,372)
(7,574,728)
-
4,823,414
(7,574,728)
(42,558)
-
(42,558)
(7,574,728)
(7,617,286)
2,822,500
(126,590)
-
-
-
(66,102)
-
832,195
-
-
-
-
2,822,500
(126,590)
(66,102)
832,195
35,180,097 14,068,134
(48,580,100)
668,131
Notes to the financial statements are included on pages 33 to 54.
Notes to the financial statements are included on pages 29 to 50.
PAINCHEK LIMITED | 31
Consolidated statement of cash flows
for the year ended 30 June 2023
Cash flows from operating activities
Receipts from customers
Receipt from government grant
Payments to suppliers and employees
Payroll Tax liability paid
Interest received
R&D Grant and other rebates
Net cash used in operating activities
Cash flows from investing activities
Proceeds from sale of plant and equipment
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 2023
$
30 June 2022
$
18.1
2,251,294
20,000
(9,659,409)
-
6,351
1,059,047
(6,322,717)
1,292,223
-
(7,996,631)
(1,400,414)
5,195
1,102,127
(6,997,500)
1,200
(13,642)
(12,442)
-
(21,960)
(21,960)
13
13
2,822,500
(126,590)
2,695,910
1,943,200
(198,000)
1,745,200
Net increase / (decrease) in cash and cash equivalents
(3,639,249)
5,274,260
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
6,141,422
10,044
2,512,217
11,419,512
(3,830)
6,141,422
18
Notes to the financial statements are included on pages 33 to 54.
Notes to the financial statements are included on pages 29 to 50.
32 | PAINCHEK LIMITED
Notes to the financial statements for the year ended 30 June 2023
1.
Significant accounting policies
Basis of preparation
The consolidated financial statements comprises PainChek Limited (referred to as the “Company” or
“Parent Entity”) and its controlled entities (together referred to as the “Consolidated Entity” or the
“Group”) and is a listed public company, incorporated and domiciled in Australia. The Group
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 and Australian Accounting Standards and Interpretations.
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 September 2023.
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
Certain new accounting standards and interpretations have been published that are not yet
mandatory for 30 June 2023 reporting periods. The Consolidated Entity has decided against early
adoption of these standards. The Consolidated Entity has assessed the impact of these new
standards and interpretations and does not expect that there would be a material impact on the
Consolidated Entity in the current or future reporting periods and on foreseeable future
transactions.
New and amended standards adopted by the Group
The accounting policies adopted are consistent with those of the previous financial year. Several
other amendments and interpretations were applied for the first time during the year, but these
changes did not have an impact on the Consolidated Entity’s financial statements, and hence, have
not been disclosed.
Going concern basis
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 disclosed in the financial statements, the consolidated entity has net operating cash outflows for
the year of $6,322,717 (2022: $6,997,500) and net current assets of $645,300 (30 June 2022:
$4,797,242). The consolidated entity also generated a loss after tax of $7,574,728 (2022:
$5,720,534).
Notes to the financial statements for the year ended 30 June 2023
1.
Significant accounting policies
Basis of preparation
The consolidated financial statements comprises PainChek Limited (referred to as the “Company” or
“Parent Entity”) and its controlled entities (together referred to as the “Consolidated Entity” or the
“Group”) and is a listed public company, incorporated and domiciled in Australia. The Group
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 and Australian Accounting Standards and Interpretations.
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 September 2023.
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
Certain new accounting standards and interpretations have been published that are not yet
mandatory for 30 June 2023 reporting periods. The Consolidated Entity has decided against early
adoption of these standards. The Consolidated Entity has assessed the impact of these new
standards and interpretations and does not expect that there would be a material impact on the
Consolidated Entity in the current or future reporting periods and on foreseeable future
transactions.
New and amended standards adopted by the Group
The accounting policies adopted are consistent with those of the previous financial year. Several
other amendments and interpretations were applied for the first time during the year, but these
changes did not have an impact on the Consolidated Entity’s financial statements, and hence, have
not been disclosed.
Going concern basis
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 disclosed in the financial statements, the consolidated entity has net operating cash outflows for
the year of $6,322,717 (2022: $6,997,500) and net current assets of $645,300 (30 June 2022:
$4,797,242). The consolidated entity also generated a loss after tax of $7,574,728 (2022:
$5,720,534).
PAINCHEK LIMITED | 33
The ability of the consolidated entity to continue as a going concern is principally dependent upon
one or more of the following conditions:
•
•
the successful commercialisation of its intellectual property in a manner that generates
sufficient operating cash inflows; and
the ability of the consolidated entity to raise sufficient capital as and when necessary.
These conditions give rise to material uncertainty which may cast significant doubt over the
consolidated entity’s ability to continue as a going concern. The directors believe that the going
concern basis of preparation is appropriate due to its recent history of raising capital and the
significant progress made on exploiting its intellectual property, control over discretionary
expenditure projects and conversion of customers onto commercial terms. The directors also note
that subsequent to year end the consolidated entity has successfully completed raised $3,550,000
before costs (refer note 20).
Should the consolidated entity be unable to continue as a going concern, it may be required to
realise its assets and extinguish its liabilities other than in the ordinary course of business, and at
amounts that differ from those stated in the financial report. This financial report does not include
any adjustments relating to the recoverability and classification of recorded asset amounts or the
amounts or classification of liabilities and appropriate disclosures that may be necessary should the
consolidated entity be unable to continue as a going concern.
Significant accounting policies of the Consolidated Entity
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
entity, 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
reporting date.
Deferred income tax is provided on all temporary differences at the reporting 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 reporting 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 reporting 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 reporting 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.
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
reporting date.
Deferred income tax is provided on all temporary differences at the reporting 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 reporting 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 reporting 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 reporting 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 reporting 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 reporting 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. The profit or loss charge or
36 | PAINCHEK LIMITED
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 with original maturities of three months or less that are readily convertible to
known amounts of cash and which are subject to an insignificant risk of changes in value. 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 the Group. Gains and losses between the carrying amount and the disposal
proceeds are taken to profit or loss.
(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
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 with original maturities of three months or less that are readily convertible to
known amounts of cash and which are subject to an insignificant risk of changes in value. 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 the Group. Gains and losses between the carrying amount and the disposal
proceeds are taken to profit or loss.
(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
PAINCHEK LIMITED | 37
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 corporate bonds with terms to maturity and currency that
match, as closely as possible, the estimated future cash outflows.
Defined contribution superannuation expense
Contributions to defined contribution superannuation plans are expensed in the period in which
they are incurred.
(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.
Revenue from Contracts with Customers and Government Grants
i)
Software subscriptions
Revenue from the sale of term (subscription) licences is recognised on a straight line basis over
the subscription term. Customers are in general invoiced on a monthly basis and payment is
received following invoice on normal commercial terms of 30 days from invoice date.
38 | PAINCHEK LIMITED
ii)
Training
Revenue from the provision of training services is recognised typically at a point in time when the
Group has provided training and has met the performance obligation. Customers are in general
invoiced on a monthly basis and payment is received following invoice on normal commercial
terms of 30 days from invoice 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 Consolidated Entity 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. Customers are in general invoiced on a
monthly basis and payment is received following invoice on normal commercial terms of 30 days
from invoice date.
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 Liabilities
A contract liability is recognised when a customer initially purchases services and goods, it is
released as they are delivered to the customer.
vi)
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 reporting date and the Company has an enforceable right to payment for its performance
completed to date.
vii)
Unsatisfied performance obligations
The Company continues to recognise its contract liabilities under AASB 15 in respect of any
unsatisfied performance obligations in the Statement of Financial Position.
viii)
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.
ix)
Government grants
Government grants are recognised where there is reasonable assurance that the grant will be
received and all attached conditions will be complied with. When the grant relates to an expense
item, it is recognised as income on a systematic basis over the periods that the related costs, for
which it is intended to compensate, are expensed. When the grant relates to an asset, it is
recognised as income in equal amounts over the expected useful life of the related asset.
ii)
Training
Revenue from the provision of training services is recognised typically at a point in time when the
Group has provided training and has met the performance obligation. Customers are in general
invoiced on a monthly basis and payment is received following invoice on normal commercial
terms of 30 days from invoice 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 Consolidated Entity 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. Customers are in general invoiced on a
monthly basis and payment is received following invoice on normal commercial terms of 30 days
from invoice date.
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 Liabilities
A contract liability is recognised when a customer initially purchases services and goods, it is
released as they are delivered to the customer.
vi)
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 reporting date and the Company has an enforceable right to payment for its performance
completed to date.
vii)
Unsatisfied performance obligations
The Company continues to recognise its contract liabilities under AASB 15 in respect of any
unsatisfied performance obligations in the Statement of Financial Position.
viii)
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
ix)
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
(l)
(l)
Comparative Figures
Comparative Figures
When required by Accounting Standards, comparative figures have been adjusted to conform to
changes in presentation for the current financial year.
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.
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.
(m)
(m)
Significant accounting judgements and key estimates
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.
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
Consolidated Entity’s accounting policies in particular to:
In preparing these statements, the key estimates made by management in applying the
Consolidated Entity’s accounting policies in particular to:
• Going concern – refer note 1 above.
• The valuation of share-based payments - refer to note 14;
• Recognition of Government Grant income when milestones are reasonably assured of
• Going concern – refer note 1 above.
• The valuation of share-based payments - refer to note 14;
• Recognition of Government Grant income when milestones are reasonably assured of
being met as detailed in notes 4 , 5 and 11.
being met as detailed in notes 4 , 5 and 11.
2.
2.
Segment information
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.
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
3. Revenue
Revenue from Contracts with Customers
Revenue from Contracts with Customers
Software subscriptions – Recognised over time
Software subscriptions – Recognised over time
Training – Recognised at a point in time
Training – Recognised at a point in time
Interest income
Interest income
Total Revenue
Total Revenue
4. R&D and other rebates
4. R&D and other rebates
Government employment allowance
Government employment allowance
COVID-19 government payments
COVID-19 government payments
Research & Development Tax Incentive
Research & Development Tax Incentive
Total Other Income
Total Other Income
Consolidated
Consolidated
2023
2023
$
$
Consolidated
Consolidated
2022
2022
$
$
1,929,826
1,929,826
19,687
19,687
6,351
6,351
1,955,864
1,955,864
970,397
970,397
8,170
8,170
15,581
15,581
994,148
994,148
Consolidated
Consolidated
2023
2023
$
$
9,811
9,811
-
-
1,048,588
1,048,588
Consolidated
Consolidated
2022
2022
$
$
-
-
9,809
9,809
1,092,691
1,092,691
1,058,399
1,058,399
1,102,500
1,102,500
Research and development tax incentive
The consolidated entity
is eligible for the Commonwealth Government research and
development tax incentive. To be eligible the company must meet stringent guidelines on what
Research and development tax incentive
The consolidated entity
is eligible for the Commonwealth Government research and
development tax incentive. To be eligible the company must meet stringent guidelines on what
40 | PAINCHEK LIMITED
represents both core and supporting activities of research and development. Government grants
are not recognised until there is reasonable assurance that the company will comply with the
conditions attaching to them and the grants will be received which generally coincides with
lodgement of the return with the regulatory body.
5. Other income – government grants
Government grant
Total government grants
Consolidated
Consolidated
2023
$
122,520
122,520
2022
$
750,796
750,796
In December 2019, the Australian Government signed a grant funding contract with the
Company for the national trial of the PainChek application for Australians with dementia living in
residential aged care facilities. The Grant ended 31 May 2021.
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 $Nil (FY22: $Nil) pursuant to the terms of the funding
contract of which $102,520 (FY22: $750,796) received in prior years has been recognised as
income and at 30 June 2023 the balance of $Nil (FY22: $102,520) has been recognised as
deferred income – see note 11.
During the rear, the Group received $20,000 (FY22:$Nil) from the Australian Government for an
Entrepreneurs’ Programme Growth Grant, for expenditure incurred in the previous year.
6.
Loss for the year
Loss for the year has been arrived at after charging the
following items of expenses:
Corporate administration expenses
Salaries & oncosts
Superannuation
Board fees
Company secretary fees
Consultants fees
Travel
Legal and professional fees
Regulatory
Share registry fees
ASX
Audit & tax
IT & telecommunications
Other administration expenses
Consolidated
Consolidated
2023
$
2022
$
806,858
86,296
200,000
88,943
72,599
121,866
98,159
169,446
46,534
59,795
177,926
669,462
435,178
842,397
80,873
180,000
77,330
71,162
83,757
127,099
105,927
52,389
58,831
186,057
330,915
468,630
3,033,062
2,665,367
represents both core and supporting activities of research and development. Government grants
are not recognised until there is reasonable assurance that the company will comply with the
conditions attaching to them and the grants will be received which generally coincides with
lodgement of the return with the regulatory body.
5. Other income – government grants
Government grant
Total government grants
Consolidated
2023
$
122,520
Consolidated
2022
$
750,796
122,520
750,796
In December 2019, the Australian Government signed a grant funding contract with the
Company for the national trial of the PainChek application for Australians with dementia living in
residential aged care facilities. The Grant ended 31 May 2021.
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 $Nil (FY22: $Nil) pursuant to the terms of the funding
contract of which $102,520 (FY22: $750,796) received in prior years has been recognised as
income and at 30 June 2023 the balance of $Nil (FY22: $102,520) has been recognised as
deferred income – see note 11.
During the rear, the Group received $20,000 (FY22:$Nil) from the Australian Government for an
Entrepreneurs’ Programme Growth Grant, for expenditure incurred in the previous year.
6.
Loss for the year
Loss for the year has been arrived at after charging the
following items of expenses:
Corporate administration expenses
Salaries & oncosts
Superannuation
Board fees
Company secretary fees
Consultants fees
Travel
Legal and professional fees
Regulatory
Share registry fees
ASX
Audit & tax
IT & telecommunications
Other administration expenses
Consolidated
Consolidated
2023
$
806,858
86,296
200,000
88,943
72,599
121,866
98,159
169,446
46,534
59,795
177,926
669,462
435,178
3,033,062
2022
$
842,397
80,873
180,000
77,330
71,162
83,757
127,099
105,927
52,389
58,831
186,057
330,915
468,630
2,665,367
PAINCHEK LIMITED | 41
7.
Income taxes
7.1
Income tax recognised in profit or loss
Current tax expense/(income)
Over/(under) provision from prior year
Deferred tax expense/(income)
Tax losses not recognised
Total Tax expense/(income)
Consolidated
Consolidated
2023
$
(1,744,499)
600,382
(62,620)
1,206,737
-
2022
$
(1,399,246)
-
43,550
1,355,696
-
8.
Loss per share
Basic and diluted loss per share (cents per share)
The loss and weighted average number of ordinary shares used in the calculation of basic loss
per share are as follows:
Consolidated
Consolidated
The income tax expense for the year can be reconciled to the accounting loss as follows:
Loss for the year attributable to the owners of the Company
(7,574,728)
(5,720,534)
Loss before tax
Income tax expense/ (revenue) calculated at 25% (2022: 25%)
Effect of items that are not assessable/deductible in
determining taxable loss:
Non-deductible expenses
Non-assessable income
Change in Tax Rates
Over/(under) provision
Effect of unused tax losses not recognised as deferred tax assets
Consolidated
2023
$
(7,574,728)
Consolidated
2022
$
(5,720,534)
(1,893,682)
(1,430,134)
357,863
(271,300)
-
600,382
1,206,737
-
370,867
(290,008)
(9,693)
3,272
1,355,696
-
The tax rate used for 2023 and 2022 year was 25% 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 calculated at 25% (2022: 25%)
7.3
Unrecognised deferred tax assets
Unused tax losses (revenue) for which no deferred tax assets
have been recognised at 25%
Temporary differences at 25% (2022: 25%)
All unused tax losses were incurred by Australian entities.
Consolidated
2023
$
Consolidated
2022
$
(31,648)
(31,648)
(49,500)
(49,500)
Consolidated
2023
$
Consolidated
2022
$
6,019,804
4,813,067
344,933
375,314
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.
42 | PAINCHEK LIMITED
Consolidated
Consolidated
2023
$
2022
$
(0.59)
(0.50)
2023
$
2023
No.
2022
$
2022
No.
Consolidated
Consolidated
Consolidated
Consolidated
2023
$
151,628
50,073
58,411
260,112
2022
$
411,946
24,807
47,956
484,709
Consolidated
Consolidated
161,851
148,209
2023
$
148,209
13,642
-
2023
$
(122,037)
(16,983)
-
2022
$
126,249
21,960
-
2022
$
(107,613)
(14,424)
(139,020)
(122,037)
22,831
26,172
Weighted average number of ordinary shares for the purposes
of basic and diluted loss per share
1,289,988,955
1,128,290,139
Options and Performance Rights on issue are considered to be anti-dilutive while the entity is making
losses.
9.
Trade and other receivables
At the reporting date, $29,957 trade receivables are past due (2022: $100,329).
10.
Property, plant and equipment
Accumulated depreciation
Consolidated
Consolidated
Trade receivables
Other receivables
Prepayments
Cost
Balance at 1 July
Additions
Disposals
Balance at 30 June
Balance at 1 July
Depreciation expense
Disposals
Balance at 30 June
Net book value
8.
Loss per share
Basic and diluted loss per share (cents per share)
Consolidated
2023
$
Consolidated
2022
$
(0.59)
(0.50)
The loss and weighted average number of ordinary shares used in the calculation of basic loss
per share are as follows:
Consolidated
2023
$
Consolidated
2022
$
Loss for the year attributable to the owners of the Company
(7,574,728)
(5,720,534)
Consolidated
2023
No.
Consolidated
2022
No.
Weighted average number of ordinary shares for the purposes
of basic and diluted loss per share
1,289,988,955
1,128,290,139
Options and Performance Rights on issue are considered to be anti-dilutive while the entity is making
losses.
9.
Trade and other receivables
Consolidated
2023
$
151,628
50,073
58,411
260,112
At the reporting date, $29,957 trade receivables are past due (2022: $100,329).
Trade receivables
Other receivables
Prepayments
Consolidated
2022
$
411,946
24,807
47,956
484,709
10.
Property, plant and equipment
Cost
Balance at 1 July
Additions
Disposals
Balance at 30 June
Accumulated depreciation
Balance at 1 July
Depreciation expense
Disposals
Balance at 30 June
Net book value
Consolidated
2023
$
148,209
13,642
-
161,851
Consolidated
2022
$
126,249
21,960
-
148,209
Consolidated
2023
$
Consolidated
2022
$
(122,037)
(16,983)
-
(139,020)
(107,613)
(14,424)
(122,037)
22,831
26,172
PAINCHEK LIMITED | 43
11.
Trade and other payables
14. Reserves
Trade creditors
Deferred income
Contract liability
Accruals and other payables
Consolidated
2023
$
498,620
-
756,964
618,570
1,874,154
Consolidated
2022
$
275,481
102,520
703,703
559,844
1,641,548
Trade creditor payment terms are 30 days from end of month.
Deferred income comprises the Federal Government Grant received and recognised as deferred income
until the related costs, for which the grant is intended to compensate, are incurred.
Contract liability is the customer initial payments for subscriptions and training recognised as a contract
liability until the services are delivered. Customer terms vary between 1 month and 1 year payment in
advance.
12.
Provisions
Provision for employee annual leave entitlements
13.
Issued capital
1,297,989,542 fully paid ordinary shares (June 2022:
1,195,601,811)
Consolidated
2023
$
252,875
Consolidated
2022
$
187,341
Consolidated
2023
$
Consolidated
2022
$
35,180,097
32,484,187
2023
Number
2022
Number
2023
$
2022
$
15.2
Categories of financial instruments
Movements during the
period
Balance at beginning of the
period
Placement – issued at $0.028
(FY22: $0.028) per share
Exercise of options –
exercise price (FY22: $0.036)
Exercise of performance
rights – exercise price $0.00
Capital raising costs (net of
tax)
Balance at end of period
1,195,601,811
1,126,804,799
32,484,187
30,738,987
44,171,429
56,632,143
62,971,429
1,236,800
1,763,200
5,000,000
1,585,700
180,000
1,584,159
825,583
-
-
(126,590)
(198,000)
1,297,989,542
1,195,601,811
35,180,097
32,484,187
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
Balance at beginning of the reporting period
Share based payments reserve
Foreign currency translation reserve
Total reserves at end of period
Reconciliation of movement in reserves
Opening balance
Foreign exchange gain/loss recognised
Share based payments reserve
Total reserves at end of period
Consolidated
Consolidated
2023
$
2022
$
13,344,599
12,790,231
766,093
(42,558)
549,191
5,177
14,068,134
13,344,599
Share based
payments
reserve
13,367,644
-
766,093
14,133,737
Foreign
exchange
reserve
Total
(23,045)
(42,558)
-
13,344,599
(42,558)
766,093
(65,603)
14,068,134
The foreign currency translation reserve records exchange rate differences arising from the
translation of the financial statements of foreign subsidiaries.
The share based payments reserve is used to record the value of share based payments provided to
employees as part of their remuneration and to consultants for services provided.
15
Financial instruments
15.1
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 2022.
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.
Financial assets
Cash and cash equivalents
Trade and other receivables
Financial liabilities
Trade and other payables
Consolidated
Consolidated
2023
$
2,512,217
260,112
2,772,329
2022
$
6,141,422
484,709
6,626,131
818,190
818,190
835,325
835,325
The fair value of the above financial instruments approximates their carrying values.
14. Reserves
Balance at beginning of the reporting period
Share based payments reserve
Foreign currency translation reserve
Total reserves at end of period
Reconciliation of movement in reserves
Opening balance
Foreign exchange gain/loss recognised
Share based payments reserve
Total reserves at end of period
Consolidated
2023
$
Consolidated
2022
$
13,344,599
766,093
(42,558)
14,068,134
12,790,231
549,191
5,177
13,344,599
Share based
payments
reserve
13,367,644
-
766,093
14,133,737
Foreign
exchange
reserve
(23,045)
(42,558)
-
(65,603)
Total
13,344,599
(42,558)
766,093
14,068,134
The foreign currency translation reserve records exchange rate differences arising from the
translation of the financial statements of foreign subsidiaries.
The share based payments reserve is used to record the value of share based payments provided to
employees as part of their remuneration and to consultants for services provided.
15
Financial instruments
15.1
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 2022.
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.
15.2
Categories of financial instruments
Financial assets
Cash and cash equivalents
Trade and other receivables
Financial liabilities
Trade and other payables
Consolidated
2023
$
Consolidated
2022
$
2,512,217
260,112
2,772,329
6,141,422
484,709
6,626,131
818,190
818,190
835,325
835,325
The fair value of the above financial instruments approximates their carrying values.
PAINCHEK LIMITED | 45
15.3 Financial risk management objectives
15.7 Liquidity risk management
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.
15.4 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 16.5 below).
15.5
Interest rate risk management
The sensitivity analyses below have been determined based on the exposure to interest rates for
cash deposits 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
cash deposits 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 2023 would increase/decrease by $47,000
(2022: $72,000).
15.6 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 cash and cash equivalents sis limited because the counterparties are banks
with high credit-ratings assigned by international credit-rating agencies.
46 | PAINCHEK LIMITED
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
1-3
3-12
month
months
months
1 year
to 5
years
Total
contractual
cash flows
$
$
$
$
$
$
2023
2022
Trade and other payables
818,190
818,190
Trade and other payables
835,325
835,325
16.
Key management personnel
-
-
-
-
-
-
818,190
835,325
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
17. Related party transactions
17.1 Entities under the control of the Group
Consolidated
Consolidated
2023
$
715,783
47,729
368,731
2022
$
692,365
45,558
275,816
1,132,243
1,013,739
Parent Entity: PainChek Ltd
Australia
Country of
Incorporation
Percentage Owned (%)*
2023
2022
Electronic Pain Assessment
Australia
Technology (EPAT) Pty Ltd
PainChek UK Limited
England
100%
100%
100%
100%
*Percentage of voting power is proportional to ownership
15.7 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
$
$
$
$
$
$
2023
Trade and other payables
818,190
818,190
2022
Trade and other payables
835,325
835,325
16.
Key management personnel
-
-
-
-
-
-
818,190
835,325
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
17. Related party transactions
17.1 Entities under the control of the Group
Consolidated
2023
$
715,783
47,729
368,731
1,132,243
Consolidated
2022
$
692,365
45,558
275,816
1,013,739
Parent Entity: PainChek Ltd
Australia
Country of
Incorporation
Percentage Owned (%)*
2023
2022
Electronic Pain Assessment
Technology (EPAT) Pty Ltd
PainChek UK Limited
Australia
England
100%
100%
100%
100%
*Percentage of voting power is proportional to ownership
PAINCHEK LIMITED | 47
17.2 Key management personnel
20.
Events after the reporting period
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 16.
17.3 Other related party transactions
There were no transactions between the Group and the key management personnel and their
related parties during the year (2022: Nil).
18. 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
Consolidated
2023
$
Consolidated
2022
$
2,512,217
6,141,422
18.1
Reconciliation of loss for the year to net cash flows from operating activities
Consolidated
2023
$
Consolidated
2022
$
(7,574,728)
(5,720,534)
16,983
766,093
14,424
549,191
235,052
(10,454)
178,802
65,535
(6,322,717)
(120,931)
9,151
(1,748,989)
20,188
(6,997,500)
Consolidated
2023
$
Consolidated
2022
$
89,000
89,000
90,243
90,243
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
19.
Remuneration of auditors
Auditor of the parent entity
Audit and review of the financial statements
The auditors of PainChek Ltd are BDO Audit Pty Ltd.
48 | PAINCHEK LIMITED
On 14 September 2023 the Group announced the completion of a Placement of shares to
sophisticated and professional investors. The Group raised $3,550,000 before costs, to be
conducted in two tranches. Tranche 1 raising $2,833,779 received in September 2023 and
Tranche 2 raising $716,221 to be paid In November 2023
There are no other events after the reporting period significant enough for disclosure.
21.
Parent entity information
The accounting policies of the parent entity, which have been applied in determining the 2023
and 2022 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 PainChek Limited.
Financial position of PainChek Limited
Assets
Current assets
Non-current assets
Total assets
Liabilities
Current liabilities
Non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Accumulated losses
Total equity
Financial performance
Loss for the year
Share based payments Reserves
Balance at beginning of the reporting period
Share based payments reserve
Total reserves at end of period
2023
$
2022
$
2,379,042
20,667
2,399,709
6,272,195
23,267
6,295,462
1,432,579
1,472,048
-
1,432,579
967,130
1,472,048
4,823,414
43,934,803
14,172,747
41,238,892
13,406,656
(57,140,420)
(49,822,134)
967,130
4,823,414
(7,318,286)
(5,715,356)
2023
$
13,406,656
766091
14,172,747
2022
$
12,857,465
549,191
13,406,656
22.
Approval of financial statements
The financial statements were approved by the board of directors and authorised for issue on 28
September 2023.
20.
Events after the reporting period
On 14 September 2023 the Group announced the completion of a Placement of shares to
sophisticated and professional investors. The Group raised $3,550,000 before costs, to be
conducted in two tranches. Tranche 1 raising $2,833,779 received in September 2023 and
Tranche 2 raising $716,221 to be paid In November 2023
There are no other events after the reporting period significant enough for disclosure.
21.
Parent entity information
The accounting policies of the parent entity, which have been applied in determining the 2023
and 2022 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 PainChek Limited.
Financial position of PainChek Limited
Assets
Current assets
Non-current assets
Total assets
Liabilities
Current liabilities
Non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Accumulated losses
Total equity
Financial performance
Loss for the year
Share based payments Reserves
Balance at beginning of the reporting period
Share based payments reserve
Total reserves at end of period
2023
$
2022
$
2,379,042
20,667
2,399,709
1,432,579
-
6,272,195
23,267
6,295,462
1,472,048
1,432,579
967,130
1,472,048
4,823,414
43,934,803
14,172,747
(57,140,420)
967,130
41,238,892
13,406,656
(49,822,134)
4,823,414
(7,318,286)
(5,715,356)
2023
$
13,406,656
766091
14,172,747
2022
$
12,857,465
549,191
13,406,656
22.
Approval of financial statements
The financial statements were approved by the board of directors and authorised for issue on 28
September 2023.
PAINCHEK LIMITED | 49
23. SHARE BASED PAYMENTS
Performance rights
The Company has granted performance rights to the non-executive directors (NEDs) and the CEO at the
2022 AGM. The performance rights were granted for nil consideration and are not quoted on the ASX.
Performance rights granted carry no dividend or voting rights. When vested, each performance right is
convertible into one ordinary share. The performance rights shares have the following key terms and
conditions:
Non- executive directors:
a) each non-executive director receive in each end of financial year on 30 June 2023, 2024 and
2025, 1/3 of their total annual remuneration in Performance Rights (these represent
tranches 4, 5 and 6 of all Performance Rights issued to directors);
b) the number of Performance Rights issued for a year are 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 vest at the end of 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
the Performance Rights expire 3 months after the vesting date
CEO
The issue of Performance Rights to Philip Daffas to the value of $750,000 over the years ending 30
June 2023, 2024 and 2025 with an annual limit of $250,000 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 are 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).
The vesting conditions are summarised:
a) The Performance Rights awarded for a year will vest over 3 years in equal annual amounts
commencing one year after the 1 October of the year of award (these represent tranches 4
to 6 of all Performance Rights issued to Philip Daffas) subject to:
1. The Company's Share price achieving a target Share price for each tranche of an award
that is vesting (Award Target Price);
2. Philip Daffas remains employed by the Company at the vesting 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
3. Accelerated vesting of all Performance Rights which have been awarded in the event of a
change of control transaction provided that Award Target Prices have been met (with
the compounded return calculated up until the date of change of control).
b) The Award Target Price for the FY23 award is twice the Award Issue Price for the first annual
tranche and thereafter a compounded annual increase in Share price of 20% p.a. for the
second and third tranche
c) The Award Target Price for the FY24 and FY25 Awards is a compounded annual increase in
Share price of 20% p.a. from the relevant Award Issue Price
50 | PAINCHEK LIMITED
Fair value of performance rights granted
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 ($0.03) (tranche 4), the value of the award
specified in applicable years 2024 (tranche 5) and 2025 (tranche 6) over the vesting period.
The fair value at the date of grant of performance rights 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. The model inputs for the
CEO’s performance rights granted during the year ended 30 June 2023 included:
• exercise price: nil
share price at grant date: $0.03
• expected dividend yield: nil
risk-free interest rate: 3.30%
•
•
• expected price volatility of the company’s shares: 100%
Grant date
Grant date
Vesting date
Expiry date
rights
23/11/2022 – Tranche 4*#
23/11/2022 – Tranche 5
23/11/2022 – Tranche 6
20/11/2019 -Tranche 2B
20/11/2019 -Tranche 3A
20/11/2019 -Tranche 3B
23/11/2022 -Tranche 4A*
23/11/2022 -Tranche 4B*
23/11/2022 -Tranche 4C*
23/11/2022 -Tranche 5A
23/11/2022 -Tranche 5B
23/11/2022 -Tranche 5C
23/11/2022 -Tranche 6A
23/11/2022 -Tranche 6B
23/11/2022 -Tranche 6C
Number of
outstanding
Grant date
fair value
30/09/2023
33,783,793
23/11/2022
23/11/2022
23/11/2022
20/11/2019
20/11/2019
20/11/2019
23/11/2022
23/11/2022
23/11/2022
23/11/2022
23/11/2022
23/11/2022
23/11/2022
23/11/2022
23/11/2022
30/06/2023
30/06/2024
30/06/2025
30/09/2024
30/09/2025
01/10/2023
01/01/2024
01/10/2023
01/01/2024
01/10/2022
01/01/2025
01/10/2023
01/01/2024
01/10/2024
01/01/2025
01/10/2025
01/01/2026
01/10/2024
01/01/2025
01/10/2025
01/01/2026
01/10/2026
01/01/2027
01/10/2025
01/01/2026
01/10/2026
01/01/2027
01/10/2027
01/01/2028
1,031,978
1,980,198
1,980,198
2,815,315
2,815,315
2,815,315
^
^
^
^
^
^
^
^
$0.0300
$0.0300
$0.0300
$0.1773
$0.1763
$0.1536
$0.0085
$0.0121
$0.0142
$0.0171
$0.0183
$0.0197
$0.0149
$0.0156
$0.0165
^ The performance rights issued for a year are 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).
* Performance rights granted during the year – 11,824,324
# Performance rights vested and exercisable – 3,378,379
Fair value of performance rights granted
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 ($0.03) (tranche 4), the value of the award
specified in applicable years 2024 (tranche 5) and 2025 (tranche 6) over the vesting period.
The fair value at the date of grant of performance rights 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. The model inputs for the
CEO’s performance rights granted during the year ended 30 June 2023 included:
share price at grant date: $0.03
• exercise price: nil
•
• expected price volatility of the company’s shares: 100%
• expected dividend yield: nil
•
risk-free interest rate: 3.30%
Grant date
Grant date
Vesting date
Expiry date
23/11/2022 – Tranche 4*#
23/11/2022 – Tranche 5
23/11/2022 – Tranche 6
20/11/2019 -Tranche 2B
20/11/2019 -Tranche 3A
20/11/2019 -Tranche 3B
23/11/2022 -Tranche 4A*
23/11/2022 -Tranche 4B*
23/11/2022 -Tranche 4C*
23/11/2022 -Tranche 5A
23/11/2022 -Tranche 5B
23/11/2022 -Tranche 5C
23/11/2022 -Tranche 6A
23/11/2022 -Tranche 6B
23/11/2022 -Tranche 6C
23/11/2022
23/11/2022
23/11/2022
20/11/2019
20/11/2019
20/11/2019
23/11/2022
23/11/2022
23/11/2022
23/11/2022
23/11/2022
23/11/2022
23/11/2022
23/11/2022
23/11/2022
30/06/2023
30/06/2024
30/06/2025
01/10/2023
01/10/2023
01/10/2022
01/10/2023
01/10/2024
01/10/2025
01/10/2024
01/10/2025
01/10/2026
01/10/2025
01/10/2026
01/10/2027
30/09/2023
30/09/2024
30/09/2025
01/01/2024
01/01/2024
01/01/2025
01/01/2024
01/01/2025
01/01/2026
01/01/2025
01/01/2026
01/01/2027
01/01/2026
01/01/2027
01/01/2028
Number of
rights
outstanding
33,783,793
^
^
1,031,978
1,980,198
1,980,198
2,815,315
2,815,315
2,815,315
^
^
^
^
^
^
Grant date
fair value
$0.0300
$0.0300
$0.0300
$0.1773
$0.1763
$0.1536
$0.0085
$0.0121
$0.0142
$0.0171
$0.0183
$0.0197
$0.0149
$0.0156
$0.0165
^ The performance rights issued for a year are 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).
* Performance rights granted during the year – 11,824,324
# Performance rights vested and exercisable – 3,378,379
PAINCHEK LIMITED | 51
The following table shows the performance rights granted and outstanding at the beginning and end of
the reporting period:
2023
Number of
performance
rights
8,075,147
11,824,324*
(1,584,159)
(1,498,614)
16,816,698
* Refer above table for performance rights granted during the year to non-executive directors and CEO.
As at 1 July
Granted during the year
Converted to shares
Forfeited during the year
As at 30 June
2022
Number of
performance
rights
3,822,810
5,544,555
(466,635)
(825,583)
8,075,147
Weighted average remaining contractual life of 1.1 years (2022: 1.3 years)
Options
Options are routinely granted to employees. The vesting period is 25% vest after 12 months of the grant
date and the balance in quarterly instalments over the next 3 years, subject to continued employment.
In addition, those granted on 28 October 2020, 1 September 2021 and 1 September 2022 have a further
restriction that the underlying shares cannot be disposed of until 2 years after grant date.
Set out below are summaries of options granted under the plan:
2023
2022
Average
exercise
price per
share option
$0.0666
$0.0300
$0.0600
$0.0497
Average
exercise
price per
share option
$0.1647
$0.0510
$0.2430
$0.0360
$0.0666
Number of
options
36,000,000
26,500,000
(7,500,000)
-
55,000,000
17,031,250
Number of
options
45,741,379
12,500,000
(17,241,379)
(5,000,000)
36,000,000
11,562,500
As at 1 July
Granted during the year
Forfeited during the year
Exercised during the year
As at 30 June
Vested and exercisable 30 June
No options expired during the periods covered by the above tables.
52 | PAINCHEK LIMITED
Share options outstanding at the end of the year have the following expiry dates and exercise prices:
Grant date
Expiry date
Exercise
price
Share
options
30 June
2023
Share
options
30 June
2022
3,000,000
-
-
3,000,000
4,000,000
3,000,000
3,000,000
1,000,000
1,000,000
500,000
5,000,000
5,000,000
22 July 2022
9 November 2023
26 September 2024
23 March 2025
28 May 2025
25 August 2025
$0.070
$0.030
$0.110
$0.090
$0.095
$0.084
$0.075
$0.051
24 September 2025
7,000,000
7,000,000
1 March 2026
9,500,000
12,500,000
1 March 2027
$0.030
26,500,000
-
55,000,000
36,000,000
2.8 years
2.8 years
22 Jan 2018
9 May 2019
26 March 2020
23 September 2020
28 October 2020
26 February 2021
24 March 2021
1 September 2021
1 September 2022
Total
Weighted average remaining contractual life of
options outstanding at end of period
Fair value of options granted
The assessed fair value at grant date of options granted during the year ended 30 June 2023
was $0.022 per option (2022 – $0.03). 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 model inputs for options granted during the year ended 30 June 2023 included:
• exercise price: $0.03 (2022 – $0.05)
• grant date: 1 September 2022 (2022 – 1 September 2021)
• expiry date: 1 September 2027 (2022 – 1 March 2026)
share price at grant date: $0.03 (2022 – $0.05)
• expected price volatility of the company’s shares: 100% (2022 – 100%)
• expected dividend yield: nil (2022 – nil), and
risk-free interest rate: 3.7% (2022 – 0.58%)
•
•
The expected price volatility is based on the historic volatility (based on the remaining life of the
options), adjusted for any expected changes to future volatility due to publicly available information.
Share options outstanding at the end of the year have the following expiry dates and exercise prices:
Grant date
Expiry date
Exercise
price
Share
options
30 June
2023
Share
options
30 June
2022
22 Jan 2018
9 May 2019
26 March 2020
23 September 2020
28 October 2020
26 February 2021
24 March 2021
1 September 2021
1 September 2022
Total
22 July 2022
9 November 2023
26 September 2024
23 March 2025
28 May 2025
25 August 2025
24 September 2025
1 March 2026
$0.070
$0.030
$0.110
$0.090
$0.095
$0.084
$0.075
$0.051
-
3,000,000
3,000,000
4,000,000
3,000,000
3,000,000
1,000,000
1,000,000
-
500,000
5,000,000
5,000,000
7,000,000
7,000,000
9,500,000
12,500,000
1 March 2027
$0.030
26,500,000
-
55,000,000
36,000,000
2.8 years
2.8 years
Weighted average remaining contractual life of
options outstanding at end of period
Fair value of options granted
The assessed fair value at grant date of options granted during the year ended 30 June 2023
was $0.022 per option (2022 – $0.03). 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 model inputs for options granted during the year ended 30 June 2023 included:
• exercise price: $0.03 (2022 – $0.05)
• grant date: 1 September 2022 (2022 – 1 September 2021)
• expiry date: 1 September 2027 (2022 – 1 March 2026)
•
• expected price volatility of the company’s shares: 100% (2022 – 100%)
• expected dividend yield: nil (2022 – nil), and
•
risk-free interest rate: 3.7% (2022 – 0.58%)
share price at grant date: $0.03 (2022 – $0.05)
The expected price volatility is based on the historic volatility (based on the remaining life of the
options), adjusted for any expected changes to future volatility due to publicly available information.
PAINCHEK LIMITED | 53
Total expenses arising from share-based payment transactions recognised during the period as part of
employee benefit expense were as follows:
Options issued under employee option plan
Performance rights
Total
2023
$
460,864
305,229
766,093
2022
$
411,117
138,074
549,191
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.
giving a true and fair view of the Group’s financial position as at 30 June 2023 and of
its performance for the year then ended; and
ii.
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 2023.
This declaration is signed in accordance with a resolution of the Board of Directors.
John Murray
Chairman
28 September 2023
54 | PAINCHEK LIMITED
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.
giving a true and fair view of the Group’s financial position as at 30 June 2023 and of
its performance for the year then ended; and
ii.
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 2023.
This declaration is signed in accordance with a resolution of the Board of Directors.
John Murray
Chairman
28 September 2023
PAINCHEK LIMITED | 55
INDEPENDENT AUDITOR’S REPORT
Tel: +61 7 3237 5999
Fax: +61 7 3221 9227
www.bdo.com.au
Level 10, 12 Creek Street
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 2023, the
consolidated statement of profit or loss and other comprehensive income, the consolidated statement
of changes in equity and the consolidated statement of cash flows for the year then ended, and notes
to the financial 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)
Giving a true and fair view of the Group’s financial position as at 30 June 2023 and of its
financial performance for the year ended on that date; and
(ii)
Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. 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.
Material uncertainty related to going concern
We draw attention to Note 1 in the financial report which describes the events and/or conditions which
give rise to the existence of a material uncertainty that may cast significant doubt about the group’s
ability to continue as a going concern and therefore the group may be unable to realise its assets and
discharge its liabilities in the normal course of business. Our opinion is not modified in respect of this
matter.
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.
(cid:24)(cid:21)(cid:3)
56 | PAINCHEK LIMITED
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report of the current period. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide
a separate opinion on these matters. In addition to the matter described in the Material uncertainty
related to going concern section, we have determined the matters described below to be the key audit
matters to be communicated in our report.
Revenue Recognition and other income
Key audit matter
How the matter was addressed in our audit
Recognition of Revenue and Other Income was
We have performed the following procedures to
identified as a key audit matter due to the
address this risk in the financial report:
significance to the financial report and the
complex nature of the agreements entered into
by the Group.
The assessment of revenue recognition and
income required significant auditor effort and
judgement.
Reviewed the terms and conditions of the
agreements entered into in the current and
prior year to determine the relevant
accounting standard to be applied to the
various revenue and income streams.
Assessed the accounting policy adopted for
recognition of revenue and other income
and assessing compliance with AASB 15
Revenue from Contracts with Customers
(‘AASB 15’) or AASB 120 Accounting for
Government Grants and Disclosure of
Government Assistance (‘AASB 120’).
Verified government grant income to bank
statements and ensured income is
recognised in the correct period and in
compliance with AASB 120.
For a sample of transactions, vouched 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.
Assessed the adequacy of the disclosures in
the financial statements.
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
(cid:24)(cid:22)
firms. Liability limited by a scheme approved under Professional Standards Legislation.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report of the current period. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide
a separate opinion on these matters. In addition to the matter described in the Material uncertainty
related to going concern section, we have determined the matters described below to be the key audit
matters to be communicated in our report.
Revenue Recognition and other income
Key audit matter
How the matter was addressed in our audit
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.
The assessment of revenue recognition and
income required significant auditor effort and
judgement.
We have performed the following procedures to
address this risk in the financial report:
Reviewed the terms and conditions of the
agreements entered into in the current and
prior year to determine the relevant
accounting standard to be applied to the
various revenue and income streams.
Assessed the accounting policy adopted for
recognition of revenue and other income
and assessing compliance with AASB 15
Revenue from Contracts with Customers
(‘AASB 15’) or AASB 120 Accounting for
Government Grants and Disclosure of
Government Assistance (‘AASB 120’).
Verified government grant income to bank
statements and ensured income is
recognised in the correct period and in
compliance with AASB 120.
For a sample of transactions, vouched 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.
Assessed the adequacy of the disclosures in
the financial statements.
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.
(cid:24)(cid:22)
PAINCHEK LIMITED | 57
Other information
The directors are responsible for the other information. The other information comprises the
information contained in directors report for the year ended 30 June 2023, but does not include the
financial report and our auditor’s report thereon, which we obtained prior to the date of this auditor’s
report, and the annual report, which is expected to be made available to us after that date.
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
identified above 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 on the other information that we obtained prior to the date
of this auditor’s report, 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.
When we read the annual report, if we conclude that there is a material misstatement therein, we are
required to communicate the matter to the directors and will request that it is corrected. If it is not
corrected, we will seek to have the matter appropriately brought to the attention of users for whom
our report is prepared.
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.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 5 to 25 of the directors’ report for the
year ended 30 June 2023.
In our opinion, the Remuneration Report of PainChek Limited, for the year ended 30 June 2023,
complies with section 300A of the Corporations Act 2001.
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
Responsibilities
Australian Auditing Standards.
BDO Audit Pty Ltd
T R Mann
Director
Brisbane, 28 September 2023
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.
(cid:24)(cid:23)
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
(cid:24)(cid:24)
firms. Liability limited by a scheme approved under Professional Standards Legislation.
58 | PAINCHEK LIMITED
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.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 5 to 25 of the directors’ report for the
year ended 30 June 2023.
In our opinion, the Remuneration Report of PainChek Limited, for the year ended 30 June 2023,
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility
is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with
Australian Auditing Standards.
BDO Audit Pty Ltd
T R Mann
Director
Brisbane, 28 September 2023
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.
(cid:24)(cid:24)
PAINCHEK LIMITED | 59
ADDITIONAL SHAREHOLDER INFORMATION
The following additional information is current as at 18 October 2023.
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
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
92
413
671
1,956
1,041
4,173
Total Units
14,296
1,398,452
5,129,495
74,847,773
1,324,932,690
1,406,322,706
Holding
118,650,000
% IC
8.437%
There are 80 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
PETERS INVESTMENTS PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
J&E CONSULTING PTY LTD
DR KRESHNIK HOTI
MR MUSTAFA ABDUL WAHED ATEE
BNP PARIBAS NOMS PTY LTD
MR CRAIG ROBERT WILLIAMSON
MR PHILIP DAFFAS
G & G CHILCOTT PTY LTD
HARLEX FARMS PTY LTD
THORNBURY NOMINEES PTY LTD
PIPERLAKE PTY LTD
DARVILLE PTY LTD
MR ALLAN GRAHAM JENZEN & MRS ELIZABETH JENZEN
CITICORP NOMINEES PTY LIMITED
Balance as at
26-09-2021
118,650,000
62,386,386
38,003,125
37,717,411
37,003,125
31,032,767
23,138,234
21,524,560
19,482,725
18,518,519
15,802,500
15,600,322
14,484,126
14,141,873
14,047,223
60 | PAINCHEK LIMITED
%
0.000
0.100
0.360
5.320
94.210
100.000
%
8.437%
4.436%
2.702%
2.682%
2.631%
2.207%
1.645%
1.531%
1.385%
1.317%
1.124%
1.109%
1.030%
1.006%
0.999%
MS ELOISE KATHLEEN JENNINGS & MR ANDREW JOHN HOPKINS
FLUE HOLDINGS PTY LTD
NANJOP PTY LTD
MR ROBERT ANTHONY HEALY
CAPPER SUPERANNUATION PTY LTD
Total Securities of Top 20 Holdings
Total of Securities
Unquoted equity securities
13,500,000
13,100,000
12,914,735
12,857,143
11,674,331
545,579,105
1,406,322,706
0.960%
0.932%
0.918%
0.914%
0.830%
39.794%
Holders of more than
20%
Number
of
Holders
Class
Number
13,438,319
3,000,000
3,000,000
1,000,000
5,000,000
7,000,000
9,500,000
1
1
1
1
3
2
7
26,500,000
22
Use of Funds
PCKAA Performance Rights
Phillip Daffas
Share options with an exercise price of $0.032 and
an expiry date of 9 November 2023
Share options with an exercise price of $0.11 and
an expiry date of 26 September 2024
Share options with an exercise price of $0.09 and
an expiry date of 23 March 2025
Share options with an exercise price of $0.084 and
an expiry date of 25 August 2025
Share options with an exercise price of $0.075 and
an expiry date of 24 September 2025
Share options with an exercise price of $0.051 and
an expiry date of 1 March 2026
Share options with an exercise price of $0.28 and
an expiry date of 1 March 2027
Issued pursuant to ESOP
Issued pursuant to ESOP
Issued pursuant to ESOP
Issued pursuant to ESOP
Issued pursuant to ESOP
Issued pursuant to ESOP
Issued pursuant to ESOP
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.
PAINCHEK LIMITED | 61
PainChek Limited (ASX: PCK)
ABN 21 146 035 127
Suite 401, 35 Lime Street,
Sydney, NSW, 2000
Registered Office:
Suite 401, 35 Lime Street,
Sydney, NSW, 2000
info@painchek.com
WWW.PAINCHEK.COM