Announcement PDF Invion Limited Appendix 4E Preliminary final report 1. Company details Name of entity: ABN: Reporting period: Previous period: Invion Limited 76 094 730 417 For the year ended 30 June 2022 For the year ended 30 June 2021 2. Results for announcement to the market $ Revenues from ordinary activities up 41.3% to 3,291,763 Loss from ordinary activities after tax attributable to the owners of Invion Limited up 51.1% to (2,241,379) Loss for the year attributable to the owners of Invion Limited 51.1% to (2,241,379) up Dividends There were no dividends paid, recommended or declared during the current financial period. Comments The loss for the consolidated entity after providing for income tax amounted to $2,241,379 (30 June 2021: $1,482,951). 3. Net tangible assets Reporting period Cent Net tangible assets per ordinary security 4. Control gained over entities Not applicable. 5. Loss of control over entities Not applicable. 6. Dividends Current period There were no dividends paid, recommended or declared during the current financial period. Previous period There were no dividends paid, recommended or declared during the previous financial period. 7. Dividend reinvestment plans Not applicable. 0.13 Previous period Cent - Invion Limited Appendix 4E Preliminary final report 8. Details of associates and joint venture entities Not applicable. 9. Foreign entities Details of origin of accounting standards used in compiling the report: Not applicable. 10. Audit qualification or review Details of audit/review dispute or qualification (if any): The financial statements have been audited and an unmodified opinion has been issued. 11. Attachments Details of attachments (if any): The Annual Report of Invion Limited for the year ended 30 June 2022 is attached. 12. Signed Signed ___________________________ Thian Chew Chairman Date: 17 August 2022 Invion Limited ABN 76 094 730 417 Annual Report - 30 June 2022 Invion Limited Contents 30 June 2022 Corporate directory Directors' report Auditor's independence declaration Statement of profit or loss and other comprehensive income Statement of financial position Statement of changes in equity Statement of cash flows Notes to the financial statements Directors' declaration Independent auditor's report to the members of Invion Limited Shareholder information 2 3 18 19 20 21 22 23 44 45 48 1 Invion Limited Corporate directory 30 June 2022 Directors Mr Thian Chew, Chairman (Executive Chairman and CEO) Mr Alan Yamashita, Non-executive Director Mr Rob Merriel, Non-executive Director Mr Alistair Bennallack, Non-executive Director Company secretary Ms Claire Newstead-Sinclair Australia Business Number 76 094 730 417 Registered office Level 4, 100 Albert Road, South Melbourne Vic 3205 Australia P: (03) 9692 7222 E: investor@inviongroup.com W: www.inviongroup.com Share register Link Market Service Limited Locked Bag A14, Sydney South NSW 1235 Australia P: 1300 554 474 F: (02) 9287 0303 W: www.linkmarketservices.com.au Auditor Grant Thornton Audit Pty Ltd, Melbourne, Australia Stock exchange listing Invion Limited shares are listed on the Australian Securities Exchange (ASX code: IVX) 2 Invion Limited Directors' report 30 June 2022 The directors present their report, together with the financial statements, on the consolidated entity (referred to hereafter as the 'consolidated entity' or 'the Group') consisting of Invion Limited (referred to hereafter as the 'company' or 'parent entity') and the entities it controlled at the end of, or during, the year ended 30 June 2022. Directors The following persons were directors of Invion Limited during the whole of the financial year and up to the date of this report, unless otherwise stated: Mr Thian Chew, Chairman (appointed Executive Chairman and CEO) Mr Alan Yamashita, Non-executive Director Mr Rob Merriel, Non-executive Director Mr Alistair Bennallack, Non-executive Director Principal activities Invion is a life sciences company that is leading the global research and development of PhotosoftTM technology for the treatment of a range of cancers, atherosclerosis and infectious diseases. The Invion Group consists of Invion Limited and its wholly owned subsidiary, Epitech Dermal Science Pty Ltd. Invion is the exclusive licensee in Australia and New Zealand of the Photosoft™. The appointment has been made by technology licensor, The RMW Cho Group, a Hong Kong based group that has funded and successfully commercialised a number of unique and advanced technologies. Via an R&D services agreement between the two entities, the development of the Photosoft™ is funded by The RMW Cho Group (RMWC). During FY 2022, there was an expansion of Invion’s exclusivity agreement with RMW Cho Group, the developer of PhotosoftTM technology, which will give Invion access to markets with more than 2.8 billion people. Under the new agreement, both parties will co-develop Photosoft™ for cancer and related diseases (Indications), pursuant to which Invion will gain exclusive distribution rights to the technology in Central, South & South-East Asia and Asia Pacific1 (Territory) for the Indications. Dividends There were no dividends paid, recommended or declared during the current or previous financial year. Review of operations The loss for the consolidated entity after providing for income tax amounted to $2,241,379 (30 June 2021: $1,482,951). Invion is a life science company that is leading the global research and development of PhotosoftTM technology for the treatment of a range of cancers, atherosclerosis and infectious diseases. During the year, Invion has made significant progress in proving-up its latest Active Pharmaceutical Ingredient (API), INV043, which it will taking to clinical trials. The results from a Proof-of-Concept (PoC) study released in October last year found that INV043 completely regressed triple negative breast cancer (TNBC) in mice. This study was undertaken by its research partner, the Hudson Institute of Medical Research (Hudson Institute). TNBC is an aggressive and metastatic tumour type that is innately resistant to most chemotherapies. These tumours are difficult to treat and have high mortality rates. Not only did the results from the PoC show a complete regression in the cancer, but also subsequent re-challenging with TNBC implants could not re-establish new tumours, suggesting the development of protective immunity. Meanwhile, in a follow-up PoC study by Hudson Institute in May this year, INV043 was found to significantly improve immune checkpoint inhibitor (ICI) therapies when used in combination. The results showed that when INV043 was administered with anti-PD-1 (a type of ICI therapy) in mice, it led to a circa 65% reduction in the TNBC tumour size when compared with the standalone ICI treatment. ICI therapies are an established type of immunotherapy used to treat cancers, although many patients do not respond to these treatments. Combining INV043 with ICI therapies have the potential to improve outcomes for cancer patients. 3 Invion Limited Directors' report 30 June 2022 The other significance of this PoC study is that it highlights the potential partnership opportunities that exist between Invion and global pharmaceutical companies that own the intellectual property of key ICI drugs. The patents in some of these drugs are set to expire in the coming years, and a partnership agreement with Invion may be one way to extend the patents associated with these treatments. Separately, the Peter MacCallum Cancer Centre (Peter Mac) has been progressing pre-clinical work that will contribute to the development of INV043. In light of these positive developments, Invion signed a new agreement with RMW Cho Group Limited (RMW), the licensor of the PhotosoftTM technology, to expand Invion’s exclusive use of the technology for cancer treatments to new territories. Invion’s original agreement with RMW covered Australia and New Zealand. The expanded agreement will also include all Asia Pacific countries excluding Macau, Taiwan, Japan, South Korea and China (but includes Hong Kong). Invion made a one-off payment of $5 million as its contribution to development costs of the Photosoft™ technology in relation to cancer treatments to RMW. Any future pre-clinical and clinical trial work for cancers for the new territories will be funded by Invion at Invion’s election. RMW and its affiliates will continue funding Invion’s R&D activities for cancers in relation to Australia and New Zealand under the original existing services agreement. To help fund the transaction and for future working capital requirements, Invion successfully raised $12.1 million late last year via a share placement to professional and sophisticated investors and a share purchase plan to existing shareholders. The Company held a cash balance of $8.5 million on 30 June 2022, which would enable funding of its share of the development work for atherosclerosis, infectious diseases and cancers that are not covered by existing funding arrangements with RMWC. Significant changes in the state of affairs There were no significant changes in the state of affairs of the consolidated entity during the financial year. Matters subsequent to the end of the financial year No matter or circumstance has arisen since 30 June 2022 that has significantly affected, or may significantly affect the consolidated entity's operations, the results of those operations, or the consolidated entity's state of affairs in future financial years. Likely developments and expected results of operations The likely developments in the operations of the Group and the expected results from those operations in future financial years will be affected by the success of management in reaching critical development and commercial milestones in its core program of the development of the PhotosoftTM technology. This could include developing and expanding existing and emerging commercial partnerships with leading global healthcare companies and securing one or more commercial transactions for the Group’s drug asset under development. Environmental regulation Invion is required to carry out its activities in accordance with applicable environment and human safety regulations in each of the jurisdictions in which it undertakes its operations. The Group is not aware of any matter that requires disclosure with respect to any significant regulations in respect of its operating activities, and there have been no issues of non-compliance during the year. 4 Invion Limited Directors' report 30 June 2022 Information on directors Name: Title: Qualifications: Experience and expertise: Mr Thian Chew Chairman and CEO Bachelor of Information Systems, MA, MBA and qualified chartered accountant Mr Chew has over 25 years’ experience in investing, finance and transforming business operations. He is Managing Partner at Polar Ventures, a private investment and consulting firm that provides capital, strategic and operating solutions, focusing on small to mid-sized enterprises in Asia. Mr Chew was previously an Executive Director at Goldman Sachs (Hong Kong and New York) responsible for the firm’s proprietary investments including growth capital, private equity and special situations in both private and public companies. Prior to this, he was a Consultant Project Manager to Morgan Stanley, New York. Mr Chew also held a number of positions in KPMG across Asia Pacific including Director at KPMG Consulting (Singapore and Sydney) where he led several large-scale operational restructurings, post-merger integration, transformation, and business performance improvement programs. As a Senior Manager at KPMG (Taipei and Melbourne), he led several business process reengineering initiatives, and also performed financial and information technology audit, risk and assurance engagements across multiple industries. Mr Chew holds an MBA from the Wharton School (Palmer Scholar), MA from the Lauder Institute, University of Pennsylvania, and a Bachelor of Information Systems from Monash University. Mr Chew is an Adjunct Professor at HKUST’s MBA program and previously qualified as a chartered accountant. Other current directorships: None Former directorships (last 3 years): None Special responsibilities: None Interests in shares: 546,857,721 Interests in options: 181,364,216 Name: Title: Qualifications: Experience and expertise: Alan Yamashita Non-executive Director MPA, BA Mr Yamashita is a highly experienced corporate consultant and investment professional, with over 40 years' experience in investment management, investment banking and alternative investment throughout the APAC region. From 1999 to 2005, Mr Yamashita was President and CEO of Search Investment Group and founding CEO and CIO of Search Alternative Investment Ltd (SAIL), a major private global hedge fund and private equity investment practice headquartered in Asia. Prior to Search Investments Group, Mr Yamashita was Managing Director and Head of Asia Capital Markets for Merrill Lynch from 1996 to 1998. Mr Yamashita is currently Managing Partner at Polar Ventures and has held numerous positions as a 16-year veteran of Goldman Sachs and an advisor to various companies, including Plantation Timber Partners, Wuhan; Duty Free Shoppers, Asia; TVSN, Shanghai; and Mizuho Alternative Investments LLC. Other current directorships: None Former directorships (last 3 years): None Special responsibilities: Chair of Nomination and Remuneration Committee, Member of Audit & Risk Committee Interests in shares: Nil Interests in options: 29,942,609 5 Invion Limited Directors' report 30 June 2022 Name: Title: Qualifications: Experience and expertise: Rob Merriel Non-executive Director BA: Grad Dip (Psychology); Grad Dip (Accounting); CPA Rob is a Certified Practicing Accountant (CPA) with over 35 years of experience working in medical research (Hudson Institute of Medical Research and Baker Institute), large public healthcare services (Melbourne Health and Southern Health) and commercial organisations (Pacific Dunlop and Deloitte Consulting). He has been a Director of two Venture Capital Funds and a Director and Company Secretary of several biotechnology focused medical research institute spin-off companies. Mr Merriel was appointed as the Chief Financial Officer, Chief Commercialisation Officer and Company Secretary of the Hudson Institute of Medical Research in May 2014, positions he continues to hold today. Other current directorships: None Former directorships (last 3 years): None Special responsibilities: Member of Audit & Risk Committee and Remuneration & Nomination Committee Interests in shares: None Interests in options: 23,642,610 Name: Title: Qualifications: Experience and expertise: Alistair Bennallack Non-executive Director CA Mr Bennallack is currently the Group Chief Financial Officer of Village Roadshow Pty Ltd, Head of Risk for Village Roadshow Pty Ltd and Chief Executive Officer of Village Roadshow Theme Parks Asia, a division of Village Roadshow Theme Parks Pty Ltd. He is the primary executive responsible for conceptualising, executing and delivering Village Roadshow’s expansion into China and Asia. He is a former member of the Village Roadshow Ltd Executive Committee, current member of the Village Roadshow Theme Parks Executive Committee and current member of all Village Roadshow Pty Ltd’s Management and Risk Committees. His previous roles have included Chief Financial Officer of Village Roadshow Ltd and General Manager Business Affairs of Village Roadshow Corporation Pty Ltd (controlling shareholder of Village Roadshow Ltd.) Other current directorships: Former directorships (last 3 years): Special responsibilities: Interests in shares: Interests in options: None None Chair of Audit and Risk Committee 16,171,550 22,780,922 'Other current directorships' quoted above are current directorships for listed entities only and excludes directorships of all other types of entities, unless otherwise stated. 'Former directorships (last 3 years)' quoted above are directorships held in the last 3 years for listed entities only and excludes directorships of all other types of entities, unless otherwise stated. Company secretary Ms Melanie Leydin resigned as Company Secretary on 1 November 2021. Ms Leydin graduated from Swinburne University in 1997, became a Chartered Accountant in 1999 and since February 2000 has been the principal of chartered accounting firm. Upon the merger of Leydin Freyer with Vistra in November 2021, Ms Leydin is the country head of Vistra Australia. Ms Leydin has over 25 years’ experience in the accounting profession and has extensive experience in relation to public company responsibilities, including ASX and ASIC compliance, control and implementation of corporate governance, statutory financial reporting, reorganisation of Companies and shareholder relations and is a director and company secretary for a number of entities listed on the Australian Securities Exchange. Ms Claire Newstead-Sinclair was appointed as the Company Secretary on 1 November 2021. With over 21 years of professional experience, Ms Newstead-Sinclair is a Chartered Accountant at the Company Secretarial and Accounting firm Vistra Australia with extensive ASX biotechnology experience across statutory reporting, compliance and corporate governance. 6 Invion Limited Directors' report 30 June 2022 Meetings of directors The number of meetings of the company's Board of Directors ('the Board') held during the year ended 30 June 2022, and the number of meetings attended by each director were: Meetings of directors The number of meetings of the company's Board of Directors ('the Board') and of each Board committee held during the year ended 30 June 2022, and the number of meetings attended by each director were: Remuneration and Nomination Committee Attended Held Full Board Attended Held T Chew A Yamashita R Merriel A Bennallack 14 10 14 14 14 14 14 14 2 2 - Audit and Risk Committee Attended Held 2 2 2 - 2 2 2 2 2 2 Held: represents the number of meetings held during the time the director held office or was a member of the relevant committee. Held: represents the number of meetings held during the time the director held office. Remuneration report (audited) The remuneration report details the key management personnel remuneration arrangements for the consolidated entity, in accordance with the requirements of the Corporations Act 2001 and its Regulations. Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly, including all directors. The remuneration report is set out under the following main headings: ● Principles used to determine the nature and amount of remuneration ● Details of remuneration ● Service agreements ● Share-based compensation ● Additional information ● Additional disclosures relating to key management personnel Principles used to determine the nature and amount of remuneration The Group’s guiding principle for remuneration is that remuneration should be simple and transparent, should reward achievement, and should facilitate the alignment of shareholder and executive interests. The Company’s philosophy is that shareholder and executive interests are best aligned: ● by providing levels of fixed remuneration and ‘at risk’ pay sufficient to attract and retain individuals with the skills and experience required to build on and execute the Company’s business strategy ● by ensuring ‘at risk’ remuneration is contingent on outcomes that grow and/or protect shareholder value; and ● by ensuring a suitable proportion of remuneration is received as a share-based payment The Group aims to reward personnel with a level and mix of remuneration commensurate with their position and responsibilities so as to: ● ● ● ● attract and retain appropriately capable and talented individuals to the company; reward personnel for corporate and individual performance; align the interest of personnel with those of shareholders; and build a strong cohesive leadership team which can deliver execution excellence against the strategy Remuneration consists of: ● ● total fixed remuneration: base salary and superannuation; and ‘at risk’ remuneration: short-term incentives (STI) and long-term incentives (LTI). 7 Invion Limited Directors' report 30 June 2022 Total fixed remuneration To ensure that the Company continues to attract, retain and motivate talented staff at a competitive cost, the Company will aim to align total fixed remuneration to the median rate paid by others operating in the relevant market, with consideration given to experience, qualifications, performance and other non-financial benefits. Total fixed remuneration will be reviewed using market data to determine what, if any, adjustments may need to be made to individual remuneration. ‘At risk’ remuneration ‘At risk’ remuneration elements are paid/issued following the performance and remuneration review conducted by executive management; assessment by the Nomination and Remuneration Committee; and approval by the Board. The Nomination and Remuneration Committee The Nomination and Remuneration Committee is responsible for determining and reviewing remuneration arrangements for its directors and executives. The performance of the consolidated entity depends on the quality of its directors and executives. The remuneration philosophy is to attract, motivate and retain high performance and high-quality personnel. The objective of the Nomination and Remuneration Committee is to assist the Board in fulfilling its duties and responsibilities by reviewing, advising and making recommendations to the Board on: (a) Nomination ● Board composition and succession planning, taking into account diversity objectives and the mix of Director skills and experience; ● induction and continuing education for Directors; ● Board performance evaluation; and ● the performance of the CEO and key management personnel (b) Remuneration ● ● ● ● implementing policies for the purposes of using remuneration to foster long-term growth and success; monitoring the implementation by management of the Board’s strategic objectives and policies; remuneration for Non-Executive Directors; and remuneration and incentive arrangements for the CEO and other key management personnel. In accordance with best practice corporate governance, the structure of non-executive director and executive director remuneration is separate. Non-executive directors' remuneration Fees and payments to non-executive directors reflect the demands and responsibilities of their role. Non-executive directors' fees and payments are reviewed by the Nomination and Remuneration Committee. The Nomination and Remuneration Committee may, from time to time, receive advice from independent remuneration consultants to ensure non-executive directors' fees and payments are appropriate and in line with the market. The chairman's fees are determined independently to the fees of other non-executive directors based on comparative roles in the external market. The chairman is not present at any discussions relating to the determination of his own remuneration. ASX listing rules require the aggregate non-executive directors' remuneration be determined periodically by a general meeting. The most recent determination was at the Annual General Meeting held on 15 July 2011, where the shareholders approved a maximum annual aggregate remuneration of $750,000. Executive remuneration The consolidated entity aims to reward executives based on their position and responsibility, with a level and mix of remuneration which has both fixed and variable components. The executive remuneration and reward framework has four components: ● base pay and non-monetary benefits ● short-term performance incentives ● share-based payments ● other remuneration such as superannuation and long service leave 8 Invion Limited Directors' report 30 June 2022 The combination of these comprises the executive's total remuneration. Fixed remuneration, consisting of base salary, superannuation and non-monetary benefits, are reviewed annually by the Nomination and Remuneration Committee based on individual and business unit performance, the overall performance of the consolidated entity and comparable market remunerations. Executives may receive their fixed remuneration in the form of cash or other fringe benefits (for example motor vehicle benefits) where it does not create any additional costs to the consolidated entity and provides additional value to the executive. The short-term incentives ('STI') program is designed to align the targets of the business units with the performance hurdles of executives. STI comprise up to 50% of fixed remuneration in cash for the CEO. This short-term incentive will be payable at the absolute discretion of the Board and subject to funds being available on the attainment of annual predetermined performance milestones. The long-term incentives ('LTI') are offered to incentivise, reward and retain personnel, and to align the interests of personnel and shareholders. The Nomination and Remuneration Committee considers the recommendation of the CEO regarding the issue of LTIs in light of the performance, financial position and current issued capital of the company. There will be no automatic grant of LTIs. At the discretion of the Board, the Company may also offer grants of LTIs as an award to incentivise high-quality prospective employees to join the company. The terms of any LTI grant are determined by the Board. LTI grants normally take the form of the issue of unlisted share options. Share options are normally issued under the company’s equity incentive plan (EIP). All grants of equity are determined by the Board. The Board reviews the general terms of new options to be issued. Options will be typically granted with an exercise price that is between a 40-60% premium to the market price of shares on the day of issue, and with an expiry date that is between three and four years from the date of issue. As LTIs are offered to incentivise, reward and retain personnel, options will typically vest over a number of years. The terms of the options, and what happens to options in the event of cessation of employment, are at the discretion of the Board. However generally, in the event that a holder of unvested options ceases to be employed, then at the absolute discretion of the Board, if the ceasing of employment is due to death or permanent disability, or in any other circumstances determined by the Board to be on a “good leaver” basis, the next tranche of unvested options vests and becomes exercisable for 30 days after the last day of engagement, after which those options expire. If at the absolute discretion of the Board, the ceasing of employment occurs for any other reason than in “good leaver” circumstances, including, but not limited to, termination for cause, or due to resignation, all unvested options lapse immediately and the expiry date is taken to have occurred on the last day of engagement. In the event of a change of control, the Board, at its absolute discretion, may determine that a proportion or all unvested awards will vest. Voting and comments made at the company's 2021 Annual General Meeting ('AGM') At the 9 November 2021 AGM, 97.62% of the votes received supported the adoption of the remuneration report for the year ended 30 June 2021. The company did not receive any specific feedback at the AGM regarding its remuneration practices. 9 Invion Limited Directors' report 30 June 2022 Details of remuneration Amounts of remuneration Details of the remuneration of key management personnel of the consolidated entity are set out in the following tables Short-term benefits 30 June 2022 Non-Executive Directors: A Yamashita(i) R Merriel(ii) A Bennallack(iii) Executive Directors: T Chew(iv) (i) (ii) (iii) (v) Cash salary and fees $ Cash bonus $ Nonmonetary $ Postemployment Long-term benefits benefits Sharebased payments Long service leave $ Equitysettled $ Superannuation $ Total $ 54,740 49,764 49,764 - - 4,976 4,976 - 21,547 - 76,287 54,740 54,740 399,000 553,268 161,100 161,100 - 9,952 23,769 23,769 918,895 940,442 1,502,764 1,688,531 Out of $54,740 of Director fee of A Yamashita, $50,182 was paid through the issue of share options in lieu of cash and $4,562 is payable as at 30 June 2022. Out of $49,764 of Director fee of R Merriel, $45,617 was paid through the issue of share options in lieu of cash and $4,147 is payable as at 30 June 2022. Out of $49,764 of Director fee of A Bennallack, $45,617 was paid through the issue of share options in lieu of cash and $4,147 is payable as at 30 June 2022. T. Chew's salary and fee of $399,000 comprise of Director fee of $90,000 and CEO salary of $309,000. Out of the Director fee for the year $82,500 was paid through the issue of share options in lieu of cash and $7,500 is payable as at 30 June 2022. Short-term benefits 30 June 2021 Non-Executive Directors: T Chew (i) M Farris(ii) A Yamashita(iii) R Merriel(iv) A Bennallack(v) Executive Directors: T Chew(vi) C Newton(vii) Cash salary and fees $ Cash bonus $ Nonmonetary $ Postemployment Long-term benefits benefits Sharebased payments Long service leave $ Equitysettled $ Total $ Superannuation $ 30,000 15,068 54,744 41,660 34,672 - - 3,960 3,296 - 13,995 (61,946) 41,984 126,952 127,157 43,995 (46,878) 96,728 172,572 165,125 266,000 70,731 512,875 - 15,846 15,846 14,541 21,797 - 41,984 147,079 437,205 323,830 232,351 987,723 10 Invion Limited Directors' report 30 June 2022 (i) (ii) $30,000 of Director fee as Non-executive Director was paid through the issue of share options in lieu of cash. M. Farris resigned as Non-Executive Director on 31 August 2020. $(61,946) of movement in share-based paym