Full Press Release Details
INTERIM CONSOLIDATED FINANCIAL STATEMENTS
OF PRANA BIOTECHNOLOGY LIMITED AND SUBSIDIARIES, OR THE
GROUP (A DEVELOPMENT STAGE ENTERPRISE)AS OF DECEMBER 31, 2018
IN AUSTRALIAN DOLLARS
| Page | ||
| CONSOLIDATED STATEMENT OF FINANCIAL POSITION | 1 | |
| CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME | 2 | |
| CONSOLIDATED STATEMENT OF CASH FLOWS | 3 | |
| CONSOLIDATED STATEMENT OF CHANGES IN EQUITY | 4 | |
| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS | 5 |
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(in Australian dollars)
| Notes | 31 December 2018 A$ | 30 June 2018 A$ | ||||||||||
| ASSETS | ||||||||||||
| Current assets | ||||||||||||
| Cash and cash equivalents | 8,383,261 | 15,235,556 | ||||||||||
| Trade and other receivables | 7 | 5,589,569 | 3,152,410 | |||||||||
| Other current assets | 112,678 | 266,625 | ||||||||||
| Total current assets | 14,085,508 | 18,654,591 | ||||||||||
| Non-current assets | ||||||||||||
| Property, plant and equipment | 60,019 | 71,422 | ||||||||||
| Total non-current assets | 60,019 | 71,422 | ||||||||||
| Total assets | 14,145,527 | 18,726,013 | ||||||||||
| LIABILITIES | ||||||||||||
| Current liabilities | ||||||||||||
| Trade and other payables | 2,671,111 | 2,055,247 | ||||||||||
| Provisions | 550,112 | 588,693 | ||||||||||
| Total current liabilities | 3,221,223 | 2,643,940 | ||||||||||
| Non-current liabilities | ||||||||||||
| Provisions | 1,338 | 916 | ||||||||||
| Total non-current liabilities | 1,338 | 916 | ||||||||||
| Total liabilities | 3,222,561 | 2,644,856 | ||||||||||
| Net assets | 10,922,966 | 16,081,157 | ||||||||||
| EQUITY | ||||||||||||
| Contributed equity | 8 | 144,013,274 | 143,910,328 | |||||||||
| Reserves | 9 | 1,212,721 | 1,753,954 | |||||||||
| Accumulated losses | (134,303,029 | ) | (129,583,125 | ) | ||||||||
| Total equity | 10,922,966 | 16,081,157 |
The above Consolidated Statement of Financial
Position should be read in conjunction with the accompanying notes.
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
AND OTHER COMPREHENSIVE INCOME
(in Australian dollars)
| Notes | 31 December 2018 A$ | 31 December 2017 A$ | ||||||||||
| Income | ||||||||||||
| Revenue from ordinary activities | 5 | 66,364 | 117,168 | |||||||||
| Other income | 5 | 2,426,518 | 1,360,238 | |||||||||
| Expenses | ||||||||||||
| Intellectual property expenses | (82,667 | ) | (104,940 | ) | ||||||||
| General and administration expenses | 6 | (2,031,326 | ) | (1,978,857 | ) | |||||||
| Research and development expenses | 6 | (5,890,241 | ) | (2,286,286 | ) | |||||||
| Other operating expenses | (28,162 | ) | (113,823 | ) | ||||||||
| Other gains/(losses) | 6 | 199,287 | (610,939 | ) | ||||||||
| Loss for the period | (5,340,227 | ) | (3,617,439 | ) | ||||||||
| Loss before income tax | (5,340,227 | ) | (3,617,439 | ) | ||||||||
| Income tax expense | - | - | ||||||||||
| Other comprehensive loss | ||||||||||||
| Other comprehensive income for the period, net of tax | - | - | ||||||||||
| Total comprehensive loss for the period | (5,340,227 | ) | (3,617,439 | ) | ||||||||
| Cents | Cents | |||||||||||
| Loss per share for profit attributable to the ordinary equity holders of the company: | ||||||||||||
| Basic loss per share | 4 | 0.99 | 0.68 | |||||||||
| Diluted loss per share | 4 | 0.99 | 0.68 |
The above Consolidated Statement of Profit
or Loss and Other Comprehensive Income should be read in conjunction with the accompanying notes.
CONSOLIDATED STATEMENT OF CASH FLOWS
(in Australian dollars)
| Notes | 31 December 2018 A$ | 31 December 2017 A$ | ||||||||||
| Cash flows from operating activities | ||||||||||||
| Payments to suppliers and employees | (7,290,291 | ) | (4,220,833 | ) | ||||||||
| R&D tax refund | - | 3,022,673 | ||||||||||
| Interest received | 68,526 | 25,497 | ||||||||||
| Net cash (outflow) from operating activities | (7,221,765 | ) | (1,172,663 | ) | ||||||||
| Cash flows from investing activities | ||||||||||||
| Payments for property, plant and equipment | (3,273 | ) | (3,338 | ) | ||||||||
| Net cash (outflow) from investing activities | (3,273 | ) | (3,338 | ) | ||||||||
| Cash flows from financing activities | ||||||||||||
| Proceeds from issues of shares and other equity securities | 166,086 | - | ||||||||||
| Transaction costs relating to issue of equity | (23,140 | ) | (37,835 | ) | ||||||||
| Net cash inflow/ (outflow) from financing activities | 142,946 | (37,835 | ) | |||||||||
| Net (decrease) in cash and cash equivalents | (7,082,092 | ) | (1,213,836 | ) | ||||||||
| Cash and cash equivalents at the beginning of the financial year | 15,235,556 | 21,734,957 | ||||||||||
| Effects of exchange rate changes on cash and cash equivalents | 229,797 | (609,934 | ) | |||||||||
| Cash and cash equivalents at end of period | 8,383,261 | 19,911,187 |
The above Consolidated Statement of Cash Flows
should be read in conjunction with the accompanying notes.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
(in Australian dollars)
| Attributable to owners of Prana Biotechnology Limited | ||||||||||||||||||||
| Notes | Contributed equity A$ | Reserves A$ | Accumulated losses A$ | Total A$ | ||||||||||||||||
| Balance at 1 July 2017 | 144,018,006 | 2,320,480 | (122,648,452 | ) | 23,690,034 | |||||||||||||||
| Loss for the period | - | - | (3,617,439 | ) | (3,617,439 | ) | ||||||||||||||
| Total comprehensive income for the period | - | - | (3,617,439 | ) | (3,617,439 | ) | ||||||||||||||
| Transactions with owners in their capacity as owners: | ||||||||||||||||||||
| Transaction costs | (119,435 | ) | - | - | (119,435 | ) | ||||||||||||||
| Employee share schemes - Share based payments | - | 162,393 | - | 162,393 | ||||||||||||||||
| (119,435 | ) | 162,393 | - | 42,958 | ||||||||||||||||
| Balance at 31 December 2017 | 143,898,571 | 2,482,873 | (126,265,891 | ) | 20,115,553 | |||||||||||||||
| Balance at 1 July 2018 | 143,910,328 | 1,753,954 | (129,583,125 | ) | 16,081,157 | |||||||||||||||
| Loss for the period | - | - | (5,340,227 | ) | (5,340,227 | ) | ||||||||||||||
| Total comprehensive loss for the period | - | - | (5,340,227 | ) | (5,340,227 | ) | ||||||||||||||
| Transactions with owners in their capacity as owners: | ||||||||||||||||||||
| Issue of ordinary shares | 8 | 166,086 | - | - | 166,086 | |||||||||||||||
| Share-based payment expenses | - | 79,090 | - | 79,090 | ||||||||||||||||
| Transaction costs | (63,140 | ) | - | - | (63,140 | ) | ||||||||||||||
| Expired options/warrants | - | (620,323 | ) | 620,323 | - | |||||||||||||||
| 102,946 | (541,233 | ) | 620,323 | 182,036 | ||||||||||||||||
| Balance at 31 December 2018 | 144,013,274 | 1,212,721 | (134,303,029 | ) | 10,922,966 |
The above Consolidated Statement of Changes
in Equity should be read in conjunction with the accompanying notes.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(in Australian dollars)
Note 1: Basis of Preparation
This condensed consolidated interim report
for the half-year reporting period ending 31 December 2018 has been prepared in accordance with Accounting Standard AASB 134 Interim
Financial Reporting and the Corporations Act 2001. These financial statements also comply with International Financial Reporting
Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB").
This condensed consolidated interim financial
report does not include all the notes of the type normally included in an annual financial report. Accordingly, this report is
to be read in conjunction with the annual report for the year ended 30 June 2018 and any public announcements made by Prana Biotechnology
Limited ("the "Company") during the interim reporting period in accordance with the continuous disclosure requirements
of the Corporations Act 2001.
The accounting policies adopted are consistent
with those of the previous financial year and corresponding interim reporting period except for the adoption of new accounting
standards as discussed below.
(a) New and amended standards adopted by
A number of new or amended standards became
applicable for the current reporting period and the Group had to change its accounting policies and make retrospective adjustments
as a result of adopting the following standards:
The impact of the adoption of these standards
and the new accounting policies are disclosed below. The other standards did not have any impact on the Group's accounting policies
and did not require retrospective adjustments.
(b) Impact of standards issued but not yet
applied by the entity
in February 2016, effective for annual period beginning on or after 1 January 2019. It will
result in almost all leases being recognised on the balance sheet, as the distinction between operating and finance leases is removed.
Under the new standard, an asset (the right to use the leased item) and a financial liability to pay rentals are recognised. The
only exceptions are short-term and low-value leases.
The accounting for lessors will not significantly
The standard will affect primarily the accounting
for the Group's operating leases. As at the reporting date, the Group has non-cancellable operating lease commitments of
A$171,624. However, the Group has not yet determined to what extent these commitments will result in the recognition of an asset
and a liability for future payments and how this will affect the Group's profit and classification of cash flows.
The Group is a development stage medical
biotechnology company and as such expects to be utilising cash until the results of its research activities have become
marketable. For the six months ended 31 December 2018, the Group incurred an operating loss of A$5,340,227 and an operating
cash outflow of A$7,221,765 compared with an operating loss of A$3,617,439 and an operating cash outflow of A$1,172,663 for
the six months ended 31 December 2017. As at 31 December 2018 the net assets of the Group stood at A$10,922,966 compared with
A$16,081,157 at June 30, 2018 and our cash position decreased to A$8,383,261 from A$15,235,556 at 30 June 2018. The Group has
recorded a Trade and Other Receivable at 31 December 2018 in the amount of A$5,552,294 from the Australian Taxation Office
comprising research and development tax incentive claims for the fiscal year 2018 (A$3,251,673) and for the six-month period
ended 31 December 2018 (A$2,300,621). The Group expects to receive A$3,251,673 relating to the research and development tax
incentive claim for the fiscal year 2018 during the 6 months ended 30 June 2019 and also expects the research and development
tax incentive to continue to be applicable in the subsequent years.
Note 1: Basis of Preparation (continued)
(c) Going concern (continued)
As stated in note 2, the Group has entered
into a securities purchase agreement with Life Biosciences LLC ("Life Biosciences") to raise up to A$44.5 million.
Life Biosciences will initially invest US$7.5 million (approx. A$10.6 million), with the agreement allowing Prana to raise an additional
US$2 million from other investors, totalling US$9.5 million (approx. A$13.4 million). This initial funding will be available following
approval by the Company's shareholders at an extraordinary general meeting to be held in April 2019. In addition to this
initial investment, the Group may also receive up to approximately A$31 million from Life Biosciences and other investors on exercise
of short-term warrants being issued as part of the transaction. There is no commitment in this regard. The Group's ongoing
solvency is reliant on receipt of the initial US$7.5 million commitment by Life Biosciences. There is uncertainty over the timing
of the receipt as shareholder approval has not been obtained.
On this basis, the continuing viability of
the Group and its ability to continue as a going concern and meet its debts and commitments as they fall due are dependent upon
funding in the form of equity-based financing to fund future operations, together with maintaining implemented cost containment
and deferment strategies.
Management and the directors believe that the
Group will be successful in obtaining the necessary shareholder approval and receiving the US$7.5 million equity funding as noted
above. Accordingly, the Directors have prepared the financial report on a going concern basis, notwithstanding that there is a
material uncertainty that may cast significant doubt on the Group's ability to continue as a going concern and that it may
be unable to realise its assets and liabilities in the normal course of business.
References to matters that may cast significant
doubt about the Group's ability to continue as a going concern also raise substantial doubt as contemplated by the Public
Company Accounting Oversight Board (PCAOB).
Note 2: Significant changes in the current
On 28 December 2018, the Group announced that
it had entered into a securities purchase agreement for a lead investment by Life Biosciences to raise up to approximately A$44.5
million (approx. US$31.4 million). Life Biosciences will initially invest US$7.5 million (approx. A$10.6 million), with the agreement
allowing Prana to raise an additional US$2 million from other investors, totalling US$9.5 million (approx. A$13.4 million). A further
amount of up to approximately A$31 million (approx. US$21.9 million) would be invested by Life Biosciences and other investors
on exercise of short-term warrants being issued as part of the transaction. Completion of the transaction is subject to approval