Resonance Health Limited
Appendix 4E
Preliminary final report
1. Company details
Name of entity:
ABN:
Reporting period:
Previous period:
Resonance Health Limited
96 006 762 492
For the year ended 30 June 2023
For the year ended 30 June 2022
2. Results for announcement to the market
2023
$
2022
$
Change
$
Change
%
Revenues from ordinary activities
4,404,360
3,827,976
576,384
15%
Loss from ordinary activities after tax attributable to the
owners of Resonance Health Limited
(780,361)
(1,141,777)
361,416
(32%)
Loss for the year attributable to the owners of Resonance
Health Limited
(780,361)
(1,141,777)
361,416
(32%)
Basic loss per share
Diluted loss per share
2023
Cents
2022
Cents
(0.17)
(0.17)
(0.25)
(0.25)
Dividends
There were no dividends paid, recommended or declared during the current financial period.
Comments
The loss for the Group after providing for income tax amounted to $780,361 (30 June 2022: $1,141,777).
Reporting
period
Cents
Previous
period
Cents
1.57
1.70
3. Net tangible assets
Net tangible assets per ordinary security
4. Control gained over entities
Not applicable.
5. Loss of control over entities
Not applicable.
6. Dividends
Current period
There were no dividends paid, recommended or declared during the current financial period.
Resonance Health Limited
Appendix 4E
Preliminary final report
Previous period
There were no dividends paid, recommended or declared during the previous financial period.
7. Dividend reinvestment plans
Not applicable.
8. Details of associates and joint venture entities
Not applicable.
9. Foreign entities
Details of origin of accounting standards used in compiling the report:
Not applicable.
10. Audit qualification or review
Details of audit/review dispute or qualification (if any):
The financial statements have been audited and an unmodified opinion has been issued.
11. Attachments
Details of attachments (if any):
The Annual Report of Resonance Health Limited for the year ended 30 June 2023 is attached.
12. Signed
Signed ___________________________
Date: 29 August 2023
Dr Martin Blake
Chairman
Perth, Western Australia
Resonance Health Limited
ABN 96 006 762 492
Annual Report - 30 June 2023
Resonance Health Limited
Chairmans letter to shareholders
30 June 2023
Dear Fellow Shareholders,
On behalf of the Board of Directors of Resonance Health Limited (Resonance Health or Company), it is with great pleasure
that I present to you our 2023 Annual Report.
Resonance Health is a leading healthcare technology and services company. The Company’s services are used globally by
clinicians in the management of human diseases and by pharmaceutical and therapeutic companies in their clinical trials.
Our Company’s operational focus is on developing and delivering world class quantitative imaging assessments essential in
managing diseases and drug development.
The technical efforts of the Company during the period were focused around improving several of its products such
HepaFatSmart® (formerly, HepaFat-AI®), shortened scanner acquisition times for FerriScan®, and the use of FerriScan® on
the latest generation 3T MRI machines, along with an extended proof of concept (EPoC) trial for the flagship new product
development for non-invasive MRI Liver Fibrosis assessment.
The Company continued to focus on the sales of its new and existing products to diagnostic and clinical trial customers
globally with a notable uptake in sales volumes driven by customers using FerriScan® on 3T scanners.
Along with investing in the continued development of existing products, the Company progressed its exciting work on the
ASO (antisense oligonucleotide) project which is aimed at the development and validation of a suite of ‘cyclophilin-type
specific’ targeting drug molecules.
Work continued on development of the Company’s clinical trial capability and revenue expansion strategy during the year
in conjunction with the opening of a new laboratory aimed at providing a broader range of services to clinical trial
customers.
This year also saw a change in management of the Company with Mitchell Wells stepping down as Managing Director and
returning to his previous role of Non-Executive Director. I would personally like to thank Mr Wells for his achievements
during his tenure especially in relation to numerous internal, operational and technical continuous improvement projects.
I would also like to extend a warm welcome to Andrew Harrison appointed to the role of CEO in July 2023. I believe Andrew
and his management team will deliver significant value for shareholders and successfully deliver our growth strategy over
coming periods.
On behalf of the Board, I would like to thank our employees for their efforts and outstanding work during the year. I would
also like to thank the patients who used our services and importantly the large group of clinicians and researchers who
supported our business.
Yours Sincerely
Dr Martin Blake
Chairman
1
Resonance Health Limited
CEO's letter to shareholders
30 June 2023
Dear Shareholders,
The 2023 financial year was one of transition for the Company, it saw progress on major new product developments, the
launch of Resonance Clinical and renewed focus on clinical trial customers, and leadership changes.
Since I was appointed as CEO of the Company in July, I have focused on taking stock of our products and technology, our
people and customers, and developing a strategy and course of action to deliver shareholder value and a platform for
growth in earnings.
The core of the plan is to return the Company to profitability and significantly grow revenue and earnings through existing
products and customers, expansion of services to clinical trial customers, and sensible accretive acquisitions that add to
scale.
The foundations of this strategy were to reorganise senior management positions and focus on hiring key competencies
required to execute our growth plan. To this end we are in the process of hiring a new CFO, Head of Business Development
and several new positions in product development and technology.
The step change in scale resulting from this strategy is illustrated by the Company’s recent clinical trial contract win totalling
$6.3m over 18 months.
We will also redouble our efforts to hear the voice of the customer in everything we do, with a strategic focus on our
relationships with clinicians using our products globally. Striving to make our products and services easier to use with
improved clinical outcomes for patients.
We often underestimate the great achievements of the Company having served some of the most recognisable hospital,
diagnostic users, and pharmaceutical companies globally. Our R&D teams are making fundamental breakthroughs in
product development and are at the leading edge of work in the field.
There have been more than 70,000 patient FerriScan® analyses completed since its launch and for our imaging CRO services
we have worked with over 250 sites in 53 countries. All from our humble home in Perth!
I have great confidence in the future of our business and extend my thanks to each of our staff for their contributions to
the success of the company and our performance fy23. I would also like to thank our shareholders for their faith in the
Company. It certainly looks like there are better days ahead!
Yours Sincerely
Andrew Harrison
CEO
2
Resonance Health Limited
Contents
30 June 2023
Corporate directory
Directors' report
Auditor's independence declaration
Consolidated statement of profit or loss and other comprehensive income
Consolidated statement of financial position
Consolidated statement of changes in equity
Consolidated statement of cash flows
Notes to the consolidated financial statements
Directors' declaration
Independent auditor's report to the members of Resonance Health Limited
Shareholder information
4
5
20
21
22
23
24
25
56
57
61
3
Resonance Health Limited
Corporate directory
30 June 2023
Directors
Joint Company Secretaries
Registered office
Principal place of business
Share register
Auditor
Solicitors
Dr Martin Blake - Non-executive Chairman
Mr Simon Panton - Non-executive Director
Dr Travis Baroni - Non-executive Director
Mr Aaron Brinkworth - Non-executive Director
Mr Mitchell Wells - Non-executive Director
Mr Mitchell Wells
Ms Liesl Ellies
Level 1
141 Burswood Road
BURSWOOD WA 6100
T: +61 8 9286 5300
F: +61 8 9286 5399
Level 1
141 Burswood Road
BURSWOOD WA 6100
T: +61 8 9286 5300
F: +61 8 9286 5399
Advanced Share Registry Ltd
110 Stirling Highway
Nedlands WA 6009
Telephone: +61 8 9389 8033
Fax: +61 8 93897871
HLB Mann Judd
Level 4
130 Stirling Street
Perth WA 6000
Steinepreis Paganin
Level 4, The Reed Building
16 Milligan Street
Perth WA 6000
Bankers
National Australia Bank Limited
Stock exchange listing
Resonance Health Limited shares are listed on the Australian Securities Exchange
(ASX) (ASX code: RHT)
Website
www.resonancehealth.com
www.resonanceclinical.com
email: info@resonancehealth.com
4
Resonance Health Limited
Directors' report
30 June 2023
The Directors present their report, together with the financial statements, on the consolidated entity (referred to
hereafter as the 'Group' or ‘Resonance Health’) consisting of Resonance Health Limited (referred to hereafter also as the
'Company' or 'parent entity') and the entities it controlled at the end of, or during, the year ended 30 June 2023.
Directors
The following persons were Directors of Resonance Health Limited during the whole of the financial year and up to the
date of this report, unless otherwise stated:
Dr Martin Blake
Mr Mitchell Wells
Mr Simon Panton
Dr Travis Baroni
Mr Aaron Brinkworth (appointed 27 March 2023)
Principal activities
The Company’s business is healthcare technology and includes the development and commercialisation of software
medical device technologies (SaMD) and services for the quantitative analysis of radiological images in a regulated and
quality-controlled environment, and the provision of clinical trial services.
The Company’s core product is FerriScan®, a non-invasive liver assessment technology used for the analysis of iron in the
liver.
Dividends
There were no dividends paid, recommended or declared during the current or previous financial year.
Review of operations
The loss for the Group after providing for income tax amounted to $780,361 (30 June 2022: $1,141,777).
Contributing to this result the Group received a $484K R&D tax incentive refund related to FY22 R&D, in June 2023.
The Group continues to invest in R&D, business development, regulatory and quality affairs, and customer service
capabilities to both develop and monetise its technologies and other services globally.
Cash at bank as at 30 June 2023 totalled $6.36 million, in comparison to the 30 June 2022 cash balance of $6.78
million. The Group has no debt.
About Resonance Health
Resonance Health Limited is an Australian healthcare technology and services company. The Group's services are used
globally by clinicians in the management of human diseases and by pharmaceutical and therapeutic companies in their
clinical trials. Resonance Health has gained endorsement by leading physicians worldwide for providing high quality
quantitative assessments essential in managing diseases and drug development.
Resonance Health’s dedication to scientific rigour and quality has enabled it to achieve regulatory clearances for a range
of Software-as-Medical Devices (SaMDs) in the USA, Europe, UK, and Australia, and to proudly carry ISO 13485 certification
for the design and manufacture of medical devices. Regulatory cleared SaMD products, some of which incorporate
Artificial Intelligence (AI), include:
5
Resonance Health Limited
Directors' report
30 June 2023
●
●
●
●
●
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FerriScan®, a core-lab product that provides an accurate assessment of liver iron concentration (LIC) through non-
invasive MRI-based technology, for use in the assessment of individuals with iron overload conditions. Internationally
recognised as the gold standard in LIC assessment.
FerriSmart®, an AI-trained, non-invasive MRI-based device for the automated real-time assessment of LIC in patients,
calibrated against the global gold standard, FerriScan®.
HepaFatScan®, an MRI-based solution which provides a reliable non-invasive assessment of liver-fat in liver tissue for
use in the assessment of individuals with confirmed or suspected fatty-liver-disease.
HepaFatSmart®, an AI-trained, non-invasive device for the automated real-time multi-metric assessment of liver-fat
in patients, for the assessment of individuals with confirmed or suspected fatty liver disease.
LiverSmart®, an AI-trained, non-invasive MRI-based multi-parametric device combining FerriSmart® and
HepaFatSmart ® into a consolidated report providing accurate assessment of LIC and liver fat.
CardiaT2*, the most widely accepted MRI method for assessing heart iron loading. Resonance Health offers a dual
analysis of FerriScan® and CardiacT2*. CardiacT2* is TGA and CE Marking regulatory cleared.
The Group has a development pipeline of additional medical imaging analysis products and services, including the MRI
Liver Fibrosis Project, aimed at accurately assessing the presence and progression of liver fibrosis utilising non-invasive
MRI analysis.
Sales Revenue
Strong demand in diagnostics and clinical trials resulted in sales revenue for the year of $4.40 million, a 15% increase on
FY2022 of $3.83 million. This was also reflected in cashflow with total customer receipts for FY23 of $4.33M, versus total
customer receipts for FY22 of $3.53M, a 23% increase.
Geographically, North America and the UK were our biggest markets, with the balance of sales mostly spread across
Europe, Asia, and Australia.
Services
The Group provides its products and services to customers in both diagnostic and clinical trial settings. During the year its
products and services were used in over 150 hospitals and MRI centres around the world. Resonance Health’s analysis
reports are an assessment tool used by clinicians when treating patients with chronic iron-overload and fatty-liver
diseases.
Customers in diagnostic settings accounted for less than 60% of revenues, while clinical trial customers accounted for
almost 40% of revenues.
Resonance Health continues to actively engage with the global clinical trial market to build on the successful use of its
products and services. Due to the highly technical and regulated nature of clinical trial services, revenue from these
customers is usually based on multiyear contracts and is higher margin compared to diagnostic customers.
Summary of Activities
Management Transition
The Group announced the appointment of Mr Andrew Harrison as CEO, with a start date of 1 July 2023. Mr Harrison is an
experienced CEO and director of publicly listed and private companies, across a range of industries, including radiology
and medical artificial intelligence (AI). He founded and was Managing Director of Capitol Health Limited (ASX: CAJ) one of
Australia’s largest radiology companies.
Mr Harrison has extensive experience in capital market transactions, technology commercialisation, local and
international mergers and acquisitions, and strategic restructuring and turnaround. He has substantial international
experience including in European, US, and Chinese markets and he served on the Board of Directors of Enlitic, LLC a world
leading US based medical AI company.
Mitchell Wells remains as a non-executive director on the Board of the Company.
6
Resonance Health Limited
Directors' report
30 June 2023
Liver MRI Fibrosis Extended Proof of Concept
The Group continues to make progress on its extended proof of concept (EPoC) for a non-invasive MRI Liver Fibrosis
assessment with agreements nearing completion to commence EPoC studies with 2 trial sites.
The results of the EPoC studies, if successful, will allow the Group continued engagement with pharmaceutical companies
developing treatments for chronic liver disease, particularly Non-Alcoholic Fatty Liver Disease (NAFLD), to further assess
the commercial potential of the technology. The Company attended the European Association for the Study of the Liver
(EASL) and European Hematology Association (EHA) conferences in Europe during the period and engaged with
international key opinion leaders (KOLs) and pharma companies active in the fibrosis space.
International advocacy associations and regulators, including the United States Food & Drug Administration (US FDA) and
the LITMUS consortium (Liver Investigation: Testing Marker Utility in Steatohepatitis) in the EU, continue to highlight the
urgent need for the development of new, validated, non-invasive biomarkers to assess liver fibrosis to accelerate drug
development in NAFLD – the most common cause of chronic liver disease.
HepaFatSmart® US FDA Clearance
The Group received regulatory clearance from the US FDA to market its improved AI trained liver-fat assessment software-
as-a-medical device (SaMD) in the USA, HepaFatSmart®. HepaFatSmart® will replace HepaFat-AI® in the United States
which received US FDA regulatory clearance in Dec 2020.
HepaFatSmart® automatically analyses magnetic resonance imaging (MRI) for the quantitative assessment of a patient’s
liver fat. Specifically, it provides clinicians with three liver fat biomarkers: volumetric liver fat fraction (VLFF), proton
density fat fraction (PDFF), and a steatosis grade.
Other Product Innovations
Resonance Health announced during the period that its gold-standard FerriScan® liver iron concentration (LIC) analysis
service is now available on newer-generation 3 tesla (3T) magnetic field strength MRI machines. Sales for this service
grew during the period as the upgrade to 3T machines globally gathered pace.
Work continued on the validation of a materially shortened MRI imaging protocol FerriScan® and FerriSmart® with a
targeted 75% reduction in patient MRI scanning time, thereby improving patient experience and increasing scanner
throughput. The datasets required for completion of this work were received during the year.
Continuing on from the technical and market success of FerriScan®’s extension to newer 3 Tesla field strength MRI
machines in August 2022, work continued on the development of a 3T version of the Group's Cardiac-T2* cardiac-iron
assessment device with technical development now complete and validation nearing completion, and documentation
being prepared for a regulatory submission in the coming months.
Resonance Clinical & Clinical Trials
The Group continued developing and enhancing its clinical trial capability and revenue expansion strategy during the year,
with conversations progressing with international pharma companies engaged or looking to engage in clinical trials in
Australia. Several business development leads were progressed during the period with a particular focus on a large
potential clinical trial to be performed in Australia, utilising a range of the Group's services.
Molecular Medicine
The Group continues its exciting work on the ASO (antisense oligonucleotide) R&D project which is aimed at the
development and validation of a suite of ‘cyclophilin-type specific’ targeting drug molecules. The Group is currently
planning a number of trials to determine the efficacy of its molecules in both liver and neurological diseases.
Significant changes in the state of affairs
There were no significant changes in the state of affairs of the Group during the financial year.
7
Resonance Health Limited
Directors' report
30 June 2023
Matters subsequent to the end of the financial year
Mr Andrew Harrison was appointed as CEO of the Company effective 1 July 2023.
Mr Nick Allan resigned as COO, CFO and joint Company Secretary of the Company effective 31 July 2023.
The Controlled Placement Agreement executed by the Company and Acuity Capital on 18 April 2019 and then extended
on 30 June 2021 ('CPA’), expired on 31 July 2023. The CPA established an at-the-market standby equity capital facility
(’ATM Facility’) providing Resonance with standby equity capital. As security for the ATM Facility, the Company issued
Acuity Capital with 20,000,000 collateral shares. Given the ATM Facility has now expired, the parties have agreed to the
return and cancellation of the 20 million collateral shares for nil consideration in accordance with the terms of the CPA
(’Buyback’). The Buyback will be implemented in accordance with Part 2J.1 of the Corporations Act 2001 (Cth) and will be
subject to shareholder approval.
The Group was awarded a significant clinical trial agreement with Sun Pharmaceutical Industries Limited on 18 August
2023. The agreement is for the provision of clinical trial services and is expected to be worth up to $6.33m over 18 months.
No other matter or circumstance has arisen since 30 June 2023 that has significantly affected, or may significantly affect
the Group's operations, the results of those operations, or the Group's state of affairs in future financial years.
Likely developments and expected results of operations
Information on likely developments in the operations of the Group and the expected results of operations have not been
included in this report because the Directors believe it would be likely to result in unreasonable prejudice to the Group.
Business risks
The Group is subject to risks of both a general nature and ones that are specific to its business activities including, but not
limited to the following:
Revenue risks associated with clinical trials
A significant percentage of the Group's revenue is derived from its technology being used in clinical trials or directly from
CRO services such as the recently announced Sun Pharmaceutical Industries Ltd clinical trial (signed 18th August 2023).
Clinical trials are complex and resource intensive. Even if the Group's products are used successfully in clinical trials, these
trials can be cancelled or cut short for any number of reasons. This is of particular importance to the significant revenue
expected to be generated by Resonance Clinical as a CRO. The potential risks include:
●
●
●
●
●
●
●
lack of effectiveness of any product candidate during clinical trials;
discovery of serious or unexpected toxicities or side effects experienced by trial participants or other safety issues;
slower than expected rates of subject recruitment and enrolment rates in clinical trials;
difficulty in retaining subjects who have initiated a clinical trial but may withdraw at any time;
delays in obtaining regulatory authorisation to commence a trial;
suspension or termination of a trial by a regulatory agency before or after a trial is commenced; and
delays or failure in reaching agreement on acceptable terms in clinical trial contracts or protocols with prospective
clinical trial sites.
Cyber security threat from data breach
A cyber security breach has the potential to disrupt the Group's information technology platform which is integral to the
efficient operation of its business. A serious data breach could expose the Group to statutory liability and reputational
damage.
8
Resonance Health Limited
Directors' report
30 June 2023
Protection of proprietary technology
The Group's success depends upon it maintaining existing, and obtaining new patents along with the protection of its
trade secrets. The Group relies upon a combination of patents, trade secret protection (i.e., know how), and confidentiality
agreements to protect its intellectual property. The Group may also face competition from companies who develop a
substantially similar product to one of its products or proposed products. Many companies have encountered significant
problems in protecting and enforcing intellectual property rights in foreign jurisdictions.
Operations in international jurisdictions
The Group operates in a number of international jurisdictions. The majority of its revenues are generated in the USA, UK,
and Europe. Wherever the Group sets up operations it is exposed to a range of multi-jurisdictional risks such as risks
relating to labour practices, environmental matters, difficulty in enforcing contracts, changes to or uncertainty in the
relevant legal and regulatory regime (including in relation to taxation and foreign investment and practices of government
and regulatory authorities) and other issues in foreign jurisdictions in which the Group operates. Businesses that operate
across multiple jurisdictions face additional complexities from the unique business requirements in each jurisdiction.
Regulatory and compliance risk
The Group operates in a complex regulatory environment and in jurisdictions that have varying degrees of enactment and
implementation of regulations and are constantly evolving to meet challenges associated with new technology including
in relation to privacy and protected health information. The Group's products are registered or have certain regulatory
approvals in various jurisdictions including the US FDA, Australian TGA, and European CE. A failure to comply with, or
adjust to variations of, regulatory requirements both in Australia and overseas may result in the Company facing
regulatory investigation and/or significant claims, and/or being required to adapt or withdraw certain products, which
may adversely affect the Group's revenues.
Dependence upon key personnel
The Group depends on the talent and experience of key personnel to deliver on its business strategy. If key personnel
leave, it may be difficult to replace them, or to do so in a timely manner or at a comparable expense. Any key personnel
who leave to work for a competitor may adversely impact the Group. Additionally, increases in recruitment, wages and
contractor costs may adversely impact upon the financial performance of the Group.
Environmental regulation
The Group is not subject to any significant environmental regulation under Australian Commonwealth or State law.
Information on Directors
Name:
Title:
Qualifications:
Experience and expertise:
Dr Martin Blake
Chair - Non-executive and Independent
Appointed 3 October 2007
MBBS, FRANZCR, FAANMS, MBA, FAICD
Dr Blake is a Radiologist and Nuclear Physician who brings significant technical and
industry experience to Resonance Health. He has been a Partner of Perth
Radiological Clinic since 1997. Dr Blake has an MBA from Melbourne University, is a
Fellow of the Australian Institute of Company Directors, and holds directorships on a
number of private Company boards.
Other current listed directorships: None
None
Former listed directorships (last 3
years):
Special responsibilities:
Interests in shares:
Interests in options:
Chair of the Board of Directors
Member of the Remuneration Committee
Member of the Audit & Risk Committee
6,464,677 ordinary shares
None
9
Resonance Health Limited
Directors' report
30 June 2023
Name:
Title:
Qualifications:
Experience and expertise:
Mr Mitchell Wells
Director - Non-executive and not Independent
Appointed 28 February 2018, Managing Director from 1 July 2021 to 1 July 2023
L.LB, B.Comm, Dip. Aviation
Mr Wells is an experienced senior executive and a qualified lawyer with commercial
and legal experience in Australia, the United States of America and the United
Kingdom. He has served as a Director and worked as a senior executive of public and
private companies including ASX and US Nasdaq listed public companies. He has
served as Chair of two large non-profit organisations and has previously served as the
Company Secretary of two ASX listed public companies and as the corporate
secretary of a US Nasdaq listed public company.
Other current listed directorships: None
None
Former listed directorships (last 3
years):
Special responsibilities:
Interests in shares:
Interest in options:
Interests in performance rights:
None
1,000,000 ordinary shares
none
At the 2022 AGM the Company's shareholders approved the issuance of 1,830,000
performance rights to Mr Wells with service based vesting conditions.
Name:
Title:
Experience and expertise:
Mr Simon Panton
Director - Non-executive and not Independent
Appointed 5 October 2009
Mr Panton has been a strong supporter of the Company and its technologies over a
number of years and is a major shareholder of Resonance Health. Mr Panton brings
skills in business and marketing having run his own successful business.
Other current listed directorships: None
None
Former listed directorships (last 3
years):
Special responsibilities:
Interests in shares:
Interests in options:
Name:
Title:
Experience and expertise:
Member of the Audit & Risk Committee
Member of the Remuneration Committee
74,346,350 ordinary shares
None
Dr Travis Baroni
Director - Non-Executive and Independent
Appointed 25 November 2016
Dr Baroni has broad experience across industrial research, commercialisation of
technology, asset valuations and investment banking services. He has a bachelor's
degree and PhD in applied physics from The University of Western Australia and
managed innovation development and technology strategy in a large company
setting as well as being an active investor in early stage investments. He has worked
in investment banking, providing advisory services to equity capital market
transactions, corporate research and valuations to clients.
Other current listed directorships: None
None
Former listed directorships (last 3
years):
Special responsibilities:
Interests in shares:
Interests in options:
Chair of the Audit & Risk Committee
Member of the Remuneration Committee
350,000 ordinary shares
None
10
Resonance Health Limited
Directors' report
30 June 2023
Name:
Title:
Experience and expertise:
Mr Aaron Brinkworth
Director - Non-executive and Independent
Appointed 27 March 2023
Mr Brinkworth had a 22-year career with Gilead Sciences, Inc. (Nasdaq: GILD) (Gilead)
during which time the company grew from a small biotech-pharma company to a
multi-billion-dollar global company with annual sales of over USD $27 billion. He held
several commercial, licensing, and patient access roles at Gilead, including that of
Executive Director – Global Patient Solutions, where he was responsible for
commercial and access strategies for emerging markets. He led Gilead’s commercial
and access operations in the Asia Pacific (APAC) where he managed a geographically
dispersed team and partners across 31 APAC countries. He completed Gilead’s Senior
Leadership Development Program, has a Bachelor’s degree in Health Sciences from
Edith Cowan University and also serves on a large sized NFP Board for The Royal
Lifesaving Society of Western Australia since 2020. He is a graduate of the AICD
Company Directors course and maintains active membership of the AICD.
Other current listed directorships: None
None
Former listed directorships (last 3
years):
Special responsibilities:
Interests in shares:
Interests in options:
Chair of Remuneration Committee
None
None
'Other current listed directorships' quoted above are current directorships for listed entities only and excludes
directorships of all other types of entities, unless otherwise stated.
'Former listed directorships (last 3 years)' quoted above are directorships held in the last 3 years for listed entities only
and excludes directorships of all other types of entities, unless otherwise stated.
Joint Company Secretaries
Mr Nicholas Allan - B.Comm, ACA (resigned 31 July 2023)
Experience: Mr Allan is a Chartered Accountant with over 25 years’ experience in commerce, corporate advisory and public
practice. Mr Allan has previously held several senior finance positions including Chief Financial Officer and Company
Secretary of a number of ASX-listed public companies.
Mr Mitchell Wells - L.LB, B.Comm, Dip. Aviation (CPL)
Experience: see above.
Ms Liesl Ellies - Bachelor of Laws and Bachelor of Asian Studies (Japanese) (appointed 29 April 2022)
Experience: Ms Ellies is an experienced corporate lawyer having advised public and private companies across a wide range
of industries on all aspects of corporate compliance, equity capital markets and mergers & acquisitions.
Meetings of Directors
The number of meetings of the Company's Board of Directors ('the Board') and of each Board committee held during the
year ended 30 June 2023, and the number of meetings attended by each Director were:
Full Board
Remuneration Committee Audit and Risk Committee
Attended
Held
Attended
Held
Attended
Held
Dr M Blake
Mr M Wells
Mr S Panton
Dr T Baroni
Mr A Brinkworth
1
-
1
1
1
1
-
1
1
1
2
-
2
2
1
2
-
2
2
1
9
9
9
8
3
9
9
9
9
3
11
Resonance Health Limited
Directors' report
30 June 2023
Held: represents the number of meetings held during the time the Director held office or was a member of the relevant
committee.
Remuneration report (audited)
The remuneration report details the key management personnel remuneration arrangements for the Group, in
accordance with the requirements of the Corporations Act 2001 and its Regulations.
Key management personnel are those persons having authority and responsibility for planning, directing and controlling
the activities of the entity, directly or indirectly, including all Directors.
The remuneration report is set out under the following main headings:
●
●
●
●
●
●
Principles used to determine the nature and amount of remuneration
Details of remuneration
Service agreements
Share-based compensation
Additional information
Additional disclosures relating to key management personnel
Principles used to determine the nature and amount of remuneration
The objective of the Group's executive reward framework is to ensure reward for performance is competitive and
appropriate for the results delivered. The framework aligns executive reward with the achievement of strategic objectives
and the creation of value for shareholders, and it is considered to conform to the market best practice for the delivery of
reward. The Board of Directors (‘Board') ensures that executive reward satisfies the following key criteria for good reward
governance practices:
●
●
set competitive remuneration packages to attract the highest calibre of employees in the context of prevailing market
conditions, particular experience of the individual concerned and the overall performance of the Company; and
reward employees for performance that results in long-term growth in shareholder wealth, with the objective of
ensuring maximum stakeholder benefit from the retention of a high-quality board and executive team.
The Remuneration Committee is responsible for determining and reviewing remuneration arrangements for its Directors
and executives. The performance of the Group depends on the quality of its Directors and executives. The remuneration
philosophy is to attract, motivate and retain high performance and high-quality personnel.
The Remuneration Committee has structured an executive remuneration framework that is market competitive and
complementary to the reward strategy of the Group.
The reward framework is designed to align executive reward to shareholders’ interests. The Board have considered that
it should seek to enhance shareholders’ interests by:
●
●
●
having economic profit as a core component of plan design
focusing on sustained growth in shareholder wealth, consisting of dividends and growth in share price, and delivering
constant or increasing return on assets as well as focusing the executive on key non-financial drivers of value
attracting and retaining high calibre executives
Additionally, the reward framework should seek to enhance executives’ interests by:
●
●
●
rewarding capability and experience
reflecting competitive reward for contribution to growth in shareholder wealth
providing a clear structure for earning rewards
In accordance with best practice corporate governance, the structure of non-executive Director and executive Director
remuneration is separate.
12
Resonance Health Limited
Directors' report
30 June 2023
Non-executive Directors remuneration
The Board seeks to set aggregate remuneration at a level that provides the Company with the ability to attract and retain
Directors of a high calibre, whilst incurring a cost that is acceptable to shareholders.
Non-executive Directors’ fees not exceeding an aggregate of $250,000 per annum have been approved by the Company
in a general meeting.
The amount of aggregate remuneration sought to be approved by shareholders and the way it is apportioned amongst
Directors is reviewed periodically. The Board considers fees paid to non-executive directors of comparable companies
when undertaking the annual review process.
Each of the non-executive Directors receives a fixed fee for their services as directors. There is no direct link between
remuneration paid to any of the Directors and corporate performance.
Executive remuneration
The Group aims to reward executives based on their position and responsibility, with a level and mix of remuneration
which has both fixed and variable components.
The executive remuneration and reward framework has four components:
●
●
●
●
base pay and non-monetary benefits
short-term performance incentives
share-based payments
other remuneration such as superannuation and long service leave
The combination of these comprises the executive’s total remuneration.
Fixed remuneration, consisting of base salary, superannuation and non-monetary benefits, are reviewed annually by the
Remuneration Committee based on individual and business unit performance, the overall performance of the Group and
comparable market remunerations.
The short-term incentives (‘STI’) program is designed to align the targets of the business units with the performance
hurdles of executives. STI payments are granted to executives based on specific annual targets and key performance
indicators (‘KPI’s’) being achieved. KPI’s include profit contribution, customer satisfaction, leadership contribution and
product management.
The long-term incentives (‘LTI’) include long service leave and share-based payments.
All bonuses and incentives are linked to predetermined performance criteria. The Board may, however, exercise its
discretion in relation to approving incentives and bonuses.
The Remuneration Committee is of the opinion that the continued improved results can be attributed in part to the
adoption of performance based compensation and is satisfied that this improvement will continue to increase shareholder
wealth if maintained over the coming years.
Adoption of Remuneration Report
The remuneration report for the year ended 30 June 2022 was adopted at the 2022 AGM.
Details of remuneration
Amounts of remuneration
Details of the remuneration of key management personnel of the Group are set out in the following tables.
13
Resonance Health Limited
Directors' report
30 June 2023
The key management personnel of the Group consisted of the following Directors of Resonance Health Limited:
●
●
●
●
●
Dr Martin Blake
Mr Mitchell Wells
Mr Simon Panton
Dr Travis Baroni
Mr Aaron Brinkworth – appointed 27 March 2023
And the following person:
●
Mr Nicholas Allan – Chief Operating Officer, Chief Financial Officer & Joint Company Secretary
Short-term benefits
Post-
employment
benefits
Long-term
benefits
Share-based
payments
2023
Cash salary
and fees
$
Cash
bonus
$
Non-Executive Directors:
Dr M Blake
Mr S Panton
Dr T Baroni
Mr A Brinkworth
Executive Directors:
Mr M Wells
Other Key Management
Personnel:
Mr N Allan
54,299
36,199
36,199
10,538
249,412
219,655
606,302
Non-
Super-
monetary annuation
$
$
Long service
leave
$
Equity-
settled
$
Total
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
5,701
3,801
3,801
1,106
25,146
23,064
62,619
-
-
-
-
-
-
-
-
-
-
-
60,000
40,000
40,000
11,644
48,325
322,883
-
48,325
242,719
717,246
Short-term benefits
Post-
employment
benefits
Long-term
benefits
Share-based
payments
2022
Cash salary
and fees
$
Cash
bonus
$
Non-Executive Directors:
Dr M Blake
Mr S Panton
Dr T Baroni
Executive Directors:
Mr M Wells
Other Key Management
Personnel:
Ms A Laws*
Mr N Allan
54,545
36,364
36,364
236,432
39,998
204,545
608,248
Non-
Super-
monetary annuation
$
$
Long service
leave
$
Equity-
settled
$
Total
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
5,454
3,636
3,636
23,568
577
20,455
57,326
14
-
-
-
-
-
-
-
-
-
-
59,999
40,000
40,000
-
260,000
-
-
-
40,575
225,000
665,574
Resonance Health Limited
Directors' report
30 June 2023
* Ms A Laws resigned on 2 July 2021, the cash salary and fees includes $34,228 of unused annual leave paid out on
termination of employment.
The proportion of remuneration linked to performance and the fixed proportion are as follows:
Name
Non-Executive Directors:
Dr M Blake
Mr S Panton
Dr T Baroni
Mr A Brinkworth
Executive Directors:
Mr M Wells
Other Key Management Personnel:
Mr N Allan
Ms A Laws
Service agreements
Fixed remuneration
2022
2023
Remuneration linked to
performance
2023
2022
100%
100%
100%
100%
100%
100%
100%
-
-
-
-
-
85%
100%
15%
100%
-
100%
100%
-
-
-
-
-
-
-
-
-
Remuneration and other terms of employment for key management personnel are formalised in service agreements.
Details of these agreements are as follows:
Name:
Title:
Agreement commenced:
Details:
Name:
Title:
Agreement commenced:
Details:
Mr Wells
Managing Director
1 July 2021
The employment agreement provides for a salary of $254,118 plus superannuation
and a termination notice of 3 months by the Company or Mr Wells.
Mr Allan
Chief Operating Officer, Chief Financial Officer & Joint Company Secretary
31 May 2021
The employment agreement provides for a salary of $225,000 plus superannuation
and a termination notice of 3 months by the Company or Mr Allan.
Key management personnel have no entitlement to termination payments in the event of removal for misconduct.
Share-based compensation
Issue of shares
There were no shares issued to Directors and other key management personnel as part of compensation during the year
ended 30 June 2023.
Options
There were no options over ordinary shares issued to Directors and other key management personnel as part of
compensation that were outstanding as at 30 June 2023.
There were no options over ordinary shares granted to or vested by Directors and other key management personnel as
part of compensation during the year ended 30 June 2023.
15
Resonance Health Limited
Directors' report
30 June 2023
Performance rights
There were no performance rights over ordinary shares issued to Directors and other key management personnel during
the year ended 30 June 2023. However, performance rights were approved for issue by shareholders at the Company's
AGM on 24 November 2022, and are being expensed from this date as the services to which the issue relate to are already
being provided.
The terms and conditions of each grant of performance rights over ordinary shares affecting remuneration of Directors
and other key management personnel in this financial year or future reporting years are as follows:
Name
Mitchell Wells
Mitchell Wells
Mitchell Wells
Number of
rights
granted
Valuation date
Vesting date
610,000 24 November 2022
610,000 24 November 2022
610,000 24 November 2022
1 October 2023
1 October 2024
1 October 2025
Performance rights granted carry no dividend or voting rights.
Fair value
per right
at grant date
$0.064
$0.064
$0.064
There were no performance rights over ordinary shares granted to or vested by Directors and other key management
personnel as part of compensation during the year ended 30 June 2023.
Additional information
The earnings of the Group for the five years to 30 June 2023 are summarised below:
2023
$'000
2022
$'000
2021
$'000
2020
$'000
2019
$'000
Sales revenue
EBITDA
EBIT
(Loss)/profit after income tax
4,404
(863)
(1,300)
(780)
3,828
(1,126)
(1,555)
(1,142)
3,779
675
310
586
3,668
653
(994)
(715)
3,625
1,150
904
1,270
The factors that are considered to affect total shareholders return ('TSR') are summarised below:
2023
2022
2021
2020
2019
Share price at financial year end ($)
Basic (loss)/earnings per share (cents per
share)
0.04
0.06
0.16
0.15
(0.17)
(0.25)
0.14
(0.17)
0.11
0.31
16
Resonance Health Limited
Directors' report
30 June 2023
Additional disclosures relating to key management personnel
Shareholding
The number of shares in the Company held during the financial year by each Director and other members of key
management personnel of the Group, including their personally related parties, is set out below:
Balance at
the start of
the year
Received
as part of
remuneration Additions
Disposals/
other
Balance at
the end of
the year
Ordinary shares
Dr M Blake
Mr M Wells
Dr T Baroni
Mr S Panton
Mr N Allan
Option holding
6,464,677
600,000
350,000
73,846,350
-
81,261,027
-
-
-
-
-
-
-
400,000
-
500,000
-
900,000
-
-
-
-
-
-
6,464,677
1,000,000
350,000
74,346,350
-
82,161,027
The number of options over ordinary shares in the Company held during the financial year by each Director and other
members of key management personnel of the Group, including their personally related parties, is set out below:
Options over ordinary shares
Dr M Blake
Mr M Wells
Dr T Baroni
Mr S Panton
Mr N Allan
Balance at
the start of
the year
3,000,000
3,000,000
1,800,000
3,000,000
-
10,800,000
Expired/
off market
transfer/
other
Balance at
the end of
the year
Granted
Exercised
-
-
-
-
-
-
-
-
-
-
-
-
(3,000,000)
(3,000,000)
(1,800,000)
(3,000,000)
-
(10,800,000)
-
-
-
-
-
-
This concludes the remuneration report, which has been audited.
Shares under option
There were no unissued ordinary shares of Resonance Health Limited under option outstanding at the date of this report.
Shares under performance rights
There were no unissued ordinary shares of Resonance Health Limited under performance rights outstanding at the date
of this report. It is intended that 1,800,000 performance rights will be issued to Mr Mitchell Wells as approved by
shareholders at the Company AGM in November 2022.
Shares issued on the exercise of options
There were no ordinary shares of Resonance Health Limited issued on the exercise of options during the year ended 30
June 2023 and up to the date of this report.
Shares issued on the exercise of performance rights
There were no ordinary shares of Resonance Health Limited issued on the exercise of performance rights during the year
ended 30 June 2023 and up to the date of this report.
17
Resonance Health Limited
Directors' report
30 June 2023
Indemnity and insurance of officers
The Company has indemnified the Directors and executives of the Company for costs incurred, in their capacity as a
Director or executive, for which they may be held personally liable, except where there is a lack of good faith.
During the financial year, the Company paid a premium in respect of a contract to insure the Directors and executives of
the Company against a liability to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits
disclosure of the nature of the liability and the amount of the premium.
Indemnity and insurance of auditor
The Company has not, during or since the end of the financial year, indemnified or agreed to indemnify the auditor of the
Company or any related entity against a liability incurred by the auditor.
During the financial year, the Company has not paid a premium in respect of a contract to insure the auditor of the
Company or any related entity.
Proceedings on behalf of the Company
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on
behalf of the Company, or to intervene in any proceedings to which the Company is a party for the purpose of taking
responsibility on behalf of the Company for all or part of those proceedings.
Non-audit services
Details of the amounts paid or payable to the auditor for non-audit services provided during the financial year by the
auditor are outlined in note 24 to the financial statements.
The Directors are satisfied that the provision of non-audit services during the financial year, by the auditor (or by another
person or firm on the auditor's behalf), is compatible with the general standard of independence for auditors imposed by
the Corporations Act 2001.
The Directors are of the opinion that the services as disclosed in note 24 to the financial statements do not compromise
the external auditor's independence requirements of the Corporations Act 2001 for the following reasons:
●
●
all non-audit services have been reviewed and approved to ensure that they do not impact the integrity and
objectivity of the auditor; and
none of the services undermine the general principles relating to auditor independence as set out in APES 110 Code
of Ethics for Professional Accountants issued by the Accounting Professional and Ethical Standards Board, including
reviewing or auditing the auditor's own work, acting in a management or decision-making capacity for the Company,
acting as advocate for the Company or jointly sharing economic risks and rewards.
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
immediately after this Directors' report.
Auditor
HLB Mann Judd continues in office in accordance with section 327 of the Corporations Act 2001.
18
Resonance Health Limited
Directors' report
30 June 2023
This report is made in accordance with a resolution of Directors, pursuant to section 298(2)(a) of the Corporations Act
2001.
On behalf of the Directors
___________________________
Dr Martin Blake
Chair
29 August 2023
Perth, Western Australia
19
AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of the consolidated financial report of Resonance Health Limited for
the year ended 30 June 2023, I declare that to the best of my knowledge and belief, there have
been no contraventions of:
a)
the auditor independence requirements of the Corporations Act 2001 in relation to the audit;
and
b)
any applicable code of professional conduct in relation to the audit.
Perth, Western Australia
29 August 2023
M R Ohm
Partner
Resonance Health Limited
Consolidated statement of profit or loss and other comprehensive income
For the year ended 30 June 2023
Revenue
Other income
Expenses
Depreciation expense
Amortisation expense
Impairment of research & development
Share-based payments
Marketing & travel
Consulting and professional services
Employee benefits expense
Research and development
Statutory and compliance
Foreign exchange gain/(loss)
Other expenses
Loss before income tax benefit
Income tax benefit
Note
2023
$
2022
$
5
6
4,404,360
3,827,976
106,899
28,323
(136,485)
(299,874)
(31,460)
(24,431)
(817,667)
(236,969)
(3,111,198)
(708,251)
(197,495)
285,356
(496,841)
(114,527)
(314,579)
-
(5,617)
(1,016,199)
(241,951)
(2,494,576)
(716,231)
(222,748)
192,602
(473,995)
(1,264,056)
(1,551,522)
7
483,695
409,745
Loss after income tax benefit for the year attributable to the owners of
Resonance Health Limited
20
(780,361)
(1,141,777)
Other comprehensive income for the year, net of tax
-
-
Total comprehensive income for the year attributable to the owners of
Resonance Health Limited
Basic loss per share
Diluted loss per share
(780,361)
(1,141,777)
Cents
Cents
33
33
(0.17)
(0.17)
(0.25)
(0.25)
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with
the accompanying notes
21
Resonance Health Limited
Consolidated statement of financial position
As at 30 June 2023
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Other assets
Total current assets
Non-current assets
Property, plant and equipment
Right-of-use assets
Intangibles
Other assets
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Lease liabilities
Provisions
Other liabilities
Total current liabilities
Non-current liabilities
Lease liabilities
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Accumulated losses
Total equity
Note
2023
$
2022
$
8
9
10
11
12
13
10
14
15
16
17
15
6,361,622
1,143,870
51,909
7,557,401
6,783,166
1,505,040
59,554
8,347,760
385,106
244,494
2,713,349
82,886
3,425,835
137,686
253,480
2,865,005
82,886
3,339,057
10,983,236 11,686,817
732,378
100,394
31,414
11,188
875,374
697,272
79,794
7,673
22,411
807,150
172,551
172,551
188,426
188,426
1,047,925
995,576
9,935,311 10,691,241
18
19
20
73,882,788 73,882,788
2,069,794
(66,041,702) (65,261,341)
2,094,225
9,935,311 10,691,241
The above consolidated statement of financial position should be read in conjunction with the accompanying notes
22
Resonance Health Limited
Consolidated statement of changes in equity
For the year ended 30 June 2023
Foreign
currency
translation
reserve
$
Share-based
payments
reserve
$
Issued
capital
$
Accumulated
losses
$
Total equity
$
Balance at 1 July 2021
73,882,788
(270,580)
2,334,757 (64,119,564) 11,827,401
Loss after income tax benefit for the year
Other comprehensive income for the year, net
of tax
Total comprehensive income for the year
Transactions with owners in their capacity as
owners:
Share-based payments (note 34)
-
-
-
-
-
-
-
-
-
(1,141,777)
(1,141,777)
-
-
-
-
(1,141,777)
(1,141,777)
5,617
-
5,617
Balance at 30 June 2022
73,882,788
(270,580)
2,340,374 (65,261,341) 10,691,241
Foreign
currency
translation
reserve
$
Share-based
payments
reserve
$
Issued
capital
$
Accumulated
losses
$
Total equity
$
Balance at 1 July 2022
73,882,788
(270,580)
2,340,374 (65,261,341) 10,691,241
Loss after income tax benefit for the year
Other comprehensive income for the year, net
of tax
Total comprehensive income for the year
Transactions with owners in their capacity as
owners:
Share-based payments (note 34)
-
-
-
-
-
-
-
-
-
-
(780,361)
(780,361)
-
-
(780,361)
(780,361)
-
24,431
-
24,431
Balance at 30 June 2023
73,882,788
(270,580)
2,364,805 (66,041,702)
9,935,311
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes
23
Resonance Health Limited
Consolidated statement of cash flows
For the year ended 30 June 2023
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employee
Interest received
Grants received
R&D tax incentive received
Note
2023
$
2022
$
4,334,471
(5,476,987)
3,527,664
(5,012,784)
(1,142,516)
25,048
67,000
893,440
(1,485,120)
4,976
25,000
-
Net cash used in operating activities
32
(157,028)
(1,455,144)
Cash flows from investing activities
Payments for property, plant and equipment
Payments for intangibles
Net cash used in investing activities
Cash flows from financing activities
Repayment of lease liabilities
Payments for cash backed guarantees
Net cash used in financing activities
Net decrease in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Effects of exchange rate changes on cash and cash equivalents
11
13
(288,225)
(179,678)
(119,043)
(584,954)
(467,903)
(703,997)
(81,967)
-
(70,129)
(36,986)
(81,967)
(107,115)
(706,898)
6,783,166
285,354
(2,266,256)
8,856,820
192,602
Cash and cash equivalents at the end of the financial year
8
6,361,622
6,783,166
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes
24
Resonance Health Limited
Notes to the consolidated financial statements
30 June 2023
Note 1. General information
The financial statements cover Resonance Health Limited as a Group consisting of Resonance Health Limited and the
entities it controlled at the end of, or during, the year. The financial statements are presented in Australian dollars, which
is Resonance Health Limited's functional and presentation currency.
Resonance Health Limited is a listed public company limited by shares, incorporated and domiciled in Australia. Its
registered office and principal place of business is:
Level 1
141 Burswood Road
BURSWOOD WA 6100
T: +61 8 9286 5300
F: +61 8 9286 5399
A description of the nature of the Group's operations and its principal activities are included in the Directors' report, which
is not part of the financial statements.
The financial statements were authorised for issue, in accordance with a resolution of Directors, on 29 August 2023. The
Directors have the power to amend and reissue the financial statements.
Note 2. Significant accounting policies
The principal accounting policies adopted in the preparation of the financial statements are set out below. These policies
have been consistently applied to all the years presented, unless otherwise stated.
New or amended Accounting Standards and Interpretations adopted
The Group 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.
Going concern
The financial report has been prepared on the going concern basis, which contemplates continuity of normal business
activities and the realisation of assets and settlements of liability in the ordinary course of business.
Basis of preparation
These general purpose financial statements have been prepared in accordance with Australian Accounting Standards and
Interpretations issued by the Australian Accounting Standards Board ('AASB') and the Corporations Act 2001, as
appropriate for for-profit oriented entities. These financial statements also comply with International Financial Reporting
Standards as issued by the International Accounting Standards Board ('IASB').
Historical cost convention:
The financial statements have been prepared under the historical cost convention.
Critical accounting estimates
The preparation of the financial statements requires the use of certain critical accounting estimates. It also requires
management to exercise its judgement in the process of applying the Group's accounting policies. The areas involving a
higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial
statements, are disclosed in note 3.
25
Resonance Health Limited
Notes to the consolidated financial statements
30 June 2023
Note 2. Significant accounting policies (continued)
Parent entity information
In accordance with the Corporations Act 2001, these financial statements present the results of the Group only.
Supplementary information about the parent entity is disclosed in note 29.
Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Resonance Health Limited
('Company' or 'parent entity') as at 30 June 2023 and the results of all subsidiaries for the year then ended. Resonance
Health Limited and its subsidiaries together are referred to in these financial statements as the 'Group'.
Subsidiaries are all those 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.
Intercompany transactions, balances and unrealised gains on transactions between entities in the Group are eliminated.
Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred.
Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted
by the Group.
The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change in ownership
interest, without the loss of control, is accounted for as an equity transaction, where the difference between the
consideration transferred and the book value of the share of the non-controlling interest acquired is recognised directly
in equity attributable to the parent.
Where the Group loses control over a subsidiary, it derecognises the assets including goodwill, liabilities and non-
controlling interest in the subsidiary together with any cumulative translation differences recognised in equity. The Group
recognises the fair value of the consideration received and the fair value of any investment retained together with any
gain or loss in profit or loss.
Operating segments
Operating segments are presented using the 'management approach', where the information presented is on the same
basis as the internal reports provided to the Chief Operating Decision Makers ('CODM'). The CODM is responsible for the
allocation of resources to operating segments and assessing their performance. The Board of Directors have been
identified as the CODM.
Foreign currency translation
The financial statements are presented in Australian dollars, which is Resonance Health Limited's functional and
presentation currency.
Foreign currency transactions
Foreign currency transactions are translated into Australian dollars using the exchange rates prevailing at the dates of the
transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the
translation at financial year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are
recognised in profit or loss.
Foreign operations
The assets and liabilities of foreign operations are translated into Australian dollars using the exchange rates at the
reporting date. The revenues and expenses of foreign operations are translated into Australian dollars using the average
exchange rates, which approximate the rates at the dates of the transactions, for the period. All resulting foreign exchange
differences are recognised in other comprehensive income through the foreign currency reserve in equity.
26
Resonance Health Limited
Notes to the consolidated financial statements
30 June 2023
Note 2. Significant accounting policies (continued)
The foreign currency reserve is recognised in profit or loss when the foreign operation or net investment is disposed of.
Revenue recognition
Refer to note 5 for accounting policy.
Government grants
Grants from the government are recognised at their fair value where there is a reasonable assurance that the grant will
be received and the Group will comply with all attached conditions.
Interest
Interest revenue is recognised as interest accrues using the effective interest method. This is a method of calculating the
amortised cost of a financial asset and allocating the interest income over the relevant period using the effective interest
rate, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset
to the net carrying amount of the financial asset.
Other revenue
Other revenue is recognised when it is received or when the right to receive payment is established.
Income tax
The income tax expense or benefit for the period is the tax payable on that period's taxable income based on the applicable
income tax rate for each jurisdiction, adjusted by the changes in deferred tax assets and liabilities attributable to
temporary differences, unused tax losses and the adjustment recognised for prior periods, where applicable.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to be applied when
the assets are recovered or liabilities are settled, based on those tax rates that are enacted or substantively enacted,
except for:
●
●
When the deferred income tax asset or liability arises from the initial recognition of goodwill or an asset or liability
in a transaction that is not a business combination and that, at the time of the transaction, affects neither the
accounting nor taxable profits; or
When the taxable temporary difference is associated with interests in subsidiaries, associates or joint ventures, and
the timing of the reversal can be controlled and it is probable that the temporary difference will not reverse in the
foreseeable future.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that
future taxable amounts will be available to utilise those temporary differences and losses.
The carrying amount of recognised and unrecognised deferred tax assets are reviewed at each reporting date. Deferred
tax assets recognised are reduced to the extent that it is no longer probable that future taxable profits will be available
for the carrying amount to be recovered. Previously unrecognised deferred tax assets are recognised to the extent that it
is probable that there are future taxable profits available to recover the asset.
Deferred tax assets and liabilities are offset only where there is a legally enforceable right to offset current tax assets
against current tax liabilities and deferred tax assets against deferred tax liabilities; and they relate to the same taxable
authority on either the same taxable entity or different taxable entities which intend to settle simultaneously.
Resonance Health Limited (the 'head entity') and its wholly-owned Australian subsidiaries have formed an income tax
consolidated group under the tax consolidation regime. The head entity and each subsidiary in the tax consolidated group
continue to account for their own current and deferred tax amounts. The tax consolidated group has applied the 'separate
taxpayer within group' approach in determining the appropriate amount of taxes to allocate to members of the tax
consolidated group.
27
Resonance Health Limited
Notes to the consolidated financial statements
30 June 2023
Note 2. Significant accounting policies (continued)
Current and non-current classification
Assets and liabilities are presented in the statement of financial position based on current and non-current classification.
An asset is classified as current when: it is either expected to be realised or intended to be sold or consumed in the Group's
normal operating cycle; it is held primarily for the purpose of trading; it is expected to be realised within 12 months after
the reporting period; or the asset is cash or cash equivalent unless restricted from being exchanged or used to settle a
liability for at least 12 months after the reporting period. All other assets are classified as non-current.
A liability is classified as current when: it is either expected to be settled in the Group's normal operating cycle; it is held
primarily for the purpose of trading; it is due to be settled within 12 months after the reporting period; or there is no
unconditional right to defer the settlement of the liability for at least 12 months after the reporting period. All other
liabilities are classified as non-current.
Deferred tax assets and liabilities are always classified as non-current.
Cash and cash equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly
liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash
and which are subject to an insignificant risk of changes in value.
Trade and other receivables
Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective
interest method, less any allowance for expected credit losses. Trade receivables are generally due for settlement within
90 days.
The Group has applied the simplified approach to measuring expected credit losses, which uses a lifetime expected loss
allowance. To measure the expected credit losses, trade receivables have been grouped based on days overdue.
Other receivables are recognised at amortised cost, less any allowance for expected credit losses.
Property, plant and equipment
Plant and equipment is stated at historical cost less accumulated depreciation and impairment. Historical cost includes
expenditure that is directly attributable to the acquisition of the items.
Depreciation is calculated on a straight-line basis to write off the net cost of each item of property, plant and equipment
(excluding land) over their expected useful lives as follows:
Plant and equipment
3-5 years
The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each reporting
date.
Leasehold improvements are depreciated over the unexpired period of the lease or the estimated useful life of the assets,
whichever is shorter.
An item of property, plant and equipment is derecognised upon disposal or when there is no future economic benefit to
the Group. Gains and losses between the carrying amount and the disposal proceeds are taken to profit or loss.
28
Resonance Health Limited
Notes to the consolidated financial statements
30 June 2023
Note 2. Significant accounting policies (continued)
Right-of-use assets
A right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is measured at cost, which
comprises the initial amount of the lease liability, adjusted for, as applicable, any lease payments made at or before the
commencement date net of any lease incentives received, any initial direct costs incurred, and, except where included in
the cost of inventories, an estimate of costs expected to be incurred for dismantling and removing the underlying asset,
and restoring the site or asset.
Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the lease or the estimated useful
life of the asset, whichever is the shorter. Where the Group expects to obtain ownership of the leased asset at the end of
the lease term, the depreciation is over its estimated useful life. Right-of use assets are subject to impairment or adjusted
for any remeasurement of lease liabilities.
The Group has elected not to recognise a right-of-use asset and corresponding lease liability for short-term leases with
terms of 12 months or less and leases of low-value assets. Lease payments on these assets are expensed to profit or loss
as incurred.
Intangible assets
Research and development
Expenditure on research activities is recognised as an expense in the period in which it is incurred. Where no internally-
generated intangible asset can be recognised, development expenditure is recognised as an expense in the period as
incurred.
An intangible asset arising from development expenditure on an internal project is recognised if, and only if, all of the
following have been demonstrated:
●
●
●
●
●
●
The technical feasibility of completing the intangible asset so that it will be available for use or sale;
The intention to complete the intangible asset and use or sell it;
The ability to use or sell the intangible asset;
How the intangible asset will generate probably future economic benefits;
The availability of adequate technical, financial and other resources to complete development and to use or sell the
intangible asset; and
The ability to measure reliably the expenditure attributable to the intangible asset during its development.
The amount initially recognised for internally generated intangible assets is the sum of the expenditure incurred from the
date when the intangible asset first meets the recognition criteria listed above.
Subsequent to initial recognition, internally-generated intangible assets are reported at cost less accumulated
amortisation and accumulated impairment losses, on the same basis as intangible assets acquired separately.
The useful life used in the calculation of amortisation is 10 years.
Trade and other payables
These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial year and
which are unpaid. Due to their short-term nature they are measured at amortised cost and are not discounted. The
amounts are unsecured and are usually paid within 30 days of recognition.
29
Resonance Health Limited
Notes to the consolidated financial statements
30 June 2023
Note 2. Significant accounting policies (continued)
Provisions
Provisions are recognised when the Group has a present (legal or constructive) obligation as a result of a past event, it is
probable the Group will be required to settle the obligation, and a reliable estimate can be made of the amount of the
obligation. The amount recognised as a provision is the best estimate of the consideration required to settle the present
obligation at the reporting date, taking into account the risks and uncertainties surrounding the obligation. If the time
value of money is material, provisions are discounted using a current pre-tax rate specific to the liability. The increase in
the provision resulting from the passage of time is recognised as a finance cost.
Lease liabilities
A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised at the present
value of the lease payments to be made over the term of the lease, discounted using the interest rate implicit in the lease
or, if that rate cannot be readily determined, the Group's incremental borrowing rate. Lease payments comprise of fixed
payments less any lease incentives receivable, variable lease payments that depend on an index or a rate, amounts
expected to be paid under residual value guarantees, exercise price of a purchase option when the exercise of the option
is reasonably certain to occur, and any anticipated termination penalties. The variable lease payments that do not depend
on an index or a rate are expensed in the period in which they are incurred.
Lease liabilities are measured at amortised cost using the effective interest method. The carrying amounts are remeasured
if there is a change in the following: future lease payments arising from a change in an index or a rate used; residual
guarantee; lease term; certainty of a purchase option and termination penalties. When a lease liability is remeasured, an
adjustment is made to the corresponding right-of use asset, or to profit or loss if the carrying amount of the right-of-use
asset is fully written down.
Employee benefits
Short-term employee benefits
Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service leave expected to be
settled wholly within 12 months of the reporting date are measured at the amounts expected to be paid when the
liabilities are settled.
Other long-term employee benefits
The liability for annual leave and long service leave not expected to be settled within 12 months of the reporting date are
measured at the present value of expected future payments to be made in respect of services provided by employees up
to the reporting date using the projected unit credit method. Consideration is given to expected future wage and salary
levels, experience of employee departures and periods of service. Expected future payments are discounted using market
yields at the reporting date on high quality corporate bonds with terms to maturity and currency that match, as closely as
possible, the estimated future cash outflows.
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 an appropriate 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 Group receives the services that entitle the employees to receive payment. No account is taken of any other
vesting conditions.
30
Resonance Health Limited
Notes to the consolidated financial statements
30 June 2023
Note 2. Significant accounting policies (continued)
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 an
appropriate 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 Group or employee, the failure to satisfy the condition is treated
as a cancellation. If the condition is not within the control of the Group 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.
Fair value measurement
When an asset or liability, financial or non-financial, is measured at fair value for recognition or disclosure purposes, the
fair value is based on 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; and assumes that the transaction will take place either: in the
principal market; or in the absence of a principal market, in the most advantageous market.
Fair value is measured using the assumptions that market participants would use when pricing the asset or liability,
assuming they act in their economic best interests. For non-financial assets, the fair value measurement is based on its
highest and best use. Valuation techniques that are appropriate in the circumstances and for which sufficient data are
available to measure fair value, are used, maximising the use of relevant observable inputs and minimising the use of
unobservable inputs.
Issued capital
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of
tax, from the proceeds.
31
Resonance Health Limited
Notes to the consolidated financial statements
30 June 2023
Note 2. Significant accounting policies (continued)
Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to the owners of Resonance Health Limited,
excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares
outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the financial year.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account
the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the
weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential
ordinary shares.
Goods and Services Tax ('GST') and other similar taxes
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not
recoverable from the tax authority. In this case it is recognised as part of the cost of the acquisition of the asset or as part
of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST
recoverable from, or payable to, the tax authority is included in other receivables or other payables in the statement of
financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities
which are recoverable from, or payable to the tax authority, are presented as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the tax authority.
New Accounting Standards and Interpretations not yet mandatory or early adopted
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet
mandatory, have not been early adopted by the Group for the annual reporting period ended 30 June 2023. The Group
has not yet assessed the impact of these new or amended Accounting Standards and Interpretations.
Note 3. Critical accounting judgements, estimates and assumptions
The preparation of the financial statements requires management to make judgements, estimates and assumptions that
affect the reported amounts in the financial statements. Management continually evaluates its judgements and estimates
in relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its judgements, estimates
and assumptions on historical experience and on other various factors, including expectations of future events,
management believes to be reasonable under the circumstances. The resulting accounting judgements and estimates will
seldom equal the related actual results. The judgements, estimates and assumptions that have a significant risk of causing
a material adjustment to the carrying amounts of assets and liabilities (refer to the respective notes) within the next
financial year are discussed below.
Impairment of intangibles
The Group determines whether intangibles with indefinite useful lives are impaired at least on an annual basis. This
requires an estimation of the recoverable amount of the cash generating units to which the intangibles with indefinite
useful lives are allocated. The assumptions used in this estimation of recoverable amount and the carrying amount of
intangibles with indefinite useful lives are discussed in note 13.
Additionally, the Group assesses impairment at the end of each reporting period by evaluating conditions and events
specific to the Group that may indicate impairment triggers. Recoverable amounts of relevant assets are reassessed using
value-in-use calculations which incorporate various key assumptions.
32
Resonance Health Limited
Notes to the consolidated financial statements
30 June 2023
Note 3. Critical accounting judgements, estimates and assumptions (continued)
With respect to cash flow projections growth rates have been factored into valuation models for the next five years on
the basis of management’s expectations regarding the Group’s continued ability to increase market share based on
contractual obligations already in place and historical sales growth rates.
Historic Group averages have been used to reflect projected cash flow growth rates in year 1 and year 2. In subsequent
periods a consistent growth rate has been attached as a conservative estimate for use in the impairment calculation.
Share-based payment transactions
The Group measures the cost of equity-settled transactions with employees by reference to the fair value of the equity
instruments at the date at which they are granted. The fair value is determined by using the Black-Scholes model taking
into account the terms and conditions upon which the instruments were granted. The accounting estimates and
assumptions relating to equity-settled share-based payments would have no impact on the carrying amounts of assets
and liabilities within the next annual reporting period but may impact profit or loss and equity.
Estimation of useful lives of assets
The Group determines the estimated useful lives and related depreciation and amortisation charges for its property, plant
and equipment and finite life intangible assets. The useful lives could change significantly as a result of technical
innovations or some other event. The depreciation and amortisation charge will increase where the useful lives are less
than previously estimated lives, or technically obsolete or non-strategic assets that have been abandoned or sold will be
written off or written down.
Impairment of non-financial assets other than goodwill and other indefinite life intangible assets
The Group assesses impairment of non-financial assets other than goodwill and other indefinite life intangible assets at
each reporting date by evaluating conditions specific to the Group and to the particular asset that may lead to impairment.
If an impairment trigger exists, the recoverable amount of the asset is determined. This involves fair value less costs of
disposal or value-in-use calculations, which incorporate a number of key estimates and assumptions.
Lease term
The lease term is a significant component in the measurement of both the right-of-use asset and lease liability. Judgement
is exercised in determining whether there is reasonable certainty that an option to extend the lease or purchase the
underlying asset will be exercised, or an option to terminate the lease will not be exercised, when ascertaining the periods
to be included in the lease term. In determining the lease term, all facts and circumstances that create an economical
incentive to exercise an extension option, or not to exercise a termination option, are considered at the lease
commencement date. Factors considered may include the importance of the asset to the Group's operations; comparison
of terms and conditions to prevailing market rates; incurrence of significant penalties; existence of significant leasehold
improvements; and the costs and disruption to replace the asset. The Group reassesses whether it is reasonably certain
to exercise an extension option, or not exercise a termination option, if there is a significant event or significant change in
circumstances.
Note 4. Operating segments
Identification of reportable operating segments
The chief operating decision maker is considered to be the Company’s Board of Directors. The Group’s operating segments
are determined by differences in the type of activities performed. The financial results of the Group’s operating segments
are reviewed by the Board of Directors on a quarterly basis.
33
Resonance Health Limited
Notes to the consolidated financial statements
30 June 2023
Note 4. Operating segments (continued)
Business Segments
The following table presents revenue and profit/(loss) information and certain asset and liability information regarding
business segments for the year ended 30 June 2023.
2023
Revenue
Sales to external customers
Total revenue
Total revenue
Other expenses
Other income
(Loss)/profit before income tax benefit
Income tax benefit
Loss after income tax benefit
Assets
Segment assets
Total assets
Liabilities
Segment liabilities
Total liabilities
2022
Revenue
Sales to external customers
Total revenue
Total revenue
Other expenses
Other income
(Loss)/profit before income tax benefit
Income tax benefit
Loss after income tax benefit
Assets
Segment assets
Total assets
Liabilities
Segment liabilities
Total liabilities
Services
$
Research and
development Corporate
$
$
Other
segments
$
Total
$
4,404,360
4,404,360
-
-
-
-
4,404,360
(993,898)
-
3,410,462
-
(1,039,585)
-
(1,039,585)
-
(3,741,832)
106,899
(3,634,933)
1,104,333
2,713,349
7,165,554
-
-
1,047,925
-
-
-
-
-
-
4,404,360
4,404,360
4,404,360
(5,775,315)
106,899
(1,264,056)
483,695
(780,361)
- 10,983,236
10,983,236
-
1,047,925
1,047,925
Services
$
Research and
development Corporate
$
$
Other
segments
$
Total
$
3,827,976
3,827,976
-
-
-
-
3,827,976
(704,525)
-
3,123,451
-
(1,030,810)
-
(1,030,810)
-
(3,672,486)
28,323
(3,644,163)
1,045,668
2,865,005
7,776,144
-
-
-
-
-
-
3,827,976
3,827,976
3,827,976
(5,407,821)
28,323
(1,551,522)
409,745
(1,141,777)
- 11,686,817
11,686,817
-
-
995,576
-
995,576
995,576
The group derived 14% of its external customer sales revenue from one major customer (2022: 11%)
34
Resonance Health Limited
Notes to the consolidated financial statements
30 June 2023
Note 4. Operating segments (continued)
Geographical Segments
The company earns revenue in three significant geographical regions, countries are grouped in the regions of Asia/Pacific,
North America, South America and Europe-Middle-East-Africa (EMEA).
All non-current assets are located in Australia being the Asia/Pacific region, applicable disclosure information is disclosed
in Business Segment assets and no additional disclosure is made.
Asia/Pacific
North America
South America
EMEA
Total sales to external customers
Note 5. Revenue
Accounting policy for revenue
2023
$
2022
$
293,885
2,779,833
-
1,330,642
327,909
2,575,512
3,812
920,743
4,404,360
3,827,976
The Group generates revenue largely in the United States of America and the United Kingdom.
The revenue and profits recognised in any period are based on the delivery of performance obligations and an assessment
of when control is transferred to the customer.
In determining the amount of revenue and profits to record, and related statement items (such as contract fulfilment
assets, capitalisation of costs to obtain a contract, trade receivables, accrued income and deferred income) to recognise
in the period, management is required to form a number of key judgements and assumptions. This includes an assessment
of the costs the Group incurs to deliver the contractual commitments and whether such costs should be expensed as
incurred or capitalised.
Revenue is recognised either when the performance obligation in the contract has been performed (so 'point in time'
recognition) or 'over time' as control of the performance obligation is transferred to the customer.
For contracts with multiple components to be delivered such as establishment services, trial establishment project and
data management, project and data management services and analysis services management applies judgement to
consider whether those promised goods and services are (i) distinct - to be accounted for as separate performance
obligations; (ii) not distinct - to be combined with other promised goods or services until a bundle is identified that is
distinct or (iii) part of a series of distinct goods and services that are substantially the same and have the same pattern of
transfer to the customer.
At contract inception the total transaction price is estimated, being the amount to which the Group expects to be entitled
and has rights to under the present contract.
The transaction price does not include estimates of consideration resulting from changed orders for additional goods and
services unless these are agreed.
35
Resonance Health Limited
Notes to the consolidated financial statements
30 June 2023
Note 5. Revenue (continued)
Once the total transaction price is determined, the Group allocates this to the identified performance obligations in
proportion to their relative stand-alone selling prices and recognises revenue when (or as) those performance obligations
are satisfied.
For each performance obligation, the Group determines if revenue will be recognised over time or at a point in time.
Where the Group recognises revenue over time for long term contracts, this is in general due to the Group performing
and the customer simultaneously receiving and consuming the benefits provided over the life of the contract.
For each performance obligation to be recognised over time, the Group applies a revenue recognition method that
faithfully depicts the Group’s performance in transferring control of the goods or services to the customer. This decision
requires assessment of the real nature of the goods or services that the Group has promised to transfer to the customer.
The Group applies the relevant output or input method consistently to similar performance obligations in other contracts.
When using the output method the Group recognises revenue on the basis of direct measurements of the value to the
customer of the goods and services transferred to date relative to the remaining goods and services under the contract.
Where the output method is used, in particular for long term service contracts where the series guidance is applied, the
Group often uses a method of time elapsed which requires minimal estimation. Certain long term contracts use output
methods based upon estimation of number of users, level of service activity or fees collected.
If performance obligations in a contract do not meet the over time criteria, the Group recognises revenue at a point in
time. This may be at the point of physical delivery of goods and acceptance by a customer or when the customer obtains
control of an asset or service in a contract with customer-specified acceptance criteria.
The Group disaggregates revenue from contracts with customers by contract type, which includes (i) commercial revenue,
(ii) voucher revenue, (iii) clinical trial revenue and (iv) other study income as management believe this best depicts how
the nature, amount, timing and uncertainty of the Group’s revenue and cash flows.
The nature of contracts or performance obligations categorised within this revenue type includes (i) establishment
services, (ii) trial establishment project and data management, (iii) project and data management services, and (iv) analysis
services.
The service contracts in this category include contracts with either a single or multiple performance obligations.
The Group considers that the services provided meet the definition of a series of distinct goods and services as they are
(i) substantially the same and (ii) have the same pattern of transfer (as the series constitutes services provided in distinct
time increments (e.g. monthly or annual services)) and therefore treats the series as one performance obligation.
(i) Establishment services
Encompasses different services from which the customer is able to benefit from on their own or with other readily
available resources. Accordingly, revenues are recognised at a point in time when the service is delivered.
(ii) Trial establishment project and data management
Revenues are recognised when the contract is signed and the trial establishment activities have been performed. The
customer can benefit from these activities on their own or with other readily available resources.
(iii) Project and data management services
Revenues are recognised over the contract period as the service is provided.
(iv) Analysis services
Revenues are recognised at a point in time following the completion of the analysis and report compilation.
36
Resonance Health Limited
Notes to the consolidated financial statements
30 June 2023
Note 5. Revenue (continued)
Contract fulfilment assets and liabilities
As a result of the contracts which the Group enters into with its customers, a number of different assets and liabilities are
recognised on the Group’s balance sheet. These include but are not limited to:
• Trade receivables
• Accrued income
• Deferred income
Deferred and accrued income
The Group’s customer contracts include a diverse range of payment schedules dependent upon the nature and type of
goods and services being provided. The Group often agrees payment schedules at the inception of long term contracts
under which it receives payments throughout the term of the contracts. These payment schedules may include
performance-based payments or progress payments as well as regular monthly payments for ongoing service delivery.
Payments for transactional goods and services may be at delivery date, in arrears or part payment in advance.
Where payments made are greater than the revenue recognised at the period end date, the Group recognises a deferred
income contract liability for this difference. Where payments made are less than the revenue recognised at the period
end date, the Group recognises an accrued income contract asset for this difference.
Disaggregation of revenue
The group derives its revenue from the services at a point in time and over time in the following major categories. This is
consistent with the revenue information that is disclosed for each reportable segment:
Revenue from contracts with customers
At a point in time:
Commercial revenue
Clinical trials
Other studies
Over time:
Clinical trials
Revenue
2023
$
2022
$
2,520,745
607,748
345,416
2,306,183
471,138
196,244
930,451
854,411
4,404,360
3,827,976
Reconciliation of revenue from contracts with customers with the amounts disclosed in segment information
Segment revenue
Adjustments and eliminations
Total revenue from contracts with customers
2023
$
2022
$
4,404,360
-
3,827,976
-
4,404,360
3,827,976
37
Resonance Health Limited
Notes to the consolidated financial statements
30 June 2023
Note 6. Other income
Subsidies and grants
Interest revenue
Other income
Note 7. Income tax
Income tax benefit
Research and Development tax offset
Aggregate income tax benefit
Numerical reconciliation of income tax benefit and tax at the statutory rate
Loss before income tax benefit
Tax at the statutory tax rate of 25%
Tax effect amounts which are not deductible/(taxable) in calculating taxable income:
Expenses that are not deductible in determining taxable profit
Non-assessable income
Unused tax losses not recognised as deferred tax assets
Effect of temporary differences not recognised in deferred tax assets and liabilities
Research and Development tax offset
Income tax benefit
Unrecognised deferred tax balances
Deferred tax assets not recognised
Deferred tax assets not recognised comprises temporary differences attributable to:
Losses available for offset against future taxable income - revenue
Amortisation and depreciation timing differences
Business related costs
Accrued expenses and liabilities
Others
Total deferred tax assets not recognised
2023
$
2022
$
67,000
39,899
25,000
3,323
106,899
28,323
2023
$
2022
$
(483,695)
(409,745)
(483,695)
(409,745)
(1,264,056)
(1,551,522)
(316,014)
(387,881)
103,513
(5,974)
175,083
-
(218,475)
171,179
47,296
(483,695)
(212,798)
300,785
(87,987)
(409,745)
(483,695)
(409,745)
2023
$
2022
$
2,304,481
140,368
543
131,525
7,113
2,133,302
140,368
1,085
80,828
3,685
2,584,030
2,359,268
The above potential tax benefit, which excludes tax losses, for deductible temporary differences has not been recognised
in the statement of financial position as the recovery of this benefit is uncertain. Tax losses may be carried forward
indefinitely under current tax legislation provided conditions for deductibility are met.
38
Resonance Health Limited
Notes to the consolidated financial statements
30 June 2023
Note 7. Income tax (continued)
Deferred tax liabilities not recognised
Deferred tax liabilities not recognised comprises temporary difference attributable to:
Capitalised research and development costs
Accrued income
Unrealised foreign exchange gains
2023
$
2022
$
678,337
3,964
62,172
716,251
251
42,510
744,473
759,012
Deferred tax liabilities have not been recognised in respect of these taxable temporary differences as the entity is able to
control the timing of the reversal of the temporary differences and it is probable that the temporary differences will not
reverse in the foreseeable future.
Tax Consolidation
Resonance Health Limited and its 100% owned Australian resident subsidiaries implemented the tax consolidation
legislation from 1st July 2012.
Note 8. Cash and cash equivalents
Current assets
Cash at bank
Term deposits
2023
$
2022
$
5,324,561
1,037,061
5,760,533
1,022,633
6,361,622
6,783,166
Cash at bank earns interest at floating rates based on daily bank deposit rates.
Term deposits are made for varying periods depending on the immediate cash requirements of the Group and earn
interest at the respective term deposit rates.
Note 9. Trade and other receivables
Current assets
Trade receivables
Other receivables
Income tax refund due
2023
$
2022
$
1,104,333
39,537
-
1,045,668
49,627
409,745
1,143,870
1,505,040
Trade receivables are non-interest bearing and are generally on terms of 14 days to 90 days. All amounts are short term.
The carrying value of trade receivables is considered a reasonable approximation of fair value.
39
Resonance Health Limited
Notes to the consolidated financial statements
30 June 2023
Note 9. Trade and other receivables (continued)
Allowance for expected credit losses
The ageing of the receivables and allowance for expected credit losses provided for above are as follows:
Not overdue
30 - 60 days overdue
60 - 90 days overdue
90 - 120 days overdue
>120 days overdue
Carrying amount
2023
$
2022
$
586,325
64,410
65,437
37,075
390,623
737,824
73,293
16,383
14,296
253,499
1,143,870
1,095,295
The Group applies the AASB 9 simplified model of recognising lifetime expected credit losses for all trade receivables as
these items do not have a significant financing component.
In measuring the expected credit losses, the trade receivables have been assessed on a collective basis as they possess
shared credit risk characteristics.
Trade receivables are written off when there is no reasonable expectation of recovery. The Group is actively working with
customers in relation to payments of outstanding receivable balances with systems and processes set up to enable
collection of funds.
On the basis determined above, the expected credit loss for trade receivables as at 30 June 2023 was determined as $nil
(30 June 2022: $nil).
Note 10. Other assets
Current assets
Prepayments
Non-current assets
Security deposits
Note 11. Property, plant and equipment
Non-current assets
Plant and equipment - at cost
Less: Accumulated depreciation
40
2023
$
2022
$
51,909
59,554
82,886
82,886
134,795
142,440
2023
$
2022
$
545,246
(160,140)
257,021
(119,335)
385,106
137,686
Resonance Health Limited
Notes to the consolidated financial statements
30 June 2023
Note 11. Property, plant and equipment (continued)
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out
below:
Balance at 1 July 2021
Additions
Depreciation expense
Balance at 30 June 2022
Additions
Depreciation expense
Balance at 30 June 2023
Note 12. Right-of-use assets
Non-current assets
Land and buildings - right-of-use
Less: Accumulated depreciation
The Group leases two premises.
$
52,481
119,043
(33,838)
137,686
288,225
(40,805)
385,106
2023
$
2022
$
406,880
(162,386)
320,188
(66,708)
244,494
253,480
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out
below:
Land and
buildings
$
55,925
278,244
(80,689)
253,480
86,694
(95,680)
244,494
Balance at 1 July 2021
Additions
Depreciation expense
Balance at 30 June 2022
Additions
Depreciation expense
Balance at 30 June 2023
41
Resonance Health Limited
Notes to the consolidated financial statements
30 June 2023
Note 13. Intangibles
Non-current assets
Research & development - at cost
Less: Accumulated amortisation
2023
$
2022
$
4,340,231
(1,626,882)
4,653,461
(1,788,456)
2,713,349
2,865,005
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out
below:
Balance at 1 July 2021
Additions
Amortisation expense
Balance at 30 June 2022
Additions
Impairment of assets*
Amortisation expense
Balance at 30 June 2023
$
2,594,630
584,954
(314,579)
2,865,005
179,678
(31,460)
(299,874)
2,713,349
* During the year management assessed the carrying value or R&D capitalised and impaired the R&D projects which were
no longer cash generating business units.
Development expenditure relates to costs incurred in developing MRI image analysis tools for the diagnosis and clinical
management of human disease.
During the current financial year this development has related to a new liver fat assessment tool, further refinement of
FerriScan® and the next stage of development of an MRI based liver fibrosis tool.
The recoupment of development expenditure is dependent on the successful development and commercialisation or sale
of the technology developed. The Directors are required to assess at each reporting date whether there is an indication
that an asset may be impaired. If any such indication exists an estimate is made of the asset’s recoverable amount.
Impairment tests are also required for intangible assets not yet ready for use regardless of the existence of indicator of
impairment. Where the asset’s carrying value exceeds the estimated recoverable amount a provision for impairment is
recognised.
As the Group has a number of intangible assets not yet ready for us, the Directors have conducted an impairment test as
required by AASB136. In making this assessment the Directors had regard to the size of the liver fibrosis and liver fat
markets, competing products, experience gained with the FerriScan® technology, the likely period over which these
revenues are expected to be generated and the likelihood of any technological obsolescence.
The recoverable amount of development expenditure detailed above is determined based on value-in-use calculations.
Value-in-use is calculated based on the present value of cash flow projections over a five-year period.
42
Resonance Health Limited
Notes to the consolidated financial statements
30 June 2023
Note 13. Intangibles (continued)
The following assumptions were used in the value-in-use calculations:
●
●
Growth rate was based on contractual obligations already in place and historical sales growth rates.
Costs are calculated taking into account historical margins and trends as well as estimated weighted average inflation
rates over the period, which are consistent with inflation rates appropriate to historic company rates.
Impairment Expense
Ferriscan® - Image R2 platform conversion
Ferriscan® - Report writer
Iron blood marker study
Note 14. Trade and other payables
Current liabilities
Trade payables (i)
Other payables
2023
$
2022
$
17,541
505
13,414
31,460
-
-
-
-
2023
$
2022
$
145,316
587,062
240,665
456,607
732,378
697,272
(i)
Trade payables are non-interest bearing and are normally settled on 30-day terms. The carrying value of the
trade payables is considered a reasonable approximation of fair value. Information regarding the effective
interest rate and credit risk of current payables is set out in note 22.
Note 15. Lease liabilities
The Group leases two premises. The remaining term of the leases as of 30 June 2023 is 26 and 50 months respectively.
Current liabilities
Lease liability
Non-current liabilities
Lease liability
Refer to note 22 for further information on financial instruments.
2023
$
2022
$
100,394
79,794
172,551
188,426
272,945
268,220
43
Resonance Health Limited
Notes to the consolidated financial statements
30 June 2023
Note 15. Lease liabilities (continued)
Underlying assets serve as security for the related lease liabilities. A maturity analysis of future minimum lease payments
is presented below:
Lease payments due
1 year or less
$
Between 1
and 2 years
$
Between 2
and 5 years
$
Total
$
111,812
(11,418)
154,198
(10,735)
29,859
(771)
295,869
(22,924)
100,394
143,463
29,088
272,945
2023
$
2022
$
31,414
7,673
2023
$
2022
$
11,188
22,411
Lease payments
Interest
Net present values
Note 16. Provisions
Current liabilities
Long service leave
Note 17. Other liabilities
Current liabilities
Unearned income
Note 18. Issued capital
2023
Shares
2022
Shares
2023
$
2022
$
Ordinary shares - fully paid
461,149,601 461,149,601 73,882,788 73,882,788
The Controlled Placement Agreement (CPA) that was entered into on 18 April 2019, was initially established with a limit
of $5m and the Company has utilised the CPA to raise a total of $2.75m. On 30 June 2021 it was announced that the CPA
limit was increased to $7.75m and expiry date was extended to 31 July 2023. The Company had an available capacity of
$5m under the CPA. Subsequent to year end on 31 July 2023 the CPA expired and will not be renewed.
Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the Company in
proportion to the number of and amounts paid on the shares held. The fully paid ordinary shares have no par value and
the Company does not have a limited amount of authorised capital.
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each
share shall have one vote.
Share buy-back
There is no current on-market share buy-back.
44
Resonance Health Limited
Notes to the consolidated financial statements
30 June 2023
Note 18. Issued capital (continued)
Capital risk management
The Group's objectives when managing capital is to safeguard its ability to continue as a going concern, so that it can
provide returns for shareholders and benefits for other stakeholders and to maintain an optimum capital structure to
reduce the cost of capital.
Capital is regarded as total equity, as recognised in the statement of financial position, plus net debt. Net debt is calculated
as total borrowings less cash and cash equivalents.
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders,
return capital to shareholders, issue new shares or sell assets to reduce debt.
The Group would look to raise capital when an opportunity to invest in a business or company was seen as value adding
relative to the current Company's share price at the time of the investment.
The capital risk management policy remains unchanged from the 30 June 2022 Annual Report.
Note 19. Reserves
Foreign currency reserve
Share-based payments reserve
2023
$
2022
$
(270,580)
2,364,805
(270,580)
2,340,374
2,094,225
2,069,794
Foreign currency reserve
The reserve is used to recognise exchange differences arising from the translation of the financial statements of foreign
operations to Australian dollars. It is also used to recognise gains and losses on hedges of the net investments in foreign
operations.
Share-based payments reserve
The reserve is used to recognise the value of equity benefits provided to employees and Directors as part of their
remuneration, and other parties as part of their compensation for services.
Movements in reserves
Movements in each class of reserve during the current and previous financial year are set out below:
Foreign
currency
translation
reserve
$
Share-based
payments
reserve
$
Total
$
(270,580)
-
2,334,757
5,617
2,064,177
5,617
(270,580)
-
-
2,340,374
(23,894)
48,325
2,069,794
(23,894)
48,325
(270,580)
2,364,805
2,094,225
Balance at 1 July 2021
Options vesting expense
Balance at 30 June 2022
Options expired
Performance rights vesting expense
Balance at 30 June 2023
45
Resonance Health Limited
Notes to the consolidated financial statements
30 June 2023
Note 20. Accumulated losses
Accumulated losses at the beginning of the financial year
Loss after income tax benefit for the year
Accumulated losses at the end of the financial year
Note 21. Dividends
2023
$
2022
$
(65,261,341) (64,119,564)
(1,141,777)
(780,361)
(66,041,702) (65,261,341)
There were no dividends paid, recommended or declared during the current or previous financial year.
Note 22. Financial instruments
Financial risk management objectives
The Group's activities expose it to a variety of financial risks: market risk (including foreign currency risk, price risk and
interest rate risk), credit risk and liquidity risk. The Group's overall risk management approach focuses on the
unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance of the
Group. The Group has not entered into or traded financial instruments, including derivative financial instruments such as
forward foreign exchange contracts to hedge certain risk exposures.
Risk management is carried out by senior finance executives ('finance') under policies approved by the Board of Directors
('the Board'). These policies include identification and analysis of the risk exposure of the Group and appropriate
procedures, controls and risk limits. Finance identifies, evaluates and hedges financial risks within the Group's operating
units. Finance reports to the Board on a monthly basis.
Market risk
Foreign currency risk
The Group undertakes certain transactions denominated in foreign currency and is exposed to foreign currency risk
through foreign exchange rate fluctuations.
Exchange rate exposures are managed by senior executives and the Board, the Group has not engaged in forward
exchange contracts.
The carrying amount of the Group's foreign currency denominated financial assets and financial liabilities at the reporting
date were as follows:
US dollars (USD)
Euros (EUR)
Pound Sterling (GBP)
Assets
Liabilities
2023
$
2022
$
2023
$
2022
$
2,430,883
564,709
1,183,013
2,786,928
193,358
1,647,524
20,356
-
21,261
30,805
11,340
22,489
4,178,605
4,627,810
41,617
64,634
46
Resonance Health Limited
Notes to the consolidated financial statements
30 June 2023
Note 22. Financial instruments (continued)
Foreign currency sensitivity analysis
The Group is exposed to United States Dollar (USD), Great British Pound (GBP) and European Euro (EUR) currency
fluctuations.
The following table illustrates the Group’s sensitivity to an 10% increase and decrease in the Australian dollar against the
relevant foreign currency. The sensitivity analysis includes only outstanding foreign currency denominated monetary
items and adjusts their translation at the period end for a 10% change in foreign currency rates. A negative number
indicates a decrease in profit and other equity where the Australian dollar strengthens against the respective currency. For
a weakening of the Australian dollar against the respective currency there would be an equal and opposite impact on the
profit and other equity and the balances below would be positive.
Profit or loss impact:
USD
EUR
GBP
Price risk
The Group is not exposed to any significant price risk.
2023
$
2022
$
(219,122)
(51,337)
(105,614)
(250,557)
(16,547)
(147,730)
Interest rate risk
All financial assets and financial liabilities are non-interest bearing except for cash and cash equivalent balances, and lease
liabilities. The following table details the Group’s expected maturities for cash and cash equivalent financial assets.
Cash and cash equivalent financial assets:
Less than one month
One to three months
2023
2022
Weighted
average
interest rate
%
Weighted
average
interest rate
%
Balance
$
Balance
$
-
4.10%
5,324,561
1,037,061
-
0.25%
5,760,533
1,022,633
6,361,622
6,783,166
The Group is exposed to fluctuations in interest rates as it has deposited monies at floating interest rates. The impact of
a 100bp change in interest rates will not have a material impact on the result for the year.
Credit risk
Credit risk is the risk that a counter party will not meet its obligations under a financial instrument or customer contract,
leading to a financial loss. The Group is exposed to credit risk from its operating activities (primarily from customer
receivables) and from its financing activities, including deposits with banks, foreign exchange transactions and other
financial instruments.
Outstanding customer receivables are regularly monitored and any credit concerns highlighted to senior management. At
30 June 2023, the Group had one customer that accounted for 9% of all trade receivables (2022: 12%). Refer note 9 for
further details.
47
Resonance Health Limited
Notes to the consolidated financial statements
30 June 2023
Note 22. Financial instruments (continued)
The maximum exposure to credit risk, excluding the value of any collateral or other security at balance date in relation to
each class of recognised financial assets is the carrying amount, net of any allowance for impairment recorded in the
financial statements. The Group does not hold any collateral as security for any trade receivable.
Liquidity risk
Ultimate responsibility for liquidity risk management rests with the Board of Directors, who have built an appropriate
liquidity risk management framework for the management of the Group’s short, medium and long-term funding and
liquidity management requirements. The Group manages liquidity risk by maintaining adequate reserves by continually
monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities.
Remaining contractual maturities
The following tables detail the Group's remaining contractual maturity for its financial instrument liabilities. The tables
have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the
financial liabilities are required to be paid. The tables include both interest and principal cash flows disclosed as remaining
contractual maturities and therefore these totals may differ from their carrying amount in the statement of financial
position.
2023
Non-derivatives
Non-interest bearing
Trade payables
Other payables
Interest-bearing - fixed rate
Lease liability
Total non-derivatives
2022
Non-derivatives
Non-interest bearing
Trade payables
Other payables
Interest-bearing - variable
Lease liability
Total non-derivatives
Weighted
average
interest rate
%
1 year or less
$
Between 1
and 2 years
$
Between 2
and 5 years
$
Over 5 years
$
Remaining
contractual
maturities
$
-
-
145,316
587,062
-
-
-
-
5.06%
100,394
832,772
143,463
143,463
29,088
29,088
-
-
-
-
145,316
587,062
272,945
1,005,323
Weighted
average
interest rate
%
1 year or less
$
Between 1
and 2 years
$
Between 2
and 5 years
$
Over 5 years
$
Remaining
contractual
maturities
$
-
-
240,665
456,607
-
-
-
-
3.60%
79,794
777,066
173,781
173,781
14,645
14,645
-
-
-
-
240,665
456,607
268,220
965,492
The cash flows in the maturity analysis above are not expected to occur significantly earlier than contractually disclosed
above.
Fair value of financial instruments
Unless otherwise stated, the carrying amounts of financial instruments reflect their fair value.
48
Resonance Health Limited
Notes to the consolidated financial statements
30 June 2023
Note 23. Key management personnel disclosures
Directors
The following persons were Directors of Resonance Health Limited during the financial year:
Dr Martin Blake
Mr Mitchell Wells
Mr Simon Panton
Dr Travis Baroni
Mr Aaron Brinkworth
Other key management personnel
The following person also had the authority and responsibility for planning, directing and controlling the major activities
of the Group, directly or indirectly, during the financial year:
Mr Nicholas Allan
Chief Operating Officer, Chief Financial Officer & Joint
Company Secretary
Compensation
The aggregate compensation made to Directors and other members of key management personnel of the Group is set out
below:
Short-term employee benefits
Post-employment benefits
Share-based payments
Note 24. Remuneration of auditors
2023
$
2022
$
606,302
62,619
48,325
608,248
57,326
-
717,246
665,574
During the financial year the following fees were paid or payable for services provided by HLB Mann Judd, the auditor of
the Company:
2023
$
2022
$
74,901
60,762
9,500
9,650
84,401
70,412
Audit services -– HLB Mann Judd
Audit or review of the financial statements
Other services – HLB Mann Judd
Preparation of the tax return
Note 25. Contingent assets
The Group has no contingent assets as at 30 June 2023 (2022: $nil).
49
Resonance Health Limited
Notes to the consolidated financial statements
30 June 2023
Note 26. Contingent liabilities
On 10 September 2020 the Company announced that they had entered into a licence agreement with the Telethon Kids
Institute (Telethon Kids) and the Erasmus University Medical Centre for the use of computer tomography (PRAGMA-CF
Data) datasets that will be used by the Company in the potential development of a new artificial intelligence (AI) algorithm
for the automated assessment of lunch disease progression in patients with cystic fibrosis see note 13.
Under the agreement a 10% net royalty on all sales of the analysis performed by the Device will be payable by the Group.
Note 27. Commitments
The Group has no operating or capital commitments.
Note 28. Related party transactions
Parent entity
Resonance Health Limited is the parent entity.
Subsidiaries
Interests in subsidiaries are set out in note 30.
Key management personnel
Disclosures relating to key management personnel are set out in note 23 and the remuneration report included in the
Directors' report.
Transactions with related parties
The following transactions occurred with related parties:
Sale of goods and services:
Services provided to Perth Radiological Clinic *
Payment for goods and services:
Services provided by Perth Radiological Clinic *
2023
$
2022
$
2,426
2,426
60
360
*
Dr Martin Blake is a shareholder, Director and consulting Radiologist of Perth Radiological Clinics.
Receivable from and payable to related parties
The following balances are outstanding at the reporting date in relation to transactions with related parties:
2023
$
2022
$
593
889
-
66
Current receivables:
Trade receivables from Perth Radiological Clinic
Current payables:
Trade payables to Perth Radiological Clinic
Loans to/from related parties
There were no loans to or from related parties at the current and previous reporting date.
Terms and conditions
All transactions were made on normal commercial terms and conditions and at market rates.
50
Resonance Health Limited
Notes to the consolidated financial statements
30 June 2023
Note 29. Parent entity information
Set out below is the supplementary information about the parent entity.
Statement of profit or loss and other comprehensive income
Loss after income tax
Total comprehensive income
Statement of financial position
Total current assets
Total assets
Total current liabilities
Total liabilities
Equity
Issued capital
Share-based payments reserve
Accumulated losses
Total equity
Note 30. Interests in subsidiaries
Parent
2023
$
2022
$
(430,226)
(366,088)
(430,226)
(366,088)
Parent
2023
$
2022
$
2,185,987
1,628,971
3,042,669
4,146,881
81,644
49,290
(503,868)
194,550
73,882,788 73,882,788
2,340,374
(72,701,056) (72,270,831)
2,364,805
3,546,537
3,952,331
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in
accordance with the accounting policy described in note 2:
Ownership interest
2022
2023
%
%
100%
100%
100%
100%
100%
100%
100%
100%
Name
Principal place of business /
Country of incorporation
Resonance Health Analysis Services Pty Ltd
CRO Services Pty Ltd*
Resonance Health Laboratory Services Pty Ltd**
Resonance USA Inc
Australia
Australia
Australia
USA
previously WA Private Health Care Services Pty Ltd
*
** previously IVB Holdings Pty Ltd
Note 31. Events after the reporting period
Mr Andrew Harrison was appointed as CEO of the Company effective 1 July 2023.
51
Resonance Health Limited
Notes to the consolidated financial statements
30 June 2023
Note 31. Events after the reporting period (continued)
Mr Nick Allan resigned as COO, CFO and joint Company Secretary of the Company effective 31 July 2023..
Controlled Placement Agreement executed by the Company and Acuity Capital on 18 April 2019 and then extended on 30
June 2021 (CPA), expired on 31 July 2023.
The CPA established an at-the-market standby equity capital facility (ATM Facility) providing Resonance with standby
equity capital. As security for the ATM Facility, the Company issued Acuity Capital with 20,000,000 collateral shares.
Given the ATM Facility has now expired, the parties have agreed to the return and cancellation of the 20 million collateral
shares for nil consideration in accordance with the terms of the CPA (Buyback). The Buyback will be implemented in
accordance with Part 2J.1 of the Corporations Act 2001 (Cth) and will be subject to shareholder approval.
The Group was awarded a significant clinical trial agreement with Sun Pharmaceutical Industries Limited on 18 August
2023. The agreement is for the provision of clinical trial services and is expected to be worth up to $6.33m over 18 months.
No other matter or circumstance has arisen since 30 June 2023 that has significantly affected, or may significantly affect
the Group's operations, the results of those operations, or the Group's state of affairs in future financial years.
Note 32. Cash flow information
Reconciliation of loss after income tax to net cash used in operating activities
Loss after income tax benefit for the year
Adjustments for:
Depreciation and amortisation
Impairment of intangibles
Share-based payments
Foreign exchange differences
Change in operating assets and liabilities:
Decrease/(increase) in trade and other receivables
Decrease/(increase) in prepayments
Increase in trade and other payables
Increase/(decrease) in employee benefits
Decrease in other operating liabilities
Net cash used in operating activities
2023
$
2022
$
(780,361)
(1,141,777)
436,359
31,460
24,431
(285,356)
429,106
-
5,617
(192,602)
361,170
7,645
35,106
23,741
(11,223)
(714,665)
(16,546)
204,764
(19,251)
(9,790)
(157,028)
(1,455,144)
52
Resonance Health Limited
Notes to the consolidated financial statements
30 June 2023
Note 32. Cash flow information (continued)
Changes in liabilities arising from financing activities
Balance at 1 July 2021
Net cash used in financing activities
Leases entered
Lease termination
Balance at 30 June 2022
Net cash used in financing activities
Leases entered
Balance at 30 June 2023
Note 33. Earnings per share
Lease
liabilities
$
60,105
(70,129)
320,188
(41,943)
268,221
(81,967)
86,692
272,946
2023
$
2022
$
Loss after income tax attributable to the owners of Resonance Health Limited
(780,361)
(1,141,777)
Weighted average number of ordinary shares used in calculating basic earnings per share 461,149,601 461,149,601
Weighted average number of ordinary shares used in calculating diluted earnings per
share
461,149,601
461,149,601
Number
Number
Basic loss per share
Diluted loss per share
The dilutionary impact of options did not change the earnings per share.
Note 34. Share-based payments
Cents
Cents
(0.17)
(0.17)
(0.25)
(0.25)
The Company has an Employee Incentive Plan for key staff members and consultants of the Company.
53
Resonance Health Limited
Notes to the consolidated financial statements
30 June 2023
Note 34. Share-based payments (continued)
Options
Set out below are summaries of options granted under the plan:
Number of
options
2023
Weighted
average
exercise price
2023
Number of
options
2022
Weighted
average
exercise price
2022
Outstanding at the beginning of the financial year
Expired
12,200,000
(12,200,000)
$0.175
$0.175
13,200,000
(1,000,000)
$0.170
$0.100
Outstanding at the end of the financial year
Exercisable at the end of the financial year
-
-
$0.000
12,200,000
$0.175
$0.000
12,200,000
$0.175
2023
Grant date
Expiry date
28/11/2019
28/11/2019
28/11/2019
02/12/2019
28/11/2022
28/11/2022
28/11/2022
01/12/2022
Exercise
price
Balance at
the start of
the year
Granted
Expired/
cancelled/
other
Balance at
the end of
the year
Exercised
$0.150
$0.180
$0.200
$0.100
4,000,000
4,000,000
4,000,000
200,000
12,200,000
-
-
-
-
-
-
-
-
-
-
(4,000,000)
(4,000,000)
(4,000,000)
(200,000)
(12,200,000)
-
-
-
-
-
200,000 options exercisable at $0.10 on or before 2 December 2022 with vesting conditions, did not vest before expiry.
An amount of $23,894 previously recognised as a share-based payment expense in prior periods was reversed.
Performance Rights
1,830,000 Performance rights were approved for issue by shareholders to Mitchell Wells at the Company AGM on 24
November 2022, with the following vesting conditions:
Tranche
A
B
C
Number granted
Vesting Date
610,000
610,000
610,000
1,830,000
1 October 2023
1 October 2024
1 October 2025
The performance rights will be issued for nil cash consideration and will be convertible into fully paid ordinary shares in
the capital of the Company, upon vesting. As at 30 June 2023 the performance rights have not been issued.
These performance rights were valued, using a valuation methodology based on the guidelines set out in AASB 2 Share-
based Payment.
54
Resonance Health Limited
Notes to the consolidated financial statements
30 June 2023
Note 34. Share-based payments (continued)
For the performance rights granted during the current financial year, the valuation model inputs used to determine the
fair value at the grant date, are as follows:
Assumptions:
Tranche A
Tranche B
Tranche C
Number of performance rights
Valuation date
Share price on valuation date
Indicative value per performance right
- Mr Mitchell Wells
610,000
24 November 2022
$0.064
$0.064
$39,040
610,000
24 November 2022
$0.064
$0.064
$39,040
610,000
24 November 2022
$0.064
$0.064
$39,040
The value of the performance rights are being expensed over the deemed life of the Rights, from shareholder approval.
During the period, $48,325 was recognised as an expense in relation to the rights.
Reconciliation of share based payments expense:
Options to staff and consultants
Performance rights expense - Mitchell Wells
2023
$
2022
$
(23,894)
48,325
5,617
-
24,431
5,617
55
Resonance Health Limited
Directors' declaration
30 June 2023
In the Directors' opinion:
●
●
●
●
the attached financial statements and notes comply with the Corporations Act 2001, the Accounting Standards, the
Corporations Regulations 2001 and other mandatory professional reporting requirements;
the attached financial statements and notes comply with International Financial Reporting Standards as issued by
the International Accounting Standards Board as described in note 2 to the financial statements;
the attached financial statements and notes give a true and fair view of the Group's financial position as at 30 June
2023 and of its performance for the financial year ended on that date; and
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become
due and payable.
The Directors have been given the declarations required by section 295A of the Corporations Act 2001.
Signed in accordance with a resolution of Directors made pursuant to section 295(5)(a) of the Corporations Act 2001.
On behalf of the Directors
___________________________
Dr Martin Blake
Chair
29 August 2023
Perth, Western Australia
56
INDEPENDENT AUDITOR’S REPORT
To the Members of Resonance Health Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Resonance Health Limited (“the Company”) and its controlled entities
(“the Group”), which comprises the consolidated statement of financial position as at 30 June 2023, the
consolidated statement of profit or loss and other comprehensive income, the consolidated statement of
changes in equity and the consolidated statement of cash flows for the year then ended, and notes to the
financial statements, 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:
(a) giving a true and fair view of the Group’s financial position as at 30 June 2023 and of its financial
performance for the year then ended; and
(b) complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section
of our report. We are independent of the Group in accordance with the auditor independence requirements
of 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 believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our
audit of the financial report of the current period. These matters were addressed in the context of our audit
of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate
opinion on these matters.
Key Audit Matter
Intangible assets
Refer to Note 13
How our audit addressed the key audit
matter
As at 30 June 2023, the Group has an intangible
asset balance of $2,713,349 which comprises
intangible assets not yet available for use and other
intangible assets.
Our audit procedures included but were not
limited to the following:
- Obtained an understanding of the key
controls associated with the preparation
of the value-in-use calculation used to
Under AASB 136 Impairment of Assets, intangible
assets not yet available for use are subject to an
annual impairment test and other intangible assets
are subject to an impairment test should indicators
of impairment arise.
We considered this to be a key audit matter as it
involves subjectivity and judgement, it is material to
the users’ understanding of
financial
statements as a whole and it required significant
auditor attention and communication with those
charged with governance.
the
assess the recoverable amount of the
intangible assets;
- Critically
evaluated management’s
methodology used in the value-in-use
calculation and
for key
assumptions including the discount rate;
- Assessed the value-in-use calculation
accounting
the basis
for
consistency with
standards requirements;
- Compared key assumptions in forecast
cash flows to historical results and,
where these were materially different,
we critically reviewed the basis for
differing future expectations;
the
assets
comprising the cash-generating unit
had been correctly allocated;
- Considered whether
- Compared
the value-in-use
the
carrying amount of assets comprising
the cash-generating unit;
to
- Performed sensitivity analyses around
the key inputs used and the headroom
impact on the value-in-use calculation;
- Ensured any additions met the criteria
for recognition;
- Ensured
amortisation
been
correctly applied and the amortisation
rate adopted was reasonable;
had
Revenue Recognition
Refer to Note 5
The Company recognised $4,404,360 of revenue
for the year ended 30 June 2023 from commercial
revenue, clinical trials revenue and other studies
recorded either at a point in time or over time based
upon the relevant performance obligation(s).
We focused on this area as a key audit matter due
to it being material to the users’ understanding of
the financial statements and it requiring significant
auditor attention and communication with those
charged with governance.
- Reviewed the mathematical accuracy of
the net present value calculation; and
- Assessed the appropriateness of the
disclosures included in the relevant
notes to the financial report.
Our audit procedures included but were not
limited to the following:
evaluated
- We
management's
processes and key controls regarding
accounting for the Group's revenue;
- We ensured that recognition of revenue
was consistent with the requirements of
AASB 15;
- We performed substantive testing over
revenue;
- We ensured revenue was correctly
recorded based upon
the relevant
performance obligation(s) and was
recorded in the correct period; and
- We ensured adequate disclosure in the
financial report.
Information Other than the Financial Report and Auditor’s Report Thereon
The directors are responsible for the other information. The other information comprises the information
included in the Group’s annual report for the year ended 30 June 2023, 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 accordingly we do not express
any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in
doing so, consider whether the other information is materially inconsistent with the financial report, or our
knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true and
fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such
internal control as the directors determine is necessary to enable the preparation of the financial report that
gives a true and fair view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the going
concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations,
or have 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 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.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement
and maintain professional scepticism throughout the audit. We also:
−
Identify and assess the risks of material misstatement of the financial report, whether due to fraud or
error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is
sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
− Obtain an understanding of internal control relevant to the audit in order to design audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
−
− Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we
conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to
the related disclosures in the financial report or, if such disclosures are inadequate, to modify our
opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report.
However, future events or conditions may cause the Group to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial report, including the disclosures,
and whether the financial report represents the underlying transactions and events in a manner that
achieves fair presentation.
−
We communicate with the directors regarding, among other matters, the planned scope and timing of the
audit and significant audit findings, including any significant deficiencies in internal control that we identify
during our audit. We also provide the directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other matters
that may reasonably be thought to bear on our independence, and where applicable, actions taken to
eliminate threats or safeguards applied.
From the matters communicated with the directors, we determine those matters that were of most
significance in the audit of the financial report of the current period and are therefore the key audit matters.
We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about
the matter or when, in extremely rare circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of doing so would reasonably be expected
to outweigh the public interest benefits of such communication.
REPORT ON THE REMUNERATION REPORT
Opinion on the Remuneration Report
We have audited the Remuneration Report included within the directors’ report for the year ended 30 June
2023. In our opinion, the Remuneration Report of Resonance Health Limited for the year ended 30 June
2023 complies with Section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration
Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an
opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing
Standards.
HLB Mann Judd
Chartered Accountants
Perth, Western Australia
29 August 2023
M R Ohm
Partner
Resonance Health Limited
Shareholder information
30 June 2023
The following additional information is disclosed in accordance with section 4.10 of the Australia Securities Exchange
Listing Rules in respect of a listed public company.
Corporate Governance
In recognising the need for the highest standards of corporate behaviour and accountability, the Directors of Resonance
Health Limited support and adhere to the principles of corporate governance. The Company’s Corporate Governance
Statement is contained on the Company’s web site located here:
http://www.resonancehealth.com
The shareholder information set out below was applicable as at 25 August 2023.
Distribution of equitable securities
Analysis of number of equitable security holders by size of holding:
Ordinary shares
Number
of holders
Number
of
% of total
shares
issued
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and over
19,050
117
791,594
212
224
1,796,356
962 39,800,292
407 418,742,309
0.01
0.17
0.39
8.63
90.80
1,922 461,149,601
100.00
Holding less than a marketable parcel
449
1,596,337
0.35
61
Resonance Health Limited
Shareholder information
30 June 2023
Equity security holders
Twenty largest quoted equity security holders
The names of the twenty largest security holders of quoted equity securities are listed below:
Ordinary shares
% of total
shares
issued
Number held
SOUTHAM INVESTMENTS 2003 PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
ACUITY CAPITAL INVESTMENT MANAGEMENT PTY LTD
MS ALISON VIRGINIA WESLEY
MR PAUL JOHN VAN DYK
MR WILLIAM MURRAY THOMPSON
MS JADE LOUISE THOMPSON
MR BRUCE ALAN STEVENSON
MR HELMUT ROCKER
MR PAUL ANDREW FITZMAURICE & MRS TANIA MARIE FITZMAURICE
MARCOLONGO NOMINEES PTY LTD
DR RUSSELL KAY HANCOCK
MR HARISH GARG
MR THOMAS PSARAKIS
DR MARTIN PETER BLAKE
MORGAN STANLEY AUSTRALIA SECURITIES (NOMINEE) PTY LIMITED (NO 1 ACCOUNT)
FULLERTON PRIVATE CAPITAL PTY LIMITED
THE UNIVERSITY OF WESTERN AUSTRALIA
NEWECONOMY COM AU NOMINEES PTY LIMITED (900 ACCOUNT)
CITICORP NOMINEES PTY LTD
73,800,000
48,501,078
20,000,000
9,940,000
9,116,947
6,658,660
6,512,759
6,400,000
5,256,471
5,250,000
5,186,200
4,610,000
4,501,245
4,434,777
3,798,590
3,589,171
3,500,000
3,478,750
3,202,660
2,574,632
16.00
10.52
4.34
2.16
1.98
1.44
1.41
1.39
1.14
1.14
1.12
1.00
0.98
0.96
0.82
0.78
0.76
0.75
0.69
0.56
Substantial holders
Substantial holders in the Company are set out below:
230,311,940
49.94
Ordinary shares
% of total
shares
issued
Number held
SOUTHAM INVESTMENTS 2003 PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
73,800,000
48,501,078
16.00
10.52
Voting rights
The voting rights attached to ordinary shares are set out below:
Ordinary shares
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each
share shall have one vote.
62