ANNUAL REPORT
Year Ended 30 June 2020
Total Brain Limited
Appendix 4E
Preliminary final report
1. Company details
Name of entity:
ABN:
Reporting period:
Previous period:
Total Brain Limited
24 094 069 682
For the year ended 30 June 2020
For the year ended 30 June 2019
2. Results for announcement to the market
The Group has adopted Accounting Standard AASB 16 'Leases' for the year ended 30 June 2020 using the modified
retrospective approach and as such the comparatives have not been restated.
$
Revenues from ordinary activities
up
48.4% to
3,892,257
Loss from ordinary activities after tax attributable to the owners of
Total Brain Limited
down
10.8%
to
(7,647,544)
Loss for the year attributable to the owners of Total Brain Limited
down
10.8% to
(7,647,544)
Dividends
There were no dividends paid, recommended or declared during the current financial period.
Comments
The loss for the Group after providing for income tax amounted to $7,647,544 (30 June 2019: $8,570,754).
AASB 16 'Leases' had no impact on the current year. As at 30 June 2020, there were no right-of-use assets and no
lease liabilities.
The Coronavirus (COVID-19) pandemic has not only severely impacted the physical health of people around the
world, but also led to an unprecedented increase in stress, fear, and anxiety for the population at large making
mental health an urgent priority to all. In this regard, the Group is mobilised to take advantage of the opportunities
that this pandemic has created globally, thus the impact of COVID-19 up to 30 June 2020 has been financially
positive for the Group.
Further information on the 'Review of operations' is detailed in the 'Operating and financial review' section which is
part of the Annual Report.
3. Net tangible assets
Net tangible assets per ordinary security
Reporting
Previous
period
Cents
period
Cents
10.51
6.84
The number of ordinary shares for the comparative period had been adjusted to give effect to the share consolidation
which occurred during the current year.
4. Control gained over entities
Not applicable.
Total Brain Limited
Appendix 4E
Preliminary final report
5. Loss of control over entities
Not applicable.
6. Dividends
Current period
There were no dividends paid, recommended or declared during the current financial period.
Previous period
There were no dividends paid, recommended or declared during the previous financial period.
7. Dividend reinvestment plans
Not applicable.
8. Foreign entities
Details of origin of accounting standards used in compiling the report:
Not applicable.
9. Audit qualification or review
Details of audit/review dispute or qualification (if any):
The financial statements have been audited and an unqualified opinion has been issued. The auditor’s report
contains a paragraph addressing a material uncertainty related to going concern.
10. Attachments
Details of attachments (if any):
The Annual Report of Total Brain Limited for the year ended 30 June 2020 is attached.
11. Signed
As authorised by the Board of Directors
Signed ___________________________
Date: 28 August 2020
Dr Evian Gordon
Chairman
Sydney
Total Brain Limited
Contents
30 June 2020
Corporate directory
Chairman's letter
Operating and financial review
Directors' report
Auditor's independence declaration
Financial statements cover
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 auditor's report to the members of Total Brain Limited
Shareholder information
Back cover
2
3
4
12
27
28
29
30
31
32
33
67
68
72
74
1
Total Brain Limited
Corporate directory
30 June 2020
Directors
Company secretary
Registered office
Share register
Auditor
Dr Evian Gordon (Executive Chairman)
Mr Louis Gagnon (Managing Director)
Mr Matthew Morgan (Non-Executive Director)
Mr David Torrible (Non-Executive Director)
Mr David Daglio (Non-Executive Director)
Mr Phillip Hains
Mr Nathan Jong
15 Belvoir Street
Surry Hills NSW 2010
Telephone: +61 2 9213 6666
Email: ir@totalbrain.com
Boardroom Pty Limited
Level 12, 225 George Street
Sydney NSW 2000
Telephone: +61 2 9290 9600
Email: enquiries@boardroomlimited.com.au
Grant Thornton
Level 18, 145 Ann Street
Brisbane QLD 4001
Stock exchange listing
Total Brain Limited shares are listed on the Australian Securities Exchange (ASX
code: TTB) and has American Depository Receipts quoted on the OTC market
(OTC Code: BRRZY)
Website
http://www.totalbrain.com
Corporate Governance Statement The directors and management are committed to conducting the business of
Total Brain Limited in an ethical manner and in accordance with the highest
standards of corporate governance. Total Brain Limited has adopted and has
substantially complied with the ASX Corporate Governance Principles and
Recommendations (Third Edition) ('Recommendations') to the extent appropriate
to the size and nature of its operations.
The Group’s Corporate Governance Statement, which sets out the corporate
governance practices that were in operation during the financial year and
identifies and explains any Recommendations that have not been followed and
ASX Appendix 4G are released to the ASX on the same day the Annual Report is
released. The Corporate Governance Statement and Corporate Governance
Compliance Manual can be found on the Company’s website at
http://www.totalbrain.com/investors/
2
28 August 2020
Dear Shareholders,
On behalf of the Board of Directors of Total Brain Limited (the “Company” or “TTB”), I am pleased to present our
Annual Report for the Fiscal Year ended 30 June 2020 (“FY2020”).
FY2020 was a year of increasing momentum for our business. While the COVID-19 pandemic has not only severely
impacted the physical health of people around the world, it has also led to an unprecedented increase in stress, fear,
and anxiety for the population at-large making mental health an urgent priority for us all. We have seen this reflected
in the increasing volume of inbound enquiry for our product which is further mobilizing us to serve, via our product, as
many organizations and individuals as we can in this time of need.
Against this backdrop, we continue to deploy various high-impact sales, product and marketing initiatives such as the
recent launch of the Mental Health Index: U.S. Worker Edition, which has already become a powerful validator for us
in the marketplace. On the product side, we have just released our largest update since 2018, which includes features
such as personalised self-care experience based on one’s strengths and weaknesses, daily programming, and new
high-quality content such as articles and podcasts. We are also in the process of developing a ground-breaking Heart-
Rate-Variability feature which will help people get out of a “fight-flight” state in a matter of minutes. As a result of all
these initiatives, we have grown revenue by 48% annually and signed more than 20 contracts and partnerships
representing $3 million in revenue ($2.1 million in Annual Recurring Revenue (ARR)).
Additionally, we have continued to thoughtfully add to our team, welcoming high-calibre talent not only in sales,
engineering, and product, but also among Senior Management, Senior Advisers and Board of Directors. We are
thrilled to grow our ranks with individuals who have significant experience in our target markets and are strong
believers in our product and its potential. Furthermore, during the course of this year, we successfully completed a
$14 million capital raise, led by institutional investors from Australia and the U.S., with meaningful participation from
our existing shareholders. We are thankful for the continued vote of confidence and have been putting the incremental
funds to good use with a focus on growing our sales, marketing, and engineering efforts.
We are encouraged by the momentum we are currently experiencing and for what is ahead of us in FY2021 and
beyond.
Yours sincerely,
Dr. Evian Gordon, PhD
Total Brain Limited
Operating and financial review
30 June 2020
1. HIGHLIGHTS
● Amidst the global COVID-19 environment, Total Brain achieved a 48% increase in revenue year-over-year, driven
by an increasing demand for scalable mental health services across large organizations, employers and
individuals.
● During FY2020 TTB was able to complete more than 20 new contracts and partnerships, representing
incremental revenue of $3 million of revenue ($2.1 million in Annual Recurring Revenue (ARR)). Highlights
include:
o Launch of the Mental Health Index (“MHI”): US Worker Edition in partnership with the HR Policy Association,
the lead public policy organization of chief human resource officers representing 390 of the largest
enterprises representing more than 20 million employees in the US and globally, One Mind at Work, a
coalition of 25 leading employers representing 6M employees, aimed at creating mentally healthy
workplaces and the National Alliance of Healthcare Purchaser Coalitions, an organisation representing
12,000 employers and 45 million individuals, spending $425 billion annually on healthcare;
o Significant expansion of a large B2C Affinity partnership for a total contract value of $3.9M over 3 years
and an ARR of $1.3M, representing a 4.7x increase in the size of the relationship;
o IBM Mental Fitness 360 – a potentially transformative partnership with a Fortune 50 company to address
the mental health needs of any population in transition, starting with the 18M US veterans via a unique
partnership with the U.S. Department of Veterans Affairs, and continuing with other large government
organisations such as the U.S. National Guard; and
o A number of contracts and renewals with multiple clients globally, including several key Fortune 500 clients,
underscoring TTB’s unique value proposition in corporate mental health.
● The Company grew cumulative User Registrations to 940k, representing 31% annual growth and the cumulative
number of Brain Profiles to 731k, representing 37% annualized growth.
● Total Brain welcomed 4 new senior members of the team:
o David Daglio, formerly Chief Investment Officer and Executive Vice President at Mellon, a U.S. Asset
Manager with $500B in assets, who joined as Non-executive Director;
o Nicole Gartner, former Vice President of Innovation at IBM Global Business Services, who joined as senior
adviser and entrepreneur-in-residence. Nicole has recently retired from IBM, where she led the public
services health group and was the founder of the IBM Mental Fitness 360 initiative;
o Noel Obourn, who joined as a senior adviser and commission-based reseller in the payer, healthcare and
employer benefits space. Noel brings to Total Brain 25 years of experience formerly as President of National
Accounts at Cigna, Chief Sales Officer at Revolution Health (acquired by Towers Watson), and Vice
President of Health Plan Segment at Walgreens; and
o Melissa Frieswick, who joined as Chief Revenue Officer following a 20+ year career in healthcare sales,
including as Head of Global Market Sales and Business Development at Virgin Pulse, Vice-President of
National Accounts and Consumer Strategy Business Leader at Cigna Insurance, and most recently Chief
Revenue Officer at Maven Clinic.
● Total Brain successfully completed a $14 million capital raise, via a two-tranche placement, consistent with the
announcement made to the ASX on 8 November 2019:
o The fundraise was supported by 10 new and existing institutional investors from the healthcare, technology,
and ESG (Environmental, Social, and Governance) sectors. The use of funds included growth in the
software and product development, as well as sales and marketing functions of the Company.
4
Total Brain Limited
Operating and financial review
30 June 2020
2. BUSINESS OPERATIONS
2.1 User KPIs
User Registrations and Brain Profiles are important user KPIs for the Total Brain business. These indicators directly
reflect product adoption, use among clients, and are a validator of TTB’s product-market-fit assumptions, while also
powering the value of the Company’s proprietary database. During Fiscal Year 2020:
● User Registrations increased by 224k, a 31% year-on-year growth in cumulative users; and
● Brain Profiles increased by 196k, a 37% year-on-year growth in cumulative profiles.
This significant growth is driven by a marketing campaign run by the Staying Sharp unit of the American Association
of Retired Persons (“AARP”). As a result, ~100k new users registered with TTB and engaged with the platform in the
last quarter. This level of interest reflects the strong demand for mental health tools in the current COVID-19 context,
especially for at-risk cohorts such as the aging population.
1,000,000
Total Brain Profiles (Cumulative)
939,617
715,162
730,706
600,045
534,463
Total User Registrations (Cumulative)
429,703
447,543
282,594
900,000
800,000
700,000
600,000
500,000
400,000
300,000
200,000
100,000
0
FY2017
FY2018
FY2019
FY2020
*Represents cumulative actual figures through 30 June 2020. User Registration figures exclude employer-pre-registered users. Brain
Profiles figures include multiple assessments taken by same user.
5
Total Brain Limited
Operating and financial review
30 June 2020
The key areas of focus and accomplishments across all business functions for the period are highlighted below:
2.2 Product and Technology
● Completed the launch of Total Brain 2.0 in December 2019, including new welcome and onboarding flows,
assessment results and dashboard capabilities, and supplemented that with another major launch in May 2020
with a personalised self-care experience that is based on strengths and weaknesses vs. thematic journeys;
o The new
features
launched
training recommendations, daily
programming, and content type expansion to include articles and podcasts. This functionality has resulted
in users consuming 12% more content per visit, according to early analytics. Shareholders are invited to
create trial accounts at https://info.totalbrain.com/covid-19-trial.
include custom capacity-targeted
● Expanded the engineering and product teams to increase the ability to deliver product and new functionality
across multiple streams of work – clients, infrastructure, and core user platform;
● With the help of a large team, completed several launches of major partnerships and clients, including a field test
with IBM Mental Fitness 360 / Veterans Affairs Administration in Q2 FY20, initial implementation with Everyday
Health, as well as several Fortune 500 platforms and channel partner integrations during the course of the year;
6
Total Brain Limited
Operating and financial review
30 June 2020
● Completed the launch of Total Brain Clinical platform MVP, including clinician portal (pictured below), clinician
reporting, expanded screening surveys and reporting within TTB application;
● Completed build-out of key infrastructure initiatives including HIPPA compliance, ISO certification, analytics, sign
on and IT security;
● Launched early alpha testing for an innovative Heart Rate Variability (“HRV”) product, which would enable users
to assess their mental state in a matter of minutes by measuring their HRV via the camera on their cell phones.
This is expected to not only increase user engagement but also enable individuals to observe the direct link
between their physical and mental states of health in real-time.
7
Total Brain Limited
Operating and financial review
30 June 2020
2.3
Sales and Customer Success
● Amidst the global COVID-19 environment, we have accelerated high-profile partnership discussions and have
been receiving increased volumes of inbound requests, reflective of the significant mental health impact of the
pandemic;
● As such, during FY2020 TTB was able to complete more than 20 new contracts and partnerships, representing
minimum revenue of $3 million ($2.1 million in ARR). Highlights include:
o Launch of the Mental Health Index (“MHI”): US Worker Edition in partnership with the HR Policy Association,
One Mind at Work, and the National Alliance of Healthcare Purchaser Coalitions, organisations
representing a combined 71 million individual employees;
▪
The purpose of the MHI is to create awareness about the impact of life events like COVID-19 on
our mental health and about the need to take concrete actions. MHI targets the business and
policy-making communities and, as such, has started attracting significant media attention and
leads to Total Brain.
o Significant expansion of a large B2C Affinity partnership for a total contract value of $3.9M over 3 years
and an ARR of $1.3M, representing a 4.7x increase in the size of the relationship;
o IBM Mental Fitness 360 – entered a transformative partnership with a Fortune 50 company to address the
mental health needs of any population in transition, starting with the 18M US veterans via the GRIT platform,
a unique partnership with the US Department of Veterans Affairs. Since the signing of the contract with
IBM, TTB has added a number of other sizable opportunities to the pipeline for this product, including large
government organisations such as the U.S. National Guard. While COVID-19 has created unplanned
process and decision-making headwinds, TTB remains confident that the platform will be implemented in
the coming quarters given the unprecedented need for scalable mental health solutions in the current times;
o A number of contracts and renewals with Fortune 500 clients globally, underscoring TTB’s unique value
proposition in corporate mental health;
o Everyday Health – a contract signed with the top 3 healthcare web portal in the US with 44M monthly unique
users to integrate and seamlessly deliver rich content on mental health and fitness to consumers. Initial
integration has been completed and is currently in production.
● Launched pilots with several addiction and behavioural health clinics as part of a proof-of-concept exercise for
the Clinical market. The clinical space represents a significant revenue opportunity for Total Brain, given the
behavioural health and addiction epidemic ongoing in the United States with 4M out of a total of 20M addicts
seeking in-patient care every year. With 90% of addiction clinics accepting insurance and clinicians being open
to licensing third-party platforms like TTB, there is a strong market need for data-driven objectivity and tech-
enabled patient engagement tools. Supported by insurance reimbursement, as well as the scientific validation
and inherent scalability of Total Brain’s tools, the Company sees this as a market with major potential.
8
Total Brain Limited
Operating and financial review
30 June 2020
2.4 Marketing
● Launched the Mental Health Index: US Worker Edition with the HR Policy Association, One-Mind at Work
and the National Alliance of Healthcare Purchaser Coalitions.
o Total Brain created the Mental Health Index to allow the public and corporations to measure mental
health progress and performance against a valid national benchmark. The index contains data drawn
from a weekly randomised sample of 500 working Americans taken from the larger universe of Total
Brain users that includes workers from all walks of life and regions;
o The data is not survey data by nature. It comes from a mix of validated tasks and questions that are
part of Total Brain’s unique neuroscientific assessment, which makes it more objective and
representative. Please refer to a video introducing the Index here.
● The account-based marketing strategy has delivered 30+ sales qualified leads from U.S. corporates with
~5,000+ employees since January 2020 and a doubling in the monthly run rate of qualified leads post-
COVID;
● Continued to build PR and thought leadership via a mix of sustained social publishing and earned media
placements on COVID-19-related topics, as well as PR initiatives such as a recent “Virtual Media Tour” of
interviews with Total Brain Founder Dr. Evian Gordon in 23 local US markets representing 23 states and 24
million impressions, including a 10-minute feature on PBS-New York, the #1 media market in the United
States, accessible here.
● Expansion of the Total Brain Podcast, high-quality conversations between Founder Dr. Evian Gordon and
world-renown Key Opinion Leaders on subjects related to mental and brain health, available here.
2.5 Human Resources
● Welcomed 4 new senior members of the Total Brain team:
o David Daglio, formerly Chief Investment Officer and Executive Vice President at Mellon, a U.S. Asset
Manager with $500B in assets, who joined as Non-executive Director;
o Nicole Gartner, former Vice President of Innovation at IBM Global Business Services, who joined as
entrepreneur-in-residence;
9
Total Brain Limited
Operating and financial review
30 June 2020
o Noel Obourn, formerly as President of National Accounts at Cigna, Chief Sales Officer at Revolution Health
(acquired by Towers Watson), and Vice President of Health Plan Segment at Walgreens joined as a senior
adviser and commission-based reseller in the payer, healthcare and employer benefits space; and
o Melissa Frieswick, who joined as Chief Revenue Officer following a 20+ year career in healthcare sales,
including as Head of Global Market Sales and Business Development at Virgin Pulse, Vice-President of
National Accounts and Consumer Strategy Business Leader at Cigna Insurance, and most recently Chief
Revenue Officer at Maven Clinic.
● Sourced and filled positions across Engineering and Product, proactively managing high industry-wide turnover
2.6 Data Licensing
Management continued to explore strategic alternatives to maximise shareholder value from the company’s scientific
assets, including iSPOT. The Company entered into a non-exclusive data licensing agreement with a large U.S.
pharmaceutical company in December 2019 and continues to work with a New York-based investment bank on
strategically monetizing its scientific assets.
3. FINANCIALS
3.1 Revenues
For the 12 months ended 30 June 2020, Total Brain’s revenues increased by $1.3 million (48%) year-over-year to
$3.9 million. This increase was driven by continued growth in the Company’s Corporate, Affinity and Data Licensing
business lines with more than 20 new clients and partners signed representing $2.1 million in ARR.
3.2 Expenses
Total expenses for the period remained in line with those during FY2019, growing by 3% year-over-year. While
personnel and operating expenses increased by $1.5 million, in-line with management’s expectations during this
growth stage of the Company, Total Brain did not undergo an impairment of its goodwill and intangible assets in the
period, which offset the increase. Additional details are available in the notes to the financial statements.
3.3 Cash Flow
Average monthly cash consumption, net of revenue, for the 12 months ended 30 June 2020 was $0.73 million
compared to $0.68 million in the prior period, reflecting the slight expansion of the business, its team and
infrastructure. The Company’s closing cash balance as of 30 June 2020 was $11.1 million.
10
Total Brain Limited
Operating and financial review
30 June 2020
4. OUTLOOK
Amidst the current global situation, Total Brain is encouraged by an increasing interest by large organisations to
deploy mental health solutions to their populations. The more than one dozen partnerships signed and contracts
won since the start of the pandemic serve as an important validation of this urgent need for scalable, scientifically-
valid, digital mental health tools in both the B2B Corporate and B2C Affinity markets. The ongoing progress of our
pilot in the clinical market also continues to be very encouraging. As such, we remain focused on the following
priorities for our business:
● Proactively penetrate various verticals of the B2C Affinity market in collaboration with our partners from IBM,
AARP and Everyday Health, while seeking new opportunities;
● Accelerate sales cycle of B2B Corporate revenue via continued execution of the Account-based Marketing
strategy, launch of a “pull” strategy with the Mental Health Index, and penetration of new and existing channel
partners;
● Test product-market-fit and scalability of the clinical market; and
● Retain and upsell of our existing book of business.
We are very excited about the business prospects of Total Brain and we remain committed to creating significant
shareholder value in FY2021 and beyond.
11
Total Brain Limited
Directors' report
30 June 2020
The directors present their report, together with the financial statements, on the consolidated entity (referred to
hereafter as the 'Group') consisting of Total Brain Limited (referred to hereafter as the 'Company' or 'parent entity')
and the entities it controlled at the end of, or during, the year ended 30 June 2020.
Directors
The following persons were directors of Total Brain Limited during the whole of the financial year and up to the date
of this report, unless otherwise stated:
Dr Evian Gordon - Executive Chairman
Mr Louis Gagnon - Managing Director and Chief Executive Officer
Mr Matthew Morgan - Non-Executive Director
Mr David Torrible - Non-Executive Director
Mr David Daglio - Non-Executive Director (appointed on 13 January 2020)
Mr Ajay Arora - Non-Executive Director (resigned on 25 November 2019 and ceased on 13 January 2020)
Principal activities
The principal activity of the Group is developing and selling brain health products.
Dividends
There were no dividends paid, recommended or declared during the current or previous financial year.
Review of operations
The loss for the Group after providing for income tax amounted to $7,647,544 (30 June 2019: $8,570,754).
AASB 16 'Leases' had no impact on the current year.
The Coronavirus (COVID-19) pandemic has not only severely impacted the physical health of people around the
world, but also led to an unprecedented increase in stress, fear, and anxiety for the population at large making
mental health an urgent priority to all. In this regard, the Group is mobilised to take advantage of the opportunities
that this pandemic has created globally, thus the impact of COVID-19 up to 30 June 2020 has been financially
positive for the Group.
A review of the operations of the Group during the financial year and the results of those operations are contained in
the 'Operating and financial review' section of this report.
Significant changes in the state of affairs
Following shareholder approval at an Extraordinary General Meeting (‘EGM’) held on 10 January 2020, it was
resolved that all shares in the Company be consolidated on the basis that every ten shares be consolidated into one
share. It was also resolved that all options in the Company be consolidated on the basis that every ten options be
consolidated into one option. The effective date of consolidation for both shares and options was 17 January 2020.
The number of shares post-consolidation are 95,388,326 (rounded) and the number of options post-consolidation are
129,000 (expiring 14 Apr 2020 with a revised exercise price of $3.75) and 19,954,534 (various expiry dates and
exercise prices).
On 15 and 16 January 2020, the Group issued fully paid shares of 129,152,989 (pre-consolidation) at $0.046 per
share.
On 16 January 2020, the Group issued 2,066,115 options exercisable at $0.045 and expiring 16 January 2024 (pre-
consolidation).
On 20 February 2020, the Group signed the full series of legal agreements with IBM, including complete commercial
terms. This represents a major revenue contract for the Group.
There were no other significant changes in the state of affairs of the Group during the financial year.
12
Total Brain Limited
Directors' report
30 June 2020
Matters subsequent to the end of the financial year
The impact of the Coronavirus (COVID-19) pandemic is ongoing and while it has been financially positive for the
Group up to 30 June 2020, it is not practicable to estimate the potential impact, positive or negative, after the
reporting date. The situation is rapidly developing and is dependent on measures imposed by the Australian
Government and other countries, such as maintaining social distancing requirements, quarantine, travel restrictions
and any economic stimulus that may be provided.
On 5 August 2020, the shareholders at an extraordinary general meeting approved the adoption of a new share
option plan and the following options were subsequently issued:
● 2,600,000 new options and 2,823,297 replacement options to Mr Louis Gagnon;
● 1,205,156 new options to Dr Evian Gordon;
● 2,871,486 replacement options to various employees; and
● 4,758,907 new options to various employees.
No other matter or circumstance has arisen since 30 June 2020 that has significantly affected, or may significantly
affect the Group's operations, the results of those operations, or the Group's state of affairs in future financial years.
Likely developments and expected results of operations
Information on likely developments in the operations of the Group and the expected results of operations have been
included in the discussion of the 'Operating and financial review' section of this report.
Environmental regulation
The Group is not subject to any significant environmental regulation under Australian Commonwealth or State law.
Information on directors
Name:
Title:
Qualifications:
Experience and expertise:
Other current directorships:
Former directorships (last 3
years):
Special responsibilities:
Interests in shares:
Interests in options:
Dr Evian Gordon
Executive Chairman
BSc (Hons), PhD, MBBCh
Dr Gordon has over 30 years of experience in human brain research. He was the
director of the Brain Dynamics Centre at Westmead Hospital and a senior lecturer
in the Department of Psychological Medicine at the University of Sydney. Dr
Gordon edited the book “Integrative Neuroscience” and has more than 200
publications credited to him.
None
None
None
1,301,875 ordinary shares
1,205,156 options over ordinary shares
13
Total Brain Limited
Directors' report
30 June 2020
Name:
Title:
Qualifications:
Experience and expertise:
Other current directorships:
Former directorships (last 3
years):
Special responsibilities:
Interests in shares:
Interests in options:
Name:
Title:
Qualifications:
Experience and expertise:
Other current directorships:
Former directorships (last 3
years):
Special responsibilities:
Interests in shares:
Interests in options:
Name:
Title:
Qualifications:
Experience and expertise:
Other current directorships:
Former directorships (last 3
years):
Special responsibilities:
Interests in shares:
Interests in options:
Mr Louis Gagnon
Managing Director and Chief Executive Officer
MSC, BBA
Mr Gagnon has been the Chief Executive Officer (CEO) of the Company since 23
May 2017. Louis has over 25 years worth of experience as a high-growth global
digital business leader, most notably at Amazon’s subsidiary Audible, where he
served as Chief Product and Marketing Officer. Prior to working with the
Company, Louis was an Advisor to TPG Capital following a short CEO
assignment to turn around portfolio company Ride.com. His other past roles
include Chief Product and Marketing Officer at Yodle and Senior VP of Global
Products at Monster Worldwide.
None
None
None
415,923 ordinary shares
8,746,593 options over ordinary shares
Mr Matthew Morgan
Non-Executive Director
MBA, B Com, B App Sc
Mr Morgan is a former venture capitalist who is the Principal of Millers Point
Company, an advisory firm focused on emerging growth companies. He was a
co-founder of Diversa Ltd (ASX DVA) which was sold to OneVue (ASX OVH).
Non-Executive Director and Chairman of the Audit and Risk Committee of
Logicamms Ltd (ASX LCM) and Leaf Resources Ltd (ASX LER).
Sensera Ltd (ASX SE1)
Chairman of the Audit and Risk Committee and member of the Nomination and
Remuneration Committee
444,723 ordinary shares
425,000 options over ordinary shares
Mr David Torrible
Non- Executive Director
BA (Hons)
Mr Torrible is an active non-executive director and advisor to private companies,
financial firms and charities since 2012 when he retired as a partner of Goldman
Sachs. Prior to 2012 he worked for 19 years as an equity specialist serving
institutional accounts in Asian capital markets. He has worked in Hong Kong,
Indonesia, USA and Australia. He is experienced in relationship management,
capital market risk and successfully managing geographically diverse teams.
None
None
Chairman of the Nomination and Remuneration Committee and member of the
Audit and Risk Committee
6,055,265 ordinary shares
206,612 options
14
Total Brain Limited
Directors' report
30 June 2020
Name:
Title:
Qualifications:
Experience and expertise:
Other current directorships:
Former directorships (last 3
years):
Special responsibilities:
Interests in shares:
Interests in options:
Name:
Title:
Qualifications:
Experience and expertise:
Other current directorships:
Former directorships (last 3
years):
Interests in shares:
Interests in options:
Mr David Daglio (appointed on 13 January 2020)
Non- Executive Director
B.Eng, MBA, CFA
David is an accomplished institutional investment manager with Mellon, a US
Asset Manager of US$500 billion in assets, where David served as Executive
Vice President and Chief Investment Officer. David remains a Non-Executive
Director of Mellon.
Non-Executive Director of Mellon (US)
None
Member of remuneration Committee
6,950,181 ordinary shares
None
Mr Ajay Arora (resigned on 25 November 2019 and ceased on 13 January 2020)
Former Non-Executive Director
MBA, MSEE, B.Eng
Mr Arora is currently a Director of Product Innovation at Netflix, a world-leading
internet entertainment service. He has spent the last 20 years in management
roles within the most successful digital subscription business in the world, with a
primary focus on user acquisition and partnerships.
None
None
Not applicable as no longer a director
Not applicable as no longer a director
'Other current directorships' quoted above are current directorships for listed entities only and excludes directorships
of all other types of entities, unless otherwise stated.
'Former directorships (last 3 years)' quoted above are directorships held in the last 3 years for listed entities only and
excludes directorships of all other types of entities, unless otherwise stated.
Company secretaries
Mr Phillip Hains (CA, MBA) has held the role of Joint Company Secretary since June 2018. He brings almost 30
years of experience in corporate secretarial, accounting and general management through his firm The CFO
Solution, a boutique professional services firm for listed companies. Mr Hains is currently a Director and Treasurer of
the Australian Outward Bound Foundation.
Mr Nathan Jong (CA) has been appointed as Joint Company Secretary effective on 18 November 2019. Mr Jong is a
qualified chartered accountant with over 10 years of experience in providing finance and corporate compliance
advisory services to a range of businesses including multinational ASX/NASDAQ listed companies. Mr Jong is also a
member of CFO Solution.
Mr Harvey Bui (ACCA, B Com) has resigned from the role of Joint Company Secretary on 18 November 2019. He is
a qualified chartered accountant with over 10 years of experience in providing accounting finance and corporate
compliance advisory services to a wide range of businesses from not-for-profit organisations to multinational
ASX/NASDAQ listed companies, along with experience in auditing and assurance, having started his career with
Ernst & Young in 2008.
15
Total Brain Limited
Directors' report
30 June 2020
Meetings of directors
The number of meetings of the Company's Board of Directors ('the Board') and of each Board committee held during
the year ended 30 June 2020, and the number of meetings attended by each director were:
Nomination and
Full Board
Attended
Held
Remuneration Committee Audit and Risk Committee
Attended
Attended
Held
Held
Dr Evian Gordon
Mr Louis Gagnon
Mr Matthew Morgan
Mr David Torrible
Mr David Daglio
Mr Ajay Arora
9
10
10
10
6
3
10
10
10
10
6
3
-
-
2
2
2
-
-
-
2
2
2
-
-
-
4
4
-
-
-
-
4
4
-
-
Held: represents the number of meetings held during the time the director held office or was a member of the
relevant committee.
Remuneration report (audited)
The remuneration report details the key management personnel ('KMP') remuneration arrangements for the Group, in
accordance with the requirements of the Corporations Act 2001 and its Regulations.
KMP are those persons having authority and responsibility for planning, directing and controlling the activities of the
entity, directly or indirectly, including all directors.
The remuneration report is set out under the following main headings:
●
●
●
●
●
●
Principles used to determine the nature and amount of remuneration
Details of remuneration
Service agreements
Share-based compensation
Additional information
Additional disclosures relating to key management personnel
Principles used to determine the nature and amount of remuneration
The objective of the Group's employee reward framework is to ensure reward for performance is competitive and
appropriate for the results delivered. The framework aligns employee reward with the achievement of strategic
objectives and the creation of value for shareholders, and it is considered to conform to the market best practice for
the delivery of reward. The Board of Directors ('the Board') ensures that employee reward satisfies the following key
criteria for good reward governance practices:
competitiveness and reasonableness;
●
acceptability to shareholders;
●
performance linkage / alignment of executive compensation; and
●
transparency.
●
The Nomination and Remuneration Committee is responsible for determining and reviewing remuneration
arrangements for its directors, executives and the general remuneration framework for all employees. The
performance of the Group depends on the quality of its directors, executives and capability of the entire team. The
remuneration philosophy is to attract, motivate and retain high performance and high quality personnel.
The Nomination and Remuneration Committee has structured an executive remuneration framework that is market
competitive and complementary to the reward strategy of the Group. The Committee uses external remuneration
reports to benchmark the framework with companies of similar size, market capitalisation and operations in similar
geography.
16
Total Brain Limited
Directors' report
30 June 2020
The reward framework is designed to align employee rewards to shareholders' interests. The Board have considered
that it should seek to enhance shareholders' interests by:
focusing on sustained growth in shareholder wealth;
●
delivering constant or increasing return on assets as well as focusing the executive on key non-financial drivers
●
of value; and
attracting and retaining high calibre executives.
●
Additionally, the reward framework should seek to enhance employees' interests by:
●
●
●
rewarding capability and experience;
reflecting competitive reward for contribution to growth in shareholder wealth; and
providing a clear structure for earning rewards.
In accordance with best practice corporate governance, the structure of non-executive director and executive director
remuneration is separate.
Non-executive directors' remuneration
Fees and payments to non-executive directors reflect the demands and responsibilities of their role. Non-executive
directors' fees and payments are reviewed by the Nomination and Remuneration Committee. The Nomination and
Remuneration Committee may, from time to time, receive advice from independent remuneration consultants to
ensure non-executive directors' fees and payments are appropriate and in line with the market but primarily refer to
Independently published remuneration reports for ASX listed companies and early stage technology Companies in
the USA to benchmark the framework with Companies of similar size, market capitalisation and operations in similar
geography.
Executive remuneration
The Group aims to reward executives based on their position and responsibility, with a level and mix of remuneration
which has both fixed and variable components.
The executive remuneration and reward framework has four components:
●
●
●
●
base pay;
short-term performance incentives;
equity-based payments; and
other remuneration such as superannuation and non-monetary benefits including health insurance for US
employees.
The combination of these comprises the executive's total remuneration.
Fixed remuneration, consisting of base salary, superannuation and non-monetary benefits, are reviewed by the
Nomination and Remuneration Committee based on individual and business unit performance, the overall
performance of the Group and comparable market remunerations.
Executives may receive their fixed remuneration in the form of cash or other fringe benefits (for example motor
vehicle benefits) where it does not create any additional costs to the Group and provides additional value to the
executive.
The short-term incentives ('STI') program is designed to align the targets of the business units with the performance
hurdles of executives and employees. STI payments are granted to executives based on specific annual targets and
key performance indicators ('KPI's') being achieved. KPI's include revenue and or profit contribution, customer
satisfaction, leadership contribution and product management. Short-term incentives included the provision of cash
and or equity-based incentives.
The long-term incentives ('LTI') include long service leave and equity-based payments in the form of options which
are exercisable at a premium to the share price at the time they are issued. Options vest annually over a period of
three or four years. The Nomination and Remuneration Committee reviewed the long-term equity-linked performance
incentives specifically for executives during the year ended 30 June 2020.
17
Total Brain Limited
Directors' report
30 June 2020
Group performance and link to remuneration
Remuneration for certain individuals is directly linked to the performance of the Group. A portion of cash bonus and
incentive payments are dependent on defined revenue and earnings targets being met. The remaining portion of the
cash bonus and incentive payments are at the discretion of the Nomination and Remuneration Committee based on
established KPI’s per employee.
The Nomination and Remuneration Committee is of the opinion that the continued improved results can be attributed
in part to the adoption of performance-based compensation and is satisfied that this improvement will continue to
increase shareholder wealth if maintained over the coming years.
Use of remuneration consultants
During the financial year ended 30 June 2020, the Group had not engaged any remuneration consultants to review or
advise upon its existing remuneration policies, including the implementation of the LTI.
Voting and comments made at the Company's 2019 Annual General Meeting ('AGM')
At the 2019 AGM, 98.36% of the votes received supported the adoption of the remuneration report for the year
ended 30 June 2019. The Company did not receive any specific feedback at the AGM regarding its remuneration
practices.
Details of remuneration
Amounts of remuneration
Details of the remuneration of key management personnel of the Group are set out in this section.
Dr Evian Gordon - Executive Chairman
The key management personnel of the Group consisted of the following directors of Total Brain Limited:
●
● Mr Louis Gagnon - Managing Director and Chief Executive Officer
● Mr Matthew Morgan - Non-Executive Director
● Mr David Torrible - Non-Executive Director
● Mr David Daglio - Non-Executive Director (appointed on 13 January 2020)
● Mr Ajay Arora - Non-Executive Director (resigned on 25 November 2019 and ceased on 13 January 2020)
And the following persons:
● Mr Matthew Mund - Chief Operating Officer (COO)
● Mr Emil Vasilev - Vice President of Finance
18
Total Brain Limited
Directors' report
30 June 2020
Short-term benefits
Post-
employ-
ment
benefits
Long-term
benefits Share-based payments
Cash
salary
and fees
$
Cash
bonus
$
Non-
Super-
monetary annuation
$
$
Long
service
leave
$
Equity-
settled
shares
$
Equity-
settled
options
$
Total
$
55,000
49,831
21,396
20,323
372,479
446,975
372,479
255,056
1,593,539
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
4,734
-
-
-
-
-
-
4,734
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
7,409
98,760
(348)
62,409
153,325
21,048
-
20,323
103,987
11,898
476,466
458,873
4,990
1,037
377,469
256,093
227,733 1,826,006
2020
Non-Executive
Directors:
Mr Matthew
Morgan
Mr David Torrible
Mr Ajay Arora *
Mr David
Daglio**
Executive
Directors:
Dr Evian Gordon
Mr Louis Gagnon
Other Key
Management
Personnel:
Mr Matthew
Mund
Mr Emil Vasilev
*
**
Represents remuneration from 1 July 2019 to 13 January 2020. Ajay Arora ceased to be a director on 13
January 2020 and his options were forfeited on this date. The share-based expense recognised in prior periods
in respect of the forfeited options has been reversed in the current reporting period.
Represents remuneration from 13 January 2020 to 30 June 2020
19
Total Brain Limited
Directors' report
30 June 2020
Short-term benefits
Post-
employ-
ment
benefits
Cash
Non-
bonus*** monetary annuation
$
Super-
$
$
Long-term
benefits Share-based payments
Long
service
leave
$
Equity-
settled
shares
$
Equity-
settled
options
$
Total
$
2019
Non-Executive
Directors:
Mr Matthew
Morgan
Mr Ajay Arora
Dr Stephen
Koslow *
Mr David
Torrible**
Executive
Directors:
Dr Evian Gordon
Mr Louis Gagnon
Other Key
Management
Personnel:
Mr Matthew
Mund
Mr Emil Vasilev
Cash
salary
and fees
$
79,944
41,656
33,000
4,583
-
-
-
-
349,469
419,361
-
256,213
349,468
230,649
1,508,130
120,638
50,427
427,278
-
-
-
-
-
-
-
-
-
-
-
-
435
-
-
-
-
435
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
26,125
348
106,069
42,004
131
33,131
-
5,018
-
32,679
349,469
708,253
12,655
2,944
482,761
284,020
74,882 2,010,725
Represents remuneration from 1 July 2018 to 1 June 2019
Represents remuneration from 1 June 2019 to 30 June 2019
*
**
*** Cash bonuses were paid upon the successful launch of the Total Brain product and brand in September 2018.
The proportion of remuneration linked to performance and the fixed proportion are as follows:
Name
Non-Executive Directors:
Mr Matthew Morgan
Mr Ajay Arora
Dr Stephen Koslow
Mr David Torrible
Mr David Daglio
Executive Directors:
Dr Evian Gordon
Mr Louis Gagnon
Other Key Management
Personnel:
Mr Matthew Mund
Mr Emil Vasilev
Fixed remuneration
2019
2020
At risk - STI
At risk - LTI
2020
2019
2020
2019
88%
102%
-
36%
100%
78%
97%
99%
100%
75%
99%
100%
100%
-
100%
59%
72%
81%
20
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
36%
25%
18%
12%
(2%)
-
64%
-
22%
3%
1%
-
25%
1%
-
-
-
-
5%
3%
1%
Total Brain Limited
Directors' report
30 June 2020
The proportion of the cash bonus paid/payable or forfeited is as follows:
Name
Executive Directors:
Mr Louis Gagnon
Other Key Management Personnel:
Mr Matthew Mund
Mr Emil Vasilev
Cash bonus paid/payable
2020
2019
Cash bonus forfeited
2019
2020
-
-
-
100%
100%
100%
-
-
-
-
-
-
Service agreements
Remuneration and other terms of employment for key management personnel are formalised in service agreements.
Details of these agreements are as follows:
Name:
Title:
Term of agreement:
Details:
Name:
Title:
Term of agreement:
Details:
Name:
Title:
Term of agreement:
Details:
Name:
Title:
Term of agreement:
Details:
Name:
Title:
Term of agreement:
Details:
Name:
Title:
Term of agreement:
Details:
Name:
Title:
Term of agreement:
Details:
Dr Evian Gordon
Executive Chairman
No fixed term
Written notice to or from the Board required to terminate. Entitled to 9 months of
gross salary.
Mr Louis Gagnon
Managing Director and Chief Executive Officer
No fixed term
1 months' notice required to terminate. Entitled to 12 months of gross salary,
medical insurances and pro-rata portion of annual bonus.
Mr Matthew Morgan
Non-Executive Director
No fixed term
No notice required to terminate. Entitled to 0% of gross fees.
Mr David Torrible
Non-Executive Director
No fixed term
No notice required to terminate. Entitled to 0% of gross fees.
Mr David Daglio
Non-Executive Director
No fixed term
No notice required to terminate. Entitled to 0% of gross fees.
Mr Matthew Mund
Chief Operating Officer
No fixed term
No notice required to terminate. Entitled to 6 months of gross salary, medical
insurances and pro-rata portion of annual bonus.
Mr Emil Vasilev
Vice President of Finance
No fixed term
No notice required to terminate. Entitled to 6 months of gross salary, medical
insurances and pro-rata portion of annual bonus.
KMP have no entitlement to termination payments in the event of removal for misconduct.
21
Total Brain Limited
Directors' report
30 June 2020
Share-based compensation
Issue of shares
There were no shares issued to directors and other key management personnel as part of compensation during the
year ended 30 June 2020.
Options
The terms and conditions of each grant of options over ordinary shares affecting remuneration of directors and other
key management personnel in this financial year or future reporting years are as follows:
Name
Mr Louis Gagnon
Mr Matthew
Morgan
Mr David Torrible
Mr Matthew
Mund
Mr Emil Vasilev
Number of
options
granted
Grant date
Vesting date and
exercisable date Expiry date
Exercise
price*
Fair value
per option
at grant date
941,099 14/12/2017
22/05/2020
22/05/2022
$1.6000
$0.0400
100,000 14/12/2017
206,612 10/01/2020
14/12/2019
16/01/2020
10/01/2023
16/01/2024
445,549 16/07/2017
445,549 16/07/2017
58,846 01/07/2017
16/07/2019
16/07/2020
17/05/2020
16/07/2022
16/07/2022
17/05/2022
$1.0000
$0.4500
$1.6000
$1.6000
$1.6000
$0.3300
$0.4800
$0.0300
$0.0300
$0.0500
*
Options with an exercise price of $1.60 were cancelled and re-issued on 5 August 2020 with an exercise price of
$0.80
Options granted carry no dividend or voting rights.
Additional information
The earnings of the Group for the five years to 30 June 2020 are summarised below:
2020
$
2019
$
2018
$
2017
$
2016
$
Sales revenue
Loss after income tax
3,877,529
(7,647,544)
2,602,137
(8,570,754)
2,608,990
(23,101,340)
2,369,321
(9,868,954)
2,910,157
(4,025,097)
The factors that are considered to affect total shareholders return ('TSR') are summarised below:
2020
2019*
2018*
2017*
2016*
Share price at financial year end ($)
Basic earnings per share (cents per share)
Diluted earnings per share (cents per share)
0.38
(8.07)
(8.07)
0.20
(14.58)
(14.58)
0.40
(63.80)
(63.80)
0.60
(64.50)
(64.50)
1.30
(28.40)
(28.40)
*
The share price, earnings per share and diluted earnings per share have been restated for the effect of the 10:1
share consolidation completed in January 2020.
22
Total Brain Limited
Directors' report
30 June 2020
Additional disclosures relating to key management personnel
Shareholding
The number of shares in the Company held during the financial year by each director and other members of key
management personnel of the Group, including their personally related parties, is set out below:
Ordinary shares
Dr Evian Gordon
Mr Louis Gagnon
Mr Matthew Morgan
Mr David Torrible
Mr David Daglio
Mr Matthew Mund
Mr Emil Vasilev
Balance at Received
the start of as part of
the year
remuneration Additions
Balance at
the end of
the year
Consolidation
13,018,749
4,159,225
4,447,231
31,425,746
-
9,887,824
702,188
63,640,963
-
-
1,301,875
-
-
415,923
-
-
444,723
- 29,126,903
6,055,265
- 69,501,809
6,950,181
-
-
988,782
-
-
70,220
- 98,628,712 (146,042,706) 16,226,969
(11,716,874)
(3,743,302)
(4,002,508)
(54,497,384)
(62,551,628)
(8,899,042)
(631,968)
Option holding
The number of options over ordinary shares in the Company held during the financial year by each director and other
members of key management personnel of the Group, including their personally related parties, is set out below:
Balance at
Balance at
the start of Granted as Consolidation
remuneration
the year
/expired
the end of Vested and
exercisable
the year
Options over ordinary shares
Mr Louis Gagnon
Mr Matthew Morgan
Mr David Torrible*
Mr Ajay Arora
Mr Matthew Mund
Mr Emil Vasilev
61,465,912
4,250,000
-
1,920,808
30,732,957
6,530,754
-
-
2,066,115
-
-
-
(55,319,319)
(3,825,000)
(1,859,503)
(1,920,808)
(27,659,659)
(5,877,678)
6,146,593
425,000
206,612
-
3,073,298
653,076
6,146,593
425,000
206,612
-
2,627,748
653,076
104,900,431
2,066,115
(96,461,967) 10,504,579 10,059,029
*
The vesting of these options was not dependent on the satisfaction of any service or performance conditions.
Instead, the options vested based on Mr David Torrible agreeing to act as a director of the company in the
current reporting period.
Loans to key management personnel and their related parties
There were no loans to key management personnel and their related parties.
There were no other transactions with key management personnel and their related parties.
This concludes the remuneration report, which has been audited.
23
Total Brain Limited
Directors' report
30 June 2020
Shares under option
The following options over ordinary shares of Total Brain Limited were outstanding at the date of this report.
Grant date
21/12/2016
22/05/2017
01/07/2017
16/07/2017
14/12/2017
14/12/2017
15/12/2017
19/12/2017
08/01/2018
24/02/2018
28/02/2018
01/04/2018
29/04/2019
31/07/2018
31/12/2018
28/02/2019
31/03/2019
30/04/2019
31/07/2019
31/08/2019
30/09/2019
18/03/2019
18/03/2019
18/03/2019
18/03/2019
17/06/2019
23/10/2019
16/01/2020
06/08/2020
06/08/2020
06/08/2020
06/08/2020
06/08/2020
06/08/2020
06/08/2020
06/08/2020
06/08/2020
06/08/2020
06/08/2020
06/08/2020
06/08/2020
06/08/2020
06/08/2020
06/08/2020
06/08/2020
06/08/2020
06/08/2020
Expiry date
29/11/2021
22/05/2022
17/05/2022
16/07/2022
22/05/2022
10/01/2023
15/12/2022
10/01/2021
07/01/2023
23/02/2023
27/02/2023
31/03/2023
28/04/2021
30/07/2023
30/12/2023
27/02/2024
30/03/2024
29/04/2024
30/07/2024
30/08/2024
29/09/2024
18/03/2019
18/03/2020
18/03/2021
18/03/2022
16/06/2024
22/10/2024
16/01/2024
14/12/2022
06/08/2025
06/08/2025
06/08/2025
21/11/2024
26/11/2024
03/12/2024
01/01/2025
10/05/2025
25/05/2025
09/06/2025
11/06/2025
30/06/2025
01/07/2025
06/07/2025
20/07/2025
26/08/2025
22/09/2025
13/10/2025
24
Exercise
price
$
Number
under
option
2.00
0.80
0.80
0.80
0.80
1.00
1.00
1.20
0.80
0.80
0.80
0.80
0.45
0.80
0.80
0.80
0.80
0.80
0.80
0.80
0.80
0.45
0.45
0.45
0.45
0.45
0.80
0.45
0.80
0.37
0.44
0.50
0.44
0.44
0.44
0.44
0.44
0.44
0.44
0.44
0.44
0.44
0.44
0.44
0.44
0.44
0.44
49,950
500,000
653,075
3,073,296
5,646,591
400,000
5,000,000
400,000
768,324
30,000
30,000
591,766
106,612
82,031
28,125
50,781
25,781
19,922
14,192
217,578
42,500
12,500
12,500
12,500
12,500
50,000
25,000
206,612
845,156
2,314,961
2,314,961
2,314,961
55,664
25,781
54,688
25,781
22,266
42,969
31,641
55,078
70,703
117,188
25,781
22,266
19,922
29,297
175,000
26,626,200
Total Brain Limited
Directors' report
30 June 2020
Shares issued on the exercise of options
The following ordinary shares of Total Brain Limited were issued during the year ended 30 June 2020 and up to the
date of this report on the exercise of options granted:
Date options granted
29/04/2019
Exercise
price
Number of
shares
issued
$0.4500
100,000
Indemnity and insurance of officers
The Company has indemnified the directors and executives of the Company for costs incurred, in their capacity as a
director or executive, for which they may be held personally liable, except where there is a lack of good faith.
During the financial year, the Company paid a premium in respect of a contract to ensure the directors and
executives of the Company against a liability to the extent permitted by the Corporations Act 2001. The contract of
insurance prohibits disclosure of the nature of the liability and the amount of the premium.
Indemnity and insurance of auditor
The Company has not, during or since the end of the financial year, indemnified or agreed to indemnify the auditor of
the Company or any related entity against a liability incurred by the auditor.
During the financial year, the Company has not paid a premium in respect of a contract to insure the auditor of the
Company or any related entity.
Proceedings on behalf of the Company
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on
behalf of the Company, or to intervene in any proceedings to which the Company is a party for the purpose of taking
responsibility on behalf of the Company for all or part of those proceedings.
Non-audit services
Details of the amounts paid or payable to the auditor for non-audit services provided during the financial year by the
auditor are outlined in note 24 to the financial statements.
The directors are satisfied that the provision of non-audit services during the financial year, by the auditor (or by
another person or firm on the auditor's behalf), is compatible with the general standard of independence for auditors
imposed by the Corporations Act 2001.
The directors are of the opinion that the services as disclosed in note 24 to the financial statements do not
compromise the external auditor's independence requirements of the Corporations Act 2001 for the following
reasons:
●
all non-audit services have been reviewed and approved to ensure that they do not impact the integrity and
objectivity of the auditor; and
none of the services undermine the general principles relating to auditor independence as set out in APES 110
Code of Ethics for Professional Accountants issued by the Accounting Professional and Ethical Standards
Board, including reviewing or auditing the auditor's own work, acting in a management or decision-making
capacity for the Company, acting as advocate for the Company or jointly sharing economic risks and rewards.
●
Officers of the Company who are former partners of Grant Thornton
There are no officers of the Company who are former partners of Grant Thornton.
Auditor's independence declaration
A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set
out immediately after this directors' report.
Auditor
Grant Thornton continues in office in accordance with section 327 of the Corporations Act 2001.
25
Total Brain Limited
Directors' report
30 June 2020
This report is made in accordance with a resolution of directors, pursuant to section 298(2)(a) of the Corporations Act
2001.
On behalf of the directors
___________________________
Dr Evian Gordon
Chairman
28 August 2020
Sydney
26
Level 18, 145 Ann Street
Brisbane QLD 4000
Correspondence to:
GPO Box 1008
Brisbane QLD 4001
T +61 7 3222 0200
E info.qld@au.gt.com
W www.grantthornton.com.au
Auditor’s Independence Declaration
To the Directors of Total Brain Limited
In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the audit of Total Brain
Limited for the year ended 30 June 2020, I declare that, to the best of my knowledge and belief, there have been:
a
b
no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
no contraventions of any applicable code of professional conduct in relation to the audit.
Grant Thornton Audit Pty Ltd
Chartered Accountants
CDJ Smith
Partner – Audit & Assurance
Brisbane, 28 August 2020
Grant Thornton Audit Pty Ltd ACN 130 913 594
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
www.grantthornton.com.au
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients
and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International
Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are
delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one
another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to
Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to
Grant Thornton Australia Limited.
Liability limited by a scheme approved under Professional Standards Legislation.
FINANCIAL STATEMENTS
Year Ended 30 June 2020
ir@totalbrain.com
totalbrain.com
ASX: TTB ABN 24 094 069 682
28
Total Brain Limited
Statement of profit or loss and other comprehensive income
For the year ended 30 June 2020
Revenue
Consolidated
Note
2020
$
2019
$
5
3,877,529
2,602,137
Interest income calculated using the effective interest method
14,728
21,261
Expenses
Cost of equipment and third-party drug trial expense
Employee benefits expense
Corporate and operating costs
Depreciation and amortisation expense
Impairment of intangible assets
Impairment of receivables
Share-based payments expense
Net foreign exchange losses
Finance costs
Loss before income tax expense
Income tax expense
6
6
7
6
13
10
20
6
6
(644,468)
(6,814,911)
(3,547,799)
(231,235)
-
(266)
(300,300)
(822)
-
(318,585)
(5,534,036)
(3,332,336)
(418,489)
(1,380,680)
(13,354)
(148,790)
(45,562)
(2,320)
(7,647,544)
(8,570,754)
8
-
-
Loss after income tax expense for the year attributable to the owners of
Total Brain Limited
(7,647,544)
(8,570,754)
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Foreign currency translation
Other comprehensive income for the year, net of tax
Total comprehensive income for the year attributable to the owners of
Total Brain Limited
(156,055)
186,793
(156,055)
186,793
(7,803,599)
(8,383,961)
Cents
Cents
Basic earnings per share
Diluted earnings per share
32
32
(8.07)
(8.07)
(14.58)
(14.58)
The above statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes
29
Total Brain Limited
Statement of financial position
As at 30 June 2020
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Contract assets
Prepayments
Total current assets
Non-current assets
Plant and equipment
Intangibles
Other
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Contract liabilities
Borrowings
Employee benefits
Total current liabilities
Non-current liabilities
Deferred tax
Employee benefits
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Accumulated losses
Total equity
Consolidated
Note
2020
$
2019
$
9
10
11
11,104,729
2,837,267
3,025
140,419
14,085,440
5,214,802
811,160
89,935
97,393
6,213,290
12
13
14
15
16
17
8
18
310,356
247,349
15,000,044 14,900,018
10,560
15,320,960 15,157,927
10,560
29,406,400 21,371,217
460,978
956,760
1,106,575
426,873
2,951,186
457,958
209,489
-
385,001
1,052,448
65,165
2,205
67,370
65,165
33,704
98,869
3,018,556
1,151,317
26,387,844 20,219,900
19
20
78,425,180 64,753,937
4,233,742
(48,767,779)
4,377,987
(56,415,323)
26,387,844 20,219,900
The above statement of financial position should be read in conjunction with the accompanying notes
30
Total Brain Limited
Statement of changes in equity
For the year ended 30 June 2020
Consolidated
Issued
capital
$
Reserves
$
Accumulated
losses
$
Total equity
$
Balance at 1 July 2018
58,080,521
3,898,159
(40,197,025) 21,781,655
Loss after income tax expense for the year
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
-
-
-
-
186,793
(8,570,754)
-
(8,570,754)
186,793
186,793
(8,570,754)
(8,383,961)
Transactions with owners in their capacity as owners:
Contributions of equity, net of transaction costs (note 19)
Share-based payments (note 20)
6,673,416
-
-
148,790
-
-
6,673,416
148,790
Balance at 30 June 2019
64,753,937
4,233,742
(48,767,779) 20,219,900
Consolidated
Issued
capital
$
Reserves
$
Accumulated
losses
$
Total equity
$
Balance at 1 July 2019
64,753,937
4,233,742
(48,767,779) 20,219,900
Loss after income tax expense for the year
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
-
-
-
-
(156,055)
(7,647,544)
-
(7,647,544)
(156,055)
(156,055)
(7,647,544)
(7,803,599)
Transactions with owners in their capacity as owners:
Contributions of equity, net of transaction costs (note 19)
Share-based payments (note 20)
13,671,243
-
-
300,300
- 13,671,243
-
300,300
Balance at 30 June 2020
78,425,180
4,377,987
(56,415,323) 26,387,844
The above statement of changes in equity should be read in conjunction with the accompanying notes
31
Total Brain Limited
Statement of cash flows
For the year ended 30 June 2020
Cash flows from operating activities
Receipts from customers (inclusive of GST)
Payments to suppliers and employees (inclusive of GST)
Research and development tax incentive
Interest received
Consolidated
Note
2020
$
2019
$
4,885,745
(12,233,400)
1,337,112
14,728
2,727,088
(9,362,747)
967,006
21,261
Net cash used in operating activities
30
(5,995,815)
(5,647,392)
Cash flows from investing activities
Payments for property, plant and equipment
Payments for intangibles
Net proceeds/(repayments) on loans made to related parties
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issue of shares
Proceeds from borrowings
Net cash from financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Effects of exchange rate changes on cash and cash equivalents
12
13
(126,417)
(2,610,223)
-
(78,520)
(2,585,125)
102,553
(2,736,640)
(2,561,092)
19
31
13,671,243
1,106,575
6,673,416
-
14,777,818
6,673,416
6,045,363
5,214,802
(155,436)
(1,535,068)
6,615,972
133,898
Cash and cash equivalents at the end of the financial year
9
11,104,729
5,214,802
The above statement of cash flows should be read in conjunction with the accompanying notes
32
Total Brain Limited
Notes to the financial statements
30 June 2020
Note 1. General information
The financial statements cover Total Brain Limited as a Group consisting of Total Brain Limited and the entities it
controlled at the end of, or during, the year. The financial statements are presented in Australian dollars, which is
Total Brain Limited's functional and presentation currency.
Total Brain Limited is a listed public company limited by shares, incorporated and domiciled in Australia. Its
registered office and principal place of business is:
15 Belvoir Street
Surry Hills NSW 2010
A description of the nature of the Group's operations and its principal activities are included in the directors' report,
which is not part of the financial statements.
The financial statements were authorised for issue, in accordance with a resolution of directors, on 28 August 2020.
The directors have the power to amend and reissue the financial statements.
Note 2. Significant accounting policies
The principal accounting policies adopted in the preparation of the financial statements are set out below. These
policies have been consistently applied to all the years presented, unless otherwise stated.
New or amended Accounting Standards and Interpretations adopted
The Group has adopted all of the new or amended Accounting Standards and Interpretations issued by the
Australian Accounting Standards Board ('AASB') that are mandatory for the current reporting period. The adoption of
these Accounting Standards and Interpretations did not have any significant impact on the financial performance or
position of the Group.
The following Accounting Standards and Interpretations are most relevant to the Group:
AASB 16 Leases
The Group has adopted AASB 16 from 1 July 2019. The standard replaces AASB 117 'Leases' and for lessees
eliminates the classifications of operating leases and finance leases. Except for short-term leases and leases of low
value assets, right-of-use assets and corresponding lease liabilities are recognised in the statement of financial
position. Straight-line operating lease expense recognition is replaced with a depreciation charge for the right-of-use
assets (included in operating costs) and an interest expense on the recognised lease liabilities (included in finance
costs). In the earlier periods of the lease, the expenses associated with the lease under AASB 16 will be higher when
compared to lease expenses under AASB 117. However, EBITDA (Earnings Before Interest, Tax, Depreciation and
Amortisation) results improve as the operating expense is now replaced by interest expense and depreciation in profit
or loss. For classification within the statement of cash flows, the interest portion is disclosed in operating activities
and the principal portion of the lease payments are separately disclosed in financing activities. For lessor accounting,
the standard does not substantially change how a lessor accounts for leases.
Impact of adoption
AASB 16 was adopted using the modified retrospective approach and as such the comparatives have not been
restated. The impact of adoption on opening accumulated losses as at 1 July 2019 was nil as follows:
Operating lease commitments as at 1 July 2019 (AASB 117)
Short-term leases not recognised as a right-of-use asset (AASB 16)
Low-value assets leases not recognised as a right-of-use asset (AASB 16)
Right-of-use assets (AASB 16)
33
1 July 2019
$
84,622
(78,291)
(6,331)
-
Total Brain Limited
Notes to the financial statements
30 June 2020
Note 2. Significant accounting policies (continued)
Basis of preparation
These general purpose financial statements have been prepared in accordance with Australian Accounting
Standards and Interpretations issued by the Australian Accounting Standards Board ('AASB') and the Corporations
Act 2001, as appropriate for for-profit oriented entities. These financial statements also comply with International
Financial Reporting Standards as issued by the International Accounting Standards Board ('IASB').
Historical cost convention
The financial statements have been prepared under the historical cost convention.
Critical accounting estimates
The preparation of the financial statements requires the use of certain critical accounting estimates. It also requires
management to exercise its judgement in the process of applying the Group's accounting policies. The areas
involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to
the financial statements, are disclosed in note 3.
Going concern
During the year, the Group incurred a net loss after tax of $7,647,544 (2019: $8,570,754) and net operating cash
outflows of $5,995,8 5 (2019: $5,647,392). Prima facie, these circumstances represent a material uncertainty
regarding the Group’s ability to continue as a going concern.
The financial statements have been prepared on a going concern basis. In making this assessment, management
have considered the following:
●
the Group’s financial position as at 30 June 2020, with net current assets of $11,134,254 (2019: $5,160,842)
and net assets of $26,387,844 (2019: $20,219,900);
the Group's external debt is a forgivable loan;
the cash flow forecast for the Group for the period of 12 months from the approval of the financial statements;
forecast sales and profitability forecasts for the Group;
accessing additional sources of capital; and
continued support of the Group’s shareholders
●
●
●
●
●
On this basis, the Directors believe that the going concern basis of presentation is appropriate. No adjustments have
been made relating to the recoverability and classification of recorded asset amounts and classification of liabilities
that might be necessary should the Group not have the ability to continue as a going concern. If for any reason the
Group is unable to continue as a going concern, it would impact on the Group’s ability to realise assets at their
recognised values and to extinguish liabilities in the normal course of business at the amounts stated in these
financial statements.
Parent entity information
In accordance with the Corporations Act 2001, these financial statements present the results of the Group only.
Supplementary information about the parent entity is disclosed in note 28.
Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Total Brain Limited
('Company' or 'parent entity') as at 30 June 2020 and the results of all subsidiaries for the year then ended. Total
Brain Limited and its subsidiaries together are referred to in these financial statements as the 'Group'.
Subsidiaries are all those entities over which the Group has control. The Group controls an entity when the Group is
exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those
returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on
which control is transferred to the Group. They are de-consolidated from the date that control ceases.
Intercompany transactions, balances and unrealised gains on transactions between entities in the Group are
eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the
asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency
with the policies adopted by the Group.
34
Total Brain Limited
Notes to the financial statements
30 June 2020
Note 2. Significant accounting policies (continued)
The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change in ownership
interest, without the loss of control, is accounted for as an equity transaction, where the difference between the
consideration transferred and the book value of the share of the non-controlling interest acquired is recognised
directly in equity attributable to the parent.
Where the Group loses control over a subsidiary, it derecognises the assets including goodwill, liabilities and non-
controlling interest in the subsidiary together with any cumulative translation differences recognised in equity. The
Group recognises the fair value of the consideration received and the fair value of any investment retained together
with any gain or loss in profit or loss.
Operating segments
Operating segments are presented using the 'management approach', where the information presented is on the
same basis as the internal reports provided to the Chief Operating Decision Makers ('CODM'). The CODM is
responsible for the allocation of resources to operating segments and assessing their performance.
Foreign currency translation
The presentation currency of the Group’s financial statements is Australian dollars.
The functional currency of Brain Resource Inc., a subsidiary of the ultimate parent company, Total Brain Limited, is
US dollars.
Foreign currency transactions
Foreign currency transactions are translated into the Company's functional currency using the exchange rates
prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such
transactions and from the translation at financial year-end exchange rates of monetary assets and liabilities
denominated in foreign currencies are recognised in profit or loss.
Foreign operations
The assets and liabilities of foreign operations are translated into Australian dollars using the exchange rates at the
reporting date. The revenues and expenses of foreign operations are translated into Australian dollars using the
average exchange rates, which approximate the rates at the dates of the transactions, for the period. All resulting
foreign exchange differences are recognised in other comprehensive income through the foreign currency reserve in
equity.
The foreign currency reserve is recognised in profit or loss when the foreign operation or net investment is disposed
of.
Revenue recognition
The Group recognises revenue as follows:
Revenue from contracts with customers
Revenue is recognised at an amount that reflects the consideration to which the Group is expected to be entitled in
exchange for transferring goods or services to a customer. For each contract with a customer, the Group: identifies
the contract with a customer; identifies the performance obligations in the contract; determines the transaction price
which takes into account estimates of variable consideration and the time value of money; allocates the transaction
price to the separate performance obligations on the basis of the relative stand-alone selling price of each distinct
good or service to be delivered; and recognises revenue when or as each performance obligation is satisfied in a
manner that depicts the transfer to the customer of the goods or services promised.
35
Total Brain Limited
Notes to the financial statements
30 June 2020
Note 2. Significant accounting policies (continued)
Variable consideration within the transaction price, if any, reflects concessions provided to the customer such as
discounts, rebates and refunds, any potential bonuses receivable from the customer and any other contingent
events. Such estimates are determined using either the 'expected value' or 'most likely amount' method. The
measurement of variable consideration is subject to a constraining principle whereby revenue will only be recognised
to the extent that it is highly probable that a significant reversal in the amount of cumulative revenue recognised will
not occur. The measurement constraint continues until the uncertainty associated with the variable consideration is
subsequently resolved. Amounts received that are subject to the constraining principle are recognised as a refund
liability.
Sale of software licenses
Software revenue comprises fees from subscribers to access the Group’s software platform during the license period.
Subscription-based arrangements generally have annual contractual terms.
In some customer contracts, software and other deliverables (such as services or support) are bundled together. The
goods and services provided under these arrangements are highly interrelated and are therefore accounted for as a
single performance obligation. The Group recognises revenue rateably as the services are performed, commencing
with the date the service is made available to customers and all other revenue recognition criteria have been
satisfied. If, at the outset of an arrangement, revenue cannot be measured reliably, revenue recognition is deferred
until the relating fees become due and payable by the customer. Additionally, if at the outset of an arrangement it is
determined that collectability is not probable, revenue recognition is deferred until the earlier of when collectability
becomes probable or payment is received.
Rendering of services
Revenue from a contract to provide services is recognised over time as the services are rendered based on either a
fixed price or an hourly rate.
Interest income is recognised as interest accrues using the effective interest method
Interest income is recognised as interest accrues using the effective interest method. This is a method of calculating
the amortised cost of a financial asset and allocating the interest income over the relevant period using the effective
interest rate, which is the rate that exactly discounts estimated future cash receipts through the expected life of the
financial asset to the net carrying amount of the financial asset.
Government grants
Government grants are recognised at fair value where there is a reasonable certainty that the grant will be received
upon meeting all grant terms and conditions. A forgivable loan is recognised as grant when there is a reasonable
assurance that the Group will meet the terms of the forgiveness of the loan. Grants related to assets are deducted
from the carrying amount of the assets presented in the statement of financial position. Government grants relating to
costs are deferred and recognised in profit or loss over the period necessary to match them with the costs that they
are intended to compensate.
Income tax
The income tax expense or benefit for the period is the tax payable on that period's taxable income based on the
applicable income tax rate for each jurisdiction, adjusted by the changes in deferred tax assets and liabilities
attributable to temporary differences, unused tax losses and the adjustment recognised for prior periods, where
applicable.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to be applied
when the assets are recovered or liabilities are settled, based on those tax rates that are enacted or substantively
enacted, except for:
● When the deferred income tax asset or liability arises from the initial recognition of goodwill or an asset or
liability in a transaction that is not a business combination and that, at the time of the transaction, affects neither
the accounting nor taxable profits; or
● When the taxable temporary difference is associated with interests in subsidiaries, associates or joint ventures,
and the timing of the reversal can be controlled and it is probable that the temporary difference will not reverse
in the foreseeable future.
36
Total Brain Limited
Notes to the financial statements
30 June 2020
Note 2. Significant accounting policies (continued)
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable
that future taxable amounts will be available to utilise those temporary differences and losses.
The carrying amount of recognised and unrecognised deferred tax assets are reviewed at each reporting date.
Deferred tax assets recognised are reduced to the extent that it is no longer probable that future taxable profits will
be available for the carrying amount to be recovered. Previously unrecognised deferred tax assets are recognised to
the extent that it is probable that there are future taxable profits available to recover the asset.
Deferred tax assets and liabilities are offset only where there is a legally enforceable right to offset current tax assets
against current tax liabilities and deferred tax assets against deferred tax liabilities; and they relate to the same
taxable authority on either the same taxable entity or different taxable entities which intend to settle simultaneously.
Current and non-current classification
Assets and liabilities are presented in the statement of financial position based on current and non-current
classification.
An asset is classified as current when: it is either expected to be realised or intended to be sold or consumed in the
Group's normal operating cycle; it is held primarily for the purpose of trading; it is expected to be realised within 12
months after the reporting period; or the asset is cash or cash equivalent unless restricted from being exchanged or
used to settle a liability for at least 12 months after the reporting period. All other assets are classified as non-current.
A liability is classified as current when: it is either expected to be settled in the Group's normal operating cycle; it is
held primarily for the purpose of trading; it is due to be settled within 12 months after the reporting period; or there is
no unconditional right to defer the settlement of the liability for at least 12 months after the reporting period. All other
liabilities are classified as non-current.
Deferred tax assets and liabilities are always classified as non-current.
Cash and cash equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term,
highly liquid investments with original maturities of three months or less that are readily convertible to known amounts
of cash and which are subject to an insignificant risk of changes in value.
Trade and other receivables
Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the
effective interest method, less any allowance for expected credit losses. Trade receivables are generally due for
settlement within 30 days.
The Group has applied the simplified approach to measuring expected credit losses, which uses a lifetime expected
loss allowance. To measure the expected credit losses, trade receivables have been grouped based on days
overdue.
Other receivables are recognised at amortised cost, less any allowance for expected credit losses.
Government grant receivable for research and development tax incentive ('R&D') is recognised to the degree that the
Group can reliably estimate that R&D expenditure for the full year will fall within the eligibility requirements. Advances
in other receivables are provided as an advance contractual payment generally covering the payable expected to
accrue over a 60-90 day period.
Contract assets
Contract assets are recognised when the Group has transferred goods or services to the customer but where the
Group is yet to establish an unconditional right to consideration. Contract assets are treated as financial assets for
impairment purposes.
37
Total Brain Limited
Notes to the financial statements
30 June 2020
Note 2. Significant accounting policies (continued)
Plant and equipment
Plant and equipment are stated at historical cost less accumulated depreciation and impairment. Historical cost
includes expenditure that is directly attributable to the acquisition of the items.
Depreciation is calculated on a diminishing value basis to write off the net cost of each item of plant and equipment
(excluding land) over their expected useful lives as follows:
Plant and equipment
3-10 years
The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each
reporting date.
An item of property, plant and equipment is derecognised upon disposal or when there is no future economic benefit
to the Group. Gains and losses between the carrying amount and the disposal proceeds are taken to profit or loss.
Intangible assets
Intangible assets acquired as part of a business combination, other than goodwill, are initially measured at their fair
value at the date of the acquisition. Intangible assets acquired separately are initially recognised at cost. Finite life
intangible assets are subsequently measured at cost less amortisation and any impairment. The gains or losses
recognised in profit or loss arising from the derecognition of intangible assets are measured as the difference
between net disposal proceeds and the carrying amount of the intangible asset. The method and useful lives of finite
life intangible assets are reviewed annually. Changes in the expected pattern of consumption or useful life are
accounted for prospectively by changing the amortisation method or period.
Research and development
Research costs are expensed in the period in which they are incurred. Development costs are capitalised when it is
probable that the project will be a success considering its commercial and technical feasibility; the Group is able to
use or sell the asset; the Group has sufficient resources; and intent to complete the development and its costs can
be measured reliably. Capitalised development costs are amortised on a straight-line basis over the period of their
expected benefit, being their finite life of 5 years.
The Brain Resource International Database and associated analysis tools (‘BRID’) is treated as a single integrated
asset for presentation and impairment testing. Amortisation of components of BRID that are ready for use are
calculated on a straight line basis over 5 years.
Impairment of non-financial assets
Goodwill is not subject to amortisation and is tested annually for impairment, or more frequently if events or changes
in circumstances indicate that they might be impaired. Other non-financial assets are reviewed for impairment
whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An
impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount.
Recoverable amount is the higher of an asset's fair value less costs of disposal and value-in-use. The value-in-use is
the present value of the estimated future cash flows relating to the asset using a pre-tax discount rate specific to the
asset or cash-generating unit to which the asset belongs. Assets that do not have independent cash flows are
grouped together to form a cash-generating unit.
Fair value less costs of disposal is determined by the directors based on an assessment of the price that would be
received to sell the asset in an orderly transaction between market participants at the measurement date.
Trade and other payables
These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial year
and which are unpaid. Due to their short-term nature they are measured at amortised cost and are not discounted.
The amounts are unsecured and are usually paid within 30 days of recognition.
38
Total Brain Limited
Notes to the financial statements
30 June 2020
Note 2. Significant accounting policies (continued)
Contract liabilities
Contract liabilities represent the Group's obligation to transfer goods or services to a customer and are recognised
when a customer pays consideration, or when the Group recognises a receivable to reflect its unconditional right to
consideration (whichever is earlier) before the Group has transferred the goods or services to the customer.
Borrowings
Loans and borrowings are initially recognised at the fair value of the consideration received, net of transaction costs.
They are subsequently measured at amortised cost using the effective interest method.
Finance costs
Finance costs attributable to qualifying assets are capitalised as part of the asset. All other finance costs are
expensed in the period in which they are incurred.
Employee benefits
Short-term employee benefits
Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service leave expected to
be settled wholly within 12 months of the reporting date are measured at the amounts expected to be paid when the
liabilities are settled.
Other long-term employee benefits
The liability for annual leave and long service leave not expected to be settled within 12 months of the reporting date
are measured at the present value of expected future payments to be made in respect of services provided by
employees up to the reporting date. Consideration is given to expected future wage and salary levels, experience of
employee departures and periods of service. Expected future payments are discounted using market yields at the
reporting date on high quality corporate bonds with terms to maturity and currency that match, as closely as possible,
the estimated future cash outflows.
Defined contribution superannuation expense
Contributions to defined contribution superannuation plans are expensed in the period in which they are incurred.
Share-based payments
Equity-settled share-based compensation benefits are provided to employees and contractors.
Equity-settled transactions are awards of shares, or options over shares, that are provided to employees and
contractors in exchange for the rendering of services.
The cost of equity-settled transactions is measured at fair value on grant date. Fair value is independently
determined using either the Binomial or Black-Scholes option pricing model that takes into account the exercise
price, the term of the option, the impact of dilution, the share price at grant date and expected price volatility of the
underlying share, the expected dividend yield and the risk free interest rate for the term of the option, together with
non-vesting conditions that do not determine whether the Group receives the services that entitle the employees to
receive payment. No account is taken of any other vesting conditions.
The cost of equity-settled transactions is recognised as an expense with a corresponding increase in equity over the
vesting period. The cumulative charge to profit or loss is calculated based on the grant date fair value of the award,
the best estimate of the number of awards that are likely to vest and the expired portion of the vesting period. The
amount recognised in profit or loss for the period is the cumulative amount calculated at each reporting date less
amounts already recognised in previous periods.
If equity-settled awards are modified, as a minimum an expense is recognised as if the modification has not been
made. An additional expense is recognised, over the remaining vesting period, for any modification that increases the
total fair value of the share-based compensation benefit as at the date of modification.
39
Total Brain Limited
Notes to the financial statements
30 June 2020
Note 2. Significant accounting policies (continued)
If the non-vesting condition is within the control of the Group or employee, the failure to satisfy the condition is
treated as a cancellation. If the condition is not within the control of the Group or employee and is not satisfied during
the vesting period, any remaining expense for the award is recognised over the remaining vesting period, unless the
award is forfeited.
If equity-settled awards are cancelled, it is treated as if it has vested on the date of cancellation, and any remaining
expense is recognised immediately. If a new replacement award is substituted for the cancelled award, the cancelled
and new award is treated as if they were a modification.
Issued capital
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of
tax, from the proceeds.
Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to the owners of Total Brain Limited,
excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary
shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the
financial year.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into
account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary
shares and the weighted average number of shares assumed to have been issued for no consideration in relation to
dilutive potential ordinary shares.
Goods and Services Tax ('GST') and other similar taxes
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is
not recoverable from the tax authority. In this case it is recognised as part of the cost of the acquisition of the asset or
as part of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST
recoverable from, or payable to, the tax authority is included in other receivables or other payables in the statement
of financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing
activities which are recoverable from, or payable to the tax authority, are presented as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the tax
authority.
New Accounting Standards and Interpretations not yet mandatory or early adopted
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet
mandatory, have not been early adopted by the Group for the annual reporting period ended 30 June 2020. The
Group's assessment of the impact of these new or amended Accounting Standards and Interpretations, most
relevant to the Group, are set out below.
40
Total Brain Limited
Notes to the financial statements
30 June 2020
Note 2. Significant accounting policies (continued)
Conceptual Framework for Financial Reporting (Conceptual Framework)
The revised Conceptual Framework is applicable to annual reporting periods beginning on or after 1 January 2020
and early adoption is permitted. The Conceptual Framework contains new definition and recognition criteria as well
as new guidance on measurement that affects several Accounting Standards. Where the Group has relied on the
existing framework in determining its accounting policies for transactions, events or conditions that are not otherwise
dealt with under the Australian Accounting Standards, the Group may need to review such policies under the revised
framework. At this time, the application of the Conceptual Framework is not expected to have a material impact on
the Group's financial statements
Note 3. Critical accounting judgements, estimates and assumptions
The preparation of the financial statements requires management to make judgements, estimates and assumptions
that affect the reported amounts in the financial statements. Management continually evaluates its judgements and
estimates in relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its
judgements, estimates and assumptions on historical experience and on other various factors, including expectations
of future events, management believes to be reasonable under the circumstances. The resulting accounting
judgements and estimates will seldom equal the related actual results. The judgements, estimates and assumptions
that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities (refer to
the respective notes) within the next financial year are discussed below.
Coronavirus (COVID-19) pandemic
Judgement has been exercised in considering the impacts that the Coronavirus (COVID-19) pandemic has had, or
may have, on the Group based on known information. This consideration extends to the nature of the products and
services offered, customers, supply chain, staffing and geographic regions in which the Group operates. Other than
as addressed in specific notes, there does not currently appear to be either any significant impact upon the financial
statements or any significant uncertainties with respect to events or conditions which may impact the Group
unfavourably as at the reporting date or subsequently as a result of the Coronavirus (COVID-19) pandemic.
Share-based payment transactions
The Group measures the cost of equity-settled transactions with employees by reference to the fair value of the
equity instruments at the date at which they are granted. The fair value is determined by using 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.
Determination of variable consideration
Judgement is exercised in estimating variable consideration which is determined having regard to past experience
with respect to goods or services that have a variable component. Revenue will only be recognised to the extent that
it is highly probable that a significant reversal in the amount of cumulative revenue recognised under the contract will
not occur when the uncertainty associated with the variable consideration is subsequently resolved.
Allowance for expected credit losses
The allowance for expected credit losses assessment requires a degree of estimation and judgement. It is based on
the lifetime expected credit loss, grouped based on days overdue, and makes assumptions to allocate an overall
expected credit loss rate for each group. These assumptions include recent sales experience, historical collection
rates and forward-looking information that is available. The allowance for expected credit losses, as disclosed in note
10, is calculated based on the information available at the time of preparation. The actual credit losses in future years
may be higher or lower.
Estimation of useful lives of assets
The Group determines the estimated useful lives and related depreciation and amortisation charges for its plant and
equipment and finite life intangible assets. The useful lives could change significantly as a result of technical
innovations or some other event. The depreciation and amortisation charge will increase where the useful lives are
less than previously estimated lives, or technically obsolete or non-strategic assets that have been abandoned or
sold will be written off or written down.
41
Total Brain Limited
Notes to the financial statements
30 June 2020
Note 3. Critical accounting judgements, estimates and assumptions (continued)
Goodwill and other intangible assets
The Group tests annually, or more frequently if events or changes in circumstances indicate impairment, whether
goodwill and other intangible assets have suffered any impairment, in accordance with the accounting policy stated in
note 2. Management have assessed the entire business as one cash-generating unit (‘CGU’). The recoverable
amount of this CGU has been determined based on fair value less costs of disposal, using a market capitalisation
approach as detailed in note 13.
Research and development costs
Research and development costs are only capitalised by the Group when the feasibility of completing the intangible
asset is valid and likely to result in a saleable asset.
Income tax
The Group is subject to income taxes in the jurisdictions in which it operates. Significant judgement is required in
determining the provision for income tax. There are many transactions and calculations undertaken during the
ordinary course of business for which the ultimate tax determination is uncertain. The Group recognises liabilities for
anticipated tax audit issues based on the Group's current understanding of the tax law. Where the final tax outcome
of these matters is different from the carrying amounts, such differences will impact the current and deferred tax
provisions in the period in which such determination is made.
Recovery of deferred tax assets
Deferred tax assets are recognised for deductible temporary differences only if the Group considers it is probable that
future taxable amounts will be available to utilise those temporary differences and losses.
Government grants for research and development tax incentive (R&D)
The Group recognises government grants related to the research and development tax incentive (R&D) as a
deduction from the carrying amount of the relevant qualifying assets, in accordance with the accounting policy
disclosed in Note 2. A government grant receivable in respect of the incentive is recognised when there is
reasonable certainty that the grant will be received upon meeting the terms and conditions associated with the grant.
Significant judgement is required in determining the value of the government grant claim and associated receivable,
and the amounts to be deducted from the carrying value of the relevant qualifying assets. The group determines
these amounts based on Advance / Overseas Findings received from AusIndustry in previous periods. In the current
period, Management determined (in conjunction with assistance from external consultants) that a receivable of
$1,152,955 should be recognised at 30 June 2020, and an amount of $2,340,931 should be deducted from the
carrying amount of its qualifying intangible assets in respect of eligible expenditure incurred, based on the Advance /
Overseas Findings obtained in previous periods and the application of those findings and consideration of other
applicable R&D Incentive interpretations to the facts and circumstances at Total Brain Limited. In circumstances
where different judgements are made in respect of these matters, such differences will impact the government grant
receivable and the amount deducted from the carrying value of the qualifying intangible asset.
Note 4. Operating segments
Identification of reportable operating segments
The Group is organised into one operating segment being the development and commercialisation of brain health
products, primarily delivered to a range of users through the one Total Brain platform. This operating segment is
based on the internal reports that are reviewed and used by the Board of Directors (who are identified as the Chief
Operating Decision Makers ('CODM')) in assessing performance and in determining the allocation of resources.
There is no aggregation of operating segments.
The CODM reviews EBITDA (earnings before interest, tax, depreciation and amortisation). The accounting policies
adopted for internal reporting to the CODM are consistent with those adopted in the financial statements.
The information reported to the CODM is on a monthly basis.
42
Total Brain Limited
Notes to the financial statements
30 June 2020
Note 4. Operating segments (continued)
Major customers
During the year ended 30 June 2020, the Group derived approximately $750,000 from one data licensing customer,
$400,000 from one affinity customer and $850,000 from one corporate customer (2019: approximately $200,000 from
one affinity customer and $700,000 from one corporate customer).
Geographical information
The majority of revenue is derived in the United States.
Note 5. Revenue
Total Brain* – Corporate
Total Brain* – Affinity
Total Brain* – All other
Clinical **
Discovery***
Data Licensing****
Revenue
Consolidated
2020
$
2019
$
2,263,916
399,464
136,015
298,378
34,798
744,958
1,788,391
194,138
85,471
323,631
42,762
167,744
3,877,529
2,602,137
Revenue from contracts with customers is derived from the Group’s combined database which includes both BRID
and Data Licensing data. The revenue is split based on go to market channels as follows:
*
Total Brain revenue primarily comprises fees received from customers to access the Group’s software platform.
Customers include:
Corporate - B2B customers who provide access to the Group’s software platform to their employees;
Affinity - Partners who provide access to the Group’s software platform to their members; and
All other - Other miscellaneous Total Brain revenue.
Clinical revenue comprises revenue from clinics who provide access to the Group’s software platform to their
clients.
Discovery revenue comprises revenue which is primarily received from academic institutions that use the
Group’s software platform to collect new data as part of their own studies.
**
***
**** Data Licensing revenue comprises revenue received from customers who are provided access to the data
assets.
Disaggregation of revenue
The disaggregation of revenue from contracts with customers is as follows:
Major revenue lines
Software license
Services and access fees
Timing of revenue recognition
Revenue transferred at a point in time
Revenue transferred over time
43
Consolidated
2020
$
2019
$
3,097,773
779,756
2,391,631
210,506
3,877,529
2,602,137
3,097,773
779,756
2,391,631
210,506
3,877,529
2,602,137
Total Brain Limited
Notes to the financial statements
30 June 2020
Note 6. Expenses
Loss before income tax includes the following specific expenses:
Cost of sales
Cost of equipment and third-party drug trial expense
Depreciation
Plant and equipment
Amortisation
Development
Total depreciation and amortisation
Impairment
Development
Finance costs
Interest and finance charges paid/payable on borrowings
Net foreign exchange loss
Net foreign exchange loss
Leases
Minimum lease payments
Short-term lease payments
Total leases
Research and development tax incentive costs
Research and development expenditure recognised as an expense
Employee benefits expense*
Employee benefits expense excluding superannuation
Defined contribution superannuation expense
Total employee benefits expense
Government grants offset against employee benefit expense
Government grants**
Offset against cost of intangibles
Total government grants offset against employee benefit expense*
Consolidated
2020
$
2019
$
644,468
318,585
61,969
46,790
169,266
371,699
231,235
418,489
-
1,380,680
-
2,320
822
45,562
-
169,091
146,270
-
169,091
146,270
179,096
149,386
6,461,825
353,086
5,207,994
326,042
6,814,911
5,534,036
1,252,411
(374,547)
877,864
-
-
-
*
**
Government grants offset against employee benefits expense total to $877,864.
During the Coronavirus (‘COVID-19’) pandemic, the Group has received stimulus support payments of $116,499
from the Australian Government and $1,135,912 (US$762,400) from the US Government (refer to note 16 for
more information). These have been recognised as government grants in the financial statements and recorded
as offsets against the cost of intangibles and offset against employee benefits expense over the periods in which
the related employee benefits are recognised as an expense.
44
Total Brain Limited
Notes to the financial statements
30 June 2020
Note 7. Corporate and operating costs
Insurance and professional fees
Communications expense
Marketing and agent support expenses
Occupancy expenses
Travel expenses
Other expenses
Note 8. Income tax
Numerical reconciliation of income tax expense and tax at the statutory rate
Loss before income tax expense
Tax at the statutory tax rate of 27.5%
Tax effect amounts which are not deductible/(taxable) in calculating taxable income:
Share-based payments
Permanent differences from research and development refund
Effect of FX movement on translation
Share issue costs
Non-assessable income
Sundry items
Current year tax losses not recognised
Prior year tax losses not recognised now recouped
Difference in overseas tax rates
Prior year (over) / under provisions
Income tax expense
Tax losses not recognised
Unused tax losses for which no deferred tax asset has been recognised
Potential tax benefit @ 27.5%
Consolidated
2020
$
2019
$
1,385,855
417,228
876,470
497,459
295,104
75,683
808,182
624,276
827,207
649,661
303,617
119,393
3,547,799
3,332,336
Consolidated
2020
$
2019
$
(7,647,544)
(8,570,754)
(2,103,075)
(2,356,957)
82,583
1,479,899
436
(323,262)
(224,510)
8,143
40,917
94,829
213,772
-
-
12,590
(1,079,786)
1,216,911
(70,449)
1,792
(68,468)
(1,994,849)
1,109,868
581,052
4,538
299,391
-
-
Consolidated
2020
$
2019
$
34,389,517
27,100,000
9,457,117
7,452,500
The above potential tax benefit for tax losses has not been recognised in the statement of financial position. These
tax losses can only be utilised in the future if the continuity of ownership test is passed, or failing that, the same
business test is passed.
45
Total Brain Limited
Notes to the financial statements
30 June 2020
Note 8. Income tax (continued)
Brain Resource, Inc., incorporated in California USA has carry-forward unused tax losses of $21,397,531 as at 30
June 2020 (2019: $15,600,000). The Company recognised deferred tax assets in respect of these tax losses as at 30
June 2020 of $nil (2019: $nil). The losses remain available to offset future income tax, but the directors have chosen
not to recognise a deferred tax asset in respect of them, until it is demonstrated that the realisation of the deferred
tax is more likely than not.
The Australian based companies have carry-forward unused tax losses of $28,912,928 as of 30 June 2020 (2019:
$25,800,000). The Company concluded that $4,378,259 (2019: $3,900,000) of the deferred tax asset relating to
carry-forward unused tax losses in Australia of $15,920,942 (2019: 14,300,000) is recoverable, within the requisite
timeframes, based on budget estimates for future taxable income as approved by the Company’s Board of Directors.
Deferred tax liability
Deferred tax liability comprises temporary differences attributable to:
Amounts recognised in profit or loss:
Development costs
Losses carried forward
Tax losses not recognised as DTA
Provisions
Foreign exchange
Other
Deferred tax liability
Movements:
Opening balance
Closing balance
Note 9. Current assets - cash and cash equivalents
Cash at bank
Consolidated
2020
$
2019
$
4,529,022
(13,917,512)
9,539,253
(117,996)
32,398
-
3,852,561
(11,839,369)
7,936,033
(115,144)
233,966
(2,882)
65,165
65,165
65,165
65,165
65,165
65,165
Consolidated
2020
$
2019
$
11,104,729
5,214,802
46
Total Brain Limited
Notes to the financial statements
30 June 2020
Note 10. Current assets - trade and other receivables
Trade receivables
Less: Allowance for expected credit losses
Other receivables
Government grant receivable for research and development tax incentive (R&D)
Government grant receivable - others
Consolidated
2020
$
2019
$
480,675
(384)
480,291
66,946
1,152,955
1,137,075
2,356,976
654,498
(172)
654,326
6,834
150,000
-
156,834
2,837,267
811,160
Allowance for expected credit losses
The Group has recognised a loss of $266 (2019: $13,354) in profit or loss in respect of the expected credit losses for
the year ended 30 June 2020.
The ageing of the receivables and allowance for expected credit losses provided for above are as follows:
Consolidated
Not overdue
0 to 3 months overdue
3 to 6 months overdue
Expected credit loss rate
2020
%
2019
%
Carrying amount
2019
$
2020
$
-
-
1.47%
-
-
6.28%
227,712
226,896
26,067
516,050
135,713
2,735
480,675
654,498
Allowance for expected
credit losses
2020
$
2019
$
-
-
384
384
-
-
172
172
The Group is not affected by Coronavirus (COVID-19) pandemic, thus no revisions on the calculation of expected
credit losses has been applied as at 30 June 2020.
Movements in the allowance for expected credit losses are as follows:
Opening balance
Additional provisions recognised
Receivables written off during the year as uncollectable
Unused amounts reversed
Closing balance
Consolidated
2020
$
2019
$
172
266
(54)
-
384
19,002
13,354
(32,724)
540
172
47
Total Brain Limited
Notes to the financial statements
30 June 2020
Note 11. Current assets - contract assets
Contract assets
Reconciliation
Reconciliation of the written down values at the beginning and end of the current and
previous financial year are set out below:
Opening balance
Additions
Transfer to trade receivables
Exchange differences
Closing balance
Note 12. Non-current assets - plant and equipment
Plant and equipment - at cost
Less: Accumulated depreciation
Consolidated
2020
$
2019
$
3,025
89,935
89,935
3,105
(91,225)
1,210
-
89,935
-
-
3,025
89,935
Consolidated
2020
$
2019
$
1,398,793
(1,088,437)
1,272,376
(1,025,027)
310,356
247,349
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set
out below:
Consolidated
Balance at 1 July 2018
Additions
Exchange differences
Depreciation expense
Balance at 30 June 2019
Additions
Exchange differences
Depreciation expense
Balance at 30 June 2020
48
Plant and
equipment
$
221,636
78,520
(6,017)
(46,790)
247,349
126,417
(1,441)
(61,969)
310,356
Total Brain Limited
Notes to the financial statements
30 June 2020
Note 13. Non-current assets - intangibles
Development - at cost
Less: Accumulated amortisation
Less: Accumulated impairment
Consolidated
2020
$
2019
$
27,387,032 27,117,740
(2,349,899)
(9,867,823)
(2,519,165)
(9,867,823)
15,000,044 14,900,018
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set
out below:
Consolidated
Balance at 1 July 2018
Additions
R&D tax incentive
Impairment of assets
Amortisation expense
Balance at 30 June 2019
Additions*
R&D tax incentive
Amortisation expense
Balance at 30 June 2020
Development
$
14,659,278
2,585,125
(592,006)
(1,380,680)
(371,699)
14,900,018
2,610,223
(2,340,931)
(169,266)
15,000,044
*Government grants offset against additions is $374,547 (refer note 6 for more information).
At 30 June 2020, the intangible assets balance comprised databases assessed to have indefinite useful lives valued
at $12,901,953 (2019: $12,393,042) and finite lived assets valued at $2,098,091 (2019: $2,506,976).
Impairment testing
The intangible assets are tested for impairment as a single Cash Generating Unit ('CGU'), as the individual assets do
not currently generate largely independent cash flows.
As at the reporting date, the intangible assets were tested for impairment, where the recoverable amount was based
on fair value less costs of disposal. Fair value is determined by the Directors and management based on an
assessment of the price that would be received to sell the intangibles of the Group, including the Total Brain
International Database ('TBID') and iSPOT in an orderly transaction between market participants at the measurement
date.
The approach and key assumptions used in the assessment of fair value was predominantly based on reference to
the market capitalisation of the Company at the reporting date and further validated using the revenue multiple
valuation approach, utilising a revenue multiple average of 2020: 5.3 (2019: 6.7) times revenue, being a discount of
30% on the internet software industry comparatives for listed companies.
The recoverable amount was higher than the carrying amount and therefore no further impairment expense was
required (2019: impairment expense of $1,380,680). As the valuation was based on a combination of observable
market data and unobservable inputs, the valuation was considered to be level 2 in the fair value hierarchy.
49
Total Brain Limited
Notes to the financial statements
30 June 2020
Note 13. Non-current assets - intangibles (continued)
Sensitivity
As disclosed in note 3, the Directors have made judgements and estimates in respect of impairment testing of
intangible assets. Any reasonable change in the key assumptions would not result in an impairment charge.
Note 14. Current liabilities - trade and other payables
Trade payables
Accrued expenses
Other payables
Refer to note 22 for further information on financial instruments.
Note 15. Current liabilities - contract liabilities
Contract liabilities
Reconciliation
Reconciliation of the written down values at the beginning and end of the current and
previous financial year are set out below:
Opening balance
Payments received in advance
Transfer to revenue - included in the opening balance
Exchange differences
Closing balance
Consolidated
2020
$
2019
$
148,147
273,076
39,755
248,493
207,474
1,991
460,978
457,958
Consolidated
2020
$
2019
$
956,760
209,489
209,489
982,125
(219,213)
(15,641)
-
380,348
(170,859)
-
956,760
209,489
Unsatisfied performance obligations
The aggregate amount of the transaction price allocated to the performance obligations that are unsatisfied at the
end of the reporting period was $956,760 as at 30 June 2020 ($209,489 as at 30 June 2019) and is expected to be
recognised as revenue in future periods as follows:
Within 6 months
6 to 12 months
12 to 18 months
50
Consolidated
2020
$
2019
$
662,399
286,899
7,462
112,741
96,748
-
956,760
209,489
Total Brain Limited
Notes to the financial statements
30 June 2020
Note 16. Current liabilities - borrowings
Bank loan
Refer to note 22 for further information on financial instruments.
Consolidated
2020
$
2019
$
1,106,575
-
On 3 May 2020, a bank loan was granted to Brain Resource Inc. The loan matures 1 May 2022. Interest is 1% per
annum paid monthly in arrears. No repayments are due within six months from the date of disbursements of the bank
loan.
A loan forgiveness maybe applied to the bank loan in an amount equal to the following cost incurred in relation to the
loan during the 8-week period beginning on the date of first disbursement of the loan:
(a) payroll costs
(b) any payment of interest on a covered mortgage obligation
(c) any payment on a covered rent obligation
(d) any covered utility payment
The loan forgiveness is subject to the eligibility requirements of the Coronavirus Aid, Relief and Economic Security
Act ('CARES Act') Section 1106 in the United States. Funds provided in the form of loans will be fully forgiven when
used for payroll costs, interest on mortgages, rent, and utilities. The program provides small business with funds to
pay up to 8 weeks of payroll costs including benefits. The Company covenants to use the proceeds from the loan for
the purposes authorised by the CARES Act. The Company expects to be eligible for loan forgiveness.
Note 17. Current liabilities - employee benefits
Annual leave
Long service leave
Note 18. Non-current liabilities - employee benefits
Long service leave
Note 19. Equity - issued capital
Consolidated
2020
$
2019
$
280,921
145,952
281,543
103,458
426,873
385,001
Consolidated
2020
$
2019
$
2,205
33,704
Ordinary shares - fully paid
108,303,784 777,688,418
78,425,180
64,753,937
Consolidated
2020
Shares
2019
Shares
2020
$
2019
$
51
Total Brain Limited
Notes to the financial statements
30 June 2020
Note 19. Equity - issued capital (continued)
Movements in ordinary share capital
Details
Date
Shares
Issue price
$
Balance
Issue of shares
Issue of shares
Issue of shares
Issue of shares
Issue of shares
Share issue transaction costs, net of tax
Balance
Issue of shares
Issue of shares upon exercise of options
Issue of shares
Issue of shares
Consolidation of shares at 10:1
Share issue transaction costs, net of tax
1 July 2018
22 March 2019
11 April 2019
1 May 2019
7 May 2019
9 May 2019
30 June 2019
14 November 2019
22 November 2019
15 January 2020
16 January 2020
17 January 2020
531,259,868
132,814,948
32,027,748
25,115,107
55,470,747
1,000,000
-
777,688,418
175,194,836
1,000,000
66,826,086
62,326,903
(974,732,459)
-
58,080,521
3,718,818
896,777
703,223
1,553,180
28,000
(226,582)
$0.0280
$0.0280
$0.0280
$0.0280
$0.0280
$0.0000
64,753,937
8,058,962
45,000
3,074,000
2,867,038
-
(373,757)
$0.0460
$0.0450
$0.0460
$0.0460
$0.0000
$0.0000
Balance
30 June 2020
108,303,784
78,425,180
Ordinary shares
Ordinary shares entitle the holder to participate in any dividends declared and any proceeds attributable to
shareholders should the Company be wound up, in proportions that consider both the number of shares held and the
extent to which those shares are paid up. The fully paid ordinary shares have no par value and the Company does
not have a limited amount of authorised capital.
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll
each share shall have one vote.
Share consolidation
Following shareholder approval at an Extraordinary General Meeting (‘EGM’) held on 10 January 2020, it was
resolved that all shares in the Company be consolidated on the basis that every ten shares be consolidated into one
share. The effective date of consolidation was 17 January 2020.
Share buy-back
There is no current on-market share buy-back.
Capital risk management
The Group's objectives when managing capital is to safeguard its ability to continue as a going concern, so that it can
provide returns for shareholders and benefits for other stakeholders and to maintain an optimum capital structure to
reduce the cost of capital.
Capital is regarded as total equity, as recognised in the statement of financial position, plus net debt. Net debt is
calculated as total borrowings less cash and cash equivalents.
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to
shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.
The Group would look to raise capital when an opportunity to invest in a business or company was seen as value
adding relative to the current Company's share price at the time of the investment. The Group is not actively pursuing
additional investments in the short term as it continues to integrate and grow its existing businesses in order to
maximise synergies.
52
Total Brain Limited
Notes to the financial statements
30 June 2020
Note 19. Equity - issued capital (continued)
The Group is not subject to any financing covenants.
The capital risk management policy remains unchanged from the 30 June 2019 Annual Report.
Note 20. Equity - reserves
Foreign currency reserve
Share-based payments reserve
Consolidated
2020
$
2019
$
425,791
3,952,196
581,846
3,651,896
4,377,987
4,233,742
Foreign currency reserve
The reserve is used to recognise exchange differences arising from the translation of the financial statements of
foreign operation to Australian dollars.
Share-based payments reserve
The reserve is used to recognise the value of equity benefits provided to employees and directors as part of their
remuneration, and other parties as part of their compensation for services.
Movements in reserves
Movements in each class of reserve during the current and previous financial year are set out below:
Consolidated
Balance at 1 July 2018
Foreign currency translation
Share-based payments
Balance at 30 June 2019
Foreign currency translation
Share-based payments
Balance at 30 June 2020
Note 21. Equity - dividends
Foreign
currency
$
Share-based
payments
$
Total
$
395,053
186,793
-
3,503,106
-
148,790
3,898,159
186,793
148,790
581,846
(156,055)
-
3,651,896
-
300,300
4,233,742
(156,055)
300,300
425,791
3,952,196
4,377,987
There were no dividends paid, recommended or declared during the current or previous financial year.
Note 22. Financial instruments
Financial risk management objectives
The Group's activities expose it to a variety of financial risks: market risk (including foreign currency risk, price risk
and interest rate risk), credit risk and liquidity risk. The Group's overall risk management program focuses on the
unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance of
the Group. These methods include sensitivity analysis in the case of interest rate, foreign exchange and other price
risks and ageing analysis for credit risk.
53
Total Brain Limited
Notes to the financial statements
30 June 2020
Note 22. Financial instruments (continued)
Risk management is carried out by senior finance executives ('finance') under policies approved by the Board of
Directors ('the Board'). These policies include identification and analysis of the risk exposure of the Group and
appropriate procedures, controls and risk limits. Finance identifies, evaluates and hedges financial risks within the
Group's operating units. Finance reports to the Board on a monthly basis.
Market risk
Foreign currency risk
The Group undertakes certain transactions denominated in foreign currency and is exposed to foreign currency risk
through foreign exchange rate fluctuations.
Foreign exchange risk arises from future commercial transactions and recognised financial assets and financial
liabilities denominated in a currency that is not the entity's functional currency. The risk is measured using sensitivity
analysis and cash flow forecasting.
The carrying amount of the Group's foreign currency denominated financial assets and financial liabilities at the
reporting date were as follows:
Consolidated
US dollars
Assets
Liabilities
2020
$
2019
$
2020
$
2019
$
10,364,309
4,742,510
2,262,017
517,527
The Group had net assets denominated in foreign currencies of $8,102,292 (assets of $10,364,309 less liabilities of
$2,262,017) as at 30 June 2020 (2019: $4,224,983 (assets of $4,742,510 less liabilities of $517,527)). Based on this
exposure, had the Australian dollars weakened/strengthened by 10% (2019: weakened/strengthened by 10%)
against these foreign currencies with all other variables held constant, the Group's profit before tax for the year would
have been $501,740 lower/higher (2019: $561,003 lower/higher) and equity would have been $900,985 lower/higher
(2019: $462,106 lower/higher). The percentage change is the expected overall volatility of the significant currencies,
which is based on management's assessment of reasonable possible fluctuations taking into consideration
movements over the last 12 months each year and the spot rate at each reporting date. The actual foreign exchange
loss for the year ended 30 June 2020 was $822 (2019: loss of $45,562).
Price risk
The Group is not exposed to any significant price risk.
Interest rate risk
The Group's main interest rate risk arises from short-term deposits. Interest rates applicable to cash financial assets
were 0.1% (2019: 0.4%) with maturities of less than 1 year. All other balances are non-interest-bearing.
The Group's exposure to market interest rates relates primarily to the short term deposits. The Board has formed the
view that these funds be held in either bank deposits or AAA short term bonds. Currently holdings are in cash
deposits with the National Australia Bank and Citibank. Based on an average cash balance, constant currency
weightings and an average interest rate, a +/-10% increase in interest rates would have equated to a change in the
after tax result of around [+/-0%] (2019: +/-0%).
54
Total Brain Limited
Notes to the financial statements
30 June 2020
Note 22. Financial instruments (continued)
As at the reporting date, the Group had the following variable rate short-term deposits outstanding:
Consolidated
2020
2019
Weighted
average
interest rate
%
Balance
$
Weighted
average
interest rate
%
Balance
$
Cash and short-term deposits
0.01%
11,104,729
0.40%
5,214,802
Net exposure to cash flow interest rate risk
11,104,729
5,214,802
An analysis by remaining contractual maturities is shown in 'liquidity and interest rate risk management' below.
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to
the Group. The Group has a strict code of credit, including obtaining agency credit information, confirming references
and setting appropriate credit limits. The Group obtains guarantees where appropriate to mitigate credit risk. The
maximum exposure to credit risk at the reporting date to recognised financial assets is the carrying amount, net of
any provisions for expected credit losses of those assets, as disclosed in the statement of financial position and
notes to the financial statements. The Group does not hold any collateral.
The Group has adopted a lifetime expected loss allowance in estimating expected credit losses to trade receivables
through the use of a provisions matrix using fixed rates of credit loss provisioning. These provisions are considered
representative across all customers of the Group based on recent sales experience, historical collection rates and
forward-looking information that is available. As disclosed in note 10,no revisions were required to the calculation of
expected credit losses as a result of Coronavirus (COVID-19) pandemic.
The Group has a credit risk exposure with three major customers (2019: a major US affinity group), which as at 30
June 2020 owed the Group $282,436 (59% of trade receivables) (2019: $355,957 (54% of trade receivables)). This
balance was within its terms of trade and no impairment was made as at 30 June 2020. There are no guarantees
against this receivable but management closely monitors the receivable balance on a monthly basis and is in regular
contact with this customer to mitigate risk.
Generally, trade receivables are written off when there is no reasonable expectation of recovery. Indicators of this
include the failure of a debtor to engage in a repayment plan, no active enforcement activity and a failure to make
contractual payments for a period greater than 1 year.
Liquidity risk
The Group’s objective is to maintain a balance between continuity of funding and flexibility, including through
accessing new equity funding. All trade creditors and other payables and interest-bearing loans have a maturity
profile of being repayable within six months (2019: within six months).
The Group manages liquidity risk by maintaining adequate cash reserves by continuously monitoring actual and
forecast cash flows and matching the maturity profiles of financial assets and liabilities.
55
Total Brain Limited
Notes to the financial statements
30 June 2020
Note 22. Financial instruments (continued)
Remaining contractual maturities
The following tables detail the Group's remaining contractual maturity for its financial instrument liabilities. The tables
have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which
the financial liabilities are required to be paid. The tables include both interest and principal cash flows disclosed as
remaining contractual maturities and therefore these totals may differ from their carrying amount in the statement of
financial position.
Consolidated - 2020
Non-derivatives
Non-interest bearing
Trade and other payables
Interest-bearing - variable
Bank loans
Total non-derivatives
Consolidated - 2019
Non-derivatives
Non-interest bearing
Trade and other payables
Total non-derivatives
Weighted
average
interest rate 1 year or less
%
$
Between 1
and 2 years
$
Between 2
and 5 years Over 5 years
$
$
-
187,902
1.00%
1,106,575
1,294,477
Weighted
average
interest rate 1 year or less
%
$
-
-
-
-
-
-
-
-
-
Between 1
and 2 years
$
Between 2
and 5 years Over 5 years
$
$
Remaining
contractual
maturities
$
187,902
1,106,575
1,294,477
Remaining
contractual
maturities
$
-
250,484
250,484
-
-
-
-
-
-
250,484
250,484
The cash flows in the maturity analysis above are not expected to occur significantly earlier than contractually
disclosed above.
Fair value of financial instruments
Unless otherwise stated, the carrying amounts of financial instruments reflect their fair value.
Note 23. Key management personnel disclosures
Compensation
The aggregate compensation made to directors and other members of key management personnel of the Group is
set out below:
Short-term employee benefits
Post-employment benefits
Share-based payments
56
Consolidated
2020
$
2019
$
1,593,539
4,734
227,733
1,935,408
435
74,882
1,826,006
2,010,725
Total Brain Limited
Notes to the financial statements
30 June 2020
Note 24. Remuneration of auditors
During the financial year the following fees were paid or payable for services provided by Grant Thornton, the auditor
of the Company:
Audit services - Grant Thornton
Audit or review of the financial statements
Other services - Grant Thornton
Transfer pricing review services
Note 25. Contingent liabilities
Consolidated
2020
$
2019
$
117,000
113,500
21,000
5,000
138,000
118,500
The Group has given bank guarantees as at 30 June 2020 of $10,500 (2019: $10,500) to various landlords.
As of 30 June 2019, the Group has a contingent liability in respect of an unresolved legal case regarding a dispute
with a former staff member. This was settled in November 2019. There are no contingent liability as of 30 June 2020.
Note 26. Commitments
Lease commitments
Committed at the reporting date but not recognised as liabilities, payable:
Within one year
One to five years
Consolidated
2020
$
2019
$
29,698
-
82,709
1,913
29,698
84,622
Lease commitments includes contracted amounts for office premises and server hosting under non-cancellable
operating leases expiring within two years with, in some cases, options to extend. The leases have various escalation
clauses. On renewal, the terms of the leases are renegotiated.
With the application of AASB 16, the Group recognised these leases as short-term leases and low value assets as
presented in note 2, thus no right-of-use assets and lease liabilities recognised as of 30 June 2020.
Note 27. Related party transactions
Parent entity
Total Brain Limited is the parent entity.
Subsidiaries
Interests in subsidiaries are set out in note 29.
Key management personnel
Disclosures relating to key management personnel are set out in note 23 and the remuneration report included in the
directors' report.
57
Total Brain Limited
Notes to the financial statements
30 June 2020
Note 27. Related party transactions (continued)
Transactions with related parties
There were no transactions with related parties during the current and previous financial year.
Receivable from and payable to related parties
There were no trade receivables from or trade payables to related parties at the current and previous reporting date.
Loans to/from related parties
There were no loans to or from related parties at the current and previous reporting date.
Note 28. Parent entity information
Set out below is the supplementary information about the parent entity.
Statement of profit or loss and other comprehensive income
Loss after income tax
Total comprehensive income
Statement of financial position
Total current assets
Total assets
Total current liabilities
Total liabilities
Equity
Issued capital
Share-based payments reserve
Accumulated losses
Total equity
Parent
2020
$
2019
$
(7,803,598)
(8,383,962)
(7,803,598)
(8,383,962)
Parent
2020
$
2019
$
31,047
11,248
26,579,676
20,414,240
-
-
191,831
194,340
78,425,180
3,952,196
(55,989,531)
64,753,937
3,651,896
(48,185,933)
26,387,845
20,219,900
Guarantees entered into by the parent entity in relation to the debts of its subsidiaries
The parent entity had no guarantees in relation to the debts of its subsidiaries as at 30 June 2020 and 30 June 2019.
Contingent liabilities
The parent entity had no contingent liabilities as at 30 June 2020 and 30 June 2019.
Capital commitments - Property, plant and equipment
The parent entity had no capital commitments for property, plant and equipment as at 30 June 2020 and 30 June
2019.
58
Total Brain Limited
Notes to the financial statements
30 June 2020
Note 28. Parent entity information (continued)
Significant accounting policies
The accounting policies of the parent entity are consistent with those of the Group, as disclosed in note 2, except for
the following:
●
●
Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity.
Dividends received from subsidiaries are recognised as other income by the parent entity and its receipt may be
an indicator of an impairment of the investment.
Note 29. Interests in subsidiaries
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in
accordance with the accounting policy described in note 2:
Name
BRC Operations Pty Ltd
BRC IP Pty Ltd
BRC Distribution Pty Ltd
BRC International Pty Ltd
BRC Development Pty Ltd
PoweringUpMBS Pty Ltd
Brain Resource, Inc.
MyBrainSolutions, Inc
Brain Resource Europe Limited
Principal place of business /
Country of incorporation
Australia
Australia
Australia
Australia
Australia
Australia
United States
United States
Ireland
Ownership interest
2019
2020
%
%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
Note 30. Reconciliation of loss after income tax to net cash used in operating activities
Loss after income tax expense for the year
(7,647,544)
(8,570,754)
Consolidated
2020
$
2019
$
Adjustments for:
Depreciation and amortisation
Impairment of intangibles
Share-based payments
Foreign exchange differences
Impairment of receivables
Research and development tax incentive
Change in operating assets and liabilities:
Increase in trade and other receivables
Decrease/(increase) in contract assets
Increase in prepayments
Increase/(decrease) in trade and other payables
Increase in contract liabilities
Increase/(decrease) in employee benefits
Net cash used in operating activities
59
231,235
-
300,300
822
266
1,337,112
418,489
1,380,680
148,790
45,562
13,526
960,172
(1,023,418)
86,910
(43,026)
3,884
747,271
10,373
(38,880)
(89,935)
-
(31,518)
209,489
(93,013)
(5,995,815)
(5,647,392)
Total Brain Limited
Notes to the financial statements
30 June 2020
Note 31. Changes in liabilities arising from financing activities
Consolidated
Balance at 1 July 2018
Balance at 30 June 2019
Net cash from financing activities
Balance at 30 June 2020
Note 32. Earnings per share
Bank loan
$
-
-
1,106,575
1,106,575
Consolidated
2020
$
2019
$
Loss after income tax attributable to the owners of Total Brain Limited
(7,647,544)
(8,570,754)
Weighted average number of ordinary shares used in calculating basic earnings per
share
94,750,313
58,782,006
Weighted average number of ordinary shares used in calculating diluted earnings per
share
94,750,313
58,782,006
Number
Number
Basic earnings per share
Diluted earnings per share
Cents
Cents
(8.07)
(8.07)
(14.58)
(14.58)
The weighted average number of ordinary shares for 2019 has been restated for the effect of the 10:1 share
consolidation completed in January 2020, in accordance with AASB 133 'Earnings per share'.
19,809,015 options (2019: 19,548,560 options) over ordinary shares are not included in the calculation of diluted
earnings per share because they are anti-dilutive for the year ended 30 June 2020. These options could potentially
dilute basic earnings per share in the future.
Note 33. Share-based payments
A share option plan has been established by the Group and approved by shareholders at a general meeting, whereby
the Group may, at the discretion of the Nomination and Remuneration Committee, grant options over ordinary shares
in the Company to the personnel of the Group. The options are issued for nil consideration and are granted in
accordance with performance guidelines established by the Nomination and Remuneration Committee.
Options consolidation
Following shareholder approval at an Extraordinary General Meeting (‘EGM’) held on 10 January 2020, it was
resolved that all options in the Company be consolidated on the basis that every ten options be consolidated into one
option. The effective date of consolidation was 13 January 2020.
60
Total Brain Limited
Notes to the financial statements
30 June 2020
Note 33. Share-based payments (continued)
Set out below are summaries of options granted under the plan:
2020
Grant date
Expiry date
Exercise
price
14/04/2015
21/12/2016
22/05/2017
01/07/2017
01/07/2017
01/07/2017
16/07/2017
16/07/2017
16/07/2017
24/07/2017
24/07/2017
24/07/2017
07/08/2017
07/08/2017
07/08/2017
14/12/2017
14/12/2017
14/12/2017
14/12/2017
08/01/2018
08/01/2018
08/01/2018
24/02/2018
28/02/2018
01/04/2018
01/04/2018
01/04/2018
01/04/2018
29/04/2019
29/04/2019
29/04/2019
30/04/2018
30/04/2018
30/04/2018
30/04/2018
31/07/2018
31/07/2018
31/07/2018
31/07/2018
14/04/2020
29/11/2021
22/05/2022
17/05/2022
17/05/2022
17/05/2022
16/07/2022
16/07/2022
16/07/2022
24/07/2022
24/07/2022
24/07/2022
07/08/2022
07/08/2022
07/08/2022
22/05/2022
22/05/2022
22/05/2022
10/01/2023
07/01/2023
07/01/2023
07/01/2023
23/02/2023
27/02/2023
31/03/2023
31/03/2023
31/03/2023
31/03/2023
28/04/2024
28/04/2024
28/04/2024
29/04/2023
29/04/2023
29/04/2023
29/04/2023
30/07/2023
30/07/2023
30/07/2023
30/07/2023
$3.7500
$2.0000
$0.8000
$0.8000
$1.2000
$1.6000
$0.8000
$1.2000
$1.6000
$0.8000
$1.2000
$1.6000
$0.8000
$1.2000
$1.6000
$0.8000
$1.2000
$1.6000
$1.0000
$0.8000
$1.2000
$1.6000
$0.8000
$0.8000
$0.8000
$1.2000
$1.6000
$2.4000
$0.8000
$1.2000
$1.6000
$0.8000
$1.2000
$1.6000
$2.4000
$0.8000
$1.2000
$1.6000
$2.4000
Balance at
the start of
the year
500,000
-
5,000,000
4,765,377
588,459
1,176,918
17,366,478
4,455,493
8,910,986
8,951,563
2,650,521
5,301,042
480,202
480,202
960,404
28,232,956
9,410,985
18,821,970
-
1,920,810
1,920,810
3,841,620
300,000
300,000
1,599,346
1,441,477
1,915,079
1,441,477
480,202
480,202
960,404
-
-
-
-
-
-
-
-
134,654,983
Granted
Consolidation
Expired/
forfeited/
other*
Balance at
the end of
the year
(688,500)
(449,550)
(4,500,000)
(4,288,839)
(529,613)
(1,059,226)
(15,629,830)
(4,009,944)
(8,019,887)
(8,056,407)
(2,385,469)
(4,770,938)
-
-
-
(25,409,660)
(8,469,887)
(16,939,773)
(3,600,000)
(1,728,729)
(1,728,729)
(3,457,458)
(270,000)
(270,000)
(1,370,857)
(1,228,775)
(1,655,015)
(1,228,775)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
97,656
97,656
97,656
97,656
205,078
205,078
205,078
205,078
(87,890)
(87,890)
(87,890)
(87,890)
(184,570)
(184,570)
(184,570)
(184,570)
1,210,936 (122,835,701)
188,500*
499,500*
-
-
-
-
-
-
-
-
-
-
(480,202)
(480,202)
(960,404)
-
-
-
4,000,000*
-
-
-
-
-
(76,172)
(76,172)
(76,172)
(76,172)
(480,202)
(480,202)
(960,404)
-
-
-
-
-
-
-
-
541,696
-
49,950
500,000
476,538
58,846
117,692
1,736,648
445,549
891,099
895,156
265,052
530,104
-
-
-
2,823,296
941,098
1,882,197
400,000
192,081
192,081
384,162
30,000
30,000
152,317
136,530
183,892
136,530
-
-
-
9,766
9,766
9,766
9,766
20,508
20,508
20,508
20,508
13,571,914
*
Represents a correction for options which were issued under the share option plan in prior periods but which
were not included in the above table in prior periods.
61
Total Brain Limited
Notes to the financial statements
30 June 2020
Note 33. Share-based payments (continued)
2020
(continued)
Grant date
Expiry date
Exercise
price
31/12/2018
31/12/2018
31/12/2018
31/12/2018
28/02/2019
28/02/2019
28/02/2019
28/02/2019
31/03/2019
31/03/2019
31/03/2019
31/03/2019
30/04/2019
30/04/2019
30/04/2019
30/04/2019
31/07/2019
31/07/2019
31/07/2019
31/07/2019
31/08/2019
31/08/2019
31/08/2019
31/08/2019
30/09/2019
30/09/2019
30/09/2019
30/09/2019
18/03/2019
18/03/2019
18/03/2019
18/03/2019
17/06/2019
17/06/2019
17/06/2019
17/06/2019
23/10/2019
23/10/2019
23/10/2019
23/10/2019
16/01/2020
30/12/2023
30/12/2023
30/12/2023
30/12/2023
27/02/2024
27/02/2024
27/02/2024
27/02/2024
30/03/2024
30/03/2024
30/03/2024
30/03/2024
29/04/2024
29/04/2024
29/04/2024
29/04/2024
30/07/2024
30/07/2024
30/07/2024
30/07/2024
30/08/2024
30/08/2024
30/08/2024
30/08/2024
29/09/2024
29/09/2024
29/09/2024
29/09/2024
18/03/2019
18/03/2020
18/03/2021
18/03/2022
16/06/2024
16/06/2024
16/06/2024
16/06/2024
22/10/2024
22/10/2024
22/10/2024
22/10/2024
16/01/2024
$0.8000
$1.2000
$1.6000
$2.4000
$0.8000
$1.2000
$1.6000
$2.4000
$0.8000
$1.2000
$1.6000
$2.4000
$0.8000
$1.2000
$1.6000
$2.4000
$0.8000
$1.2000
$1.6000
$2.4000
$0.8000
$1.2000
$1.6000
$2.4000
$0.8000
$1.2000
$1.6000
$2.4000
$0.4500
$0.4500
$0.4500
$0.4500
$0.4500
$0.4500
$0.4500
$0.4500
$0.8000
$0.8000
$0.8000
$0.8000
$0.4500
Balance at
the start of
the year
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
134,654,983
Granted Consolidation
(63,282)
(63,282)
(63,282)
(63,282)
(114,258)
(114,258)
(114,258)
(114,258)
(58,008)
(58,008)
(58,008)
(58,008)
(44,825)
(44,825)
(44,825)
(44,825)
(31,933)
(31,933)
(31,933)
(31,933)
(489,551)
(489,551)
(489,551)
(489,551)
(298,125)
(28,125)
(28,125)
(28,125)
(112,500)
(112,500)
(112,500)
(112,500)
(112,500)
(112,500)
(112,500)
(112,500)
(56,250)
(56,250)
(56,250)
(56,250)
70,313
70,313
70,313
70,313
126,953
126,953
126,953
126,953
64,453
64,453
64,453
64,453
49,805
49,805
49,805
49,805
35,481
35,481
35,481
35,481
543,945
543,945
543,945
543,945
331,250
31,250
31,250
31,250
125,000
125,000
125,000
125,000
125,000
125,000
125,000
125,000
62,500
62,500
62,500
62,500
2,066,115
8,515,851 (127,550,629)
-
Expired/
forfeited/
other*
Balance at
the end of
the year
7,031
-
7,031
-
7,031
-
7,031
-
12,695
-
12,695
-
12,695
-
12,695
-
6,445
-
6,445
-
6,445
-
6,445
-
4,980
-
4,980
-
4,980
-
4,980
-
3,548
-
3,548
-
3,548
-
3,548
-
54,394
-
54,394
-
54,394
-
54,394
-
33,125
-
3,125
-
3,125
-
3,125
-
12,500
-
12,500
-
12,500
-
12,500
-
12,500
-
12,500
-
12,500
-
12,500
-
6,250
-
6,250
-
6,250
-
6,250
-
206,612
(1,859,503)
(1,317,807) 14,302,398
Weighted average exercise price
$1.1410
$1.0770
$1.1360
$2.1260
$1.1220
62
Total Brain Limited
Notes to the financial statements
30 June 2020
Note 33. Share-based payments (continued)
2019
Grant date
Expiry date
price
Exercise
Balance at
the start of
the year
Granted
Expired/
forfeited/
other
Balance at
the end of
the year
Exercised
26/03/2014
14/04/2015
22/05/2017
01/07/2017
01/07/2017
01/07/2017
16/07/2017
16/07/2017
16/07/2017
24/07/2017
24/07/2017
24/07/2017
07/08/2017
07/08/2017
07/08/2017
14/12/2017
14/12/2017
14/12/2017
08/01/2018
08/01/2018
08/01/2018
02/02/2018
24/02/2018
28/02/2018
01/04/2018
01/04/2018
01/04/2018
01/04/2018
13/06/2018
13/06/2018
13/06/2018
13/06/2018
29/04/2019
29/04/2019
29/04/2019
26/03/2019
14/04/2020
22/05/2022
17/05/2022
17/05/2022
17/05/2022
16/07/2022
16/07/2022
16/07/2022
24/07/2022
24/07/2022
24/07/2022
07/08/2022
07/08/2022
07/08/2022
22/05/2022
22/05/2022
22/05/2022
07/01/2023
07/01/2023
07/01/2023
19/12/2018
23/02/2023
27/02/2023
31/03/2023
31/03/2023
31/03/2023
31/03/2023
12/06/2023
12/06/2023
12/06/2023
12/06/2023
28/04/2024
28/04/2024
28/04/2024
325,000
$0.3600
500,000
$0.3750
5,000,000
$0.0800
4,765,377
$0.0800
588,459
$0.1200
$0.1600
1,176,918
$0.0800 17,366,478
4,455,493
$0.1200
8,910,986
$0.1600
8,951,563
$0.0800
2,650,521
$0.1200
5,301,042
$0.1600
480,202
$0.0800
480,202
$0.1200
$0.1600
960,404
$0.0800 28,232,956
$0.1200
9,410,985
$0.1600 18,821,970
1,920,810
$0.0800
1,920,810
$0.1200
3,841,620
$0.1600
381,901
$0.0800
300,000
$0.0800
300,000
$0.0800
2,202,862
$0.0800
1,905,833
$0.1200
2,796,916
$0.1600
1,905,833
$0.2400
146,484
$0.0800
146,484
$0.1200
146,484
$0.1600
146,484
$0.2400
-
$0.0800
-
$0.1200
-
$0.1600
136,441,077
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
480,202
480,202
960,404
1,920,808
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(325,000)
-
-
500,000
-
5,000,000
-
4,765,377
-
588,459
-
1,176,918
- 17,366,478
-
4,455,493
-
8,910,986
-
8,951,563
-
2,650,521
-
5,301,042
-
480,202
-
480,202
-
960,404
- 28,232,956
-
9,410,985
- 18,821,970
-
1,920,810
-
1,920,810
-
3,841,620
(381,901)
-
-
300,000
-
300,000
(603,516)
1,599,346
(464,356)
1,441,477
(881,837)
1,915,079
(464,356)
1,441,477
(146,484)
-
(146,484)
-
(146,484)
-
(146,484)
-
-
480,202
-
480,202
-
960,404
(3,706,902) 134,654,983
Weighted average exercise price
$0.1150
$0.1300
$0.0000
$0.1600
$0.1140
63
Total Brain Limited
Notes to the financial statements
30 June 2020
Note 33. Share-based payments (continued)
Set out below are the options exercisable at the end of the financial year:
Grant date
Expiry date
21/12/2016
14/04/2015
22/05/2017
01/07/2017
16/07/2017
24/07/2017
07/08/2017
14/12/2017
08/01/2018
24/02/2018
28/02/2018
01/04/2018
29/04/2019
30/04/2018
30/04/2018
31/07/2018
31/12/2018
28/02/2019
31/03/2019
30/04/2019
18/03/2019
18/03/2019
17/06/2019
17/06/2019
23/10/2019
16/01/2020
29/11/2021
14/04/2020
22/05/2022
17/05/2022
16/07/2022
24/07/2022
07/08/2022
22/05/2022
07/01/2023
23/02/2023
27/02/2023
31/03/2023
28/04/2024
29/04/2023
29/04/2023
30/07/2023
30/12/2023
27/02/2024
30/03/2024
29/04/2024
18/03/2019
18/03/2020
16/06/2024
16/06/2024
22/10/2024
16/01/2024
2020
Number
2019
Number
49,950
-
500,000
653,076
2,627,747
1,425,260
-
6,046,592
384,162
30,000
30,000
336,210
-
9,766
9,766
20,508
7,031
12,695
6,445
4,981
12,500
12,500
12,500
12,500
6,250
206,612
-
500,000
5,000,000
5,942,295
21,821,971
11,602,084
960,404
47,054,926
1,920,810
120,000
120,000
2,072,948
480,202
-
-
-
-
-
-
-
-
-
-
-
-
-
12,417,051
97,595,640
The weighted average remaining contractual life of options outstanding at the end of the financial year was 2.14 years
(2019: 3.05 years).
For the options granted during the current financial year, the valuation model inputs used to determine the fair value at
the grant date, are as follows:
Grant date
Expiry date
Share price
at grant date
Exercise
price
Expected
volatility
Dividend
yield
Risk-free
interest rate
Fair value at
grant date
30/04/2018
30/04/2018
30/04/2018
30/04/2018
31/07/2018
31/07/2018
31/07/2018
31/07/2018
31/12/2018
31/12/2018
31/12/2018
31/12/2018
30/04/2023
30/04/2023
30/04/2023
30/04/2023
31/07/2023
31/07/2023
31/07/2023
31/07/2023
31/12/2023
31/12/2023
31/12/2023
31/12/2023
$0.4300
$0.4300
$0.4300
$0.4300
$0.4820
$0.4820
$0.4820
$0.4820
$0.3180
$0.3180
$0.3180
$0.3180
80.00%
80.00%
80.00%
80.00%
80.00%
80.00%
80.00%
80.00%
75.00%
75.00%
75.00%
75.00%
$0.8000
$1.2000
$1.6000
$2.4000
$0.8000
$1.2000
$1.6000
$2.4000
$0.8000
$1.2000
$1.6000
$2.4000
64
-
-
-
-
-
-
-
-
-
-
-
-
2.43%
2.43%
2.43%
2.43%
2.30%
2.30%
2.30%
2.30%
1.99%
1.99%
1.99%
1.99%
$0.2290
$0.1950
$0.1700
$0.1350
$0.2680
$0.2290
$0.1990
$0.1620
$0.1360
$0.1100
$0.0910
$0.0680
Total Brain Limited
Notes to the financial statements
30 June 2020
Note 33. Share-based payments (continued)
Grant date
Expiry date
Share price
at grant date
Exercise
price
Expected
volatility
Dividend
yield
Risk-free
interest rate
Fair value at
grant date
28/02/2019
28/02/2019
28/02/2019
28/02/2019
31/03/2019
31/03/2019
31/03/2019
31/03/2019
30/04/2019
30/04/2019
30/04/2019
30/04/2019
31/07/2019
31/07/2019
31/07/2019
31/07/2019
31/08/2019
31/08/2019
31/08/2019
31/08/2019
30/09/2019
30/09/2019
30/09/2019
30/09/2019
18/03/2019
18/03/2019
18/03/2019
18/03/2019
17/06/2019
17/06/2019
17/06/2019
17/06/2019
23/10/2019
23/10/2019
23/10/2019
23/10/2019
10/01/2020
28/02/2024
28/02/2024
28/02/2024
28/02/2024
31/03/2024
31/03/2024
31/03/2024
31/03/2024
30/04/2024
30/04/2024
30/04/2024
30/04/2024
31/07/2024
31/07/2024
31/07/2024
31/07/2024
31/08/2024
31/08/2024
31/08/2024
31/08/2024
30/09/2024
30/09/2024
30/09/2024
30/09/2024
18/03/2024
18/03/2024
18/03/2024
18/03/2024
17/06/2024
17/06/2024
17/06/2024
17/06/2024
23/10/2024
23/10/2024
23/10/2024
23/10/2024
16/01/2024
$0.2910
$0.2910
$0.2910
$0.2910
$0.2810
$0.2810
$0.2810
$0.2810
$0.2850
$0.2850
$0.2850
$0.2850
$0.2550
$0.2550
$0.2550
$0.2550
$0.3150
$0.3150
$0.3150
$0.3150
$0.5880
$0.5880
$0.5880
$0.5880
$0.2940
$0.2940
$0.2940
$0.2940
$0.2750
$0.2750
$0.2750
$0.2750
$0.5230
$0.5230
$0.5230
$0.5230
$0.7450
$0.8000
$1.2000
$1.6000
$2.4000
$0.8000
$1.2000
$1.6000
$2.4000
$0.8000
$1.2000
$1.6000
$2.4000
$0.8000
$1.2000
$1.6000
$2.4000
$0.8000
$1.2000
$1.6000
$2.4000
$0.8000
$1.2000
$1.6000
$2.4000
$0.4500
$0.4500
$0.4500
$0.4500
$0.4500
$0.4500
$0.4500
$0.4500
$0.8000
$0.8000
$0.8000
$0.8000
$0.4500
75.00%
75.00%
75.00%
75.00%
75.00%
75.00%
75.00%
75.00%
75.00%
75.00%
75.00%
75.00%
70.00%
70.00%
70.00%
70.00%
70.00%
70.00%
70.00%
70.00%
75.00%
75.00%
75.00%
75.00%
75.00%
75.00%
75.00%
75.00%
75.00%
75.00%
75.00%
75.00%
75.00%
75.00%
75.00%
75.00%
70.00%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1.71%
1.71%
1.71%
1.71%
1.44%
1.44%
1.44%
1.44%
1.38%
1.38%
1.38%
1.38%
0.87%
0.87%
0.87%
0.87%
0.69%
0.69%
0.69%
0.69%
0.78%
0.78%
0.78%
0.78%
1.61%
1.61%
1.61%
1.61%
1.09%
1.09%
1.09%
1.09%
0.83%
0.83%
0.83%
0.83%
0.88%
$0.1180
$0.0950
$0.0780
$0.0580
$0.1110
$0.0890
$0.0740
$0.0540
$0.1130
$0.0910
$0.0750
$0.0560
$0.0830
$0.0630
$0.0500
$0.0350
$0.1160
$0.0900
$0.0730
$0.0520
$0.3190
$0.2680
$0.2350
$0.1870
$0.1560
$0.1560
$0.1560
$0.1560
$0.1400
$0.1400
$0.1400
$0.1400
$0.2730
$0.2730
$0.2730
$0.2730
$0.4780
It is noted that some of the options in the above table have Grant dates that relate to prior reporting periods. The
relating share-based payment expense in relation to these options has been recognised in the current reporting
period only.
Any effect on prior period share-based payment expense has been considered immaterial by management.
65
Total Brain Limited
Notes to the financial statements
30 June 2020
Note 34. Events after the reporting period
The impact of the Coronavirus (COVID-19) pandemic is ongoing and while it has been financially positive for the
Group up to 30 June 2020, it is not practicable to estimate the potential impact, positive or negative, after the
reporting date. The situation is rapidly developing and is dependent on measures imposed by the Australian
Government and other countries, such as maintaining social distancing requirements, quarantine, travel restrictions
and any economic stimulus that may be provided.
On 5 August 2020, the shareholders at an extraordinary general meeting approved the adoption of a new share
option plan and the following options were subsequently issued:
● 2,600,000 new options and 2,823,297 replacement options to Mr Louis Gagnon;
● 1,205,156 new options to Dr Evian Gordon;
● 2,871,486 replacement options to various employees; and
● 4,758,907 new options to various employees.
No other matter or circumstance has arisen since 30 June 2020 that has significantly affected, or may significantly
affect the Group's operations, the results of those operations, or the Group's state of affairs in future financial years.
66
Total Brain Limited
Directors' declaration
30 June 2020
In the directors' opinion:
●
●
●
●
the attached financial statements and notes comply with the Corporations Act 2001, the Accounting Standards,
the Corporations Regulations 2001 and other mandatory professional reporting requirements;
the attached financial statements and notes comply with International Financial Reporting Standards as issued
by the International Accounting Standards Board as described in note 2 to the financial statements;
the attached financial statements and notes give a true and fair view of the Group's financial position as at 30
June 2020 and of its performance for the financial year ended on that date; and
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they
become due and payable.
The directors have been given the declarations required by section 295A of the Corporations Act 2001.
Signed in accordance with a resolution of directors made pursuant to section 295(5)(a) of the Corporations Act 2001.
On behalf of the directors
___________________________
Dr Evian Gordon
Chairman
28 August 2020
Sydney
67
Level 18, 145 Ann Street
Brisbane QLD 4000
Correspondence to:
GPO Box 1008
Brisbane QLD 4001
T +61 7 3222 0200
E info.qld@au.gt.com
W www.grantthornton.com.au
Independent Auditor’s Report
To the Members of Total Brain Limited
Report on the audit of the financial report
Opinion
We have audited the financial report of Total Brain Limited (the Company) and its subsidiaries (the Group), which
comprises the consolidated statement of financial position as at 30 June 2020, the consolidated statement of profit or loss
and other comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows
for the year then ended, and notes to the consolidated financial statements, including a summary of significant accounting
policies, and the Directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including:
a giving a true and fair view of the Group’s financial position as at 30 June 2020 and of its performance for the year
ended on that date; and
b complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are
further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report. We are
independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and
the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for
Professional Accountants (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled
our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Material uncertainty related to going concern
We draw attention to Note 2 in the financial statements, which indicates that the Group incurred a net loss of $7,647,544
during the year ended 30 June 2020, and net operating cash outflows of $5,995,815 for the year. As stated in Note 2, these
events or conditions, along with other matters as set forth in Note 2, indicate that a material uncertainty exists that may cast
doubt on the Group’s ability to continue as a going concern. Our opinion is not modified in respect of this matter.
Grant Thornton Audit Pty Ltd ACN 130 913 594
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
www.grantthornton.com.au
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients
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Liability limited by a scheme approved under Professional Standards Legislation.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial
report of the current period. These matters were addressed in the context of our audit of the financial report as a whole, and in
forming our opinion thereon, and we do not provide a separate opinion on these matters.
In addition to the matter described in the Material uncertainty related to going concern section, we have determined the
matters described below to be the key audit matters to be communicated in our report.
Key audit matter
How our audit addressed the key audit matter
Revenue recognition (Note 5)
The Group has recognised $3.9 million of revenue during the
period.
AASB 15 Revenue from Contracts with Customers requires
companies to assess revenue recognition using a five step
model focusing on meeting performance obligations.
This area is a key audit matter due to the judgement required
in assessing revenue recognition and the presumed increased
level of risk in relation to revenue recognition, particularly for
Total Brain Limited given the focus by stakeholders on
revenue growth.
Intangibles impairment (Note 13)
The Group has internally generated intangible assets primarily
consisting of research databases and technology platforms,
totalling $15.0 million as at 30 June 2020.
AASB 136 Impairment of Assets requires that an entity shall
assess (at least annually) whether there is any indication that
its finite life assets may be impaired. If impairment indicators
are present, the entity is required to undertake impairment
testing to determine whether the relevant carrying amount is in
excess of the recoverable amount.
For indefinite life intangibles assets, or for intangible assets
that are not yet available for use, an annual impairment test is
required.
The Group has both indefinite life intangible assets and finite
life intangible assets that have prima facie indicators of
impairment, and hence impairment testing is required for all
intangible assets.
This area is a key audit matter due to the inherent subjectivity
involved in Management’s judgements in estimating the
recoverable amount as part of evaluating potential impairment.
Our procedures included, amongst others:
• Understanding and documenting the key processes
and controls used to record revenue;
• Reviewing revenue recognition policies and
Management’s assessment of the application of the
five step model under AASB 15;
• Performing cut-off testing to assess whether revenue
has been recorded in the correct period by inspecting
supporting documentation;
• Analytically reviewing revenue values and associated
ratios, with any items outside of audit expectations
investigated further;
• Sampling revenue transactions statistically from the
general ledger and testing whether revenue
recognition is appropriate by agreeing through to a
sales contract, assessing the identification of
performance obligations and variable considerations,
and evaluating the timing of revenue recognition; and
• Evaluating the adequacy of related disclosures in the
financial report.
Our procedures included, amongst others:
• Obtaining Management’s impairment model and
testing the mathematical accuracy;
• Assessing the methodology used by Management
against the requirements of AASB 136;
• Assessing Management’s determination of the
Group’s CGUs based on our understanding of the
Business and the requirements of AASB 136;
• Evaluating the appropriateness of key assumptions
and inputs used in the calculations, by obtaining
corroborating evidence;
• Undertaking a sensitivity analysis on key inputs;
• Performing an assessment of replacement cost in
relation to key asset groups in considering if the
current carrying value is reasonable and supportable;
and
• Evaluating the adequacy of the disclosures relating to
intangible assets in the financial report.
Information other than the financial report and auditor’s report thereon
The Directors are responsible for the other information. The other information comprises the information included in the
Group’s annual report for the year ended 30 June 2020, but does not include the financial report and our auditor’s report
thereon.
Our opinion on the financial report does not cover the other information and we do not express any form of assurance
conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or
otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are
required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the financial report
The Directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in
accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the Directors
determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material
misstatement, whether due to fraud or error.
In preparing the financial report, the Directors are responsible for assessing the Group’s ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the
Directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee that an audit conducted in accordance with 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: http://www.auasb.gov.au/auditors_responsibilities/ar1_2020.pdf. This description forms part of
our auditor’s report.
Report on the remuneration report
Opinion on the remuneration report
We have audited the Remuneration Report included in pages 16 to 23 of the Directors’ report for the year ended 30 June
2020.
In our opinion, the Remuneration Report of Total Brain Limited, for the year ended 30 June 2020 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.
Grant Thornton Audit Pty Ltd
Chartered Accountants
CDJ Smith
Partner – Audit & Assurance
Brisbane, 28 August 2020
Total Brain Limited
Shareholder information
30 June 2020
The shareholder information set out below was applicable as at 3 August 2020.
Distribution of equitable securities
Analysis of number of equitable security holders by size of holding:
Number
of holders
of options
Number
of holders Number
of ordinary of ordinary ordinary
over
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and over
Holding less than a marketable parcel
Equity security holders
shares
shares
shares
149
273
138
273
86,732
733,496
1,088,499
9,609,672
91 96,785,385
924 108,303,784
193
138,876
1
3
4
29
15
52
-
Twenty largest quoted equity security holders
The names of the twenty largest security holders of quoted equity securities are listed below:
CITICORP NOMINEES PTY LIMITED
CS THIRD NOMINEES PTY LIMITED < HSBC CUST NOM AU LTD 13 A/C >
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
HSBC CUSTODY NOMINEES
STUTTGART PTY LTD
BNP PARIBAS NOMINEES PTY LTD < IB AU NOMS RETAILCLIENT DRP >
MORGAN STANLEY AUSTRALIA SECURITIES (NOMINEE) PTY LIMITED < NO 1
ACCOUNT >
INVIA CUSTODIAN PTY LIMITED < TORRIBLE SUPER FUND A/C >
MR GARRETT WALKER
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED - A/C 2
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
DR EVIAN GORDON
DBPC GROUP FINANCE PTY LTD < DBPC GROUP FINANCE A/C >
GLENEAGLE SECURITIES (AUST) PTY LTD
C & K BOTHWELL PTY LTD < BOTHWELL INVESTMENT A/C >
CEYX HOLDINGS PTY LTD
MR TIM YATES
COLEMAN FUNG
MR DAVID JOHN ACTON & MRS BROOKE ELIZABETH ACTON < THE ACTON
FAMILY A/C >
MRS DIANE COLMAN
72
Ordinary shares
% of total
Number held
32,181,835
10,507,673
6,224,416
5,855,282
3,900,001
2,886,631
2,723,340
2,557,312
2,040,154
1,875,337
1,862,196
1,124,025
1,025,000
993,687
908,888
900,000
715,441
715,441
620,000
600,000
shares
issued
29.71
9.70
5.75
5.41
3.60
2.67
2.51
2.36
1.88
1.73
1.72
1.04
0.95
0.92
0.84
0.83
0.66
0.66
0.57
0.55
80,216,659
74.06
Total Brain Limited
Shareholder information
30 June 2020
Unquoted equity securities
Options over ordinary shares issued
The following persons hold 20% or more of unquoted equity securities:
Name
Louis Gagnon
Robert Dominic Toresco
Class
Unlisted options
Unlisted options
Substantial holders
Substantial holders in the Company are set out below:
CITICORP NOMINEES PTY LIMITED
CS THIRD NOMINEES PTY LIMITED (HSBC CUST NOM AU LTD 13 A/C)
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
HSBC CUSTODY NOMINEES
Voting rights
The voting rights attached to ordinary shares are set out below:
Number
on issue
Number
of holders
20,223,727
52
Number held
6,146,593
5,000,000
Ordinary shares
% of total
shares
issued
Number held
32,181,835
10,507,673
6,224,416
5,855,282
29.71
9.70
5.75
5.41
Ordinary shares
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll
each share shall have one vote.
There are no other classes of equity securities.
73
ANNUAL REPORT
Year Ended 30 June 2020
ir@totalbrain.com
totalbrain.com
ASX: TTB ABN 24 094 069 682
74