Cellmid 2017 Annual Report
(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.
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