13.5 million
women
39.5 million
images
One goal
Annual Report 2021
2
3
Prevent
advanced-stage
breast cancer
Every time a woman has a mammogram and
the images are added to our database, we
improve our ability to predict breast cancer.
And, ultimately, prevent it.
2
4
6
10
12
19
20
22
24
28
32
42
43
54
61
104
107
108
Introduction
About Volpara Health
Culture
The Challenge
Creating the Future
Our Moonshot
Rebranding
Highlights
Chair's Letter
CEO's Report
Directors' Report
Auditor's Independence Declaration
Remuneration Report
Independent Auditor's Report
Consolidated Financial Statements
Additional Information
Corporate Directory
Glossary
Volpara Health Annual Report 2021
4
ABOUT VOLPARA HEALTH
When we focus
on the individual,
we serve millions
2,000+
facilities have installed Volpara
software, including top US centres
Since we first listed on the ASX in April
2016, we have raised A$132 million,
including A$37 million in April/May
2020. We’ve also made two significant
acquisitions in MRS Systems, Inc.,
and CRA Health, LLC. With offices in
Seattle and Boston, and staff on four
continents, we are proudly based in
Wellington, New Zealand.
In the sections that follow, we’ll look
more closely at the strategy guiding
our work.
Volpara’s strategy is one
rooted in deeply held
principles. Partnering
artificial intelligence
with rigorous, peer-
reviewed science, we
develop products that
empower women and
optimise screening.
We understand that
providing personalised
breast care to one
woman at a time is the
most effective way to
serve millions of women.
From the very beginning, we have
endeavoured to take the best of the
academic and commercial worlds to
produce an elegant, practical solution
for the everyday world. A world where
the prediction of breast cancer risk is
so precise that advanced-stage cancer
becomes a thing of the past, and the
prevention of breast cancer altogether
is possible in a tomorrow that's getting
closer and closer.
On our journey to hasten the arrival of
that day, we have developed the breast
health industry’s most scientifically
validated technology platform. Our
work is supported by numerous
patents, trademarks, and regulatory
registrations, including FDA clearance
and CE marking, and an unmatched
volume of peer-reviewed publications.
And we are the preferred partner of
leading clinical sites around the world.
13.5 m+
women across 39 countries have
had their breast composition
assessed by Volpara
3,600+
radiographers use Volpara
to monitor performance
39.5 m+
mammography & tomosynthesis images
have been anonymised and evaluated
for positioning and compression, and
stored in Volpara’s cloud
300+
peer-reviewed articles and
research abstracts that
include Volpara technology
5
About Volpara Health
Volpara Health Annual Report 2021 6
CULTURE
We are greater
than the sum of
our parts
Though it’s many years since Volpara
was a tiny startup in Ralph Highnam's
house, in a back bedroom overlooking
Wellington's Mount Victoria, the
sense of mission burns as brightly
as ever. Walk through the doors
of the Wellington office and you’ll
find an atmosphere humming with
engagement—lots of animated
discussions, yes, but also many heads
down doing the work that bit by bit,
piece by piece, adds up to world-
leading software.
This is a company few find themselves
in by accident, as nearly everyone has
a story of a friend or family member
affected by breast cancer. Some are
industry veterans with decades of
experience in mammography, others
have joined the ranks as experts in
other fields, and still others are newly
minted scientists, software engineers,
or designers. Highly educated, they
come from all over the world, a mix of
native New Zealanders and immigrants
to Aotearoa, united in common cause.
“I joined Volpara to
help improve the
experience of women
and families impacted
by breast cancer. I
love knowing that our
work contributes to a
more compassionate
system.”
—Anonymous, Volpara Employee
7
2021
175 people
2020
174 people
2019
80 people
2018
52 people
2017
38 people
NUMBER OF EMPLOYEES
Culture
Volpara Health Annual Report 2021 8
CULTURE
9
“Last year, during the height of the pandemic,
a dear friend discovered a lump and was
diagnosed with third-stage breast cancer. My
wife returned to the States to care for her, to
help organise her treatment plan, navigate a
complex medical system, weigh her options.
“I saw then that breast cancer never affects
a single person in isolation, and that the
work we do at Volpara is not just for those
individuals but for everyone who loves them.”
Ryan Rasmussen
Lead Writer/Editor
“We are developing algorithms and software
that I am so happy are being used on my mum!”
“My best friend was diagnosed with breast
cancer from her first mammogram at 45.
She was lucky they caught it early, but even
now she is still confused and feels bamboozled
by the system and its jargon.”
“I came to Volpara for all the women in my life
impacted by breast cancer, including Prue, a
mum of two who passed away at 35. I stay
because the job is not yet done.”
Volpara Employees | Wellington, New Zealand
Jade Yip
Product Manager,
Science & Research
Anonymous
Volpara Employee
Anonymous
Volpara Employee
Culture
Volpara Health Annual Report 2021 10
THE CHALLENGE
11
Breast cancer is now the
most-diagnosed cancer in
the world.1 Every year, over
2.25 million people are told
they have breast cancer.
Every year, over 680,000
people will die from it.
They shouldn't have to.
Despite huge advancements
in screening technology, these
numbers are only increasing.
So, at Volpara we ask:
How can we do better?
2,261,419
worldwide cases
of breast cancer2
684,996
worldwide deaths
from breast cancer2
324,000
US cases of breast
cancer (approx.)
40,000
US deaths from
breast cancer
1. https://www.who.int/news/item/03-02-2021-breast-cancer-now-most-common-form-of-cancer-who-taking-action
2. https://gco.iarc.fr/today/data/factsheets/populations/840-united-states-of-america-fact-sheets.pdf
The Challenge
Volpara Health Annual Report 2021 12
CREATING THE FUTURE
Our quest to prevent
advanced-stage
cancer
13
By providing key insights,
Volpara helps radiographers
improve their performance
over time.
1976
Taking a risk on risk
In 1976, radiologist John Wolfe
first hypothesized a link between
mammographic breast density
patterns and the risk of developing
breast cancer. His early work
generated a great deal of interest but
could not be easily replicated due
in part to the subjectivity of judging
his patterns, and the area fell into
disrepute clinically. Norman Boyd then
developed more quantitative ways of
measuring breast density, moving away
from patterns to the percentage of the
breast that was dense, fibroglandular
tissue. In hundreds of articles, Boyd
provided convincing evidence that
breast density was a significant,
independent risk factor for breast
cancer.3
Boyd’s method proved hard to fully
automate. At the same time, however,
mammography was transitioning from
film to digital. This modality struck
Ralph Highnam, then a graduate
student at Oxford University, as
well suited to a new volumetric, or
three-dimensional, approach to
measuring breast density. Ideally,
such an approach would be objective,
consistent, and repeatable, and thus
provide a more quantitative aspect to
breast cancer screening.
During this period, researchers started
to realise that breast density was not
only the strongest risk factor on a
population base but also a significant
risk factor for missing cancers if they
were present. The stakes were clear:
If a woman’s breast density could be
accurately measured, then she and
her healthcare providers would have
options—screening modalities less
affected by the masking effect of
dense tissue. Mammography would
remain the gold standard in breast
cancer screening, as it is still the only
method proven to reduce mortality.4,5
But it would now be enhanced by
Highnam’s algorithm....
3. Engmann NJ, Golmakani, MK, Miglioretti
DL, et al. JAMA Oncol. 2017;3(9):1228−1236.
doi:10.1001/jamaoncol.2016.6326
4. Moss, S.M. et al. Effect of mammographic
screening from age 40 years on breast
cancer mortality in the UK Age trial at 17
years' follow-up: a randomised controlled
trial. The Lancet Oncology 16, 1123–1132
(2015).
5. American Cancer Society. American Cancer
Society Breast Cancer Screening Guideline.
2017 [cited] Available from: https://www.
cancer.org/latest-news/special-coverage/
american-cancer-society-breast-cancer-
screening-guidelines.html
2009
Focus on quality:
refining density
assessment
By 2009, the first state law requiring
that women be notified of their breast
density and screening options was
passed in the United States. Highnam,
meanwhile, had cofounded Mātakina
Technology while continuing to refine
his “VolparaDensity” algorithm. Named
after the Māori word for “insight,”
Mātakina set to work addressing the
factors that can affect the accuracy
of density assessments. In time,
complementing what would come to
be known as the TruDensity clinical
function, there would be measures for
radiation dose, compression pressure,
and mammographic positioning.
What if we could tell breast imaging
centres how they were doing?
This question would be answered with
our development of Volpara Analytics,
the only vendor-neutral software that
provides automated and objective
assessment of image quality on
every mammogram. By providing key
insights, Volpara helps radiographers
improve their performance over time.
The result is that women have a better
experience, they are more likely to
return, and the image quality
is better—and that, in turn, means
better breast density scoring.
Creating the Future
Volpara Health Annual Report 2021 14
15
In the last year alone,
the number of images in
Volpara’s cloud—already
one of the world’s largest
data sets—has jumped
nearly 60 percent.
2015
A greater, global reach
By late 2015, Highnam’s company
would be renamed Volpara Health
Technologies to better signal
its commitment to serving the
international healthcare market. This
was only the prelude to Volpara’s listing
on the ASX in April 2016, the first move
in the next major stage of Volpara’s
development: scaling the business to
reach more women.
The second move was the acquisition
of Seattle-based MRS Systems,
Inc., in mid-2019. The purchase
instantly increased the number of US
breast clinics to which Volpara had
access—from 400 to over 2,000. It
also brought the proportion of North
American women whose images had
been analysed by a Volpara product
to over one-quarter. Apart from the
considerable financial advantages—
a significant increase in ARR,
accelerated sales through cross-
selling opportunities, and increased
ARPU through an extended
product range—Volpara now had
the foundation for an integrated
software platform.
Seeking “nothing short of a
revolution”—the widespread
implementation of personalised
cancer screening—Volpara built
upon MRS’s patient tracking and
radiologist software to create the
Volpara Breast Health Platform.
This comprehensive clinical and
workflow management software
represents a substantial leap forward
in breast clinics' ability to provide
women a high-quality, personalised
experience. It also generates the
massive amounts of well-curated
data needed to optimise AI.
2021
39.5 million
2020
25 million
2019
12 million
2018
4.3 million
2017
0.5 million
NUMBER OF CLOUD-BASED IMAGES
Creating the Future
Volpara Health Annual Report 2021 16
CREATING THE FUTURE
Year
in Review
Volpara partners with
Sheila R. Veloz Breast Center
to provide image-enhanced
patient letters
17
DENSE trial using
VolparaDensity software
shows significant reduction
in false-positive rate in
second-round results
Volpara sponsors free virtual
CME course and DetectED-X
online radiology training
courses
Volpara showcases Volpara
Breast Health Platform at AHRA
2020 Virtual conference
Volpara expands Charlotte
Radiology collaboration to sign
US Radiology to five-year SaaS
contract
Volpara signs five-year SaaS
contract with BreastScreen
Queensland
Volpara granted
97th US patent
Volpara acquires
CRA Health, LLC
Volpara customers use
Volpara Analytics to
resume breast screening
operations amid COVID-19
Volpara wins Absolute
IT Supreme Scale-Ups
award
April
May
June
July
August
September
October
November
December
January
February
March
April
2020
Volpara extends distribution
agreement with MeVIS
Medical Solutions AG
Volpara signs collaboration
agreement with Ambry
Genetics
Volpara undertakes successful
capital raise of A$37 million
(NZ$39.5 million)
2021
Volpara wins Supreme Gold and
Cyber Gold Awards at Wellington
Gold Awards
Volpara partners with
Sydney-based DetectED-X
Volpara expands
partnership with
FUJIFILM Medical
Systems U.S.A., Inc.
Volpara Solutions
rebrands to become
Volpara Health
Volpara AI study
wins Magna cum
Laude award at
European College
of Radiology 2021
Volpara Group signs highest-
value contract to date with
Trinity Health Corporation
via CRA Health
Creating the Future
Volpara Health Annual Report 2021 18
19
OUR MOONSHOT
To provide
accurate risk
assessment,
monitoring,
and detection
for all women.
detection for all women. To reach it,
we continue our focus on commercial
success and data for science.
2021+
Today the world,
tomorrow the moon
Volpara was originally founded to
provide a very accurate measurement
of breast density. Naturally, this
supported the early detection of breast
cancer via screening, which has proven
effective in reducing the disease’s
morbidity and mortality. Highnam’s
intention for Volpara’s software,
however, was much broader: to enable,
for all x-ray systems, the measurement
of changes in breast tissue over time.
Hormone replacement therapy and
breast density–reducing drugs such
as tamoxifen, for example, are useful
strategies whose effects should
be monitored. Such a temporal
component would work hand in hand
with prediction and early detection,
ultimately pointing to some key
questions:
What if we could predict far more
accurately who would develop breast
cancer in the first place and then act
to reduce those individuals’ risk?
What if we could then get the right
imaging at the right time to those
women at high risk?
What if we could then monitor those
women to ensure prevention strategies
were working?
By acquiring CRA Health, LLC, earlier
this year, Volpara has now gathered
all the elements required to answer
these questions. With world-leading
risk assessment and genetics in its
portfolio, Volpara has the means
to create the most powerful risk
model ever, one based not on tens of
thousands of women but millions of
women. This is the basis of what we
call our moonshot: to provide accurate
risk assessment, monitoring, and
Our Moonshot
Volpara Health Annual Report 2021 20
REBRANDING
A brand
to reflect our
philosophy
Our logo
The new Volpara Health logo
represents the coming together
of core components to form a
powerful and integrated platform.
Taking the V from the name, a
rounded arrow shape was crafted.
The six arrows are positioned in
symmetry, creating a juxtaposition
of both balance and dynamism,
openness and consolidation.
21
“This rebranding reflects our goal
of not only helping providers,
but also communicating clear
information, fully supported by
science, which empowers women
to understand their options and
take charge of their breast health.”
—Dr Ralph Highnam, Group CEO & Chief Scientist
A little over a year ago, many individuals across Volpara were
working hard to thoroughly integrate the Wellington and
Seattle teams. Their examination of the inner workings of the
expanded company naturally prompted a re-evaluation of
Volpara’s brand. The company had long enjoyed a reputation
as a world leader in the breast health industry, but here
was an opportunity to definitively express, through both
visual elements and messaging, the value Volpara brings to
customers, patients, and investors alike.
The challenge was to signal Volpara’s commitment to
personalised breast care while affirming its standing
as a team of trusted advisers who join their expertise with
that of leading clinical sites around the world.
The first step, taken in October 2020, was the renaming of
the company’s commercial arm, from Volpara Solutions to
Volpara Health.
The second step was more involved, requiring the
collaboration of writers, designers, and developers across
the marketing, product management, and engineering
teams. By March 2021 they had renamed the products and
launched a wholly redesigned website (www.volparahealth.
com) as well as a host of corresponding customer-facing
materials—marketing collateral, software documentation,
white papers, and training guides. Still to come is an
extensive update to the user interface of Volpara Analytics
3.0. The aim is a better experience for all those who
come into contact with Volpara, whether radiographer or
breast imaging manager, patient or prospective customer,
scientist or shareholder. And the aim beyond that is the
delivery of evidence-based science that provides the best in
personalised breast health.
Rebranding
Volpara Health Annual Report 2021 22
HIGHLIGHTS
23
Recognition
Key figures
MARKET SHARE OF NORTH AMERICA*
32%
+5%
We aim to do what's right for
women and believe in what we do.
So, it's pleasing to have our work
recognised by industry peers and
validated by the market.
WELLINGTON GOLD AWARDS 2020
WELLINGTON GOLD AWARDS 2020
REVENUE
DATABASE IMAGES
Supreme
Gold Award
Cyber
Gold Award
$19.7 m
+57%
39.5 m
+58%
EUROPEAN COLLEGE OF RADIOLOGY 2021
TECHNOLOGY INVESTMENT NETWORK 2020
ARR
GROSS MARGIN
Magna
cum Laude
award
Absolute
IT Supreme
Scale-Ups award
$27.9 m
+55%
91%
* Of US and Canadian women screened for breast cancer, approx. 32%
had at least one Volpara product analyse their data and/or images
+5%
Highlights
Volpara Health Annual Report 2021 24
CHAIR'S LETTER
Dear
Shareholders,
What a year it's been. At Volpara we are fortunate
to be able to say this in at least two senses. The first
acknowledges the challenges the COVID-19 pandemic has
posed for so many individuals and organisations the world
over. The second celebrates the hard work we’ve put in,
and the resilience we’ve demonstrated, to achieve what
has been our most financially successful year to date.
25
With CRA Health, we have
now assembled all the essential
ingredients required for our
moonshot, providing the most
powerful risk assessment
possible for every woman.
Our culture of continual learning
has served us well. It has enabled
us to quickly pivot to new ways of
working, especially when it comes
to sales and marketing. Our new
digital marketing has already
proven effective in connecting
with a breast health industry facing
unprecedented reductions and
subsequent overflows in screening
volumes due to lockdowns. We’ve
not been idle, either, in further
developing our advanced AI software
platform, perhaps the key element
in Volpara’s path to realising its
vision of becoming the global leader
in cancer-prevention software.
We’ve also benefitted from an industry
climate increasingly favourable for
what we do. Regulatory bodies are
placing greater emphasis on quality
of screening. Evidence pointing to
breast density’s role as a risk factor
continues to accumulate. The drivers
for market adoption in the United
States, Volpara’s largest market, are
growing stronger, with the US Food
and Drug Administration soon to
mandate that all women be informed
of their breast density. And US women
are increasingly being recommended
for risk assessments, including genetic
testing in some cases, to supplement
traditional mammography screening.
Such positive changes can only bolster
Volpara’s work to help usher in an era
of personalised medicine based in risk
assessment and genetics testing.
Last year I reported that our April/
May 2020 capital raise was intended to
support our ability to take advantage
of compelling merger-and-acquisition
opportunities. This is exactly what
we’ve accomplished in acquiring CRA
Health, LLC, in February. A leader
in risk and genetics, the Boston-
based firm matches Volpara’s values,
mission, and scientific background,
and its integrations with major
electronic health records systems and
genetics companies greatly expand
our ability to help many more women
benefit from personalised breast care.
Our action was immediately validated:
Within weeks of the purchase, we
signed, via CRA Health, our highest-
value contract to date, over
US$400,000 per year in ARR.
tracking and risk assessment to
density assessment, performance
monitoring, and the provisioning of
individualised screening options,
Volpara helps breast imaging centres
accommodate patients at every step
of their healthcare experience. With
CRA Health, we have now assembled
all the essential ingredients required
for our moonshot, providing the most
powerful risk assessment possible for
every woman.
The value of CRA Health goes far
beyond a single sale, of course.
The addition of its expertise means
that Volpara is now the US leader in
breast cancer risk estimations. It also
exemplifies our strategic approach
in meeting the multiple needs of
healthcare providers and the women
they serve. By building a platform
of integrated solutions that spans
the clinical workflow, from patient
I have many people to thank for their
contributions to the ongoing success
of our endeavour. The effort is always
a collaborative one, but I would
especially like to single out my fellow
Board members for their rigorous
oversight during an eventful year, and
of course you, our shareholders, for
believing in our cause, our course,
and our future.
Yours sincerely,
Paul Reid
Chair
Chair's Letter
Volpara Health Annual Report 2021
26
27
Anonymous
Volpara Investor
“I noticed the Volpara logo in the
radiologist’s office, and we had a brief
chat on how good the Volpara tech is.
So, from the bottom of our hearts, my wife
and I thank you, Ralph, and your team for
everything you have done and continue
to do to improve the outlook for women's
health through breast cancer detection.”
“I am extremely passionate about the
business you’ve built, and I am a proud
shareholder. I admire what you do, and
words can’t describe how thankful I
personally am for the work that you and
your team do over here, in New Zealand,
and, above all, in the US.”
Anonymous
Volpara Investor
“Volpara enables our vision of personalised
screening based on breast density, risk
factors, and hereditary testing.”
Leigh Loughran
Personalized Medicine
Program Director,
Rome Memorial Hospital,
Rome, New York, USA
VOLPARA HERO IMAGERY / 16 FEbRuARY 2021We love it when people use our stuff! Just check in with us first.2VOLPARA GRADED HERO IMAGE 01Volpara Health Annual Report 2021
28
CEO'S REPORT
Dear
Shareholders,
In many respects, FY2021 seems a repeat of the previous
financial year. Just as we reported last year, Volpara achieved
remarkable growth in ARR, ARPU, and market share while
acquiring a leading US risk and genetics company, but
there’s one key difference: We’ve achieved it all during an
unprecedented period of global uncertainty, public health crises,
and lockdowns. That we continued to show strong growth is a
testament to the resilience and efforts of many, many people
throughout our whānau, our extended Volpara family.
29
Working remotely has its own
challenges, but we have seen our
staff demonstrate their character
and professionalism, working to
build trust inside and outside the
organisation, with productivity
higher than ever.
Throughout the pandemic, because
of the IT nature of our work, we‘ve
been privileged to have been
able to continue our work largely
uninterrupted, other than the lack
of travel to sites and trade shows.
Working remotely has its own
challenges, of course, but we have
seen our staff demonstrate their
character and professionalism,
working to build trust inside and
outside the organisation, with
productivity higher than ever. I am
proud that they exemplify our values,
to Be Bold, Be Extraordinary,
Be Relentless, and especially Be
Whānau. Thank you to Kat Greene,
Chief People Officer, and her team
around the globe for helping us and all
our staff navigate this difficult period.
Perhaps the biggest shift was
undertaken by the sales and
marketing team, which swiftly pivoted
to a digital approach when it became
clear that face-to-face interactions
were no longer possible. Our sales
team generated tremendous growth
from significant wins across the
United States. I’d like to thank Debra
Saunders, our recently retired Director
of Sales, North America, for her
service and for adroitly leading our
outstanding US sales team throughout
this last period as they secured
or expanded contracts with many
customers. And we welcome Jill Spear,
our new Executive Vice President, US
Sales & Marketing, who joined us from
GE Healthcare in late March 2021.
In Australia, we’ve been seeing
great progress in private centres in
certain states (South Australia and
Queensland) and have won our second
contract with a public screening
programme—this time Queensland.
Thanks go to Anton Zerle, VP Sales and
Marketing ANZ, and his team—Kylie
Chandler, Tae Chung,
We are proud to welcome aboard
Brian Drohan, Chief Scientific Officer
of CRA Health, and his team. We
look forward to working together
to extend Volpara’s lead in cancer-
prevention software, where the key
is to predict, monitor, and detect
with great precision. Thanks go to
Dave Mezzoprete, Vice President,
Global Business Development, for his
outstanding work with CRA Health
and all the major genetics companies,
including especially Ambry Genetics,
who have been great to work with.
Francois Le Roux, and Gabrielle
Vaughan—for making such great
progress in helping us help the women
that invest in us and support us on a
daily basis across Australia and
New Zealand.
By design, Europe and Asia saw
less activity, but we should note
the extremely positive results of
the second round of the 10-year
Project DENSE in the Netherlands.
It showed a significant reduction in
the false-positive rate, relative to the
initial results, in screening programs
using Volpara software to assess
breast density, showing the viability
of triaging women with high breast
density to breast MRI. We look forward
to screening programs now acting on
these results and getting women the
essential screening they need.
Our product development kept pace
with our sales and marketing efforts,
thanks in part to the leadership
displayed by Chief Operating Officer
Simon Francis and Head of Product
Management Matt Prickett. We thank
them for their implementation of not
only technical innovations, such as the
move from a physical server box to a
Virtual Appliance to provide excellent
remote monitoring, but software
updates that create a better user
experience, such as the redesign of
the customer dashboards of Volpara
Analytics and the launch of our most
powerful breast density algorithm
to date. Thank you to Mark Morris,
Executive Vice President, Customer
Success, for getting those updates
to users and continuing to field a team
in Seattle that excels at customer
support.
The biggest achievement this year
was, of course, our acquisition of
Boston-based CRA Health, LLC, a
leader in risk assessment and genetics.
CEO's Report
Volpara Health Annual Report 2021 30
31
The biggest achievement
this year was our
acquisition of Boston-
based CRA Health, LLC, a
leader in risk assessment
and genetics.
It’s gratifying to have
a breast clinic here in
Wellington that models
the kind of personalised
care we seek to provide
to women throughout
the world.
Several other individuals deserve
special recognition. We thank Erica
Carnevale, Director of Integrated
Marketing and Content, for leading our
transition to digital marketing and the
rebranding of Volpara Health, including
our new website. We thank Mathew
George, Senior Portfolio Manager,
Strategy & Operational Delivery, for
leading the CRA Health integration and
coordinating our five-year corporate
strategy. And we thank Frederik
Struve, Vice President, Legal, for his
excellent work on the CRA Health
acquisition and expert navigation
of US trademark registration as we
changed our product names.
We bid farewell to US CEO Katherine
Singson, whose vision of reaching
women directly kindled both the
rebranding effort and the image-based
patient reporting we’ll be implementing
later this year. And we congratulate
Dr Monica Saini, who remains on the
Board but has stepped down from her
role as Chief Medical Officer to focus
on her new venture, Breast Institute New
Zealand. It’s gratifying to have a breast
clinic here in Wellington that models the
kind of personalised care we seek to
provide to women throughout the world.
Thanks go to Morgans and Bell Potter for
their continued support as we move ever
closer to the day when the prevention of
advanced-stage breast cancer is realised.
Finally, thank you to Craig Hadfield, Chief
Financial Officer, for his excellent work
over the year, and to the Board for their
continuing belief in the Company and its
mission.
Yours sincerely,
Ralph Highnam, PhD
Group CEO & Chief Scientist
Ralph Highnam | Wellington, New Zealand
CEO's Report
Volpara Health Annual Report 2021
32
DIRECTORS' REPORT
Meet
the Board
The Directors present their report
on Volpara Health Technologies
Limited (VHT) and the entities it
controlled during and at the end
of the year ended 31 March 2021.
Directors
The following persons held office as
Directors of VHT for the financial year:
Paul Reid
Dr Ralph Highnam
Roger Allen AM
John Pavlidis
John Diddams
Dr Monica Saini
Karin Lindgren
Company Secretary
Craig Hadfield
33
Paul Reid
Chair, Independent Non-Executive Director
BSc (Hons)
Paul joined the Board in March 2018 and brings
extensive commercial experience gained across a
range of technology/Software as a Service (SaaS)
businesses. He was the founding CEO and Chairman of
Figured Limited, a fintech SaaS company that provides
management accounting software to farmers in the
United States (USA), United Kingdom (UK), Australia
(AUS), and New Zealand (NZ). Figured was New
Zealand’s Startup of the Year in 2016 and has grown at
an incredible pace, funded by private, corporate, and
Venture Capital (VC) investors.
He is also currently CEO of Author-it Software
Corporation, which provides documentation software
for clinical, medical, and labelling information to life
sciences companies in Europe and the USA. Other key
Directorship roles include Christchurch International
Airport Limited and New Zealand Stock Exchange
(NZX)–listed Comvita Limited.
Prior to embarking on a startup and governance
career, Paul held a number of key executive roles, from
CEO to COO, in businesses such as Air New Zealand,
MetService, Carter Holt Harvey, and Ernst & Young. He
is based in Wellington, NZ.
Dr Ralph Highnam
Executive Director & CEO
BSc (Hons) 1st Class, MSc, PhD
Roger Allen AM
Non-Executive Director
BA, FACS
Ralph, a founding Director of VHT, has been at the
forefront of the digital breast imaging field for over 30
years. Ralph’s innovative work as a research scientist
in quantitative breast imaging technology at the
University of Oxford led him to form first OXIVA Limited
and then Mirada Solutions with Professor Sir John Mike
Brady. Under Ralph’s leadership Mirada became the
number-one provider of image registration and fusion
tools before being acquired by CTI Molecular Imaging
Inc. and later Siemens Medical Solutions USA, Inc.
Before founding VHT in 2009, Ralph consulted for
many of the world’s top medical imaging companies,
including R2, Siemens, Hologic, and Dexela, as well as
many leading breast screening programs. During this
time, he continued his academic research as part of an
international circle of collaborators.
Ralph is the author of numerous articles and, with
Brady, the seminal book Mammographic Image
Analysis. As CEO of VHT, Ralph is dedicated to providing
the most accurate measurements possible of breast
composition (breast density) in order to improve the
health outcomes of women around the world. Based in
Wellington, NZ, in 2015 he was named a Wellingtonian
of the Year finalist.
Roger joined the Board in June 2010 and was Chairman
from October 2015 to March 2019. Roger is a highly
experienced entrepreneur and investor in early-stage
growth companies in AUS, NZ, and internationally.
He built up Computer Power Group (CPG) in the 1970s
from a small startup to a worldwide group of 3,000 people
operating from 50 offices in 12 countries, listing on the
Australian Stock Exchange (ASX) in 1987. The company was
acquired in 1995. In 1996 he cofounded Allen & Buckeridge,
an early-stage venture capital fund with offices in Silicon
Valley and AUS. He is dedicated to social entrepreneurship
and impact investing, especially to enterprises focused on
digital health and also indigenous economic development
through his foundation Indigenous Capital Limited.
Roger has served on two Prime Ministers’ Science and
Technology Councils and Advisory Boards and was
Deputy Chairman of the Australian Government's Export
Agency, Austrade, from 1990 to 1997. Previously an Adjunct
Professor in the Business School of the University of
Technology Sydney, he has also lectured at the School
of Entrepreneurship at INSEAD. Roger has been awarded
the top two lifetime awards in the IT industry (CSIRO
Tony Benson award and the Pearcey Medal for lifetime
achievement) as well as an Order of Australia Honour for
his services to the IT sector through leadership roles,
venture capital investment, and professional development,
and in recognition of his support of the indigenous
community and philanthropic interests. He was also
elected as Fellow of the Australian Computer Society.
He is based in Sydney, AUS.
Roger is a member of the Audit Committee and the
Remuneration Committee.
Directors' Report
Volpara Health Annual Report 2021 34
35
John Pavlidis
Independent Non-Executive Director
BS, MS
John Diddams
Independent Non-Executive Director
B Com, FCPA, FAICD
Dr Monica Saini
Non-Executive Director
BSc, MS, MD
Karin Lindgren
Independent Non-Executive Director
BS, JD
John joined the VHT board in early 2015 and now has
more than 30 years of medical device experience as a
senior executive, CEO, or company director in the areas
of diagnostic imaging, women’s health, image analysis
and artificial intelligence, and cardiovascular therapies.
From 2015 through 2019, John served as the President
and CEO of Vytronus, Inc., a venture-backed startup using
novel catheter-based ultrasound and robotics technology
to treat atrial fibrillation, a cardiac arrhythmia. Prior to
Vytronus, John was the President and CEO of Endoscopic
Technologies, Inc., a leader in minimally invasive and
endoscopic treatment of atrial fibrillation, until it was
acquired by AtriCure, Inc., in 2014. Since 2007, John has
also served on the Board of Directors of several health
technology companies, including U-systems, Inc., which
pioneered automated breast ultrasound imaging as an
adjunct to mammography for breast cancer screening
and was acquired by GE Healthcare in 2012.
Previously, John served as President and CEO of R2
Technology, Inc., the pioneer and leader in computer-
assisted detection of breast cancer, until Hologic,
Inc., acquired the company in 2006. Before joining R2
Technology, John was president of the global Ultrasound
business at Siemens Healthcare, where he led the
acquisition and integration of Acuson and subsequent
growth of the combined organization to $1 billion in
revenue. He is based in Silicon Valley, California, USA.
John is the principal of an Australian CPA firm that provides
companies with corporate advisory services. John has
extensive knowledge and practical experience in the
application of Australian corporations law, ASX Listing
Rules, international accounting standards, and corporate
governance principles.
Over the past 30 years, John has managed the processes
to raise capital, perform due diligence, and seek ASX
listing for a number of enterprises, including IPOs for a
wide range of diverse offerings. These include oil and gas
interests, food and retail, a fine-wool processing plant,
an innovative telephony product, a biotech company, an
Internet advertising initiative, a dental device for snoring
and sleep apnoea, an indoor skydiving company, the
New Zealand developer of the Martin Jetpack, a healthy
fast-food chain, and Skydive the Beach Group Limited
(now Experience Co Limited).
John is currently a Non-Executive Director of Aroa
Biosurgery Limited, an NZ-based company that develops
and markets proprietary soft-tissue regenerative products,
and Surf Lakes Holdings Limited, a Gold Coast–based
business with patented technology for recreational wave
generation. John was recently appointed Non-Executive
Director of DIT Technologies Limited, a Queensland-based
“AgTech” company focused on nutrient supplementation
for livestock technology that uses the Internet of Things to
help farmers do more for less.
John is Chair of the Audit Committee and a member of the
Remuneration Committee. He is based in Sydney, AUS.
Monica joined the VHT Board in 2018. She is an
internationally recognised expert in breast cancer,
especially breast density and breast cancer risk
assessment. Monica is a Doctor of Medicine and a prior
BSc in nursing. She has had US radiology training and
an additional fellowship in women’s imaging, and has
over 10 years of patient care experience in both private
and public sectors.
In 2015, she became a medical advisor for GE Healthcare
and in 2016 was appointed Medical Director of
Automated Breast Ultrasound Systems, GE Healthcare.
Globally, she worked on early detection of breast cancer,
breast cancer research, and international physician
education for breast imaging technologies.
Monica relocated to NZ in 2017 and started as a
consultant before becoming the Chief Medical Officer
of VHT, providing hands-on expertise in product
development, research, and customer relations. She
stepped down from her executive role on 5 January
2021 but remains on the Board.
She is medical adviser for Breast Cancer New Zealand
Foundation and continues her clinical practice at Hutt
Hospital in Wellington and her new private clinic,
Breast Institute New Zealand.
Karin joined the Board in 2020. She brings 35 years’
experience in health information technology as a senior
technology executive and law firm partner. As one of
the earliest healthcare technology lawyers in the USA,
Karin has an in-depth knowledge of data governance,
data privacy, SaaS, and US healthcare, and has extensive
professional networks across the IT landscape.
Her previous roles include General Counsel, Chief
Compliance Officer, and Chief Privacy Officer at the
University Health System Consortium (which covers
90 percent of US academic medical centres); General
Counse and Chief Privacy Officer at ReedGroup, a data
and informatics technology company responsible for
absence management solutions at over 40 percent
of Fortune 100 companies; and Senior VP, Legal
Affairs, General Counsel, Corporate Secretary, Chief
Compliance Officer, Chief Privacy Officer, and Chief
Audit Executive at Availity, a revenue-cycle management,
electronic data interchange platform, PaaS IT company
that operates the largest real-time information network
in healthcare, connecting payers and providers in over
6 billion transactions every year.
Karin was a founding faculty member in the Health
Informatics Master’s Programs at both Northwestern
University (Chicago) and the University of Colorado
(College of Nursing), and has taught in schools of
medicine, law, and business at numerous US universities.
She is a board member of multiple private and non-profit
organisations.
Karin is Chair of the Risk Committee and is based in
Boulder, Colorado, USA.
Directors' Report
Volpara Health Annual Report 2021 36
37
Craig Hadfield
Chief Financial Officer & Company Secretary
H Dip Acc (Hons)/CA (SA)
Craig joined VHT in July 2016 and was appointed Chief
Financial Officer and Company Secretary in March 2017.
Craig brings over nine years’ experience in senior and
managerial auditing roles at large accounting firms,
including EY and Deloitte. He was most recently an
Associate Director for Deloitte Wellington and was the
Audit Manager for VHT during the IPO process. Previously,
he held roles internationally, including in the USA, South
Africa, NZ, and the Bahamas.
Craig is a registered member of the South African Institute
of Chartered Accountants (SAICA) and an affiliate of NZICA
(CAANZ). He is based in Wellington, NZ.
Operating results for the year
Statutory results
Some of the key statutory results have been summarised
below. The total revenue from contracts with customers
and SaaS-only revenue has continued to show strong
growth and the enduring benefit of sticking to our SaaS-
first business model while minimising churn. The 57% and
60% increases in total revenue and SaaS-only revenue,
respectively, have been driven mostly by the sale of Volpara
Analytics and Volpara Patient Hub, the latter of which we
switched to our Saas business model, from capital, soon
after the acquisition of MRS in June 2019. The sales of
Patient Hub have been in the form of new organic sales,
but also upsells from legacy versions sold under a capital
and support model. These upsells have also driven
cross-selling opportunities with Volpara's existing suite
of products. Capital revenues decreased in line with
expectations as MRS's business model switched to SaaS
as mentioned above.
Volpara’s net loss after tax decreased 14% year on year.
This was ahead of expectations as we continued to invest
in our products and also incurred a number of one-off and
non-cash costs related to the acquisition and subsequent
integration of both MRS and CRA into the Group.
Principal activities
The Group’s principal activity during the year was the sale
of Volpara Analytics, comprehensive cloud-based breast
imaging analytics software that delivers quality assurance
and performance monitoring. With dynamic, role-specific
dashboards and wide-ranging benchmarking analytics
to help clinics manage their business more efficiently,
Volpara Analytics is supported by the company's market-
leading Volpara Scorecard, powered by the TruDensity,
TruRadDose, and TruPressure clinical functions. During
the year we continued to roll out Volpara Live software,
which automatically analyses patient positioning and
compression and provides real-time feedback to
radiographers. After acquiring MRS Systems, Inc. (MRS), in
June 2019, we continued to upgrade and upsell customers
to SaaS with MRS's latest product suite, the renamed
Volpara Patient Hub, Volpara Lung, and Volpara Risk—all
integrated with Volpara's existing suite of products. Patient
Hub and Lung are patient tracking and reporting software
solutions designed to help customers’ staff become
more productive in the operation and administration
of their practice. Volpara Risk helps deliver objective
insight that assists radiologists in directing women
at high risk of developing breast cancer to essential
screening and testing. Lastly, with the acquisition of
CRA Health, LLC (CRA), in January 2021, Volpara added
a market-leading breast cancer risk-assessment tool.
CRA's software will continue to be sold as a stand-alone
risk-modelling product while it is integrated into Volpara's
suite of products, in time replacing Volpara Risk.
Significant changes in the state of affairs
During the year ended 31 March 2021, the Group raised
A$37M in a placement and share purchase plan. In
January 2021, some of the proceeds raised were used
to acquire CRA, a Boston-based software company
that specialises in breast cancer risk assessment and
was spun out from Massachusetts General Hospital,
a Harvard Medical School teaching hospital.
Directors' Report
Volpara Health Annual Report 2021 38
IFRS
SaaS
Capital
Service maintenance agreements
Lung subscriptions
Other
2021
NZ$’000
2020
NZ$’000
Variance
NZ$’000
Variance
%
10,286
6,430
3,856
1,592
6,634
1,187
48
3,396
(1,804)
2,309
4,325
467
720
60%
-53%
187%
154%
-
48
100%
Total revenue from contracts with customers
19,747
12,602
7,145
57%
Net loss for the year after tax
(17,488)
(20,371)
2,883
-14%
NON-GAAP
Revenue from contracts with customers pre-revenue adjustment
20,374
16,250
4,124
25%
Revenue adjustment1
Revenue from contracts with customers2
(627)
(3,648)
3,021
-83%
19,747
12,602
7,145
57%
1. Accounting standards require assets and liabilities acquired within a business combination to be measured at fair value. Deferred revenue balances
are therefore valued at the cost of fulfilling the service plus a small margin. This differs to the normal basis of recognition of deferred revenue. As a
result of this adjustment, deferred revenue previously recorded by MRS and CRA that would have flowed to revenue in the current year was reduced.
Furthermore, it is important for users to understand that this is a one-off, non-cash accounting adjustment which will not impact revenue in future
periods once fully unwound, and neither impacts, nor has impacted, the cash generation of the business. The Directors and management believe this
measure provides useful information to users of the financial statements to assist in understanding the Group’s financial performance and position.
Refer to note 23 in the financial statements for more information.
2. As per Consolidated statement of profit or loss and other comprehensive income.
2021
NZ$’000
2020
NZ$’000
Variance
NZ$’000
Variance
%
IFRS Net loss for the year after tax
(17,488)
(20,371)
2,883
-14%
Non-cash and one-off items
Net interest income
Tax benefit
Business integration and acquisition expenses
Share-based payments expense
Depreciation and amortisation
(476)
(1,461)
698
1,379
(697)
(1,937)
221
476
1,004
(306)
1,382
(3)
3,089
2,240
849
-32%
-25%
-30%
0%
38%
Losses/(gains) on foreign exchange transactions
189
(1,087)
1,276
-117%
Impairment of right-of-use asset
Revenue adjustment1
Bad debts write-off
Retention plan costs
-
627
171
833
106
(106)
-100%
3,648
(3,021)
-83%
44
-
127
289%
833
100%
39
Constant currency
Constant currency (CC) analysis is non–GAAP financial information that is not prepared in accordance with IFRS. CC
information has been provided to assist users of financial information to better understand and assess the Group’s
financial performance without the impacts of foreign currency fluctuations.
2021 (CC)
NZ$’000
2021
NZ$’000
2020
NZ$’000
Change in
CC %
Reported
change %
For the year ended 31 March
Revenue from contracts with customers
20,503
19,747
12,602
Cost of revenue
Operating expenses
(1,752)
(1,692)
(1,772)
(39.872)
(38,996)
(36,044)
63%
-1%
11%
57%
-5%
8%
Non-GAAP earnings before tax, depreciation, amortisation,
impairment, one-off items, and non-cash items
(12,330)
(12,439)
(15,668)
-21%
-21%
SaaS, non-GAAP metrics, and constant currency
Volpara ended the year with Annual Recurring Revenue (ARR) of ~US$18.6M (or ~NZ$27.9M1), an overall increase of 60%2
year on year, including 20% organic growth in ARR.
The Volpara Group’s (incl. CRA) combined market share in the USA, where women who are screened have at least one
of the Group's products applied on their images and data, is now in excess of 32%, up from approx. 27% at end FY20.
On a non-GAAP normalised loss before interest, tax, depreciations and amortisation, impairments, and other one-off
or non-cash items, Volpara improved by 21% year on year from NZ$15.7M to NZ$12.4M off the back of strong growth in
revenue and holding normalised expenses in line with the prior year. In constant currency, after accounting for currency
fluctuations as described and seen above, Volpara's revenue would have increased 63% versus the 57% reported.
Non-GAAP measures have been included as we believe they provide useful information that assists users of financial
statements in understanding Volpara’s financial performance. The non-GAAP financial information does not have a
standardised meaning prescribed by IFRS and therefore may not be comparable to similar financial information presented
by other entities. The non-GAAP financial information has not been subject to audit or review.
Matters subsequent to the end of the financial year
There were no significant events between balance date and the date these financial statements were authorised for issue.
Likely developments and expected results of operations
After a very successful but challenging year, Volpara is well placed, with our existing product suite and the addition of
CRA's market-leading risk software, to capitalise on market and regulatory tailwinds, especially in the risk and genetics
markets. Volpara’s balance sheet remains strong, with over NZ$32M of cash available to execute on our strategy to
increase market penetration from our current 32% and increase revenue by between 27% and 32%3 over FY21. This will
be achieved by continuing to sell our market-leading, integrated, end-to-end cancer screening software platform. At
the same time, we will continue to invest in our current products but also look to invest in our future products to ensure
we continue to be leaders in our field and provide thought leadership in areas such as breast cancer risk assessment.
Volpara Lung was not a focus for the business in FY21, but we intend to invest in this area of the business in FY22 onwards
as we see great potential here, especially after the CDC's recent mandate to improve access for those able to seek lung
screening, which resulted in the potential addressable market more than doubling from current figures.
Dividends paid or recommended
No dividends have been paid or declared for payment during the financial year.
Normalised non-GAAP net loss before interest, tax, depreciation,
amortisation, impairment, one-off items, and non-cash items
(12,439)
(15,668)
3,229
-21%
Environmental issues
The Group is not affected by any significant environmental regulation in respect of its operations.
Twelve-month trailing exchange rate used of US$0.666:NZ$1.
1.
2. This increase represents the increase for ARR in US$. The increase in NZ$ was 55%.
3. Based on a US$:NZ$ exchange rate of 0.70:1.00
Directors' Report
Volpara Health Annual Report 2021
40
41
Diversity policy
The Company has adopted a Diversity Policy, which includes the requirement for the Board or a relevant committee of
the Board to set measurable objectives for achieving gender diversity and to assess annually both the objectives and the
Company’s progress in achieving them. However, due to the stage of development and the relatively small number of
employees (compared to others listed on the ASX), the Board did not set objectives for diversity for the past financial year.
As the Company moves closer to achieving its commercialisation goals and increases its number of employees, it
will re-examine its approach in this regard. There were five men and two women on the Board at the end of the 2021
financial year.
As at the date of this Annual Report, the proportion of women in the Group as a percentage of its total employees was
66 out of 174, or 37.9% (2020: 40.8%). The proportion of women as a total of the senior executive positions (not including
the CEO) is 2 out of 6, or 33% (2020: 29%). For this purpose, senior executives are members of management who report
directly to the CEO.
Indemnifying officers
During or since the end of the financial year, the Company has given an indemnity, entered into an agreement to
indemnify, or paid or agreed to pay insurance premiums as follows.
The Company has entered into deeds of indemnity with each of the Directors in accordance with the constitution, under
which the Company indemnifies each Director against the following:
1. costs incurred by the Director in any proceeding that relates to liability for any act or omission made by the Director as
an officer of the Company and in which judgment is given in the Director's favour or in which the Director is acquitted,
or which is discontinued;
2. any liability to any third party for any act or omission by the Director as an officer of the Company; and
3. any costs incurred by the Director in defending or settling any claim or proceeding to any costs or liability of the
nature referred to in (1) and (2).
The Company has paid premiums to insure each of the Directors against liabilities for costs and expenses incurred by
them in defending legal proceedings arising from their conduct while acting in the capacity of Directors of the Company,
other than conduct involving a wilful breach of duty in relation to the Company.
Unissued shares
As at 31 March 2021, there were 10.486M unissued ordinary shares under employee share options. Refer to the
remuneration report and note 13 of the financial report for further details of the employee options outstanding.
Option holders do not have any right, by virtue of the option, to participate in any share issue of the company or any
related body corporate.
Share options
The following ordinary shares of Volpara Health Technologies Ltd were issued during the year ended 31 March 2021 on the
exercise of options granted under the Legacy Employee Share Option Plan (LESOP).
Date options exercised
29 May 2020
5 June 2020
9 June 2020
17 June 2020
26 June 2020
28 August 2020
Average issue price of shares
NZ$
Number of shares issued
0.3117
0.4667
0.1567
0.3333
0.0800
0.4667
360,000
51,872
95,745
45,000
446,430
1,350,000
2,349,047
The following ordinary shares of Volpara Health Technologies Ltd were issued during the year ended 31 March 2021 on the
exercise of options granted under the New Employee Share Option Plan (NESOP).
Date options exercised
Average issue price of shares
NZ$
Number of shares issued
29 May 2020
1 June 2020
5 June 2020
9 June 2020
17 June 2020
26 June 2020
14 August 2020
19 August 2020
28 August 2020
9 September 2020
30 November 2020
3 February 2021
0.5000
0.5364
0.5000
0.5000
0.5000
0.5000
0.5385
0.5756
0.5588
0.6000
0.5426
0.6000
48,000
88,000
192,000
120,000
96,000
800,000
65,000
36,000
68,000
16,000
184,000
16,000
1,729,000
Meetings of Directors
Attendances to meetings by each Director during the year were as follows:
Board of Directors
Audit Committee
Remuneration and
Nominations Committee
Risk Committee
No. eligible
to attend
No.
attended
No. eligible
to attend
No.
attended
No. eligible
to attend
No.
attended
No. eligible
to attend
No.
attended
Paul Reid
Dr Ralph Highnam
Roger Allen AM
John Pavlidis
John Diddams
Dr Monica Saini
Karin Lindgren
11
11
11
11
11
11
11
11
11
11
11
11
10
11
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
Non-audit services
During the year, there were non-audit services provided by PwC in the form of security penetration testing, advisory
services relating to IT security risks, and provision of a market survey report on executive remuneration levels.
Directors' Report
Volpara Health Annual Report 2021
42
43
43
AUDITOR'S INDEPENDENCE DECLARATION
RENUMERATION REPORT (UNAUDITED)
The Directors are pleased to
present this report to provide
clarity about how we recognise
and reward the Company’s
Non-Executive Directors,
Executive Directors, and other
Key Management Personnel
for their contributions to the
ongoing growth of the business.
In outlining the Director and Executive remuneration
arrangements of the Company and the Group, this
report is intended to provide greater transparency
and insight into our practices, going beyond what
we are required to disclose as a New Zealand
incorporated company under the requirements of
the Companies Act 1993 and its regulations.
This report defines Key Management Personnel (KMP)
of the Group as those persons having authority and
responsibility for planning, directing, and controlling the
major activities of the Company and the Group, directly
or indirectly, including any Director (whether Executive or
otherwise) of the Parent company. The term “Executive”
encompasses the Chief Executive and other Key
Management Personnel of the Parent and the Group.
Remuneration and
Nomination Committee
The Remuneration and Nomination Committee is
responsible for making recommendations to the Board
on the remuneration arrangements for each of the
Non-Executive Directors, Executive Directors, Chief
Executive Officer, and Key Management Personnel.
The Remuneration and Nomination Committee
periodically assesses the appropriateness of the nature
and amount of Executive remuneration by reference
to relevant employment market conditions. Where
appropriate the Remuneration Committee may engage
external consultants to provide independent advice.
As of the date of this report the Remuneration
Committee comprises the Non-Executive Directors
listed here. In accordance with best-practice corporate
governance, the structure of Non-Executive Director and
senior Executive remuneration is separate and distinct.
Paul Reid (Chair)
Independent
John Diddams
Independent
Roger Allen AM
Remuneration Report
PricewaterhouseCoopers, PwC Centre, 10 Waterloo Quay, PO Box 243, Wellington 6140, New Zealand T: +64 4 462 7000, pwc.co.nz Auditor’s Independence Declaration As lead auditor for the audit of Volpara Health Technologies Limited for the year ended 31 March 2021, I declare that to the best of my knowledge and belief, there have been: a)no contraventions of the auditor independence requirements of the Corporations Act 2001 inrelation to the audit; andb)no contraventions of any applicable code of professional conduct in relation to the audit.This declaration is in respect of Volpara Health Technologies Limited and the entities it controlled during the period. Kevin Brown Partner Wellington PricewaterhouseCoopers 27 May 2021 Volpara Health Annual Report 2021 44
45
Non-Executive Director
remuneration policy
Executive
remuneration policy
Objective
Objective
The Board seeks to set aggregate remuneration at a level
which provides the Company with the ability to attract and
retain Directors of the highest calibre, while incurring a
cost that is acceptable to shareholders.
Volpara Health Technology’s purpose is to save families
from cancer. This purpose is underpinned by our strategic
plan and values that are fundamental to how we do things
as a company (see below).
Structure
It has been resolved that the total aggregate amount to be
paid to the Directors (excluding any Executive Director) is
NZ$500,000 per annum. Under the ASX Listing Rules, any
increase to that aggregate annual amount will need to be
approved by Shareholders. The Company does not use that
full amount based on its current Board of Directors.
Structure
In determining the level and makeup of Executive
remuneration, the Board has reviewed reports detailing
market levels of remuneration for comparable roles.
Remuneration consists of fixed and variable elements,
with the variable component broken down further into
short- and long-term incentives.
In addition to their annual remuneration, the Directors
may also be reimbursed for expenses properly incurred
by the Directors in connection with the affairs of the
Company, including travel and other expenses. There
are no retirement benefit schemes for Non-Executive
Directors. The Non-Executive Directors also participate in
the employee share option plans of the Company, which
are not linked to performance.
The remuneration of Non-Executive Directors for the year
ended 31 March 2021 is detailed later in this report.
VOLPARA VALUES
Be
Bold
Grand but never
grandiose, our
ambition is simple:
nothing less than
a revolution in
cancer care.
Be
Extra
ordinary
We strive constantly
to do exceptional
work, advance our
expertise, and honour
the differences that
make us strong.
Be
Relent
less
Be
Whānau
Resolving global health
problems doesn’t
happen overnight.
We are persistent and
rigorous in our search
for innovative solutions.
We are an extended family
of colleagues, customers,
patients, and communities.
By looking after each
other, we make our best
contribution every day.
Component
Description
Link to strategy & performance
Fixed annual
remuneration
Short-term incentive (STI)
Long-term incentive (LTI)
• Base salary
• Retirement benefits (superannuation/
KiwiSaver or local equivalent)
• An at-risk component set as a
percentage of base salary
• Calculated based on achievement against
a range of company-wide operational
targets (financial and non-financial)
• Paid after a one-year performance
period (1 April–31 March)
• The Board retains discretion to make
payment as either 100% cash or 50%
cash/50% share options (subject to the
Employee Share Option Plan rules)
• The aggregate pool of potential STI
payments has been approved by the
Remuneration and Nomination Committee
• An at-risk component in the
form of share options
• Participating Executives are granted share
options as outlined later in this section
• Vesting is subject to continuing
employment, which provides an additional
time-based retention incentive
Reviewed annually based on individual
skills, experience, accountabilities,
performance, leadership, and behaviours
Rewards delivery of key strategic and
financial objectives, in line with the
annual business plan, and rewards
outcomes aligned to Volpara’s goals to
Prevent Advance-Stage Breast Cancer
and to Advance Our Industry Leader
Position
Rewards delivery against longer-term
strategy and sustained shareholder value
creation
Provides alignment between shareholder
and Executive outcomes
Remuneration benchmarking
Executive remuneration is reviewed annually by the Remuneration and Nomination Committee; the process consists of
a review of company-wide and individual performance, relevant comparative remuneration from external sources, and
relevant comparison between roles within the company. As noted above, the Committee draws on relevant industry
remuneration data.
Remuneration Report
Volpara Health Annual Report 2021 46
47
Employee share option plans (ESOP)
Volpara currently has two ESOPs, a Legacy ESOP and a New ESOP. Under normal conditions, for the New ESOPs, 40% of
the options are exercisable on the second anniversary of the grant date. The remaining 60% of the options are exercisable
in three equal tranches every 12 months thereafter. The Legacy ESOPs vest on a straight-line basis over a period of time,
ranging from monthly over a few years to yearly over a few years. All Legacy ESOPs are now fully vested.
Should a Director (Executive or Non-Executive) or senior Executive cease to be employed by Volpara, then all options
which have not yet vested will automatically be forfeited, unless the Board determines otherwise. Any options that have
vested with that person must be exercised within 60 days of ceasing employment or those vested options will also be
forfeited, unless the Board determines otherwise.
The exercise price of the options is determined relative to the prevailing market price of Volpara’s shares as at the date of
the issue. Options are usually issued at the higher of the 30-day VWAP (volume-weighted average price) and share price
achieved at the last capital-raising event.
Historically, the options have had an exercise period of between five and 10 years from the date of issue; however, all
issues of options under the New ESOP since March 2016 have an exercise period of seven years, and at any time during
that period the Executive can decide to exercise any vested options.
Key remuneration components for the CEO
The CEO’s cash-based remuneration mix is as follows:
Base salary
Base salary makes up 71% of the CEO's on-target cash-based remuneration, the remainder being made up of at-risk STI as
outlined below.
At-risk short-term incentive (STI)
STI is an at-risk component of remuneration that is structured to reward progress towards the delivery of key strategic
and financial objectives, in line with the annual business plan.
Purpose
Rewards delivery of key strategic and financial objectives,
in line with the annual business plan
Target opportunity (% base salary)
40% (target/60% [maximum])
Performance period
1 April to 31 March
Long-term incentive (LTI)
Non-financial objectives
Payment
• Annual Recurring Revenue
• Cash used in operations
• Gross margin
• Keep within Board-approved budget
• Market share
• Compliance
• Board discretion to pay either as 100% cash or 50% cash
with the remaining 50% issued in share options
The STI performance objectives have been chosen as they focus the CEO on sustainably growing the global business.
The targets are set at the beginning of each financial year, reviewed and approved by the Remuneration and Nomination
Committee, and aligned to the longer-term strategic objectives.
Performance against financial and non-financial objectives is determined at the end of each financial year after review of
CEO performance by the Remuneration and Nomination Committee.
At all times the Remuneration and Nomination Committee retains discretion over the STI Plan and any resulting payments.
STI outcome
Based on Volpara’s FY21 performance, the CEO achieved 53.31% of target STI and 35.5% of the maximum STI available.
Employment contracts
Chief Executive Officer
Dr Ralph Highnam is employed by the Company in the role of both Chief Executive Officer and Executive Director.
Under the terms of his contract:
• Dr Highnam is entitled to a base salary and benefits plus short-term and long-term incentives.
• Dr Highnam does not receive any additional payments for performance of his role as an Executive Director on the Board.
• Either the Company or Dr Highnam may terminate the employment by providing three months’ written notice.
• Dr Highnam’s remuneration and performance may be reviewed at the Company’s discretion.
• The Company may terminate Dr Highnam’s employment immediately for serious misconduct. Dr Highnam may under
certain circumstances be subject to a post-employment restraint for a period of up to three months.
• Upon termination, any options that are vested may be exercised by Dr Highnam within a 60-day period.
• Any options that are unvested, or any vested options not exercised within 60 days of termination of the employment
contract, will be forfeited, unless the Board determines otherwise.
KMP
All Executives have rolling contracts.
The Company may terminate the Executive’s employment agreement by providing written notice or by providing
payment in lieu of the notice period (based on the fixed component of the Executive’s remuneration). The notice period is
determined by the employment agreement for each Executive and can vary from 30 to 90 days. On termination or notice
by the Company, any LTI options that have vested or that will vest during the notice period will be released, subject to the
standard exercise criteria, unless the Board determines otherwise. LTI options that have not yet vested will be forfeited.
The Company may terminate the contract at any time without notice if serious misconduct has occurred. Where
termination with cause occurs, the Executive is entitled only to that portion of remuneration that is fixed, and only up to
the date of termination. On termination with cause, any unvested options will immediately be forfeited, unless the Board
determines otherwise.
One employee left the Company during the year and disputed the amount of the termination payment offered to them.
The Company is taking legal advice, with the actual termination amount offered included in the financial statements.
The Company does not believe the dispute will result in any material change to the termination payment.
Remuneration Report
Volpara Health Annual Report 2021 48
49
Performance of Volpara Health Technologies Limited
Relationship between remuneration and Volpara Health Technologies Limited’s performance.
The following table shows key performance indicators for the Group for this year and the prior year.
2020
Name
Short-term
employee
benefits
Post-
employment
benefits
Share- based
payments3
Cash salary
and fees Cash bonus
Non-monetary
benefits
Super-
annuation
Options
Total
2020
$ Variance
% Variance
Non-Executive Directors
Consolidated
Revenue from contracts with customers (NZ$'000)
Operating expenses (NZ$'000)
Net loss for the year after tax (NZ$'000)
Loss per share (NZ$)
Share price at financial year end (A$)
2021
19,747
(38,996)
(17,488)
(0.07)
1.30
12,602
(36,044)
(20,371)
(0.10)
1.07
Net cash utilised in operating activities
(14,021)
(16,638)
DETAILS OF REMUNERATION
7,145
(2,952)
2,883
0.03
0.23
(2,617)
57%
8%
-14%
29%
21%
-16%
2021
Name
Non-Executive Directors
Paul Reid
Roger Allen AM
John Pavlidis
John Diddams
Dr Monica Saini 1
Karin Lindgren
Subtotal
Executive Directors
Dr Ralph Highnam
Subtotal
Other KMP
Mark Koeniguer 2
Craig Hadfield
Subtotal
Total KMP
Short-term
employee
benefits
Post-
employment
benefits
Share- based
payments3
Cash salary
and fees
Cash bonus
Non-
monetary
benefits
Super-
annuation
Options
Total
94,000
58,051
57,702
80,072
139,074
69,461
498,360
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
28,730
22,557
115,070
115,070
122,730
80,608
172,772
195,142
2,772
60,162
202,008
-
170,892
240,353
2,772
512,481
1,013,613
341,694
341,694
79,963
79,963
26,919
26,919
8,681
8,681
86,382
543,639
86,382
543,639
236,678
241,366
478,044
1,318,098
163,386
58,984
222,370
302,333
27,359
-
27,359
54,278
15,112
8,736
23,848
35,301
876
443,411
97,576
406,662
98,452
850,073
697,315
2,407,325
1. Dr Monica Saini stepped down from her executive role as Chief Medical Officer on 5 January 2021 but remains a Director; therefore, her salary above
includes her salary earned in that role for that period.
2. Mark Koeniguer stepped down effective 2 October 2020.
3. These share-based payments are the accounting, non-cash cost of the share options granted based on NZ IFRS 2 - Share-based Payment. No cash
payments are made in relation to these.
Paul Reid
Roger Allen AM
Professor Sir
John Mike Brady4
John Pavlidis
John Diddams
Karin Lindgren5
Subtotal
Executive Directors
Dr Ralph Highnam
Dr Monica Saini6
Subtotal
Other KMP
Mark Koeniguer 2
Craig Hadfield
Subtotal
Total KMP
92,500
60,833
41,667
61,372
80,000
14,162
350,534
-
-
-
-
-
-
-
-
-
-
-
-
323,713
205,407
529,120
30,000
24,827
-
-
30,000
24,827
-
-
-
-
-
-
-
1,127
1,127
65,345
8,320
8,320
70,618
70,618
157,845
69,153
49,987
131,990
150,618
-
14,162
223,221
573,755
16,640
91,113
395,180
297,647
107,753
692,827
442,425
227,443
99,913
54,835
669,868
154,748
1,549,522
184,748
41,956
-
41,956
66,783
18,593
7,903
104,425
30,329
707,312
320,510
26,496
134,754
1,027,822
27,623
465,728
2,294,404
4. Mike Brady resigned from the Board 31 January 2020.
5. Karin Lindgren was appointed on 31 January 2020.
6. Restated due to an error in the prior year remuneration report.
The relative proportions of remuneration paid that are linked to performance are as follows:
Name
Executive Directors
Dr Ralph Highnam
Other KMP
Mark Koeniguer
Craig Hadfield
Non-Executive Directors do not receive any remuneration linked to performance.
STI
2021 %
2020 %
15
-
15
8
14
17
Remuneration Report
Volpara Health Annual Report 2021
50
51
Share-based compensation
During the financial year, options were granted as equity compensation benefits to certain Key Management Personnel.
The options were issued for $nil consideration. Each option entitles the holder to subscribe for one fully paid ordinary
share in the company at the specified exercise price.
Options are calculated at fair value using the Black-Scholes option pricing model, which takes account of factors including
the option exercise price, the current level and volatility of the underlying share price, the risk-free interest rate, expected
dividends on the underlying share, current market price of the underlying share, and the expected life of the option.
For further details relating to the options, refer to note 13 in the financial statements. Options granted to Non-Executive
Directors, Executive Directors, and KMP during the year are detailed in the table below:
2021 OPTIONS
Name
Directors
Paul Reid
Dr Ralph
Highnam
2021 OPTIONS
Name
Non-Executive
Directors
Paul Reid
Roger Allen AM
John Pavlidis
John Diddams
Dr Monica Saini
Number
granted
Fair value per
option grant date
NZ$
Exercise
price per
share A$
Final
vesting
date
First
exercise
date
Last
exercise
date
Value of options
granted during the
year NZ$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Karin Lindgren
450,000
0.92
1.84 3/02/2025
3/02/2022
3/02/2027
414,898
Executive Director
Dr Ralph Highnam 402,200
0.60
1.30 1/04/2025
1/04/2022
1/04/2027
242,883
Other KMP
Mark Koeniguer
279,500
0.60
1.30 1/04/2025
1/04/2022
1/04/2027
168,786
Craig Hadfield
574,900
0.71
74,900 at
A$1.30
500,000 at
A$1.38
18/11/2025
1/04/2022
18/11/2027
409,330
Equity instrument disclosures relating to KMP
Options holdings
The numbers of options over ordinary shares in the Company held during the financial year by each Director of Volpara
Health Technologies Limited and other KMP of the Group, including their personally related parties, are set out below.
Balance at
start of the
year
Granted as
compensation
Exercised
Other
changes
Balance at
end of the
year
Vested and
exercisable
Unvested
450,000
-
600,000
402,200
Roger Allen AM
300,000
John Pavlidis
701,872
John Diddams
450,000
Dr Monica Saini
450,000
-
-
-
-
Karin Lindgren
-
450,000
-
-
-
51,872
-
-
-
Total
2,951,872
852,200
51,872
-
-
-
-
-
-
-
-
450,000
270,000
180,000
1,002,200
360,000
642,200
300,000
240,000
650,000
200,000
450,000
-
450,000
180,000
450,000
-
60,000
450,000
450,000
270,000
450,000
3,752,200
1,250,000
2,502,200
Other KMP
Mark Koeniguer
1,810,000
279,500
1,390,000 (699,500)
-
Craig Hadfield
200,000
574,900
40,000
-
734,900
Total
2,010,000
854,400
1,430,000 (699,500)
734,900
-
-
-
-
734,900
734,900
Granted as
compensation
Exercised
Other
changes
Balance at
end of the
year
Vested and
exercisable
Unvested
2020 OPTIONS
Name
Directors
Paul Reid
Balance at
start of the
year
450,000
Dr Ralph Highnam
600,000
Professor Sir John
Mike Brady
300,000
Roger Allen AM
300,000
-
-
-
-
-
-
-
-
John Pavlidis
John Diddams
451,872
450,000
200,000
-
450,000
Dr Monica Saini
450,000
Karin Lindgren
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
450,000
180,000
600,000
360,000
270,000
240,000
300,000
180,000
120,000
300,000
180,000
701,872
251,872
450,000
450,000
-
-
-
-
120,000
450,000
450,000
450,000
-
3,251,872
1,151,872
2,100,000
1,810,000
1,370,000
200,000
20,000
2,010,000
1,390,000
440,000
180,000
620,000
Remuneration Report
HOLDERS OF OPTIONS UNDER ESOPS
Legacy ESOPs
John Pavlidis
New ESOPs
Paul Reid
John Diddams
Dr Ralph Highnam
Dr Monica Saini
Roger Allen
John Pavlidis
Karin Lindgren
Craig Hadfield
Total
2,551,872
900,000
200,000
Other KMP
Mark Koeniguer
1,450,000
360,000
-
Craig Hadfield
200,000
100,000
100,000
Total
1,650,000
900,000
100,000
Volpara Health Annual Report 2021 52
53
Shareholdings
The number of shares in the company held during the financial year by each Director of Volpara Health Technologies
Limited is set out below:
2021 SHAREHOLDINGS
Name
Directors
Paul Reid
Dr Ralph Highnam
Roger Allen AM
John Pavlidis
John Diddams
Dr Monica Saini
Karin Lindgren
2020 SHAREHOLDINGS
Name
Directors
Paul Reid
Dr Ralph Highnam
Professor Sir
John Mike Brady
Roger Allen AM
John Pavlidis
John Diddams
Dr Monica Saini
Karin Lindgren
Balance at start of
the year
Received during the year
on the exercise of options
Other changes
during the year
Balance at end
of the year
-
16,190,485
18,467,848
200,000
1,519,218
-
-
-
-
-
51,872
-
-
-
-
-
23,076
16,213,561
-
18,467,848
(251,872)
(376,924)
-
1,142,294
-
-
-
-
Balance at start of
the year
Received during the year
on the exercise of options
Other changes
during the year
Balance at end
of the year
-
18,190,485
7,919,211
20,467,848
-
1,803,118
-
-
-
-
-
-
200,000
-
-
-
-
-
(2,000,000)
16,190,485
(800,000)
7,119,211
(2,000,000)
18,467,848
-
(283,900)
-
-
200,000
1,519,218
-
-
Employee remuneration
Remuneration and other benefits (excluding commissions and non-cash share-based payments) of NZ$100,000 per
annum or more received by current and former employees (excluding Company Directors) in their capacity as employees
during the period were as follows:
Remuneration range
Number of
employees
Remuneration range
Number of
employees
100,000
110,001
120,001
130,001
140,001
150,001
160,001
170,001
180,001
190,001
200,001
210,001
220,001
230,001
240,001
250,001
260,001
270,001
280,001
290,001
300,001
310,001
to
to
to
to
to
to
to
to
to
to
to
to
to
to
to
to
to
to
to
to
to
to
110,000
120,000
130,000
140,000
150,000
160,000
170,000
180,000
190,000
200,000
210,000
220,000
230,000
240,000
250,000
260,000
270,000
280,000
290,000
300,000
310,000
320,000
10
14
10
13
6
6
320,001
330,001
340,001
350,001
360,001
370,001
10
380,001
5
5
7
7
4
2
2
2
1
2
3
1
3
2
2
390,001
400,001
410,001
420,001
430,001
440,001
450,001
460,001
470,001
480,001
490,001
500,001
510,001
520,001
530,001
to
to
to
to
to
to
to
to
to
to
to
to
to
to
to
to
to
to
to
to
to
to
330,000
340,000
350,000
360,000
370,000
380,000
390,000
400,000
410,000
420,000
430,000
440,000
450,000
460,000
470,000
480,000
490,000
500,000
510,000
520,000
530,000
540,000
-
-
1
1
-
-
-
-
-
-
1
-
1
1
-
-
-
1
-
-
-
1
This Directors’ Report, incorporating the Remuneration Report, is signed in accordance with a resolution of the
Board of Directors.
Paul Reid, Chair
Remuneration Report
Volpara Health Annual Report 2021 Independent auditor’s report
To the Shareholders of Volpara Health Technologies Limited
Our opinion
In our opinion, the accompanying consolidated financial statements of Volpara Health Technologies
Limited (the Company), including its subsidiaries (the Group), present fairly, in all material respects,
the financial position of the Group as at 31 March 2021, its financial performance and its cash flows for
the year then ended in accordance with New Zealand Equivalents to International Financial Reporting
Standards (NZ IFRS) and International Financial Reporting Standards (IFRS).
What we have audited
The Group's consolidated financial statements comprise:
●
●
●
●
●
the consolidated statement of financial position as at 31 March 2021;
the consolidated statement of profit or loss and other comprehensive income for the year then
ended;
the consolidated statement of changes in equity for the year then ended;
the consolidated statement of cash flows for the year then ended; and
the notes to the consolidated financial statements, which include significant accounting
policies and other explanatory information.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (New Zealand) (ISAs
(NZ)) and International Standards on Auditing (ISAs). Our responsibilities under those standards are
further described in the Auditor’s responsibilities for the audit of the consolidated financial statements
section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Independence
We are independent of the Group in accordance with Professional and Ethical Standard 1
International Code of Ethics for Assurance Practitioners (including International Independence
Standards) (New Zealand) (PES 1) issued by the New Zealand Auditing and Assurance Standards
Board and the International Code of Ethics for Professional Accountants (including International
Independence Standards) issued by the International Ethics Standards Board for Accountants (IESBA
Code), and we have fulfilled our other ethical responsibilities in accordance with these requirements.
Our firm carries out other services for the Group comprising a limited assurance review of the Group’s
Callaghan Grant return and the provision of non-assurance engagements in the areas of security
penetration testing, advisory services relating to IT security risks and the provision of a market survey
relating to executive remuneration levels. The provision of these other services has not impaired our
independence as auditor of the Group.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the consolidated financial statements of the current year. These matters were addressed
in the context of our audit of the consolidated financial statements as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion on these matters.
Description of the key audit matter
How our audit addressed the key audit matter
Revenue recognition
As disclosed in note 4 to the financial
statements, the Group recognises revenue
from goods and services provided under three
main product categories:
1. Software as a Service (SaaS) contracts
which involve the sale of software on a
subscription basis and where applicable,
cloud-based support (and associated items);
2. Capital sales contracts which involve the
outright sale of software and associated items;
and
3. Software Maintenance Agreements (SMAs)
to support previous Capital sales.
Both SaaS and SMA revenue streams have
experienced growth over the past year. This
growth has come from a combination of
organic growth, as well as from the Group's
strategy to migrate Capital customers to SaaS
products on contract renewal.
Revenue recognition is a key audit matter as it
is an area that requires significant audit
attention. Determining the allocation of the
transaction price for contracts with multiple
performance obligations, particularly SaaS
contracts, requires judgement. Performance
obligations have differing patterns of revenue
recognition. As a result, the allocation of the
transaction price impacts upon the amount of
revenue recognised within a period.
The key judgements made by management in
determining that revenue has been recognised
appropriately include:
• whether contracts contain elements which
should be separated for revenue
recognition purposes; and
• determining and applying the appropriate
revenue recognition policy for the
separable elements of the contract,
including:
• allocating total revenue on a contract
between the identified performance
obligations, and
• determining the period over which revenue
should be recognised and whether the
conditions for recognition have been met.
We have understood the contractual terms within
Volpara’s contracts with customers. While a level
of standardisation exists, earlier customer
contracts include bespoke and tailored terms and
conditions. These earlier contracts are however
reducing in significance as the Group continues to
onboard new customers on largely standardised
terms. Our audit approach for revenue recognition
is largely substantive in nature. This is due to the
variability of contractual terms and the complexity
involved in determining the revenue recognition.
In responding to the key judgements involved in
determining the recognition of revenue, we have:
• obtained an understanding of the systems,
processes and controls for recognising
revenue for all material revenue streams;
reconfirmed and challenged our understanding
of the judgements made by Volpara in
identifying performance obligations for
groupings of contracts with similar contractual
terms;
•
• assessed Volpara’s allocation of the
transaction price to each identified
performance obligation; and
• considered for each contract grouping the
appropriate timing of revenue recognition
(point in time, or over time).
In addition, for a sample of revenue contracts,
with specific focus on contract types with multiple
performance obligations (SaaS contracts), we
obtained an understanding of the contractual
terms and compared the terms with the revenue
recognised by Volpara. We also obtained
evidence to support the performance of the
obligation. We undertook these procedures to
assess whether revenue was supported by
contractual agreements, was recorded within the
correct period, and was recognised at the
appropriate amount.
Based on the above procedures there were no
matters to report.
PricewaterhouseCoopers, PwC Centre, 10 Waterloo Quay, PO Box 243, Wellington 6140, New Zealand
T: +64 4 462 7000, pwc.co.nz
PwC
Description of the key audit matter
How our audit addressed the key audit matter
Description of the key audit matter
How our audit addressed the key audit matter
Valuation of intangible assets acquired as part
of the CRA Health LLC acquisition
As disclosed in note 23 to the financial
statements, Volpara acquired 100% of CRA
Health LLC (CRA) on 31 January 2021 for
NZ$24.67 million (US$17.70 million).
Volpara has identified, and measured at fair
value, the assets and liabilities acquired. The
consideration paid for the acquisition of CRA
has then been allocated to these identifiable
assets and liabilities, with any excess
consideration being allocated to goodwill.
We consider the valuation of the identified
assets to be a key audit matter. This is
because of the significance of the transaction
to the financial statements and the judgements
applied by Volpara in determining the assets'
fair values.
Volpara used an independent valuation expert
to assist them to identify and determine the fair
value of the CRA assets acquired.
Asset identified Value
($m’s)
Valuation
method
Developed
technology
Customer
relationships
3.76
8.15
Replacement
cost
Multi-period
excess
earnings
Goodwill
11.89
Residual
The judgements of most significance to the
valuation of the assets include the:
•
estimated labour effort and costs
associated with developing the CRA
technology assets, and
assumed average life of customers based
on customer churn rates. This determines
the forecast period for cash flows used in
the valuation of the customer relationship
asset.
•
To obtain an understanding of the CRA business
combination we read the sale and purchase
agreement and minutes of Board of Directors’
meetings relating to the acquisition.
Volpara used an independent valuer to assist them
with the purchase price allocation exercise. We
used our own valuation expert to assess the work
of Volpara’s expert and to challenge the
reasonableness of the fair value measurements of
the material intangible assets recognised.
Together with our valuation expert we assessed
the methodology applied by Volpara to fair value
the assets acquired. This included comparing the
valuation approaches adopted for each of the
material intangible assets recognised against our
knowledge and experience of commonly used and
recognised approaches.
Information provided by Volpara to their
independent valuation expert was a key input to
the valuations. The information of most
significance related to customer churn rates and
cash flows associated with customer relationships,
and cost estimates associated with technology
development. To assess the reliability of the
information provided we:
•
•
•
•
•
compared the customer churn rate to the
conclusions reached in the independent
financial due diligence report;
compared the customer churn rate used to
rates observed within other comparable
Volpara customer bases;
tested forecast revenue for a sample of
customers to signed customer contracts;
discussed with CRA personnel the basis for
assessment and determination of the
estimated labour effort for the development of
CRA's technology assets, and inquired of
Volpara product engineers as to the
reasonableness of these estimates; and
assessed the reasonableness of the average
cost of labour development to underlying
records.
time of the acquisition. As disclosed in note 11,
the retention plan involves payments which are
to be made if CRA achieves certain revenue
performance and staff retention targets. The
Group determined that the retention plan
relates to future employee services and is not
part of the consideration for the CRA
acquisition.
We consider the accounting treatment of the
retention plan a key audit matter as
determining if the retention plan should be
included as part of the consideration paid for
the acquisition is complex.
In relation to the retention plan, Volpara has
obtained independent accounting advice which
concludes the plan should not be included as part
of the consideration for the business acquisition,
and instead be accounted for as an employee
entitlement. We have assessed this advice
against the relevant accounting standards to
ensure the accounting treatment applied is
appropriate.
Based on the above procedures there were no
matters to report.
Our audit approach
Overview
Overall group materiality: $406,000, which represents approximately 1%
of total expenses.
Given the losses incurred to date and the current focus on revenue
growth, in our judgement, total expenses provide a more stable basis for
calculating materiality.
Following our assessment of the risk of material misstatement, we
performed:
•
full scope audits for the Group’s principal business units being
Volpara Health Technologies Limited and Volpara Health, Inc.;
•
substantive audit procedures over consolidation entries; and
• analytical review procedures over the remaining group entities.
As reported above, we have two key audit matters, being:
• Revenue recognition; and
• Valuation of intangible assets acquired as part of the CRA Health LLC
acquisition.
As part of designing our audit, we determined materiality and assessed the risks of material
misstatement in the consolidated financial statements. In particular, we considered where
management made subjective judgements; for example, in respect of significant accounting estimates
that involved making assumptions and considering future events that are inherently uncertain. As in all
of our audits, we also addressed the risk of management override of internal controls, including among
other matters, consideration of whether there was evidence of bias that represented a risk of material
misstatement due to fraud.
Additionally, a retention plan agreement was
entered into with key CRA employees at the
PwC
PwC
Materiality
The scope of our audit was influenced by our application of materiality. An audit is designed to obtain
reasonable assurance about whether the consolidated financial statements are free from material
misstatement. Misstatements may arise due to fraud or error. They are considered material if,
individually or in aggregate, they could reasonably be expected to influence the economic decisions of
users taken on the basis of the consolidated financial statements.
Based on our professional judgement, we determined certain quantitative thresholds for materiality,
including the overall Group materiality for the consolidated financial statements as a whole as set out
above. These, together with qualitative considerations, helped us to determine the scope of our audit,
the nature, timing and extent of our audit procedures and to evaluate the effect of misstatements, both
individually and in aggregate, on the consolidated financial statements as a whole.
How we tailored our group audit scope
We tailored the scope of our audit in order to perform sufficient work to enable us to provide an
opinion on the consolidated financial statements as a whole, taking into account the structure of the
Group, the accounting processes and controls, and the industry in which the Group operates.
We applied the Group materiality level to the full scope audits of the principal business units. This was
appropriate as there is minimum aggregation risk between the subsidiaries’ operations. Where
financial statement balances were disaggregated across the business units we applied a portion of the
Group materiality level, using auditor judgement, to these areas.
Auditor’s responsibilities for the audit of the consolidated financial statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial
statements, as a whole, are 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 ISAs (NZ) and ISAs 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 these consolidated financial statements.
A further description of our responsibilities for the audit of the consolidated financial statements is
located at the External Reporting Board’s website at:
https://www.xrb.govt.nz/assurance-standards/auditors-responsibilities/audit-report-1/
This description forms part of our auditor’s report.
Who we report to
This report is made solely to the Company’s Shareholders, as a body. Our audit work has been
undertaken so that we might state those matters which we are required to state to them in an auditor’s
report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Company and the Company’s Shareholders, as a body, for our
audit work, for this report or for the opinions we have formed.
All audit procedures were performed by PricewaterhouseCoopers New Zealand.
The engagement partner on the audit resulting in this independent auditor’s report is Kevin Brown.
Other information
The Directors are responsible for the other information. The other information comprises the
information included in the Annual report but does not include the consolidated financial statements
and our auditor's report thereon.
Our opinion on the consolidated financial statements does not cover the other information and we do
not express any form of audit opinion or assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the
other information and, in doing so, consider whether the other information is materially inconsistent
with the consolidated financial statements or our knowledge obtained in the audit, or otherwise
appears to be materially misstated. If, based on the work we have performed on the other information
that we obtained prior to the date of this auditor’s report, we conclude that there is a material
misstatement of this other information, we are required to report that fact. We have nothing to report in
this regard.
Responsibilities of the Directors for the consolidated financial statements
The Directors are responsible, on behalf of the Company, for the preparation and fair presentation of
the consolidated financial statements in accordance with NZ IFRS and IFRS, and for such internal
control as the Directors determine is necessary to enable the preparation of consolidated financial
statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, 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.
For and on behalf of:
Chartered Accountants
27 May 2021
Wellington
PwC
PwC
60
CONSOLIDATED FINANCIAL STATEMENTS
61
62
63
Consolidated statements of profit or
loss and other comprehensive income
Consolidated statement
of financial position
Consolidated statement
of changes in equity
64
Consolidated statement of
cash flows
65
Notes to the consolidated
financial statements
104
Additional information
for listed companies
107
Corporate directory
Consolidated statement of profit or loss
and other comprehensive income
for the year ended 31 March 2021
61
REVENUE
Revenue from contracts with customers
Cost of revenue
Gross profit
Government grants and other operating income
Sales and marketing
Product research, development, and engineering
General and administration
Foreign exchange (losses)/gains
Net loss before interest and tax
Finance income
Finance expense
Net loss for the year before tax
Income tax benefit
Net loss for the year after tax
OTHER COMPREHENSIVE INCOME
Net loss for the year
Other comprehensive (expense)/income
Items that may be reclassified subsequently to profit or loss (net of tax):
Exchange differences on translation of foreign operations
Other comprehensive (expense)/income for the year (net of tax)
Total comprehensive loss for the year, net of tax
Notes
2021
NZ$’000
2020
NZ$’000
4
7
6
7
7
7
19,747
12,602
(1,692)
18,055
1,705
(12,283)
(14,171)
(12,542)
(189)
(1,772)
10,830
1,122
(13,248)
(10,905)
(11,891)
1,087
(19,425)
(23,005)
622
(146)
771
(74)
(18,949)
(22,308)
8
1,461
1,937
(17,488)
(20,371)
(17,488)
(20,371)
(2,968)
(2,968)
1,498
1,498
(20,456)
(18,873)
Basic and diluted loss per share (NZ$)
12
(0.07)
(0.10)
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes.
Financial Statements
Volpara Health Annual Report 2021
62
Consolidated statement
of financial position
as at 31 March 2021
Consolidated statement
of changes in equity
for the year ended 31 March 2021
63
ASSETS
Non-current assets
Fixed assets
Intangible assets
Right-of-use assets
Contract costs
Deferred tax assets
Total non-current assets
Current assets
Cash and cash equivalents
Cash on deposit
Trade receivables
Contract assets
Prepayments and other receivables
Inventory
Contract costs
Total current assets
Total assets
EQUITY AND LIABILITIES
Equity
Share capital
Share option reserve
Foreign currency translation reserve
Accumulated losses
Total equity
Non-current liabilities
Employee entitlements
Lease liabilities
Borrowings
Deferred tax liabilities
Total non-current liabilities
Current liabilities
Trade and other payables
Deferred revenue
Lease liabilities
Borrowings
Total current liabilities
Total liabilities
Total equity and liabilities
Notes
2021
NZ$’000
2020
NZ$’000
Share
capital
NZ$’000
Notes
Share
option
reserve
NZ$’000
Foreign currency
translation
reserve
NZ$’000
Accumulated
losses
NZ$’000
Total
equity
NZ$’000
21
22
14
5
8
9
9
10
10
5
12
13
11
14
24
8
11
4
14
24
720
46,426
2,686
1,753
80
51,665
7,873
24,357
7,754
862
1,608
53
442
42,949
94,614
1,029
26,233
3,519
1,593
-
32,374
3,673
27,705
7,103
440
1,186
54
389
40,550
72,924
180,678
3,759
(1,583)
(110,057)
72,797
140,078
3,326
1,385
(92,569)
52,220
856
2,416
486
281
4,039
3,872
11,434
483
1,989
17,778
21,817
-
3,159
-
1,641
4,800
4,530
10,769
605
-
15,904
20,704
Balance at 1 April 2020
Net loss for the year after tax
Other comprehensive loss
Total comprehensive loss for the year,
net of tax
Transactions with owners:
Issue of share capital from placement
and share purchase plan
Costs of placement and share
purchase plan capital raise
Issue of share capital from exercise of
share options
Forfeiture of share options
Recognition of share-based payments
Balance at 31 March 2021
140,078
3,326
1,385
(92,569)
52,220
-
-
-
12
12
13
13
13
39,499
(1,601)
2,702
-
-
180,678
-
-
-
-
-
(955)
(772)
2,160
3,759
-
(17,488)
(2,968)
-
(17,488)
(2,968)
(2,968)
(17,488)
(20,456)
-
-
-
-
-
-
-
-
-
-
39,499
(1,601)
1,747
(772)
2,160
(1,583)
(110,057)
72,797
Balance at 1 April 2019
84,129
2,374
(113)
(72,208)
14,182
Net loss for the period after tax
Other comprehensive income
Total comprehensive loss for the
period, net of tax
Transactions with owners:
Issue of share capital from placement
and accelerated non-renounceable
entitlement offer (ANREO)
Costs of placement and ANREO
Issue of share capital from exercise of
share options
Forfeiture of share options
Recognition of share-based payments
-
-
-
58,032
(3,118)
1,035
-
-
13
13
13
-
-
-
-
-
(419)
(19)
1,390
-
(20,371)
(20,371)
1,498
-
1,498
1,498
(20,371)
(18,873)
-
-
-
-
-
-
-
-
10
-
58,032
(3,118)
616
(9)
1,390
94,614
72,924
Balance at 31 March 2020
140,078
3,326
1,385
(92,569)
52,220
For and on behalf of the Board, who authorised the issue of these consolidated financial statements on 27 May 2021.
Ralph Highnam
John Diddams
The above consolidated statement of financial position should be read in conjunction with the accompanying notes.
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
Financial Statements
Volpara Health Annual Report 2021 64
Consolidated statement
of cash flows
for the year ended 31 March 2021
OPERATING ACTIVITIES
Receipts from customers
Payments to suppliers and employees
Other income received
Net interest received
Net taxes paid
Business integration and acquisition expenses1
Payment of low-value asset leases
Net cash utilised in operating activities
INVESTING ACTIVITIES
Purchases of property and equipment
Proceeds from sale of PPE
Payments for intangible assets
Acquisition of subsidiary net of cash acquired
Payments into term deposits
Receipts from term deposits
Net cash utilised in investing activities
FINANCING ACTIVITIES
Proceeds from issue of share capital from placement,
share purchase plan, and ANREO
Transaction costs of raising capital
Proceeds from exercise of share options
Proceeds from borrowings
Payment of principal portion of the lease liabilities
Net cash provided by financing activities
Net increase in cash and cash equivalents
Effects of currency translation on cash and cash equivalents
Cash and cash equivalents as at 1 April
Cash and cash equivalents at the end of the period2
9
1. Reclassed from investing activities to operating activities. Refer to note 2.5.
2. Cash and cash equivalents do not include cash on deposit totalling NZ$24.4M (2020: NZ$27.7M). Refer to note 9 for further details.
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
Notes
2021
NZ$’000
2020
Restated
NZ$’000
19,685
16,339
(35,141)
(33,550)
1,686
1,014
(137)
(1,032)
(96)
977
487
(146)
(680)
(65)
9
(14,021)
(16,638)
(76)
48
(751)
(484)
-
(525)
(24,672)
(21,707)
(116,732)
(32,820)
119,078
16,221
(23,105)
(39,315)
39,499
58,032
(1,601)
(3,122)
1,747
2,822
(599)
616
-
(290)
41,868
55,236
4,742
(717)
(542)
3,673
7,873
278
4,112
3,673
65
Notes to the consolidated
financial statements
for the year ended 31 March 2021
1. Corporate Information
The consolidated financial statements of Volpara Health
Technologies Limited (the Company or Volpara) and its
subsidiaries (collectively, the Group) for the year ended 31
March 2021 were authorised for issue in accordance with a
resolution of the Directors on 27 May 2021.
Volpara (the Company and the ultimate Parent) is a limited
liability company incorporated and domiciled in New
Zealand and whose shares are publicly traded. Its principal
place of business and registered office is Level 14–15, 40
Mercer Street, Wellington 6011, New Zealand.
Volpara is designated as a for-profit company incorporated
under the Companies Act 1993 (NZCN: 2206998) and is
listed on the Australian Securities Exchange. The Company
is also registered in Australia (ARBN: 609 946 867). The
Company's principal sales and services are in the medical
device and practice management software industry.
Information on the Group’s structure and other related
party relationships of the Group is provided in note 25.
2.2 Basis of consolidation
The Group’s financial statements consolidate the financial
statements of Volpara and its subsidiaries. A subsidiary
is a controlled entity over which the Group has power,
is exposed, or has rights, to variable returns from its
involvement with the entity, and has the ability to use its
power to affect its returns.
2.3 New and amended standards and interpretations
There are no new standards or interpretations material
to the Group to be applied during the year. The Group
does not anticipate adopting any standards prior to their
effective date. There are no standards or amendments that
have been issued but not yet effective that are expected to
have a material impact on the Group.
2.4 Significant accounting policies
Significant accounting policies, accounting estimates,
and judgments that summarise the measurement basis
used and are relevant to the understanding of the financial
statements are provided throughout the accompanying
notes:
2 Significant accounting policies
Note 13: Valuation of share-based payments
2.1 Basis of preparation
The consolidated financial statements for the year ended
31 March 2021 have been prepared in accordance with
Generally Accepted Accounting Practice in New Zealand
(NZ GAAP). They comply with International Financial
Reporting Standards (IFRS), New Zealand Equivalents to
International Financial Reporting Standards (NZ IFRS),
and other applicable Financial Reporting Standards as
appropriate for for-profit entities.
The consolidated financial statements have been prepared
on a historical cost basis, except for certain financial assets
and liabilities that have been measured at fair value.
The consolidated financial statements are presented
in New Zealand dollars, which is the Parent’s functional
currency and the presentational currency of the Group. All
values are rounded to the nearest thousand ($'000) except
when otherwise indicated.
The consolidated financial statements provide comparative
information in respect of the previous period.
Note 22: Intangible assets
Note 23: Acquisitions
a) Current versus non-current classification
The Group presents assets and liabilities in the
statement of financial position based on current/non-
current classification. An asset is current when it is:
• Expected to be realised or intended to be sold
or consumed in the normal operating cycle
• Held primarily for the purpose of trading
• Expected to be realised within 12 months
after the reporting period or
• Cash or cash equivalent unless restricted from being
exchanged or used to settle a liability for at least
12 months after the reporting period
The Group classifies all other assets as non-current.
A liability is current when:
•
•
•
It is expected to be settled in the
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
The Group classifies all other liabilities as non-current.
Notes to the Financial Statements
Volpara Health Annual Report 2021
66
67
b) Foreign currencies
For the purposes of presenting the Group financial
statements, the assets and liabilities of the Group’s foreign
operations are expressed in New Zealand Dollars using
exchange rates prevailing at the end of the reporting
period.
Foreign currency transactions are translated into the
functional currency using the average exchange rates for
that month. Foreign exchange gains and losses resulting
from the settlement of such transactions, and from the
translation of monetary assets and liabilities denominated
in foreign currencies at year end exchange rates, are
generally recognised in profit or loss.
Exchange differences arising on translation for
consolidation, are recognised in other comprehensive
income (OCI) and accumulated as a separate component of
equity in the Group’s foreign currency translation reserve.
On disposal of a foreign operation, the component of OCI
relating to that particular foreign operation is reclassified
to profit or loss.
c) Impairment of non-financial assets
At the end of each reporting period, the Group reviews the
carrying amounts of its tangible and intangible assets to
determine whether there is any indication that those assets
have suffered an impairment loss. If any such indication
exists, the recoverable amount of the asset is estimated
in order to determine the extent of the impairment loss (if
any). This includes intangible assets such as patents and
software and also includes goodwill acquired through
business combinations.
When it is not possible to estimate the recoverable
amount of an individual asset, the Group estimates the
recoverable amount of the cash-generating unit to which
the asset belongs. When a reasonable and consistent basis
of allocation can be identified, corporate assets are also
allocated to individual cash-generating units, or otherwise
they are allocated to the smallest group of cash-generating
units for which a reasonable and consistent allocation basis
can be identified.
Recoverable amount is the higher of fair value less costs
of disposal and value in use. In assessing value in use, the
estimated future cash flows are discounted to their present
value using a pre-tax discount rate that reflects current
market assessments of the time value of money and the
risks specific to the asset for which the estimates of future
cash flows have not been adjusted.
If the recoverable amount of an asset (or cash generating
unit) is estimated to be less than its carrying amount, the
carrying amount of the asset (or cash generating unit) is
reduced to its recoverable amount and an impairment loss
is recognised immediately in the profit or loss.
Further disclosures relating to impairment of non-financial
assets are also provided in note 22.
2.5 Restatement of comparatives
To ensure consistency with the current period,
comparative figures have been restated where
appropriate.
An adjustment was made to the classification of business
integration and acquisition expenses in the consolidated
statement of cash flows. The $680K relating to costs
associated with the acquisition of MRS Systems, Inc.,
was originally classified as an investing activity within
the consolidated statement of cash flows. Upon further
inspection of the applicable accounting standards, it was
noted that this should be classified as an operating activity.
This adjustment reflects this reclassification.
There is no impact to the consolidated statement of
profit or loss or to the consolidated statement of financial
position of the Group.
2.6 Going concern
The considered view of the Directors of the Group is that
the going concern assumption is valid. This view has been
reached after making due enquiry and having regard
to the circumstances which the Directors consider will
occur and those which are reasonably likely to affect the
Group during the period of one year from the date these
consolidated financial statements are approved.
The Group recorded a net loss of NZ$17.5M for the year
ended 31 March 2021 (2020: NZ$20.4M) and is expected to
make further losses in the following financial year.
Notwithstanding the above, the Group has prepared
cash flow forecasts which indicate that cash on hand at
year-end, combined with the net cash flow as a result of
operations, will enable the Group to continue operating as
a going concern.
3. Segment information
The Board of Directors, assessed to be the Group’s Chief Operating Decision Maker (CODM), receives financial reports
for each region as defined by the four operating subsidiaries and head office (Corporate). The reporting to the CODM has
been aggregated into four reporting segments based on region and separating out head office:
• North America
• Europe, Middle East, and Africa (EMEA)
• Asia Pacific (APAC)
• Corporate
This aggregation is based on products, customers, distribution methods, and the regulatory environment being similar in
each region.
No single customer contributes more than 10% of the Group's revenue.
The Group derives its revenue from the sale of clinical functions and patient tracking software. The clinical functions
business is sold worldwide, whereas the patient tracking software to date has been sold predominantly in North America.
The CODM assesses the performance of the reportable segments based on net profit/(loss) after tax. The segment
information provided to the Board of Directors for the year ended 31 March 2021 is as follows:
North
America
NZ$’000
EMEA
NZ$’000
APAC
NZ$’000
Corporate
NZ$’000
Reconciled
to Group
NZ$’000
2021
Revenue from breast contracts
• SaaS
• SMA
• Capital
Revenue from lung contracts
Other
Total revenue
Cost of revenue
Gross profit
9,781
6,601
1,501
1,187
48
19,118
(1,496)
17,622
82
15
3
-
-
100
(89)
11
423
18
88
-
-
529
(107)
422
-
-
-
-
-
-
-
-
1,494
(345)
(8,962)
(5,253)
(46)
10,286
6,634
1,592
1,187
48
19,747
(1,692)
18,055
1,705
(12,283)
(14,171)
(12,542)
(189)
(13,112)
(19,425)
-
-
621
(54)
622
(146)
Government grants and other operating income
17
88
106
Sales and marketing
Product research, development, and engineering
General and administration
Foreign exchange gains/(losses)
Net loss before interest and tax
Finance income
Finance expense
(10,624)
(4,832)
(6,989)
9
(4,797)
1
(91)
(319)
(369)
(128)
(2)
(719)
-
(1)
(995)
(8)
(172)
(150)
(797)
Net loss for the year before tax
(4,887)
(720)
(797)
(12,545)
(18.949)
Income tax benefit/(expense)
Net loss for the year after tax
1,426
(3,461)
(3)
(723)
38
-
1,461
(759)
(12,545)
(17,488)
Notes to the Financial Statements
Volpara Health Annual Report 2021
68
2020
Revenue from breast contracts
• SaaS
• SMA
• Capital
Revenue from lung contracts
Total revenue
Cost of revenue
Gross profit
Government grants and other operating income
Sales and marketing
Product research, development, and engineering
General and administration
Foreign exchange gains/(losses)
Net loss before interest and tax
North
America
NZ$’000
EMEA
NZ$’000
APAC
NZ$’000
Corporate
NZ$’000
Reconciled
to Group
NZ$’000
5,927
2,286
3,200
467
11,880
(1,545)
10,335
-
(11,631)
(3,624)
(4,538)
1
121
11
2
-
134
(89)
45
30
(292)
(245)
(78)
2
382
12
194
-
588
(138)
450
-
(880)
(45)
(10)
28
-
-
-
-
-
-
-
6,430
2,309
3,396
467
12,602
(1,772)
10,830
1,092
(445)
1,122
(13,248)
(6,991)
(10,905)
(7,265)
(11,891)
1,056
1,087
(9,457)
(538)
(457)
(12,553)
(23,005)
Finance income
Finance expense
7
(50)
-
(8)
15
1
749
(17)
771
(74)
Net loss for the period before tax
(9,500)
(546)
(441)
(11,821)
(22,308)
Income tax benefit
1,931
2
4
-
1,937
Net loss for the period after tax
(7,569)
(544)
(437)
(11,821)
(20,371)
SEGMENT NON-CURRENT ASSETS
As at 31 March 2021
As at 31 March 2020
North
America
NZ$’000
48,725
29,562
EMEA
NZ$’000
APAC
NZ$’000
Corporate
NZ$’000
Reconciled
to Group
NZ$’000
4
-
123
27
2,813
2,785
51,665
32,374
69
4. Revenue from contracts with customers
The Group recognises revenue from goods and services provided under three main product categories:
1. Software as a Service (SaaS) contracts, which involve the sale of software on a subscription
basis and, where applicable, cloud-based support (and associated items);
2. Capital sales contracts, which involve the outright sale of software and associated items;
3. Software Maintenance Agreements (SMAs) to support previous Capital sales.
Revenue is measured based on the consideration specified in a contract with a customer. The Group recognises revenue
when control of a good or service is transferred to the customer. Refer below for more detail.
The Group has determined that no significant financing component exists in respect of the various revenue streams.
This is due to there being no significant time lag between the delivery of goods or services and when payment is received.
Further information about the Group's three main product categories and related performance obligations is detailed below.
Software as a Service
The Group’s SaaS contracts with customers generally comprise a range of goods and services. These may include the
base software (and hardware in some instances), software updates and upgrades, installation, upfront training and
ongoing technical support, integrations, and role licences to access services.
As a result, a number of performance obligations exist. The transaction price is therefore allocated to each performance
obligation on a relative stand-alone, selling-price basis. This allocation requires estimation because, while each separate
performance obligation is identified in the contract, the contract price is set for the agreement as a whole. In the absence
of comparable market prices for the various goods and services provided, the Group relies on internal information such
as a master price list to determine the stand-alone selling price for each good or service. This internal information may be
adjusted to reflect market conditions across the geographic locations, the nature of the customer and their expected use
of the software, and other factors.
Revenue for each performance obligation is recognised as follows:
Performance obligation
Base software (and hardware)
Upfront training
Installation
Recognition
Point in time, on installation
Point in time, upon completion
Over time, as installation is provided
Role licences and volume licences which provide access to
services where the Group is required to maintain access to
analytical and other information
Over time, from the completion of installation through
to the end of the contract
Software updates, upgrades, and ongoing technical support
Predominantly "stand-ready" services recognised on a
straight-line basis over the period of service
Most contracts involve pricing based on usage of the software (mammography volumes). Revenue based on usage is
recognised on a straight-line basis as this is in line with expected usage patterns and for practicality purposes.
Most SaaS contracts are for one- to five-year terms, with a right to cancel at the end of each year without penalty. The
Group’s judgment is that these are one-year contracts with a right to renew and accordingly revenue is recognised as the
performance obligations are met over the annual period.
A number of contracts allow the customer to renew the contract at a discount to the initial price, or to obtain additional
role licences or other goods and services at a discount. Where the discount is incremental to the range of discounts
typically given for the goods or services, the value of the discount is determined and some revenue is allocated to
this customer option known as the material right. Revenue allocated to the customer option is recognised when the
subsequent discounted goods or services are provided.
Notes to the Financial Statements
Volpara Health Annual Report 2021
70
71
There are no warranties to be accounted for on SaaS products for the current period. Warranties will be applicable on
Live sales after the first year. This will include a warranty on the hardware sold with the Live product. It is expected that
the number of claims will be minimal. A provision will be recognised for the cost associated with warranty claims if it is
expected that these claims will be more than insignificant. The recognition of any provision does not impact revenue
recognition.
Capital
Capital sales contracts involve the provision of software licences, server hardware (if applicable), installation services,
integrations, and training. Customers enter into an arrangement with the Company by signing a contract, which grants
the customer a non-transferable, non-exclusive licence to use the software for its internal purposes, generally for
a perpetual period of time. The Company recognises revenue when persuasive evidence of an arrangement exists,
performance has occurred, the fee is fixed or determinable, and collectability is probable. This is usually the date that the
customer has been provided with the server (where applicable) and the licence key(s), and training (where applicable) has
been completed. Software products are delivered either electronically or via delivery of the software on a device for the
customer to install. Electronic delivery occurs when the Company provides the customer with access to the software via a
secure portal.
Training and other services are not considered essential to the functionality of the Company’s software products.
These services are generally delivered on a time-and-materials basis, and are recognised when services are performed.
Capital contracts do not involve any variable consideration. Management considers whether revenue needs to be
allocated to separate performance obligations only where significant elements of the contract remain outstanding at the
reporting date (refer below for discussion on how revenue would be allocated if this were the case).
SMAs
The Group’s SMA contracts with customers generally comprise a number of distinct performance obligations, being
the provision of software updates, upgrades, ongoing technical support, IT configuration changes, etc. SMA contracts
usually begin one year after the commencement of a Capital sale, and contracts range in length between one and four
years. SMA contracts are considered "stand-ready" performance obligations, where all elements are provided over time.
Therefore, revenue is recognised on a straight-line basis over the period of the contract. Payment is usually due upon
commencement of each year of the SMA.
Contract modifications
There were several contract modifications that occurred during the year where customers on an existing SMA or
Scorecard (previously Density, Dose, and Pressure) agreement signed SaaS contracts and as a result they were accounted
for as contract modifications. Separate performance obligations did not arise from the changes. The cash flow associated
with these contracts changed as a result of these modifications.
Disaggregation of revenue
The Group derives its revenue from the transfer of goods and services over time and at a point in time in the following
product categories:
For the year ended 31 March 2021
Software
maintenance
agreements
NZ$'000
Software
as a service
NZ$'000
Capital sales
NZ$'000
Other
NZ$'000
Total
NZ$'000
Timing of revenue recognition
Goods or services transferred at a point in time
Services transferred over time
Total revenue from contracts with customers
1,592
-
1,592
-
6,634
6,634
2,046
9,427
11,473
48
-
48
3,686
16,061
19,747
For the year ended 31 March 2020
Software
maintenance
agreements
NZ$'000
Software
as a service
NZ$'000
Capital sales
NZ$'000
Other
NZ$'000
Total
NZ$'000
Timing of revenue recognition
Goods or services transferred at a point in time
Services transferred over time
Total revenue from contracts with customers
3,396
-
3,396
-
2,309
2,309
1,298
5,599
6,897
-
-
-
4,694
7,908
12,602
Deferred revenue
Payment is usually due annually in advance either upon go-live or an agreed period after the contract is signed, whichever
occurs first. If a customer pays consideration before the Group transfers goods or services to the customer, a deferred
revenue liability is recognised when the payment is made. Deferred revenue liabilities are recognised as revenue when the
Group performs under the contract.
Opening balance as at 1 April
Amount recognised upon acquisition
Amount recognised in revenue during the year
Amounts invoiced during the year
Closing balance as at 31 March
Deferred revenue by contract type
As at 31 March
Capital
SMA contracts
SaaS contracts
Total deferred revenue
Notes
23
2021
NZ$'000
10,769
1,135
(16,649)
16,179
11,434
2020
NZ$'000
2,184
1,564
(8,254)
15,275
10,769
2021
NZ$'000
2020
NZ$'000
276
3,829
7,329
18
5,926
4,825
11,434
10,769
Notes to the Financial Statements
Volpara Health Annual Report 2021
72
73
5. Contract costs
Cost to obtain a contract
The Group pays sales commissions to its employees for each contract that they obtain, subject to conditions. These
commission costs are either amortised over the life of the contract, or for contracts recognised at a point in time,
recognised when the performance obligation is satisfied. Contracts span up to five years in length and, correspondingly,
amortisation is spread over the contract's life. These costs are recognised in cost of revenue in profit or loss.
As at 1 April
Costs to obtain contracts entered into in current year
Amortisation within cost of revenue
As at 31 March
6. Government grants and other operating income
For the year ended 31 March
Government grants - Callaghan Innovation
Other income
Total government grants and other operating income
2021
NZ$'000
2020
NZ$'000
1,982
771
(558)
2,195
1,183
1,363
(564)
1,982
2021
NZ$'000
2020
NZ$'000
1,314
391
1,705
1,077
45
1,122
Government grants are received for certain expenses incurred by the Group, and are recognised in profit or loss, when
it becomes reasonably certain that the grants will be received. The Callaghan Innovation R&D Growth Grant has 10%
withheld until conditions are met. This has been accrued for on the basis that conditions will be met.
7. Operating expenses and cost of revenue
Cost of revenue
Cost of revenue expenses consist of those expenses which are incremental in deriving additional revenue. This
includes cloud costs, commission expenses, hardware, and any travel costs associated with the onboarding process.
Overhead allocation
The presentation of the consolidated statement of profit or loss and other comprehensive income by function requires
certain overhead costs to be allocated to functions. These allocations require management to apply judgment.
Sales and marketing
Sales and marketing expenses consist of personnel and related expenses (including salaries, benefits, and bonuses)
directly associated with the sales and marketing teams and the cost of educating and onboarding customers. Other
costs included are external advertising, marketing, and conference costs for events such as the Radiological Society of
North America (RSNA) conference, as well as allocated overheads.
Product research, development, and engineering
Product research, development, and engineering costs consist primarily of personnel and related expenses (including
salaries, benefits, and bonuses) directly associated with our product research, development, engineering, regulatory and
quality employees, as well as allocated overheads.
Under NZ IFRS, the proportion of product research and development costs that creates a benefit in future years is
capitalisable as an intangible asset and is then amortised to profit or loss over the estimated life of the asset created.
The amount amortised relating to Volpara's products is included as a product research, development, and engineering
cost. Refer to note 22 for further details.
General and administration
General and administration expenses consist of personnel and related expenses (including salaries, benefits, and
bonuses) for the Chief Executive Officer (CEO) as well as the finance, human resources, and administrative employees.
It also includes legal, accounting, and other professional services fees, insurance premiums, other corporate expenses,
and allocated overheads. Share-based compensation is included for all directors, Key Management Personnel (KMP),
and employees.
For the year ended 31 March
Salaries and benefits1
Research, development, and other product engineering costs not capitalised
Depreciation and amortisation
Superannuation contributions
Consulting and subcontracting
Share-based payments expense
Customer cloud costs
Advertising and marketing
Retention plan costs
Business integration and acquisition expenses
Directors' fees
Fees paid to auditors
Low-value lease expenses
Bad debts written off
Travel
Impairment of right-of-use asset
Movement in provision for expected credit losses
Other operating expenses
Total cost of revenue and operating expenses2
AUDITORS' REMUNERATION
The auditor of the Group is PwC
Audit of financial statements
Review of interim financial statements
Review of Callaghan Grant return
Non-assurance engagement3
Total
FEES TO A NON-PWC AUDIT FIRM
Audit of financial statements
Total
Notes
2021
NZ$'000
2020
NZ$'000
14, 21, 22
13
11
23
10
17,043
7,251
3,089
2,073
2,035
1,379
933
847
833
698
406
373
90
171
47
-
(55)
3,475
40,688
17,865
3,802
2,240
1,567
1,595
1,382
927
1,510
-
1,004
401
244
65
44
1,578
106
148
3,338
37,816
2021
NZ$'000
2020
NZ$'000
220
35
5
97
357
16
16
155
35
5
33
228
16
16
1.
Excludes salaries and benefits associated with research for $6,962,000 (2020: $3,586,000). These are included as part of "Research, development,
and other product engineering costs not capitalised".
2. This total excludes foreign exchange gains/(losses).
3. The Group engaged PwC to perform security penetration testing and advisory services relating to IT security risks, and to obtain a market survey of
executive remuneration levels.
Notes to the Financial Statements
Volpara Health Annual Report 2021
74
8. Taxation
Current income tax
The income tax benefit for the year comprises current and deferred tax. Tax is recognised in the income tax component
of the consolidated statement of profit or loss, except to the extent that it relates to items recognised in other
comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or
directly in equity, respectively.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively
enacted at the reporting date, and any adjustment to tax payable in respect of previous years.
Deferred tax is recognised using the balance sheet method, providing for temporary differences between the carrying
amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred
tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on
the laws that have been enacted or substantively enacted by the reporting date.
A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which
the temporary difference can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the
extent that it is no longer probable that the related tax benefit will be realised.
As at 31 March
RECONCILIATION OF EFFECTIVE TAX RATE
Net loss for the year before tax
Prima facie taxation at 28% (2020: 28%)
Less tax effect
Income not subject to tax
Difference in effective tax rate
Expenses not deductible for tax purposes
Tax differences not recognised
Deferred tax on temporary differences relating to earlier periods
Tax losses recognised relating to earlier periods
Income tax benefit
Represented by:
Current tax
Deferred tax
Income tax benefit
The Group has unrecognised deferred tax assets consisting of:
Temporary differences
Accumulated losses
Total unrecognised deferred tax assets
2021
NZ$'000
2020
NZ$'000
(18,949)
(22,308)
(5,306)
(6,246)
(757)
259
340
4,066
(18)
(45)
(302)
-
531
4,945
-
(865)
(1,461)
(1,937)
(200)
(1,261)
(1,461)
23
(1,960)
(1,937)
3,986
10,411
3,251
7,280
14,397
10,531
The Group has tax losses in New Zealand of NZ$37,103,000 (2020: NZ$25,772,000); tax losses in the USA of US$4,050,000
(2020: US$3,230,000); tax losses in Australia of $nil (2020: A$70,000), and tax losses in Europe of GBP61,000 (2020:
GBP75,000) that are available for offset against future taxable profits of the companies in which those losses arose,
subject to satisfying relevant jurisdiction income tax-loss carry-forward rules and maintaining minimum levels of
shareholder continuity; and therefore realisation is currently uncertain.
DEFERRED TAX ASSETS/(LIABILITIES)
Intangible assets
Tax losses
Other
Balance at beginning of year
Charged to profit or loss
Gain/(loss) from movement in exchange rates
Balance at end of year
(3,752)
415
509
(2,828)
1,507
185
(221)
1,471
604
661
(109)
1,156
75
Total
(1,641)
1,261
179
(201)
Deferred tax assets of the Group relating to tax losses and other temporary differences have been recognised to the
extent of deferred tax liabilities, where the benefit of those tax losses and other temporary differences are available for
offset within the entity or jurisdiction in which the deferred tax liabilities arise.
Imputation credits
As at 31 March 2021, the Group had no imputation credits (2020: $nil).
9. Cash, cash equivalents, and cash on deposit
Cash at bank and on hand
Short-term deposits
Cash on deposit*
Total cash and cash equivalents and cash on deposit
*Cash on deposit is in the form of term deposits that require a notice period of 91–365 days to access.
2021
NZ$'000
2020
NZ$'000
5,873
2,000
24,357
32,230
3,673
-
27,705
31,378
Cash at bank and on hand earns interest at floating rates based on daily bank deposit rates (note 16). Short-term
deposits are made for varying maturity periods of between one day and three months, depending on the immediate
cash requirements of the Group, and earn interest at the respective short-term deposit rates. They are subject to an
insignificant risk of changes in value.
At 31 March 2021, the Group had available NZ$10,000 (2020: NZ$10,000) of undrawn committed borrowing facilities.
For the purpose of the statement of cash flows, cash and cash equivalents comprise cash at bank and on hand and short-
term deposits.
Notes to the Financial Statements
Volpara Health Annual Report 2021
76
77
Reconciliation of operating cash flows
For the year ended 31 March
Net loss for the year after tax
NON-CASH AND NON-OPERATING ITEMS
Depreciation and amortisation
(Gains)/losses on foreign exchange transactions
Share-based payments
(Gain)/loss on disposal of fixed assets
Bad debts write-off
Impairment of right-of-use asset
Movement in provision for expected credit losses
Deferred tax benefit
Interest on loan
Write-off lease liability
CHANGES IN WORKING CAPITAL
Increase in trade and other receivables
Increase in contract costs
Decrease/(increase) in inventory
Increase in trade and other payables and employee entitlements
Increase in deferred revenue and contract assets
Effect of foreign exchange variance
Net cash used in operating activities
2021
NZ$'000
2020
restated1
NZ$'000
(17,488)
(20,371)
3,089
1,151
1,379
(48)
171
-
(55)
2,240
(755)
1,382
-
44
106
148
(1,261)
(1,960)
24
(33)
-
-
(1,342)
(506)
2
335
511
50
(2,965)
(603)
(14)
736
5,870
(496)
(14,021)
(16,638)
1. Business integration and acquisition expenses were reclassed from investing activities to operating activities. Refer to note 2.5.
10. Trade receivables and contract assets
Trade receivables are amounts due from customers for the sale of goods or services performed in the ordinary course of
business that are unconditional. If collection is expected in one year or less, they are classified as current assets. If not,
they are classified as non-current assets.
A contract asset is the right to consideration in exchange for goods or services transferred to the customer. If the Group
performs by transferring goods or services to a customer before the customer pays consideration or before payment is
due, a contract asset is recognised for the earned consideration that is conditional.
Trade receivables
Allowance for expected credit losses
Total trade receivables
Trade receivables are non-interest bearing and are generally on terms of 30 to 90 days.
.
CONTRACT ASSETS
Opening balance as at 1 April
Amount recognised in revenue during the year
Amounts transferred to trade receivables during the year
(Loss)/gain from movement in exchange rates
Closing balance as at 31 March
Contract assets
Allowance for expected credit losses
Total contract assets
2021
NZ$'000
2020
NZ$'000
7,846
(92)
7,754
7,248
(145)
7,103
2021
NZ$'000
2020
NZ$'000
440
1,458
(1,005)
(31)
862
874
(12)
862
157
952
(687)
18
440
454
(14)
440
Customer credit risk
The Group seeks to trade only with reputable third parties, and as such collateral is typically not requested; nor is it the
Group’s policy to securitise its trade and other receivables. In addition, outstanding customer receivables and contract
assets are monitored on an ongoing basis with the result that the Group’s experience of bad debts is not significant.
An impairment analysis is performed at each reporting date using a provision matrix to measure expected credit
losses (ECLs). The provision rates are based on days past due for groupings of various customer segments with similar
loss patterns (i.e., by geographical region, product type). The calculation reflects the probability-weighted outcome,
reasonable, and supportable information that is available at the reporting date about past events, current conditions, and
forecasts of future economic conditions. Generally, trade receivables are written off if past due for an extended period
(e.g., one year) and are not subject to enforcement activity. The maximum exposure to credit risk at the reporting date
is the carrying value of trade receivables and contract assets. The Group does not hold collateral as security. The Group
evaluates the concentration of risk with respect to trade receivables and contract assets as low, as its customers are
generally large institutions.
For trade receivables and contract assets, the Group applies the simplified approach permitted by NZ IFRS 9, which
requires expected lifetime losses to be recognised from initial recognition of the trade receivables and contract assets.
Customers have been categorised into different groups based on the aging of their invoices as shown in the
following table.
Notes to the Financial Statements
Volpara Health Annual Report 2021
78
79
31 March 2021
Contract
assets
Trade receivables
Days past due
Total
Current
<30 days
31–60 days
61–90 days
>90 days
NZ$'000
NZ$'000
NZ$'000
NZ$'000
NZ$'000
NZ$'000
NZ$'000
Expected credit loss rate
Estimated total gross
carrying amount at default
Expected credit loss
31 March 2020
1.4%
874
12
Contract
assets
0.7%
4,560
31
0.6%
800
5
1.4%
587
8
1.3%
2.6%
1.2%
151
2
1,748
8,720
46
104
Trade payables
Accrued expenses
Employee entitlements
Retention plan accrual
Tax payable
Trade receivables
Days past due
Total
Total trade and other payables
Trade payables are generally on terms of 14-30 days.
11. Trade and other payables
Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business
from suppliers. Trade payables are classified as current liabilities if payment is due within one year or less. If not, they are
classified as non-current liabilities.
2021
NZ$'000
2020
NZ$'000
949
549
879
991
2,336
2,660
856
38
-
-
4,728
4,530
Current
<30 days
31–60 days
61–90 days
>90 days
NZ$'000
NZ$'000
NZ$'000
NZ$'000
NZ$'000
NZ$'000
NZ$'000
Expected credit loss rate
3.1%
0.8%
0.5%
Estimated total gross
carrying amount at default
454
2,969
2,485
Expected credit loss
14
23
12
0.5%
385
2
4.0%
8.5%
2.1%
250
10
1,159
7,702
98
159
Set out below is the movement in the allowance for expected credit losses of trade receivables and contract assets:
As at 1 April
Movement in provision for expected credit losses (note 7)
As at 31 March
2021
NZ$'000
2020
NZ$'000
159
(55)
104
11
148
159
The Group continues to recognise expected credit losses at an increased level due to the ongoing economic impacts
of the COVID-19 pandemic.
Employee entitlements comprise entitlements for annual leave, superannuation contributions in their various forms
(401(k), UK pension, Super, and Kiwisaver), salaries, commissions for sales staff, and an accrual for the CRA retention plan
(refer to note 23). Employee entitlements expected to be settled within 12 months of the reporting date are recognised in
respect of employees' services up to the reporting date.
As part of the acquisition, Volpara entered into a retention plan agreement with key employees of CRA. This retention
plan involves two US$2M payouts which are to be made if CRA achieves certain ARR performance and staff-retention
targets by 31 December 2021 and 30 June 2022. These retention payments are related to employee remuneration and are
not treated as consideration for the purchase of the business. The fair value of the payments has been accrued in line
with services performed from the employees on a straight-line basis based on the probability of achieving the targets.
The Directors have considered the likelihood of achievement of the ARR performance targets as probable. Additionally,
the Directors have assumed that all employees will meet the service conditions.
12. Share capital and earnings per share (EPS)
Ordinary shares are classified as equity. Incremental costs directly attributed to the issue of new ordinary shares or
options are shown in equity as a deduction from proceeds.
(a) Ordinary shares
All issued shares are fully paid and have no par value.
Ordinary shares are entitled to one vote per share at meetings of Volpara.
All ordinary shares rank equally with regard to Volpara.
(b) Capital management
The Group’s capital includes share capital, accumulated losses, and reserves.
The Group’s policy is to maintain a sound capital base so as to maintain investor and creditor confidence, sustain future
development of the business, and continue as a going concern. The Group's policies in respect of capital management
and allocation are reviewed by the Board of Directors.
Notes to the Financial Statements
Volpara Health Annual Report 2021
80
81
Ordinary shares issued and fully paid
Notes
NZ$’000
000’s
NZ$’000
000’s
2021
2020
In issue as at 1 April
Exercise of share options
140,078
218,480
84,129
179,350
13
2,702
4,078
1,042
2,466
Issue of share capital from placement
29,768
21,538
47,485
30,000
Issue of share capital from share purchase plan
9,731
6,923
10,547
6,664
Issue costs
In issue as at 31 March
(1,601)
-
(3,125)
-
180,678
251,019
140,078
218,480
Dividends
No dividends have been declared or paid for the year ended 31 March 2021 (2020: $nil).
Earnings per share
Basic earnings per share is calculated by dividing net loss for the year after tax by the weighted average number of
ordinary shares in issue during the year.
Diluted earnings per share is calculated by adjusting the weighted average number of shares outstanding to assume
conversion of all dilutive potential ordinary shares. The Group has potential ordinary shares in the form of share options.
However, as these are anti-dilutive due to the Company being in a loss position, the earnings per share and diluted
earnings per share are the same.
The following reflects the income and share data used in the basic and diluted EPS computations:
13. Share-based payments
The Group operates two equity-settled share-based incentive plans for Directors, Executives, senior management,
employees, and others of the Company and its subsidiaries. The plans are designed to retain key personnel. There is a
legacy employee share option plan (Legacy ESOP) that was in operation from 2009 until the Initial Public Offering (IPO)
in April 2016. Since the IPO a new employee share option plan (New ESOP) has been in operation.
The value of the services rendered for the grant of the share options is recognised as an expense over the vesting
period (which ranges from zero to five years or upon meeting stipulated milestones). The amount is determined by
reference to the fair value of the share options granted which is calculated using the Black-Scholes options model. The
cumulative expense recognised for equity-settled transactions at each reporting date until the vesting date reflects the
extent to which the vesting period has expired and the Group’s best estimate of the number of equity instruments that
will ultimately vest. The expense or credit in profit or loss for the year represents the movement in cumulative expense
recognised as at the beginning and end of that year.
The share option reserve arises on recognition of the share-based payment expense. Amounts are transferred out of the
reserve and into issued capital when the options are exercised, or reversed through profit or loss when options lapse or
are forfeited.
Legacy ESOP
There were no new options issued under this model for the period ended 31 March 2021 (31 March 2020: $nil).
Grant date/employees entitled
Number of share
options outstanding
‘000’s
Vesting conditions
Contractual life of
options
As at 31 March
2021
2020
2015
OPTIONS GRANTED TO DIRECTORS
Net loss after tax (NZ$’000)
Ordinary number of shares (‘000’s)
Weighted average number of shares on issue (‘000’s)
Basic and diluted loss per share (NZ$)
(17,488)
(20,371)
251,019
218,480
247,257
210,136
(0.07)
(0.10)
There have been no other transactions involving ordinary shares or potential ordinary shares between the reporting date
and the date of authorisation of these financial statements.
OPTIONS GRANTED TO EMPLOYEES
2013
2014
2015
2016
200
64
192
390
450
Monthly over a period of 36 months
service from grant date
10 years
Annually over a period of 2–3 years'
service from grant date & subject to
performance criteria
Quarterly over a period of 1 year's
service from grant date
1 year's service from grant date
Annually over a period of 3 years'
service from grant date
10 years
10 years
10 years
10 years
Total share options
1,296
The vesting conditions on all options were met in prior periods. As a result, there is no expense recognised for the year
ended 31 March 2021 for the Legacy ESOP share options (2020: $nil).
Notes to the Financial Statements
Volpara Health Annual Report 2021 82
83
The number and weighted-average exercise prices of share options under the Legacy ESOP plan were as follows:
Weighted-
average
exercise
price
Weighted-
average
share price
at date of
exercise
Number of
options
Weighted-
average
exercise
price
Weighted-
average
share price
at date of
exercise
Number of
options
2021
000’s
2021
NZ$
2021
A$
2020
000’s
Outstanding at 1 April
Exercised during the period
Outstanding as at 31 March
Vested as at 31 March
3,645
(2,349)
1,296
1,296
0.38
0.35
0.43
-
5,415
1.36
(1,770)
-
3,645
3,645
2020
NZ$
0.31
0.14
0.38
2020
A$
-
1.55
-
The options outstanding at 31 March 2021 had an exercise price in the range of $0.1567 to $0.4667 (2020: $0.08 to
$0.4667) and weighted-average contractual life of 3.6 years (2020: 1.8 years).
The following Legacy ESOPs were in existence during the current and prior year:
Grant year (financial year)
Number of
share options
‘000’s
NZ$
exercise
price
Expiry date
(financial
Year)
NZ$
fair value at
grant date
2010
2011
2012
2013
2013
2014
2014
2015
2015
2016
2016
Total
Less forfeited and exercised as at 31/3/2020
Exercised during the year
Total share options remaining
No further options are granted under the Legacy ESOP.
0.0003
0.0800
0.1567
0.3117
0.1567
0.3117
0.3333
0.4667
0.4600
0.4667
0.4667
2020
2021
2022
2023
2023
2024
2024
2025
2025
2021
2026
0.08
0.10
0.12
0.15
0.21
0.16
0.15
0.20
0.20
0.21
0.21
749
446
450
360
351
372
45
452
390
1,350
450
5,415
(1,770)
(2,349)
1,296
New ESOP
In accordance with the terms of the plan, as approved by shareholders at a previous annual general meeting, Executives,
senior employees, employees, and others were granted options to purchase ordinary shares at exercise prices detailed
below.
Each New ESOP converts into one ordinary share of Volpara on exercise. The options carry neither rights to dividends nor
voting rights. Options vest upon satisfying the condition of continued employment with the Group for the service period
specified in the contract (ranging from two to five years). Vested options can be exercised at set times during the year,
30 days prior to expiry or at the time of an exit event.
The options granted expire or are forfeited after seven years of their issue or on termination of employment within the
vesting period, whichever occurs first.
The key terms and conditions related to the grants under these programs are as follows; all options are to be settled by
the issue of ordinary shares.
Standard New ESOPs have a service period of five years and a contractual life of seven years. There are four tranches
which begin to vest two years after the grant date and annually thereon.
Grant date/employees entitled
OPTIONS GRANTED TO DIRECTORS
2016
2018
2019
2020
2021
OPTIONS GRANTED TO KEY MANAGEMENT PERSONNEL
2016
2017
2018
2020
2021
OPTIONS GRANTED TO EMPLOYEES
2016
2017
2018
2019
2020
2021
Total share options
Number of share options outstanding
‘000’s
300
450
450
900
450
600
20
40
100
977
768
193
40
772
2,415
715
9,190
The Black-Scholes model was used to value the Legacy ESOPs. Given there have been no issues of options in the current
or comparative year, the Company has not disclosed the previously applied valuation assumptions.
The expense recognised for the year ended 31 March 2021 for the New ESOP share options was $1,379,000 as per note 7
(2020: $1,382,000).
Notes to the Financial Statements
Volpara Health Annual Report 2021
84
85
The number and weighted-average exercise prices of share options under the New ESOP plan were as follows:
The following New ESOPs were in existence during the current and prior year:
Weighted-
average
exercise
price
Weighted-
average
share price
at date of
exercise
2021
A$
1.00
1.42
0.51
1.27
1.18
0.56
2021
A$
-
-
1.36
-
-
-
Weighted-
average
exercise
price
Weighted-
average
share price
at date of
exercise
2020
A$
0.56
1.66
0.51
0.78
1.00
0.51
2020
A$
-
-
1.59
-
-
-
Number
of options
2020
000’s
6,997
4,200
(696)
(80)
10,421
2,339
Number of
options
2021
000’
10,421
4,171
(1,729)
(3,673)
9,190
2,164
Outstanding as at 1 April
Granted during the year
Exercised during the year
Forfeited during the year
Outstanding 31 March
Vested as at 31 March
The options outstanding at 31 March 2021 had an exercise price in the range of A$0.50 to A$1.84 (2020: A$0.50 to A$1.84)
and weighted-average contractual life of 4.6 years (2020: 4.8 years).
Grant year (financial year)
Number of share
options granted
‘000’s
A$
exercise
price
Expiry date
A$
fair value at
grant date
2016
2017
2017
2017
2017
2017
2017
2018
2018
2018
2018
2018
2018
2019
2019
2019
2019
2020
2020
2020
2020
2020
2021
2021
2021
2021
2021
2021
2021
Total
Less forfeited and exercised as at 31/3/2020
Exercised during the year
Forfeited during the year
Total share options remaining
4,000
125
140
40
90
72
100
25
160
450
50
40
80
675
450
460
40
900
200
90
2,770
240
450
1,454
40
1,587
40
500
100
15,368
(776)
(1,729)
(3,673)
9,190
0.50
0.50
0.50
0.50
0.50
0.50
0.50
0.60
0.60
0.60
0.60
0.67
0.68
0.60
0.60
0.89
1.19
1.51
1.58
1.68
1.70
1.84
1.84
1.30
1.41
1.42
1.31
1.38
1.46
2023
2024
2024
2024
2024
2024
2024
2025
2025
2025
2025
2025
2025
2026
2026
2026
2026
2027
2027
2027
2027
2027
2028
2028
2028
2028
2028
2028
2028
0.27
0.17
0.19
0.20
0.22
0.27
0.27
0.16
0.22
0.39
0.42
0.39
0.35
0.48
0.52
0.47
0.63
0.68
0.77
0.98
0.87
0.89
0.89
0.54
0.72
0.65
0.66
0.69
0.75
Notes to the Financial Statements
Volpara Health Annual Report 2021 86
Valuation model assumptions
The Black-Scholes model was used to assess the value of the New ESOPs. Key variables in the model include, where
relevant, the expected life used in the model and have been adjusted based on management’s best estimates for the
effects of non-transferability, exercise restrictions, and behavioural considerations. Expected volatility is based on the
historical volatility in share price along with the volatility in comparable companies in the biomedical field over the past
seven years.
Option series
Grant date share price
Exercise price
Expected volatility
Option life
Dividend yield
Risk-free interest rate
2021
2020
A$ 1.14–1.79
A$ 1.39–1.85
A$ 1.30–1.84
A$ 1.51–1.84
50.00%
7 years
0.00%
50.00%
7 years
0.00%
0.51–0.81%
0.79–1.19%
14. Lease liabilities and right-of-use assets
The determination of whether a contract is, or contains, a lease is based on the substance of the arrangement at the
inception of the lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified
asset for a period of time in exchange for consideration.
At the commencement date of a lease agreement, the Group recognises a right-of-use asset and a lease liability. The
right-of-use asset and the lease liability are initially measured at the present value of the minimum lease payments not yet
paid at that date.
Subsequently the right-of-use asset is depreciated on a straight-line basis over the expected period of the lease. The
carrying amount of the lease liability is increased to reflect interest and reduced by the lease payments made during the
period.
Lease liabilities
During the year the following changes occurred to the Group's lease portfolio:
•
termination of the lease for the previous Wellington head of office in November 2020
87
2020
NZ$’000
252
1,753
1,881
(336)
74
-
140
3,764
605
3,159
3,764
2021
NZ$’000
3,764
-
-
(599)
156
(33)
(389)
2,899
483
2,416
2,899
LEASE LIABILITIES
Balance as at 1 April
Leases entered into during the year
Leases assigned as part of acquisition of a subsidiary
Principal repayments
Interest expense on lease liabilities
Write- off lease liability
(Loss)/gain from movement in exchange rates
Balance as at 31 March
Current
Non-current
Total
The Group’s undiscounted cash flows relating to lease liabilities are summarised below:
2021
NZ$’000
Property
≤ 3
months
3 to 6
months
6 months
to 1 year
> 1 year
Total
Level 14–15, 40 Mercer Street, Wellington, NZ
Suite 130, 19000 33rd Ave W, Lynnwood, WA, USA
Suite 220, 19000 33rd Ave W, Lynnwood, WA, USA
Total
86
56
11
153
86
57
11
154
172
116
23
311
1,146
1,658
56
1,490
1,887
101
2,860
3,478
The details for the leases are as follows:
Start date
Initial lease period
Extension options
Extension options exercised
Termination options
Termination penalties
Residual value guarantees
Variable lease payments
Indirect costs incurred
Restrictions and/or covenants
Incremental rate of borrowing
Market rent reviews
Every three years
Level 14–15,
40 Mercer Street
Suite 130,
19000 33rd Ave W
Suite 220,
19000 33rd Ave W
1 Aug 19
6 years
6 years
N/A
1 Jul 13
15 years
N/A
N/A
1 Jul 16
4 years
3 years
Yes
After 6 years
After 15 years
After 3 years
None
None
None
None
None
None
None
None
None
Lawyers' fees
Lawyers' fees
Lawyers' fees
None
6.00%
None
6.00%
None
None
6.00%
None
Notes to the Financial Statements
Volpara Health Annual Report 2021 88
89
The total cash outflow for leases for the year ended 31 March 2021 totalled $755,000 (31 March 2020: $412,000).
The total cash inflow from subleasing Level 7, 44 Victoria Street was $58,000 (31 March 2020: $12,000).
The Group considers laptop computers to be of “low value” and has therefore used the recognition exemption. The
lease expense related to these items is therefore recognised as an expense on a straight-line basis over the lease term
(2021: NZ$90,000, 2020: NZ$65,000). There are commitments relating to low-value assets totalling NZ$125,000 (2020:
NZ$230,000).
Right-of-use assets
Right-of-use assets are recognised when the Group, as a lessee, has the right to use an underlying asset for the lease
term. In the Group’s case the underlying asset relates to the office space as disclosed in the lease liability above.
COST
Balance as at 1 April
Leases entered into during the year
Leases assigned as part of acquisition of a subsidiary
Disposals
Foreign exchange differences
Balance as at 31 March
DEPRECIATION
Balance as at 1 April
Depreciation
Impairment
Disposals
Foreign exchange differences
Balance as at 31 March
Net book value
2021
NZ$’000
2020
NZ$’000
4,249
-
-
(424)
(310)
424
1,753
1,881
-
191
3,515
4,249
(730)
(535)
-
424
12
(829)
2,686
(207)
(405)
(106)
-
(12)
(730)
3,519
16. Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of
changes in market interest rates. The Group’s exposure to the risk of changes in market interest rates relates primarily
to the Group’s cash and cash equivalents with floating interest rates. The Group's deposit accounts are on fixed interest
rates, repricing periodically. The Group's remaining bank accounts are predominantly non-interest bearing. However, the
Group holds NZ$1,510,000 with varying interest rates (2020: $10,000).
At balance date, the Group had the following mix of financial assets exposed to New Zealand interest rate risk.
FINANCIAL ASSETS
Cash and cash equivalents
Cash on deposit
Total exposure
2021
NZ$’000
2020
NZ$’000
7,873
24,357
32,230
3,673
27,705
31,378
The cash on deposit has fixed interest rates between 0.28% and 1.15%.
The Group does not enter into interest rate swaps to manage the interest rate risk.
The Group consistently analyses its interest rate exposure. Within this analysis, consideration is given to potential
renewals of existing positions, and the mix of fixed and variable interest rates.
Sensitivity analysis
The following table summarises the sensitivity of the Group's post-tax loss and equity to interest rate risk.
At 31 March 2021 if interest rates had moved on the basis that all investments had rolled, as illustrated in the table below,
assuming the amount of the financial instruments outstanding at balance date was outstanding for the whole year and all
other variables held constant, post-tax loss and equity would have been affected as follows:
15. Financial risk management objectives and policies
The Group has various financial instruments such as cash and cash equivalents, cash on deposit, trade receivables,
and trade payables, which arise directly from its operations. It is, and has been throughout the period under review, the
Group's policy that no trading in financial instruments shall be undertaken.
The main risks arising from the Group's financial instruments are interest rate risk, foreign currency risk, credit risk,
and liquidity risk (refer to notes 16–19 for more detail). The Group’s senior management oversees the management of
these risks. The objective of the management of these risks is to support the delivery of the Group's financial targets
while protecting future financial security. The Group uses different methods to measure and manage different types
of risks to which it is exposed. These include monitoring levels of exposure to interest rate and foreign exchange risk
and assessments of market forecasts for interest rate and foreign exchange. Aging analyses and monitoring of specific
allowances are undertaken to manage credit risk. Liquidity risk is monitored through the development of future rolling
cash flow forecasts.
+0.5% (50 basis points)
-0.5% (50 basis points)
Post-tax loss
higher/(lower)
2021
NZ$’000
2020
NZ$’000
(139)
139
(139)
139
Notes to the Financial Statements
Volpara Health Annual Report 2021
90
91
17. Foreign currency risk
Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because
of changes in foreign exchange rates. The Group’s exposure to the risk of changes in foreign exchange rates relates
primarily to the Group’s operating activities (when revenue or expense is denominated in a different currency from the
Group’s presentation currency), receivables, or payables in the statement of financial position related to the operating
activities.
From time to time, the Group may enter into forward contracts to hedge the currency exposure of large transactions.
There are no forward contracts in place at 31 March 2021. Where possible, the Group maintains a portion of available
funds in USD, AUD, and GBP to match the respective expected expenses. The following tables demonstrate the sensitivity
to a reasonably possible change in USD, AUD, and GBP exchange rates, with all other variables held constant. The Group’s
exposure to foreign currency changes for all other currencies is not material.
2021
Cash & deposits
Trade receivables
Trade payables
Borrowings
Total
2020 (RESTATED)
Cash & deposits*
Trade receivables
Trade payables
Total
Carrying
amount in
USD
Carrying
amount in
GBP
Carrying
amount in
AUD
6,860
4,996
(83)
(1,732)
10,041
4,316
3,744
(356)
7,704
695
43
(15)
-
723
924
3
(13)
914
1,242
159
(4)
-
1,397
868
59
(25)
902
SENSITIVITY ANALYSIS
2021
2020 (restated)
2021
2020 (restated)
2021
2020 (restated)
Carrying
amount
US$’000
Change in
USD rate
%
Effect on
loss before
tax/equity
NZ$’000
10,041
7,704
10%
-10%
10%
-10%
1,305
(1,595)
1,165
(1,423)
Carrying
amount in
GBP
Change in
GBP rate
Effect
on loss
before tax
NZ$’000
723
914
10%
-10%
10%
-10%
129
(158)
171
(209)
Carrying
amount in
AUD
1,397
902
Effect
on loss
before tax
NZ$’000
Change in
AUD rate
10%
-10%
10%
-10%
138
(169)
84
(103)
*Prior period numbers have been restated to include foreign currency term deposits.
Notes to the Financial Statements
Volpara Health Annual Report 2021 92
93
18. Credit risk
Credit risk arises from the financial assets of the Group, which comprise cash and cash equivalents, cash on deposit,
trade receivables, and contract assets. The Group's exposure to credit risk arises from potential default of the
counterparty, with a maximum exposure equal to the carrying amount of these instruments. Exposure at balance date is
addressed in each applicable note.
There are significant concentrations of credit within the Group with $26,357,000 in outstanding term deposits held at the
end of the financial year (2020: $27,705,000). The Group holds some cash in current and savings accounts with various
large and reputable financial institutions in NZ, AUS, the UK, and the USA. The credit risk is considered negligible, since
the counterparties are reputable banks with high quality external credit ratings. In the USA, deposits are insured by the
government up to US$250k per bank. Volpara holds US$1,630,000 in excess of the $250k threshold.
The Group does not hold any credit derivatives to offset its credit exposure.
The Parent has a policy of lending to its wholly owned subsidiaries, ensuring their continued operations as required.
The fair value of all financial instruments held are measured at amortised cost.
19. Liquidity risk
Liquidity risk represents the Group's ability to meet its contractual obligations. The Group has established an appropriate
liquidity risk management framework for the management of the Group's short-term, medium-term, and long-term
funding and liquidity requirements. The Group manages liquidity risk by continuously monitoring forecast and actual cash
flows, and by matching the maturity profiles of financial assets and liabilities.
All financial liabilities are due for payment in less than 12 months except for the PPP loan (refer to note 24). This is the
undiscounted contractual position.
FINANCIAL LIABILITIES
As at year ended 31 March 2021
Trade and other payables
Lease liabilities
Provision for commissions
Borrowings
As at year ended 31 March 2020
Trade and other payables
Lease liabilities
Provision for commissions
≤ 3
months
NZ$’000
3 to 6
months
NZ$’000
6 months
to 1 year
NZ$’000
>1 year
NZ$’000
Total
NZ$’000
1,498
153
354
-
2,005
1,870
198
539
2,607
-
154
-
497
651
-
201
-
201
-
311
-
1,492
1,803
-
2,860
-
507
3,367
1,498
3,478
354
2,496
7,826
-
-
390
3,805
-
-
1,870
4,594
539
390
3,805
7,003
20. Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity
instrument of another entity.
Management assessed that the fair value of cash and cash equivalents, cash on deposit, trade receivables, trade and
other payables, lease liabilities, and loan payable approximate their carrying amounts largely due to the short-term
maturities of these instruments and/or because the interest rates applied are variable in nature.
Financial assets
Initial recognition and measurement
Financial assets are classified, at initial recognition, as measured at amortised cost if the Group’s intention is to hold the
financial assets for collecting cash flows and the contractual terms give rise on specified dates to cash flows that are
solely payments of principal and interest.
The Group currently classifies its cash and cash equivalents, cash on deposit, trade receivable, and other receivables as
financial assets measured at amortised cost.
Subsequent measurement
Where financial assets are measured at amortised cost, interest revenue, expected credit losses, and foreign exchange
gains or losses are recognised in profit or loss. On derecognition, any gain or loss is recognised in profit or loss.
Impairment of financial assets
The Group recognises an allowance for expected credit losses (ECLs) for trade receivables and contract assets. ECLs are
based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows
that the Group expects to receive, discounted at an approximation of the original effective interest rate.
Financial liabilities
Initial recognition and measurement
The Group currently, upon initial recognition, classifies its financial liabilities made up of trade payables, accrued
expenses, and loan payable at amortised cost.
Financial instruments by category
FINANCIAL ASSETS MEASURED AT AMORTISED COST
Cash and cash equivalents
Cash on deposit
Trade receivables
Other receivables*
Total
FINANCIAL LIABILITIES MEASURED AT AMORTISED COST
Trade and other payables
Borrowing
Total
2021
NZ$’000
2020
NZ$’000
7,873
3,673
24,357
27,705
7,754
195
7,103
117
40,179
38,598
1,498
2,475
3,973
1,870
-
1,870
*Other receivables in the prior period were restated to exclude prepayments.
Subsequent measurement
The Group's financial liabilities subsequently measured at amortised cost are measured using the effective interest
method.
Notes to the Financial Statements
Volpara Health Annual Report 2021
94
95
21. Fixed assets
Fixed assets consists of leasehold improvements, property, computer equipment, and vehicles. They are all initially
measured at cost and subsequently depreciated.
Assets are fully depreciated after acquisition, where initial recognition amounts are less than a certain threshold,
or depreciation is calculated on a straight-line basis over the estimated useful lives of the assets, as follows:
Leasehold improvements
3 to 4 years
Property
3 to 15 years
Computer equipment
1 to 5 years
Vehicles
5 years
Leasehold improvements or an item of property or computer equipment and any significant part initially recognised
is derecognised upon disposal (i.e., at the date the recipient obtains control) or when no future economic benefits are
expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference
between the net disposal proceeds and the carrying amount of the asset) is included in the consolidated statement of
profit or loss and other comprehensive income when the asset is derecognised.
The residual values, useful lives, and methods of depreciation of leasehold improvements, property, and computer
equipment are reviewed at each financial year end and adjusted prospectively, if appropriate.
Year ended 31 March 2021
COST
Balance as at 1 April 2020
Additions
Acquisitions of a subsidiary
Disposals and write-offs
Foreign exchange differences
Balance as at 31 March 2021
DEPRECIATION AND IMPAIRMENT
Balance as at 1 April 2020
Depreciation
Disposals and write-offs
Foreign exchange differences
Balance as at 31 March 2021
Net book value
Year ended 31 March 2020
COST
Balance as at 1 April 2019
Additions
Acquisitions of a subsidiary
Disposals and write-offs
Foreign exchange differences
Balance as at 31 March 2020
DEPRECIATION AND IMPAIRMENT
Balance as at 1 April 2019
Depreciation
Disposals and write-offs
Foreign exchange differences
Balance as at 31 March 2020
Net book value
Leasehold
improvements
NZ$
Property
NZ$’000
Computer
equipment
NZ$’000
Vehicles
NZ$’000
Total
NZ$’000
747
4
-
(44)
(43)
664
(129)
(98)
44
4
(179)
485
49
377
293
-
28
747
(23)
(103)
-
(3)
(129)
618
361
39
-
-
(43)
357
(202)
(101)
-
34
(269)
88
221
48
60
(1)
33
361
(43)
(145)
1
(15)
(202)
159
580
33
6
(18)
(41)
560
(338)
(107)
17
15
(413)
147
347
59
173
(14)
15
580
(214)
(128)
14
(10)
(338)
242
24
-
-
(24)
-
-
(14)
(10)
24
-
-
-
-
-
22
-
2
24
-
(13)
-
(1)
(14)
10
1,712
76
6
(86)
(127)
1,581
(683)
(316)
85
53
(861)
720
617
484
548
(15)
78
1,712
(280)
(389)
15
(29)
(683)
1,029
Notes to the Financial Statements
Volpara Health Annual Report 2021 96
97
22. Intangible assets
Intangible assets consist of both internally generated intangible assets such as capitalised software development costs
and externally generated intangible assets such as patents and trademarks, customer relationships, and goodwill upon
acquisition. Intangible assets acquired in a business combination are measured at fair value, while other intangible assets
acquired are initially measured at cost. Internally generated intangible assets, excluding capitalised software development
costs, are measured at cost. Research costs are expensed in profit or loss. Development costs (internally generated
software intangible assets) are capitalised in accordance with the software accounting policy below.
Where the useful lives of intangible assets are assessed to be finite, the assets are amortised over their useful life and
tested for impairment whenever there is an indication that they may be impaired. The amortisation period and the
amortisation method for an intangible asset with a finite useful life are reviewed at least at each financial year-end.
Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the
asset are accounted for prospectively by changing the amortisation period or method, as appropriate, which is a change
in accounting estimate. The amortisation expense on intangible assets with useful lives is recognised in profit or loss.
Where the useful lives of intangible assets are assessed to be indefinite, or where internally generated assets are not yet
available for use, the assets are not amortised but are subject to an impairment test each year and whenever there is
an indication that they may be impaired. The Group holds an intangible asset with an indefinite useful life in the form of
goodwill acquired and has software under development which is not yet available for use.
Software development
Research costs and costs associated with maintaining software products are expensed as incurred.
Costs that are directly associated with the development of new or substantially improved medical technology software
products controlled by the Group are recognised as intangible assets only where all the following criteria can be met:
it is technically feasible to complete the product so that it will be available for sale;
•
• management intends to complete the product and sell it;
•
there is an ability to sell the product;
it can be demonstrated how the product will generate future economic benefits;
•
• adequate technical, financial, and other resources to complete the
development and to sell the product are available; and
the expenditure attributable to the product during its development can be reliably measured.
•
Development costs previously recognised as expenses are not recognised as assets in a subsequent period.
Goodwill
Goodwill arising from business combinations is initially measured at cost, being the excess of the sum of the consideration
transferred over the net identifiable assets acquired and liabilities assumed.
Goodwill is not amortised but it is tested for impairment annually, or more frequently if events or changes in
circumstances indicate that it might be impaired, and is carried at cost less accumulated impairment losses.
Useful lives
Estimated useful lives
Estimated residual value
Method used
Goodwill
Software
development
Patents,
trademarks
& copyrights
Customer
relationships
Indefinite
Indefinite but
assessed annually
for impairment
3–10 years
3–20 years
15 years1
Finite
$nil
Assessed annually
for impairment
Amortised over the period of expected future benefit
from the related project on a straight-line basis
Internally generated/acquired
Acquired
Internally generated/acquired
Impairment test/recoverable amount test
Management believes the most relevant indicators of impairment are
where there is evidence of obsolescence or where unfavourable changes
to the economic benefits derived from the assets have been experienced.
1. Note that the estimated useful life of MRS Systems, Inc. (MRS), customer relationships has been adjusted from 20 to 15 years based on approximate
current churn rates. This increased amortisation on MRS customer relationships by $12,000 for FY21.
An intangible asset is derecognised on disposal, or when no future economic benefits are expected from use or disposal.
Gains or losses arising from de-recognition of an intangible asset, measured as the difference between the net disposal
proceeds and the carrying amount of the asset, are recognised in profit or loss when the asset is derecognised.
The goodwill acquired through business combinations is allocated to the North America CGU when testing for
impairment. The North American CGU is also a reportable segment.
The Group performed its annual impairment test as at 31 March 2021, using the model developed by an external
independent expert.
North America CGU
Using the capitalisation of revenue method (a market approach), the recoverable amount of the North America CGU
was estimated to be US$114M to US$137M, as at 31 March 2020. This was determined based on a fair value less costs
of disposal, as it exceeded the value in use. In order to determine the fair value using the market approach, a multiple
of revenue which a hypothetical buyer (i.e., average market participant) would pay for the business that reflects the
size, growth potential, risks, and other characteristics of the business were considered by management, as was the
appropriate revenue multiple. Management updated the prior year discounted cash flow (DCF) model (income approach)
as at 31 March 2021. Management has used similar assumptions to the prior year, albeit the cash flows have been updated
to reflect current budgets. The updated valuation continues to suggest significant headroom exists and indicates an
enterprise value in the range of US$114M to US$141M.
Based on the valuation of the recoverable amount as calculated by the external independent expert and as updated by
management, no impairment charge is required at this time.
Although the North America CGU is currently loss-making, it is expected to reach cash flow break-even in the near term
as SaaS revenues continue to grow faster than expenses.
The determination of the growth rate assumptions (income approach) and revenue multiple (market approach) are areas
in which the Group and its expert have exercised judgment, taking into account past experience and external sources.
Based on the level of headroom (excess of recoverable amount above the carrying value of assets of the CGU), the Group
does not envisage a scenario in which reasonable changes to these estimates would result in impairment of the goodwill
balance.
The inputs used in calculating the fair value less costs of disposal are deemed to be level 2 given that revenue is
observable by the market.
Notes to the Financial Statements
Volpara Health Annual Report 2021 98
99
Year ended 31 March 2021
COST
Balance as at 1 April 2020
Additions
Acquisitions of a subsidiary
Foreign exchange differences
Goodwill
NZ$’000
Software
development
NZ$’000
Patents,
trademarks &
copyrights
NZ$’000
Customer
relationships
NZ$’000
Total
NZ$’000
8,221
-
11,886
(852)
7,104
698
3,764
(832)
4,092
8,375
27,792
53
753
-
751
8,154
24,557
(500)
(969)
(3,153)
Balance as at 31 March 2021
19,255
10,734
4,398
15,560
49,947
AMORTISATION AND IMPAIRMENT
Balance as at 1 April 2020
Amortisation
Foreign exchange differences
Balance as at 31 March 2021
-
-
-
-
Net book value
19,255
(569)
(1,003)
97
(1,475)
9,259
(655)
(756)
117
(335)
(479)
(1,559)
(2,238)
62
276
(1,294)
(752)
(3,521)
3,104
14,808
46,426
Year ended 31 March 2020
COST
Balance as at 1 April 2019
Additions
Acquisitions of a subsidiary
Foreign exchange differences
Balance as at 31 March 2020
AMORTISATION AND IMPAIRMENT
Balance as at 1 April 2019
Amortisation
Foreign exchange differences
Balance as at 31 March 2020
-
-
7,504
717
8,221
-
-
-
-
89
413
6,026
576
7,104
(8)
(526)
(35)
(569)
283
112
3,376
321
-
-
372
525
7,645
24,551
730
2,344
4,092
8,375
27,792
(9)
(607)
(39)
(655)
-
(17)
(313)
(1,446)
(22)
(96)
(335)
(1,559)
Net book value
8,221
6,535
3,437
8,040
26,233
Refer to note 23 for details on the goodwill acquired through a business combination.
23. Acquisitions
Acquisition of CRA Health, LLC (CRA)
One hundred percent of CRA's units was acquired on 31 January 2021, thereby enabling Volpara to obtain control. CRA is
an industry leader in breast cancer risk assessment spun out from Massachusetts General Hospital, a Harvard Medical
School teaching hospital. The primary purpose of the acquisition is to enable Volpara to expedite product development
through the use of existing offerings of the acquiree. CRA’s year-end is 31 December.
As part of the purchase price allocation exercise (refer below) an adjustment was made to reduce the deferred revenue
balance of CRA on acquisition date. This adjustment (NZ$339K) was to reflect the cost of providing these services, rather
than the deferral of revenue.
Intangible assets arising from the acquisition include goodwill. Goodwill represents the combination of synergies
expected to be realised through a combined entity such as sales, marketing, and administration, and items that are not
separable from the business, such as the assembled workforce. The Group has recognised other separately identifiable
intangible assets, including customer relationships, software (developed technology), brands, and trademarks and a
restraint of trade, refer to note 22.
The fair value consideration paid for CRA is summarised as follows:
Net purchase price
US$'000
17,700
Note that the agreement included a portion of deferred consideration (US$1.8M) which refers to funds which have been
paid by Volpara and are being kept in escrow for 18 months for the purposes of collateral in the case of any indemnities or
warranties.
Upon acquisition, the Group engaged an independent valuation expert to assist the Group in identifying and valuing the
assets and liabilities of CRA. The below summarises the assessment:
Trade receivables
Other receivables
Fixed assets
Trade and other payables
Deferred revenue
Developed technology
Brands and trademarks
Customer relationships
Restraint of trade
Goodwill
US$’000
NZ$’000
905
109
4
(121)
(814)
2,700
20
5,850
520
8,527
1,261
152
6
(169)
(1,135)
3,764
28
8,154
725
11,886
17,700
24,672
For tax purposes, the acquisition of CRA is deemed an asset acquisition. The tax base of assets is revalued to the
corresponding values above. As such, no deferred tax was recognised as part of the purchase price allocation exercise.
Business acquisition and merger related expenses, per note 7, total NZ$698,000 and have been expensed in these
financial statements.
As part of the acquisition, Volpara entered into a retention plan agreement with key employees of CRA. Refer to note 11
for details.
Notes to the Financial Statements
Volpara Health Annual Report 2021
100
101
Goodwill is expected to be deductible for tax purposes over a 15-year period.
The fair value of trade and other receivables acquired was equal to the carrying value and the contractual amounts
receivable. As at acquisition date, there were no contractual cash flows which were not expected to be received from
trade and other receivables.
Acquisition of MRS Systems, Inc. (MRS)
One hundred percent of MRS's shares was acquired on 13 June 2019, thereby enabling Volpara to obtain control. MRS
was a mammography reporting system company whose primary function was to enable the reporting and tracking of
patients in breast and lung screening. The primary purpose of the acquisition is to enable Volpara to expedite product
development through the use of existing offerings of the acquiree. MRS’s year-end is 31 December.
US$’000
NZ$’000
Volpara Solutions, Inc., merged with MRS Systems, Inc., on 31 March 2020. MRS Systems, Inc., then changed its name to
Volpara Solutions, Inc. Volpara Solutions, Inc., then changed its name to Volpara Health, Inc., in October 2020.
CRA CONTRIBUTIONS TO GROUP ACCOUNTS
CRA revenue included in statement of profit or loss
CRA loss included in statement of profit or loss
549
(480)
764
(668)
CRA CONTRIBUTIONS TO GROUP ACCOUNTS EXCLUDING RETENTION PLAN COSTS1
CRA loss included in statement of profit or loss
119
165
IF CRA HAD BEEN ACQUIRED AS AT 1 APRIL 2020
CRA revenue included in statement of profit or loss
CRA profit included in statement of profit or loss
3,244
4,853
136
267
IF CRA HAD BEEN ACQUIRED AS AT 1 APRIL 2020 EXCLUDING RETENTION PLAN COSTS1
CRA profit included in statement of profit or loss
735
1,100
The above numbers include adjustments required under NZ IFRS 3 to reflect the fair value of the assets and liabilities
acquired.
1.
These are non-GAAP numbers which are included to show the profitability of CRA once retention plan costs have been removed.
The key estimates and judgments used in determining the assets are as follows:
Asset/liability
Valuation methodology
Estimates and judgments used in the valuations
Customer relationships
Multiple period excess
earnings method
Estimates were made for the following inputs: average customer
life,* average customer spend, gross margin operating costs,
contributory asset charges, and income tax rates.
Brands and tradenames
Relief from royalty method Estimates were made for the following inputs: revenue, royalty
Developed technology
Replacement cost
rate, economic life, and income tax rates.
Estimates were made for the following inputs: labour effort
and costs,* overhead costs, developer’s profit, entrepreneurial
incentive, and obsolescence.
Restraint of trade
With and without analysis Estimates were made for the following inputs: cash flow
forecasts without a restraint of trade, probability of competition.
Deferred revenue
Costs to fulfil obligation
Estimates were made for the following inputs: overhead costs,
labour effort and costs, and an operating profit margin.
*Denotes key estimates and judgments that have the largest impact on the valuations.
The fair value consideration paid for MRS was US$14,059,000.
Upon acquisition, the Group engaged an independent valuation expert to assist the Group in identifying and valuing the
assets and liabilities of MRS. The below summarises the assessment:
Trade receivables
Other receivables
Fixed assets
Right-of-use assets
Deferred tax liabilities
Trade and other payables
Deferred revenue
Tax payable
Lease liability
Developed technology
Trademarks and trade names
Customer relationships
Restraint of trade
Goodwill
US$'000
NZ$'000
1,444
96
361
1,239
(2,219)
(742)
(1,030)
(24)
(1,239)
3,970
2,074
5,036
150
4,943
14,059
2,192
146
548
1,881
(3,368)
(1,126)
(1,564)
(36)
(1,881)
6,026
3,148
7,645
228
7,504
21,343
24. Borrowings
In May 2020, the Company received approximately US$1.7M as part of the US government’s Paycheck Protection Program
(PPP) loan scheme established in response to COVID-19. Under the terms of the loan, the loan and accrued interest
are forgivable as long as the borrower uses the loan proceeds for eligible purposes, including payroll, benefits, rent,
and utilities, and maintains its payroll levels. The amount of loan forgiveness will be reduced if the borrower terminates
employees or reduces salaries during the forgiveness period.
As of 31 March 2021, the Company has used the entire loan proceeds to fund its payroll and rent expenses. Applications
for loan forgiveness have now opened and the Company is in the process of applying for forgiveness. As a result, until
the loan has been forgiven, the loan has been, and will continue to be, classified as debt. Should the loan not be forgiven,
Volpara would be required to repay the loan over a 10-month period from August 2021 at an interest rate of 1% per annum.
If the loan is forgiven the proceeds will be reclassified as Other Income at that time.
Notes to the Financial Statements
Volpara Health Annual Report 2021
102
103
25. Related parties
The consolidated financial statements include the financial statements of Volpara Health Technologies Limited and the
subsidiaries listed in the following table:
Name of entity
Country of Incorporation
2021
Ownership
2020
Ownership
Volpara Health Limited
(previously Volpara Solutions Limited)
Volpara Health Europe Limited
(previously Volpara Solutions Europe Limited)
Volpara Health, Inc.
(previously Volpara Solutions, Inc.)*
New Zealand
100%
100%
United Kingdom
100%
100%
United States
100%
100%
Volpara Health Australia Pty Limited
(previously Volpara Solutions Australia Pty Limited)
Australia
100%
100%
CRA Health, LLC
(acquired 31 January 2021)
United States
100%
NA
*Volpara Solutions, Inc., merged with MRS Systems, Inc., on 31 March 2020. MRS Systems, Inc., then changed its name to Volpara Solutions, Inc. Volpara
Solutions, Inc., then changed its name to Volpara Health, Inc., in October 2020.
The entities in the Group all have a balance date of 31 March except for Volpara Health, Inc., and CRA Health, LLC, which
have 31 December balance dates.
Financial support is provided to subsidiaries in accordance with Volpara's transfer pricing policy.
Ultimate Parent
Volpara Health Technologies Limited is the ultimate Parent entity.
Key Management Personnel (KMP) and Director compensation
Key Management Personnel include the Chief Executive Officer (CEO) and those employees who report directly to the
CEO who have authority and responsibility for planning, directing, and controlling the activities of the Group.
Compensation of Key Management Personnel and Directors
Short-term employee benefits1
Termination benefits
Post-employment benefits and medical benefits
KMP share-based payment expense
Directors' fees
Directors' share-based payment expense
2021
NZ$
2020
Restated2
NZ$
1,051,093
1,283,737
163,386
-
89,578
94,406
184,834
151,394
405,953
450,534
512,481
314,333
2,407,325
2,294,404
1. Short-term employee benefits include salaries and wages, car allowances, short-term incentives earned during the period, and non-monetary benefits
such as insurance;
2. Corrected for an error in the prior year financial statements relating to the exclusion of $50,000;
3. Some KMP and Directors are based in the USA and Australia and are paid in US$ and AUD$ respectively. The total compensation is therefore translated
for financial reporting purposes to NZ$ on a monthly basis.
The value of outstanding balances payable to KMP and Directors at balance date totalled $114,000 (2020: $128,000).
For additional detail related to the compensation of KMP and Directors please refer to the accompanying Directors'
Report.
Interests held by Key Management Personnel and Directors
Share options held by KMP and Directors, under the Legacy ESOP and New ESOP to purchase ordinary shares, have the
following expiry dates and exercise prices:
Issue Date
KMP
Directors
Expiry Date
Exercise Price
NZ$
2021
000s
2020
000s
14/03/2023–17/11/2027
14/03/2023–01/02/2027
0.54–1.85
0.47–2.00
1,737
2,750
4,487
2,610
2,352
4,962
Loans to directors
There were no loans to directors issued during the year ended 31 March 2021 (2020: $nil).
Other transactions and balances
During the year, fees were paid to Karin Lindgren totalling $66,000 for legal services provided (2020: $77,000). No fees
were paid to Karin after November 2020 after the Company hired in-house legal counsel.
Directors of Volpara Health Technologies Limited control 14.27% of the voting shares of the Company at balance date
(2020: 19.91%).
26. Contingencies and commitments
Contingent liabilities and capital commitments
The Group had no contingencies or commitments as at 31 March 2021 (2020: $nil).
27. Events after the balance date
There were no significant events between balance date and the date these financial statements were authorised for issue.
Notes to the Financial Statements
Volpara Health Annual Report 2021 104
Additional Information
for Listed Companies
Volpara Health Technologies Limited
(NZ Company no. 2206998/ARBN 609 946 867)
Stock exchange listing
Volpara's shares are listed on the Australian Stock Exchange (ASX:VHT).
Analysis of shareholding at 13 May 2021
Range
1 to 1000
1,001 to 5000
5,001 to 10,000
10,001 to 100,000
100,001 and over
Total
Securities
%
No. of
holders
%
3,323,768
19,086,342
19,691,933
1.32%
7.60%
7.84%
68,688,189
27.38%
140,228,849
55.86%
5,564
7,243
2,605
2,713
127
30.48%
39.68%
14.27%
14.87%
0.70%
251,019,081
100.00%
18,252
100.00%
The number of shareholdings held in less than marketable parcels is 1,707, representing 521,952 shares.
105
Twenty largest shareholders at 13 May 2021
Rank
Name
Shareholding
Percentage
holding
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
J P MORGAN NOMINEES AUSTRALIA
PATAGORANG PTY LTD
RALPH HIGHNAM AND KYC TRUSTEES
CITICORP NOMINEES PTY LIMITED
CUSTODIAL SERVICES LIMITED
PROF SIR MICHAEL BRADY
MR MARCUS SARNER
NATIONAL NOMINEES LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
SIR MARTIN FRANCIS WOOD
LADY KATHLEEN AUDREY WOOD
BNP PARIBAS NOMS (NZ) LTD
BNP PARIBAS NOMINEES PTY LTD
BNP PARIBAS NOMINEES PTY LTD SIX SIS LTD
PROF MARTIN YAFFE
PROF NICO KARSSEMEIJER
SIR MARTIN GREGORY SMITH
WHITFIELD INVESTMENTS PTY LTD
PICKARD CAPITAL PTY LTD
20
BNP PARIBAS NOMINEES PTY LTD HUB24 CUSTODIAL SERV LTD
20,555,918
18,467,848
16,213,561
12,062,094
8,828,122
6,619,075
5,980,404
4,327,085
3,757,745
3,004,655
3,004,654
2,881,734
2,840,573
2,198,322
2,066,483
1,806,806
1,366,977
1,030,767
1,029,106
1,028,394
8.19%
7.36%
6.46%
4.81%
3.52%
2.64%
2.38%
1.72%
1.50%
1.20%
1.20%
1.15%
1.13%
0.88%
0.82%
0.72%
0.54%
0.41%
0.41%
0.41%
Total
119,070,323
47.45%
Balance of register
131,948,758
Grand Total
251,019,081
Additional Information
Volpara Health Annual Report 2021 106
107
Donations made during the year
Donations made during the year ended 31 March 2021 totalled NZ$1,000 (2020: NZ$4,000).
Substantial shareholders
The names of the substantial shareholdings listed in the company's register are:
Shareholder
Shareholding
Percentage
holding
HARBOUR ASSET MANAGEMENT LIMITED
PATAGORANG PTY LTD (beneficiary for Roger Allen AM)
RALPH HIGHNAM AND KYC TRUSTEES 106 LIMITED
23,008,238
18,467,848
16,213,561
9.17%
7.36%
6.46%
Voting rights
The voting rights attaching to each class of equity securities are set out below:
(a) All ordinary fully paid share carry one vote per share without restrictions.
(b) Options do not carry a right to vote.
Entries recorded in the interest register
The company maintains an Interest Register in accordance with the Companies Act 1993. The following are particulars of
entries made in the Interest register for the period 1 April 2020 to 31 March 2021.
Director
Date
Interest
John Diddams
21 Nov 2019
Director – Aroa Biosurgery Limited
Restricted securities as at 31 March 2021
As at 31 March 2021, there were no shares on issue in escrow.
Corporate Directory
Registered Office
Volpara Health Technologies Limited
Level 14–15, 40 Mercer Street
Wellington Central
Wellington 6011
NZ
Board of Directors
Paul Reid - Chair, Non-Executive Independent
Dr Ralph Highnam - Chief Executive Officer
Roger Allen AM - Non-Executive
John Pavlidis - Non-Executive Independent
John Diddams - Non-Executive Independent
Dr Monica Saini - Non-Executive Independent
Karin Lindgren - Non-Executive Independent
Company Secretary
Craig Hadfield
New Zealand Incorporation
The Company is registered under the laws of New Zealand,
company number 2206998
Australian Registered Body Number (ARBN)
609 946 867
The Company’s registered office address in Australia
Suite 9, Level 1, 357 Military Road
Mosman
Sydney
NSW 2088
AUS
Share Register
Boardroom Pty Limited
Grosvenor Place
Level 12, 225 George Street
Sydney
NSW 2000
AUS
Auditor
PwC
10 Waterloo Quay
Wellington 6011
NZ
Legal Advisers
Davis Wright Tremaine LLP (USA)
Mills Oakley (AUS)
Simmonds Stewart (NZ)
Stoel Rives LLP (USA)
Bankers
1st Security Bank (USA)
Bank of America (USA)
JPMorgan Chase Bank (USA)
Kiwibank (NZ)
Lloyds Bank (UK)
NAB (AUS)
Needham Bank (USA)
TD Bank (USA)
Corporate Directory
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Glossary
Annual Recurring Revenue (ARR)
The normalised amount of cash reasonably expected to
be booked for the next 12 months based on the contracts
signed previously, and assuming installation upon order.
Average Revenue Per User (ARPU)
ARR per US woman screened as used to calculate the
percentage of US market.
Constant currency analysis
Non–GAAP financial information, not prepared in
accordance with IFRS, intended to assist users of financial
information to better understand and assess financial
performance without the impacts of foreign currency
fluctuations.
Microsoft® Azure6
The cloud computing platform connected to the Virtual
Appliance for the purposes of data storage, support, and
providing anonymised data for the dashboards in Volpara
Analytics.
Percentage of US market
An estimate of the number of US women who are imaged
using at least element from the Volpara Breast Health
Platform, based on the approximately 39 million women
imaged in the United States each year, most of them
screening (as opposed to diagnostic). The percentage
given should be considered indicative and not definitive.
TruDensity™ (formerly Volpara®Density™)
A Volpara clinical function which calculates volumetric
breast density, fibroglandular tissue volume, and breast
volume to assign a Volpara® Density Grade™ (VDG®). This
score is used by healthcare professionals to evaluate
breast density and is validated in the Tyrer-Cuzick v8 Risk
Evaluation Tool (TC8) for objective, precise, and consistent
assessment.
TruPGMI™ (formerly Volpara®Positioning™)
A Volpara clinical function which uses artificial intelligence
to automatically and objectively assess the positioning of the
patient and resulting image quality. Radiographers can use
this information to further develop their positioning skills.
TruPressure™ (formerly Volpara®Pressure™)
A Volpara clinical function which determines whether the
compression pressure applied by the radiographer is in the
“sweet spot” that yields the best-quality images, minimal
radiation exposure, and the least discomfort.
TruRadDose™ (formerly Volpara®Dose™)
A Volpara clinical function which analyses the radiation
dose delivered to patients based on their breast density
instead of the equipment manufacturer’s estimate. This
can be used by healthcare professionals as a quality
assurance metric.
Virtual Appliance
The virtual computing platform, operating within a breast
imaging facility’s virtual environment, that hosts Volpara
software products and manages Protected Health
Information (PHI) as it arrives.
Volpara® Analytics™ (formerly Volpara®Enterprise™)
Smart dashboards, alerts, and mammography quality
reports that optimise breast cancer screening operations.
The only vendor-neutral software that provides automated,
objective assessment of image quality on every
mammogram.
Volpara® Breast Health Platform™
Volpara’s advanced AI software platform, an integrated
suite of software solutions that collects and analyses
information to better understand a patient’s breast
cancer risk, while objectively evaluating image quality and
workflow-improvement opportunities. These capabilities
are being extended to lung cancer screening. Includes
Analytics, Live, Lung, Patient Hub, Risk, and Scorecard.
Volpara clinical functions
Clinically relevant information generated by Volpara’s
clinically validated algorithms and expressed as TruDensity,
TruPGMI, TruPressure, and TruRadDose.
Volpara® Live™ (formerly Volpara®Live!™)
Provides radiographers instant, patient-based image
quality feedback for every mammography exam. Reduces
retakes and optimises compression and positioning while
the patient is still in the room.
Volpara® Lung™ (formerly Aspen® Lung)
Patient management software that streamlines lung
screening workflow, compliance, and reimbursement.
Volpara® Patient Hub™ (formerly Aspen® Breast)
Customisable mammography reporting and patient
communications software.
Volpara® Risk™ (formerly Volpara®Risk™)
An integration with Patient Hub that uses TC8 to calculate
patients’ risk of developing breast cancer.
Volpara® Scorecard™ (formerly VolparaDensity)
Displays patient breast density and risk insights essential
for improved clinical decision-making and early detection.
Volpara® Science™
The AI-based software that powers Volpara software
products. Includes breast cancer risk models and a set
of clinically validated algorithms for assessing breast
tissue composition, compression, radiation dose, and
positioning quality.
6. Microsoft and Microsoft Azure are copyrighted trademarks of
Microsoft Corporation
Volpara Health Technologies Limited
ASX:VHT
(NZ Company no. 2206998/ARBN 609 946 867)
Volpara Health Annual Report 2021 volparahealth.com