2022 Annual Report Delivering Science. Transforming Lives.
Noxopharm Limited 2
Annual Report 2022 3 Table of Contents Chairman’s Letter 4 CEO’s Letter 6 Directors’ Report 9 Auditor’s Independence Declaration 22 Annual Financial Report - 30 June 2022 23 Statement of Profit or Loss and Other Comprehensive Income 24 Statement of Financial Position 25 Statement of Changes in Equity 26 Statement of Cash Flows 27 Notes to the Financial Statements 28 Independent Auditor’s Report to Members 52 Shareholder Information 57 Corporate Directory 63
Noxopharm Limited 4 Let me begin by acknowledging Noxopharm founder Dr Graham Kelly, who stepped down as CEO in early 2022 after being involved since the conception of the company in 2015. Graham continues his involvement at Board level as a Non-Executive Director, and was instrumental in our choice of his successor. Graham’s departure from the executive team meant that we welcomed Dr Gisela Mautner into the CEO position after serving as our Chief Medical Officer for three years. Dr Mautner has vast international experience working in leadership roles for a number of the world’s largest pharmaceutical companies. Her experience and successful track record in launching new drugs, as well as a deep understanding of the complexities of scientific research and clinical trials, puts the company in a good stead as we execute and complete our current DARRT-2, CEP-2 and IONIC trials. Gisela has an extremely strong management team supporting her, all of whom have extensive experience and expertise in their respective fields. I am very confident our team headed by Dr Mautner will deliver great value creation for our shareholders. One of the key aspects of our refreshed science-driven strategy is building a pipeline of opportunities around Chairman’s Letter A year of progress and change Dear fellow Shareholders,
Annual Report 2022 5 two drug development programs, namely the ChromaTM and SofraTM technology platforms. Focusing on cancer and inflammation respectively, these two platforms represent our ambition to advance the most promising life-saving therapies through the discovery, preclinical and clinical phases, building the value of our new assets and exploring outlicensing opportunities at critical steps along the way. These two new programs deepen and broaden the company’s operations as Veyonda® trials continue. Enrolments and patient treatments are progressing, and new hospitals such as the prestigious Mayo Clinic have been added to those participating in the trials, reflecting our strategy of working with world-class partners wherever we can. We will keep shareholders updated on key clinical trial milestones as and when they occur, and the team remains focused on exploring commercial opportunities for Veyonda® in a global market with a significant need for new cancer treatments. In regard to financials, we have a stable cash position, with the management team keeping a close eye on costs and directing resources where they will produce the greatest effect to meet our strategic goals. Overall, we are well-positioned to take the company forward, having strengthened our pipeline and progressed our trials over the previous 12 months. On behalf of the Board, I would like to thank our shareholders for their ongoing support as we work hard to deliver value across the entirety of our operations, and build a company that will deliver sustainable success both now and well into the future. Yours Sincerly, Fred Bart Chairman
CEO’s Letter Expanding our strategy to deliver value Noxopharm Limited 6 It is both a pleasure and an honour to write my first Annual Report letter to you as CEO, and let me begin by thanking you all for your ongoing support of Noxopharm. Since assuming this role in early 2022, the senior management team and I have been very appreciative of the encouragement we’ve received from shareholders, and can assure you we are deeply committed to the success of this company. For those of you who do not know me, my background is working in leadership roles around the world in many highprofile pharma companies to help them deliver new drugs to patients. This has given me not only direct experience of the journey from molecule to marketplace, but also a strong network of international industry relationships, all of which will prove very useful as we continue to grow Noxopharm. Personally, I am driven by the desire to tackle some of the most debilitating illnesses of our time, and have worked on many of these in my career, from cancer to cardiovascular diseases. It was this passion that drove me to accept the opportunity to lead Noxopharm. My aim is to ensure the company maximises its potential as we mature our operations and sharpen our strategic ambitions. Of course, I am not alone in this, and work closely with a highly skilled management team who deliver depth and strength across the company, from R&D knowledge in oncology and inflammation to significant financial and operational experience. Taken together, we have more than 100 years of scientific and pharmaceutical industry experience between us. We also have some very talented younger scientists on our team, who every day are exploring new ways to build our future through experimentation, creativity and innovation – backed by rigorous scientific analysis and a commitment to data-driven decision-making. It is challenging to develop lifeDear fellow Shareholders,
Annual Report 2022 7 saving drugs, as it takes time, resources and determination, but I know that collectively we are up to the task. We are today at a pivotal moment in our development. Our drug candidate Veyonda® is the subject of three ongoing clinical trials, and we have seen steady progress in these over the past 12 months. There have been some delays, with COVID affecting patient recruitment for example, but as these occurred we have mitigated any impacts on our timelines. Our overarching approach is to partner with the very best organisations possible, and this past year has seen some eminent names added to those already participating in our Veyonda® trials. We have also secured Orphan Drug Designation for Veyonda®, for use in treatment of soft tissue sarcoma, delivering several commercial advantages to us. Beyond Veyonda®, our focus has been to expand our corporate strategy and quickly progress our preclinical pipeline of potential therapies under the ChromaTM and SofraTM technology platforms. The ChromaTM drug candidates have novel bioactive properties which we are exploring primarily in the anti-cancer space, for example looking at how our novel drug candidate CRO-67 targets pancreatic cancer, as seen in our promising results with the UNSW Sydney team and their state-of-the-art patient explant model. Note that other drugs in this platform could be directed at other forms of cancer in the future, as we regularly screen against a panel of cancer types. In parallel, our SofraTM platform is centred around short nucleic acid sequences called oligonucleotides, which can act on specific cell receptors to stop inflammation, which is a major source of many debilitating and lethal diseases. The way we use our proprietary oligonucleotides is a novel approach, which reflects our ambition to be innovators in our field. As speed combined with the best science is a vital aspect for success, we foster strong relationships with leading research institutions such as Melbourne’s Hudson Institute of Medical Research, as well as UNSW, to leverage their world-class capabilities. It is a privilege for us to work with such gifted scientists and we will continue to invest in these collaborations, and others like them, as part of our strategy. You could say that we are a company of collaborators, as every year sees the Noxopharm family expanding and becoming more well known. Our business model is based on the strategy of advancing proprietary and in-licensed drugs through the drug discovery and preclinical stages into clinical trials. And as we reach key value inflection points, we intend to out-license the drugs to optimise value for shareholders. These building blocks represent the future of Noxopharm. As a team, we will focus on our three platforms – ChromaTM, SofraTM and Veyonda® – progressing our clinical trials and preclinical research in order to construct a robust enterprise that will make the most of commercial opportunities and deliver value to our shareholders, the owners of our company. Thank you all for your ongoing support as we enter this promising new era, and continue to develop therapies to help people manage and overcome challenging diseases. Yours sincerely, Dr Gisela Mautner CEO “Our focus has been to expand our corporate strategy and quickly progress our preclinical pipeline of potential therapies under the ChromaTM and SofraTM technology platforms.”
Noxopharm Limited 8
Directors’ Report Annual Report 2022 9 The directors present their report, together with the financial statements, on the consolidated entity (referred to hereafter as the ‘consolidated entity’) consisting of Noxopharm Limited (referred to hereafter as the ‘company’ or ‘parent entity’) and the entities it controlled at the end of, or during, the year ended 30 June 2022. Directors The following persons were directors of Noxopharm Limited during the whole of the financial year and up to the date of this report, unless otherwise stated: • Mr. Frederick Bart, Non-Executive Chairman • Dr. Graham Kelly, Non-Executive Director (resigned executive positions 1 February 2022 and appointed Non-Executive Director 1 February 2022) • Mr. Peter Marks, Non-Executive Director and Deputy Chairman • Mr. Boris Patkin, Non-Executive Director • Dr. Gisela Mautner, Chief Executive Officer and Managing Director (appointed 1 February 2022) Principal activities The consolidated entity’s principal activity in the course of the current financial year continued to be drug development, with the primary focus being the clinical development of Veyonda® (Idronoxil) as an adjuvant therapy in chemotherapy and radiotherapy in the treatment of late-stage cancers. There were no significant changes in the nature of the Company’s principal activity during the financial year. Dividends There were no dividends paid, recommended or declared during the current or previous financial year. Review of operations The loss for the consolidated entity after providing for income tax amounted to $18,666,810 (30 June 2021: $9,346,749). During the financial year, the consolidated entity has achieved the following milestones: • The Clinical Development Program continues to make solid progress this year with three cancer trials underway: DARRT-2, CEP-2 and IONIC; • Regulatory: US FDA granted Investigational New Drug status for the use of Veyonda® in combination with doxorubicin for the treatment of Sarcoma (CEP-2 trial); and IND status was granted to Veyonda® in prostate cancer (and other solid tumours) for the DARRT-2 trial; • DARRT-2 Phase 2 Trial saw a second dose cohort of patients treated with 1200mg of Veyonda®, and the dose was found to be safe and well tolerated. Approval has been given to progress the study, and treatment of the third cohort of patients with a 1600mg dose of Veyonda® will commence. The trial is now open for enrollment in the US, Europe and Australia; • CEP-2 Phase 1 Trial saw the first dose cohort of patients enrolled, with recruitment ongoing. Orphan Drug Designation was granted to Veyonda® for the use in soft tissue Sarcoma by the US FDA in early 2022; • The IONIC Trial recruitment is progressing steadily, with the final site expected to be activated shortly; • LuPIN study completed during the year, with results published in the Journal of Nuclear Medicine in January 2022; • The pre-clinical drug platforms ChromaTM and SofraTM continue to mature with a growing pipeline of drug candidates as part of a strategy of expanding the portfolio of assets and the profile of the Company in the global pharmaceutical industry. Significant changes in the state of affairs There were no significant changes in the state of affairs of the consolidated entity during the financial year. Likely developments and expected results of operations Information on likely developments in the operations of the consolidated entity and the expected results of operations have not been included in this report because the directors believe it would be likely to result in unreasonable prejudice to the consolidated entity.
Noxopharm Limited 10 Matters subsequent to the end of the financial year No matter or circumstance has arisen since 30 June 2022 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. Environmental regulation The consolidated entity is not subject to any significant environmental regulation under Australian Commonwealth or State law. Information on directors Name: Mr. Frederic Bart Title: Non-Executive Chairman Experience and expertise: In 1985, Mr Bart was appointed the Managing Director of Textile Industries Australia. The Group employed over 1,200 people and distributed product to many countries worldwide. The Company manufactured and distributed the majority of bed linen in Australia under brands like Sheridan and ACTIL. The Company was sold in 1987. In 1989, Mr Bart established and chairs a number of private companies under the umbrella of the Bart Group which covered hotels, retail, commercial and residential land development and technologies which still continue to operate. The Group today employs in excess of 1,000 people and is active in many local and overseas markets. In 2001, Mr Bart became Chairman of Electro Optic Systems Holdings Limited (ASX: EOS). Since that time it has grown to be one of Australia’s premier defence companies with activities in many countries worldwide employing over 400 people and is currently included in the S&P/ASX 300. In September 2000, Mr Bart became a director and Chairman of Audio Pixels Holdings Limited (ASX: AKP). Audio Pixels is developing the first digital speaker in the world and currently has a market capitalisation of over $600m. In 2013, Mr Bart became Director and majority shareholder of Immunovative Therapies Limited, a private Israeli company involved in the manufacture of vaccines for the treatment of certain forms of cancer. The Company has undertaken trials in both collateral and liver cancers. In March 2018, Mr Bart joined the Board of Weebit Nano Limited (ASX: WBT). Weebit is a developer of memory technology (1,000 X faster, 1,000 X more energy efficient and 100X higher endurance) than existing flash memory technologies. Other current directorships: Fred Bart is Chairman of ASX listed company, Audio Pixels Holdings Limited and is a director of Weebit Nano Limited. Mr Bart is also a director of Immunovative Therapies Limited, an Israeli company involved in in the manufacture of cancer vaccines for the treatment of most forms of cancer. Former directorships (last 3 years): Electro Optics Systems Holdings Limited (ASX:ESO) - resigned 27 July 2021. Interests in shares: 5,618,651 Interests in options: 3,846,154
Annual Report 2022 11 Name: Dr. Graham Kelly Title: Non-Executive Director Experience and expertise: Graham graduated with degrees in Science (1968) and Veterinary Science (1969) from The University of Sydney. After graduation he joined the newly‐formed Department of Transplant Surgery in the Faculty of Medicine at The University of Sydney, gaining a Doctor of Philosophy in 1972. The subject of his PhD thesis was the manufacture and use of a novel drug for the treatment of tissue rejection in kidney transplant recipients, with that drug subsequently being commercialised and used globally in kidney transplantation. Graham was appointed Senior Research Fellow in Experimental Surgery at The University of Sydney, contributing through research in the areas of organ recovery for transplantation and liver transplant surgery. The increased susceptibility of organ transplant recipients to malignant cancer eventually led Graham to focus on the causes of that phenomenon, and in turn, to the broader issue of the link between diet and the incidences of certain cancers. The latter area of research led to a research interest in dietary isoflavones and their role in human health. Graham developed a theory that dietary isoflavones were metabolised within the body into novel chemicals that possessed important hormone‐like functions, and as such made important contributions to human health. That theory provided the basis for Graham leaving academia and founding the company, Norvet Ltd, which listed on the ASX in 1994. That company subsequently changed its name to Novogen Ltd and listed in the US on NASDAQ (1998). Graham was variously CEO, Executive Chairman and an Executive Director of Novogen, 1994‐2006. He also was Executive Chairman of Marshall Edwards Inc (MEI) which listed on London’s AIM exchange (2001) and NASDAQ (2003). MEI subsequently became MEI Pharma Inc. Graham resigned from his executive and Board positions at Novogen and MEI in 2006. In early‐2012, Graham addressed the matter of the transport of isoflavones in the blood of humans, conducting formulation studies in a private capacity that led shortly thereafter to the concept behind NOX66. After leaving Novogen in 2015, Graham established private biotechnology company Noxopharm Limited in order to commercialise NOX66. Noxopharm became a public company in August 2016. Graham was also the founder of a fourth biotechnology company, Nyrada Inc. in September 2017. Nyrada (ASX:NYR) became a public company in January 2020. Nyrada is a drug development company with a focus on cardiovascular and traumatic brain injury treatments. Noxopharm is currently the major shareholder. Other current directorships: N/A Former directorships (last 3 years): Nyrada Inc. (resigned 8 September 2020) Interests in shares: 36,152,294 Interests in options: 1,820,513
Noxopharm Limited 12 Name: Mr. Peter Marks Title: Non‐Executive Director and Deputy Chairman Experience and expertise: Peter has over 35 years’ experience in corporate advisory, investment banking and capital market’s activities. Over the course of his long career, he has specialised in capital raising IPOs, cross border and M&A transactions, corporate underwriting and venture capital transactions for companies based in Australia, the US and Israel. He has been involved in a broad range of transactions with a special focus in the life sciences, biotechnology, medical technology, high tech and more recently in the resources sectors. Peter has served as both an Executive as well as NonExecutive Director of a number of different companies listed on the ASX, Nasdaq and AIM markets. Peter holds a Bachelor of Economics, Bachelor of Laws and a Graduate Diploma in Commercial Law from Monash University, Australia. He also holds an MBA from the University of Edinburgh, Scotland. Other current directorships: Alterity Therapeutics Limited (ASX:ATH) - since 29 July 2005 (formerly known as Prana Biotechnology Limited and Iris metals (ASX:IR1) - since December 2020. Former directorships (last 3 years): Fluence Corporation Limited (ASX:FLC) - resigned 31 March 2020; Elsight Limited (ASX:ELS) - resigned 30 November, 2021 and Nyrada Limited (ASX:NYR) - resigned 1 August 2022. Interests in shares: 900,000 Interests in options: 66,667 Name: Mr. Boris Patkin Title: Non-Executive Director Experience and expertise: Boris brings comprehensive market knowledge, thorough research and years of experience in investment markets and Business Consulting. Boris’s experience lends itself to Financial and Investment advising but also as a business consultant to further enhance business opportunities in Medical technology and in sourcing other opportunities to enhance investments. Boris has worked extensively with Israeli companies to explore various opportunities in the Medical and disruptive technology space. Boris has developed an in-depth understanding of industry trends and gained valuable insight into domestic and international markets. Boris has specialised in reconstruction of Companies, Investments and International trade. He has extensive experience in developing and adding value to public listed companies, especially in the Medical, Resources and Retirement space. Boris has completed a Bachelor of Science (Industrial Chemistry). Currently a member of TASSA, MeSAFAA and an Authorised Representative Morgans Financial Ltd. Other current directorships: Non-Executive Chairman of Ausmon Resources Ltd - since 2014 Former directorships (last 3 years): N/A Interests in shares: 630,000 Interests in options: 310,000
Annual Report 2022 13 Name: Dr. Gisela Mautner Title: Chief Executive Officer and Managing Director Experience and expertise: Gisela is an international business leader with significant experience developing and launching new pharmaceutical products, and delivering successful corporate strategies in highly competitive global markets. She also has over thirty years’ experience in medical and scientific research, most recently as the Chief Medical Officer of Noxopharm. Gisela has held senior positions with Amgen, Bayer, Siemens Medical Solutions and Merck/MSD, generating successful commercial and scientific outcomes. She is currently the Past-President of the Australian Pharmaceutical Physicians Association (APPA), a Fellow of the Australasian College of Physician Executives and a Member of the Australian Institute of Company Directors and the CEO Institute. Gisela holds an MD from the Technical University of Munich, a PhD from the Ludwig Maximilian University, an MPH from Harvard University and an MBA from Northwestern University Chicago. Other current directorships: Nyrada Inc. (ASX:NYR) - appointed 1 August 2022 Former directorships (last 3 years): Interests in shares: Interests in options: 2,000,000 performance options, 265,208 unlisted options. ‘Other current directorships’ quoted above are current directorships for listed entities only and excludes directorships of all other types of entities, unless otherwise stated. ‘Former directorships (last 3 years)’ quoted above are directorships held in the last 3 years for listed entities only and exclude directorships of all other types of entities, unless otherwise stated. Company secretary Mr. David Franks David Franks (BEc, CA, FFin, FGIA, JP) has held the position of Company Secretary since 16 January 2017. David is a Principal of the Automic Group. He is a Chartered Accountant, Fellow of the Financial Services Institute of Australia, Fellow of the Governance Institute of Australia, Justice of the Peace, Registered Tax Agent and holds a Bachelor of Economics (Finance and Accounting) from Macquarie University. With over 30 years’ experience in finance, governance and accounting, Mr Franks has been CFO, Company Secretary and/or Director for numerous ASX listed and unlisted public and private companies, in a range of industries covering energy retailing, transport, financial services, mineral exploration, technology, automotive, software development and healthcare. Mr Franks is currently the Company Secretary for the following ASX Listed entities: Applyflow Limited, COG Financial Services Limited, Cogstate Limited, Exopharm Limited, IRIS Metals Limited, IXUP Limited, JCurve Solutions Limited, Noxopharm Limited, Nyrada Inc, White Energy Company Limited and ZIP Co Limited. He was also a Non-Executive Director of JCurve Solutions Limited from 2014 to 2021.
Noxopharm Limited 14 Meetings of directors The number of meetings of the company’s Board of Directors (‘the Board’) and of each Board committee held during the year ended 30 June 2022, and the number of meetings attended by each director were: Full Board Audit and Risk Committee Remuneration Committee Attended Held Attended Held Attended Held Mr. Frederic Bart 6 6 - - - - Dr. Graham Kelly 6 6 2 2 1 1 Mr. Peter Marks 6 6 2 2 1 1 Mr. Boris Patkin 6 6 2 2 1 1 Dr. Gisela Mautner 3 3 - - - - Held: represents the number of meetings held during the time the director held office or was a member of the relevant committee. Remuneration report (audited) The Remuneration report, which has been audited, outlines the key management personnel remuneration arrangements for the consolidated entity, in accordance with the requirements of the Corporations Act 2001 and its Regulations. Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly, including all directors. The remuneration report is set out under the following main headings: • Principles used to determine the nature and amount of remuneration • Details of remuneration • Service agreements • Share-based compensation • Additional information • Additional disclosures relating to key management personnel Principles used to determine the nature and amount of remuneration Remuneration governance The objective of the remuneration committee (constituting the full Board) is to ensure that pay and rewards are competitive and appropriate for the results delivered. The remuneration committee charter adopted by the Board aims to align rewards with achievement of strategic objectives and the creation of value for shareholders. The remuneration framework applied provides a mix of fixed and variable pay and a blend of short and long-term incentives as appropriate. Issues of remuneration are considered annually or otherwise as required. Non-Executive Directors Fees and payments to Non-Executive Directors reflect the demands which are made on, and the responsibilities of, the Directors. The Company’s policy is to remunerate Non-Executive Directors at market rates (for comparable companies) for time commitment and responsibilities. Fees for Non-Executive Directors are not linked to the performance of the Company, however to align Directors’ interests with shareholders’ interests, Directors are encouraged to hold shares in the Company. Non-Executive Directors’ fees and payments are reviewed annually by the Board of Directors. The Board of Directors considers advice from external sources (excluding remuneration consultants) as well as the fees paid to Non-Executive Directors of comparable companies when undertaking the annual review process. Each director receives a fee for being a director of the company. The Chairman’s fees are determined independently to the fees of other Non-Executive Directors based on comparative roles in the external market. The Chairman is not present at any discussions relating to determination of his own remuneration. Retirement benefits and allowances No retirement benefits are payable other than statutory superannuation, if applicable to the Directors of the Company. Other benefits No motor vehicle, health insurance or other similar allowances are made available to Directors (other than through salarysacrifice arrangements).
Annual Report 2022 15 Executive remuneration Executive pay and reward consists of base pay, short-term performance incentives, long-term performance incentives and other remuneration such as superannuation. Superannuation contributions are paid into the executive’s nominated superannuation fund. Base Pay Executives are offered a competitive level of base pay which comprises the fixed (unrisked) component of their pay and rewards. Base pay for senior executives is reviewed annually to ensure market competitiveness. There are no guaranteed base pay increases included in any senior executives’ contracts. Base pay was increased during the year. Short-term and long-term incentives The Company currently operates an Executive Share Option Plan (“ESOP”) which has been approved by shareholders in the 2016 Annual General Meeting. Performance based Remuneration The purpose of a performance bonus is to reward individual performance in line with company objectives. Consequently, performance based remuneration is paid to an individual where the individual’s performance clearly contributes to a successful outcome for the consolidated entity. This is regularly measured in respect of performance against key performance indicators (KPI’s). The Company uses a variety of KPIs to determine achievement, depending on the role of the executive being assessed. These include: • Successful contract negotiations; • Company share price consistently reaching a targeted rate on the ASX or applicable market over a period of time; • Company undertaking clinical trials in their primary drug Veyonda® within specified time frame. Securities Trading Policy The trading of Company’s securities by employees and Directors is subject to, and conditional upon, the Securities Trading Policy which is available on the Company’s website (www.noxopharm.com). If remuneration consultants are to be engaged to provide remuneration recommendations as defined under section 9B of the Corporations Act 2001, then they are engaged by, and report directly to, the remuneration committee. No remuneration consultants were engaged to provide remuneration services during the financial year. Remuneration Policy vs Financial Performance The Company’s policy is to remunerate based on industry practice and benchmark industry salaries rather than performance as this takes into account the risk and liabilities assumed by directors and executives as a result of their involvement in an R&D Biotech company. Directors and executives are fairly compensated for the extensive work they undertake. Voting and comments made at the company’s 2021 Annual General Meeting (‘AGM’) At the 2021 AGM, more than 75% of the votes received supported the adoption of the remuneration report for the year ended 30 June 2021. The company did not receive any specific feedback at the AGM regarding its remuneration practices. Details of remuneration Amounts of remuneration Details of the remuneration of key management personnel of the consolidated entity are set out in the following tables. The key management personnel of the consolidated entity consisted of the following directors and executives of Noxopharm Limited: • Mr. Frederic Bart - Non Executive Chairman • Dr. Graham Kelly - Non Executive Director (resigned executive positions and appointed Non Executive Director 1 February 2022) • Mr. Peter Marks - Non Executive Director and Deputy Chairman • Mr. Boris Patkin - Non Executive Director • Dr. Gisela Mautner - Chief Executive Officer and Managing Director (appointed 1 February 2022)
Noxopharm Limited 16 Short-term benefits Post- employment benefits Long-term benefits Share-based payments Cash salary and fees Cash bonus Non- monetary * Super- annuation Long service leave Equity- settled Total 2022 $ $ $ $ $ $ $ Directors: Mr. Frederic Bart 41,095 - - 3,905 - - 45,000 Dr. Graham Kelly 384,496 - - 23,742 - - 408,238 Mr. Peter Marks 60,000 - - - - - 60,000 Mr. Boris Patkin 45,000 - - - - 58,669 103,669 Dr. Gisela Mautner (appointed 1 February 2022) 200,543 - (13,041) 20,054 5,350 621,074 833,980 731,134 - (13,041) 47,701 5,350 679,743 1,450,887 *provision for annual leave From 1 July 2021, Mr. David Franks was no longer considered to be a member of the key management personnel. Short-term benefits Post- employment benefits Long-term benefits Share-based payments Cash salary and fees Cash bonus Non- monetary * Super- annuation Long service leave Equity- settled Total 2021 $ $ $ $ $ $ $ Directors: Dr. Graham Kelly 300,000 - 23,126 30,000 341 - 353,467 Mr. Frederic Bart 41,095 - - 3,905 - 1,394,300 1,439,300 Mr. Peter Marks 60,000 - - - - - 60,000 Mr. Boris Patkin 45,000 - - - - 8,029 53,029 Dr. Ian Dixon (resigned 31 August 2020) 10,274 - - 976 - - 11,250 Other Key Management Personnel: Mr. David Franks - - - - - 16,490 16,490 456,369 - 23,126 34,881 341 1,418,819 1,933,536 *provision for annual leave Mr. David Franks, company secretary is also an associate of Automic Group who provides registry, accounting and company secretary services to the Company. The contracts with Automic Group Associates are based on normal commercial terms. Payments made to Automic Group during the year are disclosed in the related party transactions note of the financial statements.
Annual Report 2022 17 The proportion of remuneration linked to performance and the fixed proportion are as follows: Fixed remuneration At risk - STI At risk - LTI Name 2022 2021 2022 2021 2022 2021 Directors: Mr. Frederic Bart 100% 3% - - - 97% Dr. Graham Kelly 100% 100% - - - - Mr. Peter Marks 100% 100% - - - - Mr. Boris Patkin 43% 85% - - 57% 15% Dr. Gisela Mautner (appointed 1 February 2022) 27% - - - 73% - Dr. Ian Dixon (resigned 1 August 2020) - 100% - - - - Other Key Management Personnel: Mr. David Franks - - - - - 100% Service agreements Remuneration and other terms of employment for key management personnel are formalised in service agreements. Details of these agreements are as follows: Name: Dr. Gisela Mautner Title: Chief Executive Officer and Managing Director Agreement commenced: 1 February, 2022 Term of agreement: Open Details: Noxopharm Limited Annual salary of $410,000 plus superannuation of 10%. Notice period of 90 days by Executive or the Company. Key management personnel have no entitlement to termination payments in the event of removal for misconduct.
Noxopharm Limited 18 Share-based compensation Issue of shares There were no shares issued to directors and other key management personnel as part of compensation during the year ended 30 June 2022. Options The terms and conditions of each grant of options over ordinary shares affecting remuneration of directors and other key management personnel in this financial year or future reporting years are as follows: Grant date Vesting date and exercisable date Expiry date Exercise price Fair value per option at grant date 10 December 2018 21 November 2019 21 November 2022 $0.6200 $0.288 10 December 2018 21 November 2020 21 November 2022 $0.6200 $0.288 10 December 2018 21 November 2021 21 November 2022 $0.6200 $0.288 16 December 2019 16 December 2020 16 December 2023 $0.3200 $0.169 6 November 2020 6 November 2021 6 November 2024 $0.5500 $0.329 15 December 2020 15 December 2020 15 December 2022 $0.3150 $0.467 15 December 2020 15 December 2020 15 December 2022 $0.3150 $0.464 15 December 2020 15 December 2020 15 December 2022 $0.3150 $0.464 31 May 2021 15 December 2021 15 December 2024 $0.6810 $0.314 31 May 2021 15 December 2022 15 December 2024 $0.6810 $0.313 1 February 2022 * 1 February 2026 $0.5400 $0.310 Options granted carry no dividend or voting rights. * The performance options will vest on the achievement of any of the following: i) The Company being purchased in entirety (business sale/share sale); or ii) An AUD$10 million or greater investment in the Company; or iii) Entering into a licencing agreement with a large Pharmaceutical Company. The Directors have estimated 100% likelihood of the vesting criteria being achieved and as a result the full fair value of the options has been expensed. The number of options over ordinary shares granted to and vested by directors and other key management personnel as part of compensation during the year ended 30 June 2022 are set out below: Name Number of options granted during the year 2022 Number of options granted during the year 2021 Number of options vested during the year 2022 Number of options vested during the year 2021 Mr. Frederic Bart - 3,000,000 - 3,000,000 Mr. Boris Patkin - - 125,000 - Dr. Gisela Mautner 2,000,000 - 135,000 -
Annual Report 2022 19 Additional information The factors that are considered to affect total shareholders return (‘TSR’) are summarised below: 2022 2021 2020 2019 2018 Share price at financial year end (cents) 19.50 64.50 16.50 47.50 61.00 Share price HIGH for the financial year ended 30 June (cents) 69.50 95.00 45.92 72.00 158.00 Share price LOW for the financial year ended 30 June (cents) 17.50 18.50 8.39 35.50 29.00 Additional disclosures relating to key management personnel Shareholding The number of shares in the company held during the financial year by each director and other members of key management personnel of the consolidated entity, including their personally related parties, is set out below: Balance at the start of the year Received as part of remuneration Additions Disposals/ other Balance at the end of the year Ordinary shares Dr. Graham Kelly * 36,162,294 - - - 36,162,294 Mr. Frederic Bart 5,618,651 - - - 5,618,651 Mr. Peter Marks 900,000 - - - 900,000 Mr. Boris Patkin 630,000 - - - 630,000 43,310,945 - - - 43,310,945 * Includes securities held in the name of spouse, Mrs. Prue Kelly. Option holding - Company The number of options over ordinary shares in the company held during the financial year by each director and other members of key management personnel of the consolidated entity, including their personally related parties, is set out below: Balance at the start of the year Granted Exercised Expired/ forfeited/ other Balance at the end of the year Options over ordinary shares Mr. Frederic Bart 3,846,154 - - - 3,846,154 Dr. Graham Kelly * 2,008,013 - - - 2,008,013 Mr. Peter Marks 66,667 - - - 66,667 Mr. Boris Patkin 310,000 - - - 310,000 Dr. Gisela Mautner 265,208 2,000,000 - - 2,265,208 6,496,042 2,000,000 - - 8,496,042 * Includes options held in in the name of the spouse, Mrs. Prue Kelly. Other transactions with key management personnel and their related parties Prue Kelly, spouse of Graham Kelly (Non-Executive director) was employed as the Company’s full time Investor Relations Manager/Executive Assistant on the Company’s employment terms and conditions until 27 June 2022. Total salary inclusive of superannuation paid to Prue Kelly for the year ended 30 June 2022 was $338,635 (2021: $131,856). The total value of unlisted options granted to Prue Kelly for the year ended 30 June 2022 was nil (2021: $20,613). This concludes the remuneration report, which has been audited.
Noxopharm Limited 20 Shares under option Unissued ordinary shares of Noxopharm Limited under option at the date of this report are as follows: Grant date Expiry date Exercise price Number under option 8 December 2018 ** 21 November 2022 $0.6200 781,667 23 July 2019 *^^ 23 July 2023 $0.5605 4,722,222 30 November 2019 ** 17 December 2023 $0.3200 823,878 18 June 2020 ^ 18 June 2023 $0.3000 20,022,333 14 August 2020 ^ 14 August 2023 $0.3000 21,303,249 6 November 2020 ** 6 November 2024 $0.5500 1,050,000 15 December 2020 15 December 2024 $0.3150 3,000,000 31 May 2021 15 December 2024 $0.6810 250,000 1 February 2022 1 February 2026 $0.5400 2,000,000 53,953,349 No person entitled to exercise the options had or has any right by virtue of the option to participate in any share issue of the company or of any other body corporate. * In accordance with Listing Rule 3.11.2, and further to the terms of these options issued and Listing Rule 6.22.2, the exercise price of the options has been amended as a result of the 13 May 2020 pro-rata Entitlements Offer to shareholders. ** Issued under the Noxopharm employee share plan. ^ Issued for participating in capital raises. ^^ Issued in relation to the convertible notes issued July 2019 and December 2019. Shares issued on the exercise of options The following ordinary shares of Noxopharm Limited were issued during the year ended 30 June 2022 and up to the date of this report on the exercise of options granted: Date options granted Exercise price Number of shares issued 20 June 2020 $0.3000 14,768 14 August 2020 $0.3000 4,001,455 4,016,223 Indemnity and insurance of officers The company has indemnified the directors and executives of the company for costs incurred, in their capacity as a director or executive, for which they may be held personally liable, except where there is a lack of good faith. During the financial year, the company paid a premium in respect of a contract to insure the directors and executives of the company against a liability to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits disclosure of the nature of the liability and the amount of the premium.
Annual Report 2022 21 Indemnity and insurance of auditor The company has not, during or since the end of the financial year, indemnified or agreed to indemnify the auditor of the company or any related entity against a liability incurred by the auditor. During the financial year, the company has not paid a premium in respect of a contract to insure the auditor of the company or any related entity. Proceedings on behalf of the company No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of the company, or to intervene in any proceedings to which the company is a party for the purpose of taking responsibility on behalf of the company for all or part of those proceedings. Non-audit services There were no non-audit services provided during the financial year by the auditor. Officers of the company who are former partners of William Buck Audit (Vic) Pty Ltd There are no officers of the company who are former partners of William Buck Audit (Vic) Pty Ltd. Auditor’s independence declaration A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is set out immediately after this directors’ report. Auditor William Buck Audit (Vic) Pty Ltd continues in office in accordance with section 327 of the Corporations Act 2001. This report is made in accordance with a resolution of directors, pursuant to section 298(2)(a) of the Corporations Act 2001. On behalf of the directors ___________________________ Fred Bart Chairman 25 August 2022
Auditor’s Independence Declaration Noxopharm Limited 22 Level 20, 181 William Street, Melbourne VIC 3000 +61 3 9824 8555 William Buck is an association of firms, each trading under the name of William Buck vic.info@williambuck.com williambuck.com.au across Australia and New Zealand with affiliated offices worldwide. Liability limited by a scheme approved under Professional Standards Legislation. 13 AUDITOR’S INDEPENDENCE DECLARATION UNDER SECTION 307C OF THE CORPORATIONS ACT 2001 TO THE DIRECTORS OF NOXOPHARM LIMITED I declare that, to the best of my knowledge and belief, during the year ended 30 June 2022 there have been: — no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the audit; and — no contraventions of any applicable code of professional conduct in relation to the audit. William Buck Audit (Vic) Pty Ltd ABN 59 116 151 136 N. S. Benbow Director Melbourne, 25th August 2022
Annual Financial Report - 30 June 2022 Contents Statement of Profit or Loss and Other Comprehensive Income 24 Statement of Financial Position 25 Statement of Changes in Equity 26 Statement of Cash Flows 27 Notes to the Financial Statements 28 Independent Auditor’s Report to Members 52 Shareholder Information 57 Annual Report 2022 23 General information The financial statements cover Noxopharm Limited as a consolidated entity consisting of Noxopharm Limited and the entities it controlled at the end of, or during, the year. The financial statements are presented in Australian dollars, which is Noxopharm Limited’s functional and presentation currency. Noxopharm Limited is a listed public company limited by shares, incorporated and domiciled in Australia. Its registered office and principal place of business is: Level 20, Tower A The Zenith 821 Pacific Highway CHATSWOOD NSW 2067 A description of the nature of the consolidated entity’s operations and its principal activities are included in the directors’ report, which is not part of the financial statements. The financial statements were authorised for issue, in accordance with a resolution of directors, on 25 August 2022. The directors have the power to amend and reissue the financial statements. Corporate Governance Statement The Corporate Governance Statement is available on the Company’s website at http://www.noxopharm.com
Noxopharm Limited 24 Consolidated Note 2022 $ 2021 $ Revenue Revenue and other income 4 5,475,590 5,797,723 Net (loss)/gain on investment at fair value through profit and loss 10 (8,857,384) 8,774,212 Expenses Corporate administration expenses 5 (1,769,101) (1,722,626) Research and development expenses (7,777,415) (12,560,987) Depreciation and amortisation expenses (261,513) (261,723) Consulting, employee & director expenses 5 (5,399,652) (5,656,445) Finance costs 5 (77,335) (2,198,505) Share of loss of Associate (to 29 June 2021) - (1,040,874) Fair value movement in derivative liability - (477,524) Loss before income tax expense (18,666,810) (9,346,749) Income tax expense 6 - - Loss after income tax expense for the year attributable to the owners of Noxopharm Limited (18,666,810) (9,346,749) Other comprehensive income for the year, net of tax - - Total comprehensive income for the year attributable to the owners of Noxopharm Limited (18,666,810) (9,346,749) Cents Cents Basic earnings per share 25 (6.41) (3.54) Diluted earnings per share 25 (6.41) (3.54) Statement of Profit or Loss and Other Comprehensive Income For the year ended 30 June 2022
Annual Report 2022 25 Consolidated Note 2022 $ 2021 $ Assets Current assets Cash and cash equivalents 7 14,010,668 26,795,785 Trade and other receivables 8 5,213,381 5,799,224 Other assets 9 1,609,279 379,027 Total current assets 20,833,328 32,974,036 Non-current assets Financial assets at fair value through profit and loss 10 5,415,033 14,272,419 Plant and equipment 84,782 135,111 Right-of-use assets 137,102 349,308 Term deposit pledged for bank guarantee 123,512 122,837 Total non-current assets 5,760,429 14,879,675 Total assets 26,593,757 47,853,711 Liabilities Current liabilities Trade and other payables 11 1,795,721 6,130,170 Lease liability building 160,624 231,666 Employee entitlements 324,502 445,359 Total current liabilities 2,280,847 6,807,195 Non-current liabilities Lease liability building - 117,642 Employee entitlements 194,966 152,499 Total non-current liabilities 194,966 270,141 Total liabilities 2,475,813 7,077,336 Net assets 24,117,944 40,776,375 Equity Issued capital 12 74,635,721 72,622,560 Reserves 13 8,285,254 8,487,119 Accumulated losses (58,803,031) (40,333,304) Total equity 24,117,944 40,776,375 Statement of Financial Position
Noxopharm Limited 26 Statement of Changes in Equity Issued capital Reserves Accumulated losses Total equity Consolidated $ $ $ $ Balance at 1 July 2020 41,631,007 2,708,106 (31,466,355) 12,872,758 Loss after income tax expense for the year - - (9,346,749) (9,346,749) Other comprehensive income for the year, net of tax - - - - Total comprehensive income for the year - - (9,346,749) (9,346,749) Transactions with owners in their capacity as owners: Contributions of equity, net of transaction costs (note 12) 21,471,650 - - 21,471,650 Issue of options to underwriter (5,111,573) 5,111,573 - - Issue of Director's options - 1,402,345 - 1,402,345 Exercise of options 7,544,451 (594,803) - 6,949,648 Expired options - (479,800) 479,800 - Conversion of collateral shares 267,637 - - 267,637 Vesting of share-based payments (note 26) - 339,698 - 339,698 Conversion of short term loan convertible notes 6,819,388 - - 6,819,388 Balance at 30 June 2021 72,622,560 8,487,119 (40,333,304) 40,776,375 Issued capital Reserves Accumulated losses Total equity Consolidated $ $ $ $ Balance at 1 July 2021 72,622,560 8,487,119 (40,333,304) 40,776,375 Loss after income tax expense for the year - - (18,666,810) (18,666,810) Other comprehensive income for the year, net of tax - - - - Total comprehensive income for the year - - (18,666,810) (18,666,810) Transactions with owners in their capacity as owners: Issue of Director's options - 621,074 - 621,074 Exercise of options 2,013,161 (808,294) - 1,204,867 Expired options - (197,083) 197,083 - Vesting of share-based payments (note 26) - 182,438 - 182,438 Balance at 30 June 2022 74,635,721 8,285,254 (58,803,031) 24,117,944
Annual Report 2022 27 Consolidated Note 2022 $ 2021 $ Cash flows from operating activities Receipts from customers 36,000 16,000 Payments to suppliers and employees (19,694,617) (13,623,156) Interest received 60,181 122,464 Receipt from R&D tax rebate 5,864,838 4,642,251 Receipts from Government Grants 25,000 - (13,708,598) (8,842,441) Interest and other finance costs paid (24,929) (8,000) Net cash used in operating activities 24 (13,733,527) (8,850,441) Cash flows from investing activities Proceeds from short term loan Nyrada Inc. - 225,232 Net cash from investing activities - 225,232 Cash flows from financing activities Proceeds from the issue of shares 12 - 30,097,660 Proceeds from the exercise of options 12 1,204,868 - Lease Payments - building (229,143) (244,821) Share issue transaction costs - (1,528,350) Net cash from financing activities 975,725 28,324,489 Net increase/(decrease) in cash and cash equivalents (12,757,802) 19,699,280 Cash and cash equivalents at the beginning of the financial year 26,795,785 7,100,202 Effects of exchange rate changes on cash and cash equivalents (27,315) (3,697) Cash and cash equivalents at the end of the financial year 7 14,010,668 26,795,785 Statement of Cash Flows
Noxopharm Limited 28 Note 1. Significant accounting policies This note provides a list of all significant accounting policies adopted in the preparation of these financial statements. These policies have been consistently applied in this reporting period, unless otherwise stated. The financial statements are for Noxopharm Limited (“the Company”) and its subsidiaries (“the consolidated entity”). New or amended Accounting Standards and Interpretations adopted 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. The adoption of these Accounting Standards and Interpretations did not have any significant impact on the financial performance or position of the consolidated entity. New or amended Accounting Standards and Interpretations not yet mandatory or early adopted Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet mandatory, have not been early adopted by the consolidated entity for the annual reporting period ended 30 June 2022. The consolidated entity’s assessment of the impact of these new or amended Accounting Standards and Interpretations is that none are deemed to have a material impact on the entity Basis of preparation These general purpose financial statements have been prepared in accordance with Australian Accounting Standards and interpretations issued by the Australian Accounting Standards Board and the Corporations Act 2001. Noxopharm Limited is a for‐profit entity for the purpose of preparing the financial statements. These financial statements also comply with International Financial Reporting Standards as issued by the International Accounting Standards Board (‘IASB’). Historical cost convention These financial statements have been prepared under the historical cost convention, with the exception of the fair valuation of the investment in Nyrada. Critical accounting estimates The preparation of the financial statements requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the consolidated entity’s accounting policies. Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that may have a financial impact on the entity and that are believed to be reasonable under the circumstances. The consolidated entity makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. Parent entity information In accordance with the Corporations Act 2001, these financial statements present the results of the consolidated entity only. Supplementary information about the parent entity is disclosed in note 21. Principles of consolidation The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Noxopharm Limited (‘company’ or ‘parent entity’) as at 30 June 2022 and the results of all subsidiaries for the year then ended. Noxopharm Limited and its subsidiaries together are referred to in these financial statements as the ‘consolidated entity’. Subsidiaries are all those entities over which the consolidated entity has control. The consolidated entity controls an entity when the consolidated entity is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the consolidated entity. They are de-consolidated from the date that control ceases. Notes to the Financial Statements
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