ADALTA LIMITED — Annual Report 2018

Aug 27, 2018

Appendix 4E Preliminary Final Report

Appendix 4E

Preliminary Final Report to the Australian Securities Exchange

Part 1

Part 1
Name of Entity	AdAlta Limited
ABN	92 120 332 925
Financial Year Ended	30 June 2018
Previous Corresponding Reporting Period	12 months ended 30 June 2017

Part 2 – Results for Announcement to the Market

		2018 $	2017 $	2017 $	2017 $	Increase/ (Decrease) $	Change %
Revenue from ordinary activities		2,079,979	1,967,680			112,299	6%
Loss from ordinary activities after tax attributable to members		(3,854,894)	(2,832,517)			(1,022,377)	-36%
Net loss attributable to members		(3,854,894)	(2,832,517)			(1,022,377)	-36%
Dividends(distributions)		Amountper security			Franked amountper security
Final Dividend		Nil			Nil
Interim Dividend		Nil			Nil
Record date for determining entitlements to the dividends(if any)				Not Applicable

Brief explanation of any of the figures reported above necessary to enable the figures to be understood:

Not Applicable

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Appendix 4E Preliminary Final Report

Part 3 – Contents of ASX Appendix 4E

SECTION	CONTENTS
Part 1	Details of entity, reporting period
Part 2	Results for announcement to the market
Part 3	Contents of ASX Appendix 4E
Part 4	Consolidated statement of comprehensive income
Part 5	Consolidated accumulated losses
Part 6	Consolidated statement of financial position
Part 7	Consolidated statement of cash flows
Part 8	Basis of preparation
Part 9	Loss from ordinary activities
Part 10	Commentary on results
Part 11	Notes to the consolidated statement of cash flows
Part 12	Details relating to dividends
Part 13	Loss per share
Part 14	Net tangible assets per security
Part 15	Details of entities over which control has been gained or lost
Part 16	Details of associates and joint venture entities
Part 17	Issued securities
Part 18	Segment information
Part 19	Subsequent events
Part 20	Information on audit or review

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Appendix 4E Preliminary Final Report

Part 4 – Consolidated Statement of Profit or Loss and Other Comprehensive Income

Year Ended 30 June 2018 $ Revenue Interest received 59,804 Other revenue 9(a) 2,020,175 Expenses Cost of services (3,980,633) Depreciation and amortisation (3,142) Employee benefits expense (664,909) Travel expense (113,691) Board fees (245,000) Patent and legal costs (171,909) Share based payments (168,958) Other expenses from ordinary activities 9(b) (533,874) Net foreign exchange (loss) / gain (52,757) Loss before income tax (3,854,894) Income tax expense - Loss after income tax for the year (3,854,894) Other comprehensive income Other comprehensive income for the year, net of tax - Total comprehensive loss attributable to members of AdAlta Limited (3,854,894)	Year Ended 30 June 2017 $ 170,926 1,796,754 (3,598,678) (5,435) (404,669) (76,575) (207,037) (73,310) - (434,493) -
	(2,832,517) -
	(2,832,517)
	-
	(2,832,517)

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Appendix 4E Preliminary Final Report

Part 5 – Consolidated Accumulated losses

Accumulated losses at the beginning of the year Loss for the year Accumulated losses at the end of the year	Year Ended 30 June 2018 $ (9,818,868) (3,854,894) (13,673,762)	Year Ended 30 June 2017 $ (6,986,351) (2,832,517)
		(9,818,868)

Part 6 – Consolidated Statement of Financial Position

ASSETS Current assets Cash and cash equivalents Trade and other receivables Other current assets Total current assets Non-current assets Plant and equipment Other non-current assets Total non-current assets Total assets LIABILITIES Current liabilities Trade and other payables Provisions Total current liabilities Non-current liabilities Total non-current liabilities Total liabilities Net assets EQUITY Contributed equity Reserves Accumulated losses Total equity	Year Ended 30 June 2018 $ 2,306,048 2,130,300 - 4,436,348 - 2,600 2,600 4,438,948 285,149 81,168 366,317 - 366,317 4,072,631 17,573,527 172,866 (13,673,762) 4,072,631	Year Ended 30 June 2017 $ 6,224,617 1,862,673 -
		8,087,290
		- 2,600
		2,600
		8,089,890
		285,915 58,957
		344,512
		-
		344,512
		7,745,378
		17,560,338 3,908 (9,818,868)
		7,745,378

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Appendix 4E Preliminary Final Report

Part 7 – Consolidated Statement of Cash Flows

Cash flows from operating activities Payments to suppliers and employees R & D tax incentive Interest received Grants received Net cash provided by (used in) operating activities Cash flows from investing activities Proceeds from disposal of property, plant and equipment Payments for property, plant and equipment Payments for other assets Net cash provided by (used in) investing activities Cash flows from financing activities Proceeds from share capital Proceeds from option conversions Payments of share issue costs Net cash provided by financing activities Net increase/ (decrease) in cash held Cash and cash equivalents at beginning of financial year Cash and cash equivalents at end of financial year	Year Ended 30 June 2018 $ (5,788,893) 1,777,030 83,247 (3,928,616) - (3,142) - (3,142) 13,189 13,189 (3,918,569) 6,224,617 2,306,048	Year Ended 30 June 2017 $ (4,632,076) 738,046 147,483 19,724
		(3,726,823)
		1,000 (6,745) (2,600)
		(8,345)
		10,000,000 58,984 (584,757)
		9,474,227
		5,739,059 485,558 6,224,617

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Appendix 4E Preliminary Final Report

Part 8 – Basis of Preparation

This preliminary final report has been prepared in accordance with ASX Listing Rule 4.3A and the disclosure requirements of ASX Appendix 4E.

Part 9 – Loss from Ordinary Activities

The loss from ordinary activities before income tax includes the following items of revenue and expense:

The loss from ordinary activities before income tax includes the following items of revenue and expense: REVENUES AND EXPENSES Year Ended 30 June 2018 $ Year Ended 30 June 2017 $ (a) Other revenue Research and development tax incentive 2,020,175 1,777,030 Grant income - 19,724 2,020,175 1,796,754 (b) Other expenses Audit 24,943 29,092 Accounting 55,564 61,925 Marketing 138,897 145,135 Subscriptions 37,903 30,902 Other 276,567 167,439 (533,874) (434,493)	The loss from ordinary activities before income tax includes the following items of revenue and expense: REVENUES AND EXPENSES Year Ended 30 June 2018 $ Year Ended 30 June 2017 $ (a) Other revenue Research and development tax incentive 2,020,175 1,777,030 Grant income - 19,724 2,020,175 1,796,754 (b) Other expenses Audit 24,943 29,092 Accounting 55,564 61,925 Marketing 138,897 145,135 Subscriptions 37,903 30,902 Other 276,567 167,439 (533,874) (434,493)	The loss from ordinary activities before income tax includes the following items of revenue and expense: REVENUES AND EXPENSES Year Ended 30 June 2018 $ Year Ended 30 June 2017 $ (a) Other revenue Research and development tax incentive 2,020,175 1,777,030 Grant income - 19,724 2,020,175 1,796,754 (b) Other expenses Audit 24,943 29,092 Accounting 55,564 61,925 Marketing 138,897 145,135 Subscriptions 37,903 30,902 Other 276,567 167,439 (533,874) (434,493)
	Year Ended 30 June 2018 $ 2,020,175 - 2,020,175 24,943 55,564 138,897 37,903 276,567 (533,874)	Year Ended 30 June 2017 $ 1,777,030 19,724
		1,796,754
		29,092 61,925 145,135 30,902 167,439
		(434,493)

Part 10 – Commentary on Results

The Company reported a loss for the year ended 30 June 2018, after accounting for income tax benefit, of ($3,854,894) (30 June 2017: ($2,832,517). The year ended 30 June 2018 operating results are attributed to the following:

• Research and Development tax incentive refund: $2,020,175 (2017: $1,777,030) The 2018 R & D Tax incentive is subject to approval of the Overseas Finding application lodged with AusIndustry on 20 March 2018.

• Cost of services expense of $3,980,633 (2017: $3,598,678); and

• Employment benefit expense of $664,909 (2017: $404,669).

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Appendix 4E Preliminary Final Report

Part 11 – Notes to the Consolidated Statement of Cash Flows

Reconciliation of Cash Cash at the end of financial year as included in the statement of cash flows is reconciled to the related items in the statement of financial position as follows Cheque account Cash reserve account Savings - bonus Term Deposit Reconciliation of cash flow from operations with profit after income tax Loss attributable to members Non-cash flows in profit: Depreciation Loss on sale of plant and equipment Prior year receivables classified as capital (Increase) / decrease in receivables Increase / (decrease) in payables Increase / (decrease) in provisions Shares based payments recognised Net cash provided by (used in) operating activities	Year Ended 30 June 2018 $ 26,514 1,139,562 1,139,973 - 2,306,048 (3,854,894) 3,142 - - (267,627) (766) 22,571 168,958 (3,928,616)	Year Ended 30 June 2017 $ 20,189 275,009 929,419 5,000,000 6,224,617 (2,832,517) 5,435 592 (65,220) (965,426) 107,118 23,195 - (3,726,823)

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Appendix 4E Preliminary Final Report

Part 12 – Details Relating to Dividends

Part 12 – Details Relating to Dividends
Date the dividend is payable	N/A
Record date to determine entitlement to the dividend	N/A
Amount per security	N/A
Total dividend	N/A
Amount per security of foreign sourced dividend or distribution	N/A
Details of any dividend reinvestment plans in operation	N/A
The last date for receipt of an election notice for participation in any dividend reinvestment plans	N/A

Part 13 – Loss per Share

	Year Ended	Year Ended
	30 June 2018	30 June 2017
Basic (loss) per share	(3.81 cents)	(3.15 cents)
Weighted average number of ordinary shares used in the calculation of basic (loss) per share	101,287,250	90,035,620
As the Company is in a loss position there is no diluted earnings
per share calculated.

Part 14 – Net Tangible Assets per Security

art 14 – Net Tangible Assets per Security
	30	June 2018	30 June 2017
Net tangible asset backing per ordinary security (cents)		4.00	7.66

Part 15 – Details of Entities Over Which Control has been Gained or Lost

ost
Name of entity	Nil
Date deregistered	Nil
Contribution of the controlled entity (or group of entities) to the	Nil
profit/(loss) from ordinary activities during the period, from the
date ofgainingor losingcontrol
Profit (loss) from ordinary activities of the controlled entity (or	Nil
group of entities) for the whole of the previous corresponding
period
Contribution to consolidated profit/(loss) from ordinary	Nil
activities from sale of interest leading to loss of control

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Appendix 4E Preliminary Final Report

Part 16 – Details of Associates and Joint Venture Entities

	OwnershipInterest	OwnershipInterest	Contribution to netprofit/(loss)	Contribution to netprofit/(loss)
Name of entity	30/06/18 %	30/06/17 %	Year ended 30/06/18 $A’000	Year ended 30/06/17 $A’000
	N/A	N/A	N/A	N/A
Associate	N/A	N/A	N/A	N/A
Joint Venture Entities	N/A	N/A	N/A	N/A
Aggregate Share of Losses	N/A	N/A	N/A	N/A

Part 17 – Issued Securities

ISSUED CAPITAL Fully paid ordinary shares Fully paid Series A Preference shares Fully paid convertible notes Ordinary Shares At beginning of reporting period Issued on exercise of options Issued as part of share split Issue of ordinary shares Conversion of Preference Shares Conversion of Convertible Notes At the end of the reporting period Series A Preference Shares At beginning of reporting period Conversion to Ordinary Shares At the end of the reporting period Convertible Notes At beginning of reporting period Mezzanine Finance Conversion to Ordinary Shares At the end of the reporting period	Year ended 30 June 2018 17,573,527 - - 17,573,527 No. 101,110,890 734,955 - - - - 101,845,845 No. - - - No. - - - -	Year ended 30 June 2017 17,560,338 - -
		17,560,338
		No. 12,418,223 1,110,874 - 40,000,000 21,594,477 25,987,316
		101,110,890
		No. 2,999,998 (2,999,998)
		-
		No. 2,660,000 - (2,660,000)
		-

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Appendix 4E Preliminary Final Report

Options

The following options to subscribe for ordinary fully paid shares are outstanding at balance date:

Number of shares		Exercise price of	Expiry date of
under option	Class of shares	option	options
234,472	Ordinary	$0.17	1 November 2020
600,000	Ordinary	$0.17	16 October 2020
1,150,000	Ordinary	$0.25	14 November 2021
650,000	Ordinary	$0.50	14 November 2021
350,000	Ordinary	$0.75	14 November 2021
350,000	Ordinary	$1.00	14 November 2021
200,000	Ordinary	$0.31	30 September 2021
200,000	Ordinary	$0.31	30 September 2022

Part 18 – Segment Information

The Company has identified its operating segments based on the internal reports that are used by the Board (the chief operating decision makers) in assessing performance and in determining the allocation of resources.

The Board as a whole will regularly review the identified segments in order to allocate resources to the segment and to assess its performance.

The Board considers that the Company has only operated in one segment.

Part 19 – Subsequent Events

On 13th July 2018, the Company announced the placement of 14,166,667 fully paid ordinary shares to sophisticated and institutional investors at a price of $0.30 per share to raise $4.25 million. Directors intend to take up a total of 522,450 shares, the issue of which will be subject to shareholder approval at the Annual General Meeting.

On 16th July 2018, eligible shareholders were offered the opportunity to subscribe for up to $15,000 of new fully paid ordinary shares in AdAlta, free of brokerage and commission, under a Share Purchase Plan (SPP) at the same price as the placement.

On 15 August 2018, the Company announced the placement of 1,592,011 fully paid ordinary shares to eligible shareholders at a price of $0.30 per share to raise $477,603 from the share purchase plan.

Otherwise, there has not been any matter or circumstance that has arisen subsequent to the end of the financial year that has significantly affected, or may significantly affect, the operations of the Company, the results of those operations, or the state of affairs of the Company in future financial years.

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Appendix 4E Preliminary Final Report

Part 20 – Audit/Review Status

This report is based on accounts to which one of the following applies: (Tick one) The accounts have been audited The accounts have been subject to review The accounts are in the process of  The accounts have not yet been audited being audited or subject to review or reviewed

If the accounts have not yet been audited or subject to review and are likely to be subject to dispute or qualification, a description of the likely dispute or qualification:

Not applicable

If the accounts have been audited or subject to review and are subject to dispute or qualification, a description of the dispute or qualification:

Not applicable

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