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RESPIRI LIMITED
Respiri Limited
ABN 98 009 234 173
ANNUAL REPORT 2021
iii
VisionA world without the challenges of asthma. iv
RESPIRI LIMITED
Mission
To improve asthma management
by extending care beyond the clinic.
ANNUAL REPORT 2021
v
Chairman & CEO Update
Values
We act with
Integrity
We are
Respectful
We are
Accountable
We are
One Team
We are
Innovative
vi
RESPIRI LIMITED
Chairman & CEO Update
Dear Fellow Shareholders,
On behalf of the Board of Directors of Respiri Limited we are
proud to present the company’s Annual Report for the year
ended 30 June 2021.
This year has been an exceptionally productive and busy
period for Respiri, with a resolute focus on the Australian
launch of wheezo®, in partnership with Cipla which was
achieved on time and on budget, despite significant COVID-19
headwinds including various state lockdowns. Significant
progress was also made in both commercialisation and clinical
development partnership discussions in the target markets of
United Kingdom and USA.
In March 2021, the Company announced the receipt of 510(k)
clearance from the US Food and Drug Administration (FDA)
for wheezo®, thereby permitting Respiri to market and sell
wheezo in the United States as a class II medical device,
along with the wheezo® App. This clearance by one of the
most stringent health regulators globally represents a step-
change in technology for patients with respiratory disorders
seeking an easy, effective and reproducible measurement of
wheeze and associated App that provides patients with one-
stop respiratory shop. Importantly the Company continues
to use the GINA (Global Initiative for Asthma) guidelines as
a strategic filter for all of its patient-centric initiatives. The
Company’s plans to launch its UK operations in Q4 2021 and
enter the US market in Q3 2022 remains on track.
Operational achievements
Further detail on some of the key achievements during the
year are outlined below.
Pharmacy Banner Groups – During the year the company has
continued to grow the contracted pharmacy banner group
footprint for making wheezo® available for sale to patients
and commenced the roll out of the important in-pharmacy
education and patient engagement programs that will aid
with in-store pharmacist/patient engagement this includes
both the Respiri Connect Care Nurse team and the roll out of
the Pharmacy Platform Group’s asthma professional service
program that was developed in conjunction with Respiri.
Major banner groups agreements secured in the year take the
total number of banner group to 14 and pharmacies covered
by agreements to 1,600 representing approximately 35% of
the total number of ex-hospital community pharmacies across
Australia. To continue to bolster the pharmacy sales and
educational resource, Respiri contracted the services of Hahn
Healthcare contract sales force services. Hahn is a respected
organisation whose services are used by pharmaceutical and
healthcare companies to sell their products. Hahn will sell to
those pharmacies that are not target clients for the Cipla sales
force and will provide additional Connect Care Nurse services
to accelerate the educational programs with pharmacies that
are stocking wheezo®.
“Significant progress was also made in both commercialisation and clinical development partnership discussions in the target markets of United Kingdom and USA.” ANNUAL REPORT 2021
vii
Manufacturing – Significant progress has continued
throughout the year with manufacturing and production of
wheezo resulting in world class capabilities. Current design
Production Quality is excellent with rejection/fall out rates
<0.42%. Further, improvements in Cost Of Goods (COGS)
have further initial quotes for manufacturing wheezo model
4.0 indicate COGS of US$35, which is the target price the
Company set. This version of wheezo® will commence
manufacturing in mid-2022 once current ordered batches
are completed. Significant work has been dedicated to
ensuring the Company has successfully secured sufficient chip
inventory in a period of ongoing global supply shortfalls.
Shareholders
We would like to thank all shareholders for their continued
support of the company. The board was pleased with the
response to the oversubscribed $12.5m share placement
to institutional, professional and sophisticated Australian
investors and included a number of new institutional investors
onto the share register with strong support from our existing
investors earlier in the year.
We remain committed to delivering on the achievements to
date and committed milestones ahead including the successful
launch into the UK and US markets.
Thank you for the trust that you have placed in us as a board
and executive team and the commitment you continue to
show to the Company.
Nicholas Smedley
Executive Chairman
Marjan Mikel
CEO and
Managing Director
International Expansion – The Company has advanced
discussions with potential marketing/distribution partners
in the United States. The Company commissioned an
independent expert evaluation of its wheezo® device (and
associated App) to assess its eligibility to qualify for Remote
Patient Monitoring (RPM) Current Procedural Terminology
(CPT) code reimbursement – a significant insurance
reimbursement regime which exists in the US market. The
expert, based in the USA, is an experienced advisor to US CPT
coding committees and MACRA task forces. The Medicare
Access and CHIP Reauthorization Act (MACRA) is a law that
governs how the US federal government pays / reimburses
physicians. In summary, the expert concluded that wheezo®
analyses breath sounds for the presence of a wheeze and
that in the expert’s opinion, breath sounds and wheezing
are physiologic parameters, which indicates that wheezo®
potentially qualifies for Remote Patient Monitoring CPT Codes.
Significant progress was also made in both commercialisation
and clinical development partnership discussions in the
United Kingdom. As per MHRA requirements, the Company
appointed European Device Solutions (UK) Ltd as the
UK Responsible Person (UK-RP) and has demonstrated
that wheezo® will perform safely and achieve the stated
performance claims for its intended use.
As a result, Respiri can now apply the new UK Conformity
Assessed (UKCA) mark on wheezo®. UKCA marking is a new
UK product marking that is used for goods being placed on
the market in Great Britain (England, Scotland and Wales).
It is a prerequisite for the approval of products following
Brexit and indicates conformity with applicable regulatory
requirements. UKCA replaces CE marking, which can still
be used in the UK until 31 March 2021 for products that are
currently being sold in the UK but CE cannot be used for
any products that have not been sold in the UK market after
January 1, 2021.
Accordingly, this process fulfils a commercial requirement for
wheezo®, which is due to be launched in the UK in Q4 CY 2021.
The asthma Telehealth/Remote Patient Monitoring Program
– developed together with respiratory specialist Dr Kevin Chan
(a leading Respiratory Physician working at Campbelltown
Hospital & Sydney Adventist Hospital, Wahroonga)
commenced in June and 28 patients with moderate to severe
persistent asthma were enrolled into the program. Patients
are given a wheezo® and a smart inhaler providing them and
the physician with a more comprehensive respiratory digital
platform solution that allows for objective assessments to be
made in real time from the real world where asthma problems
occur. Program outcomes are being carefully monitored.
It is planned that this programme will be scaled to other
Respiratory physicians and also create a potential corporate
health respiratory offering for employers/companies. The
programme will also provide a template for a contemplated
United States reimbursement business model.
viii
Financial Statements
Respiri Limited
ABN 98 009 234 173
Contents
For the Year Ended 30 June 2021
Financial Statements
Directors' Report
Auditor's Independence Declaration under Section 307C of the Corporations Act 2001
Statement of Profit or Loss and Other Comprehensive Income
Statement of Financial Position
Statement of Changes in Equity
Statement of Cash Flows
Notes to the Financial Statements
Directors' Declaration
Independent Audit Report
Page
1
19
20
21
22
24
25
57
58
RESPIRI LIMITED 1
Respiri Limited
ABN 98 009 234 173
Directors' Report
30 June 2021
The Directors of Respiri Limited ("RSH", "Respiri", "Company" or "the Group") submit herewith the annual financial report of
the Group for the financial year ended 30 June 2021. In order to comply with the Corporations Act 2001, the Directors'
Report are as follows:
Directors
The names of each person who has been a director during the year and to the date of this report are:
Mr Nicholas Smedley
Appointed to the Board
Last elected by Shareholders
Experience
Qualifications
Interest in shares and options
Directorships held in other
listed entities
Mr Marjan Mikel
Appointed to the Board
Last elected by Shareholders
Experience
Qualifications
Interest in shares and options
Directorships held in other
listed entities
Executive Chairman
30 October 2019
16 December 2020
Nicholas is an experienced Investment Banker and M&A Advisor, with
14 years’ experience at UBS and KPMG. He has worked on M&A
transactions in the UK, Hong Kong, China, and Australia with
transactions ranging from the A$9bn defence of WMC Resources
through to the investment of $65m into Catch.com.au. Nicholas
currently oversees investments in the Property, Aged care,
Technology and Medical Technology space. Key areas of expertise
include M&A, Debt structuring, Corporate governance and innovation.
B.Com
14,209,668 Ordinary Shares and 77,500,000 Unlisted Options
AD1 Holdings Limited
Vortiv Limited
CEO and Executive Director
25 November 2019
16 December 2020
Marjan is a highly experienced managing director and board member
with a career spanning Australia, Europe and Japan, Marjan’s focus
has been in the healthcare industry; from pharmaceuticals and
information services and technology to medical devices and sleep
disorder solutions. He founded and subsequently sold Healthy Sleep
Solutions after developing it into a successful business, with Resmed
Ltd as a joint venture/shareholder partner.
BSc(Hons), Grad Dip Ed, MCom; MAICD
3,308,687 Ordinary Shares and 90,000,000 Unlisted Options
N/A
1
ANNUAL REPORT 2021 2
Respiri Limited
ABN 98 009 234 173
Directors' Report
30 June 2021
Directors (continued)
Dr Thomas Duthy
Appointed to the Board
Last elected by Shareholders
Experience
Qualifications
Interest in shares and options
Directorships held in other
listed entities
Company secretary
Non-Executive Director
11 February 2020
16 December 2020
Dr Duthy has over 15 years of direct financial markets experience
having worked in sell-side equity research, and senior executive roles
across investor relations and corporate development. Dr Duthy is the
Founder and CEO of Nemean Group Pty Ltd, a boutique corporate
advisory and investor relations firm specialising in delivering value-
added services across the life sciences, medical devices, healthcare,
technology and emerging companies sectors. Prior to establishing
Nemean in October 2018, Tom was the Global Head of Investor
Relations & Corporate Development at Sirtex Medical Limited
(ASX:SRX), which was sold to CDH Investments in September 2018
for A$1.9 billion, which remains the largest medical device transaction
in Australian corporate history. Prior to Sirtex, Tom spent ten years as
a leading sell-side Healthcare & Biotechnology analyst at Taylor
Collison Limited, focused mainly on small cap companies. During this
time, approximately $200 million in equity capital was raised for
selected portfolio companies. He is a Member of the Australian
Institute of Company Directors (MAICD) and the Australasian Investor
Relations Association (AIRA).
B.Sc. (Hons.), Ph.D, MBA
745,454 Ordinary Shares and 30,000,000 Unlisted Options
Invex Therapeutics Limited
Mr Alastair Beard was appointed as Company Secretary on 13 March 2019.
Mr Beard is a skillful and adaptable Certified Practicing Accountant with diverse private and public company experience
including roles as director or Chief Financial Officer in the property, utilities, aquaculture and research-to-commercialisation
industries.
Principal Activities
The Company’s principal activities in the course of the financial year have been the research, development and
commercialisation of medical devices, and the development of mobile health applications.
There were no significant changes in the nature of the Group's principal activities during the financial year.
Operating and Financial review
The loss of the Company after income tax for the financial year was $11,040,347 (2020: $7,260,935). This result has been
achieved after fully expensing all research and development costs.
2
RESPIRI LIMITED 3
Respiri Limited
ABN 98 009 234 173
Directors' Report
30 June 2021
Operating and Financial review (continued)
During the year the Company has continued to grow the contracted pharmacy banner group footprint for making wheezo®
available for sale to patients and commenced the roll out of the important in-pharmacy education and patient engagement
programs. The Company has advanced discussions with potential marketing/distribution partners in the United States and
significant progress was also made in both commercialisation and clinical development partnership discussions in the
United Kingdom.
Significant progress has continued throughout the year with manufacturing and production of wheezo® resulting in world
class capabilities. Further improvements in Cost Of Goods (COGS) for manufacturing wheezo® model 4.0 indicate COGS
of US$35, which is the target price the Company set. Significant work has been dedicated to ensuring the Company has
successfully secured sufficient chip inventory in a period of ongoing global supply shortfalls.
The asthma Telehealth/Remote Patient Monitoring Program developed together with respiratory specialist Dr Kevin Chan (a
leading Respiratory Physician working at Campbelltown Hospital & Sydney Adventist Hospital, Wahroonga) commenced in
June 2021 and 22 patients with moderate to severe persistent asthma were enrolled into the program. The program will also
provide a template for a contemplated United States reimbursement business model.
Corporate & Financial Highlights
During the year Respiri completed an oversubscribed $12,500,000 share placement to institutional, professional and
sophisticated Australian investors and included a number of new institutional investors onto the share register with strong
support from our existing investors. The additional funding has provided Respiri with the financial flexibility to meet stated
corporate objectives, which included the commercial launch of wheezo® in Australia, which occurred during the year and in
the longer term progressive commercial launches in key offshore markets including the US and Europe/UK.
The Company recorded revenue from sales of wheezo® devices of $270,074, representing initial sales to contracted
pharmacy banner groups and additional online wheezo® orders.
Product manufacturing cost of sales of $1,263,452 reflect the costs associated with initial scale up manufacturing and
inventory build including long lead time componentry for devices to support expected future demand. Advertising and
marketing costs for the year of $2,185,086 include costs associated with the launch of wheezo® in Australia during the year,
promotional activities and costs associated with the patient experiential program. Employee, consulting and corporate costs
of $4,964,796 reflect the additional headcount required to support Respiri's corporate objectives, including manufacturing,
quality, regulatory and commercial personnel.
At year end the company held $537,046 in inventories and $7,973,188 in cash on hand.
Dividends
The Company did not pay any dividends during the financial year. The Directors do not recommend the payment of a
dividend in respect of the 2021 financial year.
Significant Changes in State of Affairs
In the opinion of the Directors, there were no significant changes in the state of affairs of entities in the Group during the
financial year under review not otherwise disclosed in the Annual Report.
3
ANNUAL REPORT 2021 4
Respiri Limited
ABN 98 009 234 173
Directors' Report
30 June 2021
Matters Subsequent to Reporting Period
The Victorian Government extended a Declaration of a State of Emergency from the 29 July 2021 and “Stage 4” restrictions
continued to apply to Metro Melbourne. This event does not affect amounts recognised in the 2020/21 financial statements.
At this stage, it is not possible to estimate what, if any, affect this will have on the Company's financial performance during
2021/22.
Except for the above, no other matters or circumstances have arisen since the end of the financial year which significantly
affected or could significantly affect the operations of the Group, the results of those operations, or the state of affairs of the
Group in future financial years.
Likely Developments and Expected Results
Please refer to the ‘Operating and Financial Review’ section at the start of the Directors’ Report for information in relation to
Company’s future Developments and Events.
Environmental Regulations
The Group's operations are not regulated by any significant environmental regulations under either Commonwealth or State
legislation.
Risk Management
The Board is responsible for overseeing the establishment and implementation of the risk management system, and for the
reviewing and assessing the effectiveness of the Company's implementation of that system on a regular basis.
The Board and senior management continue to identify the general areas of risk and their impact on the activities of the
Company. The Board has established a formal process in relation to the maintenance of an internal risk register which is
updated and reviewed by the Board at its monthly meetings. The potential risk areas for the Company include:
reliance on key personnel
efficacy, safety and regulatory risk of medical devices
financial position of the Company and the financial outlook;
domestic and global economic outlook and share market activity;
changing government policy (Australian and overseas);
competitors' products and research and development programs;
market demand and market prices for medical device technologies;
environmental regulations;
ethical issues relating to medical device research and development;
the status of partnership and contractor relationships;
other government regulations including those specifically relating to the biomedical and health industries; and
4
RESPIRI LIMITED Respiri Limited
ABN 98 009 234 173
Directors' Report
30 June 2021
Risk Management (continued)
occupational health and safety and equal opportunity law.
The above list of risk areas ought not to be taken as an exhaustive one of the risks faced by the Company or by investors in
the Company. The above areas, and others not specifically referred to above, may in the future materially affect the
financial performance of the Company.
The Board and Management will continue to perform a regular review of the following:
the major risks that occur within the business;
the degree of risk involved;
the current approach to managing the risk; and
where appropriate, determine:
any inadequacies of the current approach; and
possible new approaches that more efficiently and effectively address the risk.
Healthcare Technology Companies – Inherent Risks
Some of the risks inherent in the development of medical device products to a marketable stage include the uncertainty of
patent protection and proprietary rights, whether patent applications and issued patents will offer adequate protection to
enable product development or may infringe intellectual property rights of other parties, the obtaining of the necessary
regulatory authority approvals and difficulties caused by the rapid advancements in technology.
Also a particular medical device may fail the clinical development process through lack of efficacy or safety. Companies
such as Respiri Limited are dependent on the success of their medical devices and on the ability to attract funding to
support these activities.
Investment in healthcare technology including medical devices cannot be assessed on the same fundamentals as trading
and manufacturing enterprises and thus investment in these areas must be regarded as speculative taking into account
these considerations.
Meetings of Directors
A number of formal meetings and circular resolutions were held during the year as tabled below:
Directors'
Meetings
Audit, Risk and
Compliance
Committee
Remuneration &
Nomination
Committee
Number
eligible to
attend
Number
attended
Number
eligible to
attend
Number
attended
Number
eligible to
attend
Number
attended
Mr Nicholas Smedley
Mr Marjan Mikel
Dr Thomas Duthy
11
11
11
11
11
11
-
-
-
-
-
-
-
-
-
-
-
-
5
5
ANNUAL REPORT 2021 6
Respiri Limited
ABN 98 009 234 173
Directors' Report
30 June 2021
Meetings of Directors (continued)
For the date of appointment and resignation of each Director and Executive, please refer to the Remuneration Report
section of the Directors’ Report.
Indemnification of Officers and Auditors
During the financial year, the Company maintained an insurance policy to indemnify Directors and Officers against certain
liabilities incurred as such a Director or Officer, including costs and expenses associated in successfully defending legal
proceedings. The contract of insurance prohibits disclosure of the nature of the liability and the amount of the premium.
The Company has not otherwise, during or since the financial year, indemnified or agreed to indemnify the Auditor of the
Company or any related body corporate against a liability incurred as such an Officer or Auditor.
Proceedings on Behalf of the Company
No proceedings have been brought or intervened in on behalf of the Company with leave of the Court under section 237 of
the Corporations Act 2001.
Non-audit Services
The Company may decide to employ the auditor on assignments additional to their statutory audit duties where the auditor's
expertise and experience with the Company and/or the Group are important.
During the year ended 30 June 2021 the Company did not engage the external auditor to provide non-audit services.
Auditor's Independence Declaration
The auditor's independence declaration in accordance with section 307C of the Corporations Act 2001 for the year ended
30 June 2021 has been received and can be found on page 19 of the financial report.
6
RESPIRI LIMITED 7
Respiri Limited
ABN 98 009 234 173
Directors' Report
30 June 2021
Share Options on Issue as at the Date of this Report
The unissued ordinary shares of Respiri Limited under option as at the date of this report were:
Unlisted options
Class
ASX Code
Date of Expiry
RSHAF
RSHAG
31 December 2023
31 December 2024
Exercise Price
$
0.03
0.03
01
02
03
04
05
06
07
08
09
10
11
12
13
14
15
16
17
18
19
RSHAW
21 December 2020
0.12
RSHAA
RSHAB
RSHACi
RSHACii
RSHACiii
RSHACiv
RSHAD
RSHAE
RSHAH
RSHAC
RSHAC
RSHAA
RSHAA
28 May 2023
12 June 2024
1 July 2022
1 July 2024
17 Dec 2025
17 Dec 2025
0.10
0.10
0.20
0.30
0.40
0.60
0.10
0.10
0.10
0.20
0.30
0.30
0.30
No. under Option
6,000,000
6,000,000
5,000,000
5,000,000
65,000,000 (b)
30,000,000 (b)
12,500,000 (b)
12,500,000 (b)
12,500,000 (b)
7,000,000
10,000,000
4,000,000 (a)
6,000,000 (a)
8,000,000
(a)
65,000,000
10,000,000
a) Options granted at EGM held in May 2020. Issued in 3 tranches with different vesting conditions. Of the 3 tranches, 1
has not yet been allotted to members. See Note 23.
b)
Issued in 5 tranches with different vesting conditions. See Note 23.
There were no listed options outstanding at the reporting date.
Corporate Governance
In recognising the need for the highest standards of corporate behaviours and accountability, the Directors of Respiri
support and adhere to good corporate governance practices. The Company’s Corporate Governance Statement is available
on the Company’s website at www.Respiri.co.
Remuneration Report (Audited)
This Remuneration Report outlines the Director and Executive remuneration arrangements of the Company as required by
the Corporations Act 2001 and its Regulations.
This report details the nature and amount of remuneration of each Director of Respiri Limited and all other Key Management
Personnel.
For the purposes of this report, Key Management Personnel (KMP) are defined as those persons having authority and
responsibility for planning, directing and controlling the major activities of the Company, directly or indirectly, including any
Director (whether Executive or otherwise) of the Company.
For the purposes of this report, the term 'executive' encompasses the Executive Chairman.
7
ANNUAL REPORT 2021 8
Respiri Limited
ABN 98 009 234 173
Directors' Report
30 June 2021
Remuneration Report (Audited) (continued)
Names
Directors
Mr Marjan Mikel
Mr Nicholas Smedley
Dr Thomas Duthy
Other KMP
Mr Philippe Ludekens
Dr Samaneh Sarraf Shirazi
Mr Peter Hildebrandt
Mr Theo Antonopoulos
Remuneration Policy
Position
Appointment/Resignation
CEO
Executive Director
Non-Executive Director
Executive Chairman
Non-Executive Director
General Manager - Commercial
Operations
Chief Research Officer
Chief Operating Officer
Chief Commercial Officer
Resigned 21 May 2021
Appointed on 1 November 2020
Appointed on 7 June 2021
Remuneration of all Non-Executive Directors and Officers of the Company is determined by the Board following
recommendation by the Remuneration and Nomination Committee.
The Company is committed to remunerating Executive Directors in a manner that is market-competitive and consistent with
"Best Practice" including the interests of shareholders. Remuneration packages are based on fixed and variable
components, determined by the Executives' position, experience and performance, and may be satisfied via cash or equity.
Non-Executive Directors are remunerated out of the aggregate amount limit approved by shareholders and at a level that is
consistent with industry standards. Non-Executive Directors do not receive performance based bonuses and prior
Shareholder approval is required to participate in any issue of equity. No retirement benefits are payable other than
statutory superannuation, if applicable.
Voting and comments made at the Company’s Annual General Meeting
The Company did not receive any specific feedback at the AGM or throughout 2021 on its remuneration practices. The
Remuneration Report was adopted at the 2021 AGM by more than 93% of eligible votes received.
Remuneration Policy Versus Company Financial Performance
Directors have been compensated for work undertaken and the responsibilities assumed in being Directors of this publicly
listed company based on industry practice. Consistently with good corporate governance practices, compensation of Non-
Executive Directors is not linked to specific performance hurdles or objectives.
The Company envisages its performance in terms of earnings will remain negative whilst the Company continues in the
development and commercialisation phase. Shareholder value reflects the speculative and volatile biotechnology market
sector.
This pattern is indicative of the Company's performance over the past five years. Accordingly, no dividends have been paid
during the year, or in respect of the 2021 financial year.
8
RESPIRI LIMITED Respiri Limited
ABN 98 009 234 173
Directors' Report
30 June 2021
Remuneration Report (Audited) (continued)
Financial Year
2021
2020
2019
2018
2017
Performance Based Remuneration
9
Net (Loss)/
Profit
Share Price
at Balance
Sheet Date
Loss per
Share (cents)
$
$
$
(11,040,347)
(7,260,935)
(8,474,586)
(3,207,220)
(2,522,052)
0.07
0.09
0.09
0.10
0.04
(1.58)
(1.27)
(1.69)
(0.73)
(0.58)
The purpose of a performance bonus is to reward individual performance in line with Company objectives. Consequently,
performance based remuneration is paid to an individual where the individual's performance clearly contributes to a
successful outcome for the Company. This is regularly measured in respect of performance against key performance
indicators (KPI's).
The Company uses a variety of short-term and long-term KPI's to determine achievement, depending on the role of the
executive or director being assessed and the particular KPI being targeted.
These include:
successful contract negotiations;
company share price consistently reaching a targeted rate on the ASX or applicable market over a period of time; and
completion of set milestones.
The Non-Executive Directors do not receive performance-based remuneration.
9
ANNUAL REPORT 2021 10
Respiri Limited
ABN 98 009 234 173
Directors' Report
30 June 2021
Remuneration Report (Audited) (continued)
Details of Remuneration for the Year Ended 30 June 2021
The remuneration for each Director and each of the other Key Management Personnel of the consolidated entity during the
year was as follows:
Short-term Employee Benefits
Post-employment
Benefits
Share-based
payments
Cash salary
and fees
Cash bonus
Consulting
fees
Superannuation
contribution
2021
$
$
$
$
Shares/
Options
$
$
Directors
Mr Marjan Mikel
Dr Thomas Duthy
Mr Nicholas Smedley
Professor Bruce
Thompson
Other KMP
Mr Philippe Ludekens
Mr Peter Hildebrandt
Mr Theo Antonopoulos
Dr Samaneh Sarraf
Shirazi
428,306
60,000
203,636
1,344
214,659
156,667
18,333
167,458
1,250,403
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
21,694
-
-
128
18,597
14,883
1,742
1,106,111
345,734
929,581
1,556,111
405,734
1,133,217
-
1,472
56,523
79,067
1,493
289,779
250,617
21,568
15,909
56,523
239,890
72,953
2,575,032
3,898,388
Note: For the date of appointment and resignation of each Director and Executive please refer to the Directors' Report.
a) 20,000,000 unlisted options were granted to senior management personnel at the May 2020 EGM. As at 30 June 2021,
of the total granted, 8,800,000 options with a fair value of $180,119 have not yet been formally allotted.
10
RESPIRI LIMITED 11
Respiri Limited
ABN 98 009 234 173
Directors' Report
30 June 2021
Remuneration Report (Audited) (continued)
Details of Remuneration for the Year (continued) Ended 30 June 2021
Short-term Employee Benefits
Post-employment
Benefits
Share-based
payments
Cash salary
and fees
Cash bonus
Consulting
fees
Superannuation
contribution
2020
$
$
$
$
Shares/
Options
$
$
Directors
Mr Marjan Mikel
Dr Thomas Duthy
Mr Nicholas Smedley
Professor Bruce
Thompson
Mr Mario Gattino
Mr Ross Blair-Holt
Other Key
Management
Personnel
Mr Philippe Ludekens
Dr Samaneh Sarraf
Shirazi
Ms Koswani Wall
186,998
25,000
88,978
80,603
262,550
26,250
94,032
164,459
188,528
75,000
-
-
-
-
-
-
-
-
1,117,398
75,000
At Risk Income as a Proportion of Total Remuneration
-
-
-
-
-
-
-
-
-
-
24,639
-
-
7,657
16,939
2,494
1,293,708
230,207
1,274,671
1,580,345
255,207
1,363,649
-
362,116
-
88,260
641,605
28,744
8,933
15,986
118,951
15,623
14,907
15,986
(6,908)
196,068
196,527
91,192
3,185,766
4,469,356
All Executive Directors and other key management personnel are eligible to receive incentives whether through employment
contracts or by the recommendation of the Board. Their performance payments are based on a set monetary value, set
number of shares or options or as a portion of base salary. Therefore, there is no fixed proportion between incentive and
non-incentive remuneration. Entitlement to these payments does not depend on the future performance of the Company.
Non-Executive Directors are not entitled to receive bonuses and/or incentives.
11
ANNUAL REPORT 2021 12
Respiri Limited
ABN 98 009 234 173
Directors' Report
30 June 2021
Remuneration Report (Audited) (continued)
At Risk Income as a Proportion of Total Remuneration (continued)
The relative proportions of remuneration income that are at risk, and those that are fixed, are as follows:
Directors
Mr Nicholas Smedley (appointed on 30 October 2019)
Mr Marjan Mikel (appointed on 25 November 2019)
Dr Thomas Duthy (appointed on 11 February 2020)
Mr Mario Gattino (appointed on 14 December 2017,
resigned 25 November 2019)
Mr Ross Blair-Holt (appointed on 27 November 2018,
resigned 15 November 2019)
Prof Bruce Thompson (appointed on 27 November
2018, resigned 11 February 2020)
Other Key Management Personnel
Mr Philippe Ludekens (appointed on 28 January
2020)
Mr Peter Hildebrandt (appointed 1st November 2020)
Mr Theo Antonopoulos (appointed 7th June 2021)
Dr Samaneh Sarraf Shirazi (appointed 4 February
2019)
Ms Koswani Wall (appointed on 1 June 2018,
resigned 13 December 2019)
Fixed
Remuneration
At Risk - STI
At Risk - LTI
2021
2020
2021
2020
2021
2020
%
%
%
%
%
%
18
29
15
-
-
100
80
68
93
76
-
7
18
10
40
100
100
87
-
-
92
100
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
82
71
85
-
-
-
20
32
7
24
-
93
82
90
60
-
-
13
-
-
8
-
At risk long-term incentive (LTI) relates to remuneration in the form of share based payments, which are subject to vesting
conditions based on length of service. At risk short-term incentive (STI) relates to discretionary bonuses approved by the
board in respect of performance during the relevant year.
12
RESPIRI LIMITED 13
Respiri Limited
ABN 98 009 234 173
Directors' Report
30 June 2021
Remuneration Report (Audited) (continued)
Share-based Compensation
At the General Meeting held on 31 October 2013, Shareholders approved the establishment of the 2013 Employees',
Directors' and Consultants' Share and Option Plan (ESOP). The ESOP is intended to reward Directors, employees and/or
consultants for their contributions to the Group. The Plan is to be used as a method of retaining key personnel for the
growth and development of the Group. Due to the Group's presence in Israel and USA, the Plan has been established to
benefit personnel in Australia, Israel and USA. As at 30 June 2021 equity had been issued to 3 directors & 6 employees in
Australia, 8 employees in USA and 2 employees in Israel under ESOP.
The terms and conditions of each grant of options affecting Director and other Key Management Personnel remuneration in
the current or future reporting periods are as follows:
Grant Date
Date Vested &
Exercisable
Expiry Date
Exercise Price
Share Price
Hurdle
Fully
Vested
14 Dec 2017
14 Dec 2017
26 May 2020
26 May 2020
26 May 2020
16 Jun 2020
16 Jun 2020
16 Jun 2020
16 Jun 2020
16 Jun 2020
16 Jun 2020
22 Oct 2020
21 Dec 2020
7 Jun 2021
1 Jul 2020
1 Jul 2020
30 Sep 2020
30 Sep2020
30 Sep 2020
12 Jun 2020
30 Sep 2020
31 Mar 2021
30 Sep 2021
30 Sep 2021
31 Mar 2022
1 Nov 2021
21 Dec 2020
7 Jun 2022
31 Dec 2023
31 Dec 2024
30 Sep 2024
30 Sep 2024
30 Sep 2024
12 Jun 2024
30 Sep 2024
31 Mar 2025
30 Sep 2025
30 Sep 2025
31 Mar 2026
1 Nov 2023
17 Dec 2025
7 Jun 2024
$
0.03
0.03
0.10
0.20
0.30
0.10
0.20
0.30
0.40
0.40
0.60
0.20
0.30
0.20
0.10
0.15
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
No
No
No
No
No
Yes
No
No
No
No
No
No
Yes
No
Value per Option
at Grant Date
$
0.048
0.092
0.036
0.026
0.020
0.041
0.031
0.027
0.030
0.026
0.023
0.074
0.022
0.015
Options granted under the plan carry no dividend or voting rights until exercised into ordinary fully paid shares.
When exercisable, each option is convertible into one ordinary share as soon as practical after the receipt by the Company
of the completed exercise form and full payment of the exercise price.
The exercise price of options granted under this plan shall be determined by the Committee in its sole discretion.
The plan rules contain a restriction on removing the 'at risk' aspect of the instruments granted to executives. Plan
participants may not enter into any transaction designed to remove the 'at risk' aspect of an instrument before it vests.
13
ANNUAL REPORT 2021 14
Respiri Limited
ABN 98 009 234 173
Directors' Report
30 June 2021
Remuneration Report (Audited) (continued)
Share-based Compensation (continued)
Details of options over ordinary shares in the Company provided as remuneration to each Director of the Company and
each of the other Key Management Personnel are set out below:
Directors
Mr Nicholas Smedley
Mr Marjan Mikel
Dr Thomas Duthy
Mr Mario Gattino
Mr Ross Blair-Holt
Other Key Management
Personnel
Mr Philippe Ludekens
Mr Peter Hildebrandt
Mr Theo Antonopoulos
Dr Samaneh Sarraf Shirazi
Ms Koswani Wall (resigned
on 13 December 2019)
Number of Options
Granted During the Year
Number of Options
Forfeited/ Lapsed/
Exercised During the
Year
Number of Options
Vested During the Year
2021
2020
2021
2020
2021
2020
30,000,000
30,000,000
5,000,000
-
-
47,500,000
60,000,000
25,000,000
-
-
-
-
-
- 8,000,000 12,000,000
-
-
-
- 30,000,000 30,000,000
- 30,000,000 30,000,000
- 10,000,000 5,000,000
-
-
-
2,000,000
2,000,000
-
2,000,000
-
-
2,000,000
-
-
-
-
-
-
-
-
-
-
- 10,000,000
-
-
-
-
-
-
-
-
-
-
69,000,000 136,500,000
- 18,000,000 82,000,000 65,000,000
Refer to Page 16 for closing balance of options held by each Director and other Key Management Personnel of Respiri
Limited, including their personally related parties, as at 30 June 2021.
14
RESPIRI LIMITED 15
Respiri Limited
ABN 98 009 234 173
Directors' Report
30 June 2021
Remuneration Report (Audited) (continued)
(a)
Shareholdings
The number of fully paid ordinary shares in the Company held during the financial year by each Director and other Key
Management Personnel of Respiri Limited, including shares held indirectly by them personally, are set out below:
30 June 2021
Directors
Mr Nicholas Smedley
Mr Marjan Mikel
Dr Thomas Duthy
Other Key Management Personnel
Mr Philippe Ludekens
Mr Peter Hildebrandt
Mr Theo Antonopoulos
Dr Samaneh Sarraf Shirazi
Balance at
Start of the
Year
Granted
as
Compensation
Shares
from
Options
Exercised
Net
Change
Other
Balance at
End of the
Year
14,059,668
2,643,119
745,454
-
-
-
-
17,448,241
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
150,000 (a) 14,209,668
3,308,687
665,568 (b)
745,454
- (c)
-
-
-
-
-
-
-
-
815,568
18,263,809
a) 150,000 fully paid shares were purchased in Dec 2020. At year end, nil shares are held directly and 14,209,668 held
indirectly.
b) 148,148 fully paid shares were purchased in Dec 2020, and a further 517,420 shares were purchased in June 2021. At
year end, 1,490,506 shares are held directly, 1,818,181 held indirectly.
c) At year end, nil shares are held directly and 745,454 held indirectly.
Balance at
Start of the
Year
Granted as
Compensation
Shares
from
Options
Exercised
Net
Change
Other
Balance at
End of the
Year
30 June 2020
Directors
Mr Nicholas Smedley
Mr Marjan Mikel
Dr Thomas Duthy
Prof Bruce Thomson (resigned on 11 February 2020)
Mr Mario Gattino (resigned on 25 November 2019)
Mr Ross Blair-Holt (resigned on 15 November 2019)
Other Key Management Personnel
Mr Philippe Ludekens
Dr Samaneh Sarraf Shirazi
Ms Koswani Wall (resigned on 13 December 2019)
-
-
-
-
420,000
1,120,423
-
-
359,206
1,899,629
-
-
-
-
-
-
-
-
-
-
- 14,059,668 14,059,668
2,643,119
-
745,454
-
-
-
420,000
-
-
-
2,643,119
745,454
-
-
(1,120,423)
-
-
-
-
-
-
-
-
359,206
- 16,327,818 18,227,447
15
ANNUAL REPORT 2021 16
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M
ANNUAL REPORT 2021
18
Respiri Limited
ABN 98 009 234 173
Directors' Report
30 June 2021
Remuneration Report (Audited) (continued)
The Directors and other Key Management Personnel are subject to service agreements with normal commercial terms and
conditions. The key terms of these agreements are set out below:
Duration
Periods of Notice Required to Terminate
On-going term
In the case of:
- Marjan Mikel, one months' notice of termination by the
employee and the Company;
- Peter Hildebrandt, one months' notice of termination by the
employee and the Company;
- Theo Antonopoulos, one months' notice of termination by
the employee and the company; and
- Samaneh Shirazi, one months' notice of termination by the
employee and the Company.
This is the end of the Audited Remuneration Report.
This director's report, incorporating the remuneration report, is signed in accordance with a resolution of the Board of
Directors.
Mr Nicholas Smedley
Executive-Chairman
Dated this the 27th day of August 2021
Melbourne, Australia
18
RESPIRI LIMITED 19
ANNUAL REPORT 202119 AUDITOR’S INDEPENDENCE DECLARATION As lead auditor for the audit of the financial report of Respiri Limited for the year ended 30 June 2021, I declare that, to the best of my knowledge and belief, there have been no contraventions of: (i) the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and (ii) any applicable code of professional conduct in relation to the audit. RSM AUSTRALIA PARTNERS B Y CHAN Partner Dated: 27 August 2021 Melbourne, Victoria 20
Respiri Limited
ABN 98 009 234 173
Statement of Profit or Loss and Other Comprehensive Income
For the Year Ended 30 June 2021
Revenue
Operating revenue
Non-operating revenue
Other income
Total revenue
Expenses
Cost of sales
Consulting, employee and director
Equity-based payment
Corporate administration
Depreciation
Marketing and promotion
Research and development
Travel
Loss before income tax expense from continuing
operations
Income tax expense
Loss after income tax for the year
Other comprehensive income, net of income tax
Items that will not be reclassified subsequently to
profit or loss
Exchange differences on translation of foreign
operations
Total comprehensive loss for the year
Loss attributable to:
Members of the parent entity
Total comprehensive loss attributable to:
Members of the parent entity
Basic loss per share (cents)
Diluted loss per share (cents)
Note
2021
$
2020
$
3
3
4
23
270,074
1,352
1,165,921
-
1,660
2,205,307
1,437,347
2,206,967
(1,263,452)
(3,330,901)
(2,530,169)
(1,633,895)
(79,601)
(2,185,086)
(1,387,084)
(67,506)
-
(1,738,111)
(3,270,907)
(1,526,472)
(10,380)
(783,872)
(2,035,426)
(102,734)
(11,040,347)
-
(7,260,935)
-
5
(11,040,347)
(7,260,935)
(19,833)
(7,573)
(11,060,180)
(7,268,508)
(11,040,347)
(7,260,935)
(11,060,180)
(7,268,508)
(1.58)
(1.58)
(1.27)
(1.27)
The accompanying notes form part of these financial statements.
20
RESPIRI LIMITED Respiri Limited
ABN 98 009 234 173
Statement of Financial Position
As At 30 June 2021
ASSETS
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Inventories
Other assets
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Property, plant and equipment
Other assets
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
LIABILITIES
CURRENT LIABILITIES
Trade and other payables
Borrowings
Other financial liabilities
Deferred revenue
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Other financial liabilities
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Retained earnings
TOTAL EQUITY
21
Note
2021
$
2020
$
9
10
14
13
12
13
15
16
17
17
7,973,188
135,986
537,046
298,978
3,552,334
8,199
309,219
561,363
8,945,198
4,431,115
162,374
-
162,374
187,725
64
187,789
9,107,572
4,618,904
1,294,633
-
171,255
857
1,131,283
717,144
147,655
-
1,466,745
1,996,082
70,665
70,665
128,046
128,046
1,537,410
2,124,128
7,570,162
2,494,776
18
19
127,090,401
6,826,043
(126,346,282)
113,694,614
4,106,097
(115,305,935)
7,570,162
2,494,776
The accompanying notes form part of these financial statements.
21
ANNUAL REPORT 2021 22
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C
ANNUAL REPORT 2021
24
Respiri Limited
ABN 98 009 234 173
Statement of Cash Flows
For the Year Ended 30 June 2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Receipts from customers
Payments to suppliers and employees (inclusive of GST)
Interest received
Grant income
R&D tax refund
ATO cashflow boost
Net cash used in operating activities
CASH FLOWS FROM INVESTING ACTIVITIES:
Payments for purchases of plant and equipment
Net cash used in investing activities
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issues of securities
Proceeds from exercise of options
Capital raising costs
Repayment of from borrowings
Net cash provided by financing activities
Net increase in cash and cash equivalents held
Cash and cash equivalents at beginning of year
Effects of exchange rate changes on cash and
cashequivalents
Cash and cash equivalents at end of financial year
Note
2021
$
2020
$
270,931
(8,777,301)
1,352
129,211
986,710
50,000
-
(6,894,923)
1,660
-
2,155,307
50,000
22
(7,339,097)
(4,687,956)
(54,252)
(54,252)
(12,863)
(12,863)
12,430,200
650,000
(547,350)
(744,515)
11,788,335
4,394,986
3,552,334
8,531,528
-
(425,382)
(146,808)
7,959,338
3,258,519
306,655
25,868
(12,840)
9
7,973,188
3,552,334
The accompanying notes form part of these financial statements.
24
RESPIRI LIMITED
25
Respiri Limited
ABN 98 009 234 173
Notes to the Financial Statements
For the Year Ended 30 June 2021
1
Summary of Significant Accounting Policies
Corporate Information
Respiri Limited is a listed public company limited by shares incorporated and domiciled in Australia whose shares are
publicly traded on the Australian Stock Exchange.
The addresses of its registered office and principal place of business are disclosed in company details.
The principal activities of the Company are the research, development and commercialisation of medical devices, and
the production of mobile health applications. The Company is a for-profit company.
The financial report of Respiri Limited (the Company) for the year ended 30 June 2021 was authorised for issue in
accordance with a resolution of the Directors on 26th August 2021.
Statement of Compliance
The financial report is a general purpose financial report that has been prepared in accordance with the Corporations
Act 2001, Accounting Standards and Australian Accounting Interpretations, and complies with other authoritative
pronouncements from the Australian Accounting Standards Board, as appropriate for for-profit orientated entities.
The financial report covers Respiri Limited as a consolidated entity consisting of Respiri Limited and the entities it
controlled during the year.
The financial report complies with Australian Accounting Standards, as issued by the Australian Accounting Standards
and with International Financial Reporting Standards ('IFRS') as issued by the International Accounting Standards
Board (IASB).
Basis of Preparation
The financial report has been prepared on an accruals basis and is based on historical costs. Cost is based on fair
values of the consideration given in exchange for assets. All amounts are presented in Australian dollars, unless
otherwise noted and amounts rounded to the nearest dollar.
Parent entity information
In accordance with the Corporations Act 2001, these financial statements present the results of the consolidated entity
only. Supplementary information about the parent entity is disclosed in note 2.
Going Concern Basis
The financial statements have been prepared on the going concern basis, which contemplates continuity of normal
business activities and the realisation of assets and discharge of liabilities in the normal course of business.
As disclosed in the financial statements, the Group incurred a loss of $11,040,347 and had net cash outflows from
operating activities of $7,339,097 for the year ended 30 June 2021.
These factors indicate a material uncertainty which may cast significant doubt as to whether the Group will continue
as a going concern and therefore whether it will realise its assets and extinguish its liabilities in the normal course
of business and at the amounts stated in the financial report.
The Directors believe that there are reasonable grounds to believe that the Group will be able to continue as a going
concern, after consideration of the following factors:
25
ANNUAL REPORT 2021 26
Respiri Limited
ABN 98 009 234 173
Notes to the Financial Statements
For the Year Ended 30 June 2021
1
Summary of Significant Accounting Policies (continued)
Going Concern Basis (continued)
The Group completed an oversubscribed $12,500,000 share placement in October 2020 resulting in
cash and cash equivalents of $7,973,188 on hand at 30 June 2021. As at that date the Group had net
current assets of $7,478,453 and net assets of $7,570,162.
The Group has prepared budgets and cash flow forecast for the next 12 months from the date of this
report which indicate the Group will have a positive cash balance during this period.
The Group has generated revenue in the year ended 30 June 2021 of $270,074 and is expecting to
continue to increase revenue over the next 12 months.
The Directors believe that there are reasonable grounds to expect that the Group has the capacity to
raise capital. The Group has a strong track record of accessing capital when it is required to advance its
portfolio.
Accordingly, the Directors believe that the Group will be able to continue as a going concern and that it is
appropriate to adopt the going concern basis in the preparation of the financial report.
The financial report does not include any adjustments relating to the amounts or classification of recorded assets or
liabilities that might be necessary if the Group does not continue as a going concern.
Accounting Policies
(a)
Basis for consolidation
The consolidated financial statements incorporate the financial statements of the Company and entities
controlled by the Company (its subsidiaries) (referred to as "the Company" in these financial statements).
Control is achieved where the consolidated entity 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 consolidated
entity. They are de-consolidated from the date that control ceases.
A list of controlled entities is contained in Note 11 to the financial statements. All controlled entities have 30
June 2021 financial year-end.
All intra-group transactions, balances, income and expenses are eliminated in full on consolidation. In the
separate financial statements of the Company, intra-group transactions ('common control transactions') are
generally accounted for by reference to the existing book value of the items. Where the transaction value of
common control transactions differ from their consolidated book value, the difference is recognised as a
contribution by or distribution to equity participants by the transacting entities.
Accounting policies of subsidiaries have been changed where necessary to ensure consistency with those
policies applied by the parent entity. Subsidiaries are accounted for at cost in the parent entity.
The results of subsidiaries acquired or disposed of during the year are included in profit or loss from the
effective date of acquisition or up to the effective date of disposal, as appropriate.
26
RESPIRI LIMITED 27
Respiri Limited
ABN 98 009 234 173
Notes to the Financial Statements
For the Year Ended 30 June 2021
1
Summary of Significant Accounting Policies (continued)
(b)
Income Tax
The income tax expense is based on the taxable income for the year. It is calculated using the tax rates that
have been enacted or are substantially enacted by the balance date. Current tax for current and prior periods is
recognised as a liability (or asset) to the extent that it is unpaid (or refundable).
Deferred tax is accounted for using the balance sheet liability method. Temporary differences are differences
between the tax base of an asset or liability and its carrying amount in the statement of financial position. The
tax base of an asset or liability is the amount attributed to that asset or liability for tax purposes. In principle,
deferred tax liabilities are recognised for all taxable temporary differences.
Deferred tax assets are recognised to the extent that it is probable that sufficient taxable amounts will be
available against which deductible temporary differences or unused tax losses and tax offsets can be utilised.
However, deferred tax assets and liabilities are not recognised if the temporary differences giving rise to them
arise from the initial recognition of assets and liabilities (excluding a business combination) that affects neither
taxable income nor accounting profit. Furthermore, a deferred tax liability is not recognised in relation to taxable
temporary differences arising from the initial recognition of goodwill.
Deferred tax liabilities are recognised for taxable temporary differences associated with investments in
subsidiaries, branches and associates, and interests in joint ventures except where the Group is able to control
the reversal of the temporary differences and it is probable that the temporary differences will not reverse in the
foreseeable future. Deferred tax assets arising from deductible temporary differences associated with these
investments and interests are only recognised to the extent that it is probable that there will be sufficient taxable
profits against which to utilise the benefits of the temporary differences and they are expected to reverse in the
foreseeable future.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period(s) when
the asset and liability giving rise to them are realised or settled. Current and deferred tax is recognised as an
expense or income in Profit or Loss, except when it relates to items credited or debited directly to equity, in
which case the deferred tax is also recognised directly in equity, or where it arises from the initial accounting for
a business combination, in which case it is taken into account in the determination of goodwill or excess.
The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the
manner in which the Group expects, at the reporting date, to recover or settle the carrying amount of its assets
and liabilities. Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same
taxation authority and the Company/Group intends to settle its current tax assets and liabilities on a net basis.
Respiri Limited (head entity) and its wholly owned Australian subsidiaries have formed an income tax
consolidated group under the tax consolidation regime.
Where the Company is entitled to a tax rebate under the R&D Tax Concession during a particular financial year,
the rebate is recorded as revenue for the year when received, rather than when expenditure was incurred.
(c)
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
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 a least 12 months after the reporting period. All other assets are
classified as non-current.
27
ANNUAL REPORT 2021 28
Respiri Limited
ABN 98 009 234 173
Notes to the Financial Statements
For the Year Ended 30 June 2021
1
Summary of Significant Accounting Policies (continued)
(c)
Current and non-current classification (continued)
A liability is classified as current when: it is either expected to be settled in 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.
(d)
Inventories
Raw materials, work in progress and finished goods are stated at the lower of cost and net realisable value on a
‘weighted average’ basis. The cost of inventories comprises cost of purchase and costs incurred in bringing
inventories to their present location and condition. Cost of purchased inventories is determined after deducting
rebates and discounts received or receivable.
Net realisable value is the estimated selling price in the ordinary course of business less estimated costs of
completion and the estimated selling costs.
The Company periodically evaluates the condition and age of inventories and makes provisions for slow moving
inventories accordingly.
If in a particular period production is not at normal capacity, the costs of inventories does not include additional
fixed overheads in excess of those allocated based on normal capacity. Such unallocated overheads are
recognised as an expense in Profit or Loss in the period in which they are incurred. Furthermore, cost of
inventories does not include abnormal amounts of materials, labour or other costs resulting from inefficiency.
(e)
Property, plant and equipment
Plant and equipment is stated at cost, less accumulated depreciation and impairment.
Cost includes the cost of materials, direct labour, borrowing costs and an appropriate proportion of fixed and
variable overheads. Subsequent costs are included in the asset’s carrying amount or recognised as a separate
asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to
the group and the cost of the item can be measured reliably. All other repairs and maintenance are charged to
Profit or Loss during the financial period in which they are incurred.
Depreciation
The depreciable amount of all plant and equipment is depreciated on a straight-line basis commencing from the
time the asset is held ready for use.
The depreciation rates used for each class of depreciable asset are shown below:
Fixed asset class
Furniture and Fittings
Computer Equipment
Medical Equipment
Depreciation rate
6 - 15%
15 - 33%
15%
28
RESPIRI LIMITED 29
Respiri Limited
ABN 98 009 234 173
Notes to the Financial Statements
For the Year Ended 30 June 2021
1
Summary of Significant Accounting Policies (continued)
(e)
Property, plant and equipment (continued)
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each balance date. An
asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is
greater than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains
and losses are included in profit or loss.
(f)
Leases
Lease assessment at contract inception
At inception of a contract, the Group assesses whether a lease exists - i.e. does the contract convey the right to
control the use of an identified asset for a period of time in exchange for consideration.
This involves an assessment of whether:
The contract involves the use of an identified asset - this may be explicitly or implicitly identified within
the agreement. If the supplier has a substantive substitution right then there is no identified asset.
The Group has the right to obtain substantially all of the economic benefits from the use of the asset
throughout the period of use.
The Group has the right to direct the use of the asset i.e. decision making rights in relation to changing
how and for what purpose the asset is used.
Right-of-use asset
At the lease commencement, the Group recognises a right-of-use asset and associated lease liability for the
lease term. The lease term includes extension periods where the Group believes it is reasonably certain that
the option will be exercised.
The right-of-use asset is measured using the cost model where cost on initial recognition comprises of the lease
liability, initial direct costs, prepaid lease payments, estimated cost of removal and restoration less any lease
incentives received.
The right-of-use asset is depreciated over the lease term on a straight-line basis and assessed for impairment
in accordance with the impairment of assets accounting policy.
Lease liability
The lease liability is initially measured at the present value of the remaining lease payments at the
commencement of the lease. The discount rate is the rate implicit in the lease, however where this cannot be
readily determined then the Group's incremental borrowing rate is used.
Subsequent to initial recognition, the lease liability is measured at amortised cost using the effective interest
rate method. The lease liability is remeasured whether there is a lease modification, change in estimate of the
lease term or index upon which the lease payments are based (e.g. CPI) or a change in the Group's
assessment of lease term.
29
ANNUAL REPORT 2021 30
Respiri Limited
ABN 98 009 234 173
Notes to the Financial Statements
For the Year Ended 30 June 2021
1
Summary of Significant Accounting Policies (continued)
(f)
Leases (continued)
Lease liability (continued)
Where the lease liability is remeasured, the right-of-use asset is adjusted to reflect the remeasurement or is
recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.
Adoption of short-term leases or low value asset exception
Exceptions to lease accounting
The Group has elected to apply the exceptions to lease accounting for both short-term leases (i.e. leases with a
term of less than or equal to 12 months) and leases of low-value assets. The Group recognises the payments
associated with these leases as an expense on a straight-line basis over the lease term.
(g)
Financial assets and liabilities
Recognition
Financial assets and financial liabilities are recognised when a group entity becomes a party to the contractual
provisions of the instrument.
Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly
attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and
financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial
assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the
acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised
immediately in profit or loss.
Financial liabilities
Other financial liabilities, including borrowings and trade and other payables, are initially measured at fair value,
net of transaction costs. Other financial liabilities are subsequently measured at amortised cost using the
effective interest method, with interest expense recognised on an effective yield basis. The effective interest
method is a method of calculating the amortised cost of a financial liability and of allocating interest expense
over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash
payments through the expected life of the financial liability, or (where appropriate) a shorter period, to the net
carrying amount on initial recognition.
A financial liability is removed from the balance sheet when the obligation specified in the contract is discharged
or cancelled or expires. Non-derivative financial liabilities are recognised at amortised cost using the effective
interest rate method, comprising original debt less principal payments, amortisation and impairment.
30
RESPIRI LIMITED 31
Respiri Limited
ABN 98 009 234 173
Notes to the Financial Statements
For the Year Ended 30 June 2021
1
Summary of Significant Accounting Policies (continued)
(h)
Intangibles
Intellectual property
Intellectual property relates to technology assets, know-how and patents related to assets acquired on
acquisition of Respiri (Israel) Limited (previously KarmelSonix (Israel) Limited) and is recorded at cost less
accumulated amortisation and impairment. Amortisation is charged on a straight-line basis over the expected
life, being 10 years. Amortisation commences when the asset is available for use, that is, when it is in the
location and condition necessary for it to be capable of operating in the manner intended by management.
The amortisation period and the amortisation method for an intangible asset is reviewed at least at the end of
each reporting period. If the expected useful life of the asset is different from the previous estimates, the
amortisation shall be changed accordingly. Such changes are accounted for as changes in accounting
estimates.
(i)
Foreign currency transactions and balances
Functional and presentation currency
The functional currency of each of the Group’s entities is measured using the currency of the primary economic
environment in which that entity operates. The consolidated financial statements are presented in Australian
dollars which is the parent entity's functional and presentation currency.
Transaction and balances
Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the
date of the transaction. Foreign currency monetary items are retranslated at the rates prevailing at the reporting
date. Non-monetary items that are measured in terms of historical cost are not retranslated. Non-monetary
items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing on
the date when the fair value was determined.
Exchange differences arising on the translation of monetary items are recognised in Profit or Loss, except
where deferred in equity as a qualifying cash flow or net investment hedge.
Exchange differences arising on the translation of non-monetary items are recognised directly in equity to the
extent that the gain or loss is directly recognised in equity, otherwise the exchange difference is recognised in
Profit or Loss.
For the purpose of presenting these consolidated financial statements, the assets and liabilities of the Group’s
foreign operations are translated into Australian dollars using exchange rates prevailing at the end of the
reporting period. Income and expense items are translated at the average exchange rates for the period, unless
exchange rates fluctuated significantly during that period, in which case the exchange rates at the dates of the
transactions are used. Exchange differences arising, if any, are recognised in other comprehensive income and
accumulated in equity (and attributed to non-controlling interests as appropriate).
Group companies
The financial results and position of foreign operations whose functional currency is different from the Group's
presentation currency are translated as follows:
assets and liabilities are translated at year-end exchange rates prevailing at that reporting date;
31
ANNUAL REPORT 2021 32
Respiri Limited
ABN 98 009 234 173
Notes to the Financial Statements
For the Year Ended 30 June 2021
1
Summary of Significant Accounting Policies (continued)
(i)
Foreign currency transactions and balances (continued)
Group companies (continued)
income and expenses are translated at average exchange rates for the period; and
retained earnings are translated at the exchange rates prevailing at the date of the transaction.
Exchange differences arising on translation of foreign operations are transferred directly to the Group's foreign
currency translation reserve in the Statement of Financial Position. These differences are recognised in the
Profit or Loss in the period in which the operation is disposed.
(j)
Employee benefits
Annual leave and long service leave
A liability is recognised for the Company’s liability for employee benefits arising from services rendered by
employees to balance date. Employee benefits that are expected to be settled within one year have been
measured at the amounts expected to be paid when the liability is settled, plus related on-costs.
Employee benefits payable later than one year have been measured at the present value of the estimated
future cash outflows to be made for those benefits.
Short-term benefits include salaries, paid annual leave, paid sick leave, recreation and social security
contributions (Israel only) and are recognised as expenses as the services are rendered.
Post employment benefits include superannuation and payments to insurance companies (Israel only) and are
defined contribution plans. Such payments are made in accordance with the relevant legislation for country
and/or state where an employee normally performs their duties as an employee. Payments are recognised as
expenses as the services are rendered.
Shared-based payments
Shared-based compensation benefits are provided to employees via the Respiri Limited Employee Option Plan
and an employee share scheme.
The fair value of options granted under Respiri Limited Option Share Plan is recognised as an employee benefit
expense with a corresponding increase in equity. The fair value is measured at the grant date and recognised
over the period during which the employees become unconditionally entitled to the options.
The fair value at grant date was determined using an option pricing model that takes into account the exercise
price, the term of the option, the vesting and performance criteria, the impact of dilution, the non-tradeable
nature of the option, the share price at grant date and the expected price volatility of the underlying share, the
expected dividend yield and the risk free interest rate for the term of the option.
(k)
Provisions
Provisions are recognised when the Group has a present legal or constructive obligation as a result of past
events, it is probable that an outflow of resources will be required to settle the obligation and the amount has
been reliably measured. Provisions are not recognised for future operating losses.
32
RESPIRI LIMITED 33
Respiri Limited
ABN 98 009 234 173
Notes to the Financial Statements
For the Year Ended 30 June 2021
1
Summary of Significant Accounting Policies (continued)
(k)
Provisions (continued)
The amount recognised as a provision is the best estimate of the consideration required to settle the present
obligation at reporting date, taking into account the risks and uncertainties surrounding the obligation. Where a
provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the
present value of those cash flows.
(l)
Cash and cash equivalents
Cash and cash equivalents include cash on hand, deposits held at call with banks, other short-term highly liquid
investments with original maturities of three months or less.
(m)
Revenue and other income
The revenue recognition policies for the principal revenue streams of the Group are:
Interest
Interest revenue is recognised on a proportional basis taking into account the interest rates applicable to the
financial assets. All revenue is stated net of the amount of goods and services tax (GST).
Sale of goods
Revenue from the sale of goods is recognised at the point in time when the customer obtains control of the
goods, which is generally at the time of delivery.
Government Grants
Government grants are recognised at fair value where there is reasonable assurance that the grant will be
received and all grant conditions will be met. Grants relating to expense items are recognised as income over
the periods necessary to match the grant to the costs they are compensating. Grants relating to the purchase of
property, plant and equipment are included in non-current liabilities as deferred income and are credited to
Profit or Loss over the expected useful life of the related asset on a straight-line basis.
Government grants received in Israel as support for research and development projects, include an obligation to
pay royalties (ranging from 3.5% to 5%) conditional on future sales arising from the project. These grants are
recognised upon receipt as a liability if future economic benefits are expected from the project (i.e. sales). If no
economic benefits are expected, the grants are recognised as a reduction of the related research and
development expenses and the royalty obligation treated as a contingent liability.
At the end of each reporting date, the Company evaluates if there is reasonable assurance that the liability
recognised, in whole or part, will not be repaid. If there are indications the liability will not be repaid, the
appropriate amount of the liability is derecognised and recorded in Profit or Loss as a reduction of research and
development expenses. Otherwise, the appropriate amount of the liability that reflects expected future royalty
payments is recognised with a corresponding adjustment to research and development expenses.
Royalty payments are treated as a reduction of the liability.
Other revenue
Other revenue is recognised when it is received or when the right to receive payment is established.
33
ANNUAL REPORT 2021 34
Respiri Limited
ABN 98 009 234 173
Notes to the Financial Statements
For the Year Ended 30 June 2021
1
Summary of Significant Accounting Policies (continued)
(m)
Revenue and other income (continued)
R&D Tax Concession Refunds
R&D Tax concession refunds are recorded as revenue for the year when received, rather than when
expenditure was incurred.
(n)
Goods and services tax (GST)
Revenue, expenses and assets are recognised net of the amount of goods and services tax (GST), except
where the amount of GST incurred is not recoverable from the Australian Taxation Office (ATO). In these
circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of an item of the
expense. Receivables and payables in the Statement of Financial Position sheet are shown inclusive of GST.
Cash flows are presented in the Statement of Cash Flows on a gross basis, except for the GST component of
investing and financing activities, which are disclosed as operating cash flows.
(o)
Share capital
Ordinary share capital is recognised as the fair value of the consideration received by the Company. Any
transaction costs arising on the issue of ordinary shares are recognised directly in equity as a reduction of the
share proceeds received.
(p)
Earnings per share
Basic earnings per share
Basics earnings per share is calculated by dividing the profit attributed to the owners of Respiri 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.
(q)
New Accounting Standards and Interpretations
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet
mandatory, have not been early adopted by the consolidated entity for the annual reporting period ended 30
June 2021.
34
RESPIRI LIMITED 35
Respiri Limited
ABN 98 009 234 173
Notes to the Financial Statements
For the Year Ended 30 June 2021
1
Summary of Significant Accounting Policies (continued)
(r)
Critical Accounting Estimates and Judgments
The preparation of the financial statements requires the Directors and 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 estimates and underlying assumptions are continually evaluated. Revisions to accounting estimates are
recognised in the period in which the estimate is revised if the revision affects only that period, or in the period
of the revision and future periods if the revision affects both current and future periods.
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:
Share-based payment transactions
The consolidated entity measures the cost of equity-settled transactions with employees and consultants 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.
Segment Reporting
Operating segments are identified on the basis of internal reports about components of the Group that are
regularly reviewed by the chief operating decision maker in order to allocate resources to the segment and to
assess its performance. The operating segments of the Group are determined to be Australia and Israel. For
more information, refer to Note 21.
35
ANNUAL REPORT 2021 36
Respiri Limited
ABN 98 009 234 173
Notes to the Financial Statements
For the Year Ended 30 June 2021
2
Parent entity
The following information has been extracted from the books and records of the parent entity and has been prepared in
accordance with the accounting standards.
Statement of Financial Position
Assets
Current assets
Non-current assets
Total Assets
Liabilities
Current liabilities
Non-current liabilities
Total Liabilities
Equity
Issued capital
Accumulated losses
Reserves
Total Equity
Statement of Profit or Loss and Other
Comprehensive Income
Loss after income tax
Total comprehensive income
2021
$
2020
$
8,927,189
165,130
4,409,427
190,479
9,092,319
4,599,906
1,417,618
70,665
1,972,140
128,046
1,488,283
2,100,186
127,090,401
(126,655,338)
7,168,973
113,694,614
(115,624,088)
4,429,194
7,604,036
2,499,720
(11,031,250)
(7,278,391)
(11,031,250)
(7,278,391)
Parent Entity Contingencies and Commitments
The parent entity does not have any contingent liabilities and commitments.
Parent Entity Guarantees in Respect of the Debts of its Subsidiaries
The parent entity has no guarantees in respect of its subsidiaries.
3
Revenue and Other Income
Operating revenue
- Wheezo Device Sales
- Subscriptions Sales
Total Revenue
2021
$
2020
$
269,342
732
270,074
The group derives its sales revenue from the sale of Wheezo devices and from the sale of subscriptions for its
Wheezo app.
-
-
-
36
RESPIRI LIMITED 37
Respiri Limited
ABN 98 009 234 173
Notes to the Financial Statements
For the Year Ended 30 June 2021
3
Revenue and Other Income (continued)
Revenue from the sale of Wheezo devices is based on the contracted sales price. Revenue is recognised at the point
in time when control passes to the customer with the exact timing dependent on the agreed sales terms for each
contract.
Other Income
- R&D concession (a)
- Grant Income
- ATO cashflow boost
2021
$
2020
$
986,710
129,211
50,000
2,155,307
-
50,000
1,165,921
2,205,307
a) The value of any allocable R&D tax concession refund with respect to eligible R&D expenditures incurred during
the financial year 2021 has not yet been determined and have therefore not been included within the financial
statements for financial year 2021.
4
Expenses
Consulting, employee and director
Consulting expenses
Employee expenses
Director expenses
Equity-based payment
Corporate administration
Audit and accounting fees
Foreign exchange loss/(gain)
Corporate administration expenses
Office rentals
Depreciation
Marketing and promotion
Research and development
Travel
Total expenses
2021
$
2020
$
1,430,493
1,186,772
713,636
436,958
570,793
730,360
3,330,901
1,738,111
2,530,169
3,270,907
180,016
45,700
1,357,596
50,583
185,104
5,266
1,272,356
63,747
1,633,895
1,526,473
79,602
10,380
2,185,087
783,872
1,387,084
2,035,426
67,506
102,734
11,214,244
9,467,903
37
ANNUAL REPORT 2021 38
Respiri Limited
ABN 98 009 234 173
Notes to the Financial Statements
For the Year Ended 30 June 2021
5
Income Tax Expense
(a) The prima facie tax on loss from ordinary activities before the loss is reconciled to the income tax as follows:
Loss before income tax
Tax
Income tax benefit calculated
Add:
Tax effect of amounts which are not deductible in calculating income
tax:
- share-based payments expenses
- other expenses not deductible
Other non-assessable income
Other deductible items
Deferred tax assets relating to tax losses and temporary differences
not recognised
Income tax expense
(b) Unrecognised deferred tax assets and liabilities
Deferred tax assets and liabilities are attributable to the following:
- tax losses
- prepayments
- provision
- accrual
(c) Components of tax expense
The components of tax expense comprise:
Current tax
Deferred tax
Income tax expense
2021
$
2020
$
(11,040,347)
27.50
%
(7,260,935)
27.50
%
(3,036,095)
(1,996,757)
695,796
42,547
(285,095)
(93,306)
899,499
24,289
(606,459)
18,932
2,676,153
1,660,496
-
-
2021
$
2020
$
25,511,746
(56,663)
35,894
22,999
22,812,318
(45,735)
16,500
54,740
25,513,976
22,837,823
2021
$
2020
$
-
-
-
-
-
-
38
RESPIRI LIMITED 39
Respiri Limited
ABN 98 009 234 173
Notes to the Financial Statements
For the Year Ended 30 June 2021
5
Income Tax Expense (continued)
Included in the total of deferred tax assets attributable to tax losses not recognised are tax losses in relation to
operations in Israel, United States of America, and Australia. Tax losses in Australian entities alone of $30,039,956
(2020: $21,605,123) relate to losses generated from 22 November 2006 to 30 June 2021. The ongoing availability of
these tax losses are subject to further review by the Company to ensure compliance with the relevant provisions of
Australia Income Tax laws.
6
Key Management Personnel Remuneration
The aggregate compensation made to Directors and other Key Management Personnel of the Consolidated entity is
set out below:
Short-term employee benefits
Post-employment benefits
Share-based payments (Note 23)
7
Auditors' Remuneration
Remuneration of Company's auditor, RSM, for:
- auditing or reviewing the financial report of the Group
Remuneration of Subsidiary Company's auditor, Ernst & Young Israel, for:
- auditing or reviewing the financial report of the subsidiary (a)
Total
2021
$
1,250,404
72,952
2,575,030
2020
$
1,192,398
91,192
3,185,766
3,898,386
4,469,356
2021
$
2020
$
45,000
45,000
9,334
54,334
40,000
40,000
9,378
49,378
a) Audit fees paid to Ernst & Young Israel for the auditing and/or review of the financial report of Respiri (Israel) Ltd.
8
Loss per Share
Basic loss per share (cents)
Diluted loss per share (cents)
(a) Net loss used in the calculation of basic and diluted
loss per share
(b) Weighted average number of ordinary shares
outstanding during the period used in the calculation of
basic and diluted loss per share
2021
$
2020
$
(1.58)
(1.58)
(1.27)
(1.27)
(11,040,347)
(7,260,935)
699,081,480
570,054,649
Potential ordinary shares, including options, are excluded from the weighted average number of shares used in the
calculations of basic loss per share as they are considered non-dilutive.
39
ANNUAL REPORT 2021 40
Respiri Limited
ABN 98 009 234 173
Notes to the Financial Statements
For the Year Ended 30 June 2021
9
Cash and Cash Equivalents
Cash at bank
2021
$
2020
$
7,973,188
3,552,334
7,973,188
3,552,334
The interest rates on cash at bank on 30 June 2021 was 0.9% (2020: 0.9%). The Group’s exposure to interest rate risk
is discussed in Note 26(b). The maximum exposure to credit risk at the end of the financial year is the carrying amount
of each class of cash and cash equivalents mentioned above.
10 Trade and Other Receivables
CURRENT
Trade receivables
Other receivables (a)
2021
$
2020
$
96,000
39,986
135,986
-
8,199
8,199
a) Other receivables include GST/V.A.T receivable.
Refer to Note 26(c) for more information on the Group's credit risk management policy.
11 Controlled Entities
Parent Entity
Respiri Limited
Subsidiaries of Respiri Limited
KarmelSonix Australia Pty Ltd
iSonea (Israel) Limited
iSonea USA Inc.
Principal place of
business / Country of
Incorporation
Percentage
Owned (%)*
Percentage
Owned (%)*
2021
2020
Australia
Australia
Israel
United States of America
-
100
100
100
-
100
100
100
*The percentage of ownership interest held is equivalent to the percentage voting rights for all subsidiaries.
40
RESPIRI LIMITED Respiri Limited
ABN 98 009 234 173
Notes to the Financial Statements
For the Year Ended 30 June 2021
12 Property, plant and equipment
Office equipment
At cost
Accumulated depreciation
Total office equipment
Computer equipment and software
At cost
Accumulated depreciation
Right-of-Use asset
At cost
Accumulated depreciation
Total Right-of-Use asset
Total property, plant and equipment
41
2021
$
2020
$
8,610
(354)
8,256
(60,127)
86,521
26,394
199,916
(72,192)
127,724
162,374
4,145
(6)
4,139
42,305
(29,577)
12,728
175,740
(4,882)
170,858
187,725
(a) Movements in carrying amounts of property, plant and equipment
Movement in the carrying amounts for each class of property, plant and equipment between the beginning and the end
of the current financial year:
Year ended 30 June 2021
Balance at the beginning of year
Additions
Disposals
Depreciation expense
Balance at the end of the year
Year ended 30 June 2020
Balance at the beginning of year
Additions
Depreciation expense
Balance at the end of the year
Office
Equipment
Computer
Equipment
Right-of-
Use Asset
$
$
$
Total
$
4,139
4,465
-
(348)
12,728
25,665
(55)
(11,944)
170,858
24,176
-
(67,310)
187,725
54,306
(55)
(79,602)
8,256
26,394
127,724
162,374
Office
Equipment
Computer
Equipment
Right-of-
Use Asset
$
$
$
Total
$
-
4,145
(6)
9,502
8,718
(5,492)
-
175,740
(4,882)
9,502
188,603
(10,380)
4,139
12,728
170,858
187,725
41
ANNUAL REPORT 2021 42
Respiri Limited
ABN 98 009 234 173
Notes to the Financial Statements
For the Year Ended 30 June 2021
13 Other assets
CURRENT
Prepayments
Deposits
Provision for unpaid share capital
Prepaid materials
NON-CURRENT
Other
14 Inventories
CURRENT
Inventories
15 Trade and Other Payables
CURRENT
Trade payables
Accrued expenses
2021
$
2020
$
192,775
36,203
70,000
-
298,978
-
-
146,366
48,997
-
366,000
561,363
64
64
2021
$
2020
$
537,046
537,046
309,219
309,219
2021
$
2020
$
1,080,478
214,155
870,436
260,847
1,294,633
1,131,283
Terms and conditions of the above financial liabilities:
Trade payables are non-interest bearing and are normally settled on between 30 - 45 day terms
Accrued expenses are non-interest bearing
Refer to Note 26(a) for more information on the Group’s foreign currency risk management policy.
42
RESPIRI LIMITED Respiri Limited
ABN 98 009 234 173
Notes to the Financial Statements
For the Year Ended 30 June 2021
16 Borrowings
Opening balance
Add: Loan drawdown (a)
Add: Capitalised interest
Less: Repayments
Closing balance
43
2021
2020
$
717,144
-
27,370
(744,514)
$
806,442
1,265,864
121,922
(1,477,084)
-
717,144
a) Short term R&D credit loan facility of $600,182 provided by Fundsquire in the prior year based on 80% of expected
FY2020 R&D tax refund at interest rate of 1.75% per month was repaid in full in September 2020.
17 Other Financial Liabilities
CURRENT
Lease liabilities
Other financial liability (a)
Other financial liability unsecured
2021
$
2020
$
71,805
12,912
86,538
47,694
12,912
87,049
171,255
147,655
a) Detailed information in relation to the Chief Scientist grants received in Israel is contained in Note 20.
NON-CURRENT
Lease liabilities
Total
2021
$
2020
$
70,665
70,665
128,046
128,046
43
ANNUAL REPORT 2021 44
Respiri Limited
ABN 98 009 234 173
Notes to the Financial Statements
For the Year Ended 30 June 2021
18 Issued Capital
The Company has an unlimited authorised share capital of no par value ordinary shares.
Fully paid ordinary shares
Balance at beginning of the year
Shares issued during the year
Options exercised during the year (a)
Transaction costs relating to share issues
2021
No.
2021
$
2020
No.
2020
$
651,714,790
71,126,000
-
-
113,694,614
13,650,200
292,937
(547,350)
525,883,098
128,956,692
(3,125,000)
-
106,043,361
8,616,165
(250,000)
(714,912)
Total issued capital
722,840,790
127,090,401
651,714,790
113,694,614
a)
In December 2020, 5,000,000 options were exercised by Fawkner Capital for the equivalent number of ordinary
shares, and in March 2021 a further 500,000 options were exercised by Baker Young for the equivalent number of
shares.
During the year-ended 30 June 2021, the Company issued the following securities:
Date
Details
21 Jul 2020
21 Jul 2020
28 Oct 2020
28 Oct 2020
28 Oct 2020
26 Nov 2020
19 Jan 2021
18 Mar 2021
Issue of shares to former CEO for part of
legal settlement as announced to the
market on 29 June 2020
Issue of shares to former CEO for part of
legal settlement as announced to the
market on 29 June 2020
Issue of shares to certain professional and
sophisticated investors as announced to
the market on 20 October 2020
Issue of shares in lieu of cash payment for
services rendered as announced to the
market on 20 October 2020
Issue of shares upon exercise of Options
as announced to the market on 28 October
2020
Issue of shares to certain professional and
sophisticated investors as announced to
the market on 20 October 2020
Issue of shares upon exercise of Options
as announced to the market on 18 January
2021
Issue of shares upon exercise of Options
as announced to the market on 18 March
2021
No. of
Shares
Issue Price
$
Total Value
$
625,000
0.0800
50,000
500,000
0.1000
50,000
62,500,000
0.2000
12,500,000
2,000,000
0.2000
400,000
2,000,000
0.1200
240,000
1,000
0.2000
200
3,000,000
0.1200
360,000
500,000
0.1000
50,000
71,126,000
13,650,200
44
RESPIRI LIMITED 45
Respiri Limited
ABN 98 009 234 173
Notes to the Financial Statements
For the Year Ended 30 June 2021
18 Issued Capital (continued)
Terms and Conditions of Issued Capital
Ordinary Shares:
Ordinary shareholders have the right to receive dividends as declared and in the event of winding up the Company, to
participate in the proceeds from the sale of all surplus assets in proportion to the number of and amounts paid up on
shares held. Ordinary shares entitle their holder to one vote, either in person or by proxy at a meeting of the Company.
Options:
Option holders do not have the right to receive dividends and are not entitled to vote at the meeting of the Company
until options are exercised into ordinary shares by payment of the exercise price. Options may be exercised at any time
from the date they vest to their expiry date. Share options convert into ordinary shares on a one for one basis on the
date they are exercised.
Capital Risk Management:
The consolidated entity’s objective 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.
In order to maintain or adjust the capital structure, the consolidated entity may adjust the amount of dividends paid to
shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.
The consolidated entity would look to raise capital when an opportunity to invest in a business or company was seen
as a value adding relative to the current company’s share price at the time of the investment. The consolidated entity is
not actively pursuing additional investment in the short-term as it continues to develop its technologies.
45
ANNUAL REPORT 2021 46
Respiri Limited
ABN 98 009 234 173
Notes to the Financial Statements
For the Year Ended 30 June 2021
19 Reserves
Options
Balance at beginning of the year
Unlisted options issued during the year (a)
Adjustment for options issued in prior year
Expense recorded over vesting period
Options exercised (b)
Options expired/forefeited (c)
Cancellation of options (d)
2021
No.
2021
$
2020
No.
2020
$
191,500,000
75,000,000
-
-
(5,500,000)
-
(2,000,000)
4,429,195
1,494,743
-
1,613,237
(292,937)
(2,756)
(72,509)
59,000,000
174,500,000
-
-
-
(18,000,000)
(24,000,000)
1,906,000
3,319,526
413,433
-
-
(58,225)
(1,151,540)
Balance at end of the year
259,000,000
7,168,973
191,500,000
4,429,194
FX Reserve
Balance at beginning of the year
Other comprehensive income for the year,
net of tax
Balance at end of the year
Total Reserves
-
-
-
(323,097)
(19,833)
(342,930)
-
-
-
(315,524)
(7,573)
(323,097)
259,000,000
6,826,043
191,500,000
4,106,097
a) 65,000,000 unlisted options were granted to directors and 10,000,000 were granted to employees/consultants at
the Dec 2020 EGM. As at 30 June 2021 these options have been allotted to directors and consultants
respectively.
b)
c)
In Dec 2020, 5,000,000 options were exercised by Fawkner Capital for the equivalent number of ordinary shares,
and in March 2021 a further 500,000 options were exercised by Baker Young for the equivalent number of shares.
250,000 unlisted options granted to former employee on 22 October 2020 were forfeited and returned to the ESOP
pool following resignation.
d) 2,000,000 Unlisted Options issued to former employee on 26 May 2020 exercisable at 0.10 on or before 30
November 2024 were cancelled.
During the year-ended 30 June 2021, the Company issued the following options:
Date
Details
21 Dec 2020
16 Feb 2021
Issue to Directors - Class 18
Issue to Consultants for Corporate
Advisory services rendered - Class 19
No. of
options
65,000,000
10,000,000
75,000,000
Option fair
value
$
0.0220
0.0220
Total value
$
1,427,192
67,551
1,494,743
46
RESPIRI LIMITED 47
Respiri Limited
ABN 98 009 234 173
Notes to the Financial Statements
For the Year Ended 30 June 2021
19 Reserves (continued)
Option Reserve:
The option reserve recognises the proceeds from the issue of options over ordinary shares and the expense
recognised in respect of share based payments.
20 Contingent Liabilities
Office of the Chief Scientist- Israel
On 21st February 2021 Isonea Ltd, a wholly owned subsidiary of Respiri Limited, received written confirmation from the
Israel Innovation Authority (formerly Office of Chief Scientist) that the matter, to which the previously disclosed
contingent liability related, is now closed. Accordingly there is no longer a contingent liability in relation to this matter
and the directors resolved to place the company into voluntary liquidation in accordance with Israel Companies Law.
21 Segment Reporting
AASB 8 requires operating segments to be identified on the basis of internal reports about components of the Group
that are regularly reviewed by the chief operating decision maker in order to allocate resources to the segment and to
assess its performance.
Information reported to the Group’s Chief Operating Decision Makers for the purposes of resource allocation and
assessment of performance is more specifically focused on the geographical locations of the Group’s operations.
The Group’s reportable segments under AASB 8 are therefore as follows:
Australia
Israel
The Australia reportable segment activities include research, development and commercialisation of medical devices,
and the production of mobile health applications in Australia.
The Israel reportable segment activities include research, development and commercialisation of medical devices, and
the production of mobile health applications in Israel.
In prior years, the Group has had operations in United States; however, these operations have ceased and therefore
are no longer reported as a reportable segment.
Information regarding these segments is presented below. The accounting policies of the reportable segments are the
same as the Group’s accounting policies.
47
ANNUAL REPORT 2021 48
Respiri Limited
ABN 98 009 234 173
Notes to the Financial Statements
For the Year Ended 30 June 2021
21 Segment Reporting (continued)
30 June 2021
Segment Revenue
External sales
Other income
Total Segment Revenue
Interest revenue
Total Revenue
Segment Expenses
EBITDA
Segment depreciation expenses
Interest revenue
Finance costs
Profit/(loss) before income tax
Income tax expense
Medical
Devices
Segment
Medical
Devices
Segment
Segment
Australia
Israel
Total
Corporate
Total
$
$
$
$
$
270,074
1,165,921
1,435,995
-
1,435,995
-
-
-
-
-
270,074
1,165,921
1,435,995
-
-
-
270,074
1,165,921
-
1,352
1,435,995
1,352
1,435,995
1,352
1,437,347
(2,650,993)
(109,166) (2,760,158)
(9,610,047) (12,370,205)
(1,214,998)
-
-
-
(109,166) (1,324,163)
-
-
-
-
-
-
(9,610,047) (10,934,210)
(79,601)
1,352
(27,888)
(79,601)
1,352
(27,888)
(1,214,998)
-
(109,166) (1,324,163)
-
-
(9,716,184) (11,040,347)
-
-
Profit/(loss) after income tax
(1,214,998)
(109,166) (1,324,163)
(9,716,184) (11,040,347)
Assets
Segment assets
Total Assets
Liabilities
Segment liabilities
Total Liabilities
540,963
14,814
555,777
8,551,795
9,107,572
540,963
14,814
555,777
8,551,795
9,107,572
-
-
49,127
49,127
1,488,282
1,537,410
49,127
49,127
1,488,282
1,537,410
48
RESPIRI LIMITED 49
Respiri Limited
ABN 98 009 234 173
Notes to the Financial Statements
For the Year Ended 30 June 2021
21 Segment Reporting (continued)
30 June 2020
Segment Revenue
External sales
Other income
Total Segment Revenue
Interest revenue
Total Revenue
Segment Expenses
EBITDA
Segment depreciation expenses
Interest revenue
Finance costs
Profit/(loss) before income tax
Income tax expense
Medical
Devices
Segment
Australia
$
Medical
Devices
Segment
Israel
$
Segment
Total
Corporate
$
$
Total
$
-
2,155,307
2,155,307
-
2,155,307
-
-
-
-
-
-
2,155,307
2,155,307
-
-
50,000
50,000
1,660
-
2,205,307
2,205,307
1,660
2,155,307
51,660
2,206,967
(2,066,593)
(124,275)
(2,190,868)
(7,142,806)
(9,333,674)
88,714
-
-
-
88,714
-
(124,275)
-
-
-
(124,275)
-
(35,561)
-
-
-
(7,092,806)
(10,380)
1,660
(123,848)
(7,128,367)
(10,380)
1,660
(123,848)
(35,561)
-
(7,225,374)
-
(7,260,935)
-
Profit/(loss) after income tax
88,714
(124,275)
(35,561)
(7,225,374)
(7,260,935)
Assets
Segment assets
Total Assets
Liabilities
Segment liabilities
Total Liabilities
4,108
4,108
-
-
18,368
22,476
4,596,428
4,618,904
18,368
22,476
4,596,428
4,618,904
23,942
23,942
2,100,186
2,124,128
23,942
23,942
2,100,186
2,124,128
49
ANNUAL REPORT 2021 50
Respiri Limited
ABN 98 009 234 173
Notes to the Financial Statements
For the Year Ended 30 June 2021
22 Cash Flow Information
(a) Reconciliation of cash flow from operations with loss after income tax
Net loss for the year
Non-cash flows in profit:
- depreciation
- share-based payments
- capitalised interest on loan
- foreign exchange adjustments
- facility fees on loan
- lawsuit settlement - shares issued
Changes in assets and liabilities:
- (increase)/decrease in trade and
other receivables
- (increase)/decrease in other assets
- (increase)/decrease in inventories
- increase/(decrease) in trade and
other payables
- (decrease)/increase in deferred
revenue
- (decrease)/increase in other financial
liabiltiies
Cashflows from operations
2021
$
2020
$
(11,040,347)
(7,260,935)
79,602
3,432,716
27,370
(45,700)
-
100,000
10,380
3,219,841
121,922
5,266
22,636
-
(57,787)
262,449
(227,826)
153,368
(25,545)
(309,219)
163,350
(625,670)
857
(33,781)
-
-
(7,339,097)
(4,687,956)
(b) Non-cash financing and investing activities
Please refer to Note 18 and 19 for further details regarding equity issued for nil cash consideration.
23 Share-based Payments
(a) Employee share and option plan
The following options were issued during the current year under ESOP:
No. of
Options
Grant date
Expiry date Share price
at grant
date
$
65,000,000 (a)
21 Dec 2020
17 Dec 2025
0.120
Exercise
price
Expected
volatility
Dividend
yield
Risk-free
interest
rate
$
0.300
49.06%
-
0.36%
Fair value
at grant
date
$
0.022
a) Options have vested.
The weighted average fair value of the share options granted during the financial year is $0.022 (2020: $0.034).
50
RESPIRI LIMITED 51
Respiri Limited
ABN 98 009 234 173
Notes to the Financial Statements
For the Year Ended 30 June 2021
23 Share-based Payments (continued)
(b) Fair value of share options granted in the year outside of the ESOP
For the options granted during the financial year, the Black Scholes Option valuation model inputs used to determine
the fair value at the grant date are as follows:
No. of
Options
10,000,000
Grant Date Expiry Date
17/12/2025
16/02/2021
(a)
Share
price at
grant date
0.140
Exercise
price
0.300
Expected
volatility
49.06
%
Dividend
yield
-
Risk free
interest
rate
%0.36
FV at grant
date
0.022
a) Options will vest after 15 March 2022
(c) Movement in share options during the year
The following reconciles the share options outstanding at the beginning and end of the year:
2021
Weighted
Average
Exercise
Price
$
0.21
0.30
-
-
-
0.22
0.17
2020
No. of
Options
59,000,000
174,500,000
-
(18,000,000)
(24,000,000)
191,500,000
82,000,000
2020
Weighted
Average
Exercise
Price
$
0.08
0.20
-
-
-
0.21
0.10
2021
No. of
Options
191,500,000
75,000,000
(5,500,000)
-
(2,000,000)
259,000,000
172,500,000
Outstanding at the beginning of the year
Granted
Exercised
Expired/lapsed
Cancelled
Outstanding at year-end
Exercisable at year-end
(d) Share options exercised during the year
No. of Options
2,000,000
3,000,000
500,000
Exercise Date Expiry Date
21/12/2020
21/12/2020
28/05/2023
28/10/2020
21/12/2020
18/03/2021
(a)
(a)
(b)
Share price at
grant date
Exercise price
0.175
0.120
0.165
0.120
0.120
0.100
a) 2 million options were exercised for the equivalent number of shares in Oct 2020 and a further 3 million options
were exercised for the equivalent number of shares in Dec 2020 by Fawkner Capital
b) 500,000 options were exercised for the equivalent number of shares in Mar 2021 by Baker Young Stockbrokers.
51
ANNUAL REPORT 2021 52
Respiri Limited
ABN 98 009 234 173
Notes to the Financial Statements
For the Year Ended 30 June 2021
23 Share-based Payments (continued)
(e) Share options outstanding at the end of the year
The options outstanding at 30 June 2021 had a weighted average exercise price of $0.22 (2020:$0.21) and a weighted
average remaining contractual life between 0.5 to 5.5 years.
Exercise price range from $0.03 (2020: $0.03) to $0.6 (2020: $0.6) in respect of options outstanding at 30 June 2021.
(f) Share-based payments expense
Share-based payments
- options issued to directors
- options issued to suppliers (a)
- options issued to other key management
personnel
- options issued to employees
- options issued to former CEO
- options to former CXO cancelled
- options to former CEO cancelled
- options to former employees cancelled (b)
- options to former employees forfeited (c)
- shares issued to suppliers (d)
2021
$
2020
$
2,381,425
502,548
2,798,586
403,828
193,605
30,403
-
-
-
(72,509)
(2,756)
400,000
78,075
39,038
413,434
(6,908)
(51,318)
-
-
-
3,432,716
3,674,735
a) The Company issued 10,000,000 options to consultants for corporate advisory services in February 2021.
b) The Company cancelled 2,000,000 options issued to former employee following resignation in February 2021.
c) The Company recovered 250,000 options issued to former employee forfeited following resignation in March 2021.
d) The Company issued 2,000,000 shares to a consultant for corporate advisory services in October 2020.
24 Related Party Transactions
The Group's related parties comprise of subsidiaries and key management personnel.
Disclosures relating to key management personnel are set out in the remuneration report. Transactions between the
parent company and its subsidiaries are eliminated on consolidation and are not disclosed in this note.
As part of its December 2020 placement, 815,568 fully paid ordinary shares were issued to the Company Directors
during the year.
52
RESPIRI LIMITED 53
Respiri Limited
ABN 98 009 234 173
Notes to the Financial Statements
For the Year Ended 30 June 2021
25 Events Occurring After the Reporting Date
The Victorian Government extended a Declaration of a State of Emergency from the 29 July 2021 and “Stage 4”
restrictions continued to apply to Metro Melbourne. This event does not affect amounts recognised in the 2020/21
financial statements. At this stage, it is not possible to estimate what, if any, affect this will have on the Company's
financial performance during 2021/22.
Except for the above, no other matters or circumstances have arisen since the end of the financial year which
significantly affected or could significantly affect the operations of the Group, the results of those operations, or the
state of affairs of the Group in future financial years.
26 Financial Risk Management
The Group holds the following financial instruments:
Financial assets
Cash and cash equivalents
Trade and other receivables
Total financial assets
Financial liabilities
Trade and other payables
Other borrowings
Other financial liabilities
Other financial liabilities - Non-current
Total financial liabilities
(a) Foreign exchange risk
2021
$
2020
$
7,973,188
135,986
3,552,334
8,199
8,109,174
3,560,533
1,294,633
-
171,255
70,665
1,131,283
717,144
147,655
128,046
1,536,553
2,124,128
The Group engages in international purchase transactions and is exposed to foreign currency risk arising from various
currency exposures, primarily with respect to the US dollar (USD) and Israeli shekel (ILS). The parent has minimal
exposure to foreign exchange risk as it does not hold any foreign currency cash reserves and only makes minor
foreign currency payments. The Group does not make use of derivative financial instruments to hedge foreign
exchange risk.
The carrying amount of the foreign currency denominated monetary assets and liabilities at the reporting date is as
follows, all amounts in the table below are displayed in $AUD at year-end spot rates:
53
ANNUAL REPORT 2021 54
Respiri Limited
ABN 98 009 234 173
Notes to the Financial Statements
For the Year Ended 30 June 2021
26 Financial Risk Management (continued)
(a) Foreign exchange risk (continued)
Cash and trade and other receivables
- ILS
- USD
Trade and other payables
- ILS
- USD
Sensitivity Analysis
2021
$
2020
$
6,167
-
6,167
(36,215)
-
(36,215)
4,400
-
4,400
(11,029)
-
(11,029)
The following tables demonstrate the sensitivity to a reasonably possible change in USD and ILS exchange rates, with
all other variables held constant. The impact on the Group’s profit before tax is due to changes in the fair value of
monetary assets and liabilities including non-designated foreign currency derivatives and embedded derivatives. The
Group’s exposure to foreign currency changes for all other currencies is not material.
USD
Effect on profit before tax
ILS
Effect on profit before tax
(b) Interest rate risk
2021
2020
+5%
-5%
+5%
-5%
-
-
1,502
(1,502)
-
331
-
(331)
The Group's exposure to interest rate risk is the risk that a financial instrument’s value will fluctuate as a result of
changes in market interest rates and the effective weighted average interest rates on classes of financial assets and
financial liabilities.
The following table summarises the sensitivity of the Group’s financial assets and financial liabilities to interest rate risk
(against the implied 30 day bank bill rate). The table also represents the quantitative impact on the financial statements
should the variation occur.
54
RESPIRI LIMITED Respiri Limited
ABN 98 009 234 173
Notes to the Financial Statements
For the Year Ended 30 June 2021
26 Financial Risk Management (continued)
(b)
Interest rate risk (continued)
30 June 2021
Financial assets
Cash and cash equivalents
Total (decrease)/increase
Financial liabilities
Fundsquire loan
Total (decrease)/increase
30 June 2020
Financial assets
Cash and cash equivalents
Total (decrease)/increase
Financial liabilities
Fundsquire loan
Total (decrease)/increase
(c) Credit risk
55
Weighted
average
interest
rate
Carrying
amount
(1%) effect
on profit
before tax
1% effect
on profit
before tax
$
%
$
$
7,973,188
7,973,188
-
-
3,552,334
3,552,334
(717,144)
(717,144)
0.01
-
0.01
-
0.90
-
0.90
-
(79,732)
(79,732)
79,732
79,732
-
-
-
-
(35,523)
(35,523)
35,523
35,523
7,171
7,171
(7,171)
(7,171)
Credit risk refers to the risk that a counter party will default on its contractual obligations resulting in financial loss to
the Group. The Group has no significant concentration of credit risk in the current or prior year.
The Group ensures that surplus cash is invested with financial institutions of appropriate credit worthiness and limits
the amount of credit exposure to any one counter party.
(d) Liquidity risk
Liquidity risk is the risk that the Group will not pay its debtors when they fall due. Prudent liquidity risk management
implies maintaining sufficient cash and the availability of funding through an adequate amount of committed credit
facilities. The Group manages liquidity risk by maintaining sufficient bank balances to fund its operations and the
availability of funding through committed credit facilities.
Management manages this risk by monitoring rolling forecasts of the Group's liquidity reserve on the basis of expected
cash flows. The table below analyses the Group's financial liabilities.
55
ANNUAL REPORT 2021 56
Respiri Limited
ABN 98 009 234 173
Notes to the Financial Statements
For the Year Ended 30 June 2021
26 Financial Risk Management (continued)
(d) Liquidity risk (continued)
30 June 2021
Trade and other payables
Other borrowings
Lease liabilities
30 June 2020
Trade and other payables
Other borrowings
Lease liabilities
(e) Capital Risk Management
0-12
months
Maturing 1
to 3 years
$
$
Total
$
1,294,633
-
71,805
-
-
70,664
1,294,633
-
142,469
1,366,438
70,664
1,437,102
1,131,283
717,144
47,693
-
-
128,046
1,131,283
717,144
175,739
1,896,120
128,046
2,024,166
The Group's objectives when managing capital are to safeguard the Group's ability to continue as a going concern and
to maintain a capital structure that maximises shareholder value. In order to maintain or achieve an optimal capital
structure, the Group may issue new shares or reduce its capital, subject to the provisions of the Group's constitution.
The capital structure of the Group consists of equity attributed to equity holders of the Group, comprising contributed
equity and reserves disclosed in Notes 18 and 19. By monitoring undiscounted cash flow forecasts and actual cash
flows provided to the Board by the Group's Management the Board monitors the need to raise additional equity from
the equity markets.
56
RESPIRI LIMITED 57
Respiri Limited
ABN 98 009 234 173
Directors' Declaration
The directors of the Company declare that:
1.
the financial statements and notes, as set out on pages 20 to 56, and the remuneration disclosures that are contained
within the Remuneration Report within the Directors' report, set out on pages 7 to 18, are in with the Corporations Act
2001 and:
a.
In the directors' opinion there are reasonable grounds to believe the company will be able to pay its debts as and
when they become due and payable;
In the directors' opinion the financial statements and notes also comply with the International Financial Reporting
Standards as disclosed in Note 1;
In the directors' opinion the attached financial statements and notes thereto are in accordance with the
Corporations Act 2001, including compliance with accounting standards and giving a true and fair view of the
financial position and performance of the consolidated entity; and
b.
c.
d. The directors have been given the declaration required by s295A of the Corporations Act 2001.
Signed in accordance with a resolution of the directors made pursuant to s.295(5) Corporations Act 2001.
On behalf of the Directors
Mr Nicholas Smedley
Executive-Chairman
Dated this the 27th day of August 2021
Melbourne, Australia
57
ANNUAL REPORT 2021 58
RESPIRI LIMITED58 INDEPENDENT AUDITOR’S REPORT To the Members of Respiri Limited Opinion We have audited the financial report of Respiri Limited (the Company) and its subsidiaries (the Group), which comprises the consolidated statement of financial position as at 30 June 2021, 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: i. giving a true and fair view of the Group's financial position as at 30 June 2021 and of its financial performance for the year then ended; and ii. complying with Australian Accounting Standards and the Corporations Regulations 2001. Basis for Opinion We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Report section of our report. We are independent of the Group in accordance with the 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 (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the directors of the Company, would be in the same terms if given to the directors as at the time of this auditor's report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. 59
ANNUAL REPORT 2021 59 Material Uncertainty Related to Going Concern We draw attention to Note 1 in the financial report, which indicates that the Group incurred a net loss of $11,040,347 and had net operating cash outflows from operating activities of $7,339,097 during the year ended 30 June 2021. As stated in Note 1, these events or conditions, along with other matters as set forth in Note 1, indicate that a material uncertainty exists that may cast significant doubt on the Group's ability to continue as a going concern. Our opinion is not modified in respect of this matter. Key Audit Matters Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial report of the current period. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. In addition to the matter described in the Material Uncertainty Related to Going Concern section, we have determined the matters described below to be the key audit matters to be communicated in our report. Key Audit Matter How our audit addressed this matter Share based payments Refer to Note 23 in the financial statements Respiri Limited have an Employee’s, Directors’ and Consultants’ Share and Option Plan (ESOP). The ESOP is intended to reward directors, employees and/or consultants for their contributions to the Group. We identified share-based payments as a key risk due the complexity in the valuation of the options issued, and the estimates made by management in relation to the achievement of vesting conditions. Our audit procedures in relation to share based payments included: • Assessing the reasonableness of option valuation inputs into the Black Scholes Option Valuation Model including assessment of the share volatility rates applied in comparison to entities in the similar industry; • Performing a recalculation the Black Scholes Option Valuation Model for a sample of options issued; • Testing a sample of options issued to signed ESOP agreements; • Reviewing the accounting for the share-based payments in accordance with AASB 2 Share-based Payments; and • Reviewing the reasonableness of management’s estimates of the likelihood of the achievement of vesting conditions for the options issued. 60
RESPIRI LIMITED 60 Key Audit Matters (continued) Key Audit Matter How our audit addressed this matter Valuation of inventory Refer to Note 14 in the financial statements The Group has inventory with a carrying value of $537,046 as at 30 June 2021. The valuation of inventory is considered a Key Audit Matter, due to the estimates involved with determining the net realisable value of the newly launched products. Our audit procedures included: • Testing inventory costing by verifying the key inputs in the costing calculations against supporting documentation; and • Evaluating the reasonableness of management's estimates of net realisable value, in consideration with the varying levels of gross margin achieved depending on the sales channel utilised. Other Information 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 2021, but does not include the financial report and the auditor's report thereon. Our opinion on the financial report does not cover the other information and 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. 61
ANNUAL REPORT 2021 61 Auditor's Responsibilities for the Audit of the Financial Report Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report. A further description of our responsibilities for the audit of the financial report is located at the Auditing and Assurance Standards Board website at: www.auasb.gov.au/auditors_responsibilities/ar2.pdf. This description forms part of our auditor's report. Report on the Remuneration Report Opinion on the Remuneration Report We have audited the Remuneration Report included in the directors' report for the year ended 30 June 2021. In our opinion, the Remuneration Report of Respiri Limited, for the year ended 30 June 2021, 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. RSM AUSTRALIA PARTNERS B Y CHAN Partner Dated: 27 August 2021 Melbourne, Victoria 62
SHAREHOLDERS INFORMATION as at 25 August 2021
Equity security holders
Twenty largest quoted equity holders
The names of the twenty largest security holders of quoted equity securities are listed below:
Holder
Ordinary
shares held
% of total
shares
issued
INVESTMENT HOLDINGS PTY LTD
66,504,827
9.20%
MR PETER KARL BRAUN
15,004,325
2.08%
NETWEALTH INVESTMENTS LIMITED
14,385,375
1.99%
NETWEALTH INVESTMENTS LIMITED
14,121,560
1.95%
MALLAMANDA PTY LTD
P & A MIHAILOU PTY LTD
8,597,203
1.19%
8,000,000
1.11%
ROSHERVILLE PTY LTD
8,000,000
1.11%
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
CITICORP NOMINEES PTY LIMITED
7,741,488
1.07%
7,159,990
0.99%
COONAN FAMILY SUPERANNUATION FUND PTY LTD
7,000,000
0.97%
EQUITAS NOMINEES PTY LIMITED
6,642,449
0.92%
ATLANTIS INVESTIGATIONS PTY LIMITED
6,225,078
0.86%
CLEMWELL PTY LTD
DR BELINDA DEBORAH JACKSON
DIXSON TRUST PTY LIMITED
MR ROSS SPENCE BAYNES
6,035,678
0.83%
5,903,111
0.82%
5,850,000
0.81%
5,680,000
0.79%
BNP PARIBAS NOMINEES PTY LTD HUB24 CUSTODIAL SERV LTD
5,539,608
0.77%
MR WILLIAM JOHN RICHARDS & MRS MARY MITCHELL RICHARDS
5,380,000
0.74%
MORE INVESTMENT GROUP PTY LTD
5,301,818
0.73%
MR GARY RONALD HEATH & MRS MELISSA LOUISE HEATH
5,201,819
0.72%
Unquoted equity securities
No unquoted shares
Unquoted equity securities
Number on
issue
Number of holders
Options over ordinary shares issued
259,000,000
19
RESPIRI LIMITED
63
Substantial Holders
Holder
Designation
Ordinary
shares held
% of total shares
issued
INVESTMENT HOLDINGS PTY LTD
66,504,827
9.20%
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 proxy shall have one vote and upon a poll each
share shall have one vote.
There are no other classes of equity securities.
On-market Buy-backs
There is no current on-market buy-back in relation to the Company’s securities.
Securities subject to voluntary escrow
There are no securities subject to voluntary escrow.
Distribution of equitable securities
Analysis of number of equitable security holders by size of holding:
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and above
Unmarketable Parcels
As at 25th August 2021 there were 493 unmarketable parcels on the register
Number of Holders of ordinary shares
133
344
612
1749
824
ANNUAL REPORT 2021
SHAREHOLDER ENQUIRIES
Shareholders with enquiries about their shareholdings should contact the Share Register:
Computershare Investor Services Pty Ltd
Yarra Falls
452 Johnston Street
Abbotsford, Victoria, 3067
Telephone: +61 (0)3 9415 4000
Facsimilie: +61 (0)3 9473 2500
Email:
www.investorcentre.com/contact
CHANGE OF ADDRESS, CHANGE OF NAME, CONSOLIDATION OF SHAREHOLDINGS
Shareholders should contact the Share Registry via your Investor Centre portal.
REMOVAL FROM THE ANNUAL REPORT MAILING LIST
Shareholders who no longer wish to receive the Annual Report should notify the Share Registry via the shareholder’s
respective Investor Centre portal. These shareholders will continue to receive all other shareholder information.
TAX FILE NUMBERS
It is important that Australian resident shareholders, including children, have their tax file number or exemption details noted
by the Share Registry.
CHESS (Clearing House Electronic Sub-register System)
Shareholders wishing to move to uncertified holdings under the Australian Stock Exchange (CHESS) system should contact
their stockbroker.
UNCERTIFIED SHARE REGISTER
Shareholding statements are issued at the end of each month in which there is a transaction that alters the balance of your
holding.
STATUTORY INFORMATION
AUSTRALIAN COMPANY NUMBER (ACN)
009 234 173
Respiri Limited is a Public Company Limited
by shares and is domiciled in Australia.
Appointed on 25th November 2019
Appointed on 30th October 2019
Appointed on 11th February 2020
REGISTERED OFFICE
Level 10, 446 Collins Street
Melbourne, Victoria
AUSTRALIA 3000
Telephone: + 61 (0)3 9602 3366
Fax: + 61 (0)3 9602 3606
SOLICITORS
Gadens Lawyers
Level 13, Collins Arch
447 Collins Street
Melbourne, Victoria, 3000
AUSTRALIA
Telephone: +61 (0)3 9252 2555
Fax: +61 (0)3 9252 2500
BANKERS
National Australia Bank (NAB)
330 Collins Street,
Melbourne, Victoria, 3000
Australia
DIRECTORS
Mr Marjan Mikel
Mr Nicholas Smedley
Dr Thomas Duthy
COMPANY SECRETARY
Mr Alastair Beard
PRINCIPAL PLACE OF BUSINESS
Level 9, 432 St Kilda Road
Melbourne, Victoria
AUSTRALIA 3004
Telephone: +61 1300 11 7377
SHARE REGISTRY
Computershare Investor Services Pty Ltd
Yarra Falls
452 Johnston Street
Abbotsford, Victoria, 3067
Australia
Telephone: +61 (0)3 9415 4000
Facsimile: +61 (0)3 9473 2500
AUDITORS
RSM Australia Pty Ltd
Level 21, 55 Collins Street
Melbourne, Victoria, 3000
Australia
Telephone: +61 (0) 3 9286 8000
WEBSITE
www.respiri.co
SECURITIES QUOTED
Australian Securities Exchange
- Ordinary Fully Paid Shares (Code: RSH)