Exhibit 99.1

 

 

G ENETIC T ECHNOLOGIES L IMITED

A.B.N. 17 009 212 328

 

Half-Year Financial Report

for the period ended

31 DECEMBER 2015

 

 

G ENETIC T ECHNOLOGIES L IMITED

Half-Year Financial Report

 

DIRECTORS’ REPORT

 

The Directors submit the financial report of Genetic Technologies Limited (“GTG” and the “Company”) and the entities it controlled for the half-year ended 31 December 2015.

 

Directors

 

The names of the Directors of the Company in office at the date of this Report are stated below.  All Directors were in office for the entire period, except as noted below.

 

Dr. Malcolm R. Brandon (Non-Executive Chairman)

Mr. Grahame J. Leonard AM (Non-Executive Director)

Dr. Paul A. Kasian (Non-Executive Director)

Dr. Lindsay Wakefield (Non-Executive Director)

Mr. Eutillio Buccilli (Executive Director)

 

Review and results of operations

 

Financial overview

 

During the period under review, the consolidated entity continued to operate in the molecular diagnostics sector, focussing its energies and resources on the further expansion of its U.S.-based business and the distribution of its proprietary breast cancer risk assessment test BREVAGen plus ® . The total comprehensive loss of the consolidated entity for the financial half-year ended 31 December 2015 was $3,019,678 (2014: $4,774,751).  The net cash flows used in operations during the half-year were 23.6% lower than the previous corresponding period ($4,444,201 as compared to $5,820,310).  Overall, total cash and cash equivalents for the half-year ended 31 December 2015 decreased by $3,821,816 to $14,519,541 at balance date.

 

BREVAGen plus ®  breast cancer risk test

 

The Company’s lead product, BREVAGen plus, is a clinically validated, easy-to-use, predictive risk assessment test for women at risk of developing sporadic, or non-hereditary, breast cancer.  BREVAGen plus improves upon the predictive power of the first generation BREVAGen test and is designed to facilitate better informed decisions about breast cancer screening and preventive treatment plans. BREVAGen plus expands the application of BREVAGen from Caucasian women to include African-Americans and Hispanics, and is directed towards women aged 35 years or above, who have not had breast cancer and have one or more risk factors for developing breast cancer. The Company markets BREVAGen plus to healthcare professionals in comprehensive breast health care and imaging centres, as well as to obstetricians/gynaecologists (OBGYNs) and breast cancer risk assessment specialists (such as breast surgeons). Results from BREVAGen plus provide physicians with valuable information to assist in developing a patient-specific Breast Cancer Risk Reduction and Screening Plan based on professional medical society guidelines, such as the American Cancer Society (ACS) (www.cancer.org) and The National Comprehensive Cancer Network (NCCN) (www.nccn.org). BREVAGen plus combines genetic information with a common, questionnaire-based, method of breast cancer risk-assessment (termed the Breast Cancer Risk Assessment Tool (BRCAT) or Gail Score) to provide a more accurate estimate of a woman’s risk of developing breast cancer. The genetic information used in BREVAGen plus is based on the presence/absence of 77 different single nucleotide polymorphisms (SNPs) in a woman’s DNA, with each particular SNP being associated with breast cancer risk. While the presence or absence of each SNP has a small impact on breast cancer risk, collectively, the 77 SNPs can have a significant impact. The impact of the SNPs can move a patient up or down in terms of breast cancer risk classification, which as result, enables the most appropriate type/form of breast cancer screening available and may provide eligibility for prophylactic medications.

 

Key accomplishments during the half year under review include;

 

·                   Issuance of U.S. Patent Nos: 9,051,617 and 9,068,229 covering three of the core genetic markers referred to as single nucleotide polymorphisms (“SNPs”) in the Company’s BREVAGen plus risk assessment test. The particular SNPs in question were amongst the first of the breast cancer susceptibility loci to be consistently and robustly confirmed across multiple genome-wide association

 

1

 

studies, such that their inclusion in BREVAGen plus provides the test with an additional significant proprietary competitive advantage over other SNP-based tests that might be developed. This patent family is assigned to Cambridge University, England and licensed exclusively to Genetic Technologies Limited. The patents comprise an important part of the commercialisation strategy for our breast cancer risk assessment test.

 

·                   Publication of the validation study paper entitled “Breast cancer risk prediction based on clinical models and 77 independent risk-associated SNPs in women aged under 50 years: Australian Breast Cancer Family Registry” in the peer-reviewed journal, Cancer, Epidemiology, Biomarkers and Prevention on December 16, 2015. The study was designed to examine the predictive accuracy of BREVAGen plus when using a variety of other breast cancer risk assessment methods and was conducted under the supervision of Professor John Hopper and first authored by Dr. Gillian Dite from the Centre for Molecular Epidemiology at The University of Melbourne. The authors utilised the Australian Breast Cancer Family Registry to conduct a case-control study of 1,155 women aged between 35 and 50 years. The authors concluded: “By combining a 77 SNP-based score with clinical models, the AUC (accuracy) for predicting breast cancer before age 50 years improved by >20%”. The new risk prediction scores presented in the study, represent the strongest known means available for physicians to assess the risk of a woman developing breast cancer. The article can be viewed at:

http://cebp.aacrjournals.org/content/early/2015/12/16/1055-9965.EPI-15-0838.abstract.

 

·                   Publication of the validation study paper entitled entitled “SNPs and Breast Cancer Risk Prediction for African-American and Hispanic Women” was published in the peer-reviewed journal, Breast Cancer Research and Treatment on 20 November, 2015. The authors studied 7,539 African-American and 3,363 Hispanic women from the Women’s Health Initiative. The results from this study demonstrates that including information from the SNPs associated with breast cancer risk improves the discriminatory accuracy of BCRAT and IBIS for both African-American and Hispanic women. These groups of women comprise increasing proportions of the U.S. population and are both under-represented in scientific literature and the U.S. healthcare system. The results from this study are important to physicians in that it allows them to better target and develop individualised breast cancer prevention and screening strategies for more of their patients. This publication is not only important because it increases the potential market for BREVAGen plus by about a third, but because it makes selling the test easier. The physician doesn’t need to screen for race when deciding to offer a woman BREVAGen plus and advertising materials do not need to comment on the uncomfortable subject of racial applicability. BREVAGen plus is un-validated in Asians at this time. The article can be viewed at:

http://link.springer.com/article/10.1007/s10549-015-3641-7 .

 

The Company had previously conducted multiple scientific studies to develop and validate the first generation BREVAGen test as well as created two health economic models to demonstrate potential cost savings and health benefits associated with the BREVAGen test. Importantly, due to the nature of the technology and the specific improvements incorporated in BREVAGen plus , the research undertaken and published based on the original version of the test remains applicable to the new and improved BREVAGen plus test.

 

The Company continues to amass scientific validation for the important role BREVAGen plus plays in women’s health and is making meaningful strides in the commercial development of this next generation predictive breast cancer test. The publication of the above two new validation studies, serve as a testament to the continued momentum for the Company’s BREVAGen plus breast cancer risk assessment test in the scientific community. In addition, attaining such publications in medical journals will help to further strengthen the Company’s commercial position and accelerate reimbursement discussions with private payers.

 

Licensing and IP

 

The Company continued to bolster its intellectual property portfolio with the issuance of U.S. Patent Nos: 9,051,617 and 9,068,229. These patents cover three core genetic markers referred to as SNPs in

 

2

 

Review and results of operations (cont.)

 

Licensing and IP (cont.)

 

BREVAGen plus , and comprise an important part of the commercialisation strategy for the test. This patent family is assigned to Cambridge University, England and licensed exclusively to Genetic Technologies Limited.

 

Non-Coding Assertion Program

 

On 30 October 2014, Judge Stark issued a Memorandum Opinion finding Claim 1 of the GTG’s foundation ‘179 patent ineligible and granted that Motion to Dismiss. The Company’s Legal Counsel prepared an appeal to the decision in the Federal Circuit. Counsel sought and achieved a stay of all non-appealed actions pending resolution of the Appeal.

 

On 7 December 2015, the Company argued before the Federal Circuit Court of Appeals in Washington DC that Claim 1 of the GTG’s foundation ‘179 patent is patent eligible under the standards set forth in the Mayo/Alice line of Supreme Court cases, and that Judge Stark’s decision to grant motions to dismiss finding Claim 1 patent ineligible should be reversed. It is anticipated that the Federal Circuit will issue its decision on the appeal between June and September 2016. If the appeal is successful in overturning Judge Stark’s decision, the pending cases may be immediately resumed and if the appeal is not completed or is lost, then these cases will be dismissed and over.

 

There are five cases pending, several of those cases are asserted against major pharmaceutical companies.

 

Other commercial assets

 

As part of the Company’s strategy to focus on the expansion of its cancer diagnostic franchise, work continues to sell, out-license or co-develop other assets and technologies in which the Group has an interest.

 

Significant changes in the state of affairs

 

In addition to the matters discussed above in the Review and results of operations , the following events occurred during the half-year ended 31 December 2015.

 

Key Managerial Changes

 

As announced on 6 October 2015, Mr. Kevin Fischer was appointed Chief Financial Officer and joint Company Secretary, effective 2 November 2015. Mr. Fischer has subsequently been appointed as sole Company Secretary effective 13 January 2016.

 

On 2 November 2015, Mr. Chris Saunders was appointed Senior VP Sales and Marketing, Phenogen Sciences Inc., replacing Mr. Mark Ostrowski.

 

Options

 

On 25 November 2015, the Company granted the following options over ordinary shares in the Company;

 

·                   As approved by shareholders at the Company’s Annual General Meeting held on 25 November 2015, 14,236,111 options to the CEO, Mr. Eutillio Buccilli. The options, which were granted at nil consideration, entitle Mr. Buccilli to acquire one ordinary share, at a strike price of $0.02 at any time up to, and including 24 November 2020, subject to certain vesting conditions.

 

·                   10,000,000 options to Key Management Personnel.  The options, which were granted at nil consideration, entitle the holders to acquire one ordinary share, at a strike price of $0.02 at any time up to, and including 24 November 2020, subject to certain vesting conditions.

 

·                   1,500,000 options to US based employees. The options, which were granted at nil consideration, entitle the holders to acquire one ordinary share, at a strike price of $0.058 at any time up to, and including 24 September 2020, subject to certain vesting conditions.

 

There were no other significant changes in the state of affairs that are not described elsewhere in this Report.

 

3

 

Review and results of operations (cont.)

 

Significant events after balance date

 

There have been no significant events which have occurred after balance date.

 

Further information

 

Further information concerning the operations and financial condition of the consolidated entity can be found in the reports and releases made by the Company to the Australian Securities Exchange during the half-year.

 

Auditor’s independence declaration

 

The Company has obtained an independence declaration from its auditor, PricewaterhouseCoopers, which has been reproduced on page 5 of this Report.

 

Signed in accordance with a resolution of the Directors.

 

 

DR. MALCOLM R. BRANDON
Non-Executive Chairman
Melbourne, 24 February 2016

 

4

 

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

 

				Half-year ended		Half-year ended
				31 December 2015		31 December 2014
		Notes		$		$
Revenue from continuing operations - genetic testing services				393,054		1,252,170
Less: cost of sales		3		(289,038	)	(650,360	)
Gross profit from continuing operations - genetic testing services				104,016		601,810
Other revenue		4		263,168		365,438
Other income and expenses		5		123,498		190,466
Selling and marketing expenses				(1,693,071	)	(2,824,183	)
General and administrative expenses				(1,915,373	)	(1,768,407	)
Licensing, patent and legal costs				(67,988	)	(318,036	)
Laboratory and research and development costs				(1,160,797	)	(1,724,767	)
Finance costs				—		(232,985	)
Gain on disposal of business		6		—		1,480,811
Fair value gain on financial liabilities at fair value through profit or loss				—		193,893
Fair value loss on financial assets at fair value through profit or loss		9		—		(795,533	)
Loss from continuing operations before income tax expense				(4,346,547	)	(4,831,493	)
Income tax expense				—		—
Loss for the half-year				(4,346,547	)	(4,831,493	)
Other comprehensive income / (loss)
Items that may be reclassified to profit or loss
Exchange gains / (losses) on translation of controlled foreign operations				1,326,869		56,742
Other comprehensive income / (loss) for the half-year, net of tax				1,326,869		56,742
Total comprehensive loss for the half-year				(3,019,678	)	(4,774,751	)
Loss for the half-year is attributable to:
Owners of Genetic Technologies Limited				(4,346,547	)	(4,831,493	)
Non-controlling interests				—		—
Loss for the half-year				(4,346,547	)	(4,831,493	)
Total comprehensive loss for the half-year is attributable to:
Owners of Genetic Technologies Limited				(3,019,678	)	(4,774,751	)
Non-controlling interests				—		—
Total comprehensive loss for the half-year				(3,019,678	)	(4,774,751	)
Earnings per share attributable to owners of the Company and from continuing operations:
Basic earnings / (loss) per share (cents per share)		8		(0.25	)	(0.68	)
Diluted earnings / (loss) per share (cents per share)		8		(0.25	)	(0.68	)

 

The above condensed consolidated statement of comprehensive income should be read in conjunction with the accompanying notes.

 

5

 

CONDENSED CONSOLIDATED BALANCE SHEET

 

				As at		As at
				31 December 2015		30 June 2015
		Notes		$		$
ASSETS
Current assets
Cash and cash equivalents				14,519,541		18,341,357
Trade and other receivables				681,057		714,951
Prepayments and other assets				682,457		509,788
Total current assets				15,883,055		19,566,096
Non-current assets
Property, plant and equipment				655,712		417,595
Intangible assets				672,259		736,041
Total non-current assets				1,327,971		1,153,636
Total assets				17,211,026		20,719,732
LIABILITIES
Current liabilities
Trade and other payables				621,921		1,102,974
Financial liabilities at fair value through profit or loss		10		—		25,000
Deferred revenue				25,149		77,282
Provisions				506,496		529,907
Total current liabilities				1,153,566		1,735,163
Non-current liabilities
Provisions				81,104		25,321
Total non-current liabilities				81,104		25,321
Total liabilities				1,234,670		1,760,484
Net assets				15,976,356		18,959,248
EQUITY
Contributed equity		12		115,272,576		115,247,128
Reserves				6,035,610		4,697,403
Accumulated losses				(105,331,830	)	(100,985,283	)
Total equity				15,976,356		18,959,248

 

The above condensed consolidated balance sheet should be read in conjunction with the accompanying notes.

 

6

 

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

 

				Half-year ended		Half-year ended
				31 December 2015		31 December 2014
		Notes		$		$
Cash flows from / (used in) operating activities
Receipts from customers				608,160		1,719,718
Payments to suppliers and employees				(5,069,856	)	(7,532,962	)
Interest received				17,495		15,898
Interest and finance charges paid				—		(22,964	)
Net cash flows from / (used in) operating activities				(4,444,201	)	(5,820,310	)
Cash flows from / (used in) investing activities
Purchase of property, plant and equipment				(263,698	)	(152,267	)
Proceeds from the sale of plant and equipment				—		53,276
Cash received on disposal of Heritage Business		6		—		2,100,894
Net cash flows from / (used in) investing activities				(263,698	)	2,001,903
Cash flows from / (used in) financing activities
Proceeds from the issue of shares				—		257,500
Equity transaction costs				(1,654	)	(42,086	)
Net proceeds from borrowings				—		1,999,500
Net cash flows from / (used in) financing activities				(1,654	)	2,214,914
Net increase / (decrease) in cash and cash equivalents				(4,709,553	)	(1,603,493	)
Cash and cash equivalents at the beginning of the period				18,341,357		2,831,085
Net foreign exchange difference				887,737		47,216
Cash and cash equivalents at the end of the period				14,519,541		1,274,808

 

The above condensed consolidated statement of cash flows should be read in conjunction with the accompanying notes.

 

7

 

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

 

		Contributed equity		Reserves		Accumulated losses		Total equity
		$		$		$		$
Balance at 1 July 2014		90,080,492		3,922,140		(92,175,113	)	1,827,519
Loss for the half-year		—		—		(4,831,493	)	(4,831,493	)
Other comprehensive income		—		56,742		—		56,742
Total comprehensive loss		—		56,742		(4,831,493	)	(4,774,751	)
Transactions with owners in their capacity as owners
Contributions of equity net of transaction costs		3,189,795		—		—		3,189,795
Share-based payments		—		60,020		—		60,020
		3,189,795		60,020		—		3,249,815
Balance at 31 December 2014		93,270,287		4,038,902		(97,006,606	)	302,583
Balance at 1 July 2015		115,247,128		4,697,403		(100,985,283	)	18,959,248
Loss for the half-year		—		—		(4,346,547	)	(4,346,547	)
Other comprehensive income		—		1,326,869		—		1,326,869
Total comprehensive loss		—		1,326,869		(4,346,547	)	(3,019,678	)
Transactions with owners in their capacity as owners
Contributions of equity net of transaction costs		25,448		—		—		25,448
Share-based payments		—		11,338		—		11,338
		25,448		11,338		—		36,786
Balance at 31 December 2015		115,272,576		6,035,610		(105,331,830	)	15,976,356

 

The above condensed consolidated statement of changes in equity should be read in conjunction with the accompanying notes.

 

8

 

		Consolidated
		As at		As at
		31 December 2015		31 December 2014
		$		$
8.                    LOSS PER SHARE
The following reflects the income and share data used in the calculations of basic and diluted loss per share:
Loss for the half-year attributable to the owners of Genetic Technologies Limited		(4,346,547	)	(4,831,493	)
Weighted average number of ordinary shares used in calculating loss per share (as at 31 December 2015 and 31 December 2014)		1,715,146,337		702,201,933

 

Note:         None of the 49,977,778 (31 December 2014: 14,025,000) options outstanding as at the reporting date are considered to be dilutive for the purposes of calculating diluted earnings per share and have therefore been excluded from the weighted average number of shares.

 

9.                                       FAIR VALUE MEASUREMENT OF FINANCIAL INSTRUMENTS

 

Fair value hierarchy

 

AASB requires disclosure of fair value measurements by level of the following fair value measurement hierarchy:

 

(a)              quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1);

 

(b)              inputs other than prices included within level 1 that are observable for the asset or liability, either directly or indirectly (level 2); and

 

(c)               inputs for the asset or liability that are not based on observable market data (unobservable inputs) (level 3).

 

The following table presents the Group’s financial assets and financial liabilities measured and recognised at fair value as at 31 December 2015 and 30 June 2015. No level 1 or level 2 financial assets or liabilities were held by the Group as at 31 December 2015 and 30 June 2015.

 

		ImmunAid option financial asset $		Convertible note (financial liabilities) $
Opening balance 1 July 2014		795,533		(2,502,384	)
Additions		—		(2,150,000	)
Conversions to equity		—		4,433,491
Exchange differences		—		(155,353	)
Fair value gain/ (loss) recognized through profit and loss		(795,533	)	349,246
Closing balance 30 June 2015		—	(1)	(25,000	)
Additions		—		—
Conversions to equity		—		25,000
Exchange differences		—		—
Fair value gain/ (loss) recognized through profit and loss		—		—
Closing balance 31 December 2015		—		—

 

11

 

(1)Management recognised a fair value of $NIL for the ImmunAid financial asset as at 30 June 2015, resulting in a fair value loss on financial assets at fair value through profit or loss of $(795,533).

 

9.              FAIR VALUE MEASUREMENT OF FINANCIAL INSTRUMENTS (cont.)

 

Valuation techniques used to derive level 2 and level 3 fair values

 

The fair value of financial instruments that are not traded in an active market is determined using valuation techniques.  These valuation techniques maximise the use of observable market data where it is available and rely as little as possible on entity specific estimates.  If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.  If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.

 

Valuation process

 

The value of the convertible note outstanding at 30 June 2015 was calculated with reference to its face value, which approximated to its fair value.

 

10.           BORROWINGS (CURRENT)

 

		Consolidated
		As at		As at
		31 December 2015		30 June 2015
		$		$
Debt convertible notes at fair value		—		25,000
Total borrowings		—		25,000

 

On 23 July 2015 the convertible notes plus capitalised interest were converted into 1,091,093 ordinary shares in the Company.

 

11.            SEGMENT REPORTING

 

Identification of reportable segments

 

The Group has identified a sole operating segment as reported that is consistent with the internal reporting provided to the chief operating decision maker and is aligned to the one major revenue stream.

 

The Groups operating segment is summarised as follows:

 

Business segments

 

				Revenues and income						Profit / (loss)
				Sales		Other		Totals		after tax
Segment				$		$		$		$
Operations		2015		393,054		386,666		779,720		(4,346,547	)
		2014		1,252,170		2,221,082		3,473,252		(4,831,493	)
								Amortisation		Purchases of
				Assets		Liabilities		/depreciation		equipment
Segment				$		$		$		$
Operations		2015		17,211,026		(1,234,670	)	(173,322	)	263,698
		2014		20,719,732		(1,760,484	)	(232,203	)	304,135

 

Notes:             In the above tables, all income statement figures relate to the periods ended 31 December 2015 and 2014, respectively whilst all balance sheet figures are as at 31 December 2015 and 30 June 2015, respectively.

 

Other revenues and income includes interest revenue of $17,495 (2014: $15,898).

 

Profit / (loss) after tax includes employee benefits expenses of $2,012,986 (2014: $3,220,846).

 

12

 

Assets includes cash of $14,519,541 (30 June 2015: $18,341,357).

 

Liabilities includes trade and other payables of $621,921 (30 June 2015: $1,102,974) and provisions of $587,600 (30 June 2015: $555,228).

 

There were no intersegment sales.

 

11.            SEGMENT REPORTING (cont.)

 

Geographic information

 

Australia — is the home of the parent entity and the location of the Company’s genetic testing and licensing operations.

USA — is the home of Phenogen Sciences Inc. and GeneType Corporation.

Switzerland — is the home of GeneType AG.

 

Geographic segments

 

				Revenues and income						Profit / (loss)
				Sales		Other		Totals		after tax
Segment				$		$		$		$
Australia		2015		220		386,666		386,886		(710,657	)
		2014		757,428		4,514,628		5,272,056		(232,884	)
USA		2015		392,834		—		392,834		(3,624,954	)
		2014		494,742		(2,293,547	)	(1,798,805	)	(4,591,282	)
Switzerland		2015		—		—		—		(10,936	)
		2014		—		—		—		(7,327	)
Totals		2015		393,054		386,666		779,720		(4,346,547	)
		2014		1,252,170		2,221,081		3,473,251		(4,831,493	)
								Amortisation		Purchases of
				Assets		Liabilities		/depreciation		equipment
Segment				$		$		$		$
Australia		2015		16,316,921		(1,034,876	)	(167,698	)	261,468
		2014		3,139,778		(1,532,911	)	(219,784	)	304,135
USA		2015		891,129		(197,807	)	(5,624	)	2,230
		2014		17,576,978		(224,917	)	(12,419	)	—
Switzerland		2015		2,976		(1,987	)	—		—
		2014		2,976		(2,656	)	—		—
Totals		2015		17,211,026		(1,234,670	)	(173,322	)	263,698
		2014		20,719,732		(1,760,484	)	(232,203	)	304,135

 

Note:         In the above tables, all income statement figures relate to the periods ended 31 December 2015 and 2014, respectively whilst all balance sheet figures are as at 31 December 2015 and 30 June 2015, respectively.

 

Included in the above figures are the following intersegment balances and transactions:

 

		Consolidated
		As at		As at
		31 December 2015		30 June 2015
		$		$
Loan payable (USA) and loan receivable (Australia)		3,419,479		16,792,051
Loan payable (Switzerland) and loan receivable (Australia)		168,155		156,550
Foreign exchange loss (USA) and foreign exchange gain (Australia)		2,203,232		3,823,791
Cost of sales (USA) and sales (Australia)		48,696		153,581

 

13

 

Segment products and locations

 

The principal geographic segment is Australia, with the Company’s headquarters being located in Melbourne in the State of Victoria however key sales activities take place in the USA.

 

11.            SEGMENT REPORTING (cont.)

 

Major customers

 

During the half-year ended 31 December 2014, there was one customer from whom the Group generated revenues representing more than 10% ($184,906) of the total consolidated revenue from operations.  During the half-year ended 31 December 2015, there were no such customers.

 

12.  CONTRIBUTED EQUITY

 

		Consolidated
		As at		As at
		31 December 2015		30 June 2015
		$		$
Issued and paid-up capital
Fully paid ordinary shares		115,272,577		115,247,128
Total contributed equity		115,272,577		115,247,128

 

Movements in shares on issue

 

Period ended 31 December 2015		Shares		$
Balance at the beginning of the half-year		1,714,191,631		115,247,128
Add: shares issued as part of the conversion of debt notes		1,091,093		27,103
Less: transaction costs arising on share issue		—		(1,654	)
Balance at the end of the half-year		1,715,282,724		115,272,577

 

Year ended 30 June 2015		Shares		$
Balance at the beginning of the financial year		613,918,492		90,080,492
Add: shares issued as part of private placements		621,574,062		21,445,427
Add: shares issued as part of the conversion of convertible notes		315,732,411		4,507,109
Add: shares issued on exercise of options		122,966,666		1,844,500
Less: transaction costs arising on share issue		—		(2,572,664	)
Add: shares issued in relation to share-based payment		35,876,392		—
Add/ (less): transaction costs on placement of shares		4,123,608		(57,736	)
Balance at the end of the financial year		1,714,191,631		115,247,128

 

Terms and conditions of contributed equity

 

Ordinary shares have the right to receive dividends as declared and, in the event of winding up the Company, to participate in the proceeds from the sale of all surplus assets in proportion to the number of and amounts paid up on shares held.  Ordinary shares, which have no par value, entitle their holder to one vote, either in person or by proxy, at a meeting of the Company.

 

Capital management

 

When managing capital, Management’s objective is to ensure that the Group continues as a going concern as well as to provide returns for shareholders and benefits for other stakeholders.  Management also aims to maintain a capital structure to reduce the entity’s cost of capital.

 

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