Cellmid 2017 Annual Report

NOTES TO THE

FINANCIAL STATEMENTS

CONTINUED

(b) Compound

Derivative loans and borrowings are compound ﬁnancial instruments which comprise of two components; a ﬁnancial liability

and an equity instrument

The fair value of the liability component of a convertible loan is determined using a market interest rate for an equivalent

non-convertible loan. This amount is recorded as a liability on an amortised cost basis until extinguished on conversion or

maturity of the loan. The remainder of the proceeds are allocated to the equity component. This is recognised and included in

shareholders’ equity.

On 27 February 2017, Cellmid Limited entered into an R&D loan advance agreement with Platinum Road for $2,000,000.

The loan is secured for a period of twenty four months from commencement.

The agreement gives the lenders the right to require Cellmid to issue new ordinary fully paid shares at 5.0 cents per share to

reduce the principal amount, with the maximum total being 20,000,000 shares for the ﬁrst 12 months, up to 50% of the total

loan facility. The remaining 50% of the loan may be converted to shares at 5.0 cents by the lenders at any time between 12

months from the date of the agreement and the expiry of the 24-month term. Additionally, the lenders have the right to require

Cellmid to issue fully paid ordinary shares in lieu of payment of accrued interest (at an annual rate of 12%, accrued monthly).

These shares are to be issued at 3.5 cents per shares, with a maximum total being 6,857,142 shares being issued.

The remaining loan amounts relate to loan facilities with Keiyo Bank Ltd (JPY: 24,765,000) and Chiba Bank Ltd. (JPY: 6,827,000)

and a lease facility with Business Mitsui Trust Panasonic Finance KK (JPY: 387,612).

The loan facility is secured by a ﬁxed charge over the assets of the Group, and is fully drawn as at 30 June 2017.

17. EMPLOYEE BENEFITS

Accounting Policy

Provision is made for the Company’s liability for employee beneﬁts arising from services rendered by employees up to the end

of the reporting period. In determining the liability, consideration is given to employee wage increases and the probability that

the employee may satisfy vesting requirements.

2017 2016

$ $

Current 1,783,822 655,986

Non-current - -

1,783,822 655,986

Consolidated