o | REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 |
x | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Page | ||||
PART I | ||||
ITEM 1. | IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS | |||
ITEM 2. | OFFER STATISTICS AND EXPECTED TIMETABLE | |||
ITEM 3. | KEY INFORMATION | |||
A. | Selected Financial Data | 5 | ||
B. | Capitalization and Indebtedness | 8 | ||
C. | Reasons for the Offer and Use of Proceeds | 8 | ||
D. | Risk Factors | 8 | ||
ITEM 4. | INFORMATION ON THE COMPANY | |||
A. | History and Development of the Company | 19 | ||
B. | Business Overview | 22 | ||
C. | Organizational Structure | 34 | ||
D. | Property, Plants and Equipment | 34 | ||
ITEM 4A. | UNRESOLVED STAFF COMMENTS | 34 | ||
ITEM 5. | OPERATING AND FINANCIAL REVIEW AND PROSPECTS | |||
A. | Operating Results | 35 | ||
B. | Liquidity and Capital Resources | 45 | ||
C. | Research and Development, Patents and Licenses | 50 | ||
D. | Trend Information | 54 | ||
E. | Off-Balance Sheet Arrangements | 54 | ||
F. | Tabular Disclosure of Contractual Obligations | 54 | ||
ITEM 6. | DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES | |||
A. | Directors and Senior Management | 55 | ||
B. | Compensation | 58 | ||
C. | Board Practices | 59 | ||
D. | Employees | 64 | ||
E. | Share Ownership | 65 | ||
ITEM 7. | MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS | |||
A. | Major Shareholders | 70 | ||
B. | Related Party Transactions | 71 | ||
C. | Interests of Experts and Counsel | 71 | ||
ITEM 8. | FINANCIAL INFORMATION | |||
A. | Financial Statements and Other Financial Information | 71 | ||
B. | Significant Changes | 72 | ||
ITEM 9. | THE OFFER AND LISTING | |||
A. | Offer and Listing Details | 72 | ||
B. | Plan of Distribution | 74 | ||
C. | Markets | |||
D. | Selling Shareholders | 74 | ||
E. | Dilution | 74 | ||
F. | Expenses of the Issue | 74 | ||
ITEM 10. | ADDITIONAL INFORMATION | |||
A. | Share Capital | 74 | ||
B. | Memorandum and Articles of Association | 74 | ||
C. | Material Contracts | 74 | ||
D. | Exchange Controls | 76 | ||
E. | Taxation | 77 | ||
F. | Dividends and Paying Agents | 85 | ||
G. | Statement by Experts | 85 | ||
H. | Documents on Display | 86 | ||
I. | Subsidiary Information | 86 | ||
ITEM 11. | QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISKS | |||
ITEM 12. | DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES | |||
PART II | ||||
ITEM 13. | DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES | |||
ITEM 14. | MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS | |||
ITEM 15. | CONTROLS AND PROCEDURES | |||
ITEM 16. | RESERVED | |||
ITEM 16A. | AUDIT COMMITTEE FINANCIAL EXPERT | |||
ITEM 16B. | CODE OF ETHICS | |||
ITEM 16C. | PRINCIPAL ACCOUNTANT FEES AND SERVICES | |||
ITEM 16D. | EXEMPTIONS FROM THE LISTING | |||
ITEM 16E. | ||||
ITEM 17. | FINANCIAL STATEMENTS | |||
ITEM 18. | FINANCIAL STATEMENTS | |||
ITEM 19. | EXHIBITS | |||
SIGNATURES |
Year Ended June 30, | ||||||||||||||||
2006 | 2005 | 2004 | 2003 | 2002 | ||||||||||||
(in A$, except number of shares) | ||||||||||||||||
A-IFRS: | ||||||||||||||||
Revenue | 762,023 | 892,135 | - | - | - | |||||||||||
Other income | 288,263 | 1,760,978 | - | - | - | |||||||||||
Research and development expenses | (7,613,045 | ) | (7,109,839 | ) | - | - | - | |||||||||
Research and development expenses - related party | - | (577,757 | ) | - | - | - | ||||||||||
Personnel expenses | (3,418,008 | ) | (5,750,929 | ) | - | - | - | |||||||||
Intellectual property expenses | (466,426 | ) | (729,583 | ) | - | - | - | |||||||||
Audit fees | (205,815 | ) | (202,032 | ) | - | - | - | |||||||||
Travel expenses | (212,184 | ) | (432,316 | ) | - | - | - | |||||||||
Marketing expenses | (134,750 | ) | (442,920 | ) | - | - | - | |||||||||
Depreciation expenses | (118,196 | ) | (65,223 | ) | - | - | - | |||||||||
Amortization expenses | - | (83,200 | ) | - | - | - | ||||||||||
Other expenses | (824,625 | ) | (1,204,930 | ) | - | - | - | |||||||||
Other expenses - related party | - | - | - | - | - | |||||||||||
Foreign exchange gain (loss) | 223,454 | (1,362,572 | ) | - | - | - | ||||||||||
Impairment of intangible assets | - | (786,240 | ) | - | - | - | ||||||||||
Net loss | (11,719,309 | ) | (16,094,428 | ) | - | - | - | |||||||||
Loss per share - basic and diluted | (0.09 | ) | (0.13 | ) | - | - | - | |||||||||
Weighted average number of ordinary shares outstanding - basic and diluted | 128,053,601 | 122,754,061 | - | - | - | |||||||||||
U.S. GAAP: | ||||||||||||||||
Net loss | (11,719,309 | ) | (17,799,429 | ) | (9,208,199 | ) | (3,244,397 | ) | (4,728,019 | ) | ||||||
Loss per share - basic and diluted | (0.09 | ) | (0.15 | ) | (0.12 | ) | (0.05 | ) | (0.08 | ) | ||||||
Weighted average number of ordinary shares outstanding - basic and diluted | 128,053,601 | 122,754,061 | 75,701,818 | 61,131,313 | 57,623,389 |
Balance Sheet Data: | ||||||||||||||||
As at June 30, | ||||||||||||||||
2006 | 2005 | 2004 | 2003 | 2002 | ||||||||||||
(in A$ ) | ||||||||||||||||
A-IFRS: | ||||||||||||||||
Cash and cash equivalents | 10,013,778 | 21,453,304 | - | - | - | |||||||||||
Working capital | 8,780,413 | 19,427,962 | - | - | - | |||||||||||
Total assets | 10,421,146 | 22,289,159 | - | - | - | |||||||||||
Net assets | 8,729,350 | 19,594,176 | - | - | - | |||||||||||
Issued capital | 55,097,675 | 54,662,445 | - | - | - | |||||||||||
Share based payment reserves | 2,867,249 | 2,447,996 | - | - | - | |||||||||||
Accumulated deficit during development stage | (49,235,574 | ) | (37,516,265 | ) | - | - | - | |||||||||
Total equity | 8,729,350 | 19,594,176 | - | - | - | |||||||||||
U.S. GAAP: | ||||||||||||||||
Total assets | 10,421,146 | 22,289,159 | 34,197,794 | 7,944,306 | 7,231,703 | |||||||||||
Accumulated deficit during development stage | (53,415,183 | ) | (41,695,874 | ) | (24,108,881 | ) | (14,900,682 | ) | (11,656,285 | ) | ||||||
Contributed equity | 62,144,533 | 61,290,050 | 55,593,837 | 22,278,765 | 18,372,088 | |||||||||||
Total equity | 8,729,350 | 19,594,176 | 31,484,956 | 7,378,083 | 6,715,803 |
Year Ended June 30, | ||||||||||||||||
2005 | 2004 | 2003 | 2002 | 2001 | ||||||||||||
(in A$, except per share and share data) | ||||||||||||||||
A-GAAP: | ||||||||||||||||
Revenue from ordinary activities | 2,653,113 | 2,321,227 | 1,816,478 | 793,970 | 516,182 | |||||||||||
Depreciation and amortization expense | (1,165,227 | ) | (1,195,006 | ) | (1,185,973 | ) | (1,160,595 | ) | (1,140,658 | ) | ||||||
Patents, research and development expense | (7,109,839 | ) | (4,853,536 | ) | (1,386,006 | ) | (1,961,159 | ) | (2,311,619 | ) | ||||||
Patents, research and development expense - related parties | (577,757 | ) | (379,045 | ) | (475,289 | ) | (537,327 | ) | (64,785 | ) | ||||||
Legal expense | (1,047,448 | ) | (1,650,467 | ) | (848,660 | ) | (923,816 | ) | (252,675 | ) | ||||||
Employee benefits expense | (2,438,303 | ) | (1,060,730 | ) | (760,980 | ) | (378,853 | ) | (122,199 | ) | ||||||
Consulting fee expense | (1,607,892 | ) | (1,706,809 | ) | (567,730 | ) | (604,873 | ) | (306,530 | ) | ||||||
Corporate compliance expense | (562,123 | ) | (419,708 | ) | (395,604 | ) | (339,383 | ) | (196,629 | ) | ||||||
Foreign exchange loss | (1,362,572 | ) | (182,768 | ) | (12,481 | ) | - | - | ||||||||
Impairment of intangible assets | (10,388,339 | ) | - | - | - | - | ||||||||||
Other expenses from ordinary activities - related parties | - | (81,470 | ) | (114,247 | ) | (30,000 | ) | (30,000 | ) | |||||||
Other expenses from ordinary activities | (1,402,210 | ) | (677,302 | ) | (654,346 | ) | (306,431 | ) | (230,066 | ) | ||||||
Net loss | (25,008,597 | ) | (9,885,614 | ) | (4,584,838 | ) | (5,448,467 | ) | (4,138,979 | ) | ||||||
Loss per share - basic and diluted | (0.20 | ) | (0.13 | ) | (0.08 | ) | (0.10 | ) | (0.08 | ) | ||||||
Weighted average number of ordinary shares outstanding - basic and diluted | 122,754,061 | 75,701,818 | 61,131,313 | 57,623,389 | 53,090,491 | |||||||||||
U.S. GAAP: | ||||||||||||||||
Net loss | (17,675,019 | ) | (9,208,199 | ) | (3,244,397 | ) | (4,728,019 | ) | (3,048,784 | ) | ||||||
Loss per share - basic and diluted | (0.14 | ) | (0.12 | ) | (0.05 | ) | (0.08 | ) | (0.06 | ) | ||||||
Weighted average number of ordinary shares outstanding - basic and diluted | 122,754,061 | 75,701,818 | 61,131,313 | 57,623,389 | 53,090,491 |
As at June 30, | ||||||||||||||||
2005 | 2004 | 2003 | 2002 | 2001 | ||||||||||||
(in A$ ) | ||||||||||||||||
A-GAAP: | ||||||||||||||||
Cash assets | 21,453,304 | 29,580,398 | 3,463,783 | 3,585,014 | 6,854,873 | |||||||||||
Working capital | 19,427,962 | 27,041,537 | 3,093,745 | 2,840,984 | 6,454,969 | |||||||||||
Total assets | 22,289,159 | 41,415,398 | 16,389,926 | 17,581,319 | 22,287,460 | |||||||||||
Contributed equity | 55,405,707 | 49,505,493 | 16,741,023 | 13,001,486 | 12,276,892 | |||||||||||
Accumulated deficit during development stage | (50,473,473 | ) | (25,464,876 | ) | (15,579,262 | ) | (10,994,424 | ) | (5,545,957 | ) | ||||||
Total equity | 19,594,176 | 38,702,559 | 15,823,703 | 16,668,986 | 21,392,877 | |||||||||||
U.S. GAAP: | ||||||||||||||||
Total assets | 22,289,159 | 34,197,794 | 7,944,306 | 7,231,703 | 10,298,744 | |||||||||||
Accumulated deficit during development stage | (41,783,900 | ) | (24,108,881 | ) | (14,900,682 | ) | (11,656,285 | ) | (6,928,266 | ) | ||||||
Contributed equity | 61,378,076 | 55,593,837 | 22,278,765 | 18,372,088 | 16,332,427 | |||||||||||
Total equity | 19,594,176 | 31,484,956 | 7,378,083 | 6,715,803 | 9,404,161 |
Month | High | Low | |||||
June 2005 | 0.7810 | 0.7472 | |||||
July 2005 | 0.7686 | 0.7364 | |||||
August 2005 | 0.7754 | 0.7461 | |||||
September 2005 | 0.7767 | 0.7453 | |||||
October 2005 | 0.7644 | 0.7436 | |||||
November 2005 | 0.7491 | 0.7259 |
Year Ended June 30, | At Period End | Average Rate | High | Low | ||||
2002 | 0.5614 | 0.5682 | 0.5747 | 0.4858 | ||||
2003 | 0.6713 | 0.5623 | 0.6729 | 0.5280 | ||||
2004 | 0.6903 | 0.7139 | 0.8005 | 0.6345 | ||||
2005 | 0.7620 | 0.7535 | 0.7988 | 0.6852 | ||||
2006 | 0.7301 | 0.7478 | 0.7792 | 0.7014 |
Month | High | Low | ||
April 2006 | 0.7604 | 0.7109 | ||
May 2006 | 0.7792 | 0.7465 | ||
June 2006 | 0.7652 | 0.7269 | ||
July 2006 | 0.7674 | 0.7377 | ||
August 2006 | 0.7715 | 0.7551 | ||
September 2006 | 0.7720 | 0.7463 |
Year Ended June 30, | At Period End | Average Rate | High | Low | |||||||||
2001 | 0.5100 | 0.5320 | 0.5996 | 0.4828 | |||||||||
2002 | 0.5614 | 0.5682 | 0.5747 | 0.4858 | |||||||||
2003 | 0.6713 | 0.5623 | 0.6729 | 0.5280 | |||||||||
2004 | 0.6903 | 0.7139 | 0.8005 | 0.6345 | |||||||||
2005 | 0.7620 | 0.7535 | 0.7988 | 0.6852 |
· | the continued progress of our research and development programs; |
· | the timing, scope, results and costs of pre-clinical studies and clinical trials; |
· | the cost, timing and outcome of regulatory submissions and approvals; |
· | determinations as to the commercial potential of our product candidates; |
· | our ability to successfully expand our contract manufacturing services; |
· | our ability to establish and maintain collaborative arrangements; and |
· | the status and timing of competitive developments. |
· | government or regulatory delays, including delays in obtaining approvals from applicable hospital ethics committees and internal review boards; |
· | slower than expected patient recruitment; |
· | our inability to manufacture sufficient quantities of our new proprietary compound or our other product candidates or matching controls; |
· | unforeseen safety issues; and |
· | lack of efficacy or unacceptable toxicity during the clinical trials. |
· | obtain and maintain patents to protect our own |
· | obtain licenses to the patented technologies of third parties; |
· | operate without infringing on the proprietary rights of third parties; and |
· | protect our trade secrets, know-how and |
· | the receipt and timing of regulatory approvals for the uses that we are studying; |
· | the establishment and demonstration to the medical community of the safety, clinical efficacy and cost-effectiveness of our product candidates and their potential advantages over existing therapeutics and technologies; and |
· | the pricing and reimbursement policies of governments and third-party payors. |
· | the results of pre-clinical testing and clinical trials by us and our competitors; |
· | developments concerning research and development, manufacturing, and marketing alliances or collaborations by us and our competitors; |
· | announcements of technological innovations or new commercial products by us and our competitors; |
· | determinations regarding our patent applications, patents and those of others; |
· | publicity regarding actual or potential results relating to medicinal products under development by us and our competitors; |
· | proposed governmental regulations and developments in Australia, the United States and elsewhere; |
· | litigation; |
· | economic and other external factors; and |
· | period-to-period fluctuations in our operating results. |
· | The Massachusetts General Hospital, Genetics and Aging Unit in Boston. Massachusetts General Hospital is the largest teaching hospital for Harvard Medical School; |
· | The University of Melbourne, Department of Pathology; |
· | The Mental Health Research Institute; and |
· | The Biomolecular Research Institute in Melbourne. |
· | Age-related cataracts; |
· | Parkinson’s disease; |
· | Huntington’s disease; and |
· | other neurodegenerative diseases. |
Invention | Status | Comments | ||
Applicant: The University of Melbourne Assigned to Prana Biotechnology Limited | Patents granted | The invention includes claims directed to the use of specified modulators of cation interaction with | ||
Applicant: Biomolecular Research Institute and University of Melbourne Assigned to Prana Biotechnology Limited | International (PCT) application has entered national phase in Europe, Canada, Japan and the United | The invention encompasses claims to agents capable of inhibiting binding of specified metal ions to the N-terminus of | ||
Applicant: The General Hospital Corporation Licensed to Prana Biotechnology Limited | Patents have been granted in the United States and Japan. | The invention is directed to an assay for the formation of | ||
Applicant: The General Hospital Corporation Licensed to Prana Biotechnology Limited | Two patents granted in the United States and | The invention is directed to an antibody based diagnostic assay for the detection and quantification of | ||
Applicant: The General Hospital Corporation Licensed to Prana Biotechnology Limited | Patents have been granted in Australia and | The invention is directed to the use of specified metal binding agents to reduce | ||
Applicant: The General Hospital Licensed to Prana Biotechnology Limited | The invention includes claims directed to the use of |
Applicant: The General Hospital Corporation Licensed to Prana Biotechnology Limited | Patents granted in Australia and the | The invention is directed to compositions containing | ||
Applicant: The General Hospital Corporation Licensed to Prana Biotechnology Limited | Continuation-in-part patent has been granted in the United States and a further U.S. divisional | The invention is primarily directed to specified assays that identify agents capable of modifying the neurotoxic properties of | ||
Applicants: Prana Biotechnology Limited and The General Hospital Corporation | International (PCT) | The invention is directed to an immunotherapy strategy using tyrosine cross-linked protein aggregates. The | ||
Applicant: The General Hospital Licensed to Prana Biotechnology Limited | International (PCT) | The invention is directed to assays for the detection of agents useful in the treatment of | ||
Applicant: The General Hospital Corporation Licensed to Prana Biotechnology Limited | Application has entered national phase in the United States and | The invention encompasses claims to the identification of agents functioning as copper agonists and the use | ||
Applicant: Prana Biotechnology Limited | Applications have entered national phase in the United States, | The invention encompasses the utility of the 8-hydroxyquinoline MPAC class in the treatment of neurodegenerative cognitive changes. | ||
Applicant: Prana Biotechnology Limited | International (PCT) | The invention is directed to chemical structures of the 8-hydroxyquinoline MPAC class and their utility in the treatment of neurological conditions. |
Applicant: Prana Biotechnology Limited | International (PCT) Application | The invention is directed to alternative MPAC chemical structures and their utility in the treatment of neurological conditions. |
Applicant: Prana Biotechnology Limited | International (PCT) | The invention is directed to ‘F4’ MPAC chemical structures and their utility in the treatment of neurological conditions. | ||
Applicant: Prana Biotechnology Limited | Patent has been granted | This invention is directed to the use of Phanquinone for the treatment of Alzheimer’s disease. | ||
Applicant: Prana Biotechnology Limited | Patent has been granted in the United States. An application in Japan is under examination. | This invention is directed to the use of Phanquinone for the treatment of memory impairment. | ||
Applicant: Prana Biotechnology Limited | Patent has been granted | This invention is directed to the use of | ||
Applicant: Prana Biotechnology Limited. | Patent has been granted | This invention is directed to clioquinol pharmaceutical compositions | ||
Applicant: Prana Biotechnology Limited. | Patent in the United States has been granted. An application in Japan is under examination. | This invention is directed to the use of | ||
“A method of prophylaxis or treatment of cardiovascular indications” Filed: 24 August 2005 Applicant: Prana Biotechnology Limited | Australian Provisional application has been filed. | This invention is directed to MPAC compounds for the treatment of cardiovascular disease. | ||
“A method of prophylaxis or treatment and agents for same”. Filed: 22 June 2006 Applicant: Prana Biotechnology Limited | Australian Provisional application has been filed. | This invention is directed to MPAC compounds for treating selected cancers. |
As of and for the years ended June 30, | As of and for the years ended June 30, | ||||||||||||||||
2005 | 2004 | 2003 | 2006 | 2005 | |||||||||||||
Net loss in accordance with: | |||||||||||||||||
A-GAAP | (25,008,597 | ) | (9,885,614 | ) | (4,584,838 | ) | |||||||||||
A-IFRS | (11,719,309 | ) | (16,094,428 | ) | |||||||||||||
U.S. GAAP | (17,675,019 | ) | (9,208,199 | ) | (3,244,397 | ) | (11,719,309 | ) | (17,799,429 | ) | |||||||
Total equity in accordance with: | |||||||||||||||||
A-GAAP | 19,594,176 | 38,702,559 | 15,823,703 | ||||||||||||||
A-IFRS | 8,729,350 | 19,594,176 | |||||||||||||||
U.S. GAAP | 19,594,176 | 31,484,956 | 7,378,083 | 8,729,350 | 19,594,176 | ||||||||||||
· | Government grants are recorded as income when key milestones set within each agreement are achieved and accepted by all parties to the grant. The agreements provide for payments at different phases based on product development. Milestones are based on the phases of each product development, for example phase 1, phase 2 and phase 3. |
· | Reimbursements of expenses are recognized as |
· | Corporate partner |
Furniture and fittings | 5-33 | % | ||
Computer equipment | 33 | % | ||
Laboratory equipment | 10-33 | % | ||
Leasehold improvements | 33 | % |
Year ended June 30, | |||||||
2006 | 2005 | ||||||
(A$) | |||||||
Net cash used in operating activities | (11,651,215 | ) | (11,418,813 | ) | |||
Net cash used in investing activities | (55,251 | ) | (50,466 | ) | |||
Net cash (used in) provided by financing activities | (2,020 | ) | 4,704,757 | ||||
Net decrease in cash and cash equivalents | (11,708,486 | ) | (6,764,522 | ) | |||
Cash and cash equivalents at beginning of period | 21,453,304 | 29,580,398 | |||||
Exchange rate adjustments on cash held in foreign currencies | (268,960 | ) | (1,362,572 | ) | |||
Cash and cash equivalents at end of period | 10,013,778 | 21,453,304 |
· | costs and timing of obtaining regulatory approvals; |
· | the costs and timing of obtaining, enforcing and defending our patent and intellectual property; |
· | the progress and success of pre-clinical and clinical trials of our product candidates; and |
· | the progress and number of our research programs in development. |
Contractual Obligations | Payments due by period | Payments due by period | ||||||||||||||||||||||||||||||
Total | less than 1 year | 1-3 years | 3-5 years | more than 5 years | Total | less than 1 year | 1-3 years | 3-5 years | more than 5 years | |||||||||||||||||||||||
Operating lease obligations | A$ 204,257 | A$106,569 | $ | A97,688 | A$ -- | A$ -- | A$92,726 | A$92,726 | — | — | — | |||||||||||||||||||||
Purchase obligations * | 3,139,305 | 685,128 | 1,606,481 | $ | 635,191 | 212,505 | ||||||||||||||||||||||||||
Purchase obligations* | A$2,152,887 | A$787,704 | A$1,365,183 | — | — | |||||||||||||||||||||||||||
— | — | |||||||||||||||||||||||||||||||
Total | A$3,343,562 | A$791,697 | A$1,704,1,69 | A$635,191 | A$212,505 | A$2,245,613 | $ | 880,430 | A$1,365,183 | — | — |
* | Includes obligations under our contracts with Professor Ashley Bush, Dr. Ross Murdoch and Mr. Geoffrey Kempler. See Item 5B. “Operating and Financial Review and Prospects - Liquidity and Capital Resources” and Note 16 to our consolidated financial statements. |
Name | Age | Position | ||
Geoffrey P. Kempler | Chairman of the Board of Directors and Chief Executive Officer | |||
Ross Thomas Murdoch | President and Chief Operating Officer | |||
Richard Revelins | Chief Financial Officer and Secretary | |||
Dianne Angus | Senior Vice President of Business Development, Intellectual Property and Research | |||
Peter | 50 | Director | ||
Colin L. | Director | |||
Brian D. | Director | |||
George W. | Director |
Salaries, fees, commissions and bonuses | Pension, retirement and other similar benefits | ||||||
Geoffrey P. Kempler | A$ | (1) | A$ | ||||
Peter Marks | A$75,000 | — | |||||
Colin L. Masters | A$115,000 | — | |||||
Brian D. Meltzer | A$ | A$7,431 | |||||
George W. Mihaly | A$ | — | |||||
All directors and officers as a group, consisting of 2006 | A$ | A$ |
(1) | Under an employment agreement we entered into with Mr. Geoffrey Kempler, Mr. Kempler was entitled to a bonus of A$100,000 for achievement of the satisfactory completion of a successful Phase I trial within the time frame specified by our company’s strategic plan determined by our Board of Directors in the 2006 fiscal year. The Phase I trial for PBT-2 was successfully completed during the year ended June 30, 2006 and as such, the A$100,000 bonus is now payable. This bonus has been included in the above table. See Item 5B. “Operating and Financial Review and Prospects - Liquidity and Capital Resources.” |
· | By our company without cause (as defined in the agreement) or by Mr. Kempler with good reason (as defined in the agreement), Mr. Kempler |
· | By our company with cause (as defined in the agreement) or by Mr. Kempler without good reason (as defined in the agreement), Mr. |
· | Due to death or disability (as defined in the agreement), we shall pay Mr. Kempler or his estate, as applicable, all accrued base salary, pro-rata bonus, business expenses that have not been reimbursed and accrued, unused vacation days (and in the case of disability, less such amounts under any disability policy maintained by our company). |
· | Mr. Kempler or his estate, as applicable, will be entitled to exercise vested options for ordinary shares. |
· | incurred by the person in his or her capacity as an officer of our company or a subsidiary of our company provided that the liability does not arise out of a conduct involving a willful breach of duty in relation to our company or a subsidiary of our company; or |
· | for costs and expenses incurred by that person defending proceedings, whatever their outcome. |
Name | Number of Ordinary Shares Beneficially Owned (1) | Percentage of Ownership (2) | |||
Geoffrey P. Kempler | 18,055,000 | (3)(4) | 14.09% | ||
Richard Revelins437437 | 542,808 | (5)(6) | * | ||
Ross T. Murdoch437437 | 50,000 | (7) | * | ||
Dianne Angus | - | * | |||
Peter Marks | 43,111 | (8) | * | ||
Colin L. Masters | 184,666 | (9) | * | ||
Brian D. Meltzer | 626,666 | (10)(11) | * | ||
George W. Mihaly | 526,666 | (12)(13) | * | ||
All directors and executive officers as a group (seven persons) | 20,028,917 | (14) | 15.63% |
Name | Number of Ordinary Shares Beneficially Owned (1) | Percentage of Ownership (2) | |||
Geoffrey P. Kempler | 18,055,000 | (3)(4) | 14.06% | ||
Richard Revelins | 592,808 | (5)(6) | * | ||
Ross T. Murdoch | 50,000 | (7) | * | ||
Dianne Angus | - | * | |||
Peter Marks | 343,111 | (8)(9) | * | ||
Colin L. Masters | 1,184,666 | (10)(11) | * | ||
Brian D. Meltzer | 626,666 | (12)(13) | * | ||
George W. Mihaly | 526,666 | (14)(15) | * | ||
All directors and executive officers as a group (eight persons) | 21,378,917 | (16) | 16.65% |
(1) | Beneficial ownership is determined in accordance with the rules of the |
(2) | The percentages shown are based on September 21, 2006. |
(3) | Of such shares, 30,000 ordinary shares are held directly by Mr. Kempler, 13,965,000 ordinary shares are held by Baywick Pty Ltd., an Australian corporation owned by Mr. Kempler, 90,000 ordinary shares are held of record by Crystal Triangle Pty Ltd., an Australian corporation owned by Mr. Kempler and 2,970,000 ordinary shares are held of record by NRB Developments Pty Ltd., an Australian corporation in which Mr. Kempler holds a 50% interest. Mr. Kempler may be deemed to be the beneficial owner of the ordinary shares held directly by Baywick Pty Ltd., Crystal Triangle Pty Ltd. and NRB Developments Pty Ltd. |
(4) | Includes 1,000,000 ordinary shares issuable upon the exercise of currently exercisable options |
(5) |
(6) | Includes options to purchase 500,000 ordinary shares exercisable at A$0.50 on or before December 17, 2007 granted under the 2004 ASX Plan (as defined below), held by Darontack Pty Ltd., an Australian corporation owned by Mr. Revelins. |
(7) |
(8) | Of such shares, 43,111 ordinary shares are held by Lampam Pty |
(9) | Includes options to purchase 300,000 ordinary shares at nil consideration on or before June 30, 2010 |
Of such shares, 166,666 ordinary shares are held directly by Dr. Masters, 16,000 ordinary shares are held by Helen Masters, Dr. Masters’ wife, 1,000 ordinary shares are held by Seth Masters, Dr. Masters’ son, and 1,000 ordinary shares are held by Kate Masters, Dr. Masters’ daughter. |
(11) | Includes options to purchase 1,000,000 ordinary shares at nil consideration on or before June 30, 2010 |
Of such shares, 326,666 ordinary shares are held by Navon Pty Ltd., an Australian corporation owned by Mr. Meltzer. |
(13) | Includes 300,000 ordinary shares issuable upon the exercise of currently exercisable options |
(14) |
(15) | Includes 300,000 ordinary shares issuable upon the exercise of currently exercisable options for nil consideration on or before June 30, 2010 |
(16) | See Footnotes (3) - (15). |
Year ended June 30, | |||||||||||||
2005 | 2006 | ||||||||||||
Amount | Weighted average exercise price | Amount | Weighted average exercise price | ||||||||||
Options outstanding at the beginning of the year | 6,500,000 | $ | 0.48 | — | — | ||||||||
Granted | 2,265,000 | — | 6,500,000 | $ | 0.48 | ||||||||
Exercised | — | — | — | — | |||||||||
Forfeited | (37,500 | ) | — | — | — | ||||||||
Options outstanding at the end of the year | 8,727,500 | $ | 0.36 | 6,500,000 | $ | 0.48 | |||||||
Options exercisable at the end of the year | 4,900,000 | $ | 0.64 | 4,900,000 | $ | 0.64 | |||||||
Options that may be granted as of the end of the year | 12,844,061 | 5,071,561 |
Name | Number of Ordinary Shares Beneficially Owned (1) | Percentage of Outstanding Ordinary Shares (2) | Number of Ordinary Shares Beneficially Owned (1) | Percentage of Outstanding Ordinary Shares (2) | ||||||
Geoffrey P. Kempler | 18,055,000 | (3)(4) | 14.09% | 18,055,000 | (3)(4) | 14.06% | ||||
Jagen Nominees Pty Ltd. | 14,008,500 | (5) | 10.93% | |||||||
Jagen Nominees Pty Ltd | 14,008,500 | (5) | 10.91% |
(1) | Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission and generally includes voting or investment power with respect to securities. Ordinary shares relating to options currently exercisable or exercisable within 60 days of the date of this annual report are deemed outstanding for computing the percentage of the person holding such securities but are not deemed outstanding for computing the percentage of any other person. Except as indicated by footnote, and subject to community property laws where applicable, the persons named in the table above have sole voting and investment power with respect to all shares shown as beneficially owned by them. |
(2) | The percentages shown are based on September 21, 2006. |
(3) | Of such shares, 30,000 ordinary shares are held directly by Mr. Kempler, 13,965,000 ordinary shares are held by Baywick Pty Ltd., an Australian corporation owned by Mr. Kempler, 90,000 ordinary shares are held of record by Crystal Triangle Pty Ltd., an Australian corporation owned by Mr. Kempler and 2,970,000 ordinary shares are held of record by NRB Developments Pty Ltd., an Australian corporation in which Mr. Kempler holds a 50% interest. Mr. Kempler may be deemed to be the beneficial owner of the ordinary shares held directly by Baywick Pty Ltd., Crystal Triangle Pty Ltd. and NRB Developments Pty Ltd. |
(4) | Includes 1,000,000 ordinary shares issuable upon the exercise of options, exercisable for nil consideration on or before June 30, |
(5) | Mr. Boris Liberman is the sole owner of Jagen Nominees Pty Ltd. and may be deemed to hold the voting and investment powers for the ordinary shares held by Jagen Nominees Pty Ltd. |
Per Ordinary Share (A$) | ||||||||||
High | Low | |||||||||
Fiscal Year Ended June 30, | ||||||||||
2002 | 2.60 | 0.50 | ||||||||
2003 | 2.39 | 0.44 | ||||||||
2004 | 1.18 | 0.45 | ||||||||
2005 | 0.70 | 0.13 | ||||||||
2006 | 0.30 | 0.15 | ||||||||
Fiscal Year Ended June 30, 2006: | ||||||||||
First Quarter | 0.23 | 0.15 | ||||||||
Second Quarter | 0.30 | 0.16 | ||||||||
Third Quarter | 0.245 | 0.19 | ||||||||
Fourth Quarter | 0.24 | 0.16 | ||||||||
Fiscal Year Ended June 30, 2005: | ||||||||||
First Quarter | 0.69 | 0.49 | ||||||||
Second Quarter | 0.70 | 0.51 | ||||||||
Third Quarter | 0.60 | 0.43 | ||||||||
Fourth Quarter | 0.48 | 0.13 | ||||||||
Month Ended: | ||||||||||
March 2006 | 0.22 | 0.19 | ||||||||
April 2006 | 0.24 | 0.16 | ||||||||
May 2006 | 0.225 | 0.16 | ||||||||
June 2006 | 0.215 | 0.16 | ||||||||
July 2006 | 0.49 | 0.18 | ||||||||
August 2006 | 0.385 | 0.26 |
Per Ordinary Share (A$) | |||||||
High | Low | ||||||
Fiscal Year Ended June 30, | |||||||
2001 | 1.29 | 0.36 | |||||
2002 | 2.60 | 0.50 | |||||
2003 | 2.39 | 0.44 | |||||
2004 | 1.18 | 0.45 | |||||
2005 | 0.70 | 0.13 | |||||
Fiscal Year Ended June 30, 2004: | |||||||
First Quarter | 1.15 | 0.55 | |||||
Second Quarter | 0.72 | 0.45 | |||||
Third Quarter | 0.65 | 0.48 | |||||
Fourth Quarter | �� | 1.18 | 0.58 |
Fiscal Year Ended June 30, 2005: | |||||||
First Quarter | 0.69 | 0.49 | |||||
Second Quarter | 0.70 | 0.51 | |||||
Third Quarter | 0.60 | 0.43 | |||||
Fourth Quarter | 0.48 | 0.13 | |||||
Month Ended: | |||||||
June 2005 | 0.18 | 0.18 | |||||
July 2005 | 0.18 | 0.16 | |||||
August 2005 | 0.23 | 0.18 | |||||
October 2005 | 0.19 | 0.17 | |||||
November 2005 | 0.17 | 0.29 |
Per ADR (US$) | |||||||
High | Low | ||||||
Fiscal Year Ended June 30, | |||||||
2003 (from September 5, 2002) | 12.80 | 2.96 | |||||
2004 | 10.50 | 2.95 | |||||
2005 | 5.19 | 0.98 | |||||
2006 | 2.40 | 1.20 | |||||
Fiscal Year Ended June 30, 2006: | |||||||
First Quarter | 1.73 | 1.20 | |||||
Second Quarter | 2.40 | 1.21 | |||||
Third Quarter | 1.85 | 1.30 | |||||
Fourth Quarter | 1.89 | 1.35 | |||||
Fiscal Year Ended June 30, 2005: | |||||||
First Quarter | 5.19 | 3.40 | |||||
Second Quarter | 5.05 | 3.70 | |||||
Third Quarter | 4.99 | 3.36 | |||||
Fourth Quarter | 3.55 | 0.98 | |||||
Month Ended: | |||||||
March 2006 | 1.69 | 1.30 | |||||
April 2006 | 1.89 | 1.43 | |||||
May 2006 | 1.75 | 1.45 | |||||
June 2006 | 1.89 | 1.35 | |||||
July 2006 | 3.05 | 1.35 | |||||
August 2006 | 3.06 | 2.05 |
Per ADR (US$) | |||||||
High | Low | ||||||
Fiscal Year Ended June 30, | |||||||
2003 (from September 5, 2002) | 12.80 | 2.96 | |||||
2004 | 10.50 | 2.95 | |||||
2005 | 5.19 | 0.98 | |||||
Fiscal Year Ended June 30, 2004: | |||||||
First Quarter | 7.49 | 3.87 | |||||
Second Quarter | 5.65 | 2.95 | |||||
Third Quarter | 5.21 | 3.69 | |||||
Fourth Quarter | 10.50 | 4.43 | |||||
Fiscal Year Ended June 30, 2005: | |||||||
First Quarter | 5.19 | 3.40 | |||||
Second Quarter | 5.05 | 3.70 | |||||
Third Quarter | 4.99 | 3.36 | |||||
Fourth Quarter | 3.55 | 0.98 | |||||
Month Ended: | |||||||
June 2005 | 1.46 | 1.20 | |||||
July 2005 | 1.46 | 1.20 | |||||
August 2005 | 1.73 | 1.35 | |||||
September 2005 | 1.60 | 1.32 | |||||
October 2005 | 1.50 | 1.21 | |||||
November 2005 | 2.23 | 1.25 |
· | you will be required to allocate income recognized upon receiving certain dividends or gain recognized upon the disposition of ADRs ratably over |
· | the amount allocated to each year during which we are considered a PFIC other than the year of the dividend payment or disposition would be subject to tax at the highest individual or corporate tax rate, as the case may be, in effect for that year and an interest charge would be imposed with respect to the resulting tax liability allocated to each such year, |
· | the amount allocated to the current taxable year and any taxable year before we became a PFIC would be taxable as ordinary income in the current year, and |
· | you will be required to make an annual return on IRS Form 8621 regarding distributions received with respect to ADRs and any gain realized on your ADRs. |
· | A direct or indirect owner of a pass-through entity, including a trust or estate, that is a direct or indirect shareholder of a PFIC, |
· | A shareholder of a PFIC that is a shareholder of another PFIC, or |
· | A 50%-or-more shareholder of a foreign corporation that is not a PFIC and that directly or indirectly owns stock of a PFIC. |
ITEM 14. | MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS |
Year Ended June 30, | Year Ended June 30, | |||||||||||||
2005 | 2004 | 2006 | 2005 | |||||||||||
Services Rendered | Fees | Fees | Fees | Fees | ||||||||||
Audit (1) | A$175,481 | A$129,522 | A$202,599 | A$175,481 | ||||||||||
Audit-related | -- | -- | — | — | ||||||||||
Tax (2) | A$11,631 | A$59,580 | A$185 | A$11,631 | ||||||||||
Other (3) | A$14,920 | A$6,900 | A$3,030 | A$14,920 | ||||||||||
Total | A$202,032 | A$196,002 | A$205,814 | A$202,032 |
(1) | Audit fees consist of services that would normally be provided in connection with statutory and regulatory filings or engagements, including services that generally only the independent accountant can reasonably provide. |
(2) | Tax fees relate to services performed by the tax division for tax compliance, planning, and advice. |
(3) | Other fees relate to services performed in respect of the audit of grants received from the Australian Industry Research and Development Board. |
Page | ||
Index to Consolidated Financial Statements | F-0 | |
Report of Independent Registered Public Accounting Firm | F-1 | |
Consolidated | F-2 | |
Consolidated Statements of | F-3 | |
Consolidated | F-4 | |
Consolidated Statements of Changes in Stockholders’ Equity | F-5 | |
Notes to Consolidated Financial Statements | F-6 |
Exhibit | Description | |
1.1 | Constitution of Registrant (1) |
2.1 | Deposit Agreement dated March 23, 2001, among the Registrant and the Bank of New York, as Depositary, and owners and holders of American Depositary Receipts issued thereunder, including the Form of American Depositary Receipts (2) |
4.1 |
Agreement for the Assignment of Patents and Intellectual Property Licensing dated February 8, 2000, between Registrant and the Biomolecular Research Institute (1) |
4.2 | License Agreement dated January 1, 2001, between the Registrant and The General Hospital Corporation (1) |
4.3 | Variation Agreement dated August 8, 2001, between the Registrant and The General Hospital Corporation, which amends the License Agreement dated January 1, 2001, between the parties (1) |
4.4 | Second Amendment to Exclusive License Agreement dated January 1, 2001, between the Registrant and The General Hospital Corporation, dated March 15, 2004, between the between the Registrant and The General Hospital Corporation (6) |
4.5 | Agreement for Services dated February 7, 2000, between the Registrant and Prof. Colin Masters (1) |
4.6 | Agreement to Provide Accounting, Administration, Corporate Advice and Company Secretarial Services dated February 23, 2000, between the Registrant and Malvern Administrative Services (now named The CFO solution) (1) |
4.7 |
Letter agreement dated January 6, 2004, between the Registrant and Kendle Pty Ltd. regarding strategic alliance |
Purchase Agreement dated April 27, 2004, among the Registrant and the investors signatory thereto (3) |
4.10 | Registration Rights Agreement dated April 27, 2004, among the Registrant and the investors signatory thereto (4) |
4.11 | Form of Warrant (5) |
Settlement Agreement dated July 28, 2004, among the Registrant, P.N. Gerolymatos S.A, or PNG, Mr. Gerolymatos, The General Hospital Corporation of Massachusetts, or The GHC, Professor Ashley Bush, Dr. Rudolph Tanzi and Dr. Robert Cherny and the ancillary agreements of even date therewith exhibited thereto, including the Patent Assignment and Settlement Agreement among the Registrant and PNG, Patent Rights Security Agreement among the Registrant and PNG and the Derivatives Agreement among the Registrant and PNG |
4.13 | Prana Biotechnology Limited, Employees and Consultants Option Plan 2000 (1) |
4.14 | Prana Biotechnology Limited, 2004 American Depository Share (ADS) Option Plan |
4.15 | Prana Biotechnology Limited, 2004 Employees’, Directors’ and Consultants’ Share and Option Plan |
4.16 | Employment Agreement dated June 15, 2005, among the Registrant and Mr. Kempler (11) |
4.17 | Employment Agreement effective as of August 7, 2006 among the Registrant and Dr. Ross Murdoch | |
8.1 | List of Subsidiaries of the Registrant |
12.1 | Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as |
12.2 | Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as |
13.1 | Certification of Chief Executive Officer pursuant to 18 U.S.C. Section1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of |
13.2 | Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of | |
15.1 | Consent of Deloitte Touche Tohmatsu, Independent Registered Public Accounting Firm |
(1) | Incorporated by reference to our Registration Statement on Form 20-F filed with the Securities and Exchange Commission on May 28, 2002 (File No. 000-49843). |
(2) | Incorporated by reference to our Registration Statement on Form F-6 filed with the Securities and Exchange Commission on March 9, 2001 (File No. 333-13264). |
(3) | Incorporated by reference to Item 1 of our Report on Form 6-K for the month of April, 2004 (File No. 000-49843). |
(4) | Incorporated by reference to Item 2 of our Report on Form 6-K for the month of April, 2004 (File No. 000-49843). |
(5) | Incorporated by reference to Item 3 of our Report on Form 6-K for the month of April, 2004 (File No. 000-49843). |
(6) | Filed as Exhibit 4.6 to our Annual Report on Form 20-F for the year ended June 30, 2004, and incorporated herein by reference. |
(7) | Filed as Exhibit |
(8) | Filed as Exhibit |
Incorporated by reference to Annexure A to Item 1 of our Report on Form 6-K for the month of November, 2004 (File No. 000-49843). |
Incorporated by reference to Annexure B to Item 1 of our Report on Form 6-K for the month of November, 2004 (File No. 000-49843). |
(11) | Filed as Exhibit 4.25 to our Annual Report on Form 20-F for the year ended June 30, 2005, and incorporated herein by reference. |
Page Number | ||||
Report of Independent Registered Public Accounting Firm | F-1 | |||
Consolidated Balance Sheets | F-2 | |||
Consolidated Statements of | F-3 | |||
Consolidated Cash Flow Statements | F-4 | |||
Consolidated Statements of Changes in Stockholders’ Equity | F-5 | |||
Notes to Consolidated Financial Statements | F-6 |
June 30, | ||||||||||
Notes | 2005 | 2004 | ||||||||
Current Assets | ||||||||||
Cash assets | 21,453,304 | 29,580,398 | ||||||||
Receivables | 5 | 174,476 | 92,917 | |||||||
Other | 6 | 495,165 | 72,769 | |||||||
Total Current Assets | 22,122,945 | 29,746,084 | ||||||||
Non Current Assets | ||||||||||
Property and equipment | 7 | 166,214 | 180,971 | |||||||
Intangible assets | 8 | - | 11,488,343 | |||||||
Total Non Current Assets | 166,214 | 11,669,314 | ||||||||
Total Assets | 22,289,159 | 41,415,398 | ||||||||
Current Liabilities | ||||||||||
Payables | 9 | 2,571,181 | 2,661,950 | |||||||
Provisions | 10 | 78,602 | 42,597 | |||||||
Total Current Liabilities | 2,649,783 | 2,704,547 | ||||||||
Non-Current Liabilities | ||||||||||
Provisions | 10 | 45,200 | 8,292 | |||||||
Total Non-Current Liabilities | 45,200 | 8,292 | ||||||||
Total Liabilities | 2,694,983 | 2,712,839 | ||||||||
Net Assets | 19,594,176 | 38,702,559 | ||||||||
Equity | ||||||||||
Contributed equity 2005: 127,319,260 fully paid ordinary shares 2004: 115,984,380 fully paid ordinary shares | 11 | 55,405,707 | 49,505,493 | |||||||
Reserve | 12 | 14,661,942 | 14,661,942 | |||||||
Accumulated deficit during the development stage | 12 | (50,473,473 | ) | (25,464,876 | ) | |||||
Total Equity | 19,594,176 | 38,702,559 |
Years ended June 30, | Period from | |||||||||||||||
Inception (November 11, 1997) | ||||||||||||||||
2005 | 2004 | 2003 | to June 30, 2005 | |||||||||||||
Notes | ||||||||||||||||
Revenue from ordinary activities | 2 | 2,653,113 | 2,321,227 | 1,816,478 | 8,179,728 | |||||||||||
Depreciation and amortization expense | 3 | (1,165,227 | ) | (1,195,006 | ) | (1,185,973 | ) | (6,502,436 | ) | |||||||
Patents, research and development expense | 3 | (7,109,839 | ) | (4,853,536 | ) | (1,386,006 | ) | (17,797,596 | ) | |||||||
Patents, research and development expense - related parties | 3, 21 | (577,757 | ) | (=(379,045 | ) | (475,289 | ) | (2,280,699 | ) | |||||||
Legal expense | (1,047,448 | ) | (1,650,467 | ) | (848,660 | ) | (4,736,148 | ) | ||||||||
Employee benefits expense | (2,438,303 | ) | (1,060,730 | ) | (760,980 | ) | (4,684,831 | ) | ||||||||
Consulting fee expense | (1,607,892 | ) | (1,706,809 | ) | (567,730 | ) | (4,973,832 | ) | ||||||||
Corporate compliance expense | (562,123 | ) | (419,708 | ) | (395,604 | ) | (1,989,446 | ) | ||||||||
Foreign exchange loss | (1,362,572 | ) | (182,768 | ) | (12,481 | ) | (1,557,821 | ) | ||||||||
Impairment of intangible assets | (10,388,339 | ) | - | - | (10,388,339 | ) | ||||||||||
Other expenses from ordinary activities - related parties | 21 | - | (81,470 | ) | (114,247 | ) | (268,217 | ) | ||||||||
Other expenses from ordinary activities | (1,402,210 | ) | (677,302 | ) | (654,346 | ) | (3,473,836 | ) | ||||||||
Loss from ordinary activities before income tax expense | (25,008,597 | ) | (9,885,614 | ) | (4,584,838 | ) | (50,473,473 | ) | ||||||||
Income tax expense relating to ordinary activities | 4 | - | - | - | - | |||||||||||
Net loss | 12(b) | (25,008,597 | ) | (9,885,614 | ) | (4,584,838 | ) | (50,473,473 | ) | |||||||
Loss per share (basic and diluted) | 18 | (0.20 | ) | (0.13 | ) | (0.08 | ) | N/A | ||||||||
Years Ended June 30, | Period from | |||||||||||||||
Inception (November 11, 1997) | ||||||||||||||||
2005 | 2004 | 2003 | to June 30, 2005 | |||||||||||||
Notes | ||||||||||||||||
Cash Flows from Operating Activities | ||||||||||||||||
Payments to suppliers and employees | (13,959,679 | ) | (7,896,711 | ) | (5,271,577 | ) | (35,638,125 | ) | ||||||||
Interest received | 883,583 | 176,845 | 106,835 | 1,741,413 | ||||||||||||
Government grant received | 532,283 | 909,946 | 836,575 | 3,122,518 | ||||||||||||
Nasdaq reimbursements received | - | - | 231,304 | 231,304 | ||||||||||||
Neuroscience Victoria monies received | 1,125,000 | 1,462,500 | 506,250 | 3,093,750 | ||||||||||||
Net cash flows used in operating activities | 13 (a) | (11,418,813 | ) | (5,347,420 | ) | (3,590,613 | ) | (27,449,140 | ) | |||||||
Cash Flows from Investing Activities | ||||||||||||||||
Payments for purchase of equipment | (50,466 | ) | (134,362 | ) | (87,929 | ) | (356,989 | ) | ||||||||
Net cash flows used in investing activities | (50,466 | ) | (134,362 | ) | (87,929 | ) | (356,989 | ) | ||||||||
Cash Flows from Financing Activities | ||||||||||||||||
Proceeds from issue of shares | - | 33,853,606 | - | 46,854,565 | ||||||||||||
Payment of share issue costs | (48,576 | ) | (2,834,941 | ) | - | (3,667,054 | ) | |||||||||
Proceeds from exercise of options | 4,753,333 | 762,500 | 3,713,792 | 9,812,471 | ||||||||||||
Payment of underwriting costs | - | - | (144,000 | ) | (144,000 | ) | ||||||||||
Repayment of borrowings | - | - | - | (2,038,728 | ) | |||||||||||
Net cash flows provided by financing activities | 4,704,757 | 31,781,165 | 3,569,792 | 50,817,254 | ||||||||||||
Net (decrease)/ increase in cash held | (6,764,522 | ) | 26,299,383 | (108,750 | ) | 23,011,125 | ||||||||||
Opening cash brought forward | 29,580,398 | 3,463,783 | 3,585,014 | - |
Exchange rate adjustments on cash held in foreign currencies | (1,362,572 | ) | (182,768 | ) | (12,481 | ) | (1,557,821 | ) | ||||||||
Closing cash carried forward | 13 (b) | 21,453,304 | 29,580,398 | 3,463,783 | 21,453,304 |
Number of Shares | Contributed Equity | Accumulated Deficit During Development Stage | Asset Revaluation Reserve | Total | ||||||||||||
Balance, November 11, 1997 (Inception) | - | - | - | - | - | |||||||||||
Net loss | - | - | (690 | ) | - | (690 | ) | |||||||||
Issuance of shares to founders | 20 | 20 | - | - | 20 | |||||||||||
Balance, June 30, 1998 | 20 | 20 | (690 | ) | - | (670 | ) | |||||||||
Net loss | - | - | (80,000 | ) | - | (80,000 | ) | |||||||||
Balance, June 30, 1999 | 20 | 20 | (80,690 | ) | - | (80,670 | ) | |||||||||
Net loss | - | - | (1,326,288 | ) | - | (1,326,288 | ) | |||||||||
Revaluation of intangible assets to directors’ valuation | - | - | - | 14,661,942 | 14,661,942 | |||||||||||
297 for 1 share split | 5,920 | - | - | - | - | |||||||||||
Issuance of shares in connection with private placement | 960 | 960 | - | - | 960 | |||||||||||
5,000 for 1 share split | 34,493,100 | - | - | - | - | |||||||||||
Issuance of shares in connection with initial public offering, net of issue costs | 16,000,000 | 7,470,863 | - | - | 7,470,863 | |||||||||||
Issuance of shares in connection with exercise of options | 5,000 | 2,500 | - | - | 2,500 | |||||||||||
Balance, June 30, 2000 | 50,505,000 | 7,474,343 | (1,406,978 | ) | 14,661,942 | 20,729,307 | ||||||||||
Net loss | - | - | (4,138,979 | ) | - | (4,138,979 | ) | |||||||||
Issuance of shares in connection with private placements, net of issue costs | 6,666,666 | 4,745,599 | - | - | 4,745,599 | |||||||||||
Non-cash issuance of shares to consultants | 88,600 | 48,950 | - | - | 48,950 | |||||||||||
Non-cash issuance of options to consultants | - | 8,000 | - | - | 8,000 | |||||||||||
Balance, June 30, 2001 | 57,260,266 | 12,276,892 | (5,545,957 | ) | 14,661,942 | 21,392,877 | ||||||||||
Net loss | - | - | (5,448,467 | ) | - | (5,448,467 | ) | |||||||||
Issuance of shares in connection with exercise of options | 1,160,690 | 580,346 | - | - | 580,346 | |||||||||||
Non-cash issuance of shares to consultants | 191,794 | 144,230 | - | - | 144,230 | |||||||||||
Balance, June 30, 2002 | 58,612,750 | 13,001,468 | (10,994,424 | ) | 14,661,942 | 16,668,986 | ||||||||||
June 30, | ||||||||||
Notes | 2006 | 2005 | ||||||||
Current Assets | ||||||||||
Cash and cash equivalents | 10,013,778 | 21,453,304 | ||||||||
Trade and other receivables | 6 | 194,161 | 174,476 | |||||||
Other current assets | 7 | 110,832 | 495,165 | |||||||
Total Current Assets | 10,318,771 | 22,122,945 | ||||||||
Non Current Assets | ||||||||||
Property and equipment, net of accumulated depreciation of A$508,972 and A$390,776 respectively | 8 | 102,375 | 166,214 | |||||||
Total Non Current Assets | 102,375 | 166,214 | ||||||||
Total Assets | 10,421,146 | 22,289,159 | ||||||||
Current Liabilities | ||||||||||
Trade and other payables | 9 | 1,538,358 | 2,571,181 | |||||||
Provisions | 10 | 76,672 | 78,602 | |||||||
Total Current Liabilities | 1,615,030 | 2,649,783 | ||||||||
Non-Current Liabilities | ||||||||||
Provisions | 10 | 76,766 | 45,200 | |||||||
Total Non-Current Liabilities | 76,766 | 45,200 | ||||||||
Total Liabilities | 1,691,796 | 2,694,983 | ||||||||
Commitments and contingencies | 11 | |||||||||
Net Assets | 8,729,350 | 19,594,176 | ||||||||
Equity | ||||||||||
Issued capital 2006: 128,144,260 fully paid ordinary shares 2005: 127,319,260 fully paid ordinary shares | 12 | 55,097,675 | 54,662,445 | |||||||
Reserves | 13 | 2,867,249 | 2,447,996 | |||||||
Accumulated deficit during the development stage | 14 | (49,235,574 | ) | (37,516,265 | ) | |||||
Total Equity | 8,729,350 | 19,594,176 |
Years ended June 30, | ||||||||||
Notes | 2006 | 2005 | ||||||||
Revenues | 2 | 762,023 | 892,135 | |||||||
Other income | 3 | 288,263 | 1,760,978 | |||||||
Research and development expenses | 4 | (7,613,045 | ) | (7,109,839 | ) | |||||
Research and development expenses - related party | 4 | - | (577,757 | ) | ||||||
Personnel expenses | 4 | (3,418,008 | ) | (5,750,929 | ) | |||||
Intellectual property expenses | 4 | (466,426 | ) | (729,583 | ) | |||||
Audit fees | 21 | (205,815 | ) | (202,032 | ) | |||||
Travel expenses | (212,184 | ) | (432,316 | ) | ||||||
Marketing expenses | (134,750 | ) | (442,920 | ) | ||||||
Depreciation expenses | 4 | (118,196 | ) | (65,223 | ) | |||||
Amortization expenses | 4 | - | (83,200 | ) | ||||||
Other expenses | 4 | (824,625 | ) | (1,204,930 | ) | |||||
Other expenses - related party | - | - | ||||||||
Foreign exchange gain/(loss) | 223,454 | (1,362,572 | ) | |||||||
Impairment of intangible assets | - | (786,240 | ) | |||||||
Loss before income tax expense | (11,719,309 | ) | (16,094,428 | ) | ||||||
Income tax expense | 5 | - | - | |||||||
Net loss | 14 | (11,719,309 | ) | (16,094,428 | ) | |||||
Loss per share (basic and diluted) | 19 | (0.09 | ) | (0.13 | ) | |||||
Weighted average number of ordinary shares used in computing basic and diluted net loss per share | 128,053,601 | 122,754,061 |
Years Ended June 30, | ||||||||||
Notes | 2006 | 2005 | ||||||||
Cash Flows from Operating Activities | ||||||||||
Payments to suppliers and employees | (12,647,636 | ) | (13,333,739 | ) | ||||||
Payments to suppliers and employees - related party | - | (625,940 | ) | |||||||
Interest received | 764,711 | 883,583 | ||||||||
Government grant received | 231,710 | 532,283 | ||||||||
Neuroscience Victoria monies received | - | 1,125,000 | ||||||||
Net cash flows used in operating activities | 15 (a) | (11,651,215 | ) | (11,418,813 | ) | |||||
Cash Flows from Investing Activities | ||||||||||
Proceeds from sale of equipment | 375 | - | ||||||||
Payments for purchase of equipment | (55,626 | ) | (50,466 | ) | ||||||
Net cash flows used in investing activities | (55,251 | ) | (50,466 | ) | ||||||
Cash Flows from Financing Activities | ||||||||||
Proceeds from exercise of options | - | 4,753,333 | ||||||||
Payment of share issue costs | (2,020 | ) | (48,576 | ) | ||||||
Net cash flows (used in) / provided by financing activities | (2,020 | ) | 4,704,757 | |||||||
Net (decrease) in cash and cash equivalents | (11,708,486 | ) | (6,764,522 | ) | ||||||
Opening cash and cash equivalents brought forward | 21,453,304 | 29,580,398 | ||||||||
Exchange rate adjustments on cash and cash equivalents held in foreign currencies | 268,960 | (1,362,572 | ) | |||||||
Closing cash and cash equivalents carried forward | 15 (b) | 10,013,778 | 21,453,304 |
Notes | Number of Shares | Issued Capital | Share Based Payment Reserve | Accumulated Deficit During Development Stage | Total | ||||||||||||||
Balance, June 30, 2004 | 115,984,380 | 49,505,493 | - | (21,421,837 | ) | 28,083,656 | |||||||||||||
Net loss | 14 | - | - | - | (16,094,428 | ) | (16,094,428 | ) | |||||||||||
Issuance of shares in connection with exercise of options, net of issue costs | 12(b) | 9,506,666 | 4,145,811 | - | - | 4,145,811 | |||||||||||||
Non-cash issuance of shares to consultants and directors | 12(b) | 478,214 | 255,141 | - | - | 255,141 | |||||||||||||
Non-cash issuance of shares for settlement of litigation | 12(b) | 1,350,000 | 756,000 | - | - | 756,000 | |||||||||||||
Non-cash issuance of options to directors and employees | 13(b) & (c) | - | - | 1,704,734 | - | 1,704,734 | |||||||||||||
Non-cash issuance of options to consultants | 13(b) | - | - | 289,699 | - | 289,699 | |||||||||||||
Non-cash issuance of warrants to consultants | 13(d) | - | - | 453,563 | - | 453,563 | |||||||||||||
Balance, June 30, 2005 | 127,319,260 | 54,662,445 | 2,447,996 | (37,516,265 | ) | 19,594,176 | |||||||||||||
Net loss | 14 | - | - | (11,719,309 | ) | (11,719,309 | ) | ||||||||||||
Non-cash issuance of shares to consultants | 12(b) | 825,000 | 435,230 | - | - | 435,230 | |||||||||||||
Non-cash issuance of options to consultants | 13(b) | - | - | 181,550 | - | 181,550 | |||||||||||||
Non-cash issuance of options to directors and employees | 13(b) | - | - | 76,470 | - | 76,470 | |||||||||||||
Amortization of option expenses | 13(b) | - | - | 161,233 | - | 161,233 | |||||||||||||
Balance, June 30, 2006 | 128,144,260 | 55,097,675 | 2,867,249 | (49,235,574 | ) | 8,729,350 |
Number of Shares | Contributed Equity | Accumulated Deficit During Development Stage | Asset Revaluation Reserve | Total | ||||||||||||
Net loss | - | - | (4,584,838 | ) | - | (4,584,838 | ) | |||||||||
Issuance of shares in connection with exercise of options, net of underwriting costs | 7,427,584 | 3,569,792 | - | - | 3,569,792 | |||||||||||
Non-cash issuance of shares to consultants | 146,969 | 169,763 | - | - | 169,763 | |||||||||||
Balance, June 30, 2003 | 66,187,303 | 16,741,023 | (15,579,262 | ) | 14,661,942 | 15,823,703 | ||||||||||
Net loss | - | - | (9,885,614 | ) | - | (9,885,614 | ) | |||||||||
Issuance of shares in connection with private placements, net of issue costs | 47,102,853 | 31,018,665 | - | - | 31,018,665 | |||||||||||
Issuance of shares in connection with exercise of options | 1,325,000 | 762,500 | - | - | 762,500 | |||||||||||
Non-cash issuance of shares to consultants and directors | 1,369,224 | 983,305 | - | - | 983,305 | |||||||||||
Balance, June 30, 2004 | 115,984,380 | 49,505,493 | (25,464,876 | ) | 14,661,942 | 38,702,559 | ||||||||||
Net loss | - | - | (25,008,597 | ) | - | (25,008,597 | ) | |||||||||
Issuance of shares in connection with exercise of options, net of issue costs | 9,506,666 | 4,708,574 | - | - | 4,708,574 | |||||||||||
Non-cash issuance of shares to consultants and directors | 478,214 | 255,141 | - | - | 255,141 | |||||||||||
Non-cash issuance of shares for settlement of litigation | 1,350,000 | 756,000 | - | - | 756,000 | |||||||||||
Non-cash issuance of options to consultants | - | 180,499 | - | - | 180,499 | |||||||||||
Balance, June 30, 2005 | 127,319,260 | 55,405,707 | (50,473,473 | ) | 14,661,942 | 19,594,176 |
· | The most recently prepared cash flow forecasts prepared by management and reviewed by the directors indicate that the consolidated entity will have sufficient cash to meet their current operating requirements until at least March 2007, being the expected signing date of the Director’s Declaration for the half-year ending 31 December 2006. |
· | Since inception, the consolidated entity have been able to raise funds to advance their research processes. To date, the consolidated entity have raised in excess of $55 million in equity and are presently in discussions with various potential institutional investors as well as corporate partners in relation to potential partnering and licensing opportunities. These potential relationships would further enable the consolidated entity to continue their current business objectives. |
· | In the event that additional funding is not obtained, the consolidated entity may have to significantly reduce their expenditure on research and development programs and other costs. |
(a) | Principles of consolidation |
(b) |
(c) |
Property and equipment |
5-33% | ||
Computer equipment | 33% | |
Leased |
Financial Instruments - Loans and Receivables |
(f) | Impairment of Assets |
(g) | Intangibles - Research and Development |
(h) | Foreign Currency Transactions and Balances |
(i) | Employee Benefits |
(j) | Provisions |
Cash and cash equivalents |
(l) | Revenue |
(m) | Other income |
(n) | Share Capital |
(o) | Trade and other payables |
(p) | Share-based payments |
(q) | Loss per share |
(r) | Goods and Services Tax (GST) |
(s) | Adoption of Australian Equivalents to International Financial Reporting Standards |
Consolidated | |||||||||||||
Effect of A-IFRS on the balance sheet as at July 1, 2004 | Superseded Policies at July 1, 20041 | Adjustment on introduction of A-IFRS | A-IFRS at July 1, 2004 | ||||||||||
Note | $ | $ | $ | ||||||||||
Current Assets | |||||||||||||
Cash and cash equivalents | 29,580,398 | - | 29,580,398 | ||||||||||
Trade and other receivables | 92,917 | - | 92,917 | ||||||||||
Other current assets | 72,769 | - | 72,769 | ||||||||||
Total current assets | 29,746,084 | - | 29,746,084 | ||||||||||
Non-current assets | |||||||||||||
Property and equipment | 180,971 | - | 180,971 | ||||||||||
Intangible assets | (b) | 11,488,343 | (10,618,,903 | ) | 869,440 | ||||||||
Total Non-Current Assets | 11,669,314 | (10,618,903 | ) | 1,050,411 | |||||||||
Total Assets | 41,415,398 | (10,618,903 | ) | 30,796,495 | |||||||||
Current Liabilities | |||||||||||||
Trade and other payables | 2,661,950 | - | 2,661,950 | ||||||||||
Provisions | 42,597 | - | 42,597 | ||||||||||
Total Current Liabilities | 2,704,547 | - | 2,704,547 | ||||||||||
Non-current liabilities | |||||||||||||
Provisions | 8,292 | - | 8,292 | ||||||||||
Total Non-current Liabilities | 8,292 | - | 8,292 | ||||||||||
Commitments and Contingencies | |||||||||||||
Total Liabilities | 2,712,839 | - | 2,712,839 | ||||||||||
Net assets | 38,702,559 | (10,618,903 | ) | 28,083,656 | |||||||||
Equity | |||||||||||||
Issued capital | 49,505,493 | - | 49,505,493 | ||||||||||
Reserves | (b) | 14,661,942 | (14,661,942 | ) | - | ||||||||
Accumulated deficit during the development stage | (d) | (25,464,876 | ) | 4,043,039 | (21,421,837 | ) | |||||||
Total Equity | 38,702,559 | (10,618,903 | ) | 28,083,656 |
Consolidated | |||||||||||||
Effect of A-IFRS on the balance sheet as at June 30, 2005 | Superseded Policies at June 30, 20051 | Adjustment on introduction of A-IFRS | A-IFRS at June 30, 2005 | ||||||||||
Note | $ | $ | $ | ||||||||||
Current Assets | |||||||||||||
Cash and cash equivalents | 21,453,304 | - | 21,453,304 | ||||||||||
Trade and other receivables | 174,476 | - | 174,476 | ||||||||||
Other current assets | 495,165 | - | 495,165 | ||||||||||
Total Current Assets | 22,122,945 | - | 22,122,945 | ||||||||||
Non-Current Assets | |||||||||||||
Property and equipment | 166,214 | - | 166,214 | ||||||||||
Total Non-Current Assets | 166,214 | - | 166,214 | ||||||||||
Total Assets | 22,289,159 | - | 22,289,159 | ||||||||||
Current Liabilities | |||||||||||||
Trade and other payables | 2,571,181 | - | 2,571,181 | ||||||||||
Provisions | 78,602 | - | 78,602 | ||||||||||
Total Current Liabilities | 2,649,783 | - | 2,649,783 | ||||||||||
Non-Current Liabilities | |||||||||||||
Provisions | 45,200 | - | 45,200 | ||||||||||
Total Non-Current Liabilities | 45,200 | - | 45,200 | ||||||||||
Commitments and Contingencies | |||||||||||||
Total Liabilities | 2,694,983 | - | 2,694,983 | ||||||||||
Net Assets | 19,594,176 | - | 19,594,176 | ||||||||||
Equity | |||||||||||||
Issued capital | (a) | 55,405,707 | (743,262 | ) | 54,662,445 | ||||||||
Reserves | (a) & (b) | 14,661,942 | (12,213,946 | ) | 2,447,996 | ||||||||
Accumulated deficit during the development stage | (d) | (50,473,473 | ) | 12,957,208 | (37,516,265 | ) | |||||||
Total Equity | 19,594,176 | - | 19,594,176 | ||||||||||
Note | Historical A-GAAP Consolidated | AASB 2: Share-Based Payments | AASB 138: Intangible Assets | Pro Forma A-IFRS Consolidated | ||||||||||||
Revenues From Ordinary Activities | 2,653,113 | - | - | 2,653,113 | ||||||||||||
Depreciation and amortization expense | B | (1,165,227 | ) | - | 1,016,804 | (148,423 | ) | |||||||||
Patents, research and development expense | (7,109,839 | ) | - | - | (7,109,839 | ) | ||||||||||
Patents, research and development expense- related parties | (577,757 | ) | - | - | (577,757 | ) | ||||||||||
Legal expense | (1,047,448 | ) | - | - | (1,047,448 | ) | ||||||||||
Employee benefits expense | A | (2,438,303 | ) | (1,704,734 | ) | - | (4,143,037 | ) | ||||||||
Consulting fee expense | (1,607,892 | ) | - | - | (1,607,892 | ) | ||||||||||
Corporate compliance expense | (562,123 | ) | - | - | (562,123 | ) | ||||||||||
Foreign exchange loss | (1,362,572 | ) | - | - | (1,362,572 | ) | ||||||||||
Impairment of intangible assets | B | (10,388,339 | ) | - | 9,602,099 | (786,240 | ) | |||||||||
Other expenses from ordinary activities - related parties | - | - | - | - | ||||||||||||
Other expenses from ordinary activities | (1,402,210 | ) | - | - | (1,402,210 | ) | ||||||||||
Loss From Ordinary Activities Before Income Tax Expense | (25,008,597 | ) | (1,704,734 | ) | 10,618,903 | (16,094,428 | ) | |||||||||
Income Tax Expense Relating To Ordinary Activities | - | - | - | - | ||||||||||||
Net Loss | (25,008,597 | ) | (1,704,734 | ) | 10,618,903 | (16,094,428 | ) |
Consolidated | |||||||||||||
Effect of A-IFRS on the statement of operations for the financial year ended June 30, 2005 | Superseded Policies 1 | Adjustment on introduction of A-IFRS | A-IFRS | ||||||||||
Note | $ | $ | $ | ||||||||||
Revenue | (e | ) | 2,653,113 | (1,760,978 | ) | 892,135 | |||||||
Other income | (e | ) | - | 1,760,978 | 1,760,978 | ||||||||
Research and development expenses | (7,109,839 | ) | - | (7,109,839 | ) | ||||||||
Research and development expenses - related party | (577,757 | ) | - | (577,757 | ) | ||||||||
Personnel expenses | (a | ) | (4,046,195 | ) | (1,704,734 | ) | (5,750,929 | ) | |||||
Intellectual property expenses | (729,583 | ) | - | (729,583 | ) | ||||||||
Audit fees | (202,032 | ) | - | (202,032 | ) | ||||||||
Travel expenses | (432,316 | ) | - | (432,316 | ) | ||||||||
Marketing expenses | (442,920 | ) | - | (442,920 | ) | ||||||||
Depreciation expense | (65,223 | ) | - | (65,223 | ) | ||||||||
Amortization expenses | (b | ) | (1,100,004 | ) | 1,016,804 | (83,200 | ) | ||||||
Other expenses | (1,204,930 | ) | - | (1,204,930 | ) | ||||||||
Foreign exchange gain/(loss) | (b | ) | (1,362,572 | ) | - | (1,362,572 | ) | ||||||
Impairment of intangible assets | (10,388,339 | ) | 9,602,099 | (786,240 | ) | ||||||||
LOSS BEFORE INCOME TAX EXPENSE | (25,008,597 | ) | 8,914,169 | (16,094,428 | ) | ||||||||
INCOME TAX EXPENSE | - | - | - | ||||||||||
NET LOSS | (25,008,597 | ) | 8,914,169 | (16,094,428 | ) |
Note | Historical A-GAAP Consolidated | AASB 2: Share-Based Payments | AASB 138 Intangible Assets | Pro Forma A-IFRS Consolidated | ||||||||||||
Current Assets | ||||||||||||||||
Cash assets | 21,453,304 | - | - | 21,453,304 | ||||||||||||
Receivables | 174,476 | - | - | 174,476 | ||||||||||||
Other | 495,165 | - | - | 495,165 | ||||||||||||
Total Current Assets | 22,122,945 | - | - | 22,122,945 | ||||||||||||
Non-current Assets | ||||||||||||||||
Property and equipment | 166,214 | - | - | 166,214 | ||||||||||||
Total Non-current Assets | 166,214 | - | - | 166,214 | ||||||||||||
Total Assets | 22,289,159 | - | - | 22,289,159 | ||||||||||||
Current Liabilities | ||||||||||||||||
Payables | 2,571,181 | - | - | 2,571,181 | ||||||||||||
Provisions | 78,602 | - | - | 78,602 | ||||||||||||
Total Current Liabilities | 2,649,783 | - | - | 2,649,783 | ||||||||||||
Non-current Liabilities | ||||||||||||||||
Provisions | 45,200 | - | - | 45,200 | ||||||||||||
Total Non-current Liabilities | 45,200 | - | - | 45,200 | ||||||||||||
Total Liabilities | 2,694,983 | - | - | 2,694,983 | ||||||||||||
Net Assets | 19,594,176 | - | - | 19,594,176 | ||||||||||||
Equity | ||||||||||||||||
Contributed equity | A | 55,405,707 | 1,704,734 | - | 57,110,441 | |||||||||||
Reserves | B | 14,661,942 | - | (14,661,942 | ) | - | ||||||||||
Accumulated deficit during the development stage | A&B | (50,473,473 | ) | (1,704,734 | ) | 14,661,942 | (37,516,265 | ) | ||||||||
Total Equity | 19,594,176 | - | - | 19,594,176 | ||||||||||||
June 30, 2005 | July 1, 2004 | ||||||
A$ | A$ | ||||||
Expensing of share-based payments (a) | (1,704,734 | ) | - | ||||
Derecognition of revaluation (b) | 14,661,942 | 14,661,942 | |||||
Derecognition of intangible assets (b) | - | (10,618,903 | ) | ||||
Total adjustment to accumulated deficit | 12,957,208 | 4,043,039 |
Years Ended June 30, | ||||||||||
2005 | 2004 | 2003 | ||||||||
2. REVENUE FROM ORDINARY ACTIVITIES | ||||||||||
Interest - Other persons/corporations | 892,135 | 211,327 | 111,686 | |||||||
Government grant (i) | 629,692 | 647,400 | 967,000 | |||||||
Nasdaq reimbursements (ii) | - | - | 231,304 | |||||||
Corporate partner revenues (iii) | 1,125,000 | 1,462,500 | 506,250 | |||||||
Other revenues | 6,286 | - | 238 | |||||||
Total revenues from ordinary activities | 2,653,113 | 2,321,227 | 1,816,478 | |||||||
Years Ended June 30, | |||||||
2006 | 2005 | ||||||
2. REVENUE | |||||||
Interest | 762,023 | 892,135 | |||||
3. OTHER INCOME | |||||||
Government grant (i) | 288,173 | 629,692 | |||||
Corporate partner revenues (ii) | - | 1,125,000 | |||||
Other income | 90 | 6,286 | |||||
Total other income | 288,263 | 1,760,978 | |||||
Years Ended June 30, | |||||||
2006 | 2005 | ||||||
4. EXPENSES FROM ORDINARY ACTIVITIES | |||||||
Research and development expense | |||||||
Research and development | 7,613,045 | 7,109,839 | |||||
Research and development - related parties | - | 577,757 | |||||
Total research and development expense | 7,613,045 | 7,687,596 | |||||
Personnel expenses | |||||||
Employees | 1,578,934 | 1,516,077 | |||||
Equity based payments - employees | 54,662 | - | |||||
Consultants and directors | 1,432,371 | 1,640,861 | |||||
Equity based payments - consultants and directors | 352,041 | 2,593,991 | |||||
Total personnel expense | 3,418,008 | 5,750,929 | |||||
Intellectual property expenses | |||||||
Overseas | 259,848 | 357,590 | |||||
Local | 206,578 | 371,993 | |||||
Total intellectual property expense | 466,426 | 729,583 |
Years Ended June 30, | ||||||||||
2005 | 2004 | 2003 | ||||||||
3. EXPENSES FROM ORDINARY ACTIVITIES | ||||||||||
Depreciation of non-current assets | ||||||||||
Equipment | 65,223 | 95,002 | 85,971 | |||||||
Amortization of non-current assets | ||||||||||
Core intellectual property | 1,100,004 | 1,100,004 | 1,100,002 | |||||||
Total depreciation and amortization expense | 1,165,227 | 1,195,006 | 1,185,973 |
Patents, research and development expense | ||||||||||
Research and development | 7,109,839 | 4,853,536 | 1,242,481 | |||||||
Research and development - related parties | 577,757 | 379,045 | 475,289 | |||||||
Patents | - | - | 143,525 | |||||||
Total patents, research and development expense | 7,687,596 | 5,232,581 | 1,861,295 | |||||||
Rental expense under operating leases | 105,911 | 6,947 | - | |||||||
4. INCOME TAX | ||||||||||
(a) Prima facie income tax benefit calculated on the loss from ordinary activities before income tax: | ||||||||||
Income tax benefit calculated at 30% | 7,502,579 | 2,965,684 | 1,375,451 | |||||||
Effect of lower tax rates of tax on overseas income | (4,567 | ) | - | - | ||||||
(Over)/under provision of income tax in previous year | 2,258,204 | 1,052,868 | - | |||||||
Non-deductible amortization expense | (330,001 | ) | (330,001 | ) | (330,001 | ) | ||||
Other non-deductible expenses | (3,426,262 | ) | (497,360 | ) | (300,312 | ) | ||||
Timing differences and tax losses not brought to account as future income tax benefits (Note 4(b)) | (5,999,953 | ) | (3,191,191 | ) | (745,138 | ) | ||||
Income tax expense relating to ordinary activities | - | - | - | |||||||
(b) Potential future tax benefits at 30% not brought to account attributable to: | ||||||||||
Tax losses - revenue | 11,700,174 | 6,097,949 | 3,005,525 | |||||||
Timing differences | 506,046 | 108,318 | 9,551 | |||||||
12,206,220 | 6,206,267 | 3,015,076 |
Years Ended June 30, | |||||||
2006 | 2005 | ||||||
Depreciation of non-current assets | |||||||
Laboratory equipment | 36,432 | 22,367 | |||||
Computer equipment | 30,135 | 33,306 | |||||
Furniture and fittings | 7,434 | 4,219 | |||||
Leasehold improvements | 44,195 | 5,331 | |||||
Total depreciation expense | 118,196 | 65,223 | |||||
Amortization expenses | |||||||
Core intellectual property | - | 83,200 | |||||
Total amortization expense | - | 83,200 | |||||
Other expenses | |||||||
Corporate compliance | 129,466 | 429,616 | |||||
Office expenses | 475,957 | 515,869 | |||||
Computer expenses | 25,470 | 28,592 | |||||
Insurance | 192,917 | 191,705 | |||||
Other | 815 | 39,148 | |||||
Total other expenses | 824,625 | 1,204,930 | |||||
5. INCOME TAX | |||||||
(a) The prima facie tax on net (loss) before tax is reconciled to the income tax is as follows: | |||||||
Prima facie tax income on net (loss) before income tax at 30% (2005: 30%) | (3,515,793 | ) | (4,828,328 | ) | |||
Effect of lower tax rates of tax on overseas income | (4,142 | ) | 4,567 | ||||
Add tax effect of: | |||||||
(Over) provision of income tax in previous year | (1,304,611 | ) | (2,258,204 | ) | |||
Equity issued for nil consideration | 122,011 | 778,197 | |||||
Other | 2,848 | 4,665 | |||||
Deferred tax asset not recognized | 4,699,687 | 6,299,103 | |||||
Income tax expense attributable to loss before income tax | - | - | |||||
(b) Potential deferred tax asset at June 30, 2006 and 2005 in respect of tax losses not brought to account is: | 16,529,172 | 11,700,174 | |||||
Temporary Differences | 376,735 | 506,046 |
June 30, | |||||||
2005 | 2004 | ||||||
5. CURRENT RECEIVABLES | |||||||
Government grant receivable (inclusive of GST) | - | 1,390 | |||||
Sundry debtors and other | 121,037 | 39,571 | |||||
Goods and services tax receivable | 53,439 | 51,956 | |||||
174,476 | 92,917 |
6. OTHER ASSETS | |||||||
Prepayments | 495,165 | 71,609 | |||||
Withholding tax | - | 1,160 | |||||
495,165 | 72,769 |
7. PROPERTY AND EQUIPMENT | |||||||||||||||||
June 30, | |||||||||||||||||
Notes | 2006 | 2005 | |||||||||||||||
6. TRADE AND OTHER RECEIVABLES | |||||||||||||||||
Accrued income | 119,457 | 48,123 | |||||||||||||||
Goods and services tax receivable | 73,006 | 53,439 | |||||||||||||||
Other debtors | 1,698 | 72,914 | |||||||||||||||
194,161 | 174,476 | ||||||||||||||||
7. OTHER CURRENT ASSETS | |||||||||||||||||
Prepayments | 68,453 | 495,165 | |||||||||||||||
Term Deposit A$ | 42,379 | - | |||||||||||||||
110,832 | 495,165 | ||||||||||||||||
8. PROPERTY AND EQUIPMENT | |||||||||||||||||
Gross carrying amount | |||||||||||||||||
Balance at beginning of year | 506,523 | 372,161 | 556,989 | 506,523 | |||||||||||||
Additions | 50,466 | 134,362 | 55,626 | 50,466 | |||||||||||||
Disposals | - | - | (8,626 | ) | - | ||||||||||||
Balance at end of year | 556,989 | 506,523 | 603,989 | 556,989 | |||||||||||||
Accumulated depreciation | |||||||||||||||||
Balance at beginning of year | (325,552 | ) | (230,550 | ) | (390,775 | ) | (325,552 | ) | |||||||||
Disposals | - | - | 7,357 | - | |||||||||||||
Depreciation expense | (65,223 | ) | (95,002 | ) | 3 | (118,196 | ) | (65,223 | ) | ||||||||
Balance at end of year | (390,775 | ) | (325,552 | ) | (501,614 | ) | (390,775 | ) | |||||||||
Net book value at end of year | 166,214 | 180,971 | 102,375 | 166,214 | |||||||||||||
8.PROPERTY AND EQUIPMENT continued |
June 30, | |||||||
2005 | 2004 | ||||||
Laboratory equipment, at cost | 325,899 | 325,899 | |||||
Less accumulated depreciation | (314,707 | ) | (292,340 | ) | |||
Total laboratory equipment | 11,192 | 33,559 | |||||
Computer equipment, at cost | 116,652 | 81,109 | |||||
Less accumulated depreciation | (64,510 | ) | (31,204 | ) | |||
Total computer equipment | 52,142 | 49,905 | |||||
Furniture and fittings, at cost | 43,039 | 29,304 | |||||
Less accumulated depreciation | (5,636 | ) | (1,417 | ) | |||
Total furniture and fittings | 37,403 | 27,887 | |||||
Leasehold improvements, at cost | 71,399 | 70,211 | |||||
Less accumulated depreciation | (5,922 | ) | (591 | ) | |||
Total leasehold improvements | 65,477 | 69,620 | |||||
Total | 166,214 | 180,971 | |||||
8. INTANGIBLE ASSETS | |||||||
Core intellectual property - at deemed cost | 16,500,000 | 16,500,000 | |||||
Accumulated amortization | (6,111,661 | ) | (5,011,657 | ) | |||
Impairment of core intellectual property | (10,388,339 | ) | - | ||||
- | 11,488,343 |
June 30, | ||||||||||
Notes | 2006 | 2005 | ||||||||
Property and equipment, at cost | 368,960 | 325,899 | ||||||||
Less accumulated depreciation | (351,139 | ) | (314,707 | ) | ||||||
Total property and equipment | 17,821 | 11,192 | ||||||||
Computer equipment, at cost | 120,209 | 116,652 | ||||||||
Less accumulated depreciation | (87,287 | ) | (64,510 | ) | ||||||
Total computer equipment | 32,922 | 52,142 | ||||||||
Furniture and fittings, at cost | 43,421 | 43,039 | ||||||||
Less accumulated depreciation | (13,070 | ) | (5,636 | ) | ||||||
Total furniture and fittings | 30,351 | 37,403 | ||||||||
Leasehold improvements, at cost | 71,399 | 71,399 | ||||||||
Less accumulated depreciation | (50,118 | ) | (5,922 | ) | ||||||
Total leasehold improvements | 21,281 | 65,477 | ||||||||
Total | 102,375 | 166,214 | ||||||||
9. TRADE AND OTHER PAYABLES | ||||||||||
Trade creditors | 952,145 | 1,235,320 | ||||||||
Accrued research and development expenses | 242,113 | 171,031 | ||||||||
Accrued intellectual property expenses | 14,764 | 32,586 | ||||||||
Accrued personnel expenses | 20,894 | 683,482 | ||||||||
Accrued audit fees | 111,213 | 116,220 | ||||||||
Accrued PR and marketing expense | 14,531 | 50,737 | ||||||||
Other accrued expenses | 67,698 | 200,342 | ||||||||
Deferred revenue | - | 56,463 | ||||||||
Amounts payable to Directors | 115,000 | 25,000 | ||||||||
1,538,358 | 2,571,181 | |||||||||
10. PROVISIONS | ||||||||||
Current | ||||||||||
Annual leave | 17 | 76,672 | 78,602 | |||||||
Non-Current | ||||||||||
Long service leave | 17 | 76,766 | 45,200 |
June 30, | ||||||||||
Notes | 2006 | 2005 | ||||||||
12. ISSUED CAPITAL | ||||||||||
(a) Issued Capital | ||||||||||
Fully paid ordinary shares | 11(b) | 55,097,675 | 54,662,445 | |||||||
Warrants over ADRs | 11(c) | - | - | |||||||
55,097,675 | 54,662,445 |
June 30, | ||||||||||
2005 | 2004 | |||||||||
Notes | ||||||||||
9. PAYABLES (CURRENT) | ||||||||||
Trade creditors | 1,235,320 | 336,779 | ||||||||
Accrual for settlement of patent dispute | - | 971,764 | ||||||||
Accrued patents, research and development expenses | 171,031 | 483,289 | ||||||||
Accrued legal expense | 189,199 | 72,059 | ||||||||
Accrued employee benefits expense | 192,386 | 5,894 | ||||||||
Accrued consulting expense | 476,033 | 90,256 | ||||||||
Accrued corporate compliance expense | 148,815 | 96,400 | ||||||||
Other accrued expenses | 76,934 | 191,951 | ||||||||
Deferred revenue | 56,463 | 155,261 | ||||||||
Amounts payable to Directors | 25,000 | 205,258 | ||||||||
Amounts payable to Director-related entity | 21 | - | 53,039 | |||||||
2,571,181 | 2,661,950 | |||||||||
10. PROVISIONS | ||||||||||
Current | ||||||||||
Annual leave | 15 | 78,602 | 42,597 | |||||||
Non-Current | ||||||||||
Long service leave | 15 | 45,200 | 8,292 |
June 30, | |||||||||||||
2005 | 2004 | 2003 | |||||||||||
Notes | |||||||||||||
11. CONTRIBUTED EQUITY | |||||||||||||
(a) Contributed equity | |||||||||||||
Ordinary shares fully paid | 11(b) | 54,662,445 | 49,505,493 | 16,733,023 | |||||||||
Options fully paid | 11(c) | 289,699 | - | 8,000 | |||||||||
Warrants fully paid | 11(d) | 453,563 | - | - | |||||||||
55,405,707 | 49,505,493 | 16,741,023 | |||||||||||
(b) Movements in shares on issue |
June 30, | |||||||||||||||||||
2005 | 2004 | 2003 | |||||||||||||||||
Number of Shares | $ | Number of Shares | $ | Number of Shares | $ | ||||||||||||||
Beginning of the year | 115,984,380 | 49,505,493 | 66,187,303 | 16,733,023 | 58,612,750 | 12,993,468 | |||||||||||||
Movement during the year | 11,334,880 | 5,156,952 | 49,797,077 | 32,772,470 | 7,574,553 | 3,739,555 | |||||||||||||
End of the year | 127,319,260 | 54,662,445 | 115,984,380 | 49,505,493 | 66,187,303 | 16,733,023 | |||||||||||||
June 30, | |||||||||||||
2006 | 2005 | ||||||||||||
Number of Shares | $ | Number of Shares | $ | ||||||||||
Beginning of the year | 127,319,260 | 54,662,445 | 115,984,380 | 49,505,493 | |||||||||
Movement during the year | 825,000 | 435,230 | 11,334,880 | 5,156,952 | |||||||||
End of the year | 128,144,260 | 55,097,675 | 127,319,260 | 54,662,445 |
Date | Details | Notes | Number | Issue Price | $ | |||
July 8, 2002 | Exercise of options | 4,000 | 0.50 | 2,000 | ||||
July 10, 2002 | Exercise of options | 13,274 | 0.50 | 6,637 | ||||
July 12, 2002 | Non-cash share issue in consideration for services provided by consultants | (i) | 13,550 | 2.02 | 27,371 | |||
September 18, 2002 | Exercise of options | 32,000 | 0.50 | 16,000 | ||||
September 30, 2002 | Exercise of options | 25,000 | 0.50 | 12,500 | ||||
October 15, 2002 | Exercise of options | 20,081 | 0.50 | 10,040 | ||||
November 20, 2002 | Exercise of options | 113,000 | 0.50 | 56,500 | ||||
November 22, 2002 | Exercise of options | 33,072 | 0.50 | 16,536 | ||||
November, 25 2002 | Exercise of options | 7,000 | 0.50 | 3,500 | ||||
December 4, 2002 | Non-cash share issue in consideration for services provided by consultants | (i) | 15,318 | 1.74 | 26,653 | |||
December 12, 2002 | Exercise of options | 50,000 | 0.50 | 25,000 | ||||
January 8, 2003 | Exercise of options | 50,000 | 0.50 | 25,000 | ||||
January 22, 2003 | Exercise of options | 2,620 | 0.50 | 1,310 | ||||
January 30, 2003 | Exercise of options | 9,700 | 0.50 | 4,850 | ||||
January 30, 2003 | Non-cash share issue in consideration for services provided by consultants | (i) | 118,101 | 0.98 | 115,739 | |||
February 14, 2003 | Exercise of options | 499,403 | 0.50 | 249,702 | ||||
February 20, 2003 | Exercise of options | 483,746 | 0.50 | 241,873 | ||||
February 28, 2003 | Exercise of options | 2,530,483 | 0.50 | 1,265,242 | ||||
March 5, 2003 | Exercise of options | 3,107,891 | 0.50 | 1,553,945 | ||||
March 15, 2003 | Exercise of options | 25,000 | 0.50 | 12,500 | ||||
March 2003 | Underwriting costs | (ii) | - | - | (144,000) | |||
April 3, 2003 | Exercise of options | 421,314 | 0.50 | 210,657 | ||||
Year ended June30 ,2003 | Total | 7,574,553 | 3,739,555 | |||||
August 11, 2003 | Exercise of options | 50,000 | 0.50 | 25,000 | ||||
August 13, 2003 | Exercise of options | 25,000 | 0.50 | 12,500 | ||||
August 27, 2003 | Exercise of options | 16,000 | 0.50 | 8,000 | ||||
August 27, 2003 | Non-cash share issue in consideration for services provided by consultants | (i) | 70,768 | 0.70 | 49,538 | |||
August 29, 2003 | Exercise of options | 34,000 | 0.50 | 17,000 | ||||
September 16, 2003 | Share issue to professional investors for cash | 7,102,853 | 0.70 | 4,971,997 | ||||
January 12, 2004 | Non-cash share issue to directors | (iii) | 249,999 | 0.48 | 120,000 | |||
January 12, 2004 | Non-cash share issue in consideration for services provided by consultants | (i) | 67,955 | 0.64 | 43,491 | |||
February 20, 2004 | Non-cash share issue in consideration for services provided by consultants | (i) | 155,502 | 0.55 | 85,526 |
Date | Details | Notes | Number | Issue Price | $ | |||||
August 9, 2004 | Non-cash share issue in settlement of litigation | (iii) | 1,350,000 | 0.56 | 756,000 | |||||
September 16, 2004 | Non-cash share issue in consideration for services provided by consultants | (i) | 49,775 | 0.82 | 40,816 | |||||
December 8, 2004 | Exercise of options | 9,506,666 | 0.50 | 4,753,333 | ||||||
December 17, 2004 | Non-cash share issue to directors | (ii) | 249,999 | 0.48 | 120,000 | |||||
February 21, 2005 | Non-cash share issue in consideration for services provided by consultants | (i) | 178,440 | 0.55 | 98,142 | |||||
Capital raising costs | (iv) | - | - | (611,339) | ||||||
Year ended June 30, 2005 | 11,334,880 | 5,156,952 | ||||||||
August 10, 2005 | Non cash share issue in consideration for services provided by consultants | (i) | 825,000 | 0.53 | 437,250 | |||||
Capital raising costs | - | - | (2,020) | |||||||
Year ended June 30, 2006 | 825,000 | 435,230 |
Date | Details | Notes | Number | Issue Price | $ | |||
April 8, 2004 | Exercise of options | 200,000 | 0.70 | 140,000 | ||||
April 15, 2004 | Exercise of options | 100,000 | 0.70 | 70,000 | ||||
April 16, 2004 | Exercise of options | 200,000 | 0.50 | 100,000 | ||||
April 16, 2004 | Exercise of options | 200,000 | 0.70 | 140,000 | ||||
April 20, 2004 | Exercise of options | 300,000 | 0.50 | 150,000 | ||||
April 22, 2004 | Exercise of options | 200,000 | 0.50 | 100,000 | ||||
May 10, 2004 | Non-cash share issue to consultant Professor Ashley Bush as per consulting contract (Note 14) | (i) | 825,000 | 0.83 | 684,750 | |||
June 1, 2004 | Share issued to US investors for cash | 40,000,000 | 0.72 | 28,881,609 | ||||
Expired options | - | - | 8,000 | |||||
Capital raising costs | - | - | (2,834,941) | |||||
Year ended June 30, 2004 | Total | 49,797,077 | 32,772,470 | |||||
August 9, 2004 | Non-cash share issue in settlement of litigation | (iv) | 1,350,000 | 0.56 | 756,000 | |||
September 16, 2004 | Non-cash share issue in consideration for services provided by consultants | (i) | 49,775 | 0.82 | 40,816 | |||
December 8, 2004 | Exercise of options | 9,506,666 | 0.50 | 4,753,333 | ||||
December 17, 2004 | Non-cash share issue to directors | (iii) | 249,999 | 0.48 | 120,000 | |||
February 21, 2005 | Non-cash share issue in consideration for services provided by consultants | (i) | 178,440 | 0.55 | 98,142 | |||
Capital raising costs | (v) | - | - | (611,339) | ||||
Year ended June 30, 2005 | 11,334,880 | 5,156,952 |
(i) | The consolidated entity recognized non-cash compensation expense for shares issued in consideration for services provided by consultants based on either the directors’ valuation of the services rendered or the shares issued. |
(ii) | The base fee for three of the Company’s directors was paid by the issue of 83,333 shares each as approved at the |
(iii) | The Company settled a litigation dispute with P.N. Gerolymatos via the issue of 1,350,000 shares valued as of the date the settlement agreement was signed. |
(iv) | The capital raising costs incurred in fiscal year 2005 include the issue of warrants to a consultant as part of the US capital raising that occurred in June 2004. Capital raising costs also include the issue of options to a consultant that assisted Prana with the June 2004 US capital raising and the exercise of options. |
Years Ended June 30, | |||||||||||||||||||
2005 | 2004 | 2003 | |||||||||||||||||
Number of Options | Comp. Expense ($) | Number of Options | Comp. Expense ($) | Number of Options | Comp. Expense ($) | ||||||||||||||
Beginning of the year | 21,269,167 | - | 21,085,000 | 8,000 | 27,894,310 | 8,000 | |||||||||||||
Issued during the year | 3,080,000 | 289,699 | 1,709,167 | - | 618,274 | - | |||||||||||||
Expired during the year | (11,150,501 | ) | - | (200,000 | ) | (8,000 | ) | - | - | ||||||||||
Exercised during the year (Note 11(b)) | (9,506,666 | ) | - | (1,325,000 | ) | - | (7,427,584 | ) | - | ||||||||||
End of the year | 3,692,000 | 289,699 | 21,269,167 | - | 21,085,000 | 8,000 | |||||||||||||
Years Ended June 30, | |||||||||||||||||||
2005 | 2004 | 2003 | |||||||||||||||||
Number of Warrants | Comp. Expense ($) | Number of Warrants | Comp. Expense ($) | Number of Warrants | Comp. Expense ($) | ||||||||||||||
Beginning of the year | 3,000,000 | - | - | - | - | - | |||||||||||||
Issued during the year | 320,000 | 453,563 | 3,000,000 | - | - | - | |||||||||||||
End of the year | 3,320,000 | 453,563 | 3,000,000 | - | - | - | |||||||||||||
Years Ended June 30, | |||||||||||||
2006 | 2005 | ||||||||||||
Number of Warrants | Comp. Expense ($) | Number of Warrants | Comp. Expense ($) | ||||||||||
Beginning of the year | 3,000,000 | - | 3,000,000 | - | |||||||||
Issued during the year | - | - | - | - | |||||||||
End of the year | 3,000,000 | - | 3,000,000 | - |
Ordinary shares | ||||||||
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 entitle their holder to one vote, either in person or by proxy, at a meeting of the Company. | ||||||||
Options and warrants | ||||||||
Option holders and warrant holders do not have the right to receive dividends and are not entitled to vote at a meeting of the Company. Options and warrants may be exercised at any time from the date they vest to the date of their expiry. Share options convert into ordinary shares on a one for one basis on the date they are exercised. Warrants and US options convert into |
(e)Shares issued after reporting date |
Date | Details | Number | Issue Price | Comp. Expense ($) | ||||
August 31, 2006 | Issued to a consultant | 250,000 | 0.1725 | 43,125 | ||||
250,000 | 43,125 |
June 30, | ||||||||||
2006 | 2005 | |||||||||
13. RESERVES | ||||||||||
(a) Share Based Payments | ||||||||||
Options over fully paid ordinary shares | 12(b | ) | 898,252 | 478,999 | ||||||
Options over ADRs | 12(c | ) | 1,515,434 | 1,515,434 | ||||||
Warrants over ADRs | 12(d | ) | 453,563 | 453,563 | ||||||
2,867,249 | 2,447,996 |
Date | Details | Number | Issue Price | Comp. Expense ($) | |||||||||
August 10, 2005 | Issue of shares to consultant Professor Ashley Bush as per consulting contract (Note 14) | 825,000 | 0.37 | 305,250 | |||||||||
825,000 | 305,250 |
Years Ended June 30, | |||||||||||||
2006 | 2005 | ||||||||||||
Number of Options | Comp. Expense ($) | Number of Options | Comp. Expense ($) | ||||||||||
Beginning of the year | 3,312,000 | 478,999 | 21,269,167 | - | |||||||||
Issued during the year | 2,678,000 | 258,020 | 2,700,000 | 478,999 | |||||||||
Expired during the year | (200,000 | ) | - | (11,150,501 | ) | - | |||||||
Forfeited during the year | (37,500 | ) | - | - | - | ||||||||
Amortization of option expenses | - | 161,233 | - | - | |||||||||
Exercised during the year (Note 11(b)) | - | (9,506,666 | ) | - | |||||||||
End of the year | 5,752,500 | 898,252 | 3,312,000 | 478,999 |
· | On December 17, 2004, the Company issued 600,000 options to outside consultants under the 2004 Employees, Directors and Consultants Share and Option Plan (see Note 17) in consideration for services rendered to the Company. Of the 600,000 options, 400,000 options vested immediately and 200,000 options vest quarterly over a one-year vesting period. The options
2006
PRANA BIOTECHNOLOGY LIMITED (A Development Stage Enterprise) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - in Australian dollars (unless otherwise noted) 13. RESERVES (continued)(c)Movements in share options over ADRs
Details of option issuances are summarized as follows. 2005 On December 17, 2004, the Company issued 380,000 options to a director under the 2004 ADS Option Plan (see Note 17) as per his employment contract. The options vested on June 14, 2005 following an agreement between Jonas Alsenas and the Company on Jonas Alsenas stepping down as CEO and director of the Company and are exercisable at US$5.00. The options expire on December 17, 2012 and upon exercise convert to ADRs (1 ADR = 10 ordinary shares). This issue was approved by shareholders at the 2004 Annual General Meeting. (d)Movement in warrants
Details of warrant issuances are summarized as follows. 2005 On December 17, 2004, the Company issued 320,000 warrants to an outside consultant in consideration for services rendered to the Company for the June 2004 US capital raising. The resulting compensation expense was accounted for as an issuance cost and therefore recorded as a deduction of issued capital in the Statements of Shareholders’ Equity. The warrants are convertible to 320,000 ADRs (3,200,000 ordinary shares) at an exercise price of US$8.00 per warrant on or before June 4, 2009.
F-24 PRANA BIOTECHNOLOGY LIMITED (A Development Stage Enterprise) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - in Australian dollars (unless otherwise noted) 13.RESERVES (continued)
There have been no options or warrants issued after reporting date.
(c)Non-cash financing and investing activities During the years ended June 30, PRANA BIOTECHNOLOGY LIMITED (A Development Stage Enterprise) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - in Australian dollars (unless otherwise noted) The Company moved premises in June 2004 and entered into an operating lease for a three year period totaling A$306,781, including rent increases by 3.5% per annum. Outgoing costs are set yearly by the landlord. Future minimum lease payments under the office lease are as follows as of June 30,
(b) Employee and Consultants Option Plans At the Annual General Meeting held on November 22, 2000, shareholders approved the establishment of the Employee and Consultants Option Plan 2000 designed to reward directors, employees and consultants for their contributions to the Company. It was also proposed as a method of retaining key personnel, for the growth and development of the Company’s intellectual property rights. The options could not be transferred and were not quoted on the ASX. At June 30, 2005, there were no directors, seven employees (including three executives), and five consultants participating in the Scheme. All options were issued with an exercise price of A$0.50 and expired on June 30, 2005. No further options will be issued under this plan. PRANA BIOTECHNOLOGY LIMITED (A Development Stage Enterprise) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - in Australian dollars (unless otherwise noted)
At the Annual General Meeting held on November 17, 2004, the shareholders approved the establishment of new Employee and Consultant Plans designed to reward directors, employees and/or consultants for their contributions to the Company. As per the previous plan, the new plans are to be used as a method of retaining key personnel for the growth and development of the Under the 2004 ADS Option Plan, the default exercise price must equal or exceed the fair value of the ADS on the date the options are awarded. The option expiry date cannot exceed ten years from the date the options were awarded. The default vesting conditions are 25% per year on the date the options were awarded. Under the 2004 Employees, Directors and Consultants Share and Option Plan, the default exercise price must be equal or less than the market value of the ordinary shares on ASX on the date of grant. The option expiry date cannot exceed ten years from the date the options were granted. The default vesting conditions are 25% per year on the date the options were granted. Information with respect to the number of options granted under the Employee and Consultants Option Plan 2000 is as follows:
Information with respect to the number of options granted under the 2004 Employees, Directors and Consultants Share and Option Plan as follows:
PRANA BIOTECHNOLOGY LIMITED (A Development Stage Enterprise) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - in Australian dollars (unless otherwise noted)
Information with respect to the number of shares issued under the 2004 Employees, Directors and Consultants Share and Option Plan as follows:
Information with respect to the number of options granted under the 2004 ADS Option Plan as follows:
1 These options are exercisable into ADRs (one US option converts to one NASDAQ ADR = ten ASX shares) The Options issued carry no dividend rights or right to vote. No matters or circumstances have arisen since the end of the financial year which significantly affected or may significantly affect the operations of the consolidated entity, the results of those operations, or the state of affairs of the consolidated entity in subsequent financial years.
The options and warrants in place do not have the effect to dilute the loss per share. PRANA BIOTECHNOLOGY LIMITED (A Development Stage Enterprise) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - in Australian dollars (unless otherwise noted)
(b)Key Management Personnel Remuneration Remuneration of all The Company is committed to remunerating Senior Executives in a manner that is market competitive and consistent with ‘Best Practice’ including the interests of Shareholders. Remuneration packages are based on fixed and variable components, determined by the Executive’s position, experience and performance, and may be satisfied via cash or equity. Non-executive Directors are remunerated out of the aggregate amount approved by Shareholders and at a level that is consistent with industry standards. Non-executive Directors do not receive performance based bonuses and prior Shareholder approval is required to participate in any issue of equity. No retirement benefits are payable other than statutory superannuation, if applicable.
1 2This equity was issued as per the AGM held on November 30, 2005. As per Australian accounting standards the options issued to Directors were valued at grant date and are being expensed over the anticipated life of the options. As a result, the value does not reflect the current market price of the Company’s shares. The Board believes that if the options were valued in today’s market, they would have minimal intrinsic value given the market condition attached to the options that the share price must reach A$1.00 for five consecutive trading days. The option price was calculated using the Barrier Pricing Model applying the following inputs: PRANA BIOTECHNOLOGY LIMITED (A Development Stage Enterprise) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - in Australian dollars (unless otherwise noted) 20.KEY MANAGEMENT PERSONNEL COMPENSATION (continued) Issue Date: February 2, 2006 Pricing Model: American Option Type: Call Barrier Type: Up and In Strike Price: A$0.00 Spot Price: A$0.21 Barrier: A$1.00 Days to Expiry: 1609 Volatility: 110% Risk-free Interest Rate: 5.35% Expected Dividends: A$0.00 Option Price: A$0.18 3Mr Kempler achieved a bonus milestone, the successful completion of the Phase 1 trial for PBT-2 as set out in his employment contract. There is a potential for a further A$100,000 bonus for the satisfactory completion of a proof of concept study such as a Phase Two (A) trial on efficacy and dosage.
1 The base fee includes the issue of 83,333 shares each as approved at the 2004 AGM valued at A$40,000 at date of issue. 2 Payment relates to Jonas Alsenas stepping down as CEO per the Separation Agreement and General Release. 3 This equity was issued as per the AGM held on November 17, 2004. As per Australian accounting standards the options issued to Directors were valued at grant date and are being expensed over the anticipated life of the options. As a result, the value dues not reflect the current market price of the Company’s shares. The Board believes that if the options were valued in today’s market, they would have minimal intrinsic value given the market condition attached to the options (A$1.00 share price for five consecutive trading days) or the exercise price of the options. The option price for the options issued to Mr Geoffrey Kempler, Mr Brian Meltzer and Dr George Mihaly were calculated using the Barrier Pricing Model applying the following inputs: Issue Date: December 17, 2004 Pricing Model: American Option Type: Call Barrier Type: Up and In Strike Price: A$0.00 Spot Price: A$0.56 Barrier: A$1.00 Days to Expiry: 2008 Volatility: 70% Risk-free Interest Rate: 5.05% Expected Dividends: A$0.00 Option Price: A$0.51 F-30
Issue Date: December 17, 2004 Exercise Price: USD$5.00 Stock Price: USD$4.75 Years to Expiry: 8 Volatility: 59% Risk-free Interest Rate: 3.85%: Dividend Yield: 0% Option Price: USD$3.08 (AUD$3.99)
1 On January 1, 2006, Dr Murdoch received a salary increase to A$295,000 plus 9% superannuation. 2 On January 1, 2006, Ms Angus received a salary increase to A$195,000 plus 9% superannuation. Ms Angus received additional remuneration in recognition of additional hours worked over her contracted 4 days per week.
1 The equity amount relates to 500,000 options issued to Mr Revelins for his services as Chief Financial Officer, valued at grant date. The option price was calculated using the Black-Scholes Model applying the following inputs: Issue Date: February 21, 2005 Exercise Price: A$0.50 Stock Price: A$0.53 Years to Expiry: 3 Volatility: 52% Risk-free Interest Rate: 5.47%: Dividend Yield: 0% Option Price: A$0.22 2 No equity was received by these executives during the year. 3 The equity amount relates to equity issued in the year ended June 30, 2004 that vested F-31 PRANA BIOTECHNOLOGY LIMITED 20.KEY MANAGEMENT PERSONNEL COMPENSATION (continued) The following Director was under contract at June 30,
F-32 PRANA BIOTECHNOLOGY LIMITED (A Development Stage Enterprise) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - in Australian dollars (unless otherwise noted) 20.KEY MANAGEMENT PERSONNEL COMPENSATION (continued) The following Senior Executives were under contract at June 30,
PRANA BIOTECHNOLOGY LIMITED (A Development Stage Enterprise) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - in Australian dollars (unless otherwise noted)
a. Prana owns 100% of its subsidiaries, Prana Biotechnology Inc and Prana Biotechnology UK Ltd. b.Key Management Personnel Remuneration Details of key management personnel remuneration is disclosed in note 20 to the financial statements. 22.RELATED PARTY TRANSACTIONS (continued)
1
PRANA BIOTECHNOLOGY LIMITED (A Development Stage Enterprise) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - in Australian dollars (unless otherwise noted)
For further information on equity entitlements under employment contracts, refer to note 20. PRANA BIOTECHNOLOGY LIMITED (A Development Stage Enterprise) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - in Australian dollars (unless otherwise noted)
The consolidated entity’s activities are predominantly within Australia and cover research into Alzheimer’s Disease and other major age-related degenerative disorders. (a) Significant accounting policies Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement and the basis on which revenues and expenses are recognized, in respect of each class of financial asset, financial liability and equity instrument are disclosed in Note 1 to the financial statements. (b) Interest rate risk The consolidated entity has cash on deposit which is professionally managed by external parties to optimize the impact of interest rate fluctuations pursuant to conservative investment guidelines. At June 30, 2006, the consolidated entity had the following cash accounts:
The weighted average interest rate is 2.60% for cash and cash equivalents and 5.34% for terms deposits over 3 months and apart from usual variances in general rates of interest the consolidated entity is not exposed to any significant interest rate risk. At June 30, 2005, the consolidated entity had the following cash accounts:
The weighted average interest rate is 4.57% and apart from usual variances in general rates of interest the consolidated entity is not exposed to any significant interest rate risk. Receivables and payables are non-interest bearing. PRANA BIOTECHNOLOGY LIMITED (A Development Stage Enterprise) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - in Australian dollars (unless otherwise noted) The consolidated entity’s exposure to interest rates and the effective weighted average interest rate for classes of financial assets and liabilities is set out below:
(c) The carrying amount of financial assets and financial liabilities recorded in the financial statements represents their respective PRANA BIOTECHNOLOGY LIMITED (A Development Stage Enterprise) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - in Australian dollars (unless otherwise noted) 23. FINANCIAL INSTRUMENTS (continued) (d) Credit risk Financial assets, which potentially expose the consolidated entity to concentrations of credit risk, consist primarily of cash and Prana Biotechnology Limited is a listed public company, incorporated and operating in Australia.
PRANA BIOTECHNOLOGY LIMITED (A Development Stage Enterprise) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - in Australian dollars (unless otherwise noted) The financial statements have been prepared in accordance with Reconciliation of net loss
Reconciliation of shareholders’ equity
PRANA BIOTECHNOLOGY LIMITED (A Development Stage Enterprise) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - in Australian dollars (unless otherwise noted) Roll forward analysis of shareholders’ equity under US GAAP
As described in Note 1(s), Prana adopted AASB 2:
PRANA BIOTECHNOLOGY LIMITED (A Development Stage Enterprise) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - in Australian dollars (unless otherwise noted)
Effective July 1, 2005, for U.S. GAAP purposes Prana adopted SFAS No. 123(R), Share-Based Payment (“SFAS 123R”) which replaces SFAS 123 and supersedes APB 25. Under the modified prospective method of SFAS 123R, Prana applies SFAS 123R for equity-based compensation awards (or portion thereof): (i) granted on or after July 1, 2005; (ii) modified on or after July 1, 2005; and (iii) not yet vested as of July 1, 2005. Such equity-based compensation awards are measured based on the fair value using the Black-Scholes model (for options without market conditions) or Barrier Pricing model (for options with market conditions). The As a result of Total U.S. GAAP share-based compensation costs charged to the statement of operations was A$1,046,159 and A$444,075 for the years ended June 30, 2006 and 2005, respectively. No income tax benefits were recognized and no compensation cost was capitalized as part of property and equipment during the periods presented. The retrospective transition provision of AASB 2 and the modified prospective transition provision of SFAS 123R give rise to GAAP differences in PRANA BIOTECHNOLOGY LIMITED (A Development Stage Enterprise) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - in Australian dollars (unless otherwise noted)
Under For As a result of the cancellation of a clinical study for the PBT−1 compound For the year ended June 30, 2006, there are no GAAP differences in respect to intangible assets. In the
The deferred tax effect of US GAAP adjustments is A$nil because it is more likely than not that the net deferred tax asset will not be realized, and accordingly, the consolidated entity has recorded a 100% valuation allowance against the net deferred tax asset. PRANA BIOTECHNOLOGY LIMITED (A Development Stage Enterprise) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - in Australian dollars (unless otherwise noted)
Under Under
Share-based compensation The following table summarizes the activity of share options issued to directors under the 2004 Employees, Directors and Consultants Share and Option Plan (adopted on November 17, 2004) during the
PRANA BIOTECHNOLOGY LIMITED (A Development Stage Enterprise) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - in Australian dollars (unless otherwise noted) The weighted average grant date fair value of the options issued to directors under the 2004 Employees, Directors and Consultants Share and Option Plan during the
Risk−free interest rate - This is the government bond rate (having a term that most closely resembles the expected life of the option) in effect at the grant date. The Australian government bond rate has been used for options which convert to full paid ordinary shares and the U.S. government bond rate has been used for options which convert to ADRs. Dividend yield - Prana has never declared or paid dividends on its common stock and does not anticipate paying any dividends in the foreseeable future. Expected volatility - Prana estimates expected volatility based on historical volatility over the estimated life of the option and other factors. Expected life - This is the period of time that the options granted are expected to remain outstanding. This estimate is based primarily on historical trend of option holders to exercise their option near the date of expiry. As a result the expected life is considered to equal the period from grant date to expiry date. The following table summarizes the activity of share options issued to directors under the 2004 ADS Option Plan (adopted on November 17, 2004) during the
The
The methodology for developing each of the assumptions is the same as that described above. PRANA BIOTECHNOLOGY LIMITED (A Development Stage Enterprise) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - in Australian dollars (unless otherwise noted) The following table summarizes the activity of share options issued to consultants during the year ended June 30,
The weighted average grant date fair value of options issued to consultants during the years ended June 30,
During the years ended June 30, 2006 and 2005, the Company F-45 PRANA BIOTECHNOLOGY LIMITED (A Development Stage Enterprise) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - in Australian dollars (unless otherwise noted) 26.RECONCILIATION TO US GAAP (continued) During the
The weighted average grant date fair value of warrants issued to consultants during the years ended June 30, 2005
3,000,000 warrants were issued as part of the June 2004 capital raising. No compensation expense has been recognised for these warrants which are exercisable on or before June 4, 2009 at an exercise price of USD$8.00. These warrants are convertible to one ADR which is equal to ten ordinary fully paid shares. The following table summarizes the activity of share options issued to directors and employees under the Employee and Consultants Option Plan 2000 (adopted on November 22, 2000) during the year ended June 30, 2005. Each option was exercisable for one ordinary share. No options have been issued under the Employee and Consultants Option Plan 2000 for the year ended June 30, 2006 as all options issued under the plan expired on June 30, 2005.
F-46 PRANA BIOTECHNOLOGY LIMITED (A Development Stage Enterprise) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - in Australian dollars (unless otherwise noted) 26.RECONCILIATION TO US GAAP (continued) The following table summarizes the activity of share options issued to consultants under the Employee and Consultants Option Plan 2000 (adopted on November 22, 2000) during the year ended June 30, 2005. Each option was exercisable for one ordinary share. No options have been issued under the Employee and Consultants Option Plan 2000 for the year ended June 30, 2006 as all options issued under the plan expired on June 30, 2005.
Income tax The consolidated entity has adopted SFAS No. 109: Accounting for Income Taxes (“SFAS 109”) for US GAAP purposes. SFAS 109 requires a “liability approach” to accounting for income taxes, which as it applies to the consolidated entity, is very similar to that adopted under PRANA BIOTECHNOLOGY LIMITED (A Development Stage Enterprise) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - in Australian dollars (unless otherwise noted) The components of
The components of the US GAAP deferred tax assets and liabilities as of June 30,
As of June 30, Recently issued but not yet adopted accounting pronouncements In In July 2006, the FASB issued Interpretation No. 48, Accounting for Uncertainty in Income Taxes” (“FIN 48”) as an interpretation of SFAS 109. This Interpretation clarifies the accounting for uncertainty in income taxes recognized by prescribing a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. This Interpretation also provides guidance on de-recognition of tax benefits previously recognized and additional disclosures for unrecognized tax benefits, interest and penalties. The evaluation of a tax position in accordance with this Interpretation begins with a determination as to whether it is more likely than not that a tax position will be sustained upon examination based on the technical merits of the position. A tax position that meets the more-likely-than-not recognition threshold is then measured at the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement for recognition in the financial statements. FIN 48 is effective no later than fiscal years beginning after December 15, 2006, and is required to be adopted by the consolidated entity on July 1, 2007. The consolidated entity is currently assessing the impact of the adoption of FIN 48. F-48 PRANA BIOTECHNOLOGY LIMITED (A Development Stage Enterprise) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - in Australian dollars (unless otherwise noted) 26.RECONCILIATION TO US GAAP (continued) In September 2006, the Securities and Exchange Commission (the “SEC”) issued Staff Accounting Bulletin No. 108, Considering the Effects of Prior Year Misstatements when Qualifying Misstatements in Current Year Financial Statements (“SAB 108”) which provides interpretive guidance on the consideration of the effects of prior year misstatements in quantifying current year misstatements for the purpose of a materiality assessment. SAB 108 is effective for companies with fiscal years ending after November 15, 2006 and is required to be adopted by the Company in fiscal 2007. However, early application is encouraged in any report for an interim period of the first fiscal year ending after November 15, 2006, filed after the publication of this guidance. The consolidated entity is currently assessing the impact of the adoption of SAB 108. In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements (“SFAS 157”).. SFAS 157 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. This Statement applies under other accounting pronouncements that require or permit fair value measurements, the FASB having previously concluded in those accounting pronouncements that fair value is the relevant measurement attribute. Accordingly, this Statement does not require any new fair value measurements. SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. This Statement is required to be adopted by the consolidated entity on July 1, 2008. The consolidated entity is currently assessing the impact of the adoption of this Statement.
The Company meets the definition of a development stage enterprise under SFAS No. 7, “Accounting and Reporting by Development Stage Enterprises” (“SFAS 7”). The following additional disclosures, prepared on an A-IFRS basis considering the AASB 1 exemptions, are required in accordance with SFAS 7: Cumulative consolidated statement of operations from the inception of the development stage (November 11, 1997) to June 30, 2006 - A-IFRS basis:
F-49 PRANA BIOTECHNOLOGY LIMITED (A Development Stage Enterprise) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - in Australian dollars (unless otherwise noted) 26.RECONCILIATION TO US GAAP (continued) Cumulative consolidated cash flow statement form the inception of the development stage (November 11, 1997) to June 30, 2006 - A-IFRS basis:
F-50 PRANA BIOTECHNOLOGY LIMITED (A Development Stage Enterprise) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - in Australian dollars (unless otherwise noted) 26.RECONCILIATION TO US GAAP (continued) Equity issuances from the inception of the development stage (November 11, 1997) to June 30, 2006 - A-IFRS basis:
F-51 PRANA BIOTECHNOLOGY LIMITED (A Development Stage Enterprise) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - in Australian dollars (unless otherwise noted) 26.RECONCILIATION TO US GAAP (continued)
F-52 PRANA BIOTECHNOLOGY LIMITED (A Development Stage Enterprise) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - in Australian dollars (unless otherwise noted) 26.RECONCILIATION TO US GAAP (continued)
F-53 PRANA BIOTECHNOLOGY LIMITED (A Development Stage Enterprise) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - in Australian dollars (unless otherwise noted) Note 27. U.S. GAAP Condensed Financial Information The following financial information is the audited U.S. GAAP condensed financial information of Prana as of and for the years ended June 30, 2006 and 2005. CONDENSED CONSOLIDATED BALANCE SHEET (in Australian dollars)
F-54 PRANA BIOTECHNOLOGY LIMITED (A Development Stage Enterprise) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - in Australian dollars (unless otherwise noted) Note 27. U.S. GAAP Condensed Financial Information continued CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (in Australian dollars, except number of shares)
F-55 SIGNATURES The Registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.
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