ALCHEMIA PTY LIMITED - Viralytics · 12/4/2014 · VIRALYTICS LTD . ABN 12 010 657 351 . APPENDIX...

VIRALYTICS LTD ABN 12 010 657 351

APPENDIX 4D Half Year Report

For the 6 months ended 31 December 2013 (current period) and the previous corresponding period 6 months ended 31 December 2012

Results for announcement to the market

31 Dec 2013 31 Dec 2012 Change Change $A ‘000 $A ‘000 $ ‘000 %

Revenue from ordinary activities 84 720 (636) (88%) (Loss) from ordinary activities after tax attributable to members (3,989) (2,511)

(1,478) (59%)

(Loss) for the period attributable to members

(3,989) (2,511)

(1,478)

(59%)

31 Dec 2013 31 Dec 2012

Net tangible asset backing per ordinary security

2.9 cents 8.5 cents

Basic (Loss) cents per share (4.6 cents) (3.3 cents)

An explanation of the result of the current period and full financial details, are set out in the attached Directors’ Report and Financial Report. Dividends: it is not proposed that any dividends will be paid. No dividends were paid in the previous corresponding period.

Viralytics Limited ABN 12 010 657 351

HALF-YEAR FINANCIAL REPORT 31 DECEMBER 2013

VIRALYTICS LIMITED 31 December 2013 Half-Year Financial Report

Corporate Information

1

Directors

Mr Paul Hopper Non-Executive Chairman

Dr Phillip Altman Non-Executive Director Mr Peter Molloy Non-Executive Director Dr Leonard Post Non-Executive Director Chief Executive Officer

Dr Malcolm McColl Company Secretary

Ms Catherine Officer Chief Financial Officer

Mr Robert Vickery Principal Place of Business

Suite 305, Level 3

66 Hunter Street Sydney NSW 2000

Registered Office c/- Company Matters Level 12, 680 George Street Sydney, NSW 2000

Ph: (02) 9988-4000 Fax: (02) 8068-6038 Email: [email protected]

Web: www.viralytics.com

Auditors

Bentleys Chartered Accountants Level 9, 123 Albert Street Brisbane QLD 4000

Share Registry & Register

Link Market Services Limited

Level 12, 680 George Street Sydney, NSW 2000 Ph: (02) 8280 7454

mailto:[email protected]

http://www.psiron.com/


Directors’ Report

2

Your directors submit the financial report of the Company for the half-year ended 31 December 2013. DIRECTORS The names of directors in office at the date of this report: Mr Paul Hopper Executive Chairman Dr Phillip Altman Non-Executive Director Mr Peter Molloy Non-Executive Director Dr Leonard Post Non-Executive Director RESULTS AND DIVIDENDS The loss after tax of the Company for the half-year was $4.0m (comparative half-year: loss of $2.5m). Operational expenditure relating to clinical trials and research and development increased by $1m from the prior period. The prior period loss was reduced by the inclusion of $600,000 relating to Research and Development tax Incentive refund. No dividend was proposed or paid. CASH MANAGEMENT AND FUNDING Operating cash outflow for the period increased to $1.8m from $1.2m in the prior corresponding period (to 31 December 2012). Expenditure on R&D and clinical trials was up $1.1m and staff down by $300,000. On the income side $1.9m was received from Research and Development Tax Incentive refund (2012 - $1.5m). As at 31 December 2013, cash on hand was $3.3m. This was $1.8m lower than the balance at 30 June 2013 ($5.1 m). On 30 January 2014 the company announced a $27.1m capital raising via a two tranche placement and rights issue. The second tranche of the placement totalling $16.9m is subject to shareholder approval at a General Meeting to be held in March 2014. REVIEW OF OPERATIONS The Company received $1.9 million in October 2013 from the Australian Taxation Office under the Research and Development Incentive programme for activities conducted during the year ended 30 June 2013.


Directors’ Report

3

The Company commenced trading of its American Depository Receipts (ADRs) on the OTCQX International, a segment of the OTCQX marketplace in August 2013. OTCQX International is a segment of the OTCQX marketplace reserved for high-quality non-U.S. companies that are listed on a qualified international exchange, undergo management reviews and provide their home country disclosure to U.S. investors. It provides US based investors and other groups ready access to company information and announcements that will be released contemporaneously with the ASX. Trading on OTCQX International is part of a broader strategy to promote the company and our technology in the United States. Roth Capital Partners, LLC act as the Principal American Liaison to the company, providing guidance on OTCQX matters. Roth Capital is a US based investment banking firm specialising in small-caps with a focus on the healthcare sector.

CLINICAL TRIALS Phase II CALM Melanoma Clinical Trial (USA) - CAVATAK™

The Phase II clinical trial of CAVATAK™ in the treatment of Late stage Melanoma (the CALM study) currently being conducted under an IND in the USA at 11 cancer clinics in the US achieved a key milestone with the target enrolment of 54 patients on January 8, 2014. We continue to see very encouraging results with overall immune related Progression Free Survival (irPFS) of 35% at 6 months in 40 evaluable patients. The primary endpoint of the study required 10 patients from a total of 54 evaluable patients reporting irPFS at 6 months after the first dose of CAVATAK™. This endpoint was achieved in September 2013 in the first 30 evaluable patients. Phase I/II Multi-dose Intravenous CAVATAK™ Clinical Trial (UK) The Phase I/II STORM (Systemic Treatment Of Resistant Malignancies) clinical trial for late stage melanoma, non-small cell lung, metastatic bladder and castrate-resistant prostate cancer received final approval from the UK Medicines and Healthcare products Regulatory Agency in September 2013. The STORM trial will be conducted at 3 leading cancer centres in the UK. The study will assess the activity of multi-intravenous dosing of CAVATAK™ in approximately 30 late stage subjects both in the presence and absence of standard of care chemotherapy. We anticipate the STORM study will commence in February 2014.

VIRALYTICS TIMITED

31 December 2013 Half-Year Financial Report

Directors' Report

¡NTETLECTUAL PROPERTY

The Company continues to put a strong focus on developing and strengthening itslntellectual Property portfolio. New intellectual property is being developed and existingpatent claims are continually being pursued through various lnternationaljurisdictions.

The Company was pleased to announce on 7 August 2013 and 4 February 2014 the notice ofallowance for an additional patent in Europe and the US respectively. These 2 new patents

broadened the patent protection for the use of CAVATAK'" from selected Coxsackieviruses toinclude a wider range of viruses targeting the ICAM-1 receptor expressed on cancer cells. The

USA and the European Union are the number 1 and 2 global pharmaceutical markets

respectively.

Auditor's lndependence Declaration

A statement of independence has been provided by our auditors, Bentleys Chartered

Accountants and is included at page 5.

This report is signed in accordance with a resolution of the Board of Directors.

Mr. Paul HopperChairmanSydney

Dated: 18 February 2OL4

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BentleysTHINKING AHEAD

VIRATYTICS TIMITED

AU D¡TOR,S I NDEPENDENCE DECTARATION

UNDER SECTION 3O7C OF THE CORPORATIONS ACT 2OO1

TO THE DIRECTORS OF VIRALYTICS LIMITED

I declare that, to the best of my knowledge and beliefs, during the half year ended 31

December 2013 there have been:

no contraventions of the auditor independence requirements as set out in theCorporations Act 200L in relation to the review; and

no contraventions of any applicable code of professional conduct in relation tothe review.

Bentleys Brisbane PartnershipChartered Accountants

/

Stewart Douglas

Partner

Brisbane18 February 2OL4

(¡)

(¡¡)

/ r.2l4.^

A mmber of Benllqß, æ asc¡ation of ¡ndepffdenl account¡ng fims ¡n Auslralia. The mtrberlTms of the Bentlq¡s Miation are afìl¡ated onv trd mt in partnersh¡p. Uattl¡ty limiled by a schemeapprwed oder Pofessional Standards LegisHion.

5

) Accountants

) Ruditors

) Rdvisors{no=sroN


Condensed Statement of Comprehensive Income for the half-year ended 31 December 2013

6

December 2013

$

December 2012

$

Interest Income from third parties 78,763 125,287

R&D Tax Refund 4,995 595,168

Total Income 83,758 720,455

Research and development costs:

Clinical trials (1,572,271) (661,291)

Research and development (1,026,735) (891,935)

Drug product (32,363) (29,452)

Patents and related costs (71,987) (72,806)

Amortisation of intangibles (195,156) (195,156)

Depreciation expense (13,573) (9,454)

Employee costs (461,556) (736,869)

Option Share Based Expense (146,213) (146,937)

Corporate compliance costs (285,061) (304,373)

Administration Costs (228,374) (178,109)

Foreign Currency translation loss (39,814) (4,876)

Loss on Disposal of Assets - (512)

Total Expenses (4,073,103) (3,231,770)

(Loss) from ordinary activities before income tax (3,989,345) (2,511,315)

Income tax expense

- -

(Loss) from ordinary activities after income tax

(3,989,345) (2,511,315)

Other comprehensive income

- -

Total Comprehensive Income

(3,989,345) (2,511,315)

Basic earnings/(loss) per share (cents per share)

(4.6 cents) (3.3 cents)

Diluted earnings/(loss) per share (cents per share) 8 (4.6 cents) (3.3 cents)

The accompanying notes form part of these financial statements.


Condensed Statement of Financial Position as at 31 December 2013

7

ASSETS

Notes

December 2013

$

June 2013

$

Current Assets

Cash and cash equivalents 3,287,316 5,078,859

Trade and other receivables 2 162,253 2,202,458

Total Current Assets 3,449,569 7,281,317

Non-Current Assets

Security Deposit 49,958 49,000

Plant and equipment 3 60,928 68,054

Investments 4 - -

Intangible assets 5 2,619,244 2,814,400

Total Non-Current Assets 2,730,130 2,931,454

TOTAL ASSETS 6,179,699 10,212,771

LIABILITIES

Current Liabilities

Trade and other payables 6 1,044,946 1,234,886

Total Current Liabilities 1,044,946 1,234,886

TOTAL LIABILITES 1,044,946 1,234,886

NET ASSETS 5,134,753 8,977,885

EQUITY

Issued capital 7 61,779,761 61,779,761

Convertible Notes – Equity Component 595,640 595,640

Reserves 3,155,798 3,009,584

Accumulated losses (60,396,446) (56,407,100)

TOTAL EQUITY 5,134,753 8,977,885



Condensed Statement of Changes in Equity for the half-year ended 31 December 2013

8

Share Capital

Retained Earnings

(Accumulated Losses) Reserves Total

Note Ordinary Convertible

note Option Reserve

$ $ $ $ $

Balance at 1 July 2012 58,572,063 595,640 (52,277,371) 2,669,542 9,559,874

Comprehensive income for the period - - (2,511,315) - (2,511,315)

Shares issued during the period 3,531,429 - - - 3,531,429

Transaction costs (327,922) - - - (327,922)

Share option based compensation - - - 146,937 146,937

Total transactions with owners and other transfers 3,203,507 - - 146,937 3,350,444

Balance at 31 December 2012 61,775,570 595,640 (54,788,686) 2,816,479 10,399,003



Condensed Statement of Changes in Equity for the half-year ended 31 December 2013

9

Share Capital

Retained Earnings

(Accumulated Losses) Reserves Total

Ordinary Convertible

note Option Reserve

$ $ $ $ $

Balance at 1 July 2013 61,779,761 595,640 (56,407,100) 3,009,584 8,977,885

Comprehensive income for the period - - (3,989,345) - (3,989,345)

Share option based compensation - - - 146,213 146,213

Total transactions with owners and other transfers - - - 146,213 146,213

Balance at 31 December 2013 61,779,761 595,640 (60,396,445) 3,155,797 5,134,753



Condensed Statement of Cash Flow for the half-year ended 31 December 2013

10

December

2013 $

December 2012

$

Cash flows from Operating Activities

R & D Tax Refund 1,903,061 1,466,771

Research, Development and Clinical trials (2,647,229) (1,510,504)

Staff Costs (500,684) (849,370)

Other Working Capital (521,072) (357,472)

Intellectual Property/Patent Costs (106,214) (120,702)

Interest Received 88,695 136,011

Net cash (used in) operating activities (1,783,443) (1,235,266)

Cash flows from Investing Activities

Purchase of Plant and equipment (8,100) (6,445)

Net cash (used in) investing activities (8,100) (6,445)

Cash flows from Financing Activities

Proceeds – issue of shares and options - 3,559,551

Costs of fund raising - (51,215)

Net cash provided by financing activities - 3,508,336

Net increase/(decrease) in cash held (1,791,543) 2,266,625

Cash at beginning of the financial period 5,078,859 5,884,436

Cash at the end of the financial period 3,287,316 8,151,061

The accompanying notes form part of these financial statements


Notes to the financial statements for the half-year ended 31 December 2013

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1. BASIS OF PREPARATION OF THE HALF-YEAR FINANCIAL REPORT This half-year financial report is a general-purpose interim financial report that has been prepared in accordance with Australian Accounting Standard AASB134; ‘Interim Financial Reporting’, other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001. The half-year report does not include full disclosure of the type normally included in an annual financial report. The half-year financial report should be read in conjunction with the Annual Financial Report of Viralytics Limited (the Company) as at 30 June 2013. It is recommended that the half-year financial report be considered together with any public announcements made by the Company Limited during the half-year ended 31 December 2013 in accordance with the continuous disclosure obligations arising under the Corporations Act 2001. Except as described below, the accounting policies applied by the Company in this half-year financial report are the same as those applied by the Company in the financial report as at and for the year ended 30 June 2013. Going Concern The financial report for the period ended 31 December 2013 is prepared on a going concern basis. Notwithstanding that the Company has a history of losses, it does have access to cash on hand ($3.3 million at balance date). On 30th January 2014 it announced a capital raising of up to $27.1 million. On 5th February settlement was achieved in respect of the 1st tranche placement of $6.1 million. The 2nd tranche placement for $16.9 million is subject to shareholder approval at a General Meeting of the company on 6th March 2014. The Directors consider that the Company has sufficient funds to meet all of its foreseeable expenditure and debts as and when they fall due. a) Cash and cash equivalents Cash and cash equivalents include cash on hand, deposits held at call with banks, other short- term highly liquid investments with original maturities of three months or less, and bank overdrafts.

b) Financial Instruments Recognition Financial Instruments are initially measured at cost on trade date, which includes transaction costs, when the related contractual rights or obligations exist. Subsequent to initial recognition these instruments are measured as set out below.



12

1. BASIS OF PREPARATION OF THE HALF-YEAR FINANCIAL REPORT continued b) Financial Instruments continued Financial Assets at fair value through profit and loss A financial asset is classified in this category if acquired principally for the purpose of selling in the short term, or if so designated by management and within the requirement of AASB139: ‘Financial Instruments: Recognition and Measurement’. Financial Assets at fair value through profit and loss continued Realised and unrealised gains and losses arising from changes in the fair value of these assets are included in the income statement in the period in which they arise. Loans and Receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and are stated at amortised cost using the effective interest rate method. Available-For-Sale Financial Assets Available-for-sale financial assets are reflected at fair value. Unrealised gains and losses arising from changes in fair value are taken directly to equity. c) Impairment of Assets At each reporting date the Company reviews the carrying values of its tangible and intangible assets to determine whether there is any indication that those assets have been impaired. If such an indication exists, the recoverable amount of the asset, being the higher of the asset’s fair value less costs to sell and value in use, is compared to the asset’s carrying value. Any excess of the asset’s carrying value over its recoverable amount is expensed to the income statement.

Impairment testing is performed annually for goodwill and intangible assets with indefinite lives. Where it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs.



13

1. BASIS OF PREPARATION OF THE HALF-YEAR FINANCIAL REPORT continued d) Inventories The manufacture of CAVATAK™ drug stock during the clinical trials forms part of the ongoing research and development activities of the Company. In accordance with Accounting Standard AASB 102 “Inventories”, inventories shall be measured at the lower of cost and net realisable value. As the drug stock is not held for sale in the ordinary course of business, there is no value recorded in the financial statements. e) Plant and Equipment Each class of plant and equipment is carried at cost less depreciation and impairment losses. The carrying amount of plant and equipment is reviewed annually by directors to ensure it is not in excess of the recoverable amount of these assets. The recoverable amount is assessed on the basis of the expected net cash flows that will be received from the assets employment and subsequent disposal. The expected net cash flows have been discounted to their current values in determining recoverable amounts. Depreciation is provided on a straight-line basis on all plant and equipment. The major depreciation periods are: Computer Equipment: 2-3 years Furniture & Fittings 5 years The assets residual value and useful lives are reviewed and adjusted if appropriate at each balance sheet date. An asset’s carrying value is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount. Gains and losses on disposal are determined by comparing proceeds with the carrying amounts. These gains and losses are included in the statement of comprehensive income. When revalued assets are sold, amounts included in the revaluation reserve relating to that asset are transferred to retained earnings.



14

1. BASIS OF PREPARATION OF THE HALF-YEAR FINANCIAL REPORT continued f) Investments in Associates

Investments in associate companies are recognised in the financial statements by applying the equity method of accounting where significant influence is exercised over an investee. Significant influence exists where the investor has the power to participate in the financial and operating policy decisions of the investees but does not have control or joint control over these policies. g) Intangibles

Patents Patents are recognised at the cost of acquisition. Patents have a finite life and are carried at cost less any accumulated amortisation and any impairment losses. Patents are amortised over their useful lives of 20 years or less. Amounts incurred in acquiring and extending patents are expensed as incurred, except to the extent that such costs are expected beyond any reasonable doubt to be recoverable. Intellectual Property Intellectual property has been brought to account at cost of acquisition. The technology was originally acquired under a two year licence in July 2004. In December 2006, the licensing agreement was terminated on the assignment of the intellectual property to the Company. Initial payments to acquire the licence were amortised over the period of the licence (2 years). Payments made on assignment of the Intellectual Property are being written off over the life of the shortest patent (14 years). h) Employee Benefits

Provision is made for the Company’s liability for employee benefits arising from services rendered by employees to reporting date. Employee benefits that are expected to be settled within one year or later than one year have been measured at the amounts that are expected to be paid when the liability is settled, plus related on-costs. It is immaterial to measure the employee benefits payable later than one year at the present value of expected future cash outflows to be made for those benefits. i) Provisions

Provisions are recognised when the Company has a legal or constructive obligation, as a result of past events, for which it is probable that an outflow of economic benefits will result and that outflow can be reliably measured.



15

1. BASIS OF PREPARATION OF THE HALF-YEAR FINANCIAL REPORT continued j) Revenue Recognition

Revenue from the sale of goods is recognised when goods are delivered to customers. Interest revenue is recognised on a proportional basis taking into account the interest rates applicable to the financial assets. Dividend revenue is recognised when the right to receive a dividend has been established. Revenue from the rendering of a service is recognised upon the delivery of services. Revenue from government incentives such as Research and Development tax concession is recognised when the eligibility criteria are met and it is probable that such tax concession will be received. All revenue is stated net of the amount of goods and services tax (GST). k) Research and Development Expenditure

Amounts incurred on research and development activities are expensed as incurred, except to the extent that such costs are expected beyond any reasonable doubt to be recoverable.

l) Income Taxes The charge for current income tax expense is based on the profit for the year adjusted for any non-assessable or disallowed items. It is calculated using tax rates that have been enacted or are substantially enacted by the reporting date. Deferred tax is ascertained based on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. No deferred income tax will be recognised from the initial recognition of an asset or liability, excluding a business combination, where there is no effect on accounting or taxable profit or loss. Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or liability is settled. Deferred tax is credited in the profit or loss except when it relates to items that may be credited directly to equity in which case the deferred tax is adjusted directly against equity. Deferred income tax assets are recognised to the extent that it is probable that future tax profits will be available against which deductible temporary differences can be utilised. At present, no deferred tax assets are recognised by the company. The amount of benefits which may be brought to account or which may be realised in the future is based on the company complying with the conditions of deductibility imposed by Australian taxation law and the anticipation that the company will derive sufficient future assessable income to enable the benefit to be realised. It is also assumed that no adverse changes will occur in income taxation legislation.



16

1. BASIS OF PREPARATION OF THE HALF-YEAR FINANCIAL REPORT continued m) Goods and Services Tax Revenues, expenses and assets are recognised net of the amount of goods and services tax (GST) except where the amount of GST incurred is not recoverable from the taxation authority, it is recognised as part of the cost of acquisition of an asset or as part of an item of expense. Receivables and Payables in the statement of financial position are shown inclusive of GST. Cash flows are included in the Statement of Cash Flows on a gross basis except for the GST component of investing and financing activities, which are disclosed as operating cash flows. n) Comparative Figures

Where required by Accounting Standards comparative information has been adjusted to conform to changes in presentation for the current year.

December 2013

$

June 2013

$

2. RECEIVABLES – CURRENT

GST Receivable 71,253 75,892

Prepayments 75,690 196,461

Interest Receivable 15,310 27,363

R&D Tax Refund - 1,898,067

Other - 4,675

162,253 2,202,458



17

December

2013 $

June 2013

$

3. PLANT AND EQUIPMENT

Plant and Equipment at cost 860,683 855,757

Accumulated depreciation (799,755) (787,703)

60,928 68,054

Movements in Carrying Amounts

Movements in the carrying amounts at the beginning and end of the current and previous period:

Balance at beginning of period 68,054 50,201

Additions 6,447 40,385

Disposals at written down value - (512)

Depreciation expense (13,573) (22,018)

Balance at end of period 60,928 68,054

4. INVESTMENT IN EQUITY ACCOUNTED ASSOCIATES

InJet Digital Aerosols Limited – unlisted (IDAL) - -

IDAL is an unlisted Australian public company. Viralytics Ltd has an investment in IDAL of $630,000. This represents 44.5% of that company’s issued capital as at 31 December 2013.

Viralytics Ltd has recognised the losses attributable to the associate in prior years to the extent of the investment. The most recent financial statements released by IDAL were for the year ended 30 June 2012. The net deficiency in assets was $368,196. Consequently, the carrying value of the investment is nil.



18

December 2013

$

June 2013

$

5. INTANGIBLE ASSETS

Virotherapy Intellectual Property 8,605,532 8,605,532

Accumulated Amortisation (5,986,288) (5,791,132)

2,619,244 2,814,400

Movement in Intangibles

Opening balance at beginning of period 2,814,400 3,204,712

Additions - -

Amortisation for the period (195,156) (390,312)

Net carrying value at end of period 2,619,244 2,814,400

6. TRADE AND OTHER PAYABLES

Trade payables 540,232 892,323

Sundry payables and accrued expenses 466,209 325,714

Employee entitlements – annual leave 38,505 16,849

1,044,946 1,234,886



19

7. ISSUED CAPITAL

Number of shares on

issue

December 2013

$

Ordinary Shares – Issued and fully paid 87,268,606 61,799,761

Movements in ordinary shares on issue

At 1 July 2013 87,268,606 61,799,761

Movements during the period - -

At 31 December 2013 87,268,606 61,799,761

December 2013

June 2013

Options – Number on issue

Unlisted options 5,025,000 5,825,000

Movements in Options:

Balance at the beginning of the period 5,825,000 4,650,000

Options issued - 1,525,000

Options lapsed (800,000) (350,000)

Balance at end of period 5,025,000 5,825,000



20

December 2013

$

December 2012

$

8. EARNINGS PER SHARE cents cents

Basic earnings (loss) cents per share (4.6) (3.3)

Diluted earnings (loss) cents per share (4.6) (3.3)

Income and share information used in the calculations of basic and diluted earnings per share:

Net Profit/(Loss) used to calculate basic EPS (3,989,345) (2,511,315)

Number Number

Weighted average number of ordinary shares on issue used to calculate basic earnings per share 87,268,606 75,753,807

Effect of dilutive securities - -

Adjusted weighted average number of Ordinary shares and potential ordinary shares used to calculate diluted earnings per share 87,268,606 75,753,807

As at the balance date, there are 5,025,000 share options on issue. These potential ordinary shares have not been taken into account when calculating the diluted loss per share due to their anti-dilutive nature.



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9. CONTINGENT LIABILITIES/GUARANTEE

Viralytics Ltd, guarantees the performance of the obligations of InJet Digital Aerosols Limited (see also Note 4) in the license agreement between Canon Inc and InJet Digital Aerosols Limited. The guarantee relates to an initial amount of $1 million and other non-specified amounts. InJet Digital Aerosols Limited advised its shareholders on 31 May 2010 that Canon Inc had placed on hold the project for the development of an inhalation device using the licensed InJet technology. Canon has further informally advised Injet management of its preparedness to release Injet from the license agreement; however no formal notification of cancellation has been received. No legal advice has been sought as to the effect on the guarantee of this decision, but the above action by Canon Inc would appear to limit any potential claim they could make if they were to invoke the guarantee.

At the date of this report there are no other known contingent liabilities.

10. SUBSEQUENT EVENTS On 30th January 2014, the Company announced a capital raising of up to $27.1 million with $23 million to be raised through a two tranche placement and $4.1 million from a 1 for 6 rights issue. The 1st tranche placement totalling $6.1 million was received and shares allotted on 5th February. The 2nd tranche placement for $16.9 million is subject to shareholder approval at a General Meeting of the company on 6th March 2014. There have not been any other matters or circumstances that have arisen since the end of the period, that have significantly affected, or may significantly affect, the operations of the Company, the results of those operations, or the state of affairs of the Company after the half-year period.

VIRALYTICS TIMITED

31 December 2013 Half-Year Financial Report

Directors' Decla ration

The directors'of the Company declare that:

(1) the financial statements and notes, as set out on pages 6 to 21 are in accordance withthe Corporotions Act 2O0.1 including::

(a) complying with the Australian Accounting Standard AASB 134: lnterim Financial

Reporting, and

(b) give a true and fair view of the Company's financial position as at 31 December2013 and its performance for the half-year ended on that date.

(2) in the directors' opinion there are reasonable grounds to believe that the Companywill be able to pay its debts as and when they become due and payable.

This declaration is made in accordance with a resolution of the Board of Directors.

Mr Paul HopperChairman

SydneyDate: 18 February 2014

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INDEPENDENT AUD¡TOR,S REVIEW REPORT

TO THE MEMBERS OF VIRATYT¡CS LIMITED

Report on the Holf-Year Fínancíøl Report

We have reviewed the accompanying half-year financial report ("financial report") ofViralytics Limited, which comprises the condensed statement of financial position as at 3L

December 2OL3, and the condensed statement of comprehensive income, condensedstatement of changes in equity, condensed statement of cash flow for the half-year ended onthat date, accompanying explanatory notes to the financial statements including a statementof significant accounting policies and the directors' declaration of Viralytics Limited ("theCompany").

DÍrectors' Responsíbílity for the Half-Yeør Fínancîol Report

The directors of the Company are responsible for the preparation of the half-year financialreport that gives a true and fair view in accordance with Australian Accounting Standards(including Australian Accounting lnterpretations) and the Corporotíons Act 2007 and for such

control as the directors determine is necessary to enable the preparation of the half-yearfinancial report that is free from material misstatement, whether due to fraud or error.

Audítors' Responsíbility

Our responsibility is to express a conclusion on the half-year financial report based on ourreview. We conducted our revíew in accordance with Auditing Standard on Review

Engagements ASRE 24LO: Review of on Interim Financial Report Performed by thelndependent Auditor of the Entity, in order to state whether, on the basis of the procedures

described, we have become aware of any matter that makes us believe that the financialreport is not in accordance with the Corporotions Act 2007 including giving a true and fairview of the Company's financial position as at 31 December 2013 and its performance forthe half-year ended on that date, and complying with Accounting Standard AASB 134:

lnterim Financial Reporting and the Corporations Regulotions 2007. As the auditor ofViralytics Limited, ASRE 2410 requires that we comply with the ethical requirements relevantto the audit of the annual financial report.

A review of a half-year financial report consists of making enquiries, primarily of persons

responsible for financial and accounting matters, and applying analytical and other reviewprocedures. A review is substantially less in scope than an audit conducted in accordancewith Australian Auditing Standards and consequently does not enable us to obtain assurance

that we would become aware of all significant matters that might be identified in an audit.Accordingly, we do not express an audit opinion.

A mmber of Bentleys, il asocialion of ¡ndepffdfft accilnting fims in Austrêl¡a, The memþerf¡rc of the BfftlqÆ ffiiatl)n æ dliated on¡y æd not ¡n parlnersh¡p. Uatt¡ty limited by a schmeapprwed under Pþfesþnal Standards L€bhtbn.

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) Accountants

) Ruditors

) Rdvisors{norsroN

'


lndependence

ln conducting our review, we have complied with the independence requirements of theCorporations Act 200L.

Conclusíon

Based on our revieq which is not an audit, we have not become aware of any matter thatmakes us believe that the half-year financial report of Viralytics Limited is not in accordance

with the Corporations Act 200Lincluding:

a) giving a true and fair view of the Company's financial position as at 31 December

2013 and of its performance for the half-year ended on that date; and

b) complying with Australian Accounting Standard AASB t34: lnterim Finoncíal Reporting

and the Corporations Regulotions 200L.

4rn({crEBentleys Brisbane PartnershipChartered Accountants

-( 5Stewart Douglas

Partner

Brisbane18 February 2OL4

A member of Eentleys, il âsociation of indepmdÐt accounl¡ng fims in Australia. The mflberfims of the Bmtlels ææ¡alion ae aftil¡ated only Ðd not ¡n parinæh¡p. Liabil¡ty limited by a schmeapproved under Professional Standards Legblatbn.

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Accountants

Audrtors

Adv¡sors{norsroN

ALCHEMIA PTY LIMITED - Viralytics · 12/4/2014 · VIRALYTICS LTD . ABN 12 010 657 351 . APPENDIX...

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