ORTHOCELL LIMITED — Interim / Quarterly Report 2021

Feb 25, 2021

Appendix 4D Half-yearly report for the 6 months to 31 December 2020 Orthocell Limited - ABN 57 118 897 135

1. Reporting period

Report for the half year ended 31 December 2020. Previous period is the half year ended 31 December 2019

2. Results for announcement to the market

	31 Dec 2020	31 Dec 2019	% change
Sales revenues from ordinary activities	446,201	368,095	21%
Other revenues from ordinary activities	228,664	38,131	500%
Loss from ordinary activities after tax attributable to the	(4,395,269)	(2,087,211)	111%
owners of Orthocell Limited
Loss for the half-year attributable to the owners of	(4,395,269)	(2,087,211)	111%
Orthocell Limited
. Net tangible assets per security
	31 Dec 2020	31 Dec 2019
Net tangible assets per ordinary security	$0.100	$0.122

3. Net tangible assets per security

4. Dividends

No dividends were paid during the current or previous half years and no dividends have been declared subsequent to the half year end and up to the date of this report. There are no dividend or distribution reinvestment plans in operation.

5. Foreign entities

N/A

6. Gain or loss of control over entities

In August 2019 Orthocell divested its ownership in subsidiary Orthocell (HK) Limited.

7. Associates and joint ventures

N/A

8. Audit qualification or review

Details of audit/review dispute or qualification (if any):

The Interim Report of Orthocell Limited for the half-year ended 31 December 2020 was subject to a review by the auditors and the review report is attached as part of the Interim Report.

9. Signed

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Paul Anderson Managing Director

Date: 26 February 2021 Perth

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Orthocell Limited ABN 57 118 897 135

Half-Year Report 31st December 2020

Ph: +61 8 9360 2888 Fax: +61 8 9360 2899 www.orthocell.com.au

CONTENTS

Corporate Directory ................................................................................................................................... 2 Directors’ report .......................................................................................................................................... 3 Auditor’s independence declaration ....................................................................................................... 7 Consolidated statement of profit or loss and other comprehensive income ....................................... 8 Consolidated statement of financial position .......................................................................................... 9 Consolidated statement of changes in equity ...................................................................................... 10 Consolidated statement of cash flows ................................................................................................... 11 Notes to the consolidated financial statements .................................................................................... 12 Directors’ declaration .............................................................................................................................. 18 Independent auditor’s review report ...................................................................................................... 19

Consolidated Interim Statements for the Half-Year Ended 31 December 2020 1

1

CORPORATE DIRECTORY

Board of Directors

Dr Stewart Washer Executive Chairman, appointed 7 April 2014 Mr Paul Anderson

Managing Director, appointed 21 March 2006 Mr Matthew Callahan

Non-Executive Director, appointed 30 May 2006, resigned 23 August 2019,

re-appointed 10 February 2020

Professor Lars Lidgren Independent Non-Executive Director, appointed 17 December 2007 Mr Qi Xiao Zhou

Non-Executive Director, appointed 8 November 2012 Ms Leslie Wise Executive Director, appointed 9 June 2020

Company Secretary

Mr Simon Robertson

Registered Office & Principal Place of Business

Building 191, Murdoch University South Street Murdoch WA 6150, Australia

Share Register

Automic Registry Services Level 2, 267 St Georges Terrace Perth WA 6000, Australia

Auditor

PKF Perth 4th Floor, 35 Havelock Street West Perth WA 6005, Australia

Solicitors

Gilbert + Tobin Level 16, Brookfield Place Tower 2 123 St Georges Terrace, Perth WA 6000, Australia

Bankers

Westpac Banking Corporation

Securities Exchange Listing

Australian Securities Exchange, ASX code: OCC

Website

www.orthocell.com.au

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Consolidated Interim Statements for the Half-Year Ended 31 December 2020

2

DIRECTORS REPORT

The directors present their report, together with the consolidated financial statements, on the consolidated entity ('consolidated entity') consisting of Orthocell Limited ('Company' or 'parent entity') and the entity it controlled at the end of, or during, the half-year ended 31 December 2020.

1. Directors

The following persons were directors of Orthocell Limited during the whole of the financial half-year and up to the date of this report, unless otherwise stated:

• Dr Stewart Washer, Executive Chairman

• Mr Paul Anderson, Managing Director & CEO

• Mr Matthew Callahan, Non-Executive Director (resigned 23 August 2019, re-appointed 11 February 2020)

• Professor Lars Lidgren, Independent NonExecutive Director

• Mr Qi Xiao Zhou, Non-Executive Director

• Ms Leslie Wise, Executive Director (appointed 8 June 2020)

Directors have been in office since the start of the financial year to the date of this report unless otherwise stated.

2. Principal activities

During the half year the principal continuing activities of the consolidated entity consisted of the development & commercialisation of cell therapies for the repair & regeneration of human tendons, bone, nerve and cartilage defects.

3. Summary review of operations

During the half year CelGro® Orthocell achieved key milestones on its path to Soft tissue reconstruction platform me dical device securing a distribution partner for CelGro[®] in

dental bone and tissue repair procedures, clinical development milestones in nerve and tendon repair and development objectives of key pipeline products.

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CelGro[®] Dental Bone Regeneration

Expanding target market regulatory approvals

Australia

During the half year, Orthocell announced Australian market approval for Striate + (previously named CelGro [®] Dental), for introduction into the Australian dental bone and tissue regeneration market. Subsequent to 31 December 2020 the Company received notification from the Australian Government Department of Health, that the Prosthesis List Advisory Committee has recommended the Minister of Health ratify its inclusion on the Prosthesis List (PL). Inclusion on the PL may be finalised by Q1 CY2021.

United States

On the 14[th] January 2021, Orthocell received FDA 510(k) clearance to market and supply Striate+ for dental bone and tissue regeneration procedures. The FDA 510(k) clearance now allows Orthocell to supply Striate+ in the US dental market, estimated at US$500 million per annum.

Increasing product awareness

UK and EU

During the period, new strains of COVID-19 and subsequent social distancing restrictions in the EU and the UK prevented most dental practices from treating patients. In response to these restrictions and the current dental market conditions, the Company placed various promotional and distribution personnel related expenses on hold until dental surgeons are able to return to the regular treatment of patients. The Company is utilised this period to prepare for the anticipated return of demand for high quality products, such as Striate+, to facilitate rapid and high quality dental procedures by continuing to invest in its clinician advocacy program and a digital marketing campaign, including release of the first of a series of webinars to grow product awareness and use in centres of excellence.

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Consolidated Interim Statements for the Half-Year Ended 31 December 2020

3

DIRECTORS REPORT

Video conferences were held in place of in person meetings due to COVID-19 restrictions and were effective in maintaining contact and continued development of strategic relationships with industry leading clinicians in the US, UK, Spain, France and Italy.

Clinician advocacy program and product use in centres of excellence

During the half year, the Company engaged ten industry leading clinicians (KOL’s) based in the EU and the US to assist in rolling out the clinician advocacy program, to expand the network of referring clinicians and assist discussions with strategic partners. Clinicians were supplied with Striate+ for use in their clinics, industry workshops, conference attendance and podium presentations.

Growing the body of clinical evidence

During the half year, the company announced the publication of positive pre-clinical and clinical results for the use of Striate+ in enhancing repair of critical bone defects in the highly regarded “Tissue Engineering” Journal. The paper is entitled “Collagen Membrane for Guided Bone Regeneration in Dental and Orthopaedic Applications”. A copy of the publication can be found here: CelGro GBR Publication. Accelerated repair of critical bone defects represents an area of significant clinical interest to the dental and orthopaedic community. Orthocell intends to leverage Striate+’s ability to guide superior quality bone formation to further position Striate+ as the best-in-class collagen membrane for bone and soft tissue repair.

Engaging Partners

The Company will now pursue negotiations with multi-national dental companies for US marketing and distribution rights, with Orthocell to retain manufacturing of the finished product. With US, EU and Australian market approval achieved and key opinion leaders (KOLs) actively engaging with the program, Orthocell is well positioned to secure a distribution partner and establish Striate+ as the best-in-class dental resorbable collagen membrane.

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CelGro® Nerve Regeneration

Positive CelGro® nerve regeneration results in quadriplegic patients

During the half year, Orthocell announced further positive long term clinical data showing nerve repair with CelGro[®] results in predictable and consistent restoration of upper limb function. The Company also announced it had decided, in consultations with key stakeholders, that the clinical results have met the study objectives and closed recruitment.

Positive 24-month clinical data

On the 20[th] November 2020 the Company announced clinical results from ten participants (involving 19 nerve repairs) 24 months after treatment with CelGro[®] showing upper limb function was restored in 17 of 19 (89%) nerve repairs. These positive results follow the interim data announced on 9 October 2019 showing patients ceased, or significantly reduced, prescription pain medication (including opioidbased medications), and in many cases returned to work and participation in recreational activities. Results at 12 months after treatment with CelGro[®] included:

• 96% of nerve repairs restored voluntary movement to previously paralysed muscles;

• All quadriplegic patients increased movement and power of affected muscles following CelGro[®] nerve regeneration treatment;

• 86% of patients who required prescription medication (including opioid-based medications) for chronic nerve pain were able to significantly reduce or cease their use ; and

• Nerve repair with CelGro[®] resulted in predictable and consistent restoration of muscle function .

Results showed that nerve repair using CelGro[®] resulted in improvements in muscle power at 12 months that were comparable to what would normally be expected at 24 months with other methods.

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Consolidated Interim Statements for the Half-Year Ended 31 December 2020

4

DIRECTORS REPORT

The Company believes the consistent and predictable outcomes of nerve repair with CelGro[®] , achieved in a shorter time, will empower surgeons to improve the lives of patients with these complex injuries.

Following these positive results validating the interim data, the company is progressing regulatory applications in the Australia and will commence the US regulatory study shortly to make this treatment accessible to the millions of people who experience nerve damage annually.

CelGro[®] Tendon & Ligament Repair

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Tendon
regeneration
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During the half year, Orthocell has progressed implementation of its regulatory strategy to achieve US and AUS approval to market CelGro[®] for tendon repair procedures. The regulatory and research team is continuing to work on the US study design and to prepare for a US FDA presubmission meeting. The team is also collating additional clinical evidence relating to the positive performance of CelGro[®] in augmenting tendon repair for the TGA submission. Whilst COVID-19 restrictions have impacted timeframes to collate this data, the team remains focussed on finalising submission documents for approval of the tendon repair product in the US, AUS and the EU.

– CelGro® collagen rope a potential breakthrough

pipeline product for ligament repair

Orthocell has developed an alternative to tendon graft made from braided CelGro[®] collagen fibres for ACL reconstruction. The CelGro[®] collagen rope is designed to significantly improve treatment efficiency & effectiveness by simplifying repair techniques, reducing surgery time & mitigating the risks associated with harvesting the patient’s hamstring tendon.

During the half year, the Company announced a United States patent has been accepted for the CelGro[®] collagen rope device to enhance the surgical repair of Anterior Cruciate Ligament injuries. The patent entitled “Collagen Construct & Method for Producing the Collagen Construct”

is now approved in Australia, Japan & the United States providing additional important intellectual property to protect the CelGro[®] platform for soft tissue regeneration & repair applications and expires on or after 12 October 2035.

The company is in the process of completing the pre-clinical study using CelGro[®] collagen rope for Anterior Cruciate Ligament (ACL) reconstruction & developing an appropriate regulatory and reimbursement strategy to the US, AUS and EU markets.

Ortho-ATI[®] Tendon Regeneration

Ortho-ATI® Cell therapy to regenerate damaged tendon tissue

Ortho-ATI[®] is a world-leading breakthrough in regenerative medicine – a novel cell therapy developed to treat chronic degenerative tendon injuries (tendinopathy / tendonitis). Ortho-ATI[®] can be used in both surgical and non-surgical applications and is at the forefront of a large and increasing market opportunity, estimated to be worth >US$7.7bn and growing.

The Company is currently conducting two clinical trials with Ortho-ATI[®] , the first is focused on rotator cuff and the second on tennis elbow tendon defects. The rotator cuff study is fully recruited and is on track to provide a final data read out in 3Q CY2021. This will be the world’s first randomised, active controlled clinical trial of a tendon regeneration cell therapy and represents a significant inflection point for the Company on its pathway to US approval and commercialisation. The tennis elbow study is 70% recruited and plans to be fully recruited in CY 2021.

Ortho-ATI[®] can be used in both surgical and nonsurgical applications and is at the forefront of a large and increasing market opportunity, estimated to be worth >US$7.7bn and growing.

Successful Annual Quality Survey

As part of Orthocell’s commitment to its

continuous delivery of high quality regenerative medicine products, the Company administers an Annual Quality Study (“AQS”) to capture patient feedback following treatment of chronic tendon injuries with Orthocell’s Ortho-ATI[®] cellular therapy.

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Consolidated Interim Statements for the Half-Year Ended 31 December 2020

5

DIRECTORS REPORT

On the 9th July, the Company announced the results from its 2019 AQS and trends since 2015. Summary results included:

• 87.5% satisfaction in patients who received Ortho-ATI[®] tendon repair treatment, in the shoulder , in the four AQS surveys conducted between 2015 and 2019

• 74.2% satisfaction in patients who received Ortho-ATI[®] tendon repair treatment in the four AQS surveys conducted between 2015 and 2019

• 2019 AQS included treatment of six (6) different anatomical locations (tendons) including Elbow (56%), Shoulder (18%), Hip (13%), Knee (3%) Achilles/ankle/foot (10%)

5. Directors’ resolution

This report is made in accordance with a resolution of directors, pursuant to section 306(3)(a) of the Corporations Act 2001.

On behalf of the directors

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Mr Paul Anderson Managing Director 26 February 2021 Perth

Outlook

Orthocell remains focused on executing its partnering strategy for Striate+ in dental bone & soft tissue repair. This includes increasing international product awareness, growing product use in centres of excellence & growing base of brand ambassadors led by its KOLs, designed to optimise shareholder value. Over the medium term, Orthocell intends to leverage Striate+’s regulatory milestones to drive the most appropriate regulatory programs for the introduction of the nerve & tendon indications, in parallel to the commercialisation of Ortho-ATI[®] & pipeline products.

Corporate

In January 2021 Orthocell received A$2,394,397 Research & Development (R&D) tax incentive cash refund.

The loss for the consolidated entity after income tax for the half-year amounted to $4,395,269 (31 December 2019: $2,087,211).

4. Auditor's independence declaration

A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out on the following page.

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Consolidated Interim Statements for the Half-Year Ended 31 December 2020

6

AUDITOR’S INDEPENDENCE DECLARATION

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Consolidated Interim Statements for the Half-Year Ended 31 December 2020

7

CONSOLIDATED STATEMENT OF PROFIT OR LOSS & OTHER COMPREHENSIVE INCOME

For the half-year ended 31 December 2020

Note Revenue Sales revenue 3 Cost of goods sold Gross profit Other revenue 3 Expenses Research & development Sales & marketing, & business development Administrative & general 4 Loss before income tax expenses Income tax benefit Loss after income tax expenses Other comprehensive income Other comprehensive income for the half-year, net of tax Total comprehensive loss Loss per share Basic earnings per share Diluted earnings per share	31 Dec 2020 31 Dec 2019 $ $ 446,201 368,095 (286,258) (258,846)
	159,943 109,249 228,664 38,131 (4,626,495) (2,867,085) (641,754) (911,840) (1,910,023) (1,360,212)
	(7,178,272) (5,139,137)
	(6,789,666) (4,991,757) 2,394,397 2,904,546
	(4,395,269) (2,087,211) - -
	(4,395,269) (2,087,211)
	$ $ (0.024) (0.013) (0.024) (0.013)

Note: the above statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes

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Consolidated Interim Statements for the Half-Year Ended 31 December 2020

8

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at 31 December 2020

Note Assets Current assets Cash and cash equivalents Trade and other receivables Inventories Other Total current assets Non-current assets Property, plant and equipment Right-of-use assets Intangibles Total non-current assets Total assets Liabilities Current liabilities Trade and other payables Lease liabilities Employment benefits Other Total current liabilities Non-current liabilities Lease liabilities Employment benefits Total non-current liabilities Total Liabilities Net assets Equity Issue capital 5 Share-based payment reserve 6 Accumulated losses Total equity	31 Dec 2020 30 Jun 2020 $ $ 17,561,252 20,441,616 2,591,403 253,110 34,098 47,552 12,363 63,087
	20,199,116 20,805,365
	256,354 234,648 481,785 500,887 1,450,486 1,629,671
	2,188,625 2,365,206
	22,387,741 23,170,571
	1,365,588 865,148 101,667 107,630 479,117 553,172 91,470 334,667
	2,037,842 1,860,617
	386,572 393,258 14,834 13,215
	401,406 406,473
	2,439,248 2,267,090
	19,948,493 20,903,481
	53,696,821 53,674,762 6,793,754 3,375,532 (40,542,082) (36,146,813)
	19,948,493 20,903,481

Note: the above statement of financial position should be read in conjunction with the accompanying notes

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Consolidated Interim Statements for the Half-Year Ended 31 December 2020

9

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the half-year ended 31 December 2020

Balance at 1 July 2019 Loss after income tax expense Other comprehensive income, net of tax Total comprehensive income Transactions with owners in their capacity as owners: Contributions of equity Share equity costs Expiry of options Exercise of options/warrants Issue of options Balance at 31 December 2019 Balance at 1 July 2020 Loss after income tax expense Other comprehensive income, net of tax Total comprehensive income Transactions with owners in their capacity as owners: Contributions of equity Share equity costs Expiry of options Exercise of options/warrants Issue of options Balance at 31 December 2020	Issued Capital Share-based payment reserve Accumulated losses Total equity $ $ $ $ 39,026,963 1,955,279 (30,257,780) 10,724,462 - - (2,087,211) (2,087,211) - - - -
	- - - - 14,511,750 - - 14,511,750 (660,000) - - (660,000) (228,324) 228,324 - 710,060 (41,663) - 668,397 - 1,039,381 - 1,039,381
	53,588,773 2,724,673 (32,116,667) 24,196,779
	53,674,762 3,375,532 (36,146,813) 20,903,481 - - (4,395,269) (4,395,269) - - - -
	- - - - - - - - - - - - - - - - 22,059 - - 22,059 - 3,418,222 - 3,418,222
	53,696,821 6,793,754 (40,542,082) 19,948,493

Note: the above statement of changes in equity should be read in conjunction with the accompanying notes

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Consolidated Interim Statements for the Half-Year Ended 31 December 2020

10

CONSOLIDATED STATEMENT OF CASH FLOWS

For the half-year ended 31 December 2020

Note Cash flows from operating activities Receipts from customers (inclusive of GST) Payments to suppliers & employees (inclusive of GST) Interest received Grants & subsidies received Interest paid Net cash used in operating activities Cash flows from investing activities Payments for intangible assets Payments for property, plant & equipment Payments for other investments Net cash used in investing activities Cash flows from financing activities Share subscription funds received Share equity costs Net cash from financing activities Net (decrease)/increase in cash and cash equivalents Cash & cash equivalents at the beginning of the financial half-year Cash & cash equivalents at the end of the financial half-year	31 Dec 2020 31 Dec 2019 $ $ 372,960 349,293 (3,929,999) (4,672,001) 190,340 35,606 354,000 - - (9,764)
	(3,012,699) (4,296,866)
	(11,914) (277,502) (27,810) (1,596) - (300,000)
	(39,724) (579,098)
	172,059 15,091,397 - (650,000)
	172,059 14,441,397
	(2,880,364) 9,565,433 20,441,616 11,236,299
	17,561,252 20,801,732

Note: the above consolidated statement of cash flows should be read in conjunction with the accompanying notes

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Consolidated Interim Statements for the Half-Year Ended 31 December 2020

11

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Orthocell Limited (the “Company” or “Orthocell”) is a company limited by shares incorporated in Australia whose shares are publicly traded on the Australian Securities Exchange (“ASX”). The consolidated financial statements of the Group as at and for the half-year to 31 December 2020 comprise the Company and its subsidiaries.

Note 1. Significant accounting policies

The principal accounting policies adopted in the preparation of the consolidated financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

The consolidated interim financial statements were authorised by the directors on 24 February 2020.

Basis of preparation

The interim report has been prepared on a historical cost basis. Cost is based on the fair value of the consideration given in exchange for assets. The company is domiciled in Australia and all amounts are presented in Australian dollars, unless otherwise noted. For the purpose of preparing the interim report, the half-year has been treated as a discrete reporting period.

Statement of compliance

These interim consolidated financial statements are a general purpose financial report prepared in accordance with the requirements of the Corporations Act 2001, applicable accounting standards including AASB 134 ‘Interim Financial Reporting’, Accounting Interpretations and other authoritative pronouncements of the Australian Accounting Standards Board (‘AASB’). Compliance with AASB 134 ensures compliance with IAS 34 ‘Interim Financial Reporting’.

This condensed half-year report does not include full disclosures of the type normally included in an annual financial report. Therefore, it cannot be expected to provide as full an understanding of the financial performance, financial position and cash flows of the Group as in the full financial report.

It is recommended that this financial report be read in conjunction with the annual financial report for the period ended 30 June 2020 and any

public announcements made by Orthocell Limited and its subsidiaries during the half-year in accordance with continuous disclosure requirements arising under the Corporations Act 2001 and the ASX Listing Rules.

The accounting policies adopted are consistent with those of the previous financial half-year and corresponding interim reporting period.

Critical accounting estimates and significant judgements

The preparation of interim financial reports requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expense. Actual results may differ from these estimates.

In preparing this interim report, the significant judgments made by management in applying the Group’s accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial report for the period ended 30 June 2020.

Going Concern

The Group has net assets of $19,948,521 as at 31 December 2020 (30 June 2020: $20,903,481 and incurred a loss of $4,395,269 (2019: $2,087,211) and net operating cash outflow of $3,012,699 (2019: $4,296,866) for the period ended 31 December 2020.

The Group’s ability to continue as a going concern and meet its debts and future commitments as and when they fall due is dependent on the Company’s ability to raise sufficient working capital to ensure the continued implementation of the Group’s business strategy.

The financial report has been prepared on a going concern basis. In arriving at this position, the directors have had regard to the fact that the

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Consolidated Interim Statements for the Half-Year Ended 31 December 2020

12

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Company has, or in the directors’ opinion will have access to, sufficient cash to fund administrative and other committed expenditure for a period of not less than 12 months from the date of this report.

New and amended standards adopted by the entity

The consolidated entity has adopted all of the new or amended Accounting Standards and Interpretations issued by the Australian Accounting Standards Board ('AASB') that are mandatory for the current reporting period.

Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.

Impact of standards issued but not yet applied by the entity

that Orthocell Limited anticipated no material impacts (amounts recognised and/or disclosed) arising from initial application of those standards issued but not yet applied at that date.

Note 2. Operating segments

The consolidated entity has identified its operating segments based on the internal reports that are reviewed and used by the chief operating decision maker to make decisions about resources to be allocated to the segments and assess their performance. The financial information presented in the statement of profit or loss and other comprehensive income and statement of financial position is the same as that presented to the chief operating decision makers. The consolidated entity predominately operates in the regenerative medicine industry in Australia.

There were no new standards issued since 30 June 2020 that have been applied by Orthocell Limited. The 30 June 2020 annual report disclosed

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Consolidated Interim Statements for the Half-Year Ended 31 December 2020

13

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 3. Revenue

ote 3. Revenue
Sales revenue Sale of goods Other revenue Interest Other Total revenue	31 Dec 2020 31 Dec 2019 $ $ 446,201 368,095
	446,201 368,095
	190,340 35,606 38,324 2,525
	228,664 38,131
	674,865 406,226

Note 4. Expenses

Loss before income tax includes the following specific expenses:

Depreciation and amortisation Depreciation – plant & equipment Amortisation – patents & trademarks Total depreciation and amortisation Employment expenses Wages Superannuation Leave entitlements Payroll & other taxes Share-based payments Directors’ fees Wage grants and rebates Other employment costs Total employment costs Net foreign exchange gain/(loss) Net foreign exchange gain/(loss) Rental expense relating to operating leases Minimum lease payments	84,350 30,352 137,266 92,750
	221,616 123,102
	1,664,134 1,432,558 148,748 132,567 (72,436) 39,781 80,172 89,566 2,413,670 918,306 169,070 125,263 (204,000) - 41,261 -
	4,240,619 2,738,041
	420 (9,763)
	10,725 35,270

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Consolidated Interim Statements for the Half-Year Ended 31 December 2020

14

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 5. Equity – issued capital

ote 5. Equity – issued capital
Ordinary shares – fully paid Share equity costs ovements in ordinary share capital Details Balance Issue of shares Issue of shares on exercise of options Issue of shares on exercise of options Issue of shares Issue of shares Issue of shares on exercise of options Issue of shares on exercise of options Issue of shares Issue of shares on exercise of options Issue of shares on exercise of warrants Issue of shares Issue of shares on exercise of options Balance Issue of shares on exercise of options Balance	31 Dec 2020 Shares 184,786,957 -	30 Jun 2020 31 Dec 2020 30 Jun 2020 Shares $ $ 184,698,772 56,776,552 56,754,493 - (3,079,731) (3,079,731)
	184,786,957	184,698,772 53,696,821 53,674,762
	Date 30 Jun 2019 11 Jul 2019 11 Jul 2019 25 Jul 2019 14 Aug 2019 10 Sep 2019 9 Oct 2019 29 Oct 2019 11 Dec 2019 17 Dec 2019 17 Dec 2019 30 Dec 2019 19 Jan 2020 30 Jun 2020 11 Jul 2020 31 Dec 2020	Shares Issue price 153,366,810 108,771 0.475 50,000 0.250 738,000 0.250 42,357 0.482 40,159 0.415 350,000 0.250 190,000 0.250 26,000,000 0.500 75,000 0.250 547,667 0.580 2,846,000 0.500 343,958 0.250 31,331,912 184,698,722 88,235 0.250 88,253 184,786,957	$ 41,446,694
			51,666 12,500 208,559 20,417 16,667 98,910 53,694 13,000,000 18,750 317,647 1,423,000 85,989
			15,307,799
			56,754,493
			22,059
			22,059
			56,776,552

Movements in ordinary share capital

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Consolidated Interim Statements for the Half-Year Ended 31 December 2020

15

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 6. Share-based payment reserve

Note 6. Share-based payment reserve
Share-based payment reserve Movements in share-based payment reserve Details Balance Exercised options(1) Issue of options(2) Exercised options(1) Expiry of options Exercised options(1) Issue of options(3) Issue of options(4) Expiry of options Expiry of options Expiry of options Value of options vested(5) Issue of options(6) Value of options vested(7) Expiry of options Balance Issue of options(8) Issue of options(9) Balance	31 Dec 2020 30 Jun 2020 31 Dec 2020 30 Jun 2020 No of Options No of Options $ $ 40,222,000 23,382,000 6,793,754 3,375,532
	40,222,000 23,382,000 6,793,754 3,375,532
	Date 1 Jul 2019 25 Jul 2019 14 Aug 2019 9 Oct 2019 12 Oct 2019 29 Oct 2019 20 Nov 2019 20 Nov 2019 13 Dec 2019 13 Dec 2019 22 Mar 2020 8 May 2020 10 Jun 2020 12 Jun 2020 19 Jun 2020 30 Jun 2020 8 Oct 2020 15 Oct 2020 31 Dec 2020	No of options $ 21,180,000 1,955,279
		(738,000) (24,059) 1,660,000 426,118 (350,000) (11,410) (650,000) (108,160) (190,000) (6,194) 1,650,000 560,076 150,000 53,187 (490,000) (80,164) (600,000) (40,000) (40,000) (5,612) - 394,533 2,000,000 215,481 - 74,517 (200,000) (28,060)
		2,202,000 1,420,253 23,382,000 3,375,532
		200,000 40,302 16,640,000 3,377,920
		16,840,000 3,418,222 40,222,000 6,793,754

For the options issued during the half year the valuation model inputs used to determine the fair value at the grant date are as follows:

	Grant	Expiry date	Share price	Exercise	Expected	Dividend	Risk-free	Fair value
	date		at grant	price	volatility	yield	rate	at grant
(1)	18/12/18	31/12/21	$0.160	$0.250	48%	0%	1.93%	$0.0326
(2)	14/08/19	14/08/22	$0.415	$0.413	100%	0%	0.67%	$0.2567
(3)	20/11/19	20/11/22	$0.565	$0.617	100%	0%	0.71%	$0.3394
(4)	20/11/19	20/11/22	$0.565	$0.537	100%	0%	0.71%	$0.3546
(5)	07/05/18	08/05/21	$0.345	$0.395	50%	0%	2.15%	$0.1076
(6)	10/06/20	11/06/25	$0.355	$0.410	80%	0%	0.41%	$0.2150
(7)	13/06/19	13/06/22	$0.425	$0.413	80%	0%	0.99%	$0.2236
(8)	08/10/20	08/10/23	$0.410	$0.400	75%	0%	0.15%	$0.2015
(9)	15/10/20	14/10/24	$0.420	$0.583	80%	0%	0.42%	$0.2030

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Consolidated Interim Statements for the Half-Year Ended 31 December 2020

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 7. Contingent assets

The consolidated entity has no contingent assets for the half-year ended 31 December 2020.

Note 8. Events after the reporting period

The impact of the Coronavirus ('COVID-19') pandemic is ongoing for the consolidated entity up to 31 December 2020, it is not practicable to estimate the potential impact, positive or negative, after the reporting date. The situation is rapidly developing and is dependent on measures imposed by the Australian Government and other countries, such as maintaining social distancing requirements, quarantine, travel restrictions and any economic stimulus that may be provided.

In January 2021 600,000 shares were issued on exercise of 600,000 options at an exercise price of $0.25 per option and 3,370,525 shares were issued on exercise of 10,800,000 unlisted options utilising the cashless exercise facility provided in the Company’s Equity Incentive Plan at a notional price of $0.5742.

In February 2021 650,000 options expiring 5 February 2024 and exercisable to $0.517 were issued for nil consideration to consultants and 35,294 shares were issued on exercise of 35,294 options at an exercise price of $0.25 per option.

No other matter or circumstance has arisen since 31 December 2020 that has significantly affected, or may significantly affect the consolidated entity's operations, the results of those operations, or the consolidated entity's state of affairs in future financial years.

Note 9. Commitments and contingences

There has been no change in contingent liabilities or commitments since the last annual reporting date.

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Consolidated Interim Statements for the Half-Year Ended 31 December 2020

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DIRECTORS’ DECLARATION

In the directors' opinion:

• the attached financial statements and notes thereto comply with the Corporations Act 2001, Australian Accounting Standard AASB 134 'Interim Financial Reporting', the Corporations Regulations 2001 and other mandatory professional reporting requirements;

• the attached financial statements and notes thereto give a true and fair view of the consolidated entity's financial position as at 31 December 2020 and of its performance for the financial half-year ended on that date; and

• there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.

Signed in accordance with a resolution of directors made pursuant to section 303(5)(a) of the Corporations Act 2001.

On behalf of the directors

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Paul Anderson Director 26 February 2021 Perth

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Consolidated Interim Statements for the Half-Year Ended 31 December 2020

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INDEPENDENT AUDITOR’S REVIEW REPORT

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Consolidated Interim Statements for the Half-Year Ended 31 December 2020

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INDEPENDENT AUDITOR’S REVIEW REPORT

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Consolidated Interim Statements for the Half-Year Ended 31 December 2020

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