YEAR ENDING JUNE
2024
ANNUAL
REPORT
BEYOND PAIN SCORES:
PERSONALISED
PAIN PROFILES
DELIVERING
BETTER OUTCOMES
www.painchek.com
UNIQUE PAIN
PROFILES
FOR EVERY
INDIVIDUAL
Board of Directors
Mr John Murray
Non-Executive Chairman
Mr Philip Daffas
Managing Director
Mr Adam Davey
Non-Executive Director
Mr Ross Harricks
Non-Executive Director
Ms Cynthia Payne
Non-Executive Director
Company Secretary
Ms Natalie Climo
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:
+61 2 9290 9600
Fax:
+61 2 9290 9655
Stock Exchange
Australian Securities Exchange
20 Bridge Street
Sydney, NSW 2000
ASX Code
PCK
CORPORATE DIRECTORY
Chairman's letter
4
Directors’ report
6
Auditor’s independence declaration
28
Consolidated statement of profit or
loss and other comprehensive income
29
Consolidated statement of financial position
30
Consolidated statement of changes in equity
31
Consolidated statement of cash flows
32
Notes to the financial statements
33
Consolidated Entity Disclosure Statement
52
Directors’ declaration
53
Independent auditor’s report
54
Shareholder Information
58
CONTENTS
4 | PAINCHEK LIMITED
It is with pleasure that I present the 2024 Annual Report for
PainChek Limited (ASX:PCK) and the financial results for the
Company.
This has been another year of growth and international
expansion for the Company. There are now more than
90,000 contracted licences for our Adult App across three
continents, predominantly in the residential aged care
sectors in ANZ and the UK. With more than 6,000,000
pain assessments conducted as of June 30th 2024, the
Company is delivering on it’s goal to provide best practice
pain management applications for all people everywhere.
Our plan is to significantly grow our Adult App business by
entering the North American markets and mainland Europe
during FY2025. Our North American business is initially
based on the Canadian market where we have a few early
customers that we are currently supporting remotely.
Our major goal is to enter the large 2,000,000 bed US
residential care market. We have completed our clinical FDA
trials in the US and are in the process of submitting our FDA
deNovo application for USA regulatory market clearance. We
have partners in place in the US to support a rapid market
penetration and plan to establish a physical presence in
North America during FY2025 to maximise the large market
opportunity . We are also exploring partnerships to support
entering mainland Europe.
The Company has continued to expand our international
partnerships to support growth strategies across ANZ, UK
and USA including a re-seller agreement with Nourish in the
UK.
The Company conducted a series of parental consumer
market testing with the PainChek Infant App as we refined
our initial Infant product offering. With the help of new
internal and external resources we have now launched an
early access program in Australia, targeting parents of 1
to 12 months old infants to participate in a trial of the new
product, prior to a broader commercial launch later in the
2025 financial year.
CHAIRMAN’S LETTER
4 | PAINCHEK LIMITED
Dear Fellow Shareholders,
PAINCHEK LIMITED | 5
We continue to invest in our product development,
technology platform and information security; all of which
are critical to the long-term success of the Company.
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 raising $8.6 million of new capital during FY2024.
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
John Murray
Chairman
30 September 2023
Globally 95,000 contracted licences
across 1500+ age care facilities in
ANZ, UK and Canada
ARR of $4.6M once fully implemented -
36% increase on prior year.
UK contracted licences reach 36,000 –
93% increase over prior year.
Cumulative PainChek pain assessments
reaches 6,000,000 – 128% increase over
the previous year.
US FDA de Novo clinical validation study
and data collection completed - FDA de
novo application submission to follow.
US Partners in place for rapid entry into
2,000,000 bed North American aged
care market post FDA de Novo clearance
Launch ready for PainChek®
Infant Early Access Program
in Australia in Q3 CY24.
PAINCHEK LIMITED | 5
HIGHLIGHTS
6 | PAINCHEK LIMITED
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 LLB (Hons), CA, MAICD
Non-executive Chairman (appointed 30 September 2016)
Mr Murray has 25 years’ experience in private equity and
venture capital and was a co-founder and Managing Partner
of Technology Venture Partners; one of the original and
leading venture capital firms in Australia. Mr Murray is a
past chairman of the Australian Venture Capital Association.
Mr Murray has considerable experience as an investor
and a non-executive director of high growth, technology-
based companies. He possesses a broad understanding of
global trends in technology and its impact on a variety of
industries. He is a past Chairman of a private, residential
aged care business in Australia. Mr Murray also brings 12
years’ experience in executive roles in corporate banking,
accounting and IT services industries.
Mr Murray has been on the Board of a number of successful
technology rollouts and exits including online travel play
Viator, which was acquired by TripAdvisor for approximately
US$200 million in 2014. He is a chartered accountant with
an Honour degree in Law and is a member of the Australian
Institute of Company Directors. Mr Murray is a director of UK
AIM listed company Seeing Machines Ltd and was Chairman
of ASX listed company Flamingo AI Limited until October
2019, but otherwise has not been a director of an ASX listed
company in the past 3 years.
Mr Philip Daffas BSc, Dip EENG, MBA, GAICD
Managing Director (appointed 30 September 2016)
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.
DIRECTORS’ REPORT
6 | PAINCHEK LIMITED
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 2024. In order to comply with the provisions
of the Corporations Act 2001, the directors report as follows:
PAINCHEK LIMITED | 7
Mr Ross Harricks BE, MBA
Non-executive Director (appointed 30 September 2016)
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 of 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
Non-executive Director (appointed 30 September 2014)
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.
GIVING A VOICE TO PEOPLE
WHO CANNOT RELIABLY
VERBALISE THEIR PAIN
Ms Cynthia Payne
Non Executive Director (appointed 30 March 2022)
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.
Company Secretary
Ms. Climo was appointed on 19 January 2024, and has 15
years-experience working in the corporate sector, previously
as an in-house lawyer and more recently as a Company
Secretary for a portfolio of ASX listed companies.
She holds a Bachelor of Laws and a Graduate Diploma in
Legal Practice and has extensive experience in corporate
governance and board advisory of ASX listed and unlisted
companies.
8 | PAINCHEK LIMITED
8 | PAINCHEK LIMITED
ACCURATELY IDENTIFYING PAIN TO
CREATE PERSONALISED PAIN PROFILES
DELIVERING IMPROVED OUTCOMES.
PAINCHEK LIMITED | 9
OPERATIONS REPORT
Financial and operational review
The loss of the Group for the year ended 30 June 2024, after
accounting for income tax benefit, amounted to $8,307,957
(2023 $7,574,728). The year ended 30 June 2024 operating
results are attributed to the following:
•
Cost of Sales expense of $1,945,280 (30 June 2023:
$1,237,004) increased following the increased staff to
implement new sales in UK. Cost of Sales includes the
costs of Customer Excellence (training, implementation
and renewal), Cloud Hosting and Integration fees paid to
partners.
•
Research expense of $4,571,166 (30 June 2023:
$3,817,360), increased expenses reflect the investment
in completing US based clinical trials preparing for US
FDA submission and upgrading the core technology. In
the year, costs of $1,445,524 (30 June 2023: $327,851)
associated with the US FDA clinical study and submission
were expensed
•
Share based payments in respect of options issued to
Directors and employees of $710,369 (non-cash) (30
June 2023: $766,093 (non-cash)); and
•
Corporate and administration expenses of $2,910,216 (30
June 2023: $3,033,062) decreased following reallocation
of Cloud Hosting expenses to Cost of Sales, described
above, part offset by investment in the regulatory and
information security management systems..
Operating Cashflow and Funding
The Group recorded receipts from customers of $2,637,072
(30 June 2023: $2,251,294), reflecting the continued
customer revenue growth. The Group continues to invest
in R&D and during the year receipts from R&D grant were
$1,206,113 (2023: $1,048,588).
The Group raised proceeds from the issue of shares at the
start of the year, raising $8,208,579 after share issue costs
(2023: $2,695,910).
Review of Operations
The PainChek® App
PainChek® is a unique, clinically validated and regulatory
cleared pain assessment technology to assess pain for those
who cannot reliably verbalise, ranging from elderly people
living with dementia and other cognitive impairments and
through to pre-verbal children.
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. The pain related indicators
are based on the validated and research based Facial Action
Coding System (FACS) methods. These results are combined
with other observational assessments conducted by the
carer to provide an overall pain score, pain severity level and
a personalised pain profile of the person being assessed.
PAINCHEK LIMITED | 9
10 | PAINCHEK LIMITED
The PainChek® technology has regulatory clearance in TGA
(Australia), CE Mark (Europe), United Kingdom, 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 three pillar of focus
The Company has continued to grow in the 2024 financial
year and investment of resources have been applied to three
pillars of focus:
PAINCHEK WELL POSITIONED TO ACCESS
LARGE GLOBAL MARKET OPPORTUNITES
Aged Care Market
6 MILLION BEDS 1 & $300M ANNUAL ARR 2
Home Care
UP TO 10X AGED CARE MARKET 2
Infant Market
400M PRE-VERBAL CHILDREN
150M ANNUALLY TO FIRST TIME PARENTS 3
Hospital Market
~$1Bn ANNUALLY 4
Continued acceleration in
growth of PainChek Adult App in
international markets across Aged
Care, Home care & Hospitals.
Preparation for US market entry via
US FDA regulatory submission with
De Novo clearance to follow.
Direct to parent market
entry of the Infant App.
1.World Alzheimer Report 2016
2.Management Estimates
3.United Nations Population Facts
4. Management estimates using sources from American Hospital Association,
European Commission, Australian Institute of Health and Welfare
1
2
3
PAINCHEK LIMITED | 11
Adult App growth in international markets
We have continued to focus on our global strategy
encompassing continued growth and expansion with new
markets and additional products. There are now 95,000
global commercial Adult licences contracted across ANZ,
UK and Canada, providing an Annual Recurring Revenue
(ARR) of $4.6M once entirely implemented. This is a 10%
penetration of these existing markets (ANZ 220,000 beds,
United Kingdom 500,000 beds and Canada 200,000 beds
and with an estimated ARR potential of $46M) and a 1.5%
penetration of the global 6,000,000 beds or $300M per
annum global residential aged care market opportunity.
Growth in the UK has now reached 36,000 contracted
licences, more than doubling in 12 months and clearly
showing the increased penetration driven by strong clinical
outcomes and further growth opportunity in a 500,000
residential aged care bed market. We have invested in
a customer excellence operation with increased staff
resources to implement, train clients and account manage
as the installed base increases.
PainChek’s larger UK contracted clients include both
government and private based clients providing care and
contracting greater than 1,000 beds each from PainChek:
•
NHS Bedford, Luton and Milton Keynes ICB
•
Exemplar Healthcare
•
We Care Group
•
Dovehaven Care Homes
•
Harbour Healthcare
•
Orchard Care Homes
•
Greensleeves Trust
The evidence of improved outcomes produced by existing
clients and the endorsement of PainChek by the Care
Inspectorate, Scotland’s regulator, has led to further
expansion across Scotland. In addition, Care UK has
commenced the rollout of PainChek across its Scottish
estate, and Dumfries and Galloway NHS Trust are funding
PainChek across several services.
In ANZ PainChek has maintained a growing market
penetration;
there
are
almost
59,000
contracted
licences, across over 750 aged care facilities representing
approximately 30% of the Australian market. Over half of
the ANZ contracted licences are contracted by clients with
more than 1,000 beds and as the mix moves to larger clients,
those clients have a staged rollout to fit in with their digital
transformation programmes.
US / FDA *
• 2,000,000 aged care bed market
opportunity
• Adult FDA de Novo regulatory
clearance validation study
completed
• Established go to market
partnerships with PointClickCare,
InterSystems and Ethos Labs.
• Patent secured
Canada
• Regulatory cleared
• Initial commercial clients now
implemented & growing pipeline
Europe (EU)
• Regulatory cleared & Patent secured
• Establishing commercial partner contacts
in major markets (DE, FR and CHE)
• Ongoing research underpinning new products/
functionality ongoing
Japan
• Patent secured
• Regulatory clearance
process in progress
UK
• ~35,000 beds licensed
to use PCK
• 500,000 bed market
opportunity
• 10+ integration partners
• Patent secured
PAINCHEK AROUND THE WORLD…
AND ACROSS AUSTRALIA
1500+ Aged Care facilities across 3 continents
Australia-NZ (ANZ)
• ~60,000 beds licensed to use PCK (30% share in
200,000 aged care bed market)
• 15+ integration partners
• Home care and Disabilities markets commenced
12 | PAINCHEK LIMITED
We have now reached more than 6,000,000 clinical pain
assessments across all markets, reaffirming the strong
product utility. Global client retention rates continued at
the 85% level. We have a significantly strong sales pipeline
to support continued growth for all existing markets in the
upcoming period and continue to focus on maintaining client
retention rates within target range of 85% to 90%.
Preparation for US market entry
The US-based FDA clinical study was successfully completed
in June 2024 and the Clinical Investigation Report is now
being finalised for submission to FDA in the second quarter
of FY2025. Total costs of $1,445,524 (30 June 2023: $327,851)
were expensed during the year.
This study is a pre-requisite to achieving FDA De Novo
clearance and market entry into the 2,000,000 residential
aged care beds, $100M per annum North American market.
In the meantime, we continue to grow new clients in Canada
and build new integration, sales and marketing partnerships
with North American aged care and hospital providers.
PointClickCare is the leading care
management software system provider
to nursing homes in USA & Canada -
1,000,000+ beds
PainChek is integrated into
PointClickCare platform – enabling
seamless transition of data and broad
market access to US care homes
PainChek pursuing other US based
integration and reseller partnerships
for rapid US market entry in 2025
PAINCHEK IS FINALISING SUBMISSION FOR FDA DE NOVO
CLEARANCE AND WELL POSITONED FOR RAPID NORTH AMERICAN MARKET ENTRY
NORTH AMERICAN LONG TERM
CARE MARKET OPPORTUNITY
USA – 15,000 NURSING HOMES WITH
1,700,000 BEDS1
CANADA – 2,000 CARE HOMES WITH
200,000 BEDS2
12 | PAINCHEK LIMITED
PAINCHEK LIMITED | 13
PainChek Infant App
During the year we prepared for the initial market introduction
of PainChek Infant in Australia, the world’s first AI enabled
mobile App for instant pain assessment. There is a global
direct to consumer (parent) market of 150 million new
borns each year and a global market opportunity that is
significantly larger than the global Adult Aged Care market.
The PainChek® Infant app will be available through the App
and Google Play store and provides the core assessment
functionality, as well as a range of other value adding
features, including:
•
Monitoring historical pain events
•
Documenting treatments, including medications
•
Self-guided in-app training
•
User-friendliness in a non-clinical environment
This first phase market entry commenced in August 2024 in
Australia, and targets parents of 1–12-month-old infants to
register and participate in the PainChek Infant Early Access
Program. This is a closed group initiative for eligible parents
to become early adopters of the technology and provide
valuable feedback prior to the product broad commercial
launch in Australia and overseas during FY2025.
The Company has built a go to market commercial team and
has engaged with direct-to-consumer digital partners who
are specialised in the parental market channels with a large
base of first-time parents.
Outlook
Combined, the Adult and Infant App’s provide PainChek
with a sea of unique and significantly large global market
opportunities. With the existing market penetration as
evidence of the clinical benefit and with the published
patents, trademarks and copyright in place to protect this
first to market advantage, the future continues to look bright
for the company.
BETTER OUTCOMES
START WITH
BETTER INSIGHTS
14 | PAINCHEK LIMITED
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.
Key areas of potential risk
Mitigation strategies and activities
Strategic execution - Adult App
Ability to expand in current markets and expand into
new international markets
•
Continued focus on improving execution through alignment to
the strategic plans.
•
Board oversight of plans and outcomes through regular
briefing from management.
•
US FDA clinical trials complete, now preparing for submission.
•
Good growth in UK and early success in Canadian market.
•
Continue to publish good outcome reports in local markets
•
Continuous improvement of products based on client feedback
•
Continued development of strategic partnerships and
integration of PainChek® with multiple major clinical care
systems. Closer partnerships to achieve better customer
experience in care management system
Strategic execution - Infant App
Ability to launch and sell Infant App in international
markets
•
Regulatory approval received 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
research
completed,
further
market
research
commencing through early access program with expert direct
to consumer marketing support.
PAINCHEK LIMITED | 15
Regulatory clearances
Distribution of the Company’s products is subject
to obtaining or maintaining regulatory clearances
issued by appropriate governmental authorities and
regulatory bodies
•
In house regulatory specialist
•
External specialists for clinical trials
•
Quality control systems implemented for all documentation
related to regulatory approvals
•
Regulatory committee
Cyber security and privacy risks
Cyber-attacks or security breaches could cause the
Company to lose control of its core systems or lose
data, which could include personal information. 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.
•
Data security and awareness programs in place for all PainChek
staff and contractors
•
Investment in best practice Information Security Management
System protections to protect data and reduce risk of security
breaches
•
ISO27001 compliance and certification with regular external
audits.
•
Plans in place to respond to a cybersecurity incident and
periodic simulations conducted with management.
•
All systems available and backed up in the cloud on third party
sites.
Intellectual property
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.
•
Patents in the Europe, United States, Japan and China managed
in conjunction with international patent protection program
•
Review of technical & patent landscape for third party IP.
Dependence on technology suppliers
Inability or failure of suppliers to supply the Company
with relevant products or services may adversely affect
the Company’s operating and financial performance.
•
Continuing development of open source based proprietary
technology to alleviate future supplier risks.
•
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
•
Regular remuneration and performance reviews of key staff
and staff development.
•
Measured expansion for key executive and support roles
Funding
Ability to continue as a going concern is principally
dependent upon one or more of the following
conditions:
•
the successful commercialisation of intellectual
property to generate sufficient operating cash
inflows; and
•
the ability to raise sufficient capital as and when
necessary.
•
Investor marketing and relations program
•
Capital raising strategy and a history of raising capital. In March
2024 the Company successfully completed a placement of
shares and share purchase, raising $5,000,000.
•
Executive control over discretionary expenditure projects and
Board oversight of budget processes and reporting.
•
Proven and established commercial base in Australia, strategic
plans being executed for UK expansion and US market entry.
Subsequent events
No other matters or circumstances have arisen since the end of the reporting period which have significantly affected or may
significantly affect the operations, the results of those operations, or the state of affairs of the Group in subsequent financial
years.
16 | PAINCHEK LIMITED
REMUNERATION REPORT (AUDITED)
Key Management Personnel
The report discloses the FY24 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 2024. 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.
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.
2020
2021
2022
2023
2024
Share price at 30 June
$0.115
$0.059
$0.028
$0.025
$0.027
Loss for the year
($12,392,659)
($6,063,647)
($5,720,534)
(7,574,728)
(8,307,957)
EPS for the year
(1.3) cents
(0.5) cents
(0.5) cents
(0.6) 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.
PAINCHEK LIMITED | 17
Performance Income as a Proportion of total compensation
During the financial year a short term incentive performance bonus of $Nil was paid to Mr Daffas for the year ended 30
June 2023. 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
Fee
Performance Rights
Total remuneration
John Murray
$ 80,000
$ 40,000
$ 120,000
Adam Davey
$ 40,000
$ 20,000
$ 60,000
Ross Harricks
$ 40,000
$ 20,000
$ 60,000
Cynthia Payne
$ 40,000
$ 20,000
$ 60,000
Total
$ 200,000
$ 100,000
$ 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;
b)
the number of Performance Rights issued for a year will be calculated based on the VWAP of the Company’s ordinary
shares calculated 5 days either side of and including the date of announcement of the company’s annual statutory
results for the financial year;
c)
Performance Rights will vest at 30 June each subsequent year - being the end of the financial year subject to the
director remaining a director of the Company at that date;
d)
each Performance Right has the conditional right to acquire one Share;
e)
the Performance rights are issued for Nil consideration;
f)
the Performance Rights expire 3 months after the vesting date;
g)
the Performance Rights are subject to the terms and conditions of the LTI Plan; and
h)
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
7/09/2022
23/11/2022
30/06/2023
29/09/2023
30/09/2023
2024
7/09/2023
23/11/2022
30/06/2024
06/09/2024
30/09/2024
2025
6/09/2024
23/11/2022
30/06/2025
05/09/2025
30/09/2025
18 | PAINCHEK LIMITED
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 FY24. 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 Award Target Price for the FY23 award was 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.
PAINCHEK LIMITED | 19
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 and 70% payable on achieving the
Company financial goals based on recognised revenue and contracted ARR and 30% paid on non financial goals. The
financial goals were not achieved, the non financial goals were partially achieved.
•
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 current key terms of the Agreement are:
•
A salary of $259,127 per annum inclusive of superannuation;
•
A short-term incentive of up to 20% of base salary, excluding superannuation, paid 50% on achievement of the
Company’s and 50% on the Employee’s annual goals and payable at the discretion of the PainChek Board. The
Company goals were based on recognised revenue and contracted ARR which were not achieved. The Employee’s
goals were to raise $5m capital, receive the R&D rebate, retain and recruit staff, upgrade the order to cash process and
maintain the risk register; these were 80% achieved.;
•
An offer of 6,750,000 (750,000 granted in FY24, 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.
20 | PAINCHEK LIMITED
DIRECTORS’ AND EXECUTIVE OFFICERS’ EMOLUMENTS
(a) Details of Key Management Personnel
Name
Position
Term
Executives
Philip Daffas
Managing Director
From 30 September 2016
Iain McAdam
Chief Financial Officer
From 22 March 2021
Non-Executive Directors
John Murray
Chairman
From 30 September 2016
Adam Davey
Non-Executive Director
From 30 September 2014
Ross Harricks
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.
(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 2024
is as follows:
2024
Short Term
Employee Benefits
Equity
Compensation
Post-
employment
Long-
term
benefits
Perfor-
mance
related
%
Base
Salary
and
Fees
Cash
Bonus
Value of
Options
Perform-
ance
Rights
Superannua-
tion
Contributions
Long
service
leave
Total
$
$
$
$
$
$
Directors
John Murray
80,000
-
-
38,747
-
-
118,747
33%
Philip Daffas
227,845
29,700
-
148,338
24,775
3,703
434,361
41%
Ross Harricks
40,000
-
-
19,373
-
-
59,373
33%
Adam Davey
40,000
-
-
19,373
-
-
59,373
33%
Cynthia Payne
40,000
-
-
19,372
-
-
59,372
33%
Total Directors
427,845
29,700
-
245,203
24,775
3,703
731,226
34%
Iain McAdam
236,208
20,274
44,917
-
25,679
-
327,078
20%
Total
664,053
49,974
44,917
245,203
50,454
3,703 1,058,304
27%
PAINCHEK LIMITED | 21
2023
Short Term
Employee Benefits
Equity Compensation
Post-
employment
Long-
term
benefits
Perfor-
mance
related
%
Base Salary
and
Fees
Cash
Bonus
Value of
Options
Perform
-ance
Rights
Superannua-
tion
Contributions
Long
service
leave
Total
$
$
$
$
$
$
Directors
John Murray
80,000
-
-
63,895
-
-
143,895
44%
Philip Daffas
226,244 36,000
-
145,493
23,756
11,318
442,811
33%
Ross Harricks
40,000
-
-
31,947
-
-
71,947
44%
Adam Davey
40,000
-
-
31,947
-
-
71,947
44%
Cynthia Payne
40,000
-
-
31,947
-
-
71,947
44%
Total Directors
426,244 36,000
-
305,229
23,756
11,318
802,547
43%
Iain McAdam
228,311
25,228
63,502
-
23,973
-
341,014
26%
Total
654,555
61,228
63,502
305,229
47,729
11,318
1,143,561
38%
c) Shares Held by Key Management Personnel
2024
Balance at 1
July 2023
Performance
Rights Converted
Bought &
(Sold)
Shares issued
in lieu of cash
Other
Balance at
30 June 2024
Directors
John Murray
14,336,231
1,351,351
1,323,857
17,011,439
Philip Daffas
21,524,560
-
3,786,386
25,310,946
Ross Harricks
7,168,117
675,676
1,879,412
9,723,205
Adam Davey
10,885,920
675,676
2,693,793
14,255,389
Cynthia Payne
675,676
1,495,262
2,170,938
53,914,828
3,378,379
11,178,710
68,471,917
Other key management personnel
Iain McAdam
48,675
-
198,966
-
-
247,641
53,963,503
3,378,379
11,377,676
-
-
68,719,558
2023
Balance at 1
July 2022
Performance
Rights Converted
Bought &
(Sold)
Shares issued
in lieu of cash
Other
Balance at 30
June 2023
Directors
John Murray
12,899,193
792,079
644,959
14,336,231
Philip Daffas
20,499,581
-
1,024,979
21,524,560
Ross Harricks
6,449,597
396,040
322,480
7,168,117
Adam Davey
9,990,361
396,040
499,519
10,885,920
Cynthia Payne
-
-
-
-
49,838,732
1,584,159
2,491,937
53,914,828
Other key management personnel
Iain McAdam
12,961
-
35,714
-
-
48,675
49,851,693
1,584,159
2,527,651
-
-
53,963,503
22 | PAINCHEK LIMITED
d) Options Held by Key Management Personnel – Iain McAdam
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
$0.05
Continued
employment
81.3%
1-Sep-22
1,000,000
1-Sep-26
1-Mar-27
$0.03
$0.02
Continued
employment
43.8%
28-Sep-23
750,000
28-Sep-27
28-Mar-28
$0.04
$0.03
Continued
employment
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.
2024
Balance at 1
July 2023
Received as
Remuneration
Exercise of
Options
Other
Balance at
30 June
2024
Vested and
exercisable
Unvested
Other key management personnel
Iain McAdam
24 March 2021
5,000,000
-
-
-
5,000,000
4,062,500
937,500
1 September
2022
1,000,000
-
-
-
1,000,000
437,500
562,500
28 September
2023
-
750,000
-
-
750,000
-
750,000
6,000,000
750,000
-
-
6,750,000
4,500,000
2,250,000
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
5,000,000
-
-
-
5,000,000
2,812,500
2,187,500
1 September
2022
-
1,000,000
-
-
1,000,000
-
1,000,000
5,000,000
1,000,000
-
-
6,000,000
2,812,500
3,187,500
There was no exercise of options in the period.
PAINCHEK LIMITED | 23
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
Vesting date
Grant date fair
value
23/11/2022 – Tranche 4
30/06/2023
$0.03
23/11/2022 – Tranche 5
30/06/2024
$0.03
23/11/2022 – Tranche 6
30/06/2025
$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
Expiry date
20/11/2019 -Tranche 3B
01/10/22
$0.1536
$.0768
01/01/2025
23/11/2022 -Tranche 4B
01/10/24
$0.0121
$.0710
01/01/2025
23/11/2022 -Tranche 4C
01/10/25
$0.0142
$0.0852
01/01/2026
23/11/2022 -Tranche 5A
01/10/24
$0.0171
$0.0503
01/01/2025
23/11/2022 -Tranche 5B
01/10/25
$0.0183
$0.0603
01/01/2026
23/11/2022 -Tranche 5C
01/10/26
$0.0197
$0.0724
01/01/2027
23/11/2022 -Tranche 6A
01/10/25
$0.0149
01/01/2026
23/11/2022 -Tranche 6B
01/10/26
$0.0156
01/01/2027
23/11/2022 -Tranche 6C
01/10/27
$0.0165
01/01/2028
24 | PAINCHEK LIMITED
The number of performance rights provided and granted as remuneration to key management personnel is shown below
2024
Balance at
1 July
2023
Granted
during
year
Conversion
to shares
Expired
Balance at
30 June
2024
Vested and
Exercisable
Maximum
value yet
to vest $
Directors
Philip Daffas
Tranche 2B
1,031,978
(1,031,978)
-
-
-
Tranche 3A
1,980,198
(1,980,198)
-
-
-
Tranche 3B
1,980,198
1,980,198
-
$56,014
Tranche 4A
2,815,315
(2,815,315)
-
-
-
Tranche 4B
2,815,315
2,815,315
-
$ 33,689
Tranche 4C
2,815,315
2,815,315
-
$ 39,498
Tranche 5A
1,988,863
1,988,863
$ 46,217
Tranche 5B
1,988,862
1,988,862
$ 49,524
Tranche 5C
1,988,862
1,988,862
$ 53,254
Tranche 6A
^
$ 39,567
Tranche 6B
^
$ 41,342
Tranche 6C
^
$ 43,621
John Murray
Tranche 3
-
Tranche 4
1,351,351
(1,351,351)
-
-
Tranche 5
954,654
954,654
954,654
-
Tranche 6
^
$37,664
Ross Harricks
Tranche 3
-
Tranche 4
675,676
(675,676)
-
-
Tranche 5
477,327
477,327
477,327
-
Tranche 6
^
$18,832
Adam Davey
Tranche 3
-
-
-
Tranche 4
675,676
(675,676)
-
-
Tranche 5
477,327
477,327
477,327
-
Tranche 6
^
$18,832
Cynthia Payne
Tranche 4
675,676
(675,676)
-
-
Tranche 5
477,327
477,327
477,327
-
Tranche 6
^
$18,832
16,816,698
8,353,222
(3,378,379)
(5,827,491)
15,964,050
2,386,635
$496,886
PAINCHEK LIMITED | 25
2023
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 $
Directors
Philip Daffas
Tranche 1B
466,635
(466,635)
-
-
Tranche 2A
1,031,979
(1,031,979)
-
-
Tranche 2B
1,031,978
1,031,978
-
$ 59,422
Tranche 3A
1,980,198
1,980,198
-
$ 60,301
Tranche 3B
1,980,198
1,980,198
-
$ 56,014
Tranche 4A
-
2,815,315
2,815,315
-
$ 23,675
Tranche 4B
-
2,815,315
2,815,315
-
$ 33,689
Tranche 4C
-
2,815,315
2,815,315
-
$ 39,498
Tranche 5A
-
^
$ 46,217
Tranche 5B
-
^
$ 49,524
Tranche 5C
-
^
$ 53,254
Tranche 6A
-
^
$ 39,567
Tranche 6B
-
^
$ 41,342
Tranche 6C
-
^
$ 43,621
John Murray
Tranche 3
792,079
(792,079)
-
Tranche 4
-
1,351,351
1,351,351
1,351,351
-
Tranche 5
-
^
$38,908
Tranche 6
-
^
$37,664
Ross Harricks
Tranche 3
396,040
(396,040)
-
Tranche 4
-
675,676
675,676
675,676
-
Tranche 5
-
^
$19,454
Tranche 6
-
^
$18,832
Adam Davey
Tranche 3
396,040
(396,040)
-
-
Tranche 4
-
675,676
675,676
675,676
-
Tranche 5
-
^
$19,454
Tranche 6
-
^
$18,832
Cynthia Payne
Tranche 4
-
675,676
675,676
675,676
-
Tranche 5
-
^
$19,454
Tranche 6
-
^
$18,832
8,075,147
11,824,324
(1,584,159)
(1,498,614)
16,816,698
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).
26 | PAINCHEK LIMITED
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.
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
ENVIRONMENTAL REGULATIONS AND PROCEEDINGS
The Group’s operations are not subject to any significant environmental regulations where it operates.
MEETINGS OF DIRECTORS
The number of Directors’ meetings held during the financial year each director held office and the number of meetings
attended by each director are:
Directors Meetings
Director
Meetings Attended
Number Eligible
to Attend
John Murray
14
14
Philip Daffas
13
14
Ross Harricks
14
14
Adam Davey
14
14
Cynthia Payne
13
14
The full Board currently fulfills 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
Number of Shares
Number of Options
Number of
Performance Rights
John Murray
17,011,439
-
954,654
Philip Daffas
25,310,946
-
13,577,415
Ross Harricks
9,723,205
-
477,327
Adam Davey
14,255,389
-
477,327
Cynthia Payne
2,170,938
-
477,327
Total
68,471,917
-
15,964,050
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.
PAINCHEK LIMITED | 27
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.
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
30 August 2024, Sydney, NSW
28 | PAINCHEK LIMITED
AUDITOR’S INDEPENDENCE DECLARATION
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.
Tel: +61 7 3237 5999
Fax: +61 7 3221 9227
www.bdo.com.au
Level 10, 12 Creek St
Brisbane QLD 4000
GPO Box 457 Brisbane QLD 4001
Australia
DECLARATION OF INDEPENDENCE BY T R MANN TO THE DIRECTORS OF PAINCHEK LIMITED
As lead auditor for the review of PainChek Limited for the year ended 30 June 2024, I declare that, to
the best of my knowledge and belief, there have been:
1.
No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
2.
No contraventions of any applicable code of professional conduct in relation to the review.
This declaration is in respect of PainChek Limited and the entities it controlled during the year.
T R Mann
Director
BDO Audit Pty Ltd
Brisbane, 30 August 2024
PAINCHEK LIMITED | 29
Consolidated
Consolidated
Note
30 June 2024
$
30 June 2023
$
Revenue
3
2,671,938
1,955,864
Other income – R&D Grant & other rebates
4
1,206,113
1,058,399
Other income – Government Grant
5
-
122,520
Cost of sales
(1,945,280)
(1,237,004)
Research and development expenses
(4,571,166)
(3,817,360)
Marketing and business development expenses
(2,048,977)
(1,857,992)
Corporate administration expenses
6
(2,910,216)
(3,033,062)
Share based payment expenses
14
(710,369)
(766,093)
Loss before income tax
(8,307,957)
(7,574,728)
Income tax benefit
7
Loss for the period attributable to Owners of PainChek Limited
(8,307,957)
(5,720,534)
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Exchange differences on translation of foreign operations
11,247
(42,558)
Other comprehensive income for the year, net of income tax
11,247
(42,558)
Total comprehensive income for the year
(8,296,710)
(7,617,286)
Loss and total comprehensive income attributable to:
Owners of PainChek Limited
(8,296,710)
(7,617,286)
Loss per share:
Basic and diluted (cents per share)
8
(0.57)
(0.59)
Notes to the financial statements are included on pages 33 to 51.
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2024
30 | PAINCHEK LIMITED
Consolidated
Consolidated
Note
30 June 2024
$
30 June 2023
$
Current assets
Cash and cash equivalents
18
3,561,593
2,512,217
Trade and other receivables
9
591,161
260,112
Total current assets
4,152,754
2,772,329
Non-current assets
Property, plant and equipment
10
29,366
22,831
Total non-current assets
29,366
22,831
Total assets
4,182,120
2,795,160
Current liabilities
Trade and other payables
11
2,639,163
1,874,154
Provisions
12
252,587
252,875
Total current liabilities
2,891,750
2,127,029
Total liabilities
2,891,750
2,127,029
Net assets
1,290,370
668,131
Equity
Issued capital
13
43,388,677
35,180,097
Reserves
14
14,789,750
14,068,134
Accumulated losses
(56,888,057)
(48,580,100)
Total equity
1,290,370
668,131
Notes to the financial statements are included on pages 33 to 51.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2024
PAINCHEK LIMITED | 31
Notes to the financial statements are included on pages 33 to 51.
Issued
capital
Reserves
Accumulated
losses
Total
Note
$
$
$
$
Consolidated
Balance at 1 July 2022
32,484,187
13,344,599
(41,005,372)
4,823,414
Loss for the year
-
-
(7,574,728)
(7,574,728)
Other comprehensive income
-
(42,558)
-
(42,558)
Total comprehensive loss
for the period
-
(42,558)
(7,574,728)
(7,617,286)
Transactions with owners in
their capacity as owners:
Issue of ordinary shares
(refer to note 13)
2,822,500
-
-
2,822,500
Share issue costs (refer to note 13)
(126,590)
-
-
(126,590)
Reversal of share based
payments
-
(66,102)
-
(66,102)
Recognition of share based
payments (refer to note 14)
-
832,195
-
832,195
Balance at 30 June 2023
35,180,097
14,068,134
(48,580,100)
668,131
Consolidated
Balance at 1 July 2023
35,180,097
14,068,134
(48,580,100)
668,131
Loss for the year
-
-
(8,307,957)
(8,307,957)
Other comprehensive income
-
11,247
-
11,247
Total comprehensive loss
for the period
11,247
(8,307,957)
(8,296,710)
Transactions with owners in
their capacity as owners:
Issue of ordinary shares
(refer to note 13)
8,572,500
8,572,500
Share issue costs (refer to note 13)
(459,920)
(459,920)
Issue of shares on exercise of
options
96,000
96,000
Reversal of share based
payments
-
(18,262)
(18,262)
Recognition of share based
payments (refer to note 14)
-
728,631
728,631
Balance at 30 June 2024
43,388,677
14,789,750
(56,888,057)
1,290,370
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2024
32 | PAINCHEK LIMITED
Consolidated
Consolidated
Year ended
Note
30 June 2024
$
30 June 2023
$
Cash flows from operating activities
Receipts from customers
2,637,072
2,251,294
Receipt from government grant
-
20,000
Payments to suppliers and employees
(10,977,492)
(9,659,409)
Interest received
6,750
6,351
R&D Grant and other rebates
1,206,113
1,059,047
Net cash used in operating activities
18.1
(7,127,557)
(6,322,717)
Cash flows from investing activities
Proceeds from sale of plant and equipment
-
1,200
Payments for property, plant and equipment
(34,252)
(13,642)
Net cash used in investing activities
(34,252)
(12,442)
Cash flows from financing activities
Proceeds from issue of shares
13
8,668,500
2,822,500
Payment of share issue costs
13
(459,921)
(126,590)
Net cash (used in)/provided by financing activities
8,208,579
2,695,910
Net increase / (decrease) in cash and cash equivalents
1,046,770
(3,639,249)
Cash and cash equivalents at the beginning of the period
2,512,217
6,141,422
Effect of FX on cash balances
2,606
10,044
Cash and cash equivalents at the end of the period
18
3,561,593
2,512,217
Notes to the financial statements are included on pages 33 to 51.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2024
PAINCHEK LIMITED | 33
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 statements were approved by the board of directors and authorised for issue on 30 August 2024.
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 2024
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 $7,125,083
(2023: $6,322,717) and net current assets of $1,290,370 (30 June 2023: $668,131). The consolidated entity also generated
a loss after tax of $8,307,957 (2023: $7,574,728).
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.
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.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
34 | PAINCHEK LIMITED
Material accounting policies of the Consolidated Entity
Set out below are the material 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.
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.
PAINCHEK LIMITED | 35
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.
(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 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.
36 | PAINCHEK LIMITED
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 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.
PAINCHEK LIMITED | 37
(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.
(i) 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.
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.
38 | PAINCHEK LIMITED
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.
(m)
Comparative Figures
When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation
for the current financial year. Where the Group retrospectively applies an accounting policy, makes a retrospective
restatement or reclassifies items in its financial statements, an additional (third) statement of financial position as at the
beginning of the preceding period in addition to the minimum comparative financial statements is presented. No
adjustments was made to prior year numbers.
(n)
Significant accounting judgements and key estimates
The preparation of financial statements requires management to make judgements, estimates and assumptions that affect
the application of accounting policies and the reported amounts of assets, liabilities, income and expense. Actual results
may differ from these estimates.
In preparing these statements, the key estimates made by management in applying the 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 being met as detailed in notes
4 , 5 and 11.
2.
Segment information
Operating segments are presented using the ‘management approach’, where information presented is on the same basis
as the internal reports provided to the Chief Operating Decision Makers (CODM). The CODM is responsible for the allocation
of resources to operating segments and assessing their performance. The Group operates predominantly in one segment,
being the sale of its pain assessment solutions. The primary financial statements reflects this segment.
3.
Revenue
Consolidated
Consolidated
2024
2023
$
$
Software subscriptions – Recognised over time
2,612,600
1,929,826
Training – Recognised at a point in time
52,588
19,687
Revenue from Contracts with Customers
2,665,188
1,949,513
Interest income
6,750
6,351
Total Revenue
2,671,938
1,955,864
PAINCHEK LIMITED | 39
The Consolidated entity’s revenues from external customers are divided into the following geographical areas, based on
the geographical location of the customers:
4.
R&D and other rebates
Consolidated
Consolidated
2024
2023
$
$
Government employment allowance
-
9,811
Research & Development Tax Incentive
1,206,113
1,048,588
Total Other Income
1,206,113
1,058,399
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 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
Consolidated
Consolidated
2024
2023
$
$
Government grant
-
122,520
Total government grants
-
122,520
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 rear, the Group received $Nil (FY23:$20,000) from the Australian Government for an Entrepreneurs’ Programme
Growth Grant, for expenditure incurred in the previous year.
Consolidated
Consolidated
2024
2023
$
$
Australia
2,077,862
1,723,383
United Kingdom
575,239
226,130
Other countries
12,087
-
Total Revenue from external customer
2,665,188
1,949,513
40 | PAINCHEK LIMITED
6. Loss for the year
Consolidated
Consolidated
2024
2023
$
$
Loss for the year has been arrived at after charging the following items of expenses:
Corporate administration expenses
Salaries & oncosts
876,069
806,858
Superannuation
87,191
86,296
Board fees
200,204
200,000
Company secretary fees
86,800
88,943
Consultants fees
80,449
72,599
Travel
99,665
121,866
Legal and professional fees
52,166
98,159
Regulatory
50,351
169,446
Share registry fees
53,956
46,534
ASX
71,626
59,795
Audit & tax
215,656
177,926
IT & telecommunications
527,819
669,462
Other administration expenses
508,264
435,178
2,910,216
3,033,062
7. Income taxes
Consolidated
Consolidated
7.1 Income tax recognised in profit or loss
2024
2023
$
$
Current tax expense/(income)
(1,917,243)
(1,744,499)
Over/(under) provision from prior year
-
600,382
Deferred tax expense/(income)
75,467
(62,620)
Tax losses not recognised
1,841,776
1,206,737
Total Tax expense/(income)
-
-
The income tax expense for the year can be reconciled to the accounting loss as follows:
Consolidated
Consolidated
2024
2023
$
$
Loss before tax
(8,307,957)
(7,574,728)
Income tax expense/ (revenue) calculated at 25% (2023: 25%)
(2,076,989)
(1,893,682)
Effect of items that are not assessable/deductible in determining taxable
loss:
Non-deductible expenses
536,742
357,863
Non-assessable income
(301,528)
(271,300)
Change in Tax Rates
-
-
Over/(under) provision
-
600,382
Effect of unused tax losses not recognised as deferred tax assets
1,841,775
1,206,737
-
-
The tax rate used for 2024 and 2023 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.
PAINCHEK LIMITED | 41
The Company has no franking credits available for recovery in future years.
Consolidated
Consolidated
7.2 Income tax recognised directly in equity
2024
2023
$
$
Current tax
Share issue costs calculated at 25% (2023: 25%)
(114,980)
(31,648)
(114,980)
(31,648)
Consolidated
Consolidated
7.3 Unrecognised deferred tax assets
2024
2023
$
$
Unused tax losses (revenue) for which no deferred tax assets
have been recognised at 25%
7,168,412
6,019,804
Temporary differences at 25% (2023: 25%)
534,790
344,933
All unused tax losses were incurred by Australian entities.
This benefit for tax losses will only be obtained if the specific entity carrying forward the tax losses derives future
assessable income of a nature and of an amount sufficient to enable the benefit from the deductions for the losses to be
realised, and the Group complies with continuity of business / same business test and the conditions for deductibility
imposed by tax legislation.
8. Loss per share
Consolidated
Consolidated
2024
2023
$
$
Basic and diluted loss per share (cents per share)
(0.57)
(0.59)
The loss and weighted average number of ordinary shares used in the calculation of basic loss per share are as follows:
Consolidated
Consolidated
2024
2023
$
$
Loss for the year attributable to the owners of the Company
(8,307,957)
(7,574,728)
Consolidated
Consolidated
2024
2023
No.
No.
Weighted average number of ordinary shares for the
purposes of basic and diluted loss per share
1,458,518,818
1,289,988,955
Options and Performance Rights on issue are considered to be anti-dilutive while the entity is making losses.
9. Trade and other receivables
Consolidated
Consolidated
2024
2023
$
$
Trade receivables
355,193
151,628
Other receivables
166,504
50,073
Prepayments
69,464
58,411
591,161
260,112
42 | PAINCHEK LIMITED
At the reporting date, $31,251 trade receivables are past due (2023: $29,957).
10. Property plant and equipment
Consolidated
Consolidated
2024
2023
Cost
$
$
Balance at 1 July
161,851
148,209
Additions
32,105
13,642
Disposals
-
-
Balance at 30 June
193,956
161,851
Consolidated
Consolidated
2024
2023
Accumulated depreciation
$
$
Balance at 1 July
(139,020)
(122,037)
Depreciation expense
(25,570)
(16,983)
Disposals
-
-
Balance at 30 June
(164,590)
(139,020)
Net book value
29,366
22,831
11. Trade and other payables
Consolidated
Consolidated
2024
2023
$
$
Trade creditors
842,892
498,620
Contract liability
908,185
756,964
Accrued expenditure
632,877
500,806
Employee on-costs payable
139,107
113,557
Other payables
116,102
4,207
2,639,163
1,874,154
Trade creditor payment terms are 30 days from end of month.
Contract liability is the customer initial payments for subscriptions and training recognised as a contract liability until the
services are delivered. The services will be delivered and revenue recognised over the following 12 months, Customer
terms vary between 1 month and 1 year payment in advance. During the year $747,123 (FY2023: $653,598) revenue was
recognised as the services were delivered.
12. Provisions
Consolidated
Consolidated
2024
2023
$
$
Annual leave entitlements
206,209
209,993
Long service leave provision
46,378
42,882
252,587
252,875
PAINCHEK LIMITED | 43
13. Issued capital
Consolidated
Consolidated
2024
2023
$
$
1,635,829,171 fully paid ordinary shares (June 2023: 1,297,989,542)
43,388,677
35,180,097
2024
2023
2024
2023
Number
Number
$
$
Movements during the period
Balance at beginning of the period
1,297,989,542
1,195,601,811
35,180,097
32,484,187
Placement – issued at $0.027
(FY23: $0.028) per share
131,481,489
44,171,429
3,550,000
1,236,800
Share Purchase Plan – issued at $0.0251
100,378,167
-
2,522,500
-
Placement – issued at $0.0251
99,601,594
-
2,500,000
Entitlement issue – exercise price $Nil
(FY23: $0.028)
-
56,632,143
-
1,585,700
Exercise of Options
3,000,000
96,000
Exercise of performance rights –
exercise price $0.00
3,378,379
1,584,159
Capital raising costs (net of tax)
-
(459,920)
(126,590)
Balance at end of period
1,635,829,171
1,297,989,542
43,388,677
35,180,097
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.
14. Reserves
Consolidated
Consolidated
2023
2023
$
$
Balance at beginning of the reporting period
14,068,134
13,344,599
Share based payments reserve
710,369
766,093
Foreign currency translation reserve
11,247
(42,558)
Total reserves at end of period
14,789,750
14,068,134
Reconciliation of movement in reserves
Share based
payments
reserve
Foreign exchange
reserve
Total
Opening balance
14,133,737
(65,603)
14,068,134
Foreign exchange gain/loss recognised
-
11,247
11,247
Share based payments
710,369
-
710,369
Total reserves at end of period
14,844,106
(54,356)
14,789,750
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.
44 | PAINCHEK LIMITED
15. Financial instrument
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 2023.
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
The fair value of the above financial instruments approximates their carrying values.
15.3 Financial risk management objectives
In common with all other businesses, the Group is exposed to risks that arise from its use of financial instruments. This note
describes the Group’s objectives, policies and processes for managing those risks and the methods used to measure them.
Further quantitative information in respect of those risks is presented throughout these financial statements.
There have been no substantive changes in the Group’s exposure to financial instrument risks, its objectives, policies and
processes for managing those risks or the methods used to measure them from previous periods unless otherwise stated
in this note.
The board has overall responsibility for the determination of the Group’s risk management objectives and policies and,
whilst retaining ultimate responsibility for them, it has delegated the authority for designing and operating processes that
ensure the effective implementation of the objectives and policies to the Group’s finance function
The Group’s risk management policies and objectives are therefore designed to minimise the potential impacts of these
risks on the Group where such impacts may be material. The board receives monthly financial reports through which it
reviews the effectiveness of the processes put in place and the appropriateness of the objectives and policies it sets. The
overall objective of the board is to set policies that seek to reduce risk as far as possible without unduly affecting the
Group’s competitiveness and flexibility.
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 15.5 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 2024 would increase/decrease by $28,000 (2023: $47,000).
Consolidated
Consolidated
2024
2023
Financial assets
$
$
Cash and cash equivalents
3,561,593
2,512,217
Trade and other receivables
591,161
260,112
4,152,754
2,772,329
Financial liabilities
Trade and other payables
1,664,566
818,190
1,664,566
818,190
PAINCHEK LIMITED | 45
15.6 Credit risk management
Credit risk arises from the Group’s receivables and through the Group’s cash balances held by banking institutions.
The maximum exposure to credit risk at end of the reporting period in relation to each class of recognised financial assets
is the gross carrying amount of those assets inclusive of any provisions for impairment.
The Group trades only with recognised, creditworthy third parties. The Group’s cash balances are held by Australian and
United Kingdom banks with investment grade credit ratings. In addition, receivable balances are monitored on an ongoing
basis with the result that the Group’s exposure to bad debts is minimal. At the reporting date, there are no significant
concentrations of credit risk.
The Group has policies in place to ensure that sales are made to tenants with an appropriate credit history. All customers
with outstanding balances exceeding 14 days are notified of their outstanding debt. If this is not paid within 30 days, another
letter is provided and a due date for payment advised and an account manager contacts the customer to request payment.
Where the due date is missed, the customer is advised they are in default and services may be terminated. The Group
also has the capacity to charge interest on outstanding balances in accordance with the provisions of the sales contract.
The allowance for impairment of financial assets is calculated based on objective evidence, such as past experience and
current and expected observable data indicating changes in client credit ratings.
At reporting date, the Group holds a provision of $54,900 against trade receivable balances for receivables more than 30
days past due. No other impairment of financial assets was required, and no other amounts were overdue.
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.
16. Key management personnel
The aggregate compensation made to directors and other members of key management personnel of the Company is set
out below:
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
-
-
-
818,190
2024
Trade and other payables
1,664,566
1,664,566
-
-
-
1,664,566
Consolidated
Consolidated
2024
2023
$
$
Short-term employee benefits
714,027
715,783
Post-employment benefits
54,157
59,047
Share-based payments
290,120
368,731
1,058,304
1,143,561
46 | PAINCHEK LIMITED
17. Related Party Transactions
17.1 Entities under the control of the group
17.2 Key management personnel
Any person(s) having authority and responsibility for planning, directing and controlling the activities of the entity, directly
or indirectly, including any director (whether executive or otherwise) of that entity, are considered key management
personnel.
For details of disclosures relating to key management personnel, refer to note 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 (2023: 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:
Consolidated
Consolidated
2024
2023
$
$
Cash and bank balances
3,561,593
2,512,217
18.1 Reconciliation of loss for the year to net cash flows from operating activities
Consolidated
Consolidated
2024
2023
$
$
Cash flow from operating activities
Loss for the year
(8,307,957)
(7,574,728)
Adjustments for:
Depreciation
25,570
16,983
Share based payments
710,369
766,093
Movements in working capital
(Increase)/decrease in other receivables
(223,310)
235,052
(Increase)/decrease in prepayments
(41,324)
(10,454)
Increase/(decrease) in trade and other payables
709,383
178,802
Increase in provisions
(288)
65,535
Net cash outflows from operating activities
(7,127,557)
(6,322,717)
Country of Incorporation
Percentage Owned (%)*
Parent Entity: PainChek Ltd
Australia
2024
2023
Electronic Pain Assessment
Technology (EPAT) Pty Ltd
Australia
100%
100%
PainChek UK Limited
England
100%
100%
PAINCHEK LIMITED | 47
19. Remuneration of auditors
Auditor of the parent entity
Consolidated
Consolidated
2024
2023
$
$
Audit and review of the financial statements
119,822
89,000
119,822
89,000
The auditors of PainChek Ltd are BDO Audit Pty Ltd.
20. Events after the reporting period
No other matters or circumstances have arisen since the end of the reporting period which have significantly affected or
may significantly affect the operations, the results of those operations, or the state of affairs of the Group in subsequent
financial years.
21. Parent entity information
The accounting policies of the parent entity, which have been applied in determining the 2024 and 2023 financial
information shown below, are consistent with those of the Consolidated Entity as disclosed in Note 1. The legal Parent
Entity of the Consolidated Entity is PainChek Limited.
Financial position of PainChek Limited
2024
2023
$
$
Assets
Current assets
3,701,939
2,379,042
Non-current assets
26,492
20,667
Total assets
3,728,431
2,399,709
Liabilities
Current liabilities
2,150,309
1,432,579
Non-current liabilities
-
-
Total liabilities
2,150,309
1,432,579
Net assets
1,578,122
967,130
Equity
Issued capital
52,143,383
43,934,803
Reserves
14,883,116
14,172,747
Accumulated losses
(65,448,377)
(57,140,420)
Total equity
1,578,122
967,130
Financial performance
Loss for the year
(8,307,957)
(7,318,286)
Share based payments Reserves
2024
2023
$
$
Balance at beginning of the reporting period
14,172,747
13,406,656
Share based payments reserve
710,369
766091
Total reserves at end of period
14,883,116
14,172,747
48 | PAINCHEK LIMITED
22. 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)
the Performance Rights expire 3 months after the vesting date
g)
the Performance Rights are subject to the terms and conditions of the LTI Plan
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
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
2024 included:
•
exercise price: nil
•
share price at grant date: $0.03
•
expected price volatility of the company’s shares: 100%
•
expected dividend yield: nil
•
risk-free interest rate: 3.30%
PAINCHEK LIMITED | 49
Grant date
Grant date
Vesting date
Expiry date
Number of
rights
outstanding
Grant date
fair value
23/11/2022 – Tranche 5*#
23/11/2022
30/06/2024
30/09/2024
2,386,635
$0.0300
23/11/2022 – Tranche 6
23/11/2022
30/06/2025
30/09/2025
^
$0.0300
20/11/2019 -Tranche 3B
20/11/2019
01/10/2022
01/01/2025
1,980,198
$0.1536
23/11/2022 -Tranche 4B
23/11/2022
01/10/2024
01/01/2025
2,815,315
$0.0121
23/11/2022 -Tranche 4C
23/11/2022
01/10/2025
01/01/2026
2,815,315
$0.0142
23/11/2022 -Tranche 5A*
23/11/2022
01/10/2024
01/01/2025
1,988,863
$0.0171
23/11/2022 -Tranche 5B*
23/11/2022
01/10/2025
01/01/2026
1,988,862
$0.0183
23/11/2022 -Tranche 5C*
23/11/2022
01/10/2026
01/01/2027
1,988,862
$0.0197
23/11/2022 -Tranche 6A
23/11/2022
01/10/2025
01/01/2026
^
$0.0149
23/11/2022 -Tranche 6B
23/11/2022
01/10/2026
01/01/2027
^
$0.0156
23/11/2022 -Tranche 6C
23/11/2022
01/10/2027
01/01/2028
^
$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 – 8,353,222
# Performance rights vested and exercisable – 2,386,635
The following table shows the performance rights granted and outstanding at the beginning and end of the reporting
period:
2024
2023
Number of
performance
rights
Number of
performance
rights
As at 1 July
16,816,698
8,075,147
Granted during the year
8,353,222
11,824,324*
Converted to shares
(3,378,379)
(1,584,159)
Expired during the year
(5,827,491)
(1,498,614)
As at 30 June
15,964,050
16,816,698
* Refer above table for performance rights granted during the year to non-executive directors and CEO.
Weighted average remaining contractual life of 1.0 years (2023: 1.1 years)
50 | PAINCHEK LIMITED
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:
2024
2023
Average
exercise
price per
share option
Number of
options
Average
exercise
price per
share option
Number of
options
As at 1 July
$0.0497
55,000,000
$0.0666
36,000,000
Granted during the year
$0.0410
12,900,000
$0.0300
26,500,000
Forfeited during the year
$0.0357
(1,550,000)
$0.0600
(7,500,000)
Exercised during the year
$0.0320
(3,000,000)
-
As at 30 June
$0.0492
63,350,000
$0.0497
55,000,000
Vested and exercisable 30 June
31,484,375
17,031,250
No options expired during the periods covered by the above tables.
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
2024
Share
options
30 June
2023
9 May 2019
9 November 2023
$0.030
-
3,000,000
26 March 2020
26 September 2024
$0.110
3,000,000
3,000,000
23 September 2020
23 March 2025
$0.090
1,000,000
1,000,000
26 February 2021
25 August 2025
$0.084
5,000,000
5,000,000
24 March 2021
24 September 2025
$0.075
7,000,000
7,000,000
1 September 2021
1 March 2026
$0.051
9,500,000
9,500,000
1 September 2022
1 March 2027
$0.030
25,750,000
26,500,000
15 October 2023
15 April 2028
$0.041
12,100,000
-
Total
63,350,000
55,000,000
Weighted average remaining contractual life of options
outstanding at end of period
2.3 years
2.8 years
PAINCHEK LIMITED | 51
Fair value of options granted
The assessed fair value at grant date of options granted during the year ended 30 June 2024 was $0.031 per option (2023
– $0.022). 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 2024 included:
•
exercise price: $0.041 (2023 – $0.03)
•
grant date: 28 September 2023 (2023 – 1 September 2022)
•
expiry date: 28 March 2028 (2022 – 1 March 2027)
•
share price at grant date: $0.042 (2023 – $0.03)
•
expected price volatility of the company’s shares: 100% (2023 – 100%)
•
expected dividend yield: nil (2023 – nil), and
•
risk-free interest rate: 4.2% (2023 – 3.7%)
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.
Total expenses arising from share-based payment transactions recognised during the period as part of employee benefit
expense were as follows:
2024
2023
$
$
Options issued under employee option plan
475,918
460,864
Performance rights
234,451
305,229
Total
710,369
766,093
52 | PAINCHEK LIMITED
Consolidated Entity Disclosure Statement As at 30 June 2024
Name of entity
Type of
entity
% of share
capital held
Country of
Incorporation
Australian
Resident or
foreign resident
(for tax purposes)
Foreign tax
jurisdiction (s)
of foreign
residents
PainChek Ltd
Body
Corporate
NA
Australia
Australia
NA
Electronic Pain
Assessment Technology
(EPAT) Pty Ltd
Body
Corporate
100%
Australia
Australia
NA
PainChek UK Limited
Body
Corporate
100%
United
Kingdom
NA
United
Kingdom
Basis of preparation
This Consolidated Entity Disclosure Statement (CEDS) has been prepared in accordance with the Corporations Act 2001. It
includes certain information for each entity that was part of the group at the end of the financial year.
Determination of Tax Residency
Section 295 (3A) of the Corporation Acts 2001 defines tax residency as having the meaning in the Income Tax Assessment
Act 1997. The determination of tax residency involves judgment as there are currently several different interpretations that
could be adopted, and which could give rise to a different conclusion on residency.
In determining tax residency, the consolidated entity has applied the following interpretations:
The consolidated entity has applied current legislation and judicial precedent, including having regard to the Tax
Commissioner's public guidance in Tax Ruling TR 2018/5.
PAINCHEK LIMITED | 53
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 2024 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.
a.
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
b.
the financial statements and notes thereto are in accordance with International Financial
Reporting Standards issued by the International Accounting Standards Board.
c.
The information disclosed in the consolidated entity disclosure statement is true and correct.
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 2024.
This declaration is signed in accordance with a resolution of the Board of Directors.
John Murray
Chairman
30 August 2024
54 | PAINCHEK LIMITED
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
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.
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 2024, 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 material accounting policy information, the consolidated entity
disclosure statement 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 2024 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.
54
INDEPENDENT AUDITOR'S REPORT
PAINCHEK LIMITED | 55
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.
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
Key audit matter
How the matter was addressed in our audit
Recognition of Revenue 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 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 streams.
•
Assessed the accounting policy adopted for
recognition of revenue and other income and
assessing compliance with AASB 15 Revenue
from Contracts with Customers.
•
For a sample of transactions, vouched to
supporting documentation such as customer
contracts, 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.
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 2024, 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.
55
56 | PAINCHEK LIMITED
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.
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:
a)
the financial report that gives a true and fair view in accordance with Australian Accounting
Standards and the Corporations Act 2001 and
b)
the consolidated entity disclosure statement that is true and correct in accordance with the
Corporations Act 2001, and
for such internal control as the directors determine is necessary to enable the preparation of:
i)
the financial report that gives a true and fair view and is free from material misstatement,
whether due to fraud or error; and
ii)
the consolidated entity disclosure statement that is true and correct and is free of 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.
5
PAINCHEK LIMITED | 57
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.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 10 to 23 of the directors’ report for the
year ended 30 June 2024.
In our opinion, the Remuneration Report of PainChek Limited, for the year ended 30 June 2024,
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, 30 August 2024
5
58 | PAINCHEK LIMITED
The following additional information is current as at 23 September 2024.
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
Holding
% IC
PETERS INVESTMENTS PTY LTD
118,650,000
7.253%
ORDINARY SHARES:
Holdings Ranges
Holders
Total Units
%
1-1,000
93
13,841
0.000
1,001-5,000
385
1,296,274
0.080
5,001-10,000
622
4,744,534
0.290
10,001-100,000
1,815
69,397,458
4.240
100,001-9,999,999,999
1,108
1,560,377,064
95.390
Totals
4,023
1,635,829,171
100.000
There are 1,441 shareholders with less than a marketable parcel.
VOTING RIGHTS
Each fully paid ordinary share carries voting rights of one vote per share.
ADDITIONAL SHAREHOLDER
INFORMATION
PAINCHEK LIMITED | 59
THE TOP 20 HOLDERS OF ORDINARY SHARES ARE:
Name
Balance as at
23-09-2024
%
PETERS INVESTMENTS PTY LTD
118,650,000
7.253%
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
50,811,173
3.106%
J&E CONSULTING PTY LTD
38,082,712
2.328%
DR KRESHNIK HOTI
37,717,411
2.306%
HARLEX FARMS PTY LTD
37,618,987
2.300%
MR MUSTAFA ABDUL WAHED ATEE
37,003,125
2.262%
BNP PARIBAS NOMS PTY LTD
34,181,390
2.090%
MR PHILIP DAFFAS
25,310,946
1.547%
MR RODNEY JAMES WELLSTEAD
25,000,000
1.528%
MR CRAIG ROBERT WILLIAMSON
24,188,547
1.479%
G & G CHILCOTT PTY LTD
20,676,518
1.264%
MR ROBERT ANTHONY HEALY
19,735,450
1.206%
MS ELOISE KATHLEEN JENNINGS & MR ANDREW JOHN HOPKINS
18,725,793
1.145%
GRAZIAN PTY LTD
18,716,181
1.144%
THORNBURY NOMINEES PTY LTD
16,996,293
1.039%
MR EDDY ROELOF PAUL DE VRIES & MRS PENELOPE GAIL DE VRIES
15,813,807
0.967%
PIPERLAKE PTY LTD
15,600,322
0.954%
MR ALLAN GRAHAM JENZEN & MRS ELIZABETH JENZEN
15,335,666
0.937%
MS ELOISE KATHLEEN JENNINGS & MR ANDREW JOHN HOPKINS
15,261,248
0.933%
DARVILLE PTY LTD
14,484,126
0.885%
Total Securities of Top 20 Holdings
599,909,695
36.673%
Total of Securities
1,635,829,171
UNQUOTED EQUITY SECURITIES
Number
Number of
Holders
Class
Holders of more than 20%
13,577,414
1
PCKAA Performance Rights
Phillip Daffas
2,386,636
1
PCKAA Performance Rights
Issued to non-executive
directors
3,000,000
1
Share options with an exercise price of $0.11 and an expiry date of
26 September 2024
Issued pursuant to ESOP
1,000,000
1
Share options with an exercise price of $0.09 and an expiry date of
23 March 2025
Issued pursuant to ESOP
5,000,000
3
Share options with an exercise price of $0.084 and an expiry date of
25 August 2025
Issued pursuant to ESOP
7,000,000
2
Share options with an exercise price of $0.075 and an expiry date of
24 September 2025
Issued pursuant to ESOP
9,500,000
7
Share options with an exercise price of $0.051 and an expiry date of
1 March 2026
Issued pursuant to ESOP
25,750,000
21
Share options with an exercise price of $0.03 and an expiry date of
1 March 2027
Issued pursuant to ESOP
12,100,000
25
Share options with an exercise price of $0.041 and an expiry date of
15 April 2028
Issued pursuant to ESOP
USE OF FUNDS
The entity has used the cash and assets in a form readily convertible into cash at the time of listing in a way that is
consistent with its business objectives.
There is no current share buy-back.
PAINCHEK LIMITED | 60
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