Exhibit 13.0
Universal Biosensors, Inc.
2023 Annual Report
Contents
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
F-2 |
Report of Independent Registered Public Accounting Firm |
F-9 |
Consolidated Balance Sheets |
F-10 |
Consolidated Statements of Comprehensive Income/(Loss) |
F-11 |
Consolidated Statements of Changes in Stockholders’ Equity and Comprehensive Income/(Loss) |
F-12 |
Consolidated Statements of Cash Flows |
F-13 |
Notes to Consolidated Financial Statements |
F-14 |
Unless otherwise noted, references in this Annual Report to “Universal Biosensors”, the “Company,” “Group,” “we,” “our” or “us” means Universal Biosensors, Inc. (“UBI”) a Delaware corporation and, when applicable, its wholly owned Australian operating subsidiary, Universal Biosensors Pty Ltd (“UBS”), its wholly owned US operating subsidiary, Universal Biosensors LLC (“UBS LLC”) and UBS’ wholly owned Canadian operating subsidiary, Hemostasis Reference Laboratory Inc. (“HRL”) and wholly owned Dutch operating subsidiary, Universal Biosensors B.V. (“UBS BV”). Unless otherwise noted, all references in this Form 10-K to “$”, “A$” or “dollars” and dollar amounts are references to Australian dollars. References to “US$”, “CAD$” and “€” are references to United States dollars, Canadian dollars and Euros respectively.
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our financial statements and related notes that appear elsewhere in this Annual Report. In addition to historical financial information, the following discussion contains forward-looking statements that reflect our plans, estimates and beliefs and other forward-looking information, including the types of forward-looking statements described in our Form 10-K. Our (and our customer’s, partners’ and industry’s) actual results, levels of activity, performance or achievements may differ materially from those discussed in the forward-looking statements below and elsewhere in our Form 10-K. Factors that could cause or contribute to these differences include those discussed below and elsewhere in our Form 10-K, particularly in "Risk Factors".
Our Business
We are a specialist biosensor technology company focused on commercializing a range of biosensors using proprietary electrochemical cells (strips) and point-of-use devices. Our ambition is to build a multi-product stable of biosensors in large markets which generates ongoing revenue streams. Our products are sold to human health, oneology (wine) and the vet industries.
Key developments during 2023 include:
● |
Revenue from the sale of products increased 67% to $5.64m |
● |
Total revenue increased 47% to A$6.63 million |
● |
Gross profit increased 100% to A$4.28 million |
● |
Operating costs decreased as follows: |
o |
R&D expenses declined by 60% to A$4.97 million |
o |
Total operating expenses declined by 43% to A$20.97 million |
● |
Net loss after tax and impairment of intangible assets improved by A$20.11 million |
● |
Completion of Xprecia Prime clinical trials and submission of 510K application to the US (“FDA”) |
● |
Global launch of Sentia's Fructose, Acetic Acid and Titratable Acidity tests |
● |
Global launch of the Petrackr blood glucose product |
● |
First sales of next generation Xprecia Prime in Europe |
● |
Major tender win to supply Xprecia Prime in Italy |
● |
Received regulatory approval and first order for Xprecia Prime in India and Malaysia |
● |
Received regulatory approval for the sale of Xprecia Prime 4U directly to patients for self-testing in Europe |
● |
The continuing development of our Oncology platform |
Results of Operations
Analysis of Consolidated Revenue
The financial results of the products and services we sold during the years ended December 31, 2023 and 2022 are as follows:
Year Ended December 31, |
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2023 |
2022 |
|||||||
A$ |
A$ |
|||||||
Revenue from products & services |
6,632,838 | 4,524,962 | ||||||
Cost of goods sold and services |
(2,347,901 | ) | (2,385,931 | ) | ||||
Gross profit |
4,284,937 | 2,139,031 |
Total revenue and gross profit increased by 47% and 100%, respectively delivering a gross profit of $4,284,937 in the year ended December 31, 2023.
Revenue from Products
The financial results of the products we sold during the years ended December 31, 2023 and 2022 are as follows:
Year Ended December 31, |
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2023 |
2022 |
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A$ |
A$ |
|||||||
Xprecia |
2,607,506 | 2,366,331 | ||||||
Sentia |
2,528,666 | 1,013,071 | ||||||
Petrackr |
500,320 | 0 | ||||||
5,636,492 | 3,379,402 | |||||||
Cost of goods sold |
(2,032,452 | ) | (1,386,889 | ) | ||||
Gross profit |
3,604,040 | 1,992,513 |
Our total revenue from products increased by 67% and our gross profit increased by 81%.
Revenue from coagulation testing products grew 10% but was negatively impacted by the “aggressive selling of stock” by Siemens as a result of its rights to sell Xprecia products ending formally on March 31, 2023.
Revenue from wine testing products increased by 150%. During 2022, our revenues from wine testing products were primarily from the sale of Sentia analyzers, Free SO2 and Malic Acid test strips. During 2023, we began generating revenues from the sale of the following additional test products – Fructose, Glucose, Acetic Acid and Titratable Acidity.
Petrackr, launched in May 2023, generated revenue of A$500,320.
Our gross profit has increased largely as a result of increased throughput taking into account largely the fixed cost nature of our business.
Revenue from Services
The financial results of the coagulation testing and other services we provided during the respective periods are as follows:
Year Ended December 31, |
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2023 |
2022 |
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A$ |
A$ |
|||||||
Laboratory testing services |
996,346 | 1,145,560 | ||||||
Cost of services |
(315,449 | ) | (999,042 | ) | ||||
Gross profit |
680,897 | 146,518 |
Despite this decline in revenue, HRL business accelerated during the second half of the year ended December 31, 2023, which accounted for 69% of total revenue HRL business generated during the year ended December 31, 2023.
Product Support
Product support relates to post-market technical support provided by us for our products in the market. Product support has increased by 68% compared to the previous financial year as a result of the launch of new products.
Depreciation and Amortization Expenses
Year Ended December 31, |
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2023 |
2022 |
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A$ |
A$ |
|||||||
Depreciation |
831,409 | 1,139,984 | ||||||
Amortization |
129,504 | 1,645,651 | ||||||
Depreciation allocated to cost of goods sold & services | (4,638 | ) | (135,964 | ) | ||||
956,275 | 2,649,671 |
Depreciation of fixed assets is calculated on a straight-line basis over the useful life of property, plant and equipment. Although our property, plant and equipment has increased, the decline in depreciation during the year ended December 31, 2023, compared to the previous financial year is due to certain assets not being currently depreciated as they are not available for use (currently in work in progress) and also as a result of certain assets fully depreciated during the year.
Amortization expense for the year ended December 31, 2023 represents the Company’s software. Amortization expense has declined during the year ended December 31, 2023 compared to the previous financial year as the intangible assets which were acquired in September 2019 pursuant to the Siemens acquisition were impaired as at December 31, 2022.
Impairment of Definite-Lived Intangible Assets
As part of a strategic review of the balance sheet UBI reviewed its intangible assets and recorded a A$11,014,785 impairment charge for the year ended December 31, 2022.This charge relates solely to the previously capitalized Siemens agreement which ended September 2023.
Research and Development Expenses
The primary focus of the R&D activities during the year ended December 31, 2023 were developing the Company's:
● |
Sentia wine testing platform (Fructose, Acetic Acid and Titratable Acidity tests all of which has now been launched) including further enhancement of certain Sentia tests; |
● |
Xprecia Prime next generation PT-INR Coagulation platform including U.S. Food and Drug Administration (“FDA”) Clinical Trial programs. The submission to the FDA was made in March 2023 and response received from the FDA in June 2023. The Company submitted its full response to the FDA in November 2023 and assuming there are no further queries, an FDA decision is expected during Q1 2024; |
● |
Petrackr biosensor strip and meter to be used for the detection and monitoring of diabetes in non-humans. The Petrackr product was launched in May 2023; |
● |
Oncology platform Tn Antigen biosensor used for the detection, staging and monitoring of cancer; and |
● |
Aptamer based sensing platform including COVID-19 and female fertility testing. |
As we finalize the development of our products, obtain the necessary regulatory approval required for such products and subsequently launch the same, our R&D activity relating to these developments is expected to reduce. During Q1 2023, we finalized the development of and launched the Sentia Fructose and Acetic Acid tests. The Titratable Acidity test was launched in April 2023. We submitted to the FDA our Xprecia Prime clinical trial results. Once approved by the FDA, we will be able to launch this product in the United States. We launched our Petrackr product in May 2023. As a result of these activities our R&D expenditure declined by 60% to A$4,974,437 during the year ended December 31, 2023, from A$12,291,750 during the year ended December 31, 2022.
The timing and cost of any development program is dependent upon a number of factors, including achieving technical objectives, which are inherently uncertain and subsequent regulatory approvals. We have project plans in place for all our development programs which we use to plan, manage and assess our projects. As part of this procedure, we also undertake commercial assessments of such projects to optimize outcomes and decision making.
R&D expenses consist of costs associated with research activities, as well as costs associated with our product development efforts, including pilot manufacturing costs. R&D expenses include:
● |
consultant and employee related expenses, which include consulting fees, salaries and benefits; |
● |
materials and consumables acquired for the research and development activities; |
● |
verification and validation work on the various R&D projects including clinical trials; |
● |
external research and development expenses incurred under agreements with third party organizations and universities; and |
● |
facilities, depreciation and other allocated expenses, which include direct and allocated expenses for rent and maintenance of facilities, depreciation of leasehold improvements and equipment and laboratory and other supplies. |
Selling, General and Administrative Expenses
Selling, general and administrative expenses consist principally of salaries and related costs, including stock-based compensation expense for certain personnel. Other selling, general and administrative expenses include sales and marketing costs to support our products in the market, shipping and handling costs incurred when fulfilling customer orders, repairs and maintenance, insurance, facility costs not otherwise included in R&D expenses, consultancy fees and professional fees including legal services and maintenance fees incurred for patent applications, audit and taxation services.
Selling, general and administrative expenses increased by 35% to A$14,879,937 during the year ended December 31, 2023, from A$10,984,316 during the year ended December 31, 2022 due to an investment in the Company’s sales and marketing efforts. The Company now has multiple products in the market compared to the same period in the previous financial year and these products are supported by various marketing campaigns and awareness including sales personnel to support our pipeline of products, webinar series and focused direct marketing campaign.
Interest Income
Interest income increased by 92% during the year ended December 31, 2023, compared to the previous financial year. The increase in interest income is generally attributable to higher interest rates.
Interest Expense
Interest expense relates to interest being charged on the secured short-term borrowing initiated by the Company for the 2023 financial year and the interest expense on finance lease liabilities.
Financing Costs
Disclosed in this account is accretion expense which is associated with the Company’s asset retirement obligations (“ARO”). Decrease in financing costs is as a result of change of estimate for the ARO liability.
Research and Development Tax Incentive Income
As of December 31, 2023 the aggregate turnover of the Company for the year ending December 31, 2023 was less than A$20,000,000 and accordingly an estimated A$3,774,343 has been recorded as research and development tax incentive income for the year then ended. Offset against this was an overstatement of research and development tax incentive income of A$278,413 for the year ended December 31, 2022 and as a result the aggregate amount recognized as income is A$3,495,930 for the year ended December 31, 2023. The decrease year on year is driven by the decrease in eligible research and development expenditure incurred during the year ended December 31, 2023 as compared to the previous financial year.
Research and development tax incentive income for the 2023 financial year has not yet been received and as such is recorded in “Research and development tax incentive income” in the consolidated balance sheets as current assets.
Exchange Gain/(Loss)
Foreign exchange gains and losses arise from the settlement of foreign currency transactions that are translated into the functional currency using the exchange rates prevailing at the dates of the transactions and from the translation at period end exchange rates of monetary assets and liabilities denominated in foreign currencies.
Other Income
Other income for the years ended December 31, 2023 and 2022 is as follows:
Year Ended December 31, |
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2023 |
2022 |
|||||||
A$ |
A$ |
|||||||
Federal and state government subsidies |
20,000 | 42,713 | ||||||
Rental income |
153,904 | 137,219 | ||||||
Other income |
2,198 | 2,054 | ||||||
Sundry income |
5,739,912 | 0 | ||||||
5,916,014 | 181,986 |
Sundry income represents the following:
● |
Previously accrued marketing support payment of A$2,896,764 derecognized. |
● |
Previously accrued license fee payable to Siemens of A$2,214,022 derecognized |
● |
A$629,126 as a result of change in estimates in ARO liability |
Income tax benefit
For the year ended December 31, 2022, an income tax benefit had arisen after the deferred income tax liability was reversed as a result of the impairment of the definite-lived intangible assets.
Critical Accounting Estimates and Judgments
The preparation of financial statements and related disclosures in conformity with U.S. Generally Accepted Accounting Principles and the Company’s discussion and analysis of its financial condition and operating results require the Company’s management to make judgments, assumptions and estimates that affect the amounts reported. Significant items subject to such estimates and assumptions include research and development tax incentive income, stock-based compensation expenses and asset retirement obligations:
Stock-based Compensation Expenses
Probability of attaining vesting conditions and the fair value of the stock-based compensation is highly subjective and requires judgement, and results could change materially if different estimates and assumptions were used. The probability assumptions are critically examined by management each reporting period and reviewed by the board of directors for reasonableness. See note 14 to the Consolidated Financial Statements for additional information including the unrecognized compensation expense as of December 31, 2023.
Research and Development Tax Incentive Income
The refundable tax offset is one of the key elements of the Australian Government’s support for Australia’s innovation system and if eligible, provides the recipient with cash subject to its eligible research and development activities and expenditures. The calculation of the refundable tax offset requires judgement as to what is eligible research and development activity and expenditure and the outcome will change if different assumptions were used.
Asset Retirement Obligations
ARO are legal obligations associated with the retirement and removal of long-lived assets. ARO reflects estimates of future costs directly attributable to remediating the liability, inflation, assumptions of risks associated with the future cash outflows, and the applicable risk-free interest rates for discounting future cash outflows. Changes in these factors can result in a change to the ARO recognized by the Company.
Note 1, “Summary of Significant Accounting Policies,” of the Notes to Consolidated Financial Statements in Part II, Item 8 of this Form 10-K describes in further detail the significant accounting policies and methods used in the preparation of the Company’s consolidated financial statements. Management bases its estimates on historical experience and on various other assumptions it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the recognition of revenue and expenses. Actual results may differ from these estimates.
Financial Condition, Liquidity and Capital Resources
Net Cash/(Debt)
Our net cash position for the years ended December 31, 2023 and 2022 is shown below:
Year Ended December 31, |
||||||||
2023 |
2022 |
|||||||
A$ |
A$ |
|||||||
Cash and cash equivalents |
||||||||
Cash and cash equivalents |
10,240,429 | 25,977,703 | ||||||
Debt |
||||||||
Short term debt/ loan |
911,082 | 65,768 | ||||||
Net cash |
9,329,347 | 25,911,935 |
Since inception, we have financed our business primarily through the issuance of equity securities, funding from strategic partners, government grants and rebates (including the research and development tax incentive income), cash flows generated from operations and a loan.
The Group has experienced net cash outflows over recent periods, predominantly in conducting research & development activities, product approval and registrations, launch of our products and support of the same in the marketplace. We continue to reduce research & development expenditure and other operating expenditure in the foreseeable future and focus on increasing our commercialization efforts. We are closely monitoring the success of our commercialization efforts in relation to the newly launched product portfolio and their impact on our cash position. Given the natural uncertainty that arises with the launch of new products, if we were to experience delays or encounter issues in these commercialization efforts, we would need and expect to adjust our operating expenditure accordingly, to ensure sufficient cash remains available to fund our operations for at least the next twelve months from the date of issuance. We do not have any external long-term debt obligations and are not subject to any covenant obligations.
We believe we have sufficient cash and cash equivalents to fund our operations for at least the next twelve months from the date of issuance. Liquidity risk is the risk that the Company may encounter difficulty meeting obligations associated with financial liabilities. The Company manages liquidity risk through the management of its capital structure. The purpose of liquidity management is to ensure that there is sufficient cash to meet all the financial commitments and obligations of the Company as they come due. In managing the Company’s capital, management estimates future cash requirements by preparing a budget and a multi-year plan for review and approval by the Board of Directors (“the Board”). The budget is reviewed and updated periodically and establishes the approved activities for the next twelve months and estimates the costs associated with those activities. The multi-year plan estimates future activity along with the potential cash requirements and is based upon management’s assessment of current progress along with the expected results from the coming years’ activity. Budget to actual variances is prepared and reviewed by management and are presented on a regular basis to the Board.
The carrying value of the cash and cash equivalents and the accounts receivables approximates fair value because of their short-term nature.
We regularly review all our financial assets for impairment. A financial asset is a non-physical asset whose value is derived from a contractual claim and in our case includes cash and cash equivalents, accounts receivables, fixed deposits and equity shares. There were no impairments recognized as at December 31, 2023 or for the year ended December 31, 2022.
Measures of Liquidity and Capital Resources
The following table provides certain relevant measures of liquidity and capital resources:
Year Ended December 31, |
||||||||
2023 |
2022 |
|||||||
A$ |
A$ |
|||||||
Cash and cash equivalents |
10,240,429 | 25,977,703 | ||||||
Working capital |
16,053,982 | 23,586,600 | ||||||
Ratio of current assets to current liabilities |
3.70 | 2.80 | ||||||
Shareholders’ equity per common share |
0.09 | 0.12 |
The movement in cash and cash equivalents and working capital (calculated as current assets less current liabilities) during the years ended December 31, 2023 and 2022 was primarily the result of ongoing investment in our R&D and the general operations of the Company.
We have not identified any collection issues with respect to receivables.
Summary of Cash Flows
Year Ended December 31, |
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2023 |
2022 |
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A$ |
A$ |
|||||||
Cash provided by/(used in): |
||||||||
Operating activities |
(14,619,044 | ) | (14,702,153 | ) | ||||
Investing activities |
(1,473,367 | ) | (1,565,144 | ) | ||||
Financing activities |
(82,839 | ) | 25,011,276 | |||||
Net increase/(decrease) in cash, cash equivalents and restricted cash |
(16,175,250 | ) | 8,743,979 |
Our net cash used in operating activities for the years ended December 31, 2023 and 2022 represents receipts offset by payments for our R&D projects including efforts involved in establishing and maintaining our manufacturing operations and selling, general and administrative expenditure. Cash outflows from operating activities primarily represent the ongoing investment in our R&D activities and the general operations of the Company. As our products capture increased market share, we expect our inflows from the receipt from our customers to eventually exceed the cash outflows from operating activities.
Our net cash used in investing activities for all periods is primarily for the purchase of various equipment and for the various continuous improvement programs we are undertaking. Included in accounts payable is an amount of A$35,782 and A$289,371 for the years ended December 31, 2023 and 2022, respectively for the acquisition of property, plant and equipment.
Our net cash decrease in financing activities for the year ended December 31, 2023 primarily represents repayment of the Canada Emergency Business Account unsecured loan of CAD$40,000 and transaction costs sustained during our May 2022 capital raise. Our net cash increase in financing activities for the year ended December 31, 2022 is primarily the result of A$26 million raised pursuant to a A$20 million fully underwritten rights issue and a A$6 million placement which occurred in May 2022.
Off-Balance Sheet Arrangement
As of December 31, 2023 and December 31, 2022, we did not have any off-balance sheet arrangements, as such term is defined under Item 303 of Regulation S-K, that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.
Segments
We operate in one segment. We are a specialist biosensors company focused on the development, manufacture and commercialization of a range of point-of-use devices for measuring different analytes across different industries.
Our operations are in Australia, US, Europe and Canada.
The Company’s material long-lived assets are predominantly based in Australia.
Recent Accounting Pronouncements
See Note 1, Summary of Significant Accounting Policies – Recent Accounting Pronouncements.
Financial Risk Management
The overall objective of our financial risk management program is to seek to minimize the impact of foreign exchange rate movements and interest rate movements on our earnings. We manage these financial exposures through operational means and by using financial instruments where we deem appropriate. These practices may change as economic conditions change.
Foreign Currency Market Risk
We transact business in various foreign currencies, including A$, US$, CAD$ and Euros. The Company is currently using natural hedging to limit currency exposure, however the Company has an established foreign currency hedging program available where forward contracts are used to hedge the net projected exposure for each currency and the anticipated sales and purchases in U.S. dollars where required. The goal of this hedging program is to economically guarantee or lock-in the exchange rates on our foreign exchange exposures. No forward contracts were entered by the Company for the years ended December 31, 2023 and 2022. The Company does not hold or issue derivative financial instruments for trading purposes. However, derivatives that do not qualify for hedge accounting are accounted for as trading instruments.
The Company has recorded foreign currency transaction losses of A$30,177 and A$115,515 for the years ended December 31, 2023 and 2022, respectively.
Interest Rate Risk
The majority of our investments are in cash and cash equivalents in Australian dollars. Our interest income is not materially affected by changes in the general level of U.S. and Australian interest rates. The primary objective of our investment activities is to preserve principal while at the same time maximizing the income we receive without significantly increasing risk. Our investment portfolio is subject to interest rate risk but due to the short duration of our investment portfolio, we believe an immediate 10% change in interest rates would not be material to our financial condition or results of operations.
Inflation
Our business is subject to the general risks of inflation. Our results of operations depend on our ability to anticipate and react to changes in the price of raw materials and other related costs over which we may have little control. Our inability to anticipate and respond effectively to an adverse change in the price could have a significant adverse effect on our results of operations. In the face of increasing costs, the Company strives to maintain its profit margins through cost reduction programs, productivity improvements and periodic price increases. For the two most recent fiscal years, the impact of inflation and changing prices on our net sales, revenues, income and costs from continuing operations has not been material.
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Stockholders of Universal Biosensors, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Universal Biosensors, Inc. and its subsidiaries (the “Company”) as of December 31, 2023 and 2022, and the related consolidated statements of comprehensive income/(loss), of changes in stockholders’ equity and comprehensive income/(loss), and of cash flows for the years then ended, including the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023, and 2022, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these consolidated financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
/s/
February 29, 2024
We have served as the Company's auditor since 2006
Consolidated Balance Sheets
December 31, |
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2023 |
2022 |
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A$ |
A$ |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
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Inventories |
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Accounts receivable |
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Prepayments |
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Restricted cash |
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Research and development tax incentive receivable |
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Other current assets |
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Total current assets |
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Non-current assets: |
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Property, plant and equipment |
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Less accumulated depreciation |
( |
) | ( |
) | ||||
Property, plant and equipment - net |
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Intangible assets |
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Less amortization of intangible assets |
( |
) | ||||||
Less impairment of intangible assets |
( |
) | ||||||
Intangible assets - net |
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Right-of-use asset - operating leases |
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Right-of-use asset - finance leases |
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Restricted cash |
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Other non-current assets |
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Total non-current assets |
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Total assets |
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LIABILITIES AND STOCKHOLDERS’ EQUITY |
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Current liabilities: |
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Accounts payable |
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Accrued expenses |
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Contingent consideration |
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Other liabilities |
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Contract liabilities |
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Lease liability - operating leases |
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Lease liability - finance leases |
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Employee entitlements liabilities |
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Short-term loan |
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Total current liabilities |
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Non-current liabilities: |
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Asset retirement obligations |
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Employee entitlements liabilities |
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Lease liability - operating leases |
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Lease liability - finance leases |
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Total non-current liabilities |
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Total liabilities |
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Commitments and contingencies |
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Stockholders’ equity: |
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Preferred stock, US$ |
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Additional paid-in capital |
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Accumulated deficit |
( |
) | ( |
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Current year loss |
( |
) | ( |
) | ||||
Accumulated other comprehensive loss |
( |
) | ( |
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Total stockholders’ equity |
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Total liabilities and stockholders’ equity |
See accompanying Notes to the Consolidated Financial Statements.
Consolidated Statements of Comprehensive Income/(Loss)
Year Ended December 31, |
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2023 |
2022 |
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A$ |
A$ |
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Revenue |
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Revenue from products |
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Revenue from services |
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Total revenue |
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Operating costs and expenses |
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Cost of goods sold |
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Cost of services |
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Total cost of goods sold and services |
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Gross profit |
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Other operating costs and expenses |
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Product support |
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Depreciation and amortization |
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Impairment of definite-lived intangible assets |
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Research and development |
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Selling, general and administrative |
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Total operating costs and expenses |
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Loss from operations |
( |
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Other income/(expense) |
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Interest income |
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Interest expense |
( |
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Financing costs |
( |
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Research and development tax incentive income |
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Exchange loss |
( |
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Other income |
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Total other income |
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Net loss before tax |
( |
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) | ||||
Income tax benefit/(expense) |
||||||||
Net loss after tax |
( |
) | ( |
) | ||||
Net loss per share | ||||||||
Net loss per share - basic and diluted |
( |
) | ( |
) | ||||
Average weighted number of shares - basic and diluted |
||||||||
Other comprehensive gain/(loss), net of tax: |
||||||||
Foreign currency translation reserve |
( |
) | ||||||
Other comprehensive income/(loss) |
( |
) | ||||||
Comprehensive income/(loss) |
( |
) | ( |
) |
See accompanying Notes to the Consolidated Financial Statements.
Consolidated Statements of Changes in Stockholders’ Equity and Comprehensive Income/(Loss)
Year Ended December 31, 2023
Ordinary shares |
Additional |
Accumulated |
Other comprehensive |
Total stockholders’ |
||||||||||||||||||||
Shares |
Amount |
paid-in capital | deficit | income/ (loss) | equity | |||||||||||||||||||
A$ |
A$ |
A$ |
A$ |
A$ |
||||||||||||||||||||
Balances at January 1, 2023 |
( |
) | ( |
) | ||||||||||||||||||||
Net loss |
0 | ( |
) | ( |
) | |||||||||||||||||||
Other comprehensive loss |
0 | ( |
) | ( |
) | |||||||||||||||||||
Performance awards and exercise of stock options issued to employees |
( |
) | ||||||||||||||||||||||
Stock-based compensation expense |
0 | |||||||||||||||||||||||
Balances at December 31, 2023 |
( |
) | ( |
) |
Year Ended December 31, 2022
Ordinary shares |
Additional |
Accumulated |
Other comprehensive |
Total stockholders’ |
||||||||||||||||||||
Shares |
Amount |
paid-in capital | deficit | income/ (loss) | equity | |||||||||||||||||||
A$ |
A$ |
A$ |
A$ |
A$ |
||||||||||||||||||||
Balances at January 1, 2022 |
( |
) | ( |
) | ||||||||||||||||||||
Net loss |
0 | ( |
) | ( |
) | |||||||||||||||||||
Issuance of common stock at A$ |
||||||||||||||||||||||||
Other comprehensive income |
0 | |||||||||||||||||||||||
Performance awards and exercise of stock options issued to employees |
0 | |||||||||||||||||||||||
Stock-based compensation expense |
0 | |||||||||||||||||||||||
Capitalized stock-based compensation |
0 | |||||||||||||||||||||||
Balances at December 31, 2022 |
( |
) | ( |
) |
See accompanying Notes to the Consolidated Financial Statements.
Consolidated Statements of Cash Flows
Year Ended December 31, |
||||||||
2023 |
2022 |
|||||||
A$ |
A$ |
|||||||
Cash flows from operating activities: |
||||||||
Net loss |
( |
) | ( |
) | ||||
Adjustments to reconcile net loss to net cash used in operating activities: |
||||||||
Depreciation and amortization |
||||||||
Impairment of definite-lived intangible assets |
||||||||
Stock-based compensation expense |
||||||||
Non-cash lease expense |
||||||||
Unrealized foreign exchange losses |
||||||||
Change in assets and liabilities: |
||||||||
Other liabilities |
( |
) | ||||||
Inventories |
( |
) | ( |
) | ||||
Accounts receivable |
( |
) | ( |
) | ||||
Prepayments and other assets |
( |
) | ||||||
Other non-current assets |
( |
) | ( |
) | ||||
Contract liabilities |
( |
) | ||||||
Employee entitlements |
||||||||
Accounts payable and accrued expenses |
( |
) | ||||||
Net cash used in operating activities |
( |
) | ( |
) | ||||
Cash flows from investing activities: |
||||||||
Purchases of property, plant and equipment |
( |
) | ( |
) | ||||
Net cash used in investing activities |
( |
) | ( |
) | ||||
Cash flows from financing activities: |
||||||||
Proceeds from borrowings |
||||||||
Repayment of borrowings |
( |
) | ( |
) | ||||
Proceeds from issuance of common stock, net of issuance costs |
( |
) | ||||||
Other |
( |
) | ||||||
Net cash (used in)/provided by financing activities |
( |
) | ||||||
Net decrease in cash, cash equivalents and restricted cash |
( |
) | ||||||
Cash, cash equivalents and restricted cash at beginning of period |
||||||||
Effect of exchange rate fluctuations on the balances of cash held in foreign currencies |
( |
) | ( |
) | ||||
Cash, cash equivalents and restricted cash at end of period |
See accompanying Notes to the Consolidated Financial Statements.
1. Summary of Significant Accounting Policies
Basis of Presentation
The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP” or “GAAP”).
Unless otherwise noted, references in this Annual Report to “Universal Biosensors”, the “Company,” “Group,” “we,” “our” or “us” means Universal Biosensors, Inc. (“UBI”), a Delaware corporation and, when applicable, its wholly owned Australian operating subsidiary, Universal Biosensors Pty Ltd (“UBS”) , its wholly owned US operating subsidiary, Universal Biosensors LLC (“UBS LLC”) and UBS’ wholly owned Canadian operating subsidiary, Hemostasis Reference Laboratory Inc. (“HRL”) and wholly owned Dutch operating subsidiary, Universal Biosensors B.V. (“UBS BV”). Unless otherwise noted, all references in this Form 10-K to “$”, “A$” or “dollars” and dollar amounts are references to Australian dollars. References to “US$”, “CAD$” and “€” are references to United States dollars, Canadian dollars and Euros respectively.
The consolidated financial statements have been prepared assuming the Company will continue as a going concern. We rely largely on our existing cash and cash equivalents balance and operating cash flow to provide for the working capital needs of our operations. We believe we have sufficient cash and cash equivalents to fund our operations for at least the next twelve months from the date of issuance. However, in the event our financing needs for the foreseeable future are not able to be met by our existing cash and cash equivalents balance and operating cash flow, we would seek to raise funds through public or private equity offerings, debt financings, and through other means to meet the financing requirements or through reduction of costs. There is no assurance that funding would be available at acceptable terms, if at all.
Unless otherwise stated, the accounting policies adopted are consistent with those of the previous year.
Principles of Consolidation
The consolidated financial statements include the financial statements of the Company and its wholly owned subsidiaries, UBS, UBS LLC, HRL and UBS BV. All intercompany balances and transactions have been eliminated on consolidation.
Use of Estimates
The preparation of the consolidated financial statements requires management of the Company to make a number of estimates and assumptions relating to the reported amount of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the period. Significant items subject to such estimates and assumptions include deferred income taxes, research and development tax incentive income, impairment of definite-lived intangible assets and stock-based compensation expenses. Actual results could differ from those estimates.
Recent Accounting Pronouncements
The Company assesses the adoption impacts of recently issued accounting standards by the Financial Accounting Standards Board on the Company's financial statements as well as material updates to previous assessments, if any, from the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023. There were no new material accounting standards issued in 2023 that impacted the Company with the exception of the following:
• |
In December 2023, the FASB issued ASU No. 2023-09, Improvements to Income Tax Disclosures, which requires disaggregated information about a reporting entity's effective tax rate reconciliation as well as information on income taxes paid. The standard is intended to benefit investors by providing more detailed income tax disclosures that would be useful in making capital allocation decisions. The amendments in this ASU are effective for annual periods beginning on January 1, 2025, and should be applied on a prospective basis with the option to apply the standard retrospectively. Early adoption is permitted. This ASU will have no impact on the Company's consolidated financial condition or results of operations. The Company is currently evaluating the impact to its income tax disclosures. |
• |
In November 2023, the FASB issued ASU No. 2023-07, Improvements to Reportable Segment Disclosures, which improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. In addition, the amendments enhance interim disclosure requirements, clarify circumstances in which an entity can disclose multiple segment measures of profit or loss, provide new segment disclosure requirements for entities with a single reportable segment, and contain other disclosure requirements. The purpose of the amendments is to enable investors to better understand an entity's overall performance and assess potential future cash flows. For public business entities, the amendments in this ASU are effective for annual periods beginning on January 1, 2024 and interim periods beginning on January 1, 2025, and should be applied on a retrospective basis for all periods presented. For entities other than public business entities, the ASU is effective for annual periods beginning after December 15, 2025. This ASU will have no impact on the Company's consolidated financial condition or results of operations. The Company is currently evaluating the impact to its segment disclosures. |
Net Loss per Share and Anti-dilutive Securities
Basic and diluted net loss per share is presented in conformity with ASC 260 – Earnings per Share. Basic and diluted net loss per share has been computed using the weighted-average number of common shares outstanding during the period. Diluted net loss per share is calculated by adjusting the basic net loss per share by assuming all dilutive potential ordinary shares are converted.
Foreign Currency
Functional and Reporting Currency
Items included in the financial statements of each of the Company’s entities are measured using the currency of the primary economic environment in which the entity operates (“the functional currency”). The functional currency of UBI and UBS is A$ for all years presented. The functional currencies of UBS LLC, HRL and UBS BV are US$, CAD$ and €, respectively, for all years presented.
The consolidated financial statements are presented using a reporting currency of A$.
Transactions and Balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognized in the consolidated statements of comprehensive income/(loss).
The results and financial position of all the Group entities that have a functional currency different from the reporting currency are translated into the reporting currency as follows:
● |
assets and liabilities for each balance sheet item reported are translated at the closing rate at the date of that balance sheet; |
● |
income and expenses for each income statement item reported are translated at average exchange rates (unless this is not a reasonable approximation of the effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the dates of the transactions); and |
● |
all resulting exchange differences are recognized as a separate component of equity. |
On consolidation, exchange differences arising from the translation of any net investment in foreign entities are taken to the Accumulated Other Comprehensive Income/(Loss).
Fair Value of Financial Instruments
The carrying value of all current assets and current liabilities approximates fair value because of their short-term nature. The estimated fair value of all other amounts has been determined, depending on the nature and complexity of the assets or the liability, by using one or all of the following approaches:
● |
Market approach – based on market prices and other information from market transactions involving identical or comparable assets or liabilities. |
● |
Cost approach – based on the cost to acquire or construct comparable assets less an allowance for functional and/or economic obsolescence. |
● |
Income approach – based on the present value of a future stream of net cash flows. |
These fair value methodologies depend on the following types of inputs:
● |
Quoted prices for identical assets or liabilities in active markets (Level 1 inputs). |
● |
Quoted prices for similar assets or liabilities in active markets or quoted prices for identical or similar assets or liabilities in markets that are not active or are directly or indirectly observable (Level 2 inputs). |
● |
Unobservable inputs that reflect estimates and assumptions (Level 3 inputs). |
Concentration of Credit Risk and Other Risks and Uncertainties
Cash, cash equivalents, restricted cash and accounts receivable consist of financial instruments that potentially subject the Company to concentration of credit risk to the extent of the amount recorded on the consolidated balance sheets. The Company’s cash, cash equivalents and restricted cash are primarily invested with one of Australia’s largest banks. The Company is exposed to credit risk in the event of default by the banks holding the cash, cash equivalents and restricted cash to the extent of the amount recorded on the consolidated balance sheets. The Company has not experienced any losses on its deposits of cash, cash equivalents and restricted cash. The Company has not identified any collectability issues with respect to receivables.
Cash, Cash Equivalents and Restricted Cash
The Company considers all highly liquid investments purchased with an initial maturity of three months or less to be cash equivalents. For cash and cash equivalents, the carrying amount approximates fair value due to the short maturity of those instruments.
The Company maintains cash and restricted cash, which includes collateral for facilities.
Inventory
Inventories are stated at the lower of cost or net realizable value. Net realizable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and estimated costs necessary to dispose. Inventories are principally determined under the average cost method which approximates cost. Cost comprises direct materials, direct labour and an appropriate portion of variable and fixed overhead expenditure, the latter being allocated on the basis of normal operating capacity. Costs of purchased inventory are determined after deducting rebates and discounts. The Company recognizes inventory on the consolidated balance sheets when they have concluded that the substantial risks and rewards of ownership, as well as the control of the asset, have been transferred.
Receivables
Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The allowance for credit losses is the best estimate of the amount of probable credit losses in the existing accounts receivable. The allowance is determined based on a review of individual accounts for collectability, generally focusing on those accounts that are past due. The expense to adjust the allowance for credit losses, if any, is recorded within selling, general and administrative expenses in the consolidated statements of comprehensive income/(loss). Account balances are charged against the allowance when it is probable the receivable will not be recovered.
Prepayments
Prepaid expenses represent expenditures that have not yet been recorded by the Company as an expense, but have been paid for in advance. The Company’s prepayments are primarily represented by insurance premiums paid annually in advance.
Other Current Assets
The Company’s other current assets are primarily represented by sundry receivables.
Property, Plant and Equipment
Property, plant and equipment are recorded at acquisition cost, less accumulated depreciation.
Depreciation on plant and equipment is calculated using the straight-line method over the estimated useful lives of the assets. The estimated useful life of machinery and equipment is
to years. Leasehold improvements are amortized on the straight-line method over the shorter of the remaining lease term or estimated useful life of the asset. Maintenance and repairs that do not extend the life of the asset are charged to operations as incurred and include normal services and do not include items of a capital nature.
Impairment of Long-Lived Assets
The Company reviews its long-lived assets, including property, plant and equipment and definite-lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable. An impairment loss is recognized when the undiscounted future cash flows expected to result from the use of the asset is less than the carrying amount of the asset. Accordingly, we recognise an impairment loss based on the excess of the carrying value amount over the fair value of the asset.
Australian Goods and Services Tax, Canadian Harmonized Sales Tax, US Sales Tax and European Value Added Tax, collectively “Sales Tax”
Revenues, expenses and assets are recognized net of the amount of associated Sales Tax, unless the Sales Tax incurred is not recoverable from the taxation authority. In this case it is recognized as part of the cost of acquisition of the asset or as part of the expense. Receivables and payables are stated inclusive of the amount of Sales Tax receivable or payable. The net amount of Sales Tax recoverable from, or payable to, the taxation authority is included with other current assets or accrued expenses in the consolidated balance sheets dependent on whether the balance owed to the taxation authorities is in a net receivable or payable position.
Leases
At contract inception, the Company determines if the new contractual arrangement is a lease or contains a leasing arrangement. If a contract contains a lease, the Company evaluates whether it should be classified as an operating or a finance lease. Upon modification of the contract, the Company will reassess to determine if a contract is or contains a leasing arrangement.
The Company records lease liabilities based on the future estimated cash payments discounted over the lease term, defined as the non-cancellable time period of the lease, together with all the following:
● |
periods covered by an option to extend the lease if the Company is reasonably certain to exercise the extension option; and |
● |
periods covered by an option to terminate the lease if the Company is reasonably certain not to exercise the termination option. |
Leases may also include options to terminate the arrangement or options to purchase the underlying lease property. The Company does not separate lease and non-lease components of contracts. Lease components provide the Company with the right to use an identified asset, which consist of the Company’s real estate properties and office equipment. Non-lease components consist primarily of maintenance services.
As an implicit discount rate is not readily determinable in the Company’s lease agreements, the Company uses its estimated secured incremental borrowing rate based on the information available at the lease commencement date in determining the present value of future lease payments. For certain leases with original terms of twelve months or less, the Company recognizes lease expense as incurred and does not recognize any lease liabilities. Short-term and long-term portions of operating and finance lease liabilities are classified as lease liabilities in the Company’s consolidated balance sheets.
A right-of-use (“ROU”) asset is measured as the amount of the lease liability with adjustments, if applicable, for lease incentives, initial direct costs incurred by the Company and lease prepayments made prior to or at lease commencement. ROU assets are classified as operating or finance lease right-of-use assets, net of accumulated amortization, on the Company’s consolidated balance sheets. The Company evaluates the carrying value of ROU assets if there are indicators of potential impairment and performs the analysis concurrent with the review of the recoverability of the related asset group. If the carrying value of the asset group is determined to not be fully recoverable and is in excess of its estimated fair value, the Company will record an impairment loss in its consolidated statements of income and comprehensive income/(loss).
Lease payments may be fixed or variable, however, only fixed payments or in-substance fixed payments are included in the Company’s lease liability calculation. Variable lease payments are recognized in operating expenses in the period in which the obligation for those payments is incurred.
Asset Retirement Obligations
Asset retirement obligations are legal obligations associated with the retirement and removal of long-lived assets. ASC 410 – Asset Retirement and Environmental Obligations requires entities to record the fair value of a liability for an asset retirement obligation when it is incurred. When the liability is initially recorded, the Company capitalizes the cost by increasing the carrying amounts of the related property, plant and equipment. Over time, the liability increases for the change in its present value, while the capitalized cost depreciates over the useful life of the asset. The Company derecognizes ARO liabilities when the related obligations are settled.
The ARO is in relation to our premises where in accordance with the terms of the lease, the lessee has to restore part of the building upon vacating the premises.
Revenue Recognition
The Group recognizes revenue predominantly from the sale of analyzers and test strips and the provision of laboratory testing services based on the provisions of ASC 606 Revenue from Contracts with Customers. In accordance with this provision, to determine whether to recognize revenue, the Group follows a five-step process:
a) |
Identifying the contract with a customer; |
b) |
Identifying the performance obligations within the customer contract; |
c) |
Determining the transaction price; |
d) |
Allocating the transaction price to the performance obligation; and |
e) |
Recognizing revenue when/as performance obligations are satisfied. |
Nature of goods and services
The following is a description of products and services from which the Company generates its revenue.
Products and services |
Nature, timing of satisfaction of performance obligations and significant payment terms |
|
Coagulation testing products (“Xprecia”) |
Our point-of-care coagulation testing products use electrochemical cell technology to measure Prothrombin Time (PT/INR), a test used to monitor the effect of the anticoagulant therapy warfarin.
The performance obligation for the sale of these products is satisfied at a point-in-time when the Company transfers control of the products to its customer. The point of transfer of control of the products is dictated by individual terms contained within a customer agreement, as are the payment terms. The transaction price is fixed. |
|
Laboratory testing services |
HRL provides non-diagnostic laboratory services and performs these services on behalf of customers.
The performance obligation for the services is satisfied when the testing has been finalized and results have been reported to the customer. In some cases, the performance obligations will be satisfied as predetermined milestones have been achieved by the Company. |
|
Wine testing products (“Sentia”) |
Our Sentia wine analyzer is used to measure Free SO₂, Malic Acid, Glucose, Fructose, Total Sugar, Acetic Acid and Titratable Acidity levels in wine.
The performance obligation for the sale of this product is satisfied at a point-in-time when the Company transfers control of the products to its customer. The point of transfer of control of the products is dictated by the individual terms contained within a customer agreement, as are the individual payment terms. The transaction price is fixed. |
|
Veterinary diabetes product (“Petrackr”) |
Our veterinary blood glucose product, Petrackr, is a blood glucose monitoring product for dogs and cats with diabetes.
The performance obligation for the sale of this product is satisfied at a point-in-time when the Company transfers control of the products to its customer. The point of transfer of control of the products is dictated by the individual terms contained within a customer agreement, as are the individual payment terms. The transaction price is fixed. |
See Note 12 to the Consolidated Financial Statements for a disaggregation of revenue.
Interest Income
Interest income is recognized as it accrues, taking into account the effective yield and consists of interest earned on cash, cash equivalents and restricted cash in interest-bearing accounts.
Research and Development Tax Incentive Income
Research and development tax incentive income is recognized when there is reasonable assurance that the income will be received, the relevant expenditure has been incurred and the consideration can be reliably measured.
The research and development tax incentive is one of the key elements of the Australian Government’s support for Australia’s innovation system and is supported by legislative law primarily in the form of the Australian Income Tax Assessment Act 1997 as long as eligibility criteria are met. Subject to meeting a number of conditions, an entity involved in eligible research and development (“R&D”) activities may claim research and development tax incentive income as follows:
(1) |
as a |
(2) |
as a |
In accordance with SEC Regulation S-X Article 5-03, the Company’s research and development tax incentive income has been recognized as non-operating income as it is not indicative of the core operating activities or revenue producing goals of the Company.
Management has assessed the Company’s R&D activities and expenditures to determine which activities and expenditures are likely to be eligible under the tax incentive regime described above. At each period end management estimates the refundable tax offset available to the Company based on available information at the time. This estimate is also reviewed by external tax advisors on an annual basis.
The Company has recorded research and development tax incentive income of A$
Research and Development Expenditure
R&D expenses consist of costs incurred to further the Company’s research and product development activities and include salaries and related employee benefits, costs associated with clinical trial and preclinical development, regulatory activities, research-related overhead expenses, costs associated with the manufacture of clinical trial material, costs associated with developing a commercial manufacturing process, costs for consultants and related contract research, facility costs and depreciation. R&D costs are expensed as incurred as they fall in the scope of ASC 730 ‘Research and Development’.
Clinical Trial Expenses
Clinical trial costs are a component of R&D expenses. These expenses include fees paid to participating hospitals and other service providers, which conduct certain testing activities on behalf of the Company. Depending on the timing of payments to the service providers and the level of service provided, the Company records prepaid or accrued expenses relating to these costs.
Stock-based Compensation
We measure stock-based compensation at grant date, based on the estimated fair value of the award and recognize the cost as an expense on a straight-line basis over the vesting period of the award. We estimate the fair value of stock options using the Trinomial Lattice model.
We record deferred tax assets for awards that will result in deductions on our income tax returns, based on the amount of compensation cost recognized and our statutory tax rate in the jurisdiction in which we will receive a deduction. Differences between the deferred tax assets recognized for financial reporting purposes and the actual tax deduction reported in our income tax return are recorded in expense or in capital in excess of par value if the tax deduction exceeds the deferred tax assets or to the extent that previously recognized credits to paid-in-capital are still available if the tax deduction is less than the deferred tax asset.
Employee Benefit Costs
The Company contributes a portion of each employee’s salary to standard defined contribution superannuation funds on behalf of all eligible UBS employees in line with legislative requirements. The contribution rate increased from
Registered Retirement Savings Plan and Deferred Sharing Profit Plan
The Company provides eligible HRL employees with a retirement plan. The retirement plan includes a Registered Retirement Savings Plan (“RRSP”) and Deferred Profit Sharing Plan (“DPSP”). The RRSP is voluntary and the employee contributions are matched by the Company up to a maximum of
Benefit Plan
The Company provides eligible HRL employees a Benefit Plan. In general, the Benefit Plan includes extended health care, dental care, basic life insurance, basic accidental death and dismemberment and disability insurance.
401k Plan
The Company acts as a plan sponsor for a 401K plan for eligible UBS LLC employees. A 401K plan is a US-based defined-contribution pension account into which the employees can elect to have a percentage of their salary deducted and contributed to the plan. Their contributions are matched by the Company up to a maximum of
Employee Entitlements Liabilities
Employee entitlements to annual leave and long service leave are recognized when they accrue to employees. A provision is made for the estimated liability for annual leave and long-service leave as a result of services rendered by employees up to the balance sheet date.
Income Taxes
We are subject to income taxes in Australia, Canada, the Netherlands and the United States. The Company applies ASC 740 - Income Taxes which establishes financial accounting and reporting standards for the effects of income taxes that result from a Company’s activities during the current and preceding years. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.
Where it is more likely than not that some portion or all of the deferred tax assets will not be realized, the deferred tax assets are reduced by a valuation allowance. The valuation allowance is sufficient to reduce the deferred tax assets to the amount that is more likely than not to be realized.
Pursuant to the U.S. tax reform rules, UBI is subject to regulations addressing Global Intangible Low-Taxed Income ("GILTI"). The GILTI rules are provisions of the U.S. tax code enacted as a part of tax reform legislation in the U.S. passed in December 2017. Mechanically, the GILTI rule functions as a global minimum tax for all U.S. shareholders of controlled foreign corporations (“CFCs”) and applies broadly to certain income generated by a CFC. The Company can make an accounting policy election to either: (1) treat GILTI as a period cost if and when incurred; or (2) recognize deferred taxes for basis differences that are expected to reverse as GILTI in future years. The Company has elected to treat GILTI as a period cost.
2. Cash, cash equivalents and restricted cash
The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown in the consolidated statements of cash flows.
December 31, |
||||||||
2023 |
2022 |
|||||||
A$ |
A$ |
|||||||
Cash and cash equivalents |
||||||||
Restricted cash – current assets |
||||||||
Restricted cash – non-current assets |
||||||||
Restricted cash maintained by the Company in the form of term deposits is as follows:
December 31, |
||||||||
2023 |
2022 |
|||||||
A$ |
A$ |
|||||||
Performance guarantee (a) - current assets |
||||||||
Collateral for facilities (b) - current assets |
||||||||
Collateral for facilities (b) - non-current assets |
||||||||
(a) |
|
(b) |
|
Interest earned on the restricted cash for years ended December 31, 2023 and 2022 was A$
3. Inventories
December 31, |
||||||||
2023 |
2022 |
|||||||
A$ |
A$ |
|||||||
Raw materials |
||||||||
Work in progress |
||||||||
Finished goods |
||||||||
4. Receivables
December 31, |
||||||||
2023 |
2022 |
|||||||
A$ |
A$ |
|||||||
Accounts receivable |
||||||||
Allowance for credit losses |
||||||||
5. Property, Plant and Equipment
December 31, |
||||||||
2023 |
2022 |
|||||||
A$ |
A$ |
|||||||
Plant and equipment |
||||||||
Leasehold improvements |
||||||||
Capital work in process |
||||||||
Accumulated depreciation |
( |
) | ( |
) | ||||
Property, plant & equipment - net |
6. Leases
The Company’s lease portfolio consists primarily of operating leases for office space and equipment with contractual terms expiring from December 2025 to February 2032. Lease contracts may include one or more renewal options that allow the Company to extend the lease term. The exercise of lease options is generally at the discretion of the Company. None of the Company’s leases contain residual value guarantees, substantial restrictions, or covenants. The Company’s leases are substantially within Australia and Canada.
December 31, |
||||||||
2023 |
2022 |
|||||||
A$ |
A$ |
|||||||
Operating lease right-of-use assets: |
||||||||
Non-current |
||||||||
Operating lease liabilities: |
||||||||
Current |
||||||||
Non-current |
||||||||
Weighted average remaining lease terms (in years) |
||||||||
Weighted average discount rate |
% | % |
The components of lease income/expense were as follows:
Year Ended December 31, |
||||||||
2023 |
2022 |
|||||||
A$ |
A$ |
|||||||
Fixed payment operating lease expense |
||||||||
Short-term lease expense |
||||||||
Sub-lease income |
The sublease income is deemed an operating lease.
The components of the fixed payment operating and short-term lease expense as classified in the consolidated statements of comprehensive income/(loss) are as follows:
Year Ended December 31, |
||||||||
2023 |
2022 |
|||||||
A$ |
A$ |
|||||||
Cost of goods sold |
||||||||
Cost of services |
||||||||
Research and development |
||||||||
Selling, general and administrative |
||||||||
Supplemental cash flow information related to the Company’s leases was as follows:
Year Ended December 31, |
||||||||
2023 |
2022 |
|||||||
A$ |
A$ |
|||||||
Operating cash outflows from operating leasses |
Supplemental non-cash information related to the Company’s leases was as follows:
Year Ended December 31, |
||||||||
2023 |
2022 |
|||||||
A$ |
A$ |
|||||||
Right-of-use assets obtained in exchange for lease liabilities |
||||||||
Right-of-use asset modifications |
Future lease payments are as follows:
December 31, 2023 |
||||
A$ |
||||
1 year |
||||
2 years |
||||
3 years |
||||
4 years |
||||
5 years |
||||
Thereafter |
||||
Total future lease payments |
||||
Less: imputed interest |
( |
) | ||
Total operating lease liabilities |
||||
Current |
||||
Non-current |
On January 1, 2021, the lease for 1 Corporate Avenue was terminated and a new lease entered into simultaneously. The lease expires on December 31, 2025 with an option to renew the lease for two further terms of
years each. The renewal option periods have not been included in the lease term as the Company is not reasonably certain that they will be exercised.
On June 28, 2021, HRL entered into a premises lease, which commenced in January 2022, with a
-year contractual period. The lease does not include an option to renew the lease for a further term.
On October 22, 2021, UBS entered into a lease arrangement to install solar panels and inverters ("panels"). The lease commenced in January 2022 upon installation of the panels. The panels were installed at the Company’s 1 Corporate Avenue premises. The lease has a term of
years and an option to buy at the end of the term.
As of December 31, 2023, the Company has not entered into any operating or finance lease agreements that have not yet commenced.
7. Income Taxes
Provision for Income Taxes
A reconciliation of the (benefit)/provision for income taxes is as follows:
Year Ended December 31, |
||||||||||||||||
2023 |
2022 |
|||||||||||||||
A$ |
% |
A$ |
% |
|||||||||||||
Loss before income taxes |
( |
) | ( |
) | ||||||||||||
Computed by applying income tax rate of home jurisdiction |
( |
) | ( |
) | ||||||||||||
Effect of tax rates in foreign jurisdictions |
( |
) | ( |
) | ||||||||||||
Research and development tax incentive |
( |
) | ( |
) | ||||||||||||
Disallowed expenses/(income): |
||||||||||||||||
Stock-based compensation |
( |
) | ( |
) | ||||||||||||
Amortization |
( |
) | ||||||||||||||
Other |
( |
) | ( |
) | ||||||||||||
Change in valuation allowance |
( |
) | ( |
) | ||||||||||||
Income tax expense/(benefit) |
( |
) | ( |
) |
The components of our loss before income taxes as either domestic or foreign is as follows:
Year Ended December 31, |
||||||||
2023 |
2022 |
|||||||
A$ |
A$ |
|||||||
Foreign |
( |
) | ( |
) | ||||
Domestic |
( |
) | ( |
) | ||||
( |
) | ( |
) |
Deferred Tax Assets and Liabilities
Year Ended December 31, |
||||||||
2023 |
2022 |
|||||||
A$ |
A$ |
|||||||
Deferred tax assets: |
||||||||
Operating loss carry forwards |
||||||||
Depreciation and amortization |
||||||||
Asset retirement obligations |
||||||||
Employee entitlements |
||||||||
Accruals |
||||||||
Decline in value of patents |
||||||||
Unrealized exchange loss |
||||||||
Total deferred tax assets |
||||||||
Valuation allowance for deferred tax assets |
( |
) | ( |
) | ||||
Net deferred tax asset |
||||||||
Deferred tax liabilities: |
||||||||
Other |
||||||||
Total deferred tax liabilities |
||||||||
Net deferred tax liabilities |
Significant components of deferred income taxes reflect the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting and tax purposes. A valuation allowance has been established, as realization of such assets is not more likely than not.
At December 31, 2023 the Company has A$
A reconciliation of the valuation and qualifying accounts is as follows:
Balance at Beginning |
Additions |
Deductions |
Balance at end of Period |
|||||||||||||
A$ |
A$ |
A$ |
A$ |
|||||||||||||
Year ended December 31, 2023 |
||||||||||||||||
Deferred income tax valuation allowance |
( |
) | ||||||||||||||
Year ended December 31, 2022 |
||||||||||||||||
Deferred income tax valuation allowance |
8. Accrued Expenses
Accrued expenses consist of the following:
December 31, |
||||||||
2023 |
2022 |
|||||||
A$ |
A$ |
|||||||
Legal, tax and accounting fees |
||||||||
Salary and related costs |
||||||||
Research and development costs |
||||||||
Patent fees |
||||||||
Inventory purchases |
||||||||
Legal, tax and accounting fees |
||||||||
Salary and related costs |
||||||||
Research and development costs |
||||||||
Patent fees |
||||||||
Inventory purchases |
||||||||
Sample collection site costs |
||||||||
Calibration costs |
||||||||
Public company costs |
||||||||
Freight |
||||||||
Royalties |
||||||||
Travel |
||||||||
Product design costs |
||||||||
Consultants |
||||||||
Warehouse expenses |
||||||||
Other |
||||||||
9. Contingent Consideration
Pursuant to the Siemens Acquisition and the agreement dated September 2019, the Company had agreed to pay US$
10. Other Liabilities
Other liabilities represent a marketing support payment due to a third party and is payable in US dollars once supporting documentation has been provided to the Company. This amount has been long outstanding and was derecognized as at June 30, 2023 as supporting documentation has not been provided to the Company. This amount has been recognized as Other Income in the consolidated condensed statements of comprehensive income/(loss). See note 13 for further details.
11. Short-Term Loan
The unsecured loan was a government guaranteed loan called Canada Emergency Business Account (CEBA) of CAD$
● |
the loan is interest-free and no principal repayment is required before December 31, 2023; |
● |
if the Company chooses to repay at least CAD$ |
● |
if the loan is not repaid by the above mentioned date, it will be converted into a 2-year term loan and will be charged an interest rate of 5% per annum. Interest-only payments are required each month; and |
● |
at the end of the 2-year term, the entire balance of the loan is due for repayment by December 31, 2025. |
In December 2023, the Company repaid CDN$
In January 2023, UBS entered into an arrangement with BOQF Cashflow Finance Pty Ltd to fund the Group’s 2023 insurance premium. The total amount financed was A$
In December 2023 the Company entered into a short-term loan facility to finance its 2024 Insurance Premium. The total amount available and drawn down under the facility is $
12. Revenue
Disaggregation of Revenue
In the following table, revenue is disaggregated by major product and service lines and timing of revenue recognition.
Year Ended December 31, |
||||||||
2023 |
2022 |
|||||||
A$ |
A$ |
|||||||
Major product/service lines |
||||||||
Coagulation testing products |
||||||||
Laboratory testing services |
||||||||
Wine testing products |
||||||||
Veterinary diabetes products |
||||||||
Timing of revenue recognition |
||||||||
Products and services transferred at a point in time |
Contract Balances
The following table provides information about receivables and contract liabilities from contracts with customers.
Year Ended December 31, |
||||||||
2023 |
2022 |
|||||||
A$ |
A$ |
|||||||
Receivables |
||||||||
Contract liabilities |
The Company’s contract liabilities represent the Company’s obligation to transfer products to customers for which the Company has received consideration from customers, but the transfer has not yet been completed.
Significant changes in the contract assets and the contract liabilities balances during the period are as follows:
Year Ended December 31, |
||||||||
2023 |
2022 |
|||||||
A$ |
A$ |
|||||||
Contract Liabilities - current | ||||||||
Opening balance |
||||||||
Closing balance |
||||||||
Net increase/(decrease) |
( |
) |
The Company expects all of the Company’s contract liabilities to be realized by December 31, 2024.
13. Other Income
Other income is recognized when there is reasonable assurance that the income will be received and the consideration can be reliably measured.
Other income is as follows for the relevant periods:
Year Ended December 31, |
||||||||
2023 |
2022 |
|||||||
A$ |
A$ |
|||||||
Federal and state government subsidies |
||||||||
Rental income |
||||||||
Other income |
||||||||
Sundry income |
||||||||
Sundry income represents the following:
● |
Previously accrued marketing support payment of derecognized |
● |
Previously accrued license fee payable to Siemens of derecognized |
● |
as a result of change in estimates in ARO liability |
ARO reflects estimates of future costs directly attributable to remediating the liability, inflation, assumptions of risks associated with the future cash outflows, and the applicable risk-free interest rates for discounting future cash outflows. Changes in these factors can result in a change to the ARO recognized by the Company. As a result of a change in estimates of future costs, the Company’s ARO liability decreased to
as at September 1, 2023 resulting in recorded as Other Income in the consolidated condensed statements of comprehensive income/(loss).
14. Equity Incentive Schemes
In 2004, the Company adopted an employee option plan which was subsequently replaced in 2021 by the Equity Incentive Plan (“the Equity Incentive Plan”) to cater for awards including options, performance rights, CDIs and restricted CDIs.
There were no securities awarded during the 2023 financial year pursuant to the Equity Incentive Plan. During the year ended December 31, 2022, the Company issued shares as a short-term incentive plan to select employees under the Equity Incentive Plan. All stock options and performance rights granted under the Equity Incentive Plan require eligible recipients to complete a requisite service period.
During the year ended December 31, 2022, the Company issued to Viburnum Funds Pty Ltd (“Viburnum”) in connection with the Entitlement Offer, unlisted options to purchase
At December 31, 2023, total stock compensation expense recognized in the consolidated statements of comprehensive income/(loss) was A$
(a) Stock Options
Stock options (“options”) may be granted pursuant to the Equity Incentive Plan to any person considered by the board to be employed by the Group on a permanent basis (whether full time, part time or on a long-term casual basis). Each option gives the holder the right to subscribe for
share of common stock. The total number of options that may be issued under the Equity Incentive Plan is such maximum amount permitted by law and the Listing Rules of the ASX. The exercise price and any exercise conditions are determined by the board at the time of grant of the options. Any exercise conditions must be satisfied before the options vest and become capable of exercise. The options lapse on such date determined by the board at the time of grant or earlier in accordance with the Equity Incentive Plan. Options granted to date have had a term up to years and generally vest in tranches up to years.
An option holder is not permitted to participate in a bonus issue or new issue of securities in respect of an option held prior to the issue of shares to the option holder pursuant to the exercise of an option. If the Company changes the number of issued shares through or as a result of any consolidation, subdivision, or similar reconstruction of the issued capital of the Company, the total number of options and the exercise price of the options (as applicable) will likewise be adjusted. The terms of the awards include a variety of market, performance and service conditions.
The number of options granted pursuant to the Equity Incentive Plan in 2023 and 2022 were
.
The number of options granted to parties other than those granted pursuant to the Equity Incentive Plan in 2023 and 2022 were
Stock option activity during the current period is as follows:
Number of options |
Weighted average exercise price A$ |
|||||||
Balance at December 31, 2022 |
||||||||
Lapsed |
( |
) | ||||||
Balance at December 31, 2023 |
At December 31, 2023, the number of options vested and exercisable was
The following table represents information relating to stock options outstanding under the plans as of December 31, 2023:
Exercise price A$ |
Options |
Weighted average remaining life in years |
Options exercisable shares |
||||||||||
The table below sets forth the number of employee stock options exercised and the number of shares issued in the period from January 1, 2022. We issued these shares in reliance upon exemptions from registration under Regulation S under the Securities Act of 1933, as amended.
Period ending |
Number of options exercised and corresponding number of shares issued |
Weighted average exercise price A$ |
Proceeds received A$ |
|||||||||
2023 |
||||||||||||
2022 |
As of December 31, 2023, there was
unrecognized compensation expense (2022: ).
(b) Restricted Shares
The Equity Incentive Plan permits our Board to grant shares of our common stock to our employees and directors (although our Board has determined not to issue equity to non-executive directors). The number of shares able to be granted is limited to the amount permitted to be granted at law, the ASX Listing Rules and by the limits on our authorized share capital in our certificate of incorporation. All our employees are eligible for shares under the Employee Share Plan. The Company has in the past issued
worth of restricted shares of common stock to employees of the Company, but no more frequently than annually. The restricted shares have the same terms of issue as our existing shares of common stock but are not able to be traded until the earlier of years from the date on which the shares are issued or the date the relevant employee ceases to be an employee of the Company or any of its associated group of companies. There were restricted shares issued by the Company during 2023 and 2022.
(c) Equity
Equity may be granted pursuant to the Equity Incentive Plan to any person considered by the board to be employed by the Group on a permanent basis (whether full time, part time or on a long-term casual basis). Each performance right issued gives the holder the right to subscribe for one share of common stock. The total number of performance rights that may be issued under the Equity Incentive Plan is such maximum amount permitted by law and the Listing Rules of the ASX.
Such equity granted does not involve the payment of an exercise price. Equity generally vests in tranches up to
years.
The terms of the awards include a variety of market, performance and service conditions. The number of performance rights granted in 2023 was
In accordance with ASC 718, the fair value of the rights granted were estimated on the date of each grant using the Trinomial Lattice model. The key assumptions for these grants were:
Oct-22 |
Nov-22 |
|||||||
Exercise price A$ |
||||||||
Share price at grant date A$ |
||||||||
Volatility |
% | % | ||||||
Maximum life (years) |
||||||||
Risk-free interest rate |
% | % | ||||||
Fair value A$ |
Each of the inputs to the Trinomial Lattice model is discussed below.
Share Price and Exercise Price at Valuation Date
The value of the performance rights granted has been determined either using the closing price of our common stock trading in the form of CDIs on ASX at the time of grant of the performance rights. The ASX is the only exchange upon which our securities are quoted.
Volatility
We applied volatility having regard to the historical price change of our shares in the form of CDIs available from the ASX.
Time to Expiry
All performance rights granted under our Equity Incentive Plan have a maximum four-year term and are non-transferable.
Risk Free Rate
The risk free rate which we applied is equivalent to the yield on an Australian government bond with a time to expiry approximately equal to the expected time to expiry on the options being valued.
Performance rights activity during the current period is as follows:
Number of rights |
Weighted average exercise price A$ |
|||||||
Balance at December 31, 2022 |
||||||||
Issued as common stock |
( |
) | ||||||
Lapsed |
( |
) | ||||||
Balance at December 31, 2023 |
At December 31, 2022, there were
The following table represents information relating to the maximum quantity of performance rights outstanding under the plans as of December 31, 2023:
Exercise price A$ |
Rights |
Weighted average remaining life in years |
Rights exercisable shares |
||||||||||
As of December 31, 2023, there was unrecognized compensation expense of up to A$
15. Total Comprehensive Income/(Loss)
The Company follows ASC 220 – Comprehensive Income. Comprehensive income/(loss) is defined as the total change in shareholders’ equity during the period other than from transactions with shareholders and for the Company, includes net income/(loss).
The tax effect allocated to each component of other comprehensive income/(loss) is as follows:
Before-Tax Amount |
Tax (Expense)/ Benefit |
Net-of-Tax Amount |
||||||||||
A$ |
A$ |
A$ |
||||||||||
Year Ended December 31, 2023 |
||||||||||||
Foreign currency translation reserve |
( |
) | ( |
) | ||||||||
Other comprehensive loss |
( |
) | ( |
) | ||||||||
Year Ended December 31, 2022 |
||||||||||||
Foreign currency translation reserve |
||||||||||||
Other comprehensive gain |
16. Stockholders’ Equity - Common Stock
Holders of common stock are generally entitled to one vote per share held on all matters submitted to a vote of the holders of common stock. At any meeting of the shareholders, the presence, in person or by proxy, of the majority of the outstanding stock entitled to vote shall constitute a quorum. Except where a greater percentage is required by the Company’s amended and restated certificate of incorporation or by-laws, the affirmative vote of the holders of a majority of the shares of common stock then represented at the meeting and entitled to vote at the meeting shall be sufficient to pass a resolution. Holders of common stock are not entitled to cumulative voting rights with respect to the election of directors, and the common stock does not have pre-emptive rights.
Trading in our shares of common stock on ASX is undertaken using CHESS Depositary Interests (“CDIs”). Each CDI represents beneficial ownership in one underlying share. Legal title to the shares underlying CDIs is held by CHESS Depositary Nominees Pty Ltd (“CDN”), a wholly owned subsidiary of ASX.
Holders of CDIs have the same economic benefits of holding the shares, such as dividends (if any), bonus issues or rights issues as though they were holders of the legal title. Holders of CDIs are not permitted to vote but are entitled to direct CDN how to vote. Subject to Delaware General Corporation Law, dividends may be declared by the Board and holders of common stock may be entitled to participate in such dividends from time to time.
17. Net Loss per Share
The following table shows the computation of basic and diluted loss per share for 2023 and 2022:
Year Ended December 31, |
||||||||
2023 |
2022 |
|||||||
A$ |
A$ |
|||||||
Numerator: |
||||||||
Net loss |
( |
) | ( |
) | ||||
Denominator: |
||||||||
Weighted-average basic and diluted shares |
||||||||
Basic and diluted loss per share |
( |
) | ( |
) |
The number of shares not included in the calculation of basic net loss per ordinary share because the impact would be anti-dilutive were
Basic and diluted net loss per share was computed by dividing the net loss applicable to common stock by the weighted-average number of common stock outstanding during the period.
18. Related Party Transactions
Details of related party transactions material to the operations of the Group other than compensation arrangements, expense allowances and other similar items in the ordinary course of business, are set out below:
Mr. Coleman is a Non-Executive Director of the Company and an Executive Chairman and Associate of Viburnum Funds Pty Ltd (“Viburnum”). Viburnum, as an investment manager for its associated funds, holds a beneficial interest and voting power over approximately
On April 20, 2022, the Company announced a fully underwritten non-renounceable rights issue of new CHESS depositary interests over fully paid ordinary shares in UBI (“New CDIs”) to raise approximately A$
In connection with the Entitlement Offer, on April 19, 2022, the Company entered into an underwriting agreement (the “Underwriting Agreement”) with Viburnum (the “Underwriter”). Pursuant to the terms of the Underwriting Agreement, the Underwriter agreed to take up its full entitlement under the Entitlement Offer and fully underwrite the Entitlement Offer, which meant that the Underwriter agreed to subscribe for or procure others to subscribe for all securities (if any) not subscribed for by the Company’s eligible securityholders under the Entitlement Offer. Following the close of the Entitlement Offer,
The Company also agreed, subject to the approval of the stockholders of the Company, to issue to the Underwriter (or its nominee) unlisted options to purchase up to
In accordance with ASC 718, the fair value of the Underwriter Options granted were estimated at the date of the grant using the Trinomial Lattice mode. The key assumptions for the grant were:
Tranche 1 |
Tranche 2 |
|||||||
Exercise Price ($A) |
||||||||
Share Price at Grant Date (A$) |
||||||||
Volatility |
% | % | ||||||
Maximum Life (years) |
||||||||
Risk-Free Interest rate |
% | % | ||||||
Fair Value (A$) |
Each of the inputs to the Trinomial Lattice model is discussed below.
Share Price and Exercise Price at Valuation Date
The value of the options granted has been determined using the closing price of our common stock trading in the form of CDIs on ASX at the time of grant of the options. The ASX is the only exchange upon which our securities are quoted.
Volatility
We applied volatility having regard to the historical price change of our shares in the form of CDIs available from the ASX.
Risk Free Rate
The risk free rate which we applied is equivalent to the yield on an Australian government bond with a time to expiry approximately equal to the expected time to expiry on the options being valued.
On May 27, 2022, Viburnum acquired from a member of management, unlisted options to purchase up to
There were no material related party transactions or balances as at December 31, 2023 other than as disclosed above.
19. Commitments and Contingencies
Liabilities for loss contingencies, arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated. These were
Refer to Note 9 for details of the Company’s Contingent Consideration.
20. Segment Information
We operate in
segment. We are a specialist biosensors Company focused on the development, manufacture and commercialization of a range of point of use devices for measuring different analytes across different industries.
Our operations are in Australia, US, Europe and Canada. The chief operating decision maker of the Company is the Chief Executive Officer.
The Company’s material long-lived assets are predominantly based in Australia.
Our total income as disclosed below is attributed to countries based on location of customer. Location has been determined generally based on contractual arrangements. Total income includes revenue from products and services, interest income, research and development tax incentive income and other income (excluding sundry income) as disclosed in the Consolidated Statements of Comprehensive Income/(Loss).
Year Ended December 31, |
||||||||
2023 |
2022 |
|||||||
A$ |
A$ |
|||||||
Australia (home country) |
||||||||
Americas |
||||||||
Europe |
||||||||
Other |
||||||||
% of total revenue from products and services derived from major customers:
Year Ended December 31, |
||||||||
2023 |
2022 |
|||||||
A$ |
A$ |
|||||||
Siemens |
% | % | ||||||
Other |
% | % |
21. Deed of cross guarantee
Universal Biosensors, Inc. and its wholly owned subsidiary, Universal Biosensors Pty Ltd, are parties to a deed of cross guarantee under which each company guarantees the debts of the other. By entering into the deed, the wholly-owned entity has been relieved from the requirements to prepare a financial report and directors’ report under ASIC Corporations (Wholly-owned Companies) Instrument 2016/785.
The above companies represent a “Closed Group” for the purposes of the Class Order, and as there are no other parties to the Deed of Cross Guarantee that are controlled by Universal Biosensors, Inc., they also represent the “Extended Closed Group”.
22. Guarantees and Indemnifications
The amended and restated certificate of incorporation and amended and restated bylaws of the Company provide that the Company will indemnify officers and directors and former officers and directors in certain circumstances, including for expenses, judgments, fines and settlement amounts incurred by them in connection with their services as an officer or director of the Company or its subsidiaries, provided that such person acted in good faith and in a manner such person reasonably believed to be in the best interests of the Company, and, with respect to any criminal action or proceeding, the Company had reasonable cause to believe that such person’s conduct was not unlawful.
In addition to the indemnities provided in the amended and restated certificate of incorporation and amended and restated bylaws, the Company has entered into indemnification agreements with certain of its officers and each of its directors. Subject to the relevant limitations imposed by applicable law, the indemnification agreements, among other things:
● |
indemnify the relevant officers and directors for certain expenses, judgments, fines and settlement amounts incurred by them in connection with their services as an officer or director of the Company or its subsidiaries; and |
● |
require the Company to make a good faith determination whether or not it is practicable to maintain liability insurance for officers and directors or to ensure the Company’s performance of its indemnification obligations under the agreements. |
The Company maintains directors’ and officers’ liability insurance providing for the indemnification of our directors and certain of our officers against certain liabilities incurred as a director or officer, including costs and expenses associated in defending legal proceedings. In accordance with the terms of the insurance policy and commercial practice, the amount of the premium is not disclosed.