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Onconova TherapeuticsAnnual
Report
2022
ASX:RCE FSE:R9Q
Contents
1 Business Highlights
2 Letter from the Chairman
4 Letter from the CEO
6 Overview of Company Activities
7
8
8
Phase I Clinical Trial
Phase I/II Topical Clinical Trial
Pre-Clinical Studies
9 Conference and Media Engagement
10 Board of Directors and Key Management
13 Financial Report
73 Corporate Directory
Recce Pharmaceuticals Ltd (ASX: RCE,
FSE: R9Q) is developing a new class of
Synthetic Anti-Infectives designed to
address the urgent global health problems
of antibiotic-resistant superbugs and
emerging viral pathogens.
Recce’s anti-infective pipeline includes
three patented, broad-spectrum, synthetic
polymer anti-infectives: RECCE® 327 as
an intravenous and topical therapy that
is being developed for the treatment of
serious and potentially life-threatening
infections due to Gram-positive and
Gram-negative bacteria including their
superbug forms; RECCE® 435 as an
orally administered therapy for bacterial
infections; and RECCE® 529 for viral
infections. Through their multi-layered
mechanisms of action, Recce’s anti-
infectives have the potential to overcome
the hypercellular mutation of bacteria
and viruses – the challenge of all existing
antibiotics to date.
The FDA has awarded RECCE® 327
Qualified Infectious Disease Product
designation under the Generating
Antibiotic Initiatives Now (GAIN) Act –
labelling it for Fast Track Designation,
plus 10 years of market exclusivity post
approval. Further to this designation,
RECCE® 327 has been included on
The Pew Charitable Trusts Global New
Antibiotics in Development Pipeline as
the world’s only synthetic polymer and
sepsis drug candidate in development.
RECCE® 327 is not yet market approved
for use in humans with further clinical
testing required to fully evaluate safety
and efficacy.
Recce wholly owns its automated
manufacturing, which is supporting
present clinical trials. Recce’s anti-infective
pipeline seeks to exploit the unique
capabilities of its technologies targeting
synergistic, unmet medical needs.
Business
Highlights
Commercial
$3.08m R&D Rebate Received
Delivered Opening R&D Address at World Anti-Microbial
Resistance Congress
Bonus Canadian Scientific Research & Experimental
Development Rebate received (SR&ED)
Clinical
Phase I Intravenous Clinical Trial Registered in the Australian
New Zealand Clinical Trials Registry (ANZCTR)
Phase I in-human Intravenous Clinical Trial begins with
cohort one subjects dosed with R327 at 50mg.
Phase I in-human Intravenous Clinical Trial progresses –
a total of six cohorts dosed with R327 demonstrating good
safety and tolerability at 4000mg.
Multiple Patients Dosed in Phase I/II Topical Burn Wound
Infections Clinical Trial
Broad-spectrum efficacy across all patients in Phase I/II
Clinical Trial of R327 for Treatment of Burn Wound Infections
R327 Efficacy Against Necrotizing Fasciitis ‘Flesh-Eating’
Bacteria
Regulatory
Innovation Connections Grant received under the Australian
Government’s Entrepreneurs’ Programme
Anti-Viral Patent Granted in the United States, China and
Hong Kong
1
RECCE PHARMACEUTICALS ANNUAL REPORT 2022 Letter from
the Chairman
Recce is an entrepreneurial
company and we see the
current market volatility
as providing us with a
number of exciting growth
opportunities.
Dr John Prendergast
Non-Executive Chairman
Dear Shareholders,
As I reflect on Recce Pharmaceuticals over
the past year, two themes stand out.
at predicting timelines and risk-managing our
growing clinical activities.
The first is the resilience and tenacity of Recce’s
dedicated management team adeptly led by
our CEO, James Graham. There were many of
the operational challenges from the COVID
pandemic still flowing into the 2022 financial
year. Delayed access to hospital trial sites, a
backlog of demands on clinical partners and
slower clinical trial recruitment have been issues
for every company in the sector as has the
global post-pandemic bear market for healthcare
and biotechnology investments.
The second theme is the steady growth and
progress of our anti-infective product pipeline.
The potential applications of our platform
continued to expand during the year. This
growth is driven by both our internal research
and development efforts as well as significant
inbound global interest from medical specialists
and potential commercial partners who are
seeking effective solutions to the unmet medical
needs of patients with infections such as sepsis
and burns wounds.
Our progress and success this year is a
direct reflection of the impressive focus and
execution of James Graham and his team.
Recce has continued to demonstrate that it can
adapt, respond and operate in this complex
environment. Within this situation and its
challenges, Recce has honed its capabilities
For the coming year, completion of our current
safety study, the start of pre-clinical studies for
new indications and the formal publication of
interim clinical data from our R327 intravenous
and topical programs will be a primary focus.
In addition, we are planning to capitalize on
some compelling preclinical research that
2
RECCE PHARMACEUTICALS ANNUAL REPORT 2022 we anticipate will provide further clinical
opportunities. To that end, Recce welcomes
the addition of Dr Phil Sutton from the
Murdoch Children’s Research Institute, as our
Vice President of Translational Sciences. Phil’s
outstanding expertise will be instrumental in
driving our research programs into clinical
pathways.
I am pleased to report the business is in a strong
capital position to fund the delivery of a number
of clinical milestones. At the time of writing, the
Company has cash reserves of over $15 million
and a well-managed quarterly cash burn rate of
around $1.2 million. Given the current state of
global markets, especially in the biotech industry,
this is a significant advantage as we continue
to develop the enormous potential of the
Company’s platform and programs.
At its heart, Recce is an entrepreneurial
enterprise. I am proud to state that our entire
Recce team strives daily to meet the demands
and challenges of a high-growth business with
assets to address multiple potential therapeutic
applications. It is a testament to their dedication
as we remain focused on current programs and
continue to aggressively pursue our therapeutic
clinical studies and commercialisation strategy.
Given the current market volatility we seek
to capitalise on these exciting growth
opportunities and maintain keen attention
on delivering the key commercial and clinical
milestones that will validate our unique and
innovative Australian technology.
As an integral part of this process, the emerging
quality of our share register and ongoing
support of all our shareholders is evidence of
the positive perception of what Recce is seeking
to accomplish for human health, and the value
creation for all shareholders. Over the past
12 months Recce has consistently been one
of the top 30 biotechnology businesses
listed on the Australian Securities Exchange.
Consistent with this position and a critical part
of our growth and maturation has been our
communication around the environmental,
social and governance matters essential to
the sustainable success of the business.
Recognising the fact that the prevalence and
growth of antimicrobial resistance continues
to dramatically impact global healthcare in so
many critical social and economic measures, we
are building a business model through a highly
diverse and global organisation with values that
unite and drive highly motivated employees
in Australia, the US and Europe. Our values of
collaboration, integrity and innovation plus the
quality of our team will come into sharper focus
as the business grows in size and begins to
attract the attention of potential partners and
new institutional investors globally.
On behalf of the board and all our Recce team,
I thank all our shareholders for their support
that has been instrumental in enabling this
phase of the Company’s growth. The Board
and executive team have a clear vision, mindset
and dedication to create long term shareholder
value and navigate the many ongoing challenges
and risks of the current market. I would also
like to recognise the enthusiasm, dedication
and hard work of our entire Recce team and
Board members who greatly contributed to
our achievements this year. Together with the
support of our clinical collaborators, business
partners and shareholders, we are proudly
building a company with real global impact
positioned to deliver on one of the greatest
unmet medical needs currently faced by
humanity.
Yours sincerely,
Dr John Prendergast
Non-Executive Chairman
3
RECCE PHARMACEUTICALS ANNUAL REPORT 2022 Letter from
the CEO
Our work gives our
employees and supporters
a great sense of purpose
which I believe is shared by
many of our shareholders.
James Graham
Chief Executive Officer and
Managing Director
Dear Shareholders,
The market downturn and other supply
chain challenges witnessed worldwide,
highlight the importance of companies
like ours being self-sufficient in our
ability to manufacture our product and
be well funded.
Despite these global challenges, Recce
Pharmaceuticals is one of the 30 most valuable
biotechnology stocks on the ASX in 2022 against
the backdrop of a significant downturn in the
global life sciences sector.
There are many opportunities these times
provide for Recce to advance its leading position
in the field through a commitment to engage
with potential investors, commercial and
clinical partners around the world.
4
RECCE PHARMACEUTICALS ANNUAL REPORT 2022 Recce Pharmaceuticals vs XBI Biotech Index
Recce Pharmaceuticals vs XBI Biotech Index
All converted to AUD and rebased to Recce's share price
All converted to AUD and rebased to Recce's share price
RECCE
XBI REBASED AUD
RECCE
XBI REBASED AUD
Financial Snapshot
Thanks to significant pre-clinical
and clinical progress throughout
its pipeline of anti-infective assets,
Recce Pharmaceuticals share
price managed to outperform the
Australian ASX Biotech Index by
3.5% and the US XBI Index by
36% (in AUD terms).
1.6
1.4
1.2
1.0
0.8
0.6
0.4
0.2
0.0
1.60
1.40
1.20
1.00
0.80
0.60
0.40
0.20
0
JUN 2021
JAN 2022
JUN 2022
As awareness of the unique opportunities
of our infectious diseases technology grows,
the portfolio of new programs and product
pipelines expands with it. In the coming year,
Recce is firmly placed to build upon this year’s
achievements and expand our commercial
and clinical partnerships ahead of key trial
milestones from each of our programs.
The Company is well positioned for key
milestones surrounding the validation of our
lead compound as safe and well tolerated, and
on its clinical trials pathway for the potential
treatment of sepsis as the largest unmet
medical need suffered by millions each year.
A strong company with the greatest number
of commercial and partnering options, requires
a robust balance sheet. Our financial resources
enable us to be competitive, hire the best people
globally and continue to build out a pipeline we
believe is one of the most valuable in the sector.
With two clinical trials well underway our hope
is millions of people around the world may soon
benefit from commitments to advancing this
unique anti-infective technology over the
time ahead.
Yours sincerely,
Our hope is millions of people around the
world may soon benefit from commitments
to advancing this unique anti-infective
technology over the time ahead.
Recce looks forward to reinforcing its position
as an emerging global leader in anti-infectives in
the year ahead by continuing to actively engage
and educate local and international markets
about the unique advantages of our technology
platform and its potential to address a number
of urgent global human health threats.
James Graham
Chief Executive Officer and
Managing Director
JUN 2021
JAN 2022
JUN 2022
1
1
1
1
1
1
1
1
1
1
1
1
1
1.60
1.40
1.20
1.00
0.80
0.60
0.40
0.20
0
5
RECCE PHARMACEUTICALS ANNUAL REPORT 2022 Overview
of Company
Activities
Throughout the 2021/2022
financial year, the Company
primary focus was advancing
their clinical trials and the
delivery of its overall goals
and objectives through
the utilisation of its strong
financial position.
Sepsis Patient Journey
The Company has made
considerable progress in its
ongoing human clinical trials,
and in its pre-clinical studies.
In-human clinical trials are
underway, with promising results
delivered so far and important
milestones being reached, the
Company is well placed to
continue making progress in
the clinic.
According to PEW Charitable
Trusts global antibiotic pipeline
review, R327 is the only clinical-
stage new class of antibiotic in
the world being developed for
sepsis, the largest unmet medical
need in human health.
Pre-clinical studies have also
continued, with in vivo studies
being conducted at Murdoch
Children’s Research Institute, one
of the top three children's health
research institutes worldwide for
research quality and impact.
Patient Presents at the Hospital
Current Treatment Paradigm
1/3 of patients present non-specific
symptoms, leading to delayed
treatment and high mortality rate1,2,3
Mortality from sepsis increases by
as much as 8% for every hour that
treatment is delayed1,2,3
Cost of sepsis care for inpatient
admissions and skilled nursing facility
(in-patient rehab medical treatment
centre admissions was more than
USD$62bn/year (USD $170m/day)1,2,3
1 Filbin et al, 2018
2 Liu VX et al, 2017
3 Paoli et al, 2018
What is Sepsis?
Sepsis is the body’s
overwhelming and life-
threatening response to
infection which can lead to
tissue damage, organ failure,
and death.
6
Patient Symptoms
SKIN OR SOFT
TISSUE INFECTION
CATHETER-RELATED
INFECTION
URINARY TRACT
INFECTION
Introducing broad-spectrum
antibiotic(s)
Running antibiograms
Adjusting antibiotics based on
antibiogram results
Early treatment with the correct antibiotic
is key to improving patient outcome
MENINGITIS
PNEUMONIA
BLOODSTREAM INFECTION
ABDOMINAL INFECTION
– APPENDICITIS
– INFECTIOUS DIARRHEA
– GALLBLADDER INFECTION
RECCE PHARMACEUTICALS ANNUAL REPORT 2022 Phase I Clinical Trial
Recce’s ongoing Phase I trial is an ascending single-
dose, randomised, placebo-controlled, parallel, double
blind study being conducted at Adelaide's CMAX
clinical trial facility. The study is evaluating the safety
and pharmacokinetics of R327 in 7-10 healthy subjects
per dose, across eight sequential dosing cohorts (Trial
ID ACTRN12621001313820).
Considerable progress has been
made over the FY21/22, as the
study has completed dosage
levels of 50mg up to 4,000mg
(80-fold increase on Cohort One
50mg dose), indicating a good
safety and tolerability profile
among subjects dosed with
R327 (56 subjects to date).
Study objectives broadly
achieved, now ‘dose-ceiling’
focused. 6,000mg (6 grams)
over 1 hour IV is high (double
the jump between prior two
cohorts). R327 dosing broadly in
efficacy range based on animal
models with Phase II (efficacy)
to determine.
What is a
Phase I Trial?
These studies are
usually conducted in
small groups of healthy
volunteers and aim to
determine if the drug
is safe, if it has any
side effects and how
it is metabolised and
excreted.
ADELAIDE
50mg
1x
Dose Amount*
Low Dose
4,000mg
80x
Dose Amount*
6,000mg
120x
Dose Amount*
High Dose
PERTH
*Dose increase fold based on 50mg.
7
RECCE PHARMACEUTICALS ANNUAL REPORT 2022 Multiple bacterial species were
found in and surrounding
wounds, with growth swabs
locating organisms including
pathogens from the ESKAPE
group of bacteria. No significant
adverse effects or abnormalities
have been reported among
patients. The Company seeks
to build upon these promising
interim results in the upcoming
year.
Sponsored by the Western
Australia’s Department of Health
South Metropolitan Health
Service, the study is thorough
and methodical, which may set a
solid foundation for the potential
expansion of the study into a
wider cohort of patients who
often have few medical options.
Phase I/II Topical Clinical Trial
The West Australian Department of Health sponsored
clinical trial at Fiona Stanley Hospital is assessing the safety
and efficacy of RECCE® 327 (R327) in patients with infected
burn wounds under Trial ID ACTRN12621000412831.
ADELAIDE
Burn wound infections consisted
of Gram-positive and Gram-
negative bacteria, including
multi-drug resistant and ‘biofilm’
categorised forms
Broad spectrum antibiotic
activity on bacterial burn wound
infections with visible infection
reduction <24 hours on all
patients to date
“We are highly encouraged by
the initial success of R327 in this
topical Phase I/II trial. Patients
with burn wounds often suffer
severe bacterial infections that are
painful, prevent wound healing
and can even result in death if not
properly treated. Because many
of these bacteria are resistant
to most available drugs, we are
pleased by the potential in R327
offering a treatment option for
patients in need.”
Study Investigator, Dr Ed Raby,
7 December 2021
Pre-Clinical Studies
The Company’s clinical and pre-
clinical programs focused on the
treatment of significant unmet
medical needs of the growing
infectious disease landscape.
Advancements have continued
in their respective third-party
operated programs – chosen for
their expertise and regulatory
recognised capabilities. Please
visit Recce’s website for further
updates.
PERTH
Trial Investigators
Dr Edward Raby
(Clinical Microbiologist and
Infectious Diseases expert at
Royal Perth and Fiona Stanley
Hospitals).
Professor Fiona Wood
(Director of the Burns Service
of WA) – world-renowned burns
specialist and spray-on skin
pioneer.
Dr Chris Heath
(Snr. Staff Specialist – Infectious
Diseases).
8
RECCE PHARMACEUTICALS ANNUAL REPORT 2022 Conference
and Media
Engagement
Key Events with Investors, Key Opinion Leaders,
and Global Conferences
The Company has increased its engagement with global
conferences and key opinion leaders in order to increase
investment opportunities and engagement within the
sepsis and antimicrobial resistance community.
See below for the conferences and media opportunities
that the Company participated in throughout the
financial year.
Two of the most prominent events were the 2022
BIO International Convention, the world's largest trade
association representing biotechnology companies,
academic institutions, state biotechnology centres and
related organisations across the United States and in
more than 30 other nations.
The World AMR Congress is the largest AMR conference
in the world with more than 1,000 attendees from over
50 countries. The congress attracts industry leaders,
clinicians, healthcare payers, and medical regulators
from around the world.
9
RECCE PHARMACEUTICALS ANNUAL REPORT 2022DateEventPresence2021JulyThe Capital Network – Corporate PresentationVirtualSeptember Equity Forum – German Fall Conference Frankfurt, Germany Switzer Small and Microcap Investor DayVirtualNovember LifeSci Advisors – Investor LuncheonZurich, SwitzerlandThe MTP Connect Podcast – World AMR WeekPodcastWorld AMR Congress 2021Washington DC, USA2022January11th Annual LifeSci Partners Corporate Access EventVirtualFebruarySpark Plus NDRVirtualMarchGerman Australian Business Council – CEO RoundtableGlobal WebinarWholesale Investor – EmergenceSydney, NSW Wholesale Investor – EmergenceLondon, UKWholesale Investor – CEO InterviewPodcastStocks Down Under – Meet the CEO (Life Sciences Edition)Sydney, NSWAprilSepsis Alliance Leadership Conference Global WebinarECCMID 2022Lisbon, PortugalMayBiotech Investors LunchSydney, NSWSpark Plus NDRSingaporeJuneRecce Expert KOL Webinar: How R327 is leading the way as a potential, robust solution to Sepsis and SuperbugsGlobal WebinarBIO 2022San Diego, USA Board of Directors
and Key Management
Dr John Prendergast
Non-Executive Chairman
BSc (Hons), MSc (UNSW),
PhD (UNSW), CSS (HU)
Dr Prendergast is currently Chairman and Co-founder of
Palatin Technologies, Inc. (NYSE: PTH), a US biotechnology
company developing therapeutics for diseases with significant
unmet medical need. He is also lead director of Nighthawk
Biosciences (NYSE: HHWK). During his career, Dr Prendergast
has been responsible for the approval of three (3) New Drug
Applications.
James Graham
Managing Director and
Chief Executive Officer
BCom (Entrepreneurship), GAICD
Mr Graham is the Chief Executive Officer of Recce
Pharmaceuticals. Mr Graham was former Executive Director
and has extensive experience in marketing, business
development and commercialisation of early-stage
technologies with global potential. Mr Graham has served on
Recce’s Board of Directors for six years and has invested in
almost every capital raise to date with a focus on expanding
Recce’s commercial opportunities and clinical initiatives.
Michele Dilizia
Executive Director and
Chief Scientific Officer
BSc (Med Sci), Grad Dip Bus (Mkting),
BA (Journ), GAICD, MASM
Ms Dilizia is a qualified Medical Scientist with a specialisation
in medical microbiology. Ms Dilizia successfully co-led the
research and development of Recce’s suite of anti-infective
compounds, resulting in a portfolio of granted patents across
the globe, including a Qualified Infectious Disease Product
designation with the U.S. Food and Drug Administration (FDA).
Dr Justin Ward
Executive Director and
Principal Quality Chemist
BSc (Chem), PhD (Chem),
MRACI, CChem
Dr Ward is a qualified Chemist who specialises in
pharmaceutical quality management and product
development. He previously held a technical role with
Pfizer, involving providing data for the regulatory
submissions to the FDA and TGA.
Dr Alan Dunton
Non-Executive Director
BSc (BioChem) Hons, M.D. (NYU)
Dr Dunton has over three decades of senior pharmaceutical
experience, where he has held leadership positions at various
biotechnology and pharmaceutical companies including
former President and Managing Director of Janssen Research
Foundation (Johnson & Johnson). Dr Dunton has advanced
numerous blockbuster antibiotics through regulatory review
and commercialisation at Fortune 500 companies including
Johnson & Johnson and Roche. Dr Dunton has been responsible
for the approval of approximately 20 New Drug Applications;
an amalgamation of prescription and OTC products.
10
RECCE PHARMACEUTICALS ANNUAL REPORT 2022 Arthur Kollaras
Principal Engineer & Head
of Manufacturing
BSc, BEng (Chem), PhilEng (Enviro),
MIEAust, MISPE
Mr Kollaras is highly qualified in chemical engineering
and microbiology. He has significant experience taking
a new technology concept from pilot plant to full-scale
international production under FDA standards.
Dr Philip Sutton
(appointed after June 30, 2022)
Vice President of Translational
Sciences
BSc (Hons), PhD
Global infectious disease expert with over 30 years
of research and industry experience, having served as
former Head of Immunology at CSL Ltd in Melbourne.
Dr Sutton has acted as an expert advisor to the World
Health Organisation was Chief Editor of the book
‘Helicobacter pylori in the 21st Century’ and has
co-authored 100 manuscripts published in peer-
reviewed journals.
Justin Reynolds
Chief Financial Officer
(Pitcher Partners)
Mr Reynolds is a Partner at Pitcher Partners Sydney.
Mr Reynolds’ experience with multinational companies has
led him to developing expertise as an Outsourced Financial
Controller.
Alistair McKeough
Company Secretary
(Automic Group)
Mr McKeough is a Principal at Automic Legal. He
specialises in complex commercial matters that require
careful and strategic planning. Mr McKeough has extensive
experience advising ASX-listed companies and their
directors and is a member of the University of New South
Wales Law Advisory Council.
Daniel Astudillo
Head of Marketing
BCom (Marketing), BA (Spanish), MBA
Mr Astudillo is an experienced Marketing Specialist in the
pharmaceutical and clinical trial sector with expertise in
digital marketing campaigns and targeting key investors
in the healthcare industry.
Thomas Jarrett
Operations Manager
(Macquarie Park)
BSc (Bioengineering)
With a background in bioengineering, Thomas is an
experienced pilot plant operations manager overseeing
all manufacturing activities including quality assurance
programs and strategic process improvements.
11
RECCE PHARMACEUTICALS ANNUAL REPORT 2022 12
RECCE PHARMACEUTICALS ANNUAL REPORT 2022 Financial
Report
Recce Pharmaceuticals Ltd
(Formerly Recce Ltd) and Controlled
Entities ABN 73 124 849 065 Consolidated
Financial Report for the year ended
30 June 2022
14 Directors’ Report
26 Auditor's Independence Declaration
27 Corporate Governance Statement
40 Consolidated Statement of Profit or Loss and
Other Comprehensive Income
41 Consolidated Statement of Financial Position
42 Consolidated Statement of Changes In Equity
43 Consolidated Statement of Cash Flows
44 Notes to the Consolidated Financial Statements
66 Directors’ Declaration
67 Independent Auditor’s Report
71 ASX Additional Information
13
RECCE PHARMACEUTICALS ANNUAL REPORT 2022
Directors’ Report
For the year ended 30 June 2022
Your Directors present their report on Recce
Pharmaceuticals Ltd (the ‘Company’) and controlled
entities (the ‘Group’) for the year ended 30 June 2022.
Directors
The following persons held office as Directors of
the Company during the year and up to the date
of this report:
Dr John Prendergast
Non-Executive Chairman
Dr Alan Dunton
Non-Executive Director
Mr James Graham
Managing Director & Chief Executive Officer
Ms Michele Dilizia
Executive Director and Chief Scientific Officer
Dr Justin Ward
Executive Director and Principal Quality Chemist
Directors have been in office since the start of the
financial year to the date of this report unless otherwise
stated.
Information on Directors
Dr John Prendergast
Chairman (Non-Executive)
Qualifications
BSc (Hons), M.Sc. and Ph.D., C.S.S. (Admin & Mgmt)
Experience
Dr Prendergast is currently Non-Executive Chairman
and Co-Founder of Palatin Technologies developing
targeted therapeutics for the treatment of diseases with
significant unmet medical need and Lead Director of
Nighthawk Biosciences, Inc., a publicly traded, clinical
stage immunomodulatory company.
He was previously a member of the board of the life
science companies, Avigen, AVAX Technologies and
MediciNova Inc and also as a member of the Advisory
Board for the Institute for the Biotechnology of Infectious
Diseases (‘IBID’) at the University of Technology Sydney,
now called the ithree Institute.
Prior to that he was a Managing Director of The Castle
Group Ltd., a New York medical venture capital firm.
Dr Prendergast held Post-Doctoral Fellowships in the
Department of Biochemistry and Molecular Biology,
Harvard University and at the Center for Research on
Blood Diseases in Paris with Professor Jean Dausset
(Nobel Prize, 1980).
During his career, Dr Prendergast has been responsible
for the approval of three (3) New Drug Applications.
Dr Prendergast received his M.Sc. and Ph.D. from the
University of New South Wales, Sydney, Australia and a
C.S.S. in administration and management from Harvard
University.
Interest in Shares and Options
250,000 Ordinary Shares
2,175,000 Unlisted Options
Special Responsibilities
Chairman of the Audit & Risk Management Committee
Member of the Nomination & Remuneration Committee
Directorships held in other listed entities during
the last three years
Palatin Technologies, Inc. (NYSE: PTN)
Heat Biologics, Inc. (NASDAQ: HTBX)
14
RECCE PHARMACEUTICALS ANNUAL REPORT 2022 Ms Michele Dilizia
Mr James Graham
Director (Executive) and Chief Scientific Officer
Director (Executive) and Chief Executive Officer
Qualifications
BSc (Med Sci), Grad Dip Bus (Mkting), BA (Journ),
GAICD, MASM
Experience
Ms Dilizia is a Qualified Medical Scientist with
specialisation in medical microbiology. Previously, she
had a successful executive career in public relations and
marketing for a leading retail chain.
Ms Dilizia was a market research consultant, which
included marketing development of health-care and
pharmaceutical products.
Qualifications
BCom (Entrepreneurship), GAICD
Experience
Mr Graham is Chief Executive Officer and Executive
Director of the Company.
Mr Graham has a background in marketing, business
development and commercialisation of early stage
technology with global potential.
Mr Graham continues to work closely with the growth
and direction of Company, routinely investing alongside
shareholders in capital rounds to date.
Interest in Shares and Options
3,543,485 Ordinary Shares
1,500,000 Unlisted Options
Special Responsibilities
Nil
Directorships held in other listed entities during
the last three years
Nil
Interest in Shares and Options
Direct ownership
2,840,332 Ordinary Shares
2,250,000 Unlisted Options
Indirect ownership
3,191,600 Ordinary Shares
Special Responsibilities
Member of the Audit and Risk Management Committee
Directorships held in other listed entities during
the last three years
Nil
15
RECCE PHARMACEUTICALS ANNUAL REPORT 2022 Dr Justin Ward
Director (Executive)
Qualifications
Dr Alan Dunton
Director (Non-Executive)
Qualifications
BSc (Chem), PhD (Chem), MRACI, Chartered Chemist
M.D. New York University School of Medicine
Experience
Dr Ward is qualified chemist with specialisation in
pharmaceutical quality management and product
development.
Before Recce Pharmaceuticals, he held a technical
speciality and special project leadership role with
Pfizer Pharmaceuticals, involving providing data for
the regulatory submissions to the FDA and TGA.
After Pfizer, he was the Laboratory Manager for Solbec,
involving, again as presently, drug specifications and
pharmaceutical trials for the ASX-Listed company.
Interest in Shares and Options
Direct ownership
158,966 Ordinary Shares
600,000 Unlisted Options
Special Responsibilities
Nil
Directorships held in other listed entities during
the last three years
Nil
B.S. Biochemistry. (Magna cum laude) State University
School of New York at Buffalo
Experience
Dr Dunton has held leadership positions at various
biotechnology and pharmaceutical companies
including serving as President and Chief Executive
Officer at Panacos Pharmaceuticals, Inc., Metaphore
Pharmaceuticals, Inc., and Chief Operating Officer at
Emisphere Technologies, Inc.
Dr Dunton served in several positions at Johnson and
Johnson including President and Managing Director at the
Janssen Research Foundation where he was responsible
for leading over 2,000 professionals worldwide and
prior to this as Vice President of global clinical research
and development at the R.W. Johnson Pharmaceutical
Research Institute. During his career, Dr Dunton has been
responsible for the approval of approximately 20 New
Drug Applications; an amalgamation of prescription and
OTC products.
Dr Dunton earned his medical degree from New York
University School of Medicine following his bachelor’s
degree in biochemistry from the State University of New
York at Buffalo. Dr Dunton then completed his fellowship
in clinical pharmacology at New York Hospital/Cornell
University Medical Center and, in 1987, was awarded The
Nellie Westerman Prize from the American Federation for
Clinical Research (AFCR) for his work in medical ethics.
Interest in Shares and Options
Direct ownership
60,000 Ordinary Shares
1,125,000 Unlisted Options
Indirect ownership
10,000 Ordinary Shares
Special Responsibilities
Chairman of the Nomination & Remuneration Committee
Member of the Audit & Risk Management Committee
Directorships held in other listed entities during
the last three years
Palatin Technologies, Inc. (NYSE: PTN)
Oragenics, Inc. (NYSE: OGEN)
CorMedix, Inc. (NYSE: GRMD)
Regeneus Ltd (ASX: RGS)
16
RECCE PHARMACEUTICALS ANNUAL REPORT 2022Directors’ Report ContinuedFor the year ended 30 June 2022 Chief Financial Officer
Justin Reynolds
Justin Reynolds is a Partner at Pitcher Partners Sydney.
Mr Reynolds’ experience with multinational companies
has led to him developing particular expertise as an
Outsourced Financial Controller. He and his team provide
their clients with the peace of mind that comes from high
quality, technically expert outsourced accounting.
Company Secretary
Alistair McKeough
Alistair McKeough is a Partner at Automic Legal.
Mr Alistair specialises in complex commercial matters
that require careful strategic planning. An experienced
commercial litigator with an outstanding record of
success in contested litigation, Alistair also applied his
exceptional back letter knowledge and analytical skills in
transactional work. He is trusted by some of Australia’s
most preeminent business people to handle their
personal legal affairs.
Alistair is regularly engaged in matters involving serious
risk to personal and corporate reputations and he has
extensive experience in media sensitive matters. Prior
to founding Automic Legal in 2010, Alistair worked at
Freehills and was an associate to a Judge of the Federal
Court of Australia.
Alistair’s academic work has been quoted by the Court
of Appeal of New South Wales and in leading Australian
text books. Alistair has extensive experience advising ASX
listed companies and their directors and is a member of
the University of New South Wales Law Advisory Council.
Principal Activity
The Group is pioneering the development and
commercialisation of a drug discovery and development
business commercialising new Classes of synthetic
anti-infectives with broad spectrum activity designed
to address the urgent global health threat of antibiotic
resistant superbugs and emerging viral pathogens.
Its patented lead candidate, RECCE® 327 has been
developed for the treatment of blood infections and
sepsis derived from E. coli and S. aureus bacteria –
including their superbug forms.
Review of Operations
On 5 July 2021, the Company announced its first
international cash receipt of A$176,870 from the
Canadian Government as part of its Scientific Research
& Experimental Development (SR&ED) Tax Incentive
program. The Canadian Government's 10% Research and
Development (R&D) rebate is in addition to the Australian
government's 43.5% R&D Tax Incentive Program.
On 12 July 2021, the Company announced that multiple
patients had been dosed with topical RECCE® 327 in
a Phase I/II clinical trial, with no adverse symptoms
reported, at the Fiona Stanley Hospital Burns Unit in
Perth. The clinical trial is sponsored by the Western
Australia Health Department.
On 19 July 2021, the Company announced positive
efficacy of RECCE® 327 against Clostridium perfringens
(C. perfringens) and Streptococcus pyogenes (S.
pyogenes), two main strains of bacteria associated
with necrotizing fasciitis, also known as 'flesh-eating'
disease. RECCE® 327 demonstrated a Below Limit of
Quantification (BLOQ) efficacy as early as 30 minutes
in C. perfringens; 99.9% (3-log) reduction achieved in all
bacteria tested, at various concentrations.
On 20 July 2021, the Company announced the Chinese
Patent Office had granted Patent Family 3 ‘Anti-Virus
Agent and Method for Treatment of Viral Infections’,
furthering marketing and manufacturing monopolies to
February 2037. This was the third Patent in Family 3 to
be granted to the Company following its patent grant
in Europe and Japan, with applications in other major
pharmaceutical markets around the world in advanced
stages of independent patent reviews.
On 22 July 2021, the Company announced the United
States (U.S.) Patent and Trademark Office had granted
Patent Family 3 ‘Anti-Virus Agent and Method for
Treatment of Viral Infections’, furthering marketing and
manufacturing monopolies to February 2037. This was
the fourth of five patents in Family 3 to be granted to
the Company following its patent grants in the biggest
pharmaceutical markets in the world: China, Japan,
Europe, with only Australia remaining.
On 11 August 2021, the Company announced it had
been awarded the second grant from the Innovation
Connections scheme of AUD $50,000 plus Goods and
Services Tax (GST) under the Australian Government's
Entrepreneurs' Programme. The Innovation Connections
scheme assists businesses in establishing research
priorities, locating researchers, and providing access to
funding to enable R&D project.
On 30 September 2021, the Company announced trial
registration for its lead compound RECCE® 327 in the
Australian New Zealand Clinical Trial Registry (ANZCTR)
for its Phase I Intravenous Study in Humans under the
Trial ID ACTRN12621001313820p.
On 25 October 2021, the Company announced it had
received Human Research Ethics Committee approval
to start its Phase I Intravenous clinical trial evaluating
the safety and pharmacokinetics of its lead compound,
RECCE® 327.
On 8 November 2021, the Company announced it was
to deliver the Opening R&D Address at the World Anti-
Microbial Resistance Congress on 8th-9th November
2021 highlighting the urgent need for new antibiotics
to address the rapidly growing threat of antimicrobial-
resistance.
17
RECCE PHARMACEUTICALS ANNUAL REPORT 2022 On 7th December 2021, the Company announced
an update on its Phase I/ll clinical trial. RECCE® 327
demonstrated broad spectrum antibiotic activity on
bacterial infections in burn wounds with visible infection
reduction less than 24 hours on all patients to date.
All infections were cleared within 5 days (acute) or
7 days (chronic); clinicians reducing treatment windows
per protocol/positive patient indications. Burn wound
infections consisted of Gram-positive and Gram-negative
bacteria, some of which are defined as multidrug-
resistant and categorised as difficult to treat due to
biofilms.
On 15 December 2021, the Company announced it had
recruited 10 healthy male subjects (first cohort) in its
Phase I intravenous (IV) clinical trial of its lead compound,
RECCE® 327. Dosing commenced shortly thereafter.
On 7 January 2022, the Company announced positive
data from its Phase I intravenous (IV) clinical trial of
RECCE® 327, demonstrating safety and tolerability, among
9 healthy male subjects in cohort one. Based upon
clinical data readouts, an independent safety committee
approved a threefold increase (from 50mg to 150mg)
among 7-10 healthy subjects (cohort two).
On 18 January 2022, the Company announced further
positive data from its Phase I intravenous (IV) clinical trial
of RECCE® 327 , demonstrating safety and tolerability,
among 7 healthy male subjects in Cohort Two. Based
upon these clinical data readouts, an independent safety
committee approved a tenfold increase on the initial
dosing of Cohort one (50mg) or threefold increase (from
150mg to 500mg) among 7-10 healthy subjects (Cohort
Three).
On 8 February 2022, the Company announced Phase I
intravenous (IV) clinical trial of RECCE® 327 Cohort Three
at 500mg (tenfold increase on cohort one 50mg dose),
indicating a good safety and tolerability profile among
7 healthy male subjects.
On 21 February 2022, the Company announced that
the final three subjects of Cohort three at 500mg had
been intravenously dosed in the Phase I intravenous (IV)
clinical trial of RECCE® 327, indicating a good safety and
tolerability profile among 10 healthy male subjects.
On 7 March 2022, the Company announced that an
Independent Safety Committee data review of 10
healthy human subjects intravenously dosed in the
Phase I intravenous (IV) clinical trial of RECCE® 327,
demonstrating good safety and tolerability – unanimously
recommending Cohort 4 (R327, 1,000mg I.V.) to go ahead.
On 28 March 2022, the Company announced the cash
receipt of A$3,084,955 Research and Development Tax
Incentive rebate from the Australian Tax Office for the
year ending 30 June 2021.
On 30 March 2022, the Company announced Phase I
intravenous (IV) clinical trial of RECCE® 327 Cohort Four
at 1,000mg (twenty-fold increase on cohort one 50mg
dose), indicating a good safety and tolerability profile
among 10 healthy male subjects.
On 11 April 2022, the Company announced that the
Intellectual Property Department of the Hong Kong
Special Administrative Region had granted Patent Family
3 ‘Anti-Virus Agent and Method for Treatment of Viral
Infection’, furthering marketing and manufacturing
monopolies to February 2037.
On 12 April 2022, the Company announced an
Independent Safety Committee data review of 10 healthy
human subjects dosed in the Phase I intravenous (IV)
clinical trial of RECCE® 327, demonstrating good safety
and tolerability at 1,000mg. ‘Low-dose’ cohorts data
review complete, end-points achieved with unanimous
recommendation to start ‘high-dose’ Cohort 5 (R327,
2,000mg IV).
On 20 May 2022, the Company announced that in
Cohort 5 of a Phase I clinical trial, R327 demonstrated
a good safety and tolerability profile among 10 healthy
male subjects intravenously dosed at 2,000mg. An
Independent Safety Committee has unanimously
approved Cohort 6 to commence at 4,000mg, with
subjects recruited and dosing underway.
On 16 June 2022, the Company announced that the
remaining 1,356,249 Class C Performance Shares and
1,356,249 Class D Performance Shares, held by former
directors and key management personnel of the
Company, were converted following the resolution of
a dispute. Each Class C Performance Share and Class D
Performance Share converted into one fully paid ordinary
share.
On 21 June 2022, the Company announced Phase I
intravenous (IV) clinical trial of RECCE® 327 Cohort 6
Six at 4,000mg (80-fold increase on Cohort One 50mg
dose) indicating a good safety and tolerability profile
among 10 healthy male subjects. A review of the data will
be conducted by an Independent Safety Committee with
an expected recommendation to commence recruiting for
Cohort Seven.
Results of Operations
The operating loss has decreased to $10,986,277 (2021:
loss of $13,513,366) as a result of reduced share based
payment costs. The annual loss was after a R&D tax
incentive of $3,084,955 (2021: $1,566,031).
The Company settled its legal dispute in relation to
the Class C and Class D Performance shares with the
payment of $1,417,527 as full and final settlement of all
matters in the dispute.
Other than the above, no matters or circumstances
have arisen since the end of the financial year, which
significantly affected, or may significantly affect, the
operations of the Group, the results of those operations,
or state of affairs of the Group in future financial years.
The loss per share has decreased during the year to
6.31 cents (2021: 8.70 cents).
The Group’s focus is on progressing RECCE® 327 into
human clinical trials.
18
RECCE PHARMACEUTICALS ANNUAL REPORT 2022Directors’ Report ContinuedFor the year ended 30 June 2022 Dividends Paid or Recommended
No dividends have been paid or declared for payment
during the year and at the date of this report.
Options
During the financial year, the Company issued 435,000
(2021: 12,165,000) options to acquire ordinary shares in
the Company at exercise prices and dates as disclosed
in Note 22 to the consolidated financial statements.
1,156,565 options were exercised for $287,408 during
the financial year (2021: 1,331,440 options were exercised
for $255,249).
Significant Changes in State of Affairs
No significant changes in the Group's state of affairs
occurred during the year.
Environmental Issues
The Group’s operations are not subject to significant
environmental regulations under the law of the
Commonwealth or of a State or Territory. The policy is
to comply with or exceed its environmental obligations
in each jurisdiction in which it operates. No known
environmental breaches have occurred.
Future Developments, Prospects and
Business Strategies
The Group continues its strategy of having its antibiotic
drug tested for safety, efficacy and chemistry to enable
the Group to lodge its application for Investigational New
Drug (IND) status with the Food and Drug Administration
(FDA) in the USA.
Events Subsequent to Reporting Period
On 5 August 2022, the Company settled its legal dispute
in relation to the Class C and Class D Performance shares
issued to former directors/KMP with the cash payment of
$1,417,527 as full and final settlement of all matters in the
dispute. This amount has been recognised as a provision
as at 30 June 2022 as it reflects an adjusting subsequent
event.
Other than the above, no matters or circumstances
have arisen since the end of the financial year, which
significantly affected, or may significantly affect, the
operations of the Group, the results of those operations,
or state of affairs of the Group in future financial years.
Going Concern
The Directors believe that the Group is in a position to
meet all its commitments as and when they fall due. Refer
to Note 3 to the consolidated financial statements for
further details.
Insurance of Officers
During the financial year, the Company paid a premium
for an insurance policy insuring all Directors and Officers
against liabilities for costs and expenses incurred by
them in defending any legal proceedings arising out of
their conduct while acting in their capacity as Director
or Officer of the Company, other than conduct involving
a wilful breach of duty in relation to the Company. In
accordance with common commercial practice, the
insurance policy prohibits disclosure of the nature of the
liability insured against the amount of the premium.
Proceedings on Behalf of Group
No person has applied for leave of Court to bring
proceedings on behalf of the Group or intervened in
any proceedings to which the Group is a party for the
purpose of taking responsibility on behalf of the Group
for all or any part of those proceedings.
The Group was not a party to any other such proceedings
during the year.
Remuneration Report (Audited)
The remuneration report details the Key Management
Personnel (‘KMP’) remuneration arrangements for the
Group, in accordance with the requirements of the
Corporations Act 2001 and its Regulations.
KMP are those persons having authority and
responsibility for planning, directing and controlling the
activities of the entity, directly or indirectly, including all
Directors.
For the purposes of this Remuneration Report, KMP
includes the following Directors and Senior Executives
who were engaged by the Company at any time during
the year ended 30 June 2022:
(i) Directors
Dr John Prendergast Non-Executive Chairman
Dr Alan Dunton
Non-Executive Director
Mr James Graham
Ms Michele Dilizia
Managing Director & Chief
Executive Officer
Executive Director and Chief
Scientific Officer
Dr Justin Ward
Executive Director and Principal
Quality Chemist
(ii) Key Management Personnel
Mr Arthur Kollaras1
Principal Engineer
1 Entered into a consultancy agreement with the Company
effective 1 August 2019.
19
RECCE PHARMACEUTICALS ANNUAL REPORT 2022 The total remuneration of executives and other senior
managers consists of the following:
(a) Salary – Executive Directors and senior managers
receive a sum payable monthly in cash;
(b) Long-term incentives – Executive Directors may
participate in share option/performance right
schemes with the prior approval of shareholders.
Other senior managers may also participate in
employee share option/performance right schemes,
with any option/performance right scheme, with
any option/performance rights issues generally
being made in accordance with thresholds set in
plans approved by shareholders. The Board however,
considers it appropriate to retain the flexibility to
issue options/performance rights to executives
outside of approved employee option/performance
right plans in exceptional circumstances; and
(c) Other benefits – Executive Directors and senior
managers are eligible to participate in superannuation
schemes and other appropriate additional benefits.
Non-Executive Remuneration
Shareholders approve the maximum aggregate
remuneration for Non-Executive Directors. The full Board
recommends the actual payments to Directors and the
Board is responsible for ratifying any recommendations,
if appropriate. The maximum approved aggregate
remuneration approved for Non-Executive Directors is
currently $180,000.
It is recognised that Non-Executive Directors’
remuneration is ideally structured to exclude equity based
remuneration. However, whilst the Group remains small,
and the full Board, including the Non-Executive Directors
are included in the operations of the Group more closely
than may be the case with larger companies, the Non-
Executive Directors are entitled to participate in equity
based remuneration schemes subject to shareholders
approval.
The Directors’ believe that as at this stage, there is
no relationship between the remuneration policy and
performance.
All Directors are entitled to have their indemnity
insurance paid by the Group.
The Remuneration Report covers the following matters:
(A) Principles used to determine the nature and
amount of remuneration;
(B) Executive service agreements;
(C) Details of remuneration;
(D) Share-based remuneration;
(E) Other transactions with Key Management
Personnel; and
(F) Other information.
(A) Principles Used to Determine the Nature
and Amount of Remuneration
In determining competitive remuneration rates, the Board
seeks independent advice on local and international
trends among comparative companies and industry
generally. It examines terms and conditions for employee
incentive schemes, benefit plans and share plans.
Independent advice may also be obtained to confirm that
executive remuneration is in line with market practice
and is reasonable in the context of Australian executive
reward practices.
Executive Remuneration
The Group’s Remuneration Policy for Executive and
Non-Executive Directors is designed to promote superior
performance and long-term commitment to the Group.
Executives receive a base remuneration which is market
related, and may be entitled to performance based
remuneration at the ultimate discretion of the Board.
Overall remuneration policies are subject to the discretion
of the Board and can be changed to reflect competitive
market and business conditions where it is in the interests
of the Group and shareholders to do so.
Executive remuneration and other terms of employment
are normally reviewed annually by the Board having
regard to performance, relevant comparative information
and expert advice.
The Group’s reward policy reflects its obligation to align
executive’s remuneration with shareholders’ interests and
to retain appropriately qualified executive talent for the
benefit of the Group. The principles underpinning the
Group’s remuneration policy are that:
– Reward reflects the competitive global market in
which we operate;
– Rewards to executives are linked to creating value for
shareholders;
– Remuneration arrangements are equitable and facilitate
the development of senior management across the
consolidated entity; and
– Where appropriate senior managers may receive a
component of their remuneration in equity securities to
align their interests with those of the shareholders.
20
RECCE PHARMACEUTICALS ANNUAL REPORT 2022Directors’ Report ContinuedFor the year ended 30 June 2022 (B) Service Agreements
Name
Base Salary
Dr John Prendergast $120,000 pa
Ms Michele Dilizia
$230,000 pa
Mr James Graham
$300,000 pa
Mr Justin Ward¹
Mr Arthur Kollaras²
–
–
Dr Alan Dunton
$60,000 pa
Performance-
Based Incentives
Term
Nil
Nil
Nil
Nil
Nil
Nil
No fixed term
No fixed term
No fixed term
No fixed term
No fixed term
No fixed term
Notice Period
3 months
3 months
3 months
4 weeks
4 weeks
4 weeks
1 Entered into an employment agreement with the Company effective 1 January 2020. Remunerated at $170 per hour plus 10%
Superannuation based on a one-day per week basis. Overtime pay of $250 per hour plus 10% Superannuation.
2 Entered into a consultancy agreement with the Company effective 1 August 2019. Remunerated at the rate of $450 per hour
(C) Details of Remuneration
Director and other KMP Remuneration
Details of the nature and amount of each element of the remuneration of each KMP are shown in the table below:
Year ended 30 June 2022
Short-term
benefits,
cash salary and
fees
$
Accrued
Long
Service
Leave
$
Superannuation
(post-
employment
benefit)
$
Termination
payments
$
Bonus1
$
Share-
based
payments
$
Percentage
Performance
Related
%
Total
$
Name
Directors
M Dilizia
230,000
40,042
J Graham
328,403
38,459
J Prendergast
120,000
J Ward
A Dunton
Executives
A Kollaras
176,066
60,000
168,347
–
14,298
–
–
1,082,815
92,800
29,900
46,340
–
17,607
–
12,515
106,362
–
–
–
–
–
–
69,000
135,000
–
–
–
–
–
–
–
–
–
368,942
548,202
120,000
207,971
60,000
18.7
24.6
–
–
–
117,925
298,786
39.5
– 204,000
117,925 1,603,901
1 30 June 2022 bonus values were determined at the discretion of the Board based on performance.
Year ended 30 June 2021
Short-term
benefits,
cash salary and
fees
$
Accrued
Long
Service
Leave
$
Superannuation
(post-
employment
benefit)
$
Termination
payments
$
Bonus
$
Share-
based
payments
$
Percentage
Performance
Related
%
Total
$
Name
Directors
G Melrose
M Dilizia
J Graham
J Ward
A Dunton
Executives
J Prendergast
120,000
–
2,538
–
240
99,805
216,346
35,646
294,314
27,539
139,123
8,858
60,000
–
–
20,553
27,960
–
13,217
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
102,584
91,4739 1,187,284
1,372,109 1,721,922
1,326,372 1,446,372
365,896
527,093
752,954
812,954
243,930
375,130
–
–
–
–
–
–
–
A Kollaras1
131,200
1 Entered into a consultancy agreement with the Company effective 1 August 2019.
963,521
72,043
61,969
99,805
– 4,976,000 6,173,340
21
RECCE PHARMACEUTICALS ANNUAL REPORT 2022 (D) Share-Based Remuneration
Year ended 30 June 2022
(i) Issue of ordinary shares
There were no ordinary shares issued to Directors or KMP as part of their compensation during the year ended
30 June 2022.
(ii) Issue of options
The following options were issued on 11 February 2022 as part of remuneration under a share-based payment.
Name
Executives
A Kollaras
Options Issued
No.
$
200,000
200,000
117,925
117,925
The terms and conditions of each grant of options affecting remuneration in the current reporting period are as follows:
– exercise price: $1.56
– grant date 11 February 2022
– grant date share price: $1.15
– value per option at grant date $0.58963
– issue date 11 February 2022
– dividend yield: 0.0%;
– risk-free rate based on the Australian Treasury bond rate for five years, to align with the term of the options: 1.92%;
– expected volatility derived from the share volatility of compatible listed companies over five years, to align with the
term of the options: 68.94%; and
– expected life of the Share Option: five years.
(iii) Issue of performance shares
There were no performance shares issued to Directors or KMP as part of their compensation during the year ended 30
June 2022.
1,356,249 Class C and 1,356,249 Class D performance shares were converted to ordinary shares during the year. These
related to ex-employees and the performance shares were fully expensed during the 30 June 2016 financial year.
Year ended 30 June 2021
(i) Issue of ordinary shares
The following shares were issued on 4 December 2020 after approval at the Annual General Meeting on 30 November
2020 as part of remuneration under a share-based payment.
Shares issued
No.
$
60,000
60,000
66,900
66,900
Name
Executives
A Dunton
22
RECCE PHARMACEUTICALS ANNUAL REPORT 2022Directors’ Report ContinuedFor the year ended 30 June 2022 (ii) Issue of options
The following options were issued on 22 February 2021 after approval at the Annual General Meeting on 30 November
2020 as part of remuneration under a share-based payment.
Name
Directors
J Graham
M Dilizia
A Dunton
J Prendergast
J Ward
Executives
A Kollaras
Options Issued
No.
$
2,250,000
1,500,000
1,125,000
2,175,000
600,000
1,372,109
914,739
686,054
1,326,372
365,896
400,000
243,930
8,050,000
4,909,100
The terms and conditions of each grant of options affecting remuneration in the current reporting period are as follows:
– exercise price: $1.56
– grant date 9 October 2020
– grant date share price: $1.115
– value per option at grant date $0.6098
– issue date 22 February 2021
– dividend yield: 0.0%;
– risk-free rate based on the Australian Treasury bond rate for five years, to align with the term of the options: 0.32%;
– expected volatility derived from the share volatility of compatible listed companies over five years, to align with the
term of the options: 77.0%; and
– expected life of the Share Option: five years.
(iii) Issue of performance shares
There were no performance shares issued to Directors or KMP as part of their compensation during the year ended
30 June 2021.
Details of Performance Shares issued
There were no new performance shares issued during the year ended 30 June 2021. The Class B performance shares
lapsed whilst the Class C and Class D performance shares were converted to ordinary shares.
A summary of performance shares which were on issue is as follows:
Name
Directors
G Melrose
M Dilizia
J Graham
Value per performance share
Performance Shares
Class B
Class C
Class D
6,075,000
6,075,000
6,075,000
577,212
745,962
7,398,174
0.00¹
577,212
745,962
7,398,174
0.111²
577,212
745,962
7,398,174
$0.054²
1 Class B performance shares have a non-market vesting condition i.e. the Company is awarded the US Food and Drug Administration’s
Investigational New Drug (IND) status on or before 19 August 2020. These shares lapsed during the year.
2 The Class C and Class D performance shares were expensed in full during the 30 June 2016 financial year. These were converted to
ordinary shares during the current financial year.
23
RECCE PHARMACEUTICALS ANNUAL REPORT 2022 The Trinomial option pricing model has been used to calculate the value of the performance shares.
The following assumptions were used:
Underlying share price
20-day VWAP barrier
Term
Risk-free rate
Number of Initial Performance Shares Issued
Probability of reaching milestone
Equity Instrument Disclosures Relating to KMP
(a) Ordinary Shares
Class C
$0.20
$0.60
5 Years
2.18%
Class D
$0.20
$1.20
5 Years
2.18%
8,754,423
8,754,423
N/A
N/A
The movement of the numbers of shares in the Company for the year ended 30 June 2022 held by the Directors of the
Company and other KMP of the Group, including their personally related parties, are set out below:
Name
Directors
M Dilizia
J Graham
J Prendergast
J Ward
A Dunton
Executives
A Kollaras
Balance at
1 July 2021
Net Change
Other
Share-based
Payment
Conversion of
Class C and D
Performance Shares
Balance at
30 June 2022
3,543,485
6,031,932
250,000
158,966
60,000
67,155
10,121,538
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
3,543,485
6,031,932
250,000
158,966
60,000
67,155
10,121,538
(b) Performance Shares
There are no performance shares outstanding as at 30 June 2022.
(c) Options
The movement of the numbers of options in the Company for the year ended 30 June 2022 held by the Directors of
the Company and other KMP of the Group, including their personally related parties, are set out below:
Directors
J Graham
M Dilizia
A Dunton
J Prendergast
J Ward
Executives
A Kollaras
24
Balance at
1 July 2021
Share-based
payments
Balance at
30 June 2022
2,250,000
1,500,000
1,125,000
2,175,000
600,000
–
–
–
–
–
2,250,000
1,500,000
1,125,000
2,175,000
600,000
400,000
200,000
600,000
8,050,000
200,000
8,250,000
RECCE PHARMACEUTICALS ANNUAL REPORT 2022Directors’ Report ContinuedFor the year ended 30 June 2022 (E) Other Transactions with KMP
During the financial year, consulting fees for technical services totalling $727,348 (2021:$406,770) were paid to an
entity associated with Dr A Dunton. All payments were made on normal commercial terms and conditions.
(F) Other Information
Loans to key management personnel
An amount of $388,734 (2021: $Nil) was advanced to Mr James Graham as a loan. The amount outstanding at reporting
date including accrued interest was $400,324 (2021: $Nil). The loan is interest bearing at the rate of 5% per annum.
Interest accrued on the loan amounted to $11,500 (2021: $Nil). The loan is repayable within 12 months of reporting date.
At year end, expense advances repayable by Mr James Graham totalled $Nil (2021: $40,193).
There were no other loans, payables, receivables or other transactions at the end of the financial year with Directors
and other KMP and their related parties of the Company or the Group.
Two strikes Rule in Respect to the Adoption of the Remuneration Report
The Corporations Act 2001 includes a ‘two strikes’ rule with regard to the adoption of Remuneration Reports. The
‘two strikes’ rule provides that if 25% or more of the votes cast on the resolution to adopt the Remuneration Report at
two consecutive Annual General Meetings are against the resolution, the Company must at the later Annual General
Meeting put a resolution to the shareholders proposing to convene another shareholder meeting to consider the spill
of the Board (‘Spill Resolution’).
Under the Corporations Act 2001, the Company must have a minimum of three Directors at all times. The Corporations
Act 2001, provides guidance in circumstances where either or both of the Directors are not re-elected by way of
ordinary resolution, then they will be taken to have been appointed as Directors by resolutions passed at the Spill
Meeting so that the Company maintains the required three Directors.
For the purposes of determining the length of time in office for future retirements by rotation, each Director who is
re-elected at the Spill Meeting is considered to have been in office from the time of their previous rotation.
At the Annual General Meeting held in November 2019, the Company received a ‘Yes’ vote of more than 96.3% on its
Remuneration Report for the 2019 financial year. No such vote was received in the November 2021 Annual General
Meeting for the 2021 financial year. The group did not receive any specific remuneration related feedback from
shareholders at either meeting.
No remuneration consultants were engaged during the year.
End of audited remuneration report.
Rounding of amounts
In accordance with ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191, the amounts
in the Directors' Report have been rounded to the nearest dollar, unless otherwise stated.
Auditor's independence declaration
A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set
out on page 26.
No non-audit services were provided during the year.
This report is made in accordance with a resolution of the Board of Directors.
Dr John Prendergast
Non-Executive Chairman
31 August 2022
25
RECCE PHARMACEUTICALS ANNUAL REPORT 2022 Auditor’s Independence Declaration
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
Level 9, Mia Yellagonga Tower 2
5 Spring Street
Perth WA 6000
PO Box 700 West Perth WA 6872
Australia
DECLARATION OF INDEPENDENCE BY NEIL SMITH TO THE DIRECTORS OF RECCE PHARMACEUTICALS
LTD
As lead auditor of Recce Pharmaceuticals Ltd for the year ended 30 June 2022, I declare that, to the
best of my knowledge and belief, there have been:
1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
2. No contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Recce Pharmaceuticals Ltd and the entities it controlled during the
period.
Neil Smith
Director
BDO Audit (WA) Pty Ltd
Perth
31 August 2022
26
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 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 (WA) 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
RECCE PHARMACEUTICALS ANNUAL REPORT 2022 Corporate Governance Statement
This corporate governance statement sets out Recce
Pharmaceutical Limited’s (Company) current compliance
with the ASX Corporate Governance Council’s Corporate
Governance Principles and Recommendations (Fourth
Edition) (ASX Principles and Recommendations). The
ASX Principles and Recommendations are not mandatory.
However, this corporate governance statement discloses
the extent to which the Company has followed the
ASX Principles and Recommendations. This corporate
governance statement is current as 31 August 2022
and has been approved by the board of the Company
(Board).
ASX PRINCIPLES AND RECOMMENDATIONS
COMPLY
(Yes/No)
EXPLANATION
1: Lay solid foundations for management and oversight
1.1 A listed entity should have and disclose a
YES
board charter setting out:
The Board is responsible for the corporate
governance of the Company.
(a) the respective roles and responsibilities of its
board and management; and
(b) those matters expressly reserved to the board
and those delegated to management.
1.2 A listed entity should:
YES
(a) undertake appropriate checks before
appointing a director or senior executive, or
putting someone forward for election as a
director; and
(b) provide security holders with all material
information in its possession relevant to a
decision on whether or not to elect or re-elect
a director.
1.3 A listed entity should have a written
YES
agreement with each director and senior
executive setting out the terms of their
appointment.
1.4 The company secretary of a listed entity
YES
should be accountable directly to the board,
through the chair, on all matters to do with the
proper functioning of the board.
The Board has adopted a Board Charter which
outlines the manner in which its powers and
responsibilities will be exercised, discharged or
delegated, having regard to principles of good
corporate governance and applicable laws.
A copy of the Board Charter is available on the
Company’s website at the following URL: https://
www.recce.com.au/index.php/company/corporate-
governance.
(a) The Nomination and Remuneration Committee
is responsible for recommendations to the
Board for the selection and appointment
of members of the Board. The Company’s
Nomination and Remuneration Committee
Charter requires the Nomination and
Remuneration Committee to undertake
appropriate checks before the Board appoints
a person or puts forward a candidate to
security holders for election as a director.
(b) All material information relevant to the decision
on whether or not to elect any potential
directors, including information relating to their
qualifications, experience and proposed roles
within the Board are provided to shareholders
in the Company’s notices of meetings.
Directors and senior executives of the Company
are given letters of appointment and/or service
agreements prior to their engagement with
the Company which sets out the terms of their
appointment.
The Company Secretary position is directly
accountable to the Board through the Chairperson
on all matters relevant to the proper functioning
of the Board. The Company Secretary is accessible
to all Directors.
27
RECCE PHARMACEUTICALS ANNUAL REPORT 2022 ASX PRINCIPLES AND RECOMMENDATIONS
COMPLY
(Yes/No)
EXPLANATION
1.5 A listed entity should:
NO
(a) The Company has adopted a Diversity Policy
(a) Have and disclose a diversity policy which
includes requirements for the board or a
relevant committee of the board to set
measurable objectives for achieving gender
diversity and to assess annually both the
objectives and the entity’s progress in
achieving them;
(a) through its board or a committee of the board
set measurable objectives for achieving gender
diversity in the composition of its board, senior
executives and workforce generally; and
(b) disclose in relation to each reporting period:
(1) the measurable objectives set for that
period to achieve gender diversity;
(2) the entity’s progress towards achieving
those objectives; and
(3) either:
(A) the respective proportions of men
and women on the board, in senior
executive positions and across the
whole workforce (including how the
entity has defined ‘senior executive’ for
these purposes); or
(B) if the entity is a ‘relevant employer’
under the Workplace Gender Equality
Act, the entity’s most recent ‘Gender
Equality Indicators’, as defined in and
published under that Act.
If the entity was in the S&P/ASX 300 Index at
the commencement of the reporting period,
the measurable objective for achieving gender
diversity in the composition of its board should be
to have not less than 30% of its directors of each
gender within a specified period.
which complies with the guidelines prescribed
by the ASX Corporate Governance Council. The
Diversity Policy is available on the Company’s
website at https://recce.com.au/index.php/
company/corporate-governance.
(b) The Diversity Policy:
(i) provides a framework for the Company
to set and achieve measurable objectives
for achieving diversity;
(ii) provides for the monitoring and evaluation
of the scope and currency of the Diversity
Policy. The Company is responsible for
implementing, monitoring and reporting
on the measurable objectives.
A copy of the Diversity Policy is available
on the Company’s website at the following
URL: https://www.recce.com.au/index.php/
company/corporate-governance.
(c) As of 30 June 2022, the respective proportions
of men and women on the Board, in Senior
Executive positions and across the whole
organisation are set out below.
(i) 80% of the Company’s Board were male
and 20% were female;
(ii) 67% of the Company’s Senior Executives
were male and 33% were female; and
(iii) 31% of the Group’s entire workforce
(including Board members) were female
and 69% were male.
Senior Executives are defined as the Executive
Directors and those with a direct report into the
CEO.
28
RECCE PHARMACEUTICALS ANNUAL REPORT 2022Corporate Governance Statement Continued
ASX PRINCIPLES AND RECOMMENDATIONS
COMPLY
(Yes/No)
EXPLANATION
1.6 A listed entity should:
YES
(a) The Nomination and Remuneration Committee
(a) have and disclose a process for periodically
evaluating the performance of the board, its
committees and individual directors; and
(b) disclose, for each reporting period, whether a
performance evaluation has been undertaken
in the reporting period in accordance with that
process during or in respect of that period.
is responsible for evaluating the performance
of the Board and individual Directors on an
annual basis. The process for this is set out in
the Company’s Nomination and Remuneration
Committee Charter which is available on the
Company’s website at: https://www.recce.com.
au/index.php/company/corporate-governance.
(b) An informal evaluation of the performance of
the board, its committees and its individual
Directors was conducted in relation to the
reporting period.
1.7 A listed entity should:
YES
(a) The Nomination and Remuneration Committee
(a) have and disclose a process for periodically
evaluating the performance of its senior
executives at least once every reporting
period; and
(b) disclose, in relation to each reporting period,
whether a performance evaluation has
been undertaken in the reporting period in
accordance with that process during or in
respect of that period.
is responsible for evaluating the performance
of Senior Executives on an annual basis in
accordance with the Company’s Nomination
and Remuneration Committee Charter which
is available on the Company’s website at:
https://www.recce.com.au/index.php/company/
corporate-governance.
(b) An evaluation of the Company’s Senior
Executives was conducted in relation to the
reporting period.
29
RECCE PHARMACEUTICALS ANNUAL REPORT 2022 ASX PRINCIPLES AND RECOMMENDATIONS
COMPLY
(Yes/No)
EXPLANATION
2: Structure the Board to be effective and add value
2.1 The board of a listed entity should:
YES
(a) have a nomination committee which:
(1) has at least three members, a majority of
whom are independent directors; and
(2) is chaired by an independent director,
and disclose:
(3) the charter of the committee;
The Company has established a Nomination and
Remuneration Committee with Dr Alan Dunton, an
independent Director, as Chair of the Committee.
The Committee has three members, who are:
(a) Dr Alan Dunton – Independent Non-executive
Director;
(b) Dr John Prendergast – Independent Non-
executive Director; and
(4) the members of the committee; and
(c) Mr James Graham – Managing Director and
(5) as at the end of each reporting period,
the number of times the committee met
throughout the period and the individual
attendances of the members at those
meetings; or
(b) if it does not have a nomination committee,
disclose that fact and the processes it employs
to address board succession issues and to
ensure that the board has the appropriate
balance of skills, knowledge, experience,
independence and diversity to enable it
to discharge its duties and responsibilities
effectively.
2.2 A listed entity should have and disclose a
YES
board skills matrix setting out the mix of skills
and diversity that the Board currently has or is
looking to achieve in its membership.
2.3 A listed entity should disclose:
YES
(a) the names of the directors considered by
the board to be independent directors;
(b) if a director has an interest, position,
association or relationship of the type
described in Box 2.3 but the board is of the
opinion that it does not compromise the
independence of the director, the nature of the
interest, position, association or relationship in
question and an explanation of why the board
is of that opinion; and
(c) the length of service of each director.
CEO.
The attendance at each committee meeting is
disclosed in the Company’s Annual Report. A copy
of the Nomination and Remuneration Committee
Charter is available on the Company’s website at
the following URL: https://www.recce.com.au/
index.php/company/corporate-governance.
The Board strives to ensure that it is comprised
of Directors with a blend of skills, experience and
attributes appropriate for the Company and its
business. The Company has a board skills matrix,
setting out the mix of skills and diversity of the
current Directors of the Company.
A copy of the Board Skills Matrix is available on the
Company website at the following URL: https://
www.recce.com.au/index.php/company/corporate-
governance.
(a) Dr John Prendergast and Dr Alan Dunton, are
the only Directors of the Company considered
independent.
(b) Dr John Prendergast and Dr Alan Dunton,
are the only two Directors of the Company
considered independent and does not have an
interest, position, association or relationship
of the type described in Box 2.3 of the ASX
Principles and Recommendations. The Board
assesses the independence of new Directors
upon appointment and reviews Director
independence as appropriate.
(c) Details of each Director (including their length
of service) is disclosed in the Company’s
Annual Report.
30
RECCE PHARMACEUTICALS ANNUAL REPORT 2022Corporate Governance Statement Continued ASX PRINCIPLES AND RECOMMENDATIONS
COMPLY
(Yes/No)
EXPLANATION
2.4 A majority of the board of a listed entity
NO
should be independent directors.
The Board Charter requires that where practical
the majority of the Board will be independent.
The Board currently comprises a total of five
Directors, of whom two are considered to be
independent, being Dr John Prendergast and
Dr Alan Dunton.
The Board does not currently consider an
independent majority of the Board to be
appropriate given:
(a) the magnitude of the Company’s operations;
and
(b) the relevant skills and experience of Ms Dilizia,
Mr Graham Dr Ward, Dr Prendergast and
Dr Dunton mean that the Board is
appropriately skilled at this stage, to further
the progress and development of the Company.
2.5 The chair of the board of a listed entity should
YES
be an independent director and, in particular,
should not be the same person as the CEO
of the entity.
The Company’s Non-Executive Chairman,
Dr Prendergast, satisfies the ASX Principles and
Recommendations definition of an independent
director and is not the CEO of the Company.
2.6 A listed entity should have a program for
YES
inducting new directors and for periodically
reviewing whether there is a need for
existing directors to undertake professional
development to maintain the skills and
knowledge needed to perform their role
as directors effectively.
The Nomination and Remuneration Committee
is responsible to the Board for reviewing and
recommending to the Board induction and
professional development programs and
procedures for Directors to ensure that they can
effectively discharge their responsibilities.
As a result, the Company has in place a program
for the induction of new Directors which is tailored
to each new Director depending on their personal
requirements, background skills, qualifications
and experience and includes the provision of a
formal letter of appointment and an induction
pack containing sufficient information to allow
the new Director to gain an understanding of the
business of the Company, and the roles, duties
and responsibilities of Directors and the Executive
Team.
All Directors are encouraged to undergo continual
professional development and, subject to prior
approval by the Chairman, all Directors have
access to numerous resources and professional
development training to address any skills gaps.
31
RECCE PHARMACEUTICALS ANNUAL REPORT 2022 ASX PRINCIPLES AND RECOMMENDATIONS
COMPLY
(Yes/No)
EXPLANATION
3: Instill a culture of acting lawfully, ethically and responsibly
3.1 A listed entity should articulate and disclose
YES
The Company values are:
its values.
3.2 A listed entity should:
YES
(a) have and disclose a code of conduct for its
directors, senior executives and employees;
and
(b) ensure that the board or a committee of the
board is informed of any material breaches
of that code.
3.3 A listed entity should:
YES
(a) have and disclose a whistleblower policy; and
(b) ensure that the board or a committee of the
board is informed of any material incidents
reported under that policy.
(a) Integrity;
(b) Inclusivity;
(c) Innovation;
(d) Respect; and
(e) Accountability.
The Company values are published on the
Company’s website at the following URL: https://
www.recce.com.au/index.php/company/corporate-
governance
(a) The Board is committed to the establishment
and maintenance of appropriate ethical
standards in order to instil confidence in
both clients and the community in the way
the Company conducts its business. These
standards are encapsulated in the Code of
Conduct which outlines how the Company
expects each person who represents it to
behave and conduct business. The Company
has a Code of Conduct which applies to all
Directors, senior executives and employees
and is available on the Company’s website at
the following URL: https://www.recce.com.au/
index.php/company/corporate-governance .
(b) The Company ensures that the Board is
informed of any material breaches under the
Code of Conduct Policy.
(a) The Company has adopted a Whistleblower
Protection Policy which establishes a system
for the reporting, investigation and rectification
of wrongdoing. A copy of the Whistleblower
Policy is available on the Company’s website at
the following URL: https://www.recce.com.au/
index.php/company/corporate-governance.
(b) Through ongoing reporting, whilst preserving
confidentiality, the Board is provided
periodic reports on any disclosures under
the Whistleblower Policy.
32
RECCE PHARMACEUTICALS ANNUAL REPORT 2022Corporate Governance Statement Continued
ASX PRINCIPLES AND RECOMMENDATIONS
3.4 A listed entity should:
(a) have and disclose an anti-bribery and
corruption policy; and
(b) ensure that the board or committee of the
board is informed of any material breaches
of that policy.
COMPLY
(Yes/No)
YES
EXPLANATION
(a) The Company has adopted an Anti-bribery
and Corruption Policy which sets out the
Company’s policy in relation to bribery,
corruption and related improper conduct and
establishes a process for the reporting of such
conduct. The Anti-bribery and Corruption
Policy is available on the Company’s website at:
https://www.recce.com.au/index.php/company/
corporate-governance.
(b) Through on-going reporting, the Company
ensures that the Board is informed of any
material breaches under the Anti-bribery and
Corruption Policy.
4: Safeguard the integrity of corporate reports
4.1 The board of a listed entity should:
YES
(a) have an audit committee which:
(1) has at least three members, all of whom
are non-executive directors and a majority
of whom are independent directors; and
(2) is chaired by an independent director, who
is not the chair of the board,
and disclose:
The Company has established an Audit and Risk
Management Committee with Dr Alan Dunton, an
independent Director, as Chair of the Committee.
The Committee has three members, who are:
(a) Dr Alan Dunton – Independent Non-executive
Director;
(b) Dr John Prendergast – Independent
Non-executive Director; and
(c) Mr James Graham – Managing Director
(3) the charter of the committee;
and CEO.
The attendance at each committee meeting is
disclosed in the Company’s Annual Report. A copy
of the Audit and Risk Management Committee
Charter is available on the Company’s website at
https://www.recce.com.au/index.php/company/
corporate-governance.
(4) the relevant qualifications and experience
of the members of the committee; and
(5) in relation to each reporting period, the
number of times the committee met
throughout the period and the individual
attendances of the members at those
meetings; or
(b) if it does not have an audit committee, disclose
that fact and the processes it employs that
independently verify and safeguard the
integrity of its corporate reporting, including
the processes for the appointment and
removal of the external auditor and the
rotation of the audit engagement partner.
N/A
33
RECCE PHARMACEUTICALS ANNUAL REPORT 2022
ASX PRINCIPLES AND RECOMMENDATIONS
COMPLY
(Yes/No)
EXPLANATION
4.2 The board of a listed entity should, before
YES
it approves the entity’s financial statements
for a financial period, receive from its CEO
and CFO a declaration that, in their opinion,
the financial records of the entity have been
properly maintained and that the financial
statements comply with the appropriate
accounting standards and give a true and fair
view of the financial position and performance
of the entity and that the opinion has been
formed on the basis of a sound system of risk
management and internal control which is
operating effectively.
4.3 A listed entity should disclose its process to
verify the integrity of any periodic corporate
report it releases to the market that is not
audited or reviewed by an external auditor.
YES
Prior to the execution of the financial statements
of the Company, the Company’s Executive
Director and CFO provided the Board with
written assurances that the declaration provided
in accordance with section 295A of the
Corporations Act is founded on a sound system
of risk management and internal controls which
is operating effectively in all material aspects in
relation to the Company’s financial reporting risks.
The Board ensures that any periodic corporate
report the Company releases to the market that
has not been subject to audit or review by an
external auditor discloses the process taken to
verify the integrity of its content.
The Company releases Half Year Financial Reports
which are reviewed by external auditor, BDO, and
Full Year Financial Reports which are audited by
external auditor BDO.
The Company is committed to providing clear,
concise and effective disclosure in its corporate
reports. The Company’s goal is that periodic
corporate reports will be accurate, balanced and
provide investors with appropriate information
to make informed investment decisions. The
Company’s process for verifying unaudited periodic
corporate reports is as follows:
• reports are prepared by or under the supervision
of subject matter experts;
• material statements in the reports are reviewed
for accuracy and material requirements and
appropriately interrogated;
• other than administrative announcements all the
announcements must be approved by the Board.
This process is intended to ensure that all
applicable laws, regulations and company policies
have been complied with and that the source of
the information is able to be verified and that
appropriate approvals have been obtained before
a report is released to the market.
34
RECCE PHARMACEUTICALS ANNUAL REPORT 2022Corporate Governance Statement Continued ASX PRINCIPLES AND RECOMMENDATIONS
COMPLY
(Yes/No)
EXPLANATION
5: Make timely and balanced disclosure
5.1 A listed entity should have and disclose
YES
a written policy for complying with its
continuous disclosure obligations under
listing rule 3.1.
5.2 A listed entity should ensure that its board
receives copies of all material market
announcements promptly after they have
been made.
5.3 A listed entity that gives a new and substantive
investor or analyst presentation should release
a copy of the presentation materials on the
ASX Market Announcements Platform ahead
of the presentation.
YES
YES
6: Respect the rights of security holders
6.1 A listed entity should provide information
YES
about itself and its governance to investors
via its website.
6.2 A listed entity should have an investor relations
program that facilitates effective two-way
communication with investors.
YES
The Company is committed to providing timely,
complete and accurate disclosure of information
to allow a fair and well-informed market in its
securities and compliance with the continuous
disclosure requirements imposed by law, including
the Corporations Act and the ASX Listing Rules.
A copy of the Company’s Continuous Disclosure
Policy is available at the following URL: https://
www.recce.com.au/index.php/company/corporate-
governance.
The Company ensure that the Board receives
copies of all material market announcements
promptly after they have been made.
The Company ensure that ahead of any new and
substantive investor or analyst presentations, a
copy of the presentations materials are released
to ASX Announcement Platform.
The Company provides information about itself and
its governance to its investors on the Company’s
website via the following URL: https://www.recce.
com.au/index.php/company/corporate-governance.
The Company will regularly update the website and
contents therein as deemed necessary.
The Company has adopted a Shareholder
Communications Strategy which aims to promote
and facilitate effective two-way communication
with its investors. The Strategy outlines a range
of ways in which information is communicated to
shareholders.
A copy of the Company’s Shareholder
Communications Strategy policy is available on the
Company’s website at: https://www.recce.com.au/
index.php/company/corporate-governance.
35
RECCE PHARMACEUTICALS ANNUAL REPORT 2022 ASX PRINCIPLES AND RECOMMENDATIONS
6.3 A listed entity should disclose how it facilitates
and encourages participation at meetings of
security holders.
COMPLY
(Yes/No)
YES
6.4 A listed entity should ensure that all
YES
substantive resolutions at a meeting of
security holders are decided by a poll rather
than by a show of hands.
EXPLANATION
The Company encourages shareholder participate
at the Company’s general meetings through various
means including:
(a) having the opportunity to ask questions of
Directors at all general meetings;
(b) ensuring that the auditor is present at AGMs
to take shareholder questions on any issue
relevant to their capacity as auditor;
(c) ensuring that Directors are available to answer
shareholder questions submitted by telephone,
email and other means (where appropriate);
and
(d) providing Shareholders with the option of
appointing a proxy to vote on their behalf.
Traditionally, the key forum for two-way
communication between the Company and its
shareholders is its AGM.
All resolutions at a meeting of security holders are
decided by a poll rather than a show of hands.
6.5 A listed entity should give security holders the
option to receive communications from, and
send communications to, the entity and its
security registry electronically.
YES
Shareholders can register with the Company to
receive email notifications when an announcement
is made by the Company to the ASX.
Shareholders can also elect to receive electronic
communications via the Company’s registry,
Automic Registry Services.
36
RECCE PHARMACEUTICALS ANNUAL REPORT 2022Corporate Governance Statement Continued ASX PRINCIPLES AND RECOMMENDATIONS
COMPLY
(Yes/No)
EXPLANATION
7: Recognise and manage risk
7.1 The Board of a listed entity should:
YES
(a) have a committee or committees to oversee risk,
each of which:
(1) has at least three members, a majority of
whom are independent directors; and
(2) is chaired by an independent director,
and disclose:
The Company has established an Audit and Risk
Management Committee with Dr Alan Dunton, an
independent Director, as Chair of the Committee.
The Committee has three members, who are:
(a) Dr Alan Dunton – Independent Non-executive
Director;
(b) Dr John Prendergast – Independent Non-
executive Director; and
(3) the charter of the committee;
(c) Mr James Graham – Managing Director and
(4) the members of the committee; and
(5) as at the end of each reporting period,
the number of times the committee met
throughout the period and the individual
attendances of the members at those
meetings; or
(b) if it does not have a risk committee or
N/A
committees that satisfy (a) above, disclose that
fact and the processes it employs for overseeing
the entity’s risk management framework.
7.2 The board or a committee of the board should:
YES
(a) review the entity’s risk management framework
at least annually to satisfy itself that it continues
to be sound and that the entity is operating with
due regard to the risk appetite set by the board;
and
(b) disclose in relation to each reporting period,
whether such a review has taken place.
CEO.
The attendance at each committee meeting is
disclosed in the Company’s Annual Report. A copy
of the Audit and Risk Management Committee
Charter is available on the Company’s website at:
https://www.recce.com.au/index.php/company/
corporate-governance.
(a) The Audit and Risk Management Committee
Charter sets out a requirement for the Audit
and Risk Management Committee to review the
Company’s risk management framework on an
annual basis.
The Company monitors, evaluates and seeks
to improve its risk management and internal
control processes in line with the processes set
out in its Risk Management Policy, a copy of
which is available on the Company’s website at:
https://www.recce.com.au/index.php/company/
corporate-governance .
In addition, the Company has a number of
other policies that directly or indirectly serve
to reduce and/or manage risk, including:
(i) Continuous Disclosure Policy;
(ii) Code of Conduct; and
(iii) Trading Policy.
(b) The Audit and Risk Management Committee
completed such a review during the current
reporting period. Having conducted such
reviews throughout the reporting period
the Audit and Risk Management Committee
resolved that the Company’s risk management
framework continues to be sound.
37
RECCE PHARMACEUTICALS ANNUAL REPORT 2022
COMPLY
(Yes/No)
YES
ASX PRINCIPLES AND RECOMMENDATIONS
7.3 A listed entity should disclose:
(a) if it has an internal audit function, how the
function is structured and what role it performs;
or
(b) if it does not have an internal audit function, that
fact and the processes it employs for evaluating
and continually improving the effectiveness of
its governance, risk management and internal
control processes.
7.4 A listed entity should disclose whether it has
YES
any material exposure to environmental or social
risks and, if it does, how it manages or intends to
manage those risks.
EXPLANATION
The Audit and Risk Management Committee
Charter provides for the Audit and Risk
Management Committee to monitor the need for
an internal audit function. At this stage, due to the
current size and nature of the existing Board and
the magnitude of the Company’s operations the
Company does not have an internal audit function.
The Company has adopted a Risk Management
Policy which the Company follows. The Board of
the Company and the Audit and Risk Management
Committee will periodically review the Company’s
operations to evaluate the effectiveness of risk
management and internal control processes of
the Company. In addition, the Audit and Risk
Management Committee will directly monitor the
potential exposures facing the Company through
ongoing reporting by the CFO.
For each reporting period the Company’s external
auditor also conducts a control review to consider
and report on the risks facing the Company and
the controls the Company has in place to mitigate
those risks.
All material risks to economic, environmental and
social sustainability risks will be announced to the
market, in accordance with the requirements of the
ASX Listing Rules and otherwise within the Annual
Report.
38
RECCE PHARMACEUTICALS ANNUAL REPORT 2022Corporate Governance Statement Continued ASX PRINCIPLES AND RECOMMENDATIONS
COMPLY
(Yes/No)
EXPLANATION
8: Remunerate fairly and responsibly
8.1 The Board of a listed entity should:
YES
(a) have a remuneration committee which:
(1) has at least three members, a majority of
whom are independent directors; and
The Company has established a Nomination and
Remuneration Committee with Dr Alan Dunton, an
independent Director, as Chair of the Committee.
The Committee has three members, who are:
(a) Dr Alan Dunton – Independent Non-executive
(2) is chaired by an independent director,
Director;
and disclose:
(3) the charter of the committee;
(4) the members of the committee; and
(5) as at the end of each reporting period,
the number of times the committee met
throughout the period and the individual
attendances of the members at those
meetings; or
(b) if it does not have a remuneration
committee, disclose that fact and the
processes it employs for setting the level and
composition of remuneration for directors
and senior executives and ensuring that such
remuneration is appropriate and not excessive.
8.2 A listed entity should separately disclose
its policies and practices regarding the
remuneration of non-executive directors and
the remuneration of executive directors and
other senior executives.
(b) Dr John Prendergast – Independent Non-
executive Director; and
(c) Mr James Graham – Managing Director and
CEO.
The attendance at each committee meeting is
disclosed in the Company’s Annual Report. A copy
of the Nomination and Remuneration Committee
Charter is available on the Company’s website at:
https://www.recce.com.au/index.php/company/
corporate-governance.
YES
The structure and details of Directors’ remuneration
is disclosed in the 2022 Annual Report.
8.3 A listed entity which has an equity-based
YES
remuneration scheme should:
(a) have a policy on whether participants are
permitted to enter into transactions (whether
through the use of derivatives or otherwise)
which limit the economic risk of participating
in the scheme; and
(b) disclose that policy or a summary of it.
The Company’s Nomination and Remuneration
Committee is responsible for the review and
recommendation to the Board of any equity-based
remuneration schemes offered to Directors and
employees of the Company. Further, in accordance
with the Nomination and Remuneration Committee
Charter, the Nomination and Remuneration
Committee is also responsible for recommending,
on a case by case basis, for scheme participants to
enter into transactions (whether through the use of
derivatives or otherwise) which limit the economic
risk of participating in the Scheme. The Company’s
policy in this regard is set out in the Company’s
Nomination and Remuneration Committee Charter,
a copy of which is available on the Company’s
website at: https://www.recce.com.au/index.php/
company/corporate-governance.
39
RECCE PHARMACEUTICALS ANNUAL REPORT 2022 Consolidated Statement of
Profit or Loss and Other Comprehensive Income
For the year ended 30 June 2022
OTHER INCOME
EXPENSES
Laboratory expenses
Employee benefits expenses
Share-based payments expense
Depreciation and amortisation expenses
Travel expenses
Patent related costs
Rental outgoings expenses
Finance costs
Other expenses
Amortisation: Leases
Interest expense: Leases
Advertising and marketing
Donations
Note
5
6
23
13
6
6
14
2022
$
2021
$
3,175,953
1,963,254
(6,223,502)
(2,031,393)
(256,487)
(48,499)
(484,281)
(61,994)
(85,127)
(2,416)
(3,825,574)
(139,173)
(9,510)
(994,274)
–
(5,556,647)
(1,553,387)
(5,217,955)
(120,926)
(14,520)
(100,703)
(41,979)
(2,107)
(1,888,147)
(174,704)
(10,034)
(695,511)
(100,000)
(14,162,230)
(15,476,620)
LOSS BEFORE INCOME TAX
(10,986,277)
(13,513,366)
Income tax expense
LOSS FOR THE YEAR
8
–
–
(10,986,277)
(13,513,366)
Other comprehensive income for the year
–
–
TOTAL COMPREHENSIVE LOSS FOR THE YEAR
(10,986,277)
(13,513,366)
LOSS PER SHARE ATTRIBUTABLE TO THE OWNERS OF RECCE PHARMACEUTICALS:
Basic loss per share for the year
Diluted loss per share for the year
9
9
(6.31)
(6.31)
(8.70)
(8.70)
Cents
Cents
The above consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction
with the accompanying notes
40
RECCE PHARMACEUTICALS ANNUAL REPORT 2022
Consolidated Statement of
Financial Position
As at 30 June 2022
ASSETS
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Other current assets
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Plant and equipment
Right of use asset
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
LIABILITIES
CURRENT LIABILITIES
Trade and other payables
Provisions for employee benefits
Other provisions
Lease Liabilities
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Provisions for employee benefits
Lease Liabilities
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Share capital
Reserves
Accumulated losses
TOTAL EQUITY
Note
2022
$
2021
$
10
11
12
13
14
15
16
17
18
16
18
19
20
11,581,934
182,474
420,334
12,184,742
371,243
67,537
438,780
20,873,040
245,484
62,399
21,180,923
379,397
121,235
500,632
12,623,522
21,681,555
752,013
202,548
1,417,527
74,762
2,446,850
115,312
–
115,312
627,903
337,747
–
112,585
1,078,235
85,215
14,364
99,579
2,562,163
1,177,814
10,061,358
20,503,741
43,968,321
8,550,939
(42,457,902)
43,297,309
8,678,057
(31,471,625)
10,061,358
20,503,741
The above consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
41
RECCE PHARMACEUTICALS ANNUAL REPORT 2022
Consolidated Statement of
Changes in Equity
For the year ended 30 June 2022
Share
Capital
$
Reserves
$
Accumulated
Losses
$
Total
$
BALANCE AT 1 JULY 2020
18,466,336
1,804,502
(17,958,259)
2,312,579
COMPREHENSIVE INCOME:
Loss for the year
Other comprehensive loss
–
–
–
TRANSACTIONS WITH OWNERS IN THEIR
CAPACITY AS OWNERS:
Issuance of shares (net of cash-settled share issue costs) 26,231,325
–
–
–
–
Options issued to KMPs and employees
Options issued to lead manager
Conversion of option into ordinary shares
Share based payments
Transfer from reserve to share capital
–
5,131,685
(3,018,244)
3,018,244
255,249
86,268
–
–
1,276,375
(1,276,375)
24,830,973
6,873,555
(13,513,366)
(13,513,366)
–
–
(13,513,366)
(13,513,366)
–
-
–
–
–
–
–
26,231,325
5,131,685
–
255,249
86,268
–
31,704,527
BALANCE AT 30 JUNE 2021
43,297,309
8,678,057
(31,471,625)
20,503,742
BALANCE AT 1 JULY 2021
43,297,309
8,678,057
(31,471,625)
20,503,742
COMPREHENSIVE INCOME:
Loss for the year
Other comprehensive loss
TRANSACTIONS WITH OWNERS IN THEIR
CAPACITY AS OWNERS:
Options issued to KMPs and employees
Conversion of options into ordinary shares
Transfer from reserve to share capital
–
–
–
–
–
–
(10,986,277)
(10,986,277)
–
–
(10,986,277)
(10,986,277)
–
256,487
287,406
383,605
671,011
–
(383,605)
(127,118)
–
–
–
–
256,487
287,406
–
543,894
BALANCE AT 30 JUNE 2022
43,968,321
8,550,939
(42,457,902)
10,061,358
The above consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
42
RECCE PHARMACEUTICALS ANNUAL REPORT 2022
Consolidated Statement of
Cash Flows
For the year ended 30 June 2022
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from Australian Taxation Office
Payments to suppliers and employees
Interest received
Other income
Note
2022
$
2021
$
3,084,955
(12,174,716)
79,498
–
1,566,031
(9,636,495)
105,757
108,858
NET CASH USED IN OPERATING ACTIVITIES
21
(9,010,263)
(7,855,849)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of plant and equipment
NET CASH USED IN INVESTING ACTIVITIES
CASH FLOWS FROM FINANCING ACTIVITIES
Advances to directors
Other assets
Repayment of lease liabilities
Proceeds from issue of equity securities
Proceeds from exercise of options
24
Transaction costs related to issues of equity or convertible securities
(40,345)
(40,345)
(388,734)
–
(139,173)
(76,007)
(76,007)
–
(40,193)
(174,704)
–
27,950,000
287,408
–
106,276
(1,718,675)
NET CASH (USED IN)/PROVIDED BY FINANCING ACTIVITIES
(240,499)
26,122,704
Net (decrease)/increase in cash and cash equivalents held
(9,291,106)
18,190,848
Cash and cash equivalent at the beginning of the year
20,873,040
2,682,192
CASH AND CASH EQUIVALENTS AT END OF THE YEAR
10
11,581,934
20,873,040
The above consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
43
RECCE PHARMACEUTICALS ANNUAL REPORT 2022
1: Corporate Information
The consolidated financial statements of Recce
Pharmaceuticals Ltd (‘the Company’) and together with
its controlled entities (‘the Group’) for the year ended
30 June 2022.
The Company is a company limited by shares
incorporated in Australia whose shares are publicly
traded on the Australian Securities Exchange (ASX: RCE)
and the Frankfurt Stock Exchange (FSE: R9Q).
(c) Basis of Consolidation
Subsidiaries are all entities (including structured entities)
over which the Group has control. The Group controls
an entity when the Group is exposed to, or has rights
to, variable returns from its involvement with the entity
and has the ability to affect those returns through its
power to direct the activities of the entity. Subsidiaries
are fully consolidated from the date on which control is
transferred to the Group. They are de-consolidated from
the date that control ceases.
2: Significant Accounting Policies
(a) New or amended Accounting Standards and
Interpretations adopted
The Company has adopted all of the new or amended
Accounting Standards and Interpretations issued by the
Australian Accounting Standards Board ('AASB') that
are mandatory for the current reporting period.
Any new or amended Accounting Standards or
Interpretations that are not yet mandatory have not
been early adopted.
(b) Basis of Preparation of the Financial Report
The consolidated financial statements are general
purpose financial statements which have been prepared
in accordance with Australian Accounting Standards,
other authoritative pronouncements of the Australian
Accounting Standards Board and the Corporations
Act 2001.
The financial statements comprise the consolidated
financial statements of the Group. For the purposes of
preparing the consolidated financial statements, the
Company is a for profit entity.
Accounting Standards include Australian Accounting
Standards. Compliance with Australian Accounting
Standards ensures that the consolidated financial
statements and notes of the Company and the Group
comply with International Financial Reporting Standards
(IFRS).
The consolidated financial statements have been
prepared in accordance with the significant accounting
policies disclosed below as adopted by the Group. Such
accounting policies are consistent with the previous year
unless stated otherwise.
The consolidated financial statements have been
prepared on an accrual basis and are based on historical
costs, except for the Consolidated Statement of Cash
Flows.
Historical cost is generally based on the fair values of the
consideration given in exchange for goods and services.
All amounts are presented in Australian dollars, unless
otherwise stated.
Intercompany transactions, balances and unrealised
gains on transactions between the Group are eliminated.
Unrealised losses are also eliminated unless the
transaction provides evidence of the impairment of the
transferred asset. Accounting policies of subsidiaries have
been changed where necessary to ensure consistency
with the policies adopted by the Group.
(d) Foreign Currency Translation
The individual financial statements of each Group entity
are presented in the currency of the primary economic
environment in which the entity operates (its functional
currency). For the purpose of the consolidated financial
statements, the results and financial position of the Group
are expressed in Australian dollars, which is the functional
currency of the Company and the presentation currency
for the consolidated financial statements.
Foreign currency transactions are translated into the
functional currency using the exchange rates ruling at
the date of the transaction. Monetary assets and liabilities
denominated in foreign currencies are retranslated at the
rate of exchange ruling at the end of the reporting year.
Foreign exchange gains and losses resulting from settling
foreign currency transactions, as well as from restating
foreign currency denominated monetary assets and
liabilities, are recognised in profit or loss.
Foreign exchange gains and losses are presented in
profit or loss on a net basis within other income or other
expenses, unless they relate to borrowings, in which case
they are presented as part of finance costs.
Non-monetary items measured at fair value in a foreign
currency are translated using the exchange rates at the
date when fair value was measured.
The functional currency of the subsidiaries is United
States Dollars and British Pounds. At the end of the
reporting year, the assets and liabilities of these overseas
subsidiaries are translated into the presentation currency
of Recce Pharmaceuticals Ltd at the closing rate at the
end of the reporting year and income and expenses are
translated at the weighted average exchange rates for the
year. All resulting exchange differences are recognised in
other comprehensive income as a separate component of
equity (foreign currency translation reserve). On disposal
of a foreign entity, the cumulative exchange differences
recognised in foreign currency translation reserves
relating to that particular foreign operation is recognised
in profit or loss.
44
RECCE PHARMACEUTICALS ANNUAL REPORT 2022Notes to the Consolidated Financial StatementsFor the year ended 30 June 2022 (e) Revenue Recognition
Interest Income
Revenue is recognised as interest accrues using the
effective interest method. The effective interest method
uses the effective interest rate which is the rate that
exactly discounts the estimated future cash receipts over
the expected life of the financial asset.
Research and Development (R&D) Tax Incentive
R&D tax incentives from the government (both Australian
and overseas) are recognised when received or when the
right to receive payment is established.
(f) Income Tax
The income tax expense for the year is the tax payable
on the current year's taxable income based on the
national income tax rate for each jurisdiction adjusted by
changes in deferred tax assets and liabilities attributable
to temporary differences between the tax base of assets
and liabilities and their carrying amounts in the financial
statements, and to unused tax losses.
Deferred tax assets and liabilities are recognised for all
temporary differences, between carrying amounts of
assets and liabilities for financial reporting purposes
and their respective tax bases, at the tax rates expected
to apply when the assets are recovered or liabilities
settled, based on those tax rates which are enacted or
substantively enacted for each jurisdiction. Exceptions
are made for certain temporary differences arising on
initial recognition of an asset or a liability if they arose
in a transaction, other than a business combination,
that at the time of the transaction did not affect either
accounting profit or taxable profit.
Deferred tax assets are only recognised for deductible
temporary differences and unused tax losses if it is
probable that future taxable amounts will be available to
utilise those temporary differences and losses.
Deferred tax assets and liabilities are not recognised for
temporary differences between the carrying amount and
tax bases of investments in subsidiaries, associates and
joint ventures where the parent entity is able to control
the timing of the reversal of the temporary differences
and it is probable that the differences will not reverse in
the foreseeable future.
Current and deferred tax balances relating to amounts
recognised directly in other comprehensive income
and equity are also recognised directly in other
comprehensive income and equity, respectively.
The Company and its wholly-owned subsidiaries have
implemented the tax consolidation legislation for the
whole of the financial year. The Company is the head
entity in the tax consolidated group. These entities are
taxed as a single entity and deferred tax assets and
liabilities have been offset in these consolidated financial
statements.
(g) Impairment of Non-Financial Assets
At the end of each reporting year the Group assesses
whether there is any indication that individual assets are
impaired. Where impairment indicators exist, recoverable
amount is determined and impairment losses are
recognised in profit or loss where the asset's carrying
value exceeds its recoverable amount. Recoverable
amount is the higher of an asset's fair value less costs of
disposal and value in use. For the purpose of 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.
(h) Cash and Cash Equivalents
For the purposes of the Statement of Cash Flows, cash
and cash equivalents includes cash on hand and at bank,
deposits held at call with financial institutions, other
short-term, highly liquid investments with 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 and bank overdrafts.
(i) Fair Values
Fair values may be used for financial asset and liability
measurement as well as for sundry disclosures.
Fair value is the price that would be received to sell
an asset or paid to transfer a liability in an orderly
transaction between market participants at the
measurement date. It is based on the presumption that
the transaction takes place either in the principal market
for the asset or liability or, in the absence of a principal
market, in the most advantageous market. The principal
or most advantageous market must be accessible to, or
by, the Group.
Fair value is measured using the assumptions that market
participants would use when pricing the asset or liability,
assuming that market participants act in their best
economic interest.
The fair value measurement of a non-financial asset takes
into account the market participant's ability to generate
economic benefits by using the asset at its highest and
best use or by selling it to another market participant
that would use the asset at its highest and best use. In
measuring fair value, the group uses valuation techniques
that maximise the use of observable inputs and minimise
the use of unobservable inputs.
(j) Trade and Other Receivables
The Group makes use of a simplified approach in
accounting for trade and other receivables as well as
contract assets and records the loss allowance at the
amount equal to the expected lifetime credit losses. In
using this practical expedient, the Group uses its historical
experience, external indicators and forward looking
information to calculate the expected credit losses using
a provision matrix.
45
RECCE PHARMACEUTICALS ANNUAL REPORT 2022 The Group has determined that the application of
AASB 9 – Financial Instrument' s impairment
requirements does not have a material impact on
receivables.
(k) Plant and Equipment
All plant and equipment is stated at historical cost,
including costs directly attributable to bringing the
asset to the location and condition necessary for it to
be capable of operating in the manner intended by
management, less depreciation and any impairments.
All plant and equipment is stated at historical cost,
including costs directly attributable to bringing the
asset to the location and condition necessary for it to
be capable of operating in the manner intended by
management, less depreciation and any impairments.
Depreciation on other assets is calculated on a reducing
balance basis over the estimated useful life, or in the case
of leasehold improvements and certain leased plant and
equipment, the shorter lease term, as follows:
– Certain laboratory machinery
and equipment
– Office improvements
10 – 15 years
3 – 8 years
Each class of plant and equipment is stated at historical
cost, including costs directly attributable to bringing
the asset to the location and condition necessary for it
to be capable of operating in the manner intended by
management, less depreciation and any impairments.
Depreciation
Depreciation is calculated on a diminishing value basis
over the estimated useful life as follows:
Class of Fixed Asset
Depreciation Rate
– Laboratory machinery
and equipment
8% – 40%
– Office furniture and equipment
5% – 33%
– Computer equipment
– Library and website costs
33% – 67%
20% – 40%
The assets’ residual values and useful lives are reviewed
and adjusted, if appropriate, at the end of each
reporting year.
Gains and losses on disposals are calculated as the
difference between the net disposal proceeds and the
assets' carrying amount and are included in profit or
loss in the year that the item is derecognised.
(l) Research Expenditure
Research costs are expensed as incurred.
(m) Trade and Other Payables
Trade and other payables represent liabilities for goods
and services provided to the Group prior to the year end
and which are unpaid. These amounts are unsecured and
have 30-60 day payment terms. They are recognised
initially at fair value and subsequently measured at
amortised cost using the effective interest method.
(n) Borrowings
All loans and borrowings are initially recognised at fair
value, net of transaction costs incurred. Borrowings are
subsequently measured at amortised cost. Any difference
between the proceeds (net of transaction costs) and the
redemption amount is recognised in profit or loss over
the year of the loans and borrowings using the effective
interest method.
Borrowings are derecognised from the statement of
financial position when the obligation specified in the
contract has been discharged, cancelled or expires. The
difference between the carrying amount of the borrowing
derecognised and the consideration paid is recognised in
profit or loss as other income or finance costs.
All borrowings are classified as current liabilities unless
the Group has an unconditional right to defer settlement
of the liability for at least 12 months after the end of the
reporting year.
(o) Other Liabilities
Other liabilities comprises non-current amounts due to
related parties that do not bear interest and are repayable
within 366 days of the end of the reporting year. As these
are non-interest bearing, fair value at initial recognition
requires an adjustment to discount these loans using a
market-rate of interest for a similar instrument with a
similar credit rating (Group's incremental borrowing rate).
The discount is credited to profit or loss immediately and
amortised using the effective interest method.
(p) Employee Benefit Provisions
Short-term employee benefit obligations
Liabilities for wages and salaries, including non-monetary
benefits, annual leave and accumulating sick leave
expected to be settled wholly within 12 months after the
end of the reporting year are recognised in other liabilities
in respect of employees' services rendered up to the
end of the reporting year and are measured at amounts
expected to be paid when the liabilities are settled.
Liabilities for non-accumulating sick leave are recognised
when leave is taken and measured at the actual rates paid
or payable.
Other long-term employee benefits obligations
Liabilities for long service leave and annual leave are not
expected to be settled wholly within 12 months after the
end of the reporting year. They are recognised as part of
the provision for employee benefits and measured as the
present value of expected future payments to be made
in respect of services provided by employees to the end
of the reporting year. Consideration is given to expected
future salaries and wages levels, experience of employee
departures and years of service. Expected future
payments are discounted using Australian corporate
bond rates at the end of the reporting year with terms to
maturity and currency that match, as closely as possible,
the estimated future cash outflows.
46
RECCE PHARMACEUTICALS ANNUAL REPORT 2022Notes to the Consolidated Financial StatementsFor the year ended 30 June 2022 Regardless of when settlement is expected to occur,
liabilities for long service leave and annual leave
are presented as current liabilities in the statement
of financial position if the entity does not have an
unconditional right to defer settlement for at least
12 months after the end of the reporting year.
(q) Provisions
Provisions are recognised when the group has a present
obligation as a result of a past event, the future sacrifice
of economic benefits is probable, and the amount of the
provision can be reliably estimated.
The amount recognised as a provision is the best estimate
of the consideration required to settle the present
obligation at reporting date, taking into account the risks
and uncertainties surrounding the obligation. Where a
provision is measured using the cash flows estimated to
settle the present obligation, its carrying amount is the
present value of those cash flows.
When some or all of the economic benefits required to
settle a provision are expected to be recovered from a
third party, the receivable is recognised as an asset if it
is virtually certain that recovery will be received and the
amount of the receivable can be measured reliably.
(r) Contributed Equity
Ordinary shares are classified as equity.
Costs directly attributable to the issue of new shares
are shown as a deduction from the equity proceeds, net
of any income tax benefit. Costs directly attributable
to the issue of new shares or options associated with
the acquisition of a business are included as part of the
purchase consideration.
(s) Share-Based Payments
Equity-settled and cash-settled share-based
compensation benefits are provided to employees.
Equity-settled transactions are awards of shares, or
options over shares, that are provided to employees in
exchange for the rendering of services. Cash-settled
transactions are awards of cash for the exchange of
services, where the amount of cash is determined by
reference to the share price.
The cost of equity-settled transactions are measured
at fair value on grant date. Fair value is independently
determined using either the Binomial or Black-Scholes
option pricing model that takes into account the exercise
price, the term of the option, the impact of dilution, the
share price at grant date and expected price volatility of
the underlying share, the expected dividend yield and the
risk free interest rate for the term of the option, together
with non-vesting conditions that do not determine
whether the consolidated entity receives the services that
entitle the employees to receive payment. No account is
taken of any other vesting conditions.
The cost of equity-settled transactions are recognised
as an expense with a corresponding increase in equity
over the vesting period. The cumulative charge to profit
or loss is calculated based on the grant date fair value
of the award, the best estimate of the number of awards
that are likely to vest and the expired portion of the
vesting period. The amount recognised in profit or loss
for the period is the cumulative amount calculated at
each reporting date less amounts already recognised in
previous periods.
The cost of cash-settled transactions is initially, and at
each reporting date until vested, determined by applying
either the Binomial or Black-Scholes option pricing
model, taking into consideration the terms and conditions
on which the award was granted. The cumulative
charge to profit or loss until settlement of the liability is
calculated as follows:
– during the vesting period, the liability at each reporting
date is the fair value of the award at that date
multiplied by the expired portion of the vesting period.
– from the end of the vesting period until settlement of
the award, the liability is the full fair value of the liability
at the reporting date.
All changes in the liability are recognised in profit or loss.
The ultimate cost of cash-settled transactions is the cash
paid to settle the liability.
Market conditions are taken into consideration in
determining fair value. Therefore any awards subject to
market conditions are considered to vest irrespective
of whether or not that market condition has been met,
provided all other conditions are satisfied.
If equity-settled awards are modified, as a minimum
an expense is recognised as if the modification has
not been made. An additional expense is recognised,
over the remaining vesting period, for any modification
that increases the total fair value of the share-based
compensation benefit as at the date of modification.
If the non-vesting condition is within the control of the
consolidated entity or employee, the failure to satisfy
the condition is treated as a cancellation. If the condition
is not within the control of the consolidated entity or
employee and is not satisfied during the vesting period,
any remaining expense for the award is recognised
over the remaining vesting period, unless the award is
forfeited.
If equity-settled awards are cancelled, it is treated as
if it has vested on the date of cancellation, and any
remaining expense is recognised immediately. If a new
replacement award is substituted for the cancelled award,
the cancelled and new award is treated as if they were a
modification.
47
RECCE PHARMACEUTICALS ANNUAL REPORT 2022 (t) Earnings/(Loss) Per Share
Basic earnings/(loss) per share
Basic earnings/(loss) per share is calculated by dividing
the profit/(loss) attributable to owners of the Company,
adjusted for the after-tax effect of preference dividends
on preference shares classified as equity, by the weighted
average number of ordinary shares outstanding during
the financial year, adjusted for bonus elements in ordinary
shares during the year.
Diluted earnings/(loss) per share
Earnings/(loss) used to calculate diluted earnings/(loss)
per share are calculated by adjusting the basic earnings/
(loss) by the after-tax effect of dividends and interest
associated with dilutive potential ordinary shares. The
weighted average number of shares used is adjusted for
the weighted average number of ordinary shares that
would be issued on the conversion of all the dilutive
potential ordinary shares into ordinary shares.
(x) Critical Accounting Judgements and Key Sources
of Estimation Uncertainty
The preparation of the consolidated financial statements
requires management to make judgements, estimates
and assumptions that affect the reported amounts in
the consolidated financial statements. Management
continually evaluates its judgements and estimates in
relation to assets, liabilities, contingent liabilities, revenue
and expenses. Management bases its judgements,
estimates and assumptions on historical experience and
on other various factors, including expectations of future
events, management believes to be reasonable under
the circumstances. The resulting accounting judgements
and estimates will seldom equal the related actual results.
The judgements, estimates and assumptions that have
a significant risk of causing a material adjustment to
the carrying amounts of assets and liabilities (refer to
the respective notes) within the next financial year are
discussed below.
(u) Goods and Services Tax (GST)
Share-based payment transactions
The Company measures the cost of equity-settled
transactions with employees by reference to the fair value
of the equity instruments at the date at which they are
granted. The fair value is determined by using either the
Trinomial or Black-Scholes model taking into account
the terms and conditions upon which the instruments
were granted. The accounting estimates and assumptions
relating to equity-settled share-based payments would
have no impact on the carrying amounts of assets and
liabilities within the next annual reporting year but may
impact profit or loss and equity.
Revenues and expenses are recognised net of GST
except where GST incurred on a purchase of goods and
services is not recoverable from the taxation authority, in
which case the GST is recognised as part of the cost of
acquisition of the asset or as part of the expense item.
Receivables and payables are stated with the amount of
GST included. The net amount of GST recoverable from,
or payable to, the taxation authority is included as part
of receivables or payables in the statement of financial
position.
Cash flows are included in the statement of cash flows
on a gross basis and the GST component of cash flows
arising from investing and financing activities, which is
recoverable from, or payable to, the taxation authority are
classified as operating cash flows.
Commitments and contingencies are disclosed net of
the amount of GST recoverable from, or payable to, the
taxation authority.
(v) Accounting Standards Issued But Not Yet Effective
The AASB has issued a number of new and amended
Accounting Standards and Interpretations that have
mandatory application dates for future reporting years,
some of which are relevant to the Group. The Group has
decided not to early adopt any of the new and amended
pronouncements.
(w) Rounding of Amounts to Nearest Dollar
In accordance with ASIC Corporations (Rounding of
Financial/Directors' Reports) Instrument 2016/191, the
amounts in the consolidated financial statements have
been rounded to the nearest dollar.
48
RECCE PHARMACEUTICALS ANNUAL REPORT 2022Notes to the Consolidated Financial StatementsFor the year ended 30 June 2022
3: Going Concern
For the year ended 30 June 2022 the Group recorded a
loss of $10,986,277 (2021: $13,513,366) and had net cash
outflows from operating activities of $9,010,263 (2021:
$7,855,849). The ability of the Group to continue as a
going concern and being able to continue to fund its
operating activities is dependent on securing additional
funding through a share placement to new or existing
investors and financial support through short-term loans,
together with continuous receipt of the R&D tax rebate.
These conditions indicate a material uncertainty that
may cast significant doubt about the Group's ability to
continue as a going concern and, therefore, that it may be
unable to realise its assets and discharge its liabilities in
the normal course of business.
The Directors believe there will be sufficient funds to
meet the Company’s working capital requirements.
Based on the success of current progress in the Group,
it is considered that re-financing through equity funds
would be well supported. Additional funds will be raised
via share placements and/or other financing options
as required.
The financial statements have been prepared on the basis
that the Group is a going concern, which contemplates
the continuity of normal business activity, realisation of
assets and settlement of liabilities in the normal course
of business for the following reasons:
– The Directors have prepared cashflow projections
that support the ability of the Company to continue
as a going concern, subject to raising additional funds
through equity or other means as detailed above
– The Company continually receiving its Australian
R&D tax rebates for R&D expenditure in Australia and
overseas incurred by the Company
Should the Group not be able to continue as a going
concern, it may be required to realise its assets and
discharge its liabilities other than in the ordinary course
of business, and at amounts that differ from those
stated in the financial statements and that the financial
report does not include any adjustments relating to
the recoverability and classification of recorded asset
amounts or liabilities that might be necessary should
the Group not continue as a going concern.
49
RECCE PHARMACEUTICALS ANNUAL REPORT 2022
4: Segment Reporting
(a) Reportable segments
The Directors have considered the requirements of AASB 8 Operating Segments and the internal reports that are
reviewed by the chief operating decision maker (the Board of Directors) in allocating resources and have concluded
that at this time there are no separate identifiable segments as the Group operates in only one business segment being
research and development of pharmaceutical drugs. However, the Group operates in three geographic segment being
Australia, UK and USA.
(b) Segment results
The following is an analysis of the Group’s results by reportable segments:
Australia
USA
UK
Central Administration
Segment revenue and other
income for the year
Segment loss after tax
for the year
2022
$
2021
$
2022
$
2021
$
2,835,787
1,803,747
(4,521,529)
(4,523,537)
317,158
23,008
–
134,174
25,333
(505,694)
(36,685)
(336,488)
(63,532)
–
(5,922,368)
(8,589,810)
3,175,953
1,963,254
(10,986,277)
(13,513,366)
The accounting policies of the reportable segments are the same as the Group’s accounting policies described in
Note 2. Segment loss represents the loss after tax incurred by each segment. This is the measure reported to the Board
of Directors for the purposes of resource allocation and assessment of segment performance.
(c) Segment assets and liabilities
Australia
Central Administration
There are no assets or liabilities in other countries.
(d) Segment net assets/(liabilities)
Australia
Central Administration
Segment assets
at end of the financial year
Segment liabilities
at end of the financial year
2022
$
332,271
12,291,251
12,623,522
2021
$
357,577
21,323,978
21,681,555
2022
$
–
2,562,163
2,562,163
2021
$
–
1,177,814
1,177,814
2022
$
2021
$
332,270
357,577
9,729,088
20,146,164
10,061,358
20,503,741
50
RECCE PHARMACEUTICALS ANNUAL REPORT 2022Notes to the Consolidated Financial StatementsFor the year ended 30 June 2022
5: Revenue and Other Income
Other Income:
Research and Development (R&D) tax incentive
Interest income
Other income
Other grants
Project Reimbursements – Canadian Government
Total other income
6: Expenses
Employee Benefits Expenses:
Salaries and wages
Superannuation expenses
Long service leave expenses
Payroll taxes
Total employee benefit expenses
Finance Costs:
Interest from short-term borrowings
Bank fees and charges
Total finance costs
Other Expenses:
Audit and review fees
Communication expenses
Computer maintenance and consumables
Consulting fees
Insurance expenses
Legal expenses
Legal dispute settlement
Listing and regulatory fees
Overseas listing and regulatory fees
Printing and stationery expenses
Roadshows and conferences
Sundry expenses
Total other expenses
17
2022
$
2021
$
3,084,955
90,998
–
–
–
3,175,953
1,777,787
170,718
30,098
52,790
1,566,031
105,757
71,351
37,507
182,608
1,963,254
1,431,768
99,576
9,557
12,486
2,031,393
1,553,387
644
1,772
2,416
52,499
3,277
45,451
818,791
73,529
336,833
1,417,527
89,796
59,693
59,187
278,998
589,993
3,825,574
–
2,107
2,107
48,806
8,019
47,244
466,829
63,929
193,969
–
123,786
88,865
35,475
134,616
676,609
1,888,147
51
RECCE PHARMACEUTICALS ANNUAL REPORT 2022
7: Auditor's Remuneration
During the year, the following fees were paid or payable for services to BDO Audit (WA) Pty Ltd (BDO) and its related
practices (also referred to hereafter as BDO, network firms of BDO and non BDO firms):
Audit services
– BDO for audit and review of the consolidated financial statements
52,499
48,806
2022
$
2021
$
Non-audit services
– BDO
8: Income Tax Expense
Loss before income tax
–
–
(10,986,277)
(13,513,366)
The prima facie tax on loss from ordinary activities before
income tax is reconciled to income tax as follows:
– Prima facie tax payable on loss from ordinary activities before
income tax at 27.5% (2021: 27.5%)
(2,746,569)
(3,716,176)
Add:
Non-allowable items:
– Share-based payments expense
– Expenses subject to R&D tax incentive
– Other non-allowable items
Less:
– Non assessable income
– Tax losses and deferred tax not recognised
64,122
2,074,075
125,142
771,239
1,254,469
1,431,288
2,169,886
14,439
(451,770)
552,333
Income tax attributable to the Group
–
–
Deferred tax attributable to the Group
Tax losses carried forward
Accruals and provisions
Blackhole expenses
Patents
3,379,191
99,848
382,663
–
2,249,758
124,427
490,960
–
3,861,702
2,865,145
The Group's ability to use losses in the future is subject to the companies in the Group satisfying the relevant tax
authority's criteria for using these losses.
52
RECCE PHARMACEUTICALS ANNUAL REPORT 2022Notes to the Consolidated Financial StatementsFor the year ended 30 June 2022
9: Loss Per Share
The following reflects the loss and share data used in the
calculations of basic and diluted losses per share:
Loss attributable to the members of the Company
(10,986,277)
(13,513,366)
2022
$
2021
$
Weighted average number of shares
Weighted average number of ordinary shares used in
calculating basic losses per share
Loss per share (cents per share):
Basic loss for the year attributable to the members of the Company
Diluted loss for the year attributable to the members of the Company
10: Cash and Cash Equivalents
Cash at bank
Cash on hand
No.
No.
174,133,576
174,133,576
155,404,474
155,404,474
(6.31)
(6.31)
2022
$
(8.70)
(8.70)
2021
$
11,581,494
20,873,023
440
17
11,581,934
20,873,040
Cash at bank and in hand bear floating interest rates between 0.10% and 0.50% depending on the amount on deposit.
Refer to Note 22 for additional risk exposure analysis.
11: Trade and Other Receivables
CURRENT
Rebates receivable from Canadian Government
Sundry debtors
Net GST receivable
Refer to Note 22 for additional risk exposure analysis.
–
67,530
114,944
182,474
183,444
4,325
57,715
245,484
53
RECCE PHARMACEUTICALS ANNUAL REPORT 2022
12: Other Current Assets
Prepayments
Rental deposits
Director loans
Other current assets
13: Plant and Equipment
Laboratory machinery and equipment
– at cost
– accumulated depreciation
Office furniture and equipment
– at cost
– accumulated depreciation
Computer equipment
– at cost
– accumulated depreciation
Office improvements
– at cost
– accumulated depreciation
Library
– at cost
– accumulated depreciation/amortisation
Website Development
– at cost
– accumulated depreciation/amortisation
24
2022
$
–
20,100
400,234
–
420,334
542,153
(253,104)
289,049
64,232
(40,610)
23,622
54,772
(39,456)
15,316
78,646
(36,481)
42,165
4,379
(3,321)
1,058
2,797
(2,764)
33
2021
$
2,106
20,100
–
40,193
62,399
530,462
(218,722)
311,740
49,497
(32,697)
16,800
40,853
(35,887)
4,966
78,646
(34,132)
44,514
4,379
(3,057)
1,322
2,797
(2,742)
55
Total plant and equipment
371,243
379,397
54
RECCE PHARMACEUTICALS ANNUAL REPORT 2022Notes to the Consolidated Financial StatementsFor the year ended 30 June 2022
Reconciliations
Reconciliations of the carrying amounts of each class of plant and equipment at the beginning and end of the current
and previous financial year are set out below:
Laboratory
machinery and
equipment
$
Office
furniture and
equipment
$
Computer
equipment
Office
improvements
$
$
Library and
website
costs
$
2022
Beginning of the year
Additions
Depreciation
End of the year
2021
Beginning of the year
Additions
Depreciation
End of the year
311,740
11,691
(34,382)
289,049
16,800
14,735
(7,913)
23,622
4,966
13,919
(3,569)
15,316
44,514
–
(2,349)
42,165
349,592
23,013
18,517
20,960
7,435
10,223
47,027
21,811
(60,865)
(22,677)
(12,692)
(24,324)
311,740
16,800
4,966
44,514
1,377
–
(286)
1,091
1,745
–
(368)
1,377
14: Right of Use Assets
Land and buildings – right-of-use
Less: Current year amortisation
2022
$
206,710
(139,173)
67,537
Total
$
379,397
40,345
(48,499)
371,243
424,316
76,007
(120,926)
379,397
2021
$
295,939
(174,704)
121,235
The Company leases land and buildings for its offices under agreements of between one to five years. On renewal, the
terms of the leases are renegotiated.
15: Trade and Other Payables
CURRENT
Unsecured liabilities
Trade payables
Employee related payables
Sundry creditors
481,429
173,277
97,307
752,013
487,321
52,582
88,000
627,903
55
RECCE PHARMACEUTICALS ANNUAL REPORT 2022
16: Provisions for Employee Benefits
CURRENT
Unsecured liabilities
Annual leave
Sick leave
NON-CURRENT
Long service leave
17: Other Provisions
CURRENT
Provision for legal settlement
2022
$
2021
$
202,548
–
202,548
153,765
183,982
337,747
115,312
85,215
1,417,527
–
An unfavourable judgement was handed down with respect to the non-issue of ordinary shares to holders of 1,356,249
Class C Performance Shares and 1,356,249 Class D Performance Shares. However, after taking appropriate legal advice,
the directors appealed the decision. The appeal was subsequently lost resulting in a damages payment to the Plaintiffs
of $1,417,527 subsequent to year end. Refer also to Note 19.
18: Lease Liabilities
CURRENT
Lease liability
NON-CURRENT
Lease liability
74,762
112,585
–
14,364
56
RECCE PHARMACEUTICALS ANNUAL REPORT 2022Notes to the Consolidated Financial StatementsFor the year ended 30 June 2022
19: Share Capital
Movements in ordinary shares on issue:
Opening balance
Shares issued during the year:
– shares issued to KMP and consultants
– conversion of performance shares¹
2022
2021
No.
$
No.
$
173,777,847 43,297,309
136,071,787
18,466,336
–
–
78,272
86,268
2,712,498
383,605
14,796,348
1,220,699
– new shares issued from placement (net costs)2
–
– 21,500,000
23,213,081
– new shares issued on options exercised
1,156,565
287,408
1,331,440
255,249
– Transfer from reserves to share capital
3,869,063
671,013 37,706,060 24,775,297
–
–
–
–
–
–
55,676
55,676
Total³
177,646,910 43,968,323 173,777,847 43,297,309
1 Settlement of a dispute in relation to 1,356,249 of the Company’s Class C Performance Shares and 1,356,249 Class D Performance Shares
resulted in the issue of 2,712,498 ordinary fully paid shares.
2 On 30 September 2020, the Company issued 21,500,000 ordinary shares raising $27,950,000 (before capital raising costs). Total capital
raising costs were $4,736,919 comprising cash component of $1,718,675 and options fee component of $3,018,244 (refer Note 22).
3 At 30 June 2022, 177,646,910 ordinary shares on issue were quoted on the ASX.
Options from shares issued
The following options remain outstanding at each respective reporting date:
Particulars
Issue Date
Exercise Date
Exercise Price
cents
2022
No.
2021
No.
Options
Options
Options
Options
Options
15-Feb-19
19-Dec-19
15-Feb-23
19-Feb-23
30-Sep-20
30-Sep-23
22-Feb-21
22-Feb-26
11-Feb-22
11-Feb-27
16.80
31.20
156.00
156.00
156.00
607,400
603,435
1,117,400
1,250,000
3,750,000
3,750,000
8,415,000
8,415,000
435,000
–
13,810,835
14,532,400
57
RECCE PHARMACEUTICALS ANNUAL REPORT 2022
20: Reserves
Performance shares reserve
Options reserve
(a) Performance shares reserve
Note
20(a)
20(b)
2022
$
2021
$
–
8,550,939
8,550,939
223,782
8,454,275
8,678,057
The performance shares reserve is used to recognise the fair value of Performance Shares issued to Executives and
Non-Executive Directors.
Movements of performance shares reserve:
At beginning of year
Conversion of Class C performance shares
Conversion of Class D performance shares
At end of year
(b) Options reserve
The options reserve is used to recognise the fair vale of options issued.
Movements of options reserve:
At beginning of year
Options issued to KMPs and employees¹
Options issued to lead manager
Conversion of options into ordinary shares
At end of year
1 Refer to Note 23.
21: Cash Flow Information
Reconciliation of loss after income tax to net cash flow from operating activities:
Loss for the year
Adjustments and non-cash items:
– Depreciation and amortisation
– Share-based payments expense
– Accounting for lease assets and liabilities
Change in operating assets and liabilities
– Decrease/(Increase) in trade and other receivables
– Decrease/(Increase) in other current assets
– Increase in trade and other payables
– (Decrease)/Increase in provisions for employee benefits
– Increase in other provisions
223,782
(111,891)
(111,891)
–
1,444,481
(821,198)
(399,501)
223,782
8,454,275
256,487
–
(159,823)
8,550,939
360,022
5,131,685
3,018,244
(55,676)
8,454,275
(10,986,277)
(13,513,366)
48,499
256,487
139,173
63,010
43,810
112,610
(105,102)
1,417,527
120,926
5,217,955
174,704
(204,120)
(6,538)
284,421
70,169
–
Net cash outflow from operating activities
(9,010,263)
(7,855,849)
58
RECCE PHARMACEUTICALS ANNUAL REPORT 2022Notes to the Consolidated Financial StatementsFor the year ended 30 June 2022
22: Financial Risk Management
The Group's activities expose it to a variety of financial risks: market risk (including foreign exchange risk and interest
rate risk), credit risk and liquidity risk. The Group's overall risk management program focuses on the unpredictability of
the financial markets and seeks to minimise potential adverse effects on the financial performance of the Group. The
Group uses different methods to measure and manage different types of risks to which it is exposed. These include
monitoring levels of exposure to interest rate and foreign exchange risk and assessments of markets forecasts for
interest rate and foreign exchange prices. Liquidity risk is monitored through the development of future cash flow
forecasts.
Risk management is carried out by Management and overseen by the Board of Directors.
The main risks arising for the Group are foreign exchange risk, interest rate risk, credit risk and liquidity risk. The
carrying values of the Group's financial instruments are as follows:
Financial Assets
At amortised cost
Director loan
Cash and cash equivalents
Trade and other receivables
Financial Liabilities
At amortised cost
2022
$
2021
$
400,234
11,581,934
182,474
12,164,642
–
20,873,040
245,484
21,118,524
Trade payables and sundry creditors
578,736
575,321
Loans payable
R&D Advance
(a) Market Risk
(i) Foreign exchange risk
–
–
–
–
578,736
575,321
The Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures,
primarily with respect to the US dollar.
Foreign exchange risk arises from future commercial transactions denominated in a currency that is not the Group's
functional currency. Over the next 12 months the Group will enter into contracts with various research organisations
in the USA, Canada and Netherlands to perform numerous laboratory tests as well as use the services of expert
consultants in the USA, Canada and The Netherlands that will result in approximately US$3.285 million and
CDN$0.06 million in expenditure.
(ii) Interest Rate Risk
The Group is exposed to interest rate risk due to variable interest being earned on its interest-bearing bank accounts.
At the end of the reporting year, the Group had the following interest-bearing financial instruments:
Cash and cash equivalents
Director loan
2022
2021
Weighted
average
0.60%
5.00%
Balance
$
11,581,494
400,234
Weighted
average
Balance
$
0.58%
0.00%
20,873,023
–
59
RECCE PHARMACEUTICALS ANNUAL REPORT 2022
(b) Credit Risk
Credit risk is the risk of financial loss to the Group if a counter party to a financial instrument fails to meet its
contractual obligations. During the year credit risk has principally arisen from the financial assets of the Group, which
comprises cash and cash equivalents and trade and other receivables. The Group's exposure to credit risk arises from
potential default of the counter party, with the maximum exposure equal to the carrying amount of the instruments.
The carrying amount of financial assets included in the Consolidated Statement of Financial Position represents the
Group's maximum exposure to credit risk in relation to those assets. The Group does not held any credit derivatives to
offset its credit exposure. The Group trades only with recognised and credit worthy third parties. Receivable balances
are monitored on an ongoing basis with the result that the Group does not have a significant exposure to bad debts.
The Group has no significant concentrations of credit risk within the Group except for the following:
Cash held with BankWest Bank
Cash held with National Australian Bank
Cash held with ME Bank
Cash held with American Express
Rating
AA-
AA-
BBB
N/A
2022
$
2021
$
1,948,305
1,299,443
2
9,651,138
(17,951)
2
19,573,478
100
11,581,494
20,873,023
The Group's primary banker is BankWest. The Board considers the use of this financial institution, which has a rating of
AA- from Standards and Poors, to be sufficient in the management of credit risk with regards to these funds.
(c) Liquidity Risk
Prudent liquidity risk management implies maintaining sufficient cash and the availability of funding through an
adequate amount of committed credit facilities to meet obligations when due and to close out market positions.
The Directors and Management monitor the cash outflow of the Group on an on-going basis against budget and the
maturity profiles of financial assets and liabilities to manage its liquidity risk.
The financial liabilities the Group had at reporting date were trade payables, employee related payables, sundry
creditors, loan payables, R&D advance and lease liability incurred in the normal course of the business. Trade payables
were non-interest bearing and were deducted within the normal 30-60 day term of creditor payments.
60
RECCE PHARMACEUTICALS ANNUAL REPORT 2022Notes to the Consolidated Financial StatementsFor the year ended 30 June 2022
The table below reflects the respective undiscounted cash flows for financial liabilities existing at end of reporting year:
Contractual maturities of
financial liabilities
<6
months
>6-12
months
>12 months
30 June 2022
Trade payables
Employee related payables
Sundry creditors
Lease liability
30 June 2021
Trade payables
Employee related payables
Sundry creditors
Lease liability
$
481,429
173,277
97,307
74,762
826,775
487,321
52,582
88,000
112,585
740,488
$
–
–
–
–
–
–
–
–
–
–
$
–
–
–
–
–
–
–
–
–
–
Total
contractual
cash flows
$
Carrying
amount
$
481,429
173,277
97,307
74,762
481,429
173,277
97,307
74,762
826,775
826,775
487,321
52,582
88,000
487,321
52,582
88,000
112,585
112,585
740,488
740,488
At 30 June 2022, the Group had sufficient cash to meet the financial liabilities as and when they are due and payables.
(d) Fair Value Hierarchy
Fair value of assets and liabilities approximates carrying value given their short term nature.
61
RECCE PHARMACEUTICALS ANNUAL REPORT 2022
23: Share-Based Payments
Share-based payments expense recognised during the financial year:
Issue of 18,272 shares to Spark Plus
Issue of 60,000 shares to Alan Dunton1
Issue of 2,250,000 options to James Graham²
Issue of 1,500,000 options to Michele Dilizia²
Issue of 1,125,000 options to Alan Dunton²
Issue of 2,175,000 options to John Prendergast²
Issue of 600,000 options to Justin Ward²
Issue of 400,000 options to Arthur Kollaras²
Issue of 100,000 options to Daniel Astudillo²
Issue of 125,000 options to Thomas Jarrett²
Issue of 70,000 options to Wendy Potts²
Issue of 70,000 options to Julia Stanford²
Issue of 100,000 options to Daniel Astudillo⁴
Issue of 75,000 options to Thomas Jarrett⁴
Issue of 200,000 options to Arthur Kollaras⁴
Issue of 30,000 options to Wendy Potts⁴
Issue of 30,000 options to Julia Stanford⁴
2022
$
2021
$
–
–
–
–
–
–
–
–
–
–
–
–
58,963
44,222
117,925
17,689
17,689
19,368
66,900
1,372,109
914,739
686,054
1,326,372
365,896
243,930
60,983
76,228
42,688
42,688
–
–
–
–
–
Total share-based payments recognised through P&L
256,487
5,217,955
Issue of 3,750,000 Corporate Advisor Options³
Total share-based payments recognised through equity
–
–
3,018,244
3,018,244
1 Issued 60,000 shares on 4 December 2020 as part of remuneration for his services.
Fair value of share options granted to executive and employees
2 The fair value of the 8,415,000 Share Options was calculated using the Black-Scholes model. The assumptions used
in calculating the fair value of Share Options, were:
– exercise price: $1.56
– grant date 9 October 2020
– grant date share price: $1.115
– value per option at grant date $0.6098
– issue date 22 February 2021
– dividend yield: 0.0%;
– risk-free rate based on the Australian Treasury bond rate for five years, to align with the term of the options: 0.32%;
– expected volatility derived from the share volatility of compatible listed companies over five years, to align with the
term of the options: 77.0%; and
– expected life of the Share Option: five years.
62
RECCE PHARMACEUTICALS ANNUAL REPORT 2022Notes to the Consolidated Financial StatementsFor the year ended 30 June 2022
Fair value of share options granted to corporate advisors
3 Where the fair value of services rendered by consultant during the period could not be realiably measured, these are
measured by reference to the fair value of equity instruments granted. The estimate of the fair value of the services
is measured based on a Black-Scholes option valuation methodology, The fair value of the 3,750,000 Share Options
was calculated using the Black-Scholes model. The assumptions used in calculating the fair value of share Options,
were:
– exercise price: $1.56
– grant date share price: $1.115
– grant date 23 October 2020
– issue date 30 September 2020
– dividend yield: 0.0%;
– 3,750,000 options issued to Shaw and Partners as part of payment for capital raising fee;
– risk-free rate based on the Australian Treasury bond rate for three years, to align with the term of the options:
0.19%;
– expected volatility derived from the share volatility of compatible listed companies over three years, to align with
the term of the options: 81.0%; and
– expected life of the Share Option: three years.
Fair value of share options granted to executive and employees
4 The fair value of the 435,000 Share Options was calculated using the Black-Scholes model. The assumptions used in
calculating the fair value of Share Options, were:
– exercise price: $1.56
– grant date 11 February 2022
– grant date share price: $1.15
– value per option at grant date $0.58963
– issue date 11 February 2022
– dividend yield: 0.0%;
– risk-free rate based on the Australian Treasury bond rate for five years, to align with the term of the options: 1.92%;
– expected volatility derived from the share volatility of compatible listed companies over five years, to align with the
term of the options: 68.94%; and
– expected life of the Share Option: five years.
The value brought to account as share-based payment expenses in the year ended 30 June 2022 was $256,487 (2021:
$5,217,955) relating to the fair value of options granted to the employees was expensed to the profit or loss. The fair
value of options granted to the Corporate Advisors for capital raising amounting to $Nil (2021: $3,018,244) has been
recognised as transaction costs on share issue.
63
RECCE PHARMACEUTICALS ANNUAL REPORT 2022 24: Related Party Transactions
Parent entity
The ultimate parent entity within the Group is Recce Pharmaceuticals Ltd.
Subsidiaries
Interests in subsidiaries are disclosed in Note 26.
Key management personnel compensation
Short-term employee benefits
Post-employment benefits
Bonus
Termination payments
Share-based payments
2022
$
1,082,815
199,161
204,000
–
117,925
1,603,901
2021
$
963,521
134,013
–
99,805
4,976,000
6,173,340
The following transactions occurred with related parties:
Superannuation contributions
Contributions to superannuation funds on behalf of employees
106,362
61,969
Loans to key management personnel
An amount of $388,734 (2021: $Nil) was advanced to Mr James Graham as an unsecured loan. The amount outstanding
at reporting date including accrued interest was $400,234 (2021: $Nil). The loan is interest bearing at the rate of
5% per annum. Interest accrued on the loan amounted to $11,500 (2021: $Nil). The loan is repayable within 12 months
of reporting date.
At year end, expense advances repayable by Mr James Graham totalled $Nil (2021: $40,193).
Other transactions with key management personnel
During the financial year, consulting fees for technical services totalling $727,348 (2021: $406,770) were paid to an
entity associated with Dr A Dunton. All payments were made on normal commercial terms and conditions. There were
no other related party transactions during the financial year.
64
RECCE PHARMACEUTICALS ANNUAL REPORT 2022Notes to the Consolidated Financial StatementsFor the year ended 30 June 2022
25: Parent Entity Information
The following information relates to the parent entity, Recce Pharmaceuticals Ltd, as at 30 June 2022. The information
presented hereto has been prepared using accounting policies consistent with those presented in Note 2.
(a) Summarised statement of financial position
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Share capital
Reserves
Accumulated losses
Net Assets/(Liabilities)
2022
$
2021
$
12,184,742
438,780
12,623,522
2,446,850
115,312
2,562,163
43,968,321
8,550,939
(42,457,902)
10,061,358
21,180,923
500,632
21,681,554
1,078,235
99,579
1,177,814
43,297,309
8,678,057
(31,471,625)
20,503,741
(b) Summarised consolidated statement of profit or loss and other comprehensive income
Loss for the year
Other comprehensive income
Total comprehensive loss for the year
(10,986,277)
(13,513,366)
–
–
(10,986,277)
(13,513,366)
The parent entity has no contingent liabilities as at 30 June 2022.
26: Interest in Subsidiaries
Country of Incorporation
Parent entity
Recce Pharmaceuticals Ltd
Australia
Subsidiaries
Recce (USA) LLP
Recce (UK) Limited
United States
United Kingdom
27: Events Subsequent to Reporting Period
Percentage Owned
2022
%
–
100
100
2021
%
–
100
100
On 5 August 2022, the Company settled its legal dispute in relation to the Class C and Class D Performance shares issued
to former directors/KMP with the cash payment of $1,417,527 as full and final settlement of all matters in the dispute. This
amount has been recognised as a provision as at 30 June 2022 as it reflects an adjusting subsequent event.
Other than the above, no matters or circumstances have arisen since the end of the financial year, which significantly
affected, or may significantly affect, the operations of the Group, the results of those operations, or state of affairs of
the Group in future financial years.
28: Contingent Liabilities
There were no contingent liabilities as at 30 June 2022.
In the prior year, there was a dispute in relation to the non-conversion of Performance Shares to Ordinary Shares.
Refer to Note 19.
65
RECCE PHARMACEUTICALS ANNUAL REPORT 2022
Director’s Declaration
The Directors of the Company declare that:
1. The consolidated financial statements comprising the consolidated statement of profit or loss and other
comprehensive income, consolidated statement of financial position, consolidated statement of changes in equity,
consolidated statement of cash flows and accompanying notes, as set out on pages 40 to 65, are in accordance
with the Corporations Act 2001, including:
a. complying with Accounting Standards and the Corporations Regulations 2001; and other mandatory reporting
requirements; and
b. give a true and fair view of the financial position as at 30 June 2022 and of the performance for the year ended
on that date of the Group;
2. The Executive Chairman and Chief Financial Officer have each declared that:
a. the financial records of the Company for the financial year have been properly maintained in accordance with
section 286 of the Corporations Act 2001;
b. The financial statements and notes for the financial year comply with the Accounting Standards; and
c. The financial statements and notes for the financial year give a true and fair view;
3. In the Directors’ opinion there are reasonable grounds to believe that the Group will be able to pay its debts
as and when they become due and payable.
This declaration is made in accordance with a resolution of the Board of Directors.
John Prendergast
Non-Executive Chairman
31 August 2022
66
RECCE PHARMACEUTICALS ANNUAL REPORT 2022 Independent Auditor’s Report
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
Level 9, Mia Yellagonga Tower 2
5 Spring Street
Perth WA 6000
PO Box 700 West Perth WA 6872
Australia
INDEPENDENT AUDITOR'S REPORT
To the members of Recce Pharmaceuticals Ltd
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Recce Pharmaceuticals Ltd (the Company) and its subsidiaries
(the Group), which comprises the consolidated statement of financial position as at 30 June 2022, the
consolidated statement of profit or loss and other comprehensive income, the consolidated statement
of changes in equity and the consolidated statement of cash flows for the year then ended, and notes
to the financial report, including a summary of significant accounting policies, and the directors’
declaration.
In our opinion the accompanying financial report of the Group, is in accordance with the Corporations
Act 2001, including:
(i)
Giving a true and fair view of the Group’s financial position as at 30 June 2022 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 Company 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.
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 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 (WA) 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
67
RECCE PHARMACEUTICALS ANNUAL REPORT 2022 Independent Auditor’s Report Continued
Material uncertainty related to going concern
We draw attention to Note 3 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.
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.
Measurement and Disclosure of Legal Provisions
Key audit matter
How the matter was addressed in our audit
During the 30 June 2022 financial year the Group
Our audit procedures in respect of this area included but
was subject to legal proceedings with former
were not limited to the following:
employees and key management personnel which
required management to make an assessment of a
legal provision recognition as at 30 June 2022 in
accordance with AASB 137 Provisions, Contingent
Liabilities and Contingent Assets.
There were also subsequent events which
impacted this assessment in accordance with
AASB 110 Events after the Reporting Period. This
legal provision and the related subsequent event
is disclosed in Note 17 and Note 27, respectively,
to the financial report.
Given the nature of the matter and its material
impact on the financial report of Recce
Pharmaceuticals Ltd, we deem this to be a key
audit matter at 30 June 2022.
Assessing management’s position and evaluation of
items of legal proceedings and claims as a
provision in line with the requirements of AASB
137;
Assessing management’s position of the adjusting
subsequent event in line with the requirements of
AASB 110;
Reviewing the Director’s minutes, ASX
announcements and correspondence with third
parties;
Reviewing supporting legal documentation and
supporting payment records to support the post
year-end settlement payment; and
Assessing the adequacy of disclosures in Note 1,
Note 17 and Note 27 to the financial report
68
RECCE PHARMACEUTICALS ANNUAL REPORT 2022 Other information
The directors are responsible for the other information. The other information comprises the
information in the Group’s annual report for the year ended 30 June 2022, but does not include the
financial report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
In preparing the financial report, the directors are responsible for assessing the Company’s ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Company 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.
69
RECCE PHARMACEUTICALS ANNUAL REPORT 2022 Independent Auditor’s Report Continued
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in the directors’ report for the year ended 30 June
2022.
In our opinion, the Remuneration Report of Recce Pharmaceuticals Ltd, for the year ended 30 June
2022, 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 (WA) Pty Ltd
Neil Smith
Director
Perth
31 August 2022
70
RECCE PHARMACEUTICALS ANNUAL REPORT 2022 ASX Additional Information
Shareholder Information as at 22 August 2022
Additional information required by the Australian Securities Exchange listing rules and not shown elsewhere in this
report is as follows:
(a) Distribution of equity securities (as at 22 August 2022)
The number of shareholders, option holders and performance right holders by size of holding are:
Holding
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Total
Holding
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Total
Holding
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Total
Number of Shareholders
Number of Shares
% Issued Share Capital
1,084
1487
675
1,140
206
4,592
689,662
4,284,499
5,492,178
37,496,774
130,056,197
178,019,310
0.39
2.41
3.09
21.06
73.06
100.00
Option Holders
Number of Options
% Issued Share Capital
–
–
–
6
14
20
–
–
–
435,000
13,003,435
13,438,435
0.00
0.00
0.00
3.24
96.76
100.00
Performance Right Holders
Number of Shares
% Issued Share Capital
–
–
–
3
7
10
–
–
–
168,750
8,585,673
8,754,423
0.00
0.00
0.00
1.93
98.07
100.00
71
RECCE PHARMACEUTICALS ANNUAL REPORT 2022
ASX Additional Information Continued
(b) Twenty largest shareholders (as at 22 August 2022)
The names of the twenty largest holders of quoted shares are:
Name
1 Graham Melrose and Olga Melrose
2 HSBC Custody Nominees (Australia) Limited
3 Mr James Graham
4 M Rogers and A Veliss
5 Acuity Capital Investment Management Pty Ltd
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