DIMERIX LIMITED — Annual Report 2009

Aug 26, 2009

SUN BIOMEDICAL LIMITED ABN 18 001 285 230 PRELIMINARY FINAL REPORT APPENDIX 4E FINANCIAL YEAR ENDED 30 JUNE 2009

1. Details of the reporting period

	Reporting period Previous corresponding	Reporting period Previous corresponding	Reporting period Previous corresponding	period	period
	30 June 2009	30 June 2008
2.	Results for announcement to the market
						$
2.1	Revenues from continuing operations	down	79%	to	33,332
2.2	Loss from ordinary activities before income	down	53%	to	(479,097)
	tax
	Loss from discontinued operations after	up	44%		(3,649,641)
	income tax
2.3	Net loss attributable to members of the	up	16%	to	(4,128,738)
	parent entity
2.4	Dividends/Distributions
	No dividends declared in current or prior year
2.5	Record date for determining entitlements to		N/A
	dividends
2.6	Refer point 14 below for explanation of figures in 2.1		to 2.4 above

3. Statement of Financial Performance

Refer attached financial statements.

4. Statement of Financial Position

Refer attached financial statements.

5. Statement of Cash Flows

Refer attached financial statements.

6. Details of dividends or distributions

N/A

7. Details of dividend reinvestment plan

N/A

8. Statement of Retained Earnings

Refer attached financial statements.

SUN BIOMEDICAL LIMITED ABN 18 001 285 230 PRELIMINARY FINAL REPORT APPENDIX 4E FINANCIAL YEAR ENDED 30 JUNE 2009

9. Net tangible assets per security

2009 2008 Net tangible assets per ordinary share $0.0005 $(0.002)

10. Details of entities over which control has been gained or lost during the period

N/A

11. Details of associates and joint venture entities

N/A

12. Other significant information

Refer point 14 below .

13. Accounting standards used by foreign entities

N/A

14. Commentary on results and explanatory information

The consolidated loss for the 12 month period ended 30 June 2009 was $4,128,738 compared to a loss of $3,557,390 for the previous 12 months ended 30 June 2008.

The loss of $4,128,738 was split between the Australian based legal operating entity of $1,661,934 and the loss incurred in the US based drug screening segment of $2,466,804. The activities in the US drug screening segment were discontinued as at 30 April 2009.

During April 2009, the Company implemented a strategy to protect its intellectual property and preserve its cash resources. The directors determined that this is strategy was necessary as the business did not have the sufficient cash resources to sustain the current US manufacturing and distribution infrastructure. Consequently, the Company exercised its first ranking charge over all the assets of the US subsidiary, Sun Biomedical Laboratories, Inc. (“SBL”), which was held as security for the intercompany loan which amounted to US$3,088,806. The enforcement of security involved transferring the ownership of the drug screening patents to the Company from SBL, the retrenchment of all SBL staff and the closure of the premises at Blackwood, New Jersey by the end of April 2009. The entire intercompany loan has been written off as at 30 June 2009.

The Company is continuing to seek offers for its patents and is also evaluating a number of new investment opportunities.

The major component of the loss is the amortisation and impairment of the Sun Biomedical Laboratories intellectual property and patents of $1,781,824 which includes a

SUN BIOMEDICAL LIMITED ABN 18 001 285 230 PRELIMINARY FINAL REPORT APPENDIX 4E FINANCIAL YEAR ENDED 30 JUNE 2009

complete write off of $1,382,407 in the carrying value of the patents covering the VisuaLine and OraLine products. This is discussed in further detail below.

The accounting policies, estimation methods and measurement bases used in this Appendix 4E are the same as those used in the last annual report and the last half-year report.

Some of the key features of the year ended 30 June 2009 include:

• The conclusion of the Rights Issue in August 2008 which raised a total of $3.179m;

• The restructure and settlement of the final amount owing to Dr Ming and Alice Sun, the founders of SBL, in September 2008 as final consideration for the acquisition of SBL in August 2006;

• The downturn in US drug screening sales as a result of the poor economic conditions;

• The unsuccessful search for a strategic partner for its US subsidiary, Sun Biomedical Laboratories, Inc;

• The termination of the Co-operation Agreement with Shanghai Siyi Biotechnology Co Ltd in April 2009; and

• The enforcement of the first ranking security over the loan to SBL and the closure of the US operations in April 2009.

The table below summarises the sources and applications of the funds raised from the Rights Issue:

	$’000
Opening cash balance at 1 July 2008 Gross proceeds from 2008 capital raising Costs of capital raising	118 3,179 (450)
Available cash after capital raising	2,847
Repayment of Promissory Note to Dr Sun US operating costs (net of sales) US fixed asset purchases Australian legal, regulatory and compliance costs Other costs of maintaining listed entity in Australia	(608) (1,145) (119) (258) (345)
Closing cash balance as at 30 June 2009	372

As discussed above, the closure of the US operations on 30 April 2009 resulted in the termination of work on all ongoing projects including China, BioScreens and Oraline VIII. This was clearly not anticipated at the time of the Rights Issue. Additional expenses incurred as a result of the closure were approximately $250,000.

SUN BIOMEDICAL LIMITED ABN 18 001 285 230 PRELIMINARY FINAL REPORT APPENDIX 4E FINANCIAL YEAR ENDED 30 JUNE 2009

Impairment of Intangibles

The loss for the year includes a write down of $1,382,407 in the carrying value of the patents covering the VisuaLine and OraLine products to zero. The Directors are of the view that this is the prudent approach given the closure of the US manufacturing and distribution operations discussed above. As noted above, the Company now has ownership of the patents and is continuing to seek third party offers.

Top 20 Shareholders

A list of the top 20 shareholders in the Company as at 24 August 2009 is attached to this report.

15. Audit

The report is based on accounts which are currently being audited.

SUN BIOMEDICAL LIMITED ABN 18 001 285 230 PRELIMINARY FINAL REPORT APPENDIX 4E FINANCIAL YEAR ENDED 30 JUNE 2009

CONSOLIDATED INCOME STATEMENT

Revenue from continuing operations -refer Note 1 below Expenses -refer Note 3 Loss before income tax Income tax expense Loss for the period from continuing operations Loss from discontinued operations -refer Note 2 Loss for the period attributable to members Basic Earnings Per Share Diluted Earnings Per Share	2009 A$'000	2008 A$'000
	33,332 (512,429)	160,598 (1,184,938)
	(479,097) -	(1,024,340) -
	(479,097)	(1,024,340)
	(3,649,641)	(2,533,050)
	(4,128,738)	(3,557,390)
	(0.53) cents (0.97) cents (0.53) cents (0.97) cents

SUN BIOMEDICAL LIMITED ABN 18 001 285 230 PRELIMINARY FINAL REPORT APPENDIX 4E FINANCIAL YEAR ENDED 30 JUNE 2009

NOTES TO THE CONSOLIDATED INCOME STATEMENT

Note 1

Revenue from continuing operations

Revenue from Sales Interest Revenue Other Revenue	2009 A$'000	2008 A$'000
	- 33,332 -	30,000 129,203 1,395
	33,332	160,598

Note 2

Discontinued Operations

Revenues from discontinued operations Expenses from discontinued operations Loss before income tax from discontinued operations	2009 A$'000	2008 A$'000
	836,347 (4,485,988)	785,018 (3,318,068)
	(3,649,641)	(2,533,050)

Note 3

Expenses from continuing operations

Operating expenses Employee expenses Consulting fees Legal fees Administration expenses Travel and accommodation Insurance Advertising and marketing expense Regulatory compliance expenses Rent Loss on disposal of non current assets Total operating expenses Non cash items Equity based payments	2009 A$'000	2008 A$'000
	- 76,644 70,492 116,427 2,883 16,507 - 188,172 5,461 -	398,579 56,177 153,336 83,750 62,383 21,903 15,550 224,343 66,300 5,896
	476,586 35,843	1,088,217 96,721
	512,429	1,184,938

SUN BIOMEDICAL LIMITED ABN 18 001 285 230 PRELIMINARY FINAL REPORT APPENDIX 4E FINANCIAL YEAR ENDED 30 JUNE 2009

Note 4

Amortisation and Impairment Expenses

Amortisation of intangibles Total amortisation of intangibles Impairment of other intangibles Total impairment write-downs	Consolidated - Currentperiod	Consolidated - Currentperiod	Consolidated - Currentperiod	Consolidated - Currentperiod
	Before tax A$'000	Related tax A$'000	Related outside equity interests A$'000	Amount (after tax) attributable to members A$'000
	399,417	-	-	399,417
	399,417	-	-	399,417
	1,432,992 1,432,992	- -	- -	1,432,992 1,432,992

Note 5 Comparison of Half-Year Profits

Consolidated profit(loss) after tax attributable to members reported for the 1st half yearly report Consolidated profit(loss) after tax attributable to members for the 2nd half year	2009 A$'000	2008 A$'000
	(1,255,215)	(1,543,017)
	(2,873,523)	(2,014,373)

SUN BIOMEDICAL LIMITED ABN 18 001 285 230 PRELIMINARY FINAL REPORT APPENDIX 4E FINANCIAL YEAR ENDED 30 JUNE 2009

CONSOLIDATED BALANCE SHEET

Current Assets Cash and cash equivalents Trade and other receivables Inventories Total Current Assets Non-Current Assets Property, plant and equipment Intangible assets Total Non-Current Assets TOTAL ASSETS Current Liabilities Trade and other payables Borrowings Promissory note Total Current Liabilities Non-Current Liabilities Promissory note Total Non-Current Liabilities TOTAL LIABILITIES NET ASSETS Equity Contributed equity Reserves Accumulated losses Total Equity	2009 A$'000	2008 A$'000
	371,670 11,070 -	118,223 270,890 210,096
	382,740	599,209
	2,593 -	16,988 1,832,410
	2,593	1,849,398
	385,333	2,448,607
	43,357 - -	422,372 - 1,018,076
	43,357	1,440,448
	-	-
	-	-
	43,357	1,440,448
	341,976	1,008,159
	27,833,891 59,600 (27,551,515)	24,483,424 28,397 (23,503,662)
	341,976	1,008,159

SUN BIOMEDICAL LIMITED ABN 18 001 285 230 PRELIMINARY FINAL REPORT APPENDIX 4E FINANCIAL YEAR ENDED 30 JUNE 2009

NOTES TO THE CONSOLIDATED BALANCE SHEET

Consolidated Retained Earnings

Accumulated losses at the beginning of the financial period Tranfers to/(from) reserves Net profit (loss) attributable to members Retained Earnings at the end of the financial period	Current Period A$'000	Previous corresponding period A$'000
	(23,503,662) 80,885 (4,128,738)	(20,125,947) 179,675 (3,557,390)
	(27,551,515)	(23,503,662)

SUN BIOMEDICAL LIMITED ABN 18 001 285 230 PRELIMINARY FINAL REPORT APPENDIX 4E FINANCIAL YEAR ENDED 30 JUNE 2009

CONSOLIDATED CASH FLOW STATEMENT

Cash flows related to operating activities Receipts from customers Payments to suppliers and employees Interest and other items of a similar nature received Interest and other costs of finance paid Other Net operating cash flows Cash flows related to investing activities Payments for purchases of property, plant and equipment Net investing cash flows Cash flows related to financing activities Proceeds from issues of shares Proceeds from/(Repayment) of borrowings Share issue costs Net financing cash flows Net increase (decrease) in cash held Cash at beginning of period -refer note below Cash at end of period -refer note below	2009 A$'000	2008 A$'000
	726,639 (2,607,256) 33,404 (12,948) 111,479	822,882 (3,267,321) 41,483 - 1,395
	(1,748,682) (119,175)	(2,401,561) - (60,756)
	(119,175)	(60,756)
	3,742,637 (1,171,454) (449,879)	3,496,418 (1,005,869) (356,343)
	2,121,304	2,134,206
	253,447 118,223	(328,111) 446,334
	371,670	118,223

NOTES TO THE CONDENSED CONSOLIDATED CASH FLOW STATEMENT

Reconciliation of Cash Cash on hand and at bank Total cash at end of period
	2009 A$'000	2008 A$'000
	371,670	118,223
	371,670	118,223

SUN BIOMEDICAL LIMITED ABN 18 001 285 230 PRELIMINARY FINAL REPORT APPENDIX 4E FINANCIAL YEAR ENDED 30 JUNE 2009

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

As at 1 July 2007 Shares issued during the year Transaction costs Cost of share based payments Transfer to (from) reserves Foreign currency translation reserve differences Total income and expense for the year recognised directly in equity Loss for the year As at 1 July 2008 Shares issued during the year Transaction costs Transfer to (from) reserves Foreign currency translation reserve differences Total income and expense for the year recognised directly in equity Loss for the year As at 30 June 2009	Issued capital	Accumulated Losses	Share Based Payment Reserve	Foreign Currency Translation Reserve	TOTAL EQUITY
	21,300,481 3,539,285 (356,342)	(20,125,947) - - - 179,675 -	244,212 - - 53,854 (179,675) -	(3,974) - - - - (86,020)	1,414,772 3,539,285 (356,342) 53,854 - (86,020)
		179,675	(125,821)	(86,020)	3,150,777
		(3,557,390)	-	-	(3,557,390)
	24,483,424 3,800,345 (449,878)	(23,503,662) - - - 80,885 -	118,391 - - 22,094 (80,885) -	(89,994) - - - 29,196	1,008,159 3,800,345 (449,878) 22,094 - 29,196
		80,885	(58,791)	29,196	3,401,757
		(4,128,738)	-	60,798	(4,067,940)
	27,833,891	(27,551,515)	59,600	-	341,976