half year report to the australian securities …appendix 4d half year report adalta limited page 1...
TRANSCRIPT
Appendix 4D Half Year Report
AdAlta Limited Page 1
Appendix 4D
Half Year Report
to the Australian Securities Exchange
Part 1
Name of Entity EPAT Technologies Limited (formerly Minquest Limited)
ABN 21 146 035 127
Half Year Ended 31 December 2016
Previous Corresponding Reporting
Period Half Year Ended 31 December 2015
Part 2 – Results for Announcement to the Market
$’000
Percentage
increase
/(decrease) over
previous
corresponding
period
Revenue from continuing operations 25 777%
Loss from continuing activities after tax attributable to
members (6,978) 8,270%
Net loss attributable to members (6,978) 8,270%
Dividends (distributions) Amount per security Franked amount per security
Final Dividend Nil Nil
Interim Dividend Nil Nil
Record date for determining entitlements to the
dividends (if any)
Not Applicable
Brief explanation of any of the figures reported above necessary to enable the figures to be
understood:
The Company completed the acquisition of Electronic Pain Assessment Technologies (EPAT) Pty Ltd,
undertook a change of nature of business and completed a capital raising of $4.7m. Refer to the
Review of Operations contained in the Directors’ Report which forms part of the attached Interim
Financial Report for details.
For
per
sona
l use
onl
y
Appendix 4D Half Year Report
AdAlta Limited Page 2
Part 3 – Contents of ASX Appendix 4D
Section Contents
Part 1 Details of entity, reporting period
Part 2 Results for announcement to the market
Part 3 Contents of ASX Appendix 4D
Part 4 Commentary on results
Part 5 Details relating to dividends
Part 6 Net tangible assets per security
Part 7 Details of entities over which control has been gained or lost
Part 8 Details of associates and joint venture entities
Part 9 Information on audit or review
For
per
sona
l use
onl
y
Appendix 4D Half Year Report
AdAlta Limited Page 3
Part 4 – Commentary on Results
Refer to the Review of Operations contained in the Directors’ Report which forms part of the attached
Interim Financial Report for details.
Part 5 – Details Relating to Dividends
Date the dividend is payable N/A
Record date to determine entitlement to the dividend N/A
Amount per security N/A
Total dividend N/A
Amount per security of foreign sourced dividend or
distribution
N/A
Details of any dividend reinvestment plans in operation N/A
The last date for receipt of an election notice for
participation in any dividend reinvestment plans
N/A
Part 6 – Net Tangible Assets per Security
2016 2015
Net tangible asset backing per ordinary security 0.52 cents 1.07 cents
Part 7 – Details of Entities Over Which Control has been Gained or Lost
Name of entity (or group of entities) Electronic Pain Assessment
Technologies (EPAT) Pty Ltd
Date control gained 23 September 2016
Contribution of the controlled entity (or group of entities)
to the profit/(loss) from ordinary activities during the
period, from the date of gaining control
($223,929)
Profit (loss) from ordinary activities of the controlled
entity (or group of entities) for the whole of the previous
corresponding period
($285,073)
Contribution to consolidated profit/(loss) from ordinary
activities from sale of interest leading to loss of control N/A
For
per
sona
l use
onl
y
Appendix 4D Half Year Report
AdAlta Limited Page 4
Name of entity (or group of entities) lost Merah African Exploration Limited, Merah West Africa Limited, Oresearch Limited, Merah Resources Canada Limited
Date control lost 31 August 2016
Contribution of the controlled entity (or group of entities)
to the profit/(loss) from ordinary activities during the
period, from the date of gaining control
Nil
Profit (loss) from ordinary activities of the controlled
entity (or group of entities) for the whole of the previous
corresponding period
Nil
Contribution to consolidated profit/(loss) from ordinary
activities from sale of interest leading to loss of control N/A
Part 8 – Details of Associates and Joint Venture Entities
Ownership Interest Contribution to net profit/(loss)
2016
%
2015
%
2016
$A’000
2015
$A’000
Name of entity N/A N/A N/A N/A
Associates
Joint Venture Entities
Aggregate Share of Losses
Part 9 – Audit/Review Status
This report is based on accounts to which one of the following applies:
(Tick one)
The accounts have been audited
The accounts have been subject to review
The accounts are in the process of being
audited or subject to review The accounts have not yet been audited or
reviewed
If the accounts have not yet been audited or subject to review and are likely to be subject to
dispute or qualification, a description of the likely dispute or qualification:
Not applicable
If the accounts have been audited or subject to review and are subject to dispute or qualification,
a description of the dispute or qualification:
Not applicable
For
per
sona
l use
onl
y
Appendix 4D Half Year Report
AdAlta Limited Page 5
Attachments Forming Part of Appendix 4D
Attachment No. Details
1 Interim Financial Report
Signed by Company Secretary
Ian Hobson
Dated: 22 February 2017
For
per
sona
l use
onl
y
ePATTechnologiesLimited(formerlyMinQuestLimited)ABN21146035127
Halfyearreportforthehalf-yearended
31December2016
For
per
sona
l use
onl
y
ePATTechnologiesLimited(formerlyMinQuestLimited)
CorporatedirectoryBoardofDirectorsMrJohnMurray Non-ExecutiveChairman MrPhilipDaffas ManagingDirectorMrAdamDavey Non-ExecutiveDirectorMrRossHarricks Non-ExecutiveDirectorCompanySecretaryMrIanHobson
RegisteredOffice PrincipalPlaceofBusinessSuite5,95HayStreet Suite401,35LimeStreetSubiaco,WesternAustralia6008 SydneyNSW2000Tel: +61893888290Fax: +61893888256PostalAddressPOBox226Subiaco,WesternAustralia6904WebsiteWebsite:www.epattechnologies.comAuditorsBDOAuditPtyLtd
ShareRegistryBoardroomPtyLtdGrosvenorPlaceLevel12,225GeorgeStreetSydney,NSW2000Tel: +1300737760Fax: +61292909655StockExchangeAustralianSecuritiesExchange20BridgeStreetSydney,NSW2000ASXCodeEPTF
or p
erso
nal u
se o
nly
ePATTechnologiesLimited(formerlyMinQuestLimited)
Halfyearreportforthehalf-yearended31December2016
Contents
Directors’report………………………………………………………………………………………………….…….…… 1
Auditor’sindependencedeclaration…………………………………………………………………….….…….. 5
Independentauditor’sreviewreport…………………………………………………………………..….……. 6
Directors’declaration…………………………………………………………………………………………………….. 8
Consolidatedstatementofprofitorlossandothercomprehensiveincome………… 9
Consolidatedstatementoffinancialposition…………………………………. 10
Consolidatedstatementofchangesinequity……………………………………………………………. 11
Consolidatedstatementofcashflows………………………………………………………………………. 12
Condensednotestothefinancialstatements…………………………………………………………………. 13
For
per
sona
l use
onl
y
ePATTechnologiesLimited(formerlyMinQuestLimited)
1
Directors’reportThe directors of ePAT Technologies Limited formerlyMinQuest Limited (“ePAT Technologies” or “theCompany”) submit herewith the financial report of the Company and its subsidiary (“Group” or“ConsolidatedEntity”)forthehalf-yearended31December2016.InordertocomplywiththeprovisionsoftheCorporationsAct2001,thedirectorsreportasfollows:NamesofDirectorsThenamesof thedirectorsof theCompanyduringor since theendof thehalf-yeararenotedbelow.Directorswereinofficefortheentireperiodunlessotherwisestated:MrJohnMurray(appointed30September2016)MrPhilipDaffas(appointed30September2016)MrRossHarricks(appointed30September2016)MrAdamDaveyMrPaulNiardone(resigned30September2016)MrJeremyRead(resigned30September2016)MrFrankTerranova(resigned5September2016)OperatingresultsOn 23 September 2016, the Company completed the acquisition of Electronic Pain AssessmentTechnologies (EPAT) Pty Ltd (“ePAT”). For accounting purposes, ePAT has been identified as theaccounting acquirer of the consolidated group. The accompanying consolidated financial statementsrepresentacontinuationofePAT’sfinancialstatements.TheconsolidatedresultsreflectafullperiodofePATplus ePATTechnologies from thedateof acquisition, 23 September2016 to31December2016.Thecomparativeperiodresultsarestatedunderthe“Company”columnsfor2015butreflectePAT.The loss of the Group for the half-year ended 31 December 2016, after accounting for income taxbenefit, amounted to $6,977,675. The loss after tax for ePAT was $83,365 for the half-year ended31December2015. The half-year ended 31 December 2016 operating results are attributed to thefollowing:• Corporaterestructurecost(non-cash)of$4,574,424followingtheacquisition(31December2015:$
nil);• Share based payments in respect of options issued to Directors of $1,728,066 (non-cash) (31
December2015:$nil);and• Corporateandadministrationexpensesof$476,673(31December2015:$22,673).
Reviewofoperations–pre-acquisition
• On18July2016,theCompanyannouncedthatithadcompletedanissueof300,000convertiblenotestoraise$300,000toassistinmeetingthecostsoftheproposedacquisitionofePATandtoprovideworkingcapital.Theconvertiblenoteswereconvertedtoordinarysharesataconversionpriceof$0.02pershareon26September2016.
• On18July2016,theCompanyadvisedPacificRidgeExplorationthatithadelectedtonotmakeanyfurtherownershippaymentsundertheFyreLakefarminjointventureagreement,effectivelybringingthatagreementtoanend.TheCompanyfullyimpairedallcapitalisedexplorationexpenditurerelatingtotheFyreLakeProjectintheyearended30June2016.
• On25July2016theCompanyexecutedasharepurchaseagreementfortheacquisitionofone
hundredpercentoftheissuedcapitalofePAT.Thesignificanttermsoftheagreementwere:
For
per
sona
l use
onl
y
ePATTechnologiesLimited(formerlyMinQuestLimited)
2
- Completionofthesaleandpurchaseof100%oftheissuedcapitalofePATistooccurona
dateandtimeagreedbytheparties,followingthesatisfactionorwaiverofthelatestconditionprecedenttobesatisfiedorwaived.Theconditionsprecedentswere:
§ theCompanyobtainingallnecessaryShareholderapprovals;
§ theCompanyobtainingconditionalapprovalforthere-quotationoftheCompany’sSharesfollowingCompletionoftheAcquisitionandre-compliancewithChapters1and2oftheListingRules;
§ theCompanydivestingitsentirelegalandbeneficialinterestsinitsmineralprojects;
§ completionofacapitalconsolidationbytheCompanyontermstobemutuallyagreed;
§ theCompanycompletingacapitalraisingofatleast$4,000,000;
§ CurtinUniversitysellingallofitsePATshares;and
§ totheextentrequiredbyASXortheListingRules,eachpersonenteringintoarestrictionagreementimposingsuchrestrictionsasmandatedbytheListingRulesinrespectofanyothersecuritiestobeissuedinrelationtothetransaction.
- InexchangefortheCompanyacquiringePAT,theCompanyagreedtoissuethefollowingconsiderationtoePATshareholders:
(i) 213,219,616sharestobeissuedatcompletion;and
(ii) $1,000,000worthofsharestobeissuediftheCompanyannouncesthateitherofthefollowingmilestoneshavebeenmetwithin12monthsfromthedateofcompletionoftheacquisition:
(A) RegulatoryapprovalhavingbeenreceivedtoenablecommercialuseoftheePATAppinAustralia,theUnitedStatesofAmericaorEurope.(Inthiscontext,“RegulatoryApproval”meansapprovalbytheTherapeuticGoodsAdministrationofAustralia,FoodandDrugAdministrationoftheUnitedStates,oraCEmarkfromtherelevantauthorityinEurope);or
(B) theexecutionofabindinglicenceagreementtolicencetheePATAppto:
§ oneormoreresidentialagedcarefacilityownersmanagingintotalinexcessof150beds;
§ oneormoremedicalclinicswhichserviceintotalinexcessof2,000patientsperyear;
§ ametropolitanhospitalwithinexcessof200beds;
(eachan"EndUser”)or
§ aglobaldistributionpartnerwithmultipleEndUsersasexistingcustomers.
• On25August2016,theCompanyissuedaProspectusforthepurposesofraisingbetween$4,000,000and$5,750,000throughtheissueofupto287,500,000fullypaidordinarysharesatanissuepriceof$0.02pershareandsatisfyingtherequirementsofChapters1and2oftheASXListingRules.TheofferundertheProspectuswasunderwrittentotheamountof$4,500,000.
For
per
sona
l use
onl
y
ePATTechnologiesLimited(formerlyMinQuestLimited)
3
• On31August2016,anExtraordinaryGeneralMeetingoftheCompany’sshareholdersapprovedanumberofresolutionsrelatingtotheproposedacquisitionofePATandrelatedmattersassummarisedbelow:- theCompanychangingthenatureandscaleofitsactivitiesasaresultoftheacquisition.
Uponcompletionoftheacquisition,theCompanywilleffectivelychangefromamineralexplorertoahealthandtechnologycompany.
- theCompanychangingitsnamefrom"MinQuestLimited"to"ePATTechnologiesLimited",witheffectfromthedatethatASICaltersthedetailsoftheCompany'sregistration.
- theCompanyconsolidatingitssharesonthebasisofeverysevensharesbeingconsolidatedintofourShares.
- theCompanyissuingtheconsiderationsharestotheePATshareholdersinconsiderationfortheacquisitionof100%ofthesharesofePAT.
- theCompanyissuingupto287,500,000sharestothepublicunderaProspectustoraiseupto$5,750,000.
- theCompanyissuingupto45,000,000UnderwriterOptionstotheUnderwriters(ortheirnominees).
- theelectionofMrJohnMurray,MrRossHarricksandMrPhilipDaffasasDirectorsoftheCompanysubjecttothecompletionoftheacquisition.
• On5September2016MrFrankTerranovaresignedasdirectoroftheCompanyandMrPaulNiardoneassumedtheroleofNon-ExecutiveChairman.
• On7September2016theCompanyannouncedthattheconsolidationoftheCompany’scapitalonthebasisofeverysevensharesbeingconsolidatedintofourshareshadbeencompleted.
• On16September2016theCompanywasadvisedbytheASXthattheCompany’sapplicationforrelistingoftheCompany’sshareshadbeenconditionallyapproved.
• On16September2016theofferundertheProspectusdated25August2016closedwiththeCompanyreceivingapplicationsfor236,625,000sharestoraise$4,732,500beforetransactioncosts.Theshareswereallottedon27September2016.
Reviewofoperations–post-acquisition
• On23September2016,theCompanywasadvisedthatCurtinUniversityhadcompletedthesaleofitsshareholdinginePAT.Thisrepresentedthefulfilmentofthefinalconditionprecedentunderthesharepurchaseagreementdated25July2016.
• On23September2016and26September2016,theCompanycompletedtheallotmentofthevariousequitysecuritiesrequiredasaconsequenceoftheacquisitionofePAT.
• On27September2016,theCompanychangeditsnametoePATTechnologiesLtdandallottedthesharespursuanttotheprospectus.
• On30September2016,JohnMurraywasappointednon-executivechairman,PhilipDaffaswasappointedmanagingdirector,RossHarrickswasappointednon-executivedirectorandIanHobsonwasappointedcompanysecretary.
• On30September2016JeremyReadandMrPaulNiardoneresignedasdirectors.
For
per
sona
l use
onl
y
ePATTechnologiesLimited(formerlyMinQuestLimited)
4
• On7October2016,theCompanyissued2,475,000at$0.02pershareinlieuofremunerationtoStephenKelly,theformercompanysecretary.MrKellyresignedascompanysecretaryonthesameday.
• On21December2016,theCompanyissued90,198,155optionsexercisableat2centsandexpiring24November2019tothedirectorsasapprovedbyshareholdersattheannualgeneralmeetingon23November2016.
OverviewofGroupStrategyTheGroup’sstrategyistocontinuetodevelopit’smobileapplication(ePATApp)whichusescamerasinsmartphonesandtabletstocaptureabriefvideooftheperson,whichisanalysedinrealtimeusingfacialrecognition software to detect the presence of facial micro-expressions that are indicative of thepresenceofpain.
This data is then combined with other indicators of pain, such as vocalisations, behaviours andmovementscapturedthroughtheePATApptocalculateapainseverityscore.
Duetoitseaseofuseanditsreproducibility,itisintendedthattheePATAppwillbeabletobeusedinthefirstinstancetodetectandmeasureaperson’spain,andthenfurthermeasurementscanbeusedtomonitortheeffectivenessofpainmanagementprovidedtotheperson.
TheePATApp isbeingdevelopedandwillberolledoutglobally in twophases: first, theePATAppforDementia forpersonswhohave lost theability tocommunicatewiththeircarers,andthesecond, theePATAppforChildrenwhohavenotyetlearnttospeak.
SubsequenteventsTherehasnotbeenanymatterorcircumstancethathasarisensincetheendofthehalf-yearthathassignificantly affected, ormay significantly affect, the operations of the Company, the results of thoseoperations,orthestateofaffairsoftheCompanyinfuturefinancialyears.
Auditor’sindependencedeclarationTheauditor’sindependencedeclarationisincludedonpage5ofthehalf-yearreport.
Signed inaccordancewitha resolutionofdirectorsmadepursuant to s.306(3)of theCorporationsAct2001.
Onbehalfofthedirectors
JohnMurrayChairman22February2017Sydney,NSWF
or p
erso
nal u
se o
nly
ePAT Technologies Limited (formerly MinQuest Limited)
Level 10, 12 Creek St Brisbane QLD 4000 GPO Box 457 Brisbane QLD 4001 Australia
Tel: +61 7 3237 5999 Fax: +61 7 3221 9227 www.bdo.com.au
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation, other than for the acts or omissions of financial services licensees.
DECLARATION OF INDEPENDENCE BY C R JENKINS TO THE DIRECTORS OF EPAT TECHNOLOGIES
LIMITED
As lead auditor for the review of ePAT Technologies Limited for the half-year ended 31 December
2016, I declare that, to the best of my knowledge and belief, there have been:
1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the review; and
2. No contraventions of any applicable code of professional conduct in relation to the review.
This declaration is in respect of ePAT Technologies Limited and the entities it controlled during the
period.
C R Jenkins
Director
BDO Audit Pty Ltd
Brisbane, 22 February 2017
5
Auditor's Independence Declaration
For
per
sona
l use
onl
y
Level 10, 12 Creek St Brisbane QLD 4000 GPO Box 457 Brisbane QLD 4001 Australia
Tel: +61 7 3237 5999 Fax: +61 7 3221 9227 www.bdo.com.au
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation, other than for the acts or omissions of financial services licensees.
INDEPENDENT AUDITOR’S REVIEW REPORT
To the members of ePAT Technologies Limited
Report on the Half-Year Financial Report
We have reviewed the accompanying half-year financial report of ePAT Technologies Limited, which
comprises the consolidated statement of financial position as at 31 December 2016, the consolidated
statement of profit or loss and other comprehensive income, the consolidated statement of changes in
equity and the consolidated statement of cash flows for the half-year ended on that date, notes
comprising a statement of accounting policies and other explanatory information, and the directors’
declaration of the consolidated entity comprising the company and the entities it controlled at the
half-year’s end or from time to time during the half-year.
Directors’ Responsibility for the Half-Year Financial Report
The directors of the company are responsible for the preparation of the half-year financial report that
gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act
2001 and for such internal control as the directors determine is necessary to enable the preparation of
the half-year financial report that is free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express a conclusion on the half-year financial report based on our review. We
conducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410 Review
of a Financial Report Performed by the Independent Auditor of the Entity, in order to state whether,
on the basis of the procedures described, we have become aware of any matter that makes us believe
that the half-year financial report is not in accordance with the Corporations Act 2001 including: giving
a true and fair view of the consolidated entity’s financial position as at 31 December 2016 and its
performance for the half-year ended on that date; and complying with Accounting Standard AASB 134
Interim Financial Reporting and the Corporations Regulations 2001. As the auditor of ePAT
Technologies Limited, ASRE 2410 requires that we comply with the ethical requirements relevant to
the audit of the annual financial report.
A review of a half-year financial report consists of making enquiries, primarily of persons responsible
for financial and accounting matters, and applying analytical and other review procedures. A review is
substantially less in scope than an audit conducted in accordance with Australian Auditing Standards
and consequently does not enable us to obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Independence
In conducting our review, we have complied with the independence requirements of the Corporations
Act 2001. We confirm that the independence declaration required by the Corporations Act 2001, which
has been given to the directors of ePAT Technologies Limited, would be in the same terms if given to
the directors as at the time of this auditor’s review report.
6
For
per
sona
l use
onl
y
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation, other than for the acts or omissions of financial services licensees.
Conclusion
Based on our review, which is not an audit, we have not become aware of any matter that makes us
believe that the half-year financial report of ePAT Technologies Limited is not in accordance with the
Corporations Act 2001 including:
(i) Giving a true and fair view of the consolidated entity’s financial position as at 31 December 2016
and of its performance for the half-year ended on that date; and
(ii) Complying with Accounting Standard AASB 134 Interim Financial Reporting and Corporations
Regulations 2001.
BDO Audit Pty Ltd
C R Jenkins
Director
Brisbane, 22 February 2017
7
For
per
sona
l use
onl
y
ePATTechnologiesLimited(formerlyMinQuestLimited)
8
Directors’declarationThedirectorsdeclarethat:(a) inthedirectors’opinion,therearereasonablegroundstobelievethattheCompanywillbeableto
payitsdebtsasandwhentheybecomedueandpayable;and(b) in thedirectors’ opinion, the attached financial statements andnotes thereto are in accordance
withtheCorporationsAct2001,includingcompliancewithaccountingstandardAASB134‘InterimFinancialReporting’andgivingatrueandfairviewofthefinancialpositionat31December2016andperformanceoftheConsolidatedEntityfortheperiodendedonthatdate.
Signedinaccordancewitharesolutionofthedirectorsmadepursuanttos.303(5)oftheCorporationsAct2001.Onbehalfofthedirectors JohnMurrayChairman22February2017Sydney,NSW
For
per
sona
l use
onl
y
ePATTechnologiesLimited(formerlyMinQuestLimited)
9
Consolidated statement of profit or loss and othercomprehensive income for thehalf-year ended31December2016
Consolidated Company
Note31Dec2016
$31Dec2015
$Continuingoperations Revenue 3 5,061 2,265Otherincome 4 20,049 598Researchanddevelopmentexpenses (223,622) (63,555)Corporateadministrationexpenses (476,673) (22,673)Corporaterestructureexpenses 8 (4,574,424) -Sharebasedpaymentexpenses (1,728,066) -Lossbeforeincometax (6,977,675) (83,365) Incometaxbenefit - -Loss for the period attributable to Owners of EPAT TechnologiesLimited (6,977,675) (83,365) Othercomprehensiveincome,netofincometax Itemsthatwillnotbereclassifiedsubsequentlytoprofitorloss - -Itemsthatmaybereclassifiedsubsequentlytoprofitorloss - -Othercomprehensiveincomefortheperiod,netofincometax - -Totalcomprehensivelossfortheperiod (6,977,675) (83,365)Lossandtotalcomprehensivelossattributableto: OwnersofEPATTechnologiesLimited (6,977,675) (83,365) Losspershare: Basicanddiluted(centspershare) 5 (0.0) (0.1)Condensednotestothefinancialstatementsareincludedonpages13to24.
For
per
sona
l use
onl
y
ePATTechnologiesLimited(formerlyMinQuestLimited)
10
Consolidated statement of financial position as at 31December2016
Consolidated Company
Note 31Dec2016
$30Jun2016
$Currentassets Cashandcashequivalents 3,553,510 75,079Tradeandotherreceivables 51,976 1,782Totalcurrentassets 3,605,486 76,861 Currentliabilities Tradeandotherpayables 117,885 8,728Provisions 1,687 -Totalcurrentliabilities 119,572 8,728Totalliabilities 119,572 8,728Netassets 3,485,914 68,133 Equity Issuedcapital 6 8,502,533 357,143Reserves 7 2,250,066 -Accumulatedlosses (7,266,685) (289,010)Totalequity 3,485,914 68,133Condensednotestothefinancialstatementsareincludedonpages13to24.
For
per
sona
l use
onl
y
ePATTechnologiesLimited(formerlyMinQuestLimited)
11
Consolidated statement of changes in equity for the half-yearended31December2016
Issuedcapital Reserves
Accumulatedlosses Total
Company $ $ $ $Balanceat1July2015 528,571 - (131,149) 397,422Lossfortheperiod - - (83,365) (83,365)Othercomprehensiveincome - - - -Totalcomprehensivelossfortheperiod - - - 314,057Transactionswithownersintheircapacityasowners: Sharecancellation (171,428) - - (171,428)Balanceat31December2015 357,143 - (214,514) 142,629 Consolidated Balanceat1July2016 357,143 - (289,010) 68,133Lossfortheperiod - - (6,977,675) (6,977,675)Othercomprehensiveincome - - - -Totalcomprehensivelossfortheperiod (6,977,675) (6,977,675)Issueofordinaryshares(refertonote6) 9,224,069 - - 9,224,069Shareissuecosts(refertonote6) (1,078,679) - - (1,078,679)Recognitionofsharebasedpayments - 2,250,066 - 2,250,066Balanceat31December2016 8,502,533 2,250,066 (7,266,685) 3,485,914Condensednotestothefinancialstatementsareincludedonpages13to24.
For
per
sona
l use
onl
y
ePATTechnologiesLimited(formerlyMinQuestLimited)
12
Consolidated statementof cash flows for thehalf-yearended31December2016
Consolidated Company Half-yearended
Note 31Dec2016
$31Dec2015
$Cashflowsfromoperatingactivities Paymentstosuppliersandemployees (679,471) (86,777)Interestreceived 5,061 2,265Rebatesandgrantsreceived 20,049 598Netcashusedinoperatingactivities (654,361) (83,914) Cashflowsfrominvestingactivities Cashfromacquisitionofsubsidiary 8 18,243 -Netcashprovidedbyinvestingactivities 18,243 - Cashflowsfromfinancingactivities Proceeds/(repayment)fromissue/(buy-back)ofshares 4,732,500 (171,428)(Payment)/refundofshareissuecosts (617,951) -Netcash(usedin)/providedbyfinancingactivities 4,114,549 (171,428) Netincreaseincashandcashequivalents 3,478,431 Cashandcashequivalentsatthebeginningoftheperiod 75,079 345,405 Cashandcashequivalentsattheendoftheperiod 3,553,510 90,063Condensednotestothefinancialstatementsareincludedonpages13to24
For
per
sona
l use
onl
y
ePATTechnologiesLimited(formerlyMinQuestLimited)
13
Condensednotestothefinancialstatementsforthehalf-yearended31December20161. Significantaccountingpolicies
StatementofcomplianceThehalf-yearfinancialreportisageneralpurposefinancialreportpreparedinaccordancewiththeCorporations Act 2001 and AASB 134 ‘Interim Financial Reporting’. The Company is a for-profitentityforfinancialreportingpurposesunderAustralianAccountingStandards.Thehalf-yearreportdoesnotincludenotesofthetypenormallyincludedinanannualfinancialreportandshallbereadinconjunctionwithannual financial statementsof theCompany for theyearended30 June2016togetherwithanypublicannouncementsmadeduringthefollowinghalfyear.
Thehalf-yearfinancialreportwasauthorisedforissuebythedirectorson22February2017.
BasisofpreparationThefinancialstatementshavebeenpreparedonthebasisofhistoricalcost.Costisbasedonthefairvaluesof theconsiderationgiven inexchange forassets. Allamountsarepresented inAustraliandollars,unlessotherwisenoted.ReverseacquisitionePATTechnologiesLimitedacquiredElectronicPainAssessmentTechnologies(EPAT)PtyLtdon23September2016. Froma legal and taxationperspectiveePATTechnologies Limited is consideredtheacquiringentity.However,theacquisitionhasthefeaturesofareverseacquisitionasdescribedin the Australian Accounting Standard AASB3 “Business Combinations” (AASB 3) notwithstandingePATTechnologiesLimitedbeingthelegalparentoftheGroup.AtthetimeoftheacquisitionePATTechnologies Limiteddivested all of its operations, and its activitieswere limited tomanaging itscashbalances,filingobligations(ie,alistedshell),andcompletionoftheacquisition.ItisthereforeconsideredthatePATTechnologiesLimitedwillnotbeabusinessforthepurposesofAASB3asitwillhavenoprocessesoroutputs.The transaction has therefore been accounted for as a reverse acquisition from a consolidatedperspective, where Electronic Pain Assessment Technologies (EPAT) Pty Ltd is the accountingacquirerandePATTechnologiesLimitedisthelegalacquirer.Thehalf–yearfinancialreportincludestheconsolidatedfinancialstatementsofthenewePATTechnologiesLimitedgroupfortheperiod23September2016to31December2016andrepresentsacontinuationofElectronicPainAssessmentTechnologies (EPAT) Pty Ltd financial statements with exception of the capital structure. Theamount recognised as equity instruments in these consolidated statements represents the issuedequity of ePAT Technologies Limited adjusted to reflect the equity issued by ePAT TechnologiesLimited on acquisition. Refer to note 6 on issued capital and note 8 on the accounting for theacquisition. The comparable figuresare thoseof ElectronicPainAssessmentTechnologies (EPAT)PtyLtd.Underthereverseacquisitionprinciples,theconsiderationprovidedbyElectronicPainAssessmentTechnologies(EPAT)PtyLtdwasdeterminedtobe$4,422,069whichisthedeemedfairvalueofthe222,103,433sharesownedbytheformerMinQuestLimitedshareholdersatthecompletionoftheacquisition,valuedatthecapitalraisingshareprice.The excess of the deemed fair value of the shares owned by the ePAT Technologies Limited(formerlyMinQuestLimited)shareholdersandthefairvalueofthe identifiablenetassetsofePATTechnologies Limited immediately prior to the completion of themerger is accounted for under“AASB2“Share–basedPayment”and resulted in the recognitionof$4,574,424being recordedas
For
per
sona
l use
onl
y
ePATTechnologiesLimited(formerlyMinQuestLimited)
14
“CorporateRestructureExpense”. ThenetassetsofePATTechnologies Limitedwere recordedatfairvalueatcompletionofthemerger.Noadjustmentswererequiredtothehistoricalvalues.NewaccountingpoliciesforthemergedgroupUponcompletionoftheEPATAcquisition,thebusinessoftheCompanychangedtothatoftheconsolidatedgroupresultingintheneedtoconsiderand/oradoptnewaccountingpolicies.Significantnewaccountingpoliciesadoptedbytheconsolidatedgroupareoutlinedbelow.
(a) Revenueandotherincome
Revenueisrecognisedwhenitisprobablethattheeconomicbenefitwillflowtothecompanyandtherevenuecanbereliablymeasured.Revenueismeasuredatthefairvalueoftheconsiderationreceivedorreceivable.
Saleofgoodsrevenueisrecognisedatthepointofsale,whichiswherethecustomerhastakendeliveryofthegoods,therisksandrewardsaretransferredtothecustomerandthereisavalidsalescontract.Amountsdisclosedasrevenuearenetofsalesreturnsandtradediscounts.
Interestrevenueisrecognisedasinterestaccruesusingtheeffectiveinterestmethod.Thisisamethodofcalculatingtheamortisedcostofafinancialassetandallocatingtheinterestincomeovertherelevantperiodusingtheeffectiveinterestrate,whichistheratethatexactlydiscountsestimatedfuturecashreceiptsthroughtheexpectedlifeofthefinancialassettothenetcarryingamountofthefinancialasset.
Otherrevenueisrecognisedwhenitisreceivedorwhentherighttoreceivepaymentisestablished.
(b) Intangibleassets
Intellectualpropertyrightsarerecognisedatcostofacquisitionlessaccumulatedamortisationandanyimpairmentlosses.Forintellectualpropertyrightsnotyetinuse,theyaretestedforimpairmentannuallyormorefrequentlyifeventsorchangesincircumstancesindicatethattheymightbeimpaired,andarecarriedatcostlessaccumulatedimpairmentlosses.
Expenditureduringtheresearchphaseofaprojectisrecognisedasanexpensewhenincurred.Developmentcostsarecapitalisedonlywhentechnicalfeasibilitystudiesidentifythattheprojectisexpectedtodeliverfutureeconomicbenefitsandthesebenefitscanbemeasuredreliably.
Intangibleassetshaveafiniteusefullifeandareamortisedonasystematicbasisbasedonthefutureeconomicbenefitsovertheusefullifeoftheprojectfollowingcommercialisationoftheassets.
SignificantaccountingpoliciesoftheCompanyandEPATSetoutbelowarethesignificantaccountingpoliciesthathavebeenappliedinthepreparationoftheconsolidatedfinancialstatements:
(a) PrinciplesofConsolidation
TheconsolidatedfinancialstatementscomprisethefinancialstatementsofallsubsidiariesoftheCompanyandtheresultsofallsubsidiariesfromthedatethatcontrolwasobtained.TheCompanycontrolsanotherentitywhentheCompanyisexposedto,orhastherightsto,variablereturnsfromitsinvolvementwiththeentityandhastheabilitytoaffectthosereturnsthroughitspowertodirecttheactivitiesoftheentity.
Subsidiariesarefullyconsolidatedfromthedateonwhichcontrolisfullytransferred.Theyaredeconsolidatedfromthedatecontrolceases.
For
per
sona
l use
onl
y
ePATTechnologiesLimited(formerlyMinQuestLimited)
15
Thefinancialstatementofthesubsidiaryispreparedforthesamereportingperiodastheparentcompany,usingconsistentaccountingpolicies.
Inpreparingtheconsolidatedfinancialstatements,allintercompanybalancesandtransactions,incomeandexpensesandprofitandlossesresultingfromintra-grouptransactionshavebeeneliminatedinfull.
Theacquisitionofsubsidiariesisaccountedforusingtheacquisitionmethodofaccounting.Achangeinownershipinterestwithoutalossofcontrolisaccountedforasanequitytransaction.
Non-controllinginterestsintheresultsandequityofsubsidiariesareshownseparatelyinthefinancialstatements.Lossesincurredbytheconsolidatedentityareattributedtothenon-controllinginterestsinfull,evenifthatresultsinadeficitbalance.
Wheretheconsolidatedentitylosescontroloverasubsidiary,itderecognisestheassetsincludinggoodwill,liabilitiesandnon-controllinginterestinthesubsidiary,togetherwithanycumulativetranslationdifferencesinequity.Theconsolidatedentityrecognisesthefairvalueoftheconsiderationreceivedandthefairvalueofanyinvestmentretainedtogetherwithanygainsorlossesinprofitorloss.
(b) IncomeTax
Currenttaxassetsandliabilitiesforthecurrentandpriorperiodsaremeasuredattheamountexpectedtoberecoveredfromorpaidtothetaxationauthorities.Thetaxratesandtaxlawsusedtocomputetheamountarethosethatareenactedorsubstantivelyenactedbythebalancedate.
Deferredincometaxisprovidedonalltemporarydifferencesatthebalancedatebetweenthetaxbasesofassetsandliabilitiesandtheircarryingamountsforfinancialreportingpurposes.Deferredincometaxliabilitiesarerecognisedforalltaxabletemporarydifferencesexcept:
§ whenthedeferredincometaxliabilityarisesfromtheinitialrecognitionofgoodwillorofanassetorliabilityinatransactionthatisnotabusinesscombinationandthat,atthetimeofthetransaction,affectsneithertheaccountingprofitnortaxableprofitorloss;or
§ whenthetaxabletemporarydifferenceisassociatedwithinvestmentsinsubsidiaries,associatesorinterestsinjointventures,andthetimingofthereversalofthetemporarydifferencecanbecontrolledanditisprobablethatthetemporarydifferencewillnotreverseintheforeseeablefuture.
Deferredincometaxassetsarerecognisedforalldeductibletemporarydifferences,carry-forwardofunusedtaxassetsandunusedtaxlosses,totheextentthatitisprobablethattaxableprofitwillbeavailableagainstwhichthedeductibletemporarydifferencesandthecarry-forwardofunusedtaxcreditsandunusedtaxlossescanbeutilised,except:
§ whenthedeferredincometaxassetrelatingtothedeductibletemporarydifferencearisesfromtheinitialrecognitionofanassetorliabilityinatransactionthatisnotabusinesscombinationand,atthetimeofthetransaction,affectsneithertheaccountingprofitnortaxableprofitorloss;or
§ whenthedeductibletemporarydifferenceisassociatedwithinvestmentsinsubsidiaries,associatesorinterestsinjointventures,inwhichcaseadeferredtaxassetisonlyrecognisedtotheextentthatitisprobablethatthetemporarydifferencewillreverseintheforeseeablefutureandtaxableprofitwillbeavailableagainstwhichthetemporarydifferencecanbeutilised.
For
per
sona
l use
onl
y
ePATTechnologiesLimited(formerlyMinQuestLimited)
16
Thecarryingamountofdeferredincometaxassetsisreviewedateachbalancedateandreducedtotheextentthatitisnolongerprobablethatsufficienttaxableprofitwillbeavailabletoallowallorpartofthedeferredincometaxassettobeutilised.Unrecogniseddeferredincometaxassetsarereassessedateachbalancedateandarerecognisedtotheextentthatithasbecomeprobablethatfuturetaxableprofitwillallowthedeferredtaxassettoberecovered.
Deferredincometaxassetsandliabilitiesaremeasuredatthetaxratesthatareexpectedtoapplytotheyearwhentheassetisrealisedortheliabilityissettled,basedontaxrates(andtaxlaws)thathavebeenenactedorsubstantivelyenactedatthebalancedate.
Incometaxesrelatingtoitemsrecogniseddirectlyinequityarerecognisedinequityandnotinprofitorloss.
Deferredtaxassetsanddeferredtaxliabilitiesareoffsetonlyifalegallyenforceablerightexiststosetoffcurrenttaxassetsagainstcurrenttaxliabilitiesandthedeferredtaxassetsandliabilitiesrelatetothesametaxableentityandthesametaxationauthority.
(c) ImpairmentofAssets
TheGroupassessesateachbalancedatewhetherthereisanindicationthatanassetmaybeimpaired.
Ifanysuchindicationexists,orwhenannualimpairmenttestingforanassetisrequired,theCompanymakesanestimateoftheasset’srecoverableamount.Anasset’srecoverableamountisthehigherofitsfairvaluelesscoststosellanditsvalueinuseandisdeterminedforanindividualasset,unlesstheassetdoesnotgeneratecashinflowsthatarelargelyindependentofthosefromotherassetsorgroupsofassetsandtheasset'svalueinusecannotbeestimatedtobeclosetoitsfairvalue.Insuchcasestheassetistestedforimpairmentaspartofthecashgeneratingunittowhichitbelongs.Whenthecarryingamountofanassetorcash-generatingunitexceedsitsrecoverableamount,theassetorcash-generatingunitisconsideredimpairedandiswrittendowntoitsrecoverableamount.
Inassessingvalueinuse,theestimatedfuturecashflowsarediscountedtotheirpresentvalueusingapre-taxdiscountratethatreflectscurrentmarketassessmentsofthetimevalueofmoneyandtherisksspecifictotheasset.Impairmentlossesrelatingtocontinuingoperationsarerecognisedinthoseexpensecategoriesconsistentwiththefunctionoftheimpairedassetunlesstheassetiscarriedatrevaluedamount(inwhichcasetheimpairmentlossistreatedasarevaluationdecrease).
Anassessmentisalsomadeateachbalancedateastowhetherthereisanyindicationthatpreviouslyrecognisedimpairmentlossesmaynolongerexistormayhavedecreased.Ifsuchindicationexists,therecoverableamountisestimated.Apreviouslyrecognisedimpairmentlossisreversedonlyiftherehasbeenachangeintheestimatesusedtodeterminetheasset’srecoverableamountsincethelastimpairmentlosswasrecognised.Ifthatisthecasethecarryingamountoftheassetisincreasedtoitsrecoverableamount.Thatincreasedamountcannotexceedthecarryingamountthatwouldhavebeendetermined,netofdepreciation,hadnoimpairmentlossbeenrecognisedfortheassetinprioryears.Suchreversalisrecognisedinprofitorlossunlesstheassetiscarriedatrevaluedamount,inwhichcasethereversalistreatedasarevaluationincrease.
Aftersuchareversalthedepreciationchargeisadjustedinfutureperiodstoallocatetheasset’srevisedcarryingamount,lessanyresidualvalue,onasystematicbasisoveritsremainingusefullife.
For
per
sona
l use
onl
y
ePATTechnologiesLimited(formerlyMinQuestLimited)
17
(d) Share-basedPaymentTransactions
Thecostofequity-settledtransactionswithemployeesismeasuredbyreferencetothefairvalueoftheequityinstrumentsatthedateatwhichtheyaregranted.Thefairvalueisdeterminedbyusingasuitableoptionpricingmodel.
Invaluingequity-settledtransactions,noaccountistakenofanyperformanceconditions,otherthanconditionslinkedtothepriceofthesharesoftheCompany.
Thecostofequity-settledtransactionsisrecognised,togetherwithacorrespondingincreaseinequity,overtheperiodinwhichtheperformanceand/orserviceconditionsarefulfilled,endingonthedateonwhichtherelevantrecipientoftheequitybecomesfullyentitledtotheaward(thevestingperiod).
Thecumulativeexpenserecognisedforequity-settledtransactionsateachreportingdateuntilvestingdatereflects(i)theextenttowhichthevestingperiodhasexpiredand(ii)theCompany’sbestestimateofthenumberofequityinstrumentsthatwillultimatelyvest.Noadjustmentismadeforthelikelihoodofmarketperformanceconditionsbeingmetastheeffectoftheseconditionsisincludedinthedeterminationoffairvalueatgrantdate.Theincomestatementchargeorcreditforaperiodrepresentsthemovementincumulativeexpenserecognisedasatthebeginningandendofthatperiod.
Noexpenseisrecognisedforawardsthatdonotultimatelyvest,exceptforawardswherevestingisonlyconditionaluponamarketcondition.
Ifthetermsofanequity-settledawardaremodified,asaminimumanexpenseisrecognisedasifthetermshadnotbeenmodified.Inaddition,anexpenseisrecognisedforanymodificationthatincreasesthetotalfairvalueoftheshare-basedpaymentarrangement,orisotherwisebeneficialtotheemployee,asmeasuredatthedateofmodification.
Ifanequity-settledawardiscancelled,itistreatedasifithadvestedonthedateofcancellation,andanyexpensenotyetrecognisedfortheawardisrecognisedimmediately.However,ifanewawardissubstitutedforthecancelledawardanddesignatedasareplacementawardonthedatethatitisgranted,thecancelledandnewawardaretreatedasiftheywereamodificationoftheoriginalaward,asdescribedinthepreviousparagraph.
(e) Cashandcashequivalents
Cashcomprisescashatbankandinhand.Cashequivalentsareshortterm,highlyliquidinvestmentsthatarereadilyconvertibletoknownamountsofcashandwhicharesubjecttoaninsignificantriskofchangesinvalue.Bankoverdraftsareshownwithinborrowingsincurrentliabilitiesinthestatementoffinancialposition.
ForthepurposeoftheStatementofCashFlows,cashincludesonhandandotherfundsheldatcallnetofbankoverdrafts.
SignificantaccountingjudgementsandkeyestimatesThe preparation of interim financial statements requires management to make judgements,estimates and assumptions that affect the application of accounting policies and the reportedamountsofassets,liabilities,incomeandexpense.Actualresultsmaydifferfromtheseestimates.Inpreparingthesehalf-yearlystatements,thekeyestimatesmadebymanagementinapplyingtheCompany’saccountingpolicieshavebeenappliedtothevaluationofsharebasedpayments,refertonote7.
For
per
sona
l use
onl
y
ePATTechnologiesLimited(formerlyMinQuestLimited)
18
In preparing these half-yearly statements, the significant judgements made by management inapplying the Company’s accounting policies and the key sources of estimation uncertainty havebeenappliedtothereverseacquisition,refertonote8.AmendmentstoAASBsandthenewInterpretationthataremandatorilyeffectiveforthecurrentreportingperiodThe Group has adopted all of the new and revised Standards and Interpretations issued by theAustralian Accounting Standards Board (the AASB) that are relevant to their operations andeffectiveforthecurrenthalf-year.NewandrevisedStandardsandamendmentsthereofand Interpretationseffectiveforthecurrenthalf-year that are relevant to the Consolidated Entity do not have any material impact on thedisclosuresortheamountsrecognisedintheCompany’sfinancialstatements.
2. SegmentinformationAASB 8 requires operating segments to be identified on the basis of internal reports aboutcomponentsoftheConsolidatedEntitythatareregularlyreviewedbythechiefoperatingdecisionmakerinordertoallocateresourcestothesegmentandtoassessitsperformance.AASB8 “Operating Segments’” states that similar operating segments canbe aggregated to formone reportable segment. Following the acquisition of Electronic Pain Assessment Technologies(EPAT) Pty Ltd the Group aggregated all its reporting segments into one reportable operatingsegment. Prior to that, the Company operated as a corporate shell having ceased its previousexplorationactivitiesinthepriorperiod.
3. Revenue Consolidated Company 31Dec2016 31Dec2015 $ $Interestincome 5,061 2,265
4. Otherincome Consolidated Company 31Dec2016 31Dec2015 $ $Rebates 49 598Grants 20,000 -TotalOtherIncome 20,049 598
5. Losspershare Consolidated Company 31Dec2016 31Dec2015 $ $Basicanddilutedlosspershare(centspershare) (0.0) (0.1)
Thelossandweightedaveragenumberofordinarysharesusedinthecalculationofbasic losspershareareasfollows: Consolidated Company 31Dec2016 31Dec2015 $ $Lossforthehalf-yearattributabletotheownersoftheCompany
(6,977,675) (83,365)
For
per
sona
l use
onl
y
ePATTechnologiesLimited(formerlyMinQuestLimited)
19
Consolidated Company 31Dec2016 31Dec2015 No. No.Weightedaveragenumberofordinarysharesforthepurposesofbasicanddilutedlosspershare 365,121,486 1,000,001
Optionsonissueareconsideredtobeanti-dilutivewhiletheentityismakinglosses.
6. Issuedcapital Consolidated Company 31Dec2016 30June2016 $ $FullypaidOrdinaryshares 8,502,533 357,143
Consolidated Company 31December2016 30June2016 No. $ No. $Balanceatbeginningofthereportingperiod 1,000,001 357,143 1,000,001 357,143MergerofEPATTechnologiesLtdandElectronicPainAssessmentTechnologies(EPAT)PtyLtd
EliminationofexistingElectronicPainAssessmentTechnologies(EPAT)PtyLtdshares (1,000,001) - - -ExistingePATTechnologiesLimitedsharesonacquisition 222,103,433 4,442,069 - -IssueofEPATTechnologiesLtdsharesonacquisition 213,219,616 - - -Issuedpursuanttocapitalraising 236,625,000 4,732,500 Issuedinlieuofremuneration 2,475,000 49,500 Capitalraisingcosts - (1,078,679) - -Balanceatendofperiod 674,423,049 8,502,533 1,000,001 357,143
Fullypaidordinarysharescarryonevotepershareandcarrytherighttodividends.Ordinarysharesparticipate in theproceedsonwindingupof theCompany inproportionto thenumberofsharesheld.
7. Reserves Consolidated Company
Optionreserve:31Dec2016 30June
2016 $ $Balanceatbeginningofthereportingperiod - -Issueof45,000,000Underwriteroptions 522,000 -Issueof90,198,155Directoroptions 1,728,066 -Totalreservesatendofperiod 2,250,066 -
For
per
sona
l use
onl
y
ePATTechnologiesLimited(formerlyMinQuestLimited)
20
Optionsissuedduringtheperiod:Options Consolidated Company
31-Dec-16 30-Jun-16
No. $ No. $
Balanceatbeginningofthereportingperiod
-
-
-
-
ExistingePATTechnologiesLtdsharesonacquisition
103,035,179
- - -
Issueofoptionstounderwriters 45,000,000 522,000 - - Issueofdirectoroptions 90,198,155 1,728,066 - -Balanceatendofperiod 238,233,334 2,250,066 - -
Underwriteroptions45,000,000optionswere grantedUnderwriter pursuant to theProspectusdated25August 2016.ThefairvalueoftheoptionsatgrantdatearedeterminedusingaBlackScholespricingmethodthattakes into account the exercise price, the term of the option, the share price at grant date andexpected volatility of the underlying share, the expected dividend yield and the risk free interestrateforthetermoftheoption.Thefollowingtableliststheinputstothemodelusedforvaluationoftheunlistedoptions:Item InputsVolatility(%) 100%Riskfreeinterestrate(%) 1.54%Expectedlifeofoption(years) 3.03Expecteddividendyield nilExercisepricepertermsandconditions $0.025Underlyingsecuritypriceatgrantdate $0.020Expirydate 7October2019Valueperoption $0.0116
Directoroptions90,198,155 options were granted to the Directors as approved by shareholders at the annualgeneralmeetingon23November2016.Thefairvalueoftheoptionsatgrantdatearedeterminedusing a Black Scholes pricingmethod that takes into account the exercise price, the term of theoption,thesharepriceatgrantdateandexpectedvolatilityoftheunderlyingshare,theexpecteddividendyieldandtheriskfreeinterestrateforthetermoftheoption.Refertonote10fordetailsofthevestingconditions.Thefollowingtableliststheinputstothemodelusedforvaluationoftheunlistedoptions:Item Inputs
Volatility(%) 100%Riskfreeinterestrate(%) 1.54%Expectedlifeofoption(years) 3.003Expecteddividendyield nilExercisepricepertermsandconditions $0.020Underlyingsecuritypriceatgrantdate $0.037Expirydate 24November2019Valueperoption $0.0271
For
per
sona
l use
onl
y
ePATTechnologiesLimited(formerlyMinQuestLimited)
21
8. Acquisitionaccounting&sharebasedpaymentexpenseSubsidiaryacquiredOn 25 July 2016 the Company executed a share purchase agreement for the acquisition of onehundredpercentoftheissuedcapitalofElectronicPainAssessmentTechnologies(EPAT)PtyLtd.Theconsiderationforthisacquisitionwasmadeupasfollows:
(i) 213,219,616sharestobeissuedatcompletion;and
(ii) $1,000,000worthofsharestobeissuediftheCompanyannouncesthateitherofthefollowingmilestoneshavebeenmetwithin12monthsfromthedateofcompletionoftheacquisition:
(A) RegulatoryapprovalhavingbeenreceivedtoenablecommercialuseoftheePATAppinAustralia,theUnitedStatesofAmericaorEurope.(Inthiscontext,“RegulatoryApproval”meansapprovalbytheTherapeuticGoodsAdministrationofAustralia,FoodandDrugAdministrationoftheUnitedStates,oraCEmarkfromtherelevantauthorityinEurope);or
(B) theexecutionofabindinglicenceagreementtolicencetheePATAppto:
§ oneormoreresidentialagedcarefacilityownersmanagingintotalinexcessof150beds;
§ oneormoremedicalclinicswhichserviceintotalinexcessof2,000patientsperyear;
§ ametropolitanhospitalwithinexcessof200beds;
(eachan"EndUser”)or
§ aglobaldistributionpartnerwithmultipleEndUsersasexistingcustomers.
FromalegalandtaxationperspectiveePATTechnologiesLimitedisconsideredtheacquiringentity.However, the acquisition has the features of a reverse acquisition as described in the AustralianAccountingStandardAASB3“BusinessCombinations”notwithstandingePATTechnologiesLimitedbeing the legal parent of the Group. The transaction has been accounted for as a reverseacquisitionfromaconsolidatedperspective,whereElectronicPainAssessmentTechnologies(EPAT)PtyLtdistheaccountingacquirerandePATTechnologiesLimitedisthelegalacquirer.TheexcessofthefairvalueofthesharesownedbytheePATTechnologiesLimitedshareholdersandthe fair valueof the identifiablenetassetsofePATTechnologies Limited immediatelyprior to thecompletionofthemergerisaccountedforunder“AASB2“Share–basedPayment”andresultedintherecognitionof$4,574,424beingrecordedas“CorporateRestructureExpense”.ThenetassetsofePATTechnologiesLimitedwererecordedatfairvalueatcompletionofthemerger.Noadjustmentswererequiredtothehistoricalvalues.
For
per
sona
l use
onl
y
ePATTechnologiesLimited(formerlyMinQuestLimited)
22
EPATTechnologies
LimitedAssetsacquiredandliabilitiesofEPATTechnologiesLimitedassumedatthedateofacquisition $Currentassets Cashandcashequivalents 18,243Tradereceivables 12,025Totalassets 30,268 Currentliabilities Tradeandotherpayables 134,372Provisions 28,251Totalliabilities 162,623Netliabilitiesacquired (132,355)
Thefairvaluesoftheassetsacquiredandtheliabilitiesassumedapproximatetheircarryingvalue.TheinitialaccountingfortheacquisitionofEPATTechnologiesLimited(thelegalacquirer)hasbeendeterminedattheendofthereportingperiod.Corporaterestructureexpenseonacquisition Fairvalueofnotionalsharesissuedtoaffectthetransaction 4,442,069Lessfairvalueofidentifiablenetliabilitiesacquired-EPATTechnologiesLimited (132,355)Corporaterestructureexpense 4,574,424
9. InterestsinSubsidiariesTheconsolidatedfinancialstatementsincludethefinancialstatementsofePATTechnologiesLimitedanditssubsidiarycompanyElectronicPainAssessmentTechnologies(EPAT)PtyLtd.Thefollowingsubsidiariesweredisposedof/acquiredduringtheperiod:
Name CountryofIncorporation
PercentageofequityinterestheldbyConsolidatedEntity%
31Dec2016 30June2016ElectronicPainAssessmentTechnologies(EPAT)PtyLtd Australia 100 -
MerahAfricanExplorationLimited Zambia - 100MerahWestAfricaLimited Ghana - 100OresearchLimited Australia - 100MerahResourcesCanadaLimited Canada - 100
10. KeymanagementpersonnelRemuneration arrangements of keymanagement personnel are disclosed in the annual financialreportat30 June2016. During theperiodunder review therewereanumberof changes tokeymanagementpersonnel.Directorresignationswerereceivedfrom:
MrPaulNiardone(resigned30September2016)MrJeremyRead(resigned30September2016)MrFrankTerranova(resigned5September2016)
For
per
sona
l use
onl
y
ePATTechnologiesLimited(formerlyMinQuestLimited)
23
On 30 September 2016, the following personnel were appointed directors of the Company(excluding Mr Davey who remained a director) and entered into letters of appointment on thefollowingkeyterms:
Name Position CashRemunerationinclusiveof
superannuation
Noticeperiod/terminationprovisions
Optionsequivalentto%offully
dilutedsharesonissue
MrJohnMurray Non-ExecutiveChairman $80,000 Nil 3%
MrAdamDavey Non-ExecutiveDirector $40,000 Nil 1.5%
MrRossHarricks Non-ExecutiveDirector $40,000 Nil 1.5%
MrPhilipDaffas ManagingDirector $225,000* 3months 5%
*Duringtheinitialtermexpiringon31January2017,MrDaffaswillwork3daysperweekandwillreceiveapro-ratedsalaryof$135,000.
Attheannualgeneralmeetingheldon23November2016,shareholdersapprovedtheissueofthefollowingoptionsexercisableat2centspershareandexpiringon24November2019andvestingoncertainconditions:
Name Position Unlistedoptionsallotted19December2016
MrJohnMurray Non-ExecutiveChairman 24,599,497
MrAdamDavey Non-ExecutiveDirector 12,299,748
MrRossHarricks Non-ExecutiveDirector 12,299,748
MrPhilipDaffas ManagingDirector 40,999,162
Total 90,198,155
Theoptionsissuedtodirectorsaretovestasfollows:
i. Onethirdafteroneyearofservice.
ii. OnethirdaftertheCompanymakesanannouncementthatRegulatoryApprovaltoenablecommercialuseoftheEPATAppinAustralia,theUnitedStatesorEuropeisreceived,ortheCompanyhasannouncedtheexecutionofabindinglicenceagreementtolicencetheEPATAppto:
a. oneormoreresidentialagedcarefacilitiesfacilityownersmanagingintotalinexcessof150beds;or
b. oneormoremedicalclinicswhichserviceintotalinexcessof2,000patientsperyear;or
c. ametropolitanhospitalwithinexcessof200beds;(eachan“EndUser”);
d. oraglobaldistributionpartnerwithmultipleEndUsersasexistingcustomers.
iii. OnethirdupontheCompanygeneratingcumulativerevenueof$1,000,000.
For
per
sona
l use
onl
y
ePATTechnologiesLimited(formerlyMinQuestLimited)
24
Theoptionsissuedtodirectorsareexpensedasfollows:
Numberofoptions
VestingDate
Value
$
Expensed31
December2016
Tobeexpensed30June2017
Tobeexpensed30June2017
Tranche1 30,066,052 30Sept2017
814,286 99,495 473,909 240,882
Tranche2 30,066,052 Performancebased
814,286 814,286 - -
Tranche3 30,066,052 Performancebased
814,286 814,286 - -
Total 90,198,155 2,442,857 1,728,066 473,909 240,882
11. DividendsNodividendswerepaidordeclared for thehalf-yearended31December2016and thedirectorshavenotrecommendedthepaymentofadividend.
12. CommitmentsandcontingenciesAssetoutinnote8above,theCompanyhasagreedtoissue$1,000,000worthofsharesasdeferredconsiderationsharesiftheCompanyachievescertainmilestoneswithin12monthsfromthedateofcompletion of the acquisition of Electronic Pain Assessment Technologies (EPAT) Pty Ltd (23September2016).Otherwise,therehasbeennochangetothecommitmentsandcontingenciesdisclosedinthemostrecentannualfinancialreport.
13. SubsequenteventsTherehasnotbeenanymatterorcircumstancethathasarisensincetheendofthehalf-yearthathassignificantlyaffected,ormaysignificantlyaffect,theoperationsoftheCompany,theresultsofthoseoperations,orthestateofaffairsoftheCompanyinfuturefinancialyears.
For
per
sona
l use
onl
y