Rua Bioscience Annual Results
Rua Bioscience Limited
Results for announcement to the market
Reporting Period12 months to June 2022
Previous Reporting Period12 months to June 2021
Amount (000s)Percentage change
Revenue from ordinary
activities
646 NZD+43.0%
Profit (loss) from ordinary
activities after tax attributable to
security holders
-8,636 NZD-95.0%
Net profit (loss) attributable to
security holders
-8,636 NZD-95.0%
No dividends declared
30 Jun 202130 Jun 2022
Net tangible assets per security
0.180 NZD0.060 NZD
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Rua Bioscience Limited
Contents
Company Directory
3
Independent Auditor's Report
4 – 8
Consolidated Statement of Profit or Loss and Other Comprehensive
Income
9
Consolidated Statement of Changes in Equity 10
Consolidated Statement of Financial Position
11
Consolidated Statement of Cash
Flows
12
Notes forming part of the Consolidated Financial
Statements
13 - 59
3
Company Directory
For the year ended 30 June 2022
Country of incorporation of company: New Zealand
Company Number: 6484092
Legal form: NZ Limited Company
Principal activities: Pharmaceutical Manufacturer
Registered office: 1 Commerce Place
Awapuni
Gisborne
Directors: Trevor BURT
Panapa EHAU
Brett GAMBLE
Martin SMITH
Anna Kate STOVE
Auditor: PricewaterhouseCoopers
Bankers: Kiwibank
Solicitors: Lowndes Jordan
PricewaterhouseCoopers, Level 3, 6 Albion St, PO Box 645, Napier, 4110, New Zealand 4
T: +64 6 835 6144, pwc.co.nz
Independent auditor’s report
To the shareholders of Rua Bioscience Limited
Our opinion
In our opinion, the accompanying consolidated financial statements of Rua Bioscience Limited (the
Company), including its subsidiary (the Group), present fairly, in all material respects, the financial
position of the Group as at 30 June 2022, its financial performance and its cash flows for the year then
ended in accordance with New Zealand Equivalents to International Financial Reporting Standards
(NZ IFRS) and International Financial Reporting Standards (IFRS).
What we have audited
The Group's consolidated financial statements comprise:
● the consolidated statement of financial position as at 30 June 2022;
● the consolidated statement of profit or loss and other comprehensive income for the year then
ended;
● the consolidated statement of changes in equity for the year then ended;
● the consolidated statement of cash flows for the year then ended; and
● the notes to the consolidated financial statements, which include significant accounting policies
and other explanatory information.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (New Zealand) (ISAs
(NZ)) and International Standards on Auditing (ISAs). Our responsibilities under those standards are
further described in the Auditor’s responsibilities for the audit of the consolidated financial statements
section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Independence
We are independent of the Group in accordance with Professional and Ethical Standard 1 International
Code of Ethics for Assurance Practitioners (including International Independence Standards)
(New Zealand) (PES 1) issued by the New Zealand Auditing and Assurance Standards Board and the
International Code of Ethics for Professional Accountants (including International Independence
Standards) issued by the International Ethics Standards Board for Accountants (IESBA Code), and we
have fulfilled our other ethical responsibilities in accordance with these requirements.
Our firm carries out other services for the Group in the area of half year review procedures. The
provision of these other services has not impaired our independence as auditor of the Group.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the consolidated financial statements of the current year. These matters were addressed
in the context of our audit of the consolidated financial statements as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion on these matters.
PwC 5
Description of the key audit matter How our audit addressed the key audit matter
Derecognition of Deferred Tax Asset
As disclosed in Note 8, the Group has
derecognised the deferred tax asset of
$2.2m down to the level of the deferred tax
liability. The tax losses have been incurred
during the pre-commercialisation stage of the
Group's business in the medicinal cannabis
industry.
NZ IAS 12 Income Taxes permits a deferred
tax asset to be recognised for the carry
forward of unused tax losses and unused tax
credits to the extent that it is probable that
future taxable profit will be available against
which the unused tax losses and unused tax
credits can be utilised. As the Group
progresses towards commercialisation in its
chosen markets, key milestones, including
obtaining and retaining licenses to operate,
have taken longer than originally anticipated.
The Group has determined that the timing of
taxable profit is beyond a reliable forecast
horizon to enable continued recognition of a
deferred tax asset.
The derecognition of the deferred tax asset is
considered a key audit matter due to the
inherent estimation uncertainty due to the
nature of the balance and significance of the
balance to the financial statements.
We focused our audit response on the evaluation of
the Group's assessment regarding the forecast
profitability, the timeframe to taxable profit and the
derecognition of the deferred tax asset. This
included:
• obtaining and understanding the Group's
assessment and plans, including management's
updated profit and loss forecasts;
• discussing with management the Group's
assumptions regarding the forecasted
profitability including the underlying revenue and
expenditure assumptions;
• confirming key milestones that have been met
and assessing management's ability to achieve
forecast milestones;
• challenging management's assessment and
assumptions of the future forecast profitability;
• testing the mathematical accuracy of
management's profit and loss forecast; and
• reviewing the appropriateness of the disclosure
in Note 8.
Acquisition of Zalm Therapeutics Limited
On the 4th of February 2022, Zalm
Therapeutics Limited was acquired for
$11.5m as disclosed in note 13 of the
financial statements. The acquisition will be
settled via the issue of Rua Bioscience
Limited shares. The shares are to be issued
at three separate dates. The first tranche
was issued on the date of acquisition and the
remaining tranches are planned to be
distributed in equal instalments on the
achievement of two subsequent milestones.
The acquisition accounting has been
completed by management and includes the
fair value of physical assets, the identifiable
intangible assets with the remaining balance
of goodwill of $6.3m. In estimating the value
of goodwill, management has assessed the
Our audit of the acquisition of Zalm Therapeutics
Limited focused on verifying the purchase price and
assessing the significant estimates and judgements
made by management for the acquisition. Our audit
procedures included:
• confirming the transaction details to the Sale
and Purchase Agreement.
• assessing management's treatment of milestone
one and two by reviewing the relevant sections
of the Sale and Purchase agreement and
confirming our understanding is consistent with
the approach taken and supporting
documentation available;
• obtaining an understanding of the approach
management has undertaken to identify and
value the tangible and identifiable intangible
assets, liabilities assumed and goodwill arising
on acquisition;
PwC 6
Description of the key audit matter How our audit addressed the key audit matter
value of the supply contract that was unable
to be quantified on acquisition.
Management has used independent experts
to assist with the valuation of the identified
intangible asset and to account for the
business combination.
Because of the significant estimates and
judgement involved in determining the fair
values of assets acquired and the contingent
consideration, this was considered to be a
key audit matter.
• considered management’s assessment of the
goodwill arising on acquisition to identify any
indicators of impairment;
• using our auditor's expert, to assist us in
assessing and challenging whether the
assumptions used in the valuation model for
identifiable intangible assets were reasonable.
The key areas assessed included:
● the valuation methodology used; and
● the reasonableness of the discount rate;
● testing the mathematical accuracy of the
underlying details within managements
identifiable intangible asset valuation
calculation; and
• auditing the disclosures in note 13 of the
consolidated financial statements to ensure that
they are compliant with the requirements of the
relevant accounting standards.
Our audit approach
Overview
Overall group materiality: $81,500, which represents approximately 1% of total
expenses.
We chose total expenses as the benchmark because, in our view, it is the most
representative measure of the current operations and performance of the
Group, and of most relevance to the users of the financial statements. The
Group is incurring losses in a start-up phase; therefore, we consider that
profit/loss before tax is not an appropriate benchmark. Total expenses is also
a generally accepted benchmark.
Following our assessment of the risk of material misstatement, we performed
full scope audits for all of the entities in the Group based on their financial
significance.
As reported above, we have two key audit matters, being:
● Derecognition of Deferred Tax Asset
● Acquisition of Zalm Therapeutics Limited
As part of designing our audit, we determined materiality and assessed the risks of material
misstatement in the consolidated financial statements. In particular, we considered where
management made subjective judgements; for example, in respect of significant accounting estimates
that involved making assumptions and considering future events that are inherently uncertain. As in all
of our audits, we also addressed the risk of management override of internal controls, including among
other matters, consideration of whether there was evidence of bias that represented a risk of material
misstatement due to fraud.
PwC 7
Materiality
The scope of our audit was influenced by our application of materiality. An audit is designed to obtain
reasonable assurance about whether the consolidated financial statements are free from material
misstatement. Misstatements may arise due to fraud or error. They are considered material if,
individually or in aggregate, they could reasonably be expected to influence the economic decisions of
users taken on the basis of the consolidated financial statements.
Based on our professional judgement, we determined certain quantitative thresholds for materiality,
including the overall Group materiality for the consolidated financial statements as a whole as set out
above. These, together with qualitative considerations, helped us to determine the scope of our audit,
the nature, timing and extent of our audit procedures and to evaluate the effect of misstatements, both
individually and in aggregate, on the consolidated financial statements as a whole.
How we tailored our group audit scope
We tailored the scope of our audit in order to perform sufficient work to enable us to provide an opinion
on the consolidated financial statements as a whole, taking into account the structure of the Group, the
accounting processes and controls, and the industry in which the Group operates.
Other information
The Directors are responsible for the other information. The other information comprises the
information included in the Annual report, but does not include the consolidated financial statements
and our auditor's report thereon. The Annual report is expected to be made available to us after the
date of this auditor's report.
Our opinion on the consolidated financial statements does not cover the other information and we will
not express any form of audit opinion or assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the
other information and, in doing so, consider whether the other information is materially inconsistent
with the consolidated financial statements or our knowledge obtained in the audit, or otherwise
appears to be materially misstated.
When we read the other information not yet received, if we conclude that there is a material
misstatement therein, we are required to communicate the matter to the Directors and use our
professional judgement to determine the appropriate action to take.
Responsibilities of the Directors for the consolidated financial statements
The Directors are responsible, on behalf of the Company, for the preparation and fair presentation of
the consolidated financial statements in accordance with NZ IFRS and IFRS, and for such internal
control as the Directors determine is necessary to enable the preparation of consolidated financial
statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, the Directors are responsible for assessing the
Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the Directors either intend to liquidate
the Group or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the consolidated financial statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial
statements, as a whole, are free from material misstatement, whether due to fraud or error, and to
issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance,
but is not a guarantee that an audit conducted in accordance with ISAs (NZ) and ISAs will always
detect a material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to influence
the economic decisions of users taken on the basis of these consolidated financial statements.
PwC 8
A further description of our responsibilities for the audit of the consolidated financial statements is
located at the External Reporting Board’s website at:
https://www.xrb.govt.nz/assurance-standards/auditors-responsibilities/audit-report-1/
This description forms part of our auditor’s report.
Who we report to
This report is made solely to the Company’s shareholders, as a body. Our audit work has been
undertaken so that we might state those matters which we are required to state to them in an auditor’s
report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Company and the Company’s shareholders, as a body, for our
audit work, for this report or for the opinions we have formed.
The engagement partner on the audit resulting in this independent auditor’s report is Maxwell John
Dixon.
For and on behalf of:
Chartered Accountants
29 August 2022
Napier
9
Rua Bioscience Limited
Consolidated Statement of Profit or Loss
and Other Comprehensive Income
For the year ended 30 June 2022
Note
2022
2021
$ $
Revenue from contracts with customers 5 24,226 -
Other income 6 621,872 450,971
Changes in inventories of finished goods and work in progress 7 (128,643) -
Research and development costs 7 (2,977,522) (1,897,126)
Other expenses 7 (5,123,241) (4,744,082)
Total expenses before operating loss (8,229,406) (6,641,208)
Operating loss before net financing income (7,583,308) (6,190,237)
Interest income 138,145 47,560
Interest expense (70) (9,699)
Interest expense - leases (40,752) (21,859)
Net finance income 97,323 16,002
Loss before tax (7,485,985) (6,174,235)
Income tax (expense)/credit 8 (1,150,067) 1,756,275
Loss after tax (8,636,052) (4,417,960)
Other comprehensive income - -
Total comprehensive loss for the year attributable to
shareholders
(8,636,052) (4,417,960)
Earnings per share attributable to the
ordinary equity holders of the Company
Loss from operations
Basic ($)
10 (0.06)* (0.03)**
Diluted ($)
10 (0.06)* (0.03)**
_______ _______
The above statements should be read in conjunction with the accompanying notes.
10
Rua Bioscience Limited
Consolidated Statement of Changes in Equity
For the year ended 30 June 2022
Note Share Share option Accumulated Total
capital reserve losses equity
$ $ $ $
Opening balance at 1 July 2020
18,922,913
260,308
(4,781,260)
14,401,961
Total comprehensive loss for the year
- Loss for the year -
-
(4,417,960)
(4,417,960)
- Other comprehensive income - - - -
Total comprehensive loss for the year - - (4,417,960) (4,417,960)
Transactions with owners
- Issue of share capital 20,000,000 - - 20,000,000
- Costs of issuing share capital (1,504,414) - - (1,504,414)
- Employee share options expense 23 - 354,459 - 354,459
Total transactions with owners 18,495,586 354,459 - 18,850,045
Balance at 30 June 2021 37,418,499 614,767 (9,199,220) 28,834,046
Opening balance at 1 July 2021 37,418,499 614,767 (9,199,220) 28,834,046
Total comprehensive loss for the year
- Loss for the year - - (8,636,052) (8,636,052)
- Other comprehensive income - - - -
Total comprehensive loss for the year - - (8,636,052) (8,636,052)
Transactions with owners
- Issue of share capital 13 3,820,916 - - 3,820,916
- Employee share options expense 23 - 179,181 - 179,181
- Share options vested and exercised 23 652,262 (652,262) - -
Total transactions with owners 4,473,178 (473,081) - 4,000,097
Balance at 30 June 2022 41,891,677 141,686 (17,835,272) 24,198,091
The above statements should be read in conjunction with the accompanying notes.
11
Rua Bioscience Limited
Consolidated Statement of Financial Position
As at 30 June 2022
Note 2022 2021
$ $
Current assets
Cash and cash equivalents 4
1,897,285 3,359,479
Other receivables 16
1,070,323 605,927
Prepayments
166,521 110,527
Investments 4
8,041,493 13,041,549
Inventory 11
218,805 -
Total current assets
11,394,427 17,117,482
Non-current assets
Property, plant and equipment 12
5,843,284 6,174,610
Goodwill 13,14
10,448,082 4,000,000
Intangible assets 14
5,016,035 -
Right-of-use lease assets 15
796,772 929,897
Other receivables 16
75,000 75,000
Deferred tax asset 8
-2,554,480
Total non-current assets
22,179,173 13,733,987
Total assets
33,573,600 30,851,469
Current liabilities
Trade and other payables 17
438,378 510,167
Contract liabilities 5
2,062 -
Employee benefit liabilities 18 459,735 233,862
Lease liabilities 4,15 128,544 133,958
Borrowings 4 -10,762
Deferred grant income 9,500 -
Contingent consideration payable 13 3,820,916 -
Share-based payment liability 23 -286,647
Total current liabilities
4,859,135 1,175,396
Non-current liabilities
Contingent consideration payable 13 3,820,916 -
Lease liabilities 4,15 695,458 810,120
Share-based payment liability -31,907
Total non-current liabilities
4,516,374 842,027
Total liabilities
9,375,509 2,017,423
Net assets 24,198,091 28,834,046
Equity
Share capital 19
41,891,677 37,418,499
Accumulated losses
(17,835,272) (9,199,220)
Share option reserve
141,686 614,767
Total equity 24,198,091 28,834,046
The consolidated financial statements on pages 9 to 59 were approved and authorised for issue by
the Board of Directors on 29 August 2022 and were signed on its behalf by:
______________________ (Director) ______________________ (Director)
The above statements should be read in conjunction with the accompanying notes.
12
Ru
a Bioscience Limited
Consolidated Statement of Cash Flows
For the year ended 30 June 2022
Note 2022 2021
$ $
Cash flows from operating activities
Receipts from customers 24,280 -
Grant income received 696,171 691,261
Payments to suppliers and employees (7,565,373) (5,138,432)
Net cash inflows/(outflows) from operating activities 9 (6,844,922) (4,447,171)
Cash flows from Investing activities
Interest income 113,360 69,277
Proceeds from sale of plant and equipment 1,656 15,739
Proceeds from maturing investments 4 29,070,711 2,001,420
Cash acquired in acquisition of subsidiary (net of cash
paid)
876,452 -
Investment deposits made 4 (24,070,711) (15,117,969)
Purchase of property, plant and equipment (400,103) (1,402,258)
Net cash inflows/(outflows) from investing activities 5,591,365 (14,433,791)
Cash flows from financing activities
Issue of ordinary shares -20,000,000
Repayment of borrowings (10,762) (78,169)
Principal elements of lease payments (153,284) (82,914)
Interest paid (44,591) (27,789)
Share issue costs paid -(1,508,188)
Net cash inflows/(outflows) from financing activities (208,637) 18,302,940
Net increase/(decrease) in cash and cash equivalents (1,462,194) (578,022)
Cash and cash equivalents at beginning of year 3,359,479 3,937,501
Cash and cash equivalents at end of year 4 1,897,285 3,359,479
T
he above statements should be read in conjunction with the accompanying notes.
13
Ru
a Bioscience Limited
Notes forming part of the consolidated financial statements
For the year ended 30 June 2022
1.R
eporting Entity
The consolidated financial statements comprise the results of Rua Bioscience Limited and its
subsidiary (together, “the Group”).
Rua Bioscience Limited (“the Company”) is a company incorporated and domiciled in New
Zealand and registered under the Companies Act 1993. The address of the Company’s registered
office and principal place of business is 1 Commerce Place, Awapuni, Gisborne. During the
period, the Company acquired its first subsidiary (refer to Note 13) and reports consolidated
financial statements accordingly.
The Company is principally engaged in the business of research and development, and
pharmaceuticals manufacturing.
2.
B
asis of preparation
(a) Statement of compliance
T
he consolidated financial statements have been prepared in accordance with New Zealan
d
G
enerally Accepted Accounting Practice (NZ GAAP), being in accordance with New Zealand
Equivalents to International Financial Reporting Standards (NZ IFRS) and other New Zealand
accounting standards and authoritative notices that are applicable to entities that apply NZ IFRS
and International Financial Reporting Standards (IFRS). They comply with interpretations issued
by the IFRS Interpretations Committee (IFRS IC) applicable to companies reporting under IFRS. Th
e
c
onsolidated financial statements have also been prepared in accordance with the requirements
of the Companies Act 1993, the Financial Markets Conduct Act 2013 and the Main Board/Debt
Market Listing Rules of NZX Limited.
T
he Group is a for-profit entity for the purposes of complying with NZ GAAP.
T
hese consolidated financial statements include non-GAAP financial measures that are not
prepared in accordance with NZ IFRS. The Group presents Net Tangible Assets, in Note 25 . Th
e
G
roup believes that this non-GAAP measure provides useful information to readers, as this is a
required disclosure under the NZX Listing Rules, but it should not be viewed in isolation, nor
considered as a substitute for measures reported in accordance with NZ IFRS. Non-GAAP measures
as reported by the Group may not be comparable to similarly titled amounts reported by other
companies.
T
he consolidated financial statements are presented in New Zealand dollars ($), which is also th
e
G
roup’s functional currency. All financial information presented has been rounded to the nearest
dollar.
(
b)Significant accounting polici
es
S
ignificant accounting policies have been disclosed alongside the related notes in the consolidated
financial statements.
(
c)Basis of measurement
T
he consolidated financial statements have been prepared on a historical cost basis, except for
the following items (refer to note 2(h) for further details
).
14
Rua Bioscience Limited
Notes forming part of the consolidated financial statements
For the year ended 30 June 2022
2. Basis of preparation (continued)
(d) New standards, interpretations and amendments
(i) Adopted during the period
Inventory and Revenue recognition
Subsequent to it having received verification from the NZ Medicinal Cannabis Agency
(Medsafe) for the sale and distribution of medicinal CBD products, the Group has during the
period begun purchasing raw materials and manufacturing inventory, as well as entering
agreements for the sale of inventory to customers.
• Refer to note 11 for details of the Group’s Inventory accounting policy.
• Refer to note 5 for details of the Group’s Revenue recognition accounting policy.
Consolidation
As a result of the business combination in the period, the Group acquired the shares of Zalm
Therapeutics Limited (refer to note 13). Because the transaction resulted in the Company
obtaining control of Zalm, this investee has been consolidated as a subsidiary as part of the
preparation of the Group’s consolidated financial statements. Refer to note 2(h) for details
of the accounting policy.
(ii) New standards mandatorily effective during the period
Other new standards that have become mandatorily effective in the annual consolidated
financial statements for the year ended 30 June 2022, but have not had a significant effect
on the Group are:
• Interest Rate Benchmark Reform – ‘phase 2’ (Amendments to NZ IFRS 9, NZ IAS
39, NZ IFRS 7, NZ IFRS 4 and NZ IFRS 16);
• COVID-19 Related Rent Concessions beyond 30 June 2021 (Amendment to NZ IFRS
16);
15
Rua Bioscience Limited
Notes forming part of the consolidated financial statements
For the year ended 30 June 2022
2. Basis of preparation (continued)
(iii) Issued, but not yet effective
There are a number of standards, amendments to standards, and interpretations which have
been issued that are effective in future accounting periods that the Group has decided not to
adopt early.
The following amendments are effective for the periods beginning on or after 1 January 2022:
• Onerous Contracts – Cost of Fulfilling a Contract (Amendments to NZ IAS 37);
• Property, Plant and Equipment: Proceeds before Intended Use (Amendments to
NZ IAS 16);
• Annual Improvements to NZ IFRS Standards 2018-2020 (Amendments to NZ IFRS 1,
NZ IFRS 9, NZ IFRS 16 and NZ IAS 41); and
• References to Conceptual Framework (Amendments to NZ IFRS 3);
• Amendments to IAS 1 – Classification of Liabilities as Current or Non-current
(Deferral of Effective Date)
• NZ IFRS 17 Insurance Contracts (effective 1 January 2023);
• Amendments to IAS 1 – Classification of Liabilities as Current or Non-current
(effective 1 January 2023);
• Amendments to NZ IFRS 17 (effective 1 January 2023);
• Disclosure of Accounting Policies (Amendments to NZ IAS 1 and IFRS Practice
Statement 2) (effective 1 January 2023);
• Definition of Accounting Estimate (Amendments to NZ IAS 8) (effective 1 January
2023);
• Deferred Tax Related to Assets and Liabilities Arising from a Single Transaction –
Amendments to NZ IAS 12 Income Taxes (effective 1 January 2023);
• Initial Application of NZ IFRS 17 and NZ IFRS 9 – Comparative Information
(effective 1 January 2023);
• Sale or Contribution of Assets between an Investor and its Associate or Joint
Venture (Amendments to NZ IFRS 10 and NZ IAS 28) (effective 1 January 2025).
The Group does not expect these new and amended standards to have a material impact on
the Group.
The Group is in the process of identifying the impact of climate change on the business and
its assets. Rua has engaged the services of Toitu Envirocare to assist in the development of
carbon and environmental reporting processes. Our annual report will set out the key targets
for Rua’s sustainability programme.
16
Rua Bioscience Limited
Notes forming part of the consolidated financial statements
For the year ended 30 June 2022
2. Basis of preparation (continued)
(e) Accounting estimates and judgements made
The preparation of the consolidated financial statements, in conformity with NZ IFRS, requires
management to make judgements, estimates and assumptions that affect the application of
accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual
results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an on-going basis, with revisions to
accounting estimates recognised in the period in which the estimates are revised and in any future
periods affected.
Details of significant judgements and estimates made by management include:
Judgements
− Recognition (or not) of deferred tax assets related to carried forward tax losses (note 8).
− Classification of contingent consideration (note 13)
− Identification and valuation of intangible assets arising on business combinations (note 13)
− Useful life of externally acquired intangible assets (note 14)
− Recognition of research and development tax credits and research and development expenses
(notes 6 & 7).
− Preparation of the financial statements on a going concern basis (note 2(f)).
Estimates
− Identification and valuation of intangible assets arising on business combinations (note 13)
− Estimation of contingent consideration (note 13)
(f) Going Concern
The consolidated financial statements have been prepared on the going concern basis, which
assumes that the Group will continue to be able to meet its liabilities as they fall due for the
foreseeable future.
The Group incurred a net loss of $8,636,052 during the year ended 30 June 2022 (2021: net loss of
$4,417,960).
The purchase of Zalm Therapeutics Limited in February 2022 creates a significant opportunity for
the Group. Zalm’s contract with Cann Group provides a scalable and sustainable supply of range
of cannabinoid medicines at a very competitive cost base.
With the market for cannabis derived medicines continuing to show strong growth globally it is
forecast the Group will be able to capture a proportion of the market in key jurisdictions and that
the sales of the Group’s products will increase.
In FY22, the Group obtained key licenses that allowed it to commercialise its first product and
create the foundation for further commercial opportunities. The key licenses obtained in the
period include License to Manufacture Medicine (GMP) and New Medical Cannabis Product
Application (CBD100).
17
Rua Bioscience Limited
Notes forming part of the consolidated financial statements
For the year ended 30 June 2022
2. Basis of preparation (continued)
(f) Going Concern (continued)
Currently there are no indications that the Group will not be able to continue as a going concern.
The Group has net current assets and the Directors are of the opinion that the Group is able to
settle liabilities as they fall due.
There are risks related to the assumptions being made, particularly around the timing of regulatory
approvals and supplying product to markets, sales volumes, and the sales price of these products.
The Group is monitoring and managing these risks, however there is no indications at this point in
time that they will affect the Group's ability to continue as a going concern.
(g) Estimates and assumptions
− Fair value measurement
The fair value of certain assets and liabilities included in the Group’s consolidated financial
statements is disclosed.
Determining the fair value of these assets and liabilities utilises market observable inputs and
data as far as possible. Inputs used in determining fair value measurements are categorised
into different levels based on how observable the inputs used in the valuation technique
utilised are (the ‘fair value hierarchy’):
- Level 1: Quoted prices in active markets for identical items (unadjusted)
- Level 2: Observable direct or indirect inputs other than Level 1 inputs
- Level 3: Unobservable inputs (i.e. not derived from market data).
The classification of an item into the above levels is based on the lowest level of the inputs
used that has a significant effect on the fair value measurement of the item.
For more detailed information in relation to the fair value measurement of the items above,
please refer to the applicable notes.
- Borrowings, disclosure of fair value (note 4)
- Financial assets and liabilities at amortised cost, disclosure of fair value (note 4)
- Contingent consideration (note 13)
- Valuation of intangible assets in a business combination (note 13)
- Share-based payments measured at fair value (note 23).
18
Rua Bioscience Limited
Notes forming part of the consolidated financial statements
For the year ended 30 June 2022
2. Basis of preparation (continued)
(h ) Basis of consolidation
Where the Company has control over an investee, it is classified as a subsidiary. The company
controls an investee if all three of the following elements are present” power over the investee,
exposure to variable returns from the investee, and the ability of the investor to use its power to
affect those variable returns. Control is reassessed whenever facts and circumstances indicate
that there may be a change in any element of control.
The consolidated financial statements present the results of the Company and its subsidiaries (“the
Group”) as if they formed a single entity. Intercompany transactions and balances between Group
companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the
“acquisition method” (refer to note 13). In the statement of financial position, the acquiree's
identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values
at the acquisition date. The results of acquired operations are included in the consolidated
statement of comprehensive income from the date on which control is obtained, and are
subsequently deconsolidated from the date on which control ceases.
(i ) Impairment of non-financial assets
The carrying amounts of the Group’s property, plant and equipment (note 12), intangible assets
(note 14) and right-of -use assets (note 15) are reviewed at each reporting date to determine
whether there is any indication of impairment. If any such indication exists, then the asset’s
recoverable amount is estimated.
An impairment loss is recognised whenever the carrying amount of an asset exceeds its recoverable
amount. Impairment losses directly reduce the carrying amount of assets and are recognised in
profit or loss.
The estimated recoverable amount of non-financial assets is the greater of their fair value less
costs to sell and value in use. Value in use is determined by estimating future cash flows from the
use and ultimate disposal of the asset and discounting these to their present value using a pre-tax
discount rate that reflects current market rates and the risks specific to the asset. For an asset
that does not generate largely independent cash inflows, the recoverable amount is determined
for the cash-generating unit to which the asset belongs.
Impairment losses are reversed when there is a change in the estimate used to determine the
recoverable amount and there is an indication that the impairment loss has decreased or no longer
exists. An impairment loss is reversed only to the extent that the asset's carrying amount does not
exceed the carrying amount that would have been determined, net of depreciation or
amortisation, if no impairment loss had been recognised. All other impairment losses are reversed
through profit or loss.
19
Rua Bioscience Limited
Notes forming part of the consolidated financial statements
For the year ended 30 June 2022
3. Segment Reporting
The Group operates in one segment, its primary business being research and development and the
sale and manufacture of pharmaceutical products in New Zealand.
The chief operating decision maker has been identified as the Chief Executive Officer (CEO), as
they make all the key strategic resource allocation decisions related to the Group’s segment.
The Group currently derives revenue from customers through the sale of goods to a single
distributor in New Zealand. The Group currently only derives revenue from a single product line
and therefore revenue is not disaggregated further.
4. Financial instruments and Financial Risk Management and Capital Management
This note describes:
(A) The Group’s accounting policies with respect to financial instruments recognised in the
Group’s consolidated financial statements, and detail of those balances.
(B) The nature of the financial risk that the Group is exposed to, and the Group’s objectives,
policies and processes for managing those risks, the methods used to measure them, and
sensitivity analysis to movements in rates (where applicable).
(C) The nature of the Group’s Capital Management policies.
(A) Financial instruments recognised
The Group recognises financial assets and financial liabilities when it becomes party to the
contractual provisions of the financial instrument.
Financial Assets
The Group classifies its financial assets depending on the purpose for which the asset was acquired
(i.e. the business model) and the contractual terms of the cash flows.
Amortised Cost
These represent financial assets where the objective is to hold these assets in order to collect
contractual cash flows that represent solely payments of principal and interest. These comprise
cash and cash equivalents, other receivables and term deposit investments.
Cash and cash equivalents comprise of cash on hand and demand deposits, as well as highly liquid
deposits that are readily convertible to known amounts of cash and which are subject to an
insignificant risk of changes in value, with terms of 90 days or less. Otherwise, deposits with a
term greater than 90 days but less than 1 year are presented as “investments”.
These financial assets are:
− Initially measured at fair value, plus directly attributable transaction costs.
− Subsequently measured at amortised cost using the effective interest rate method, less
provision for impairment. Cash and cash equivalents and investments are held with
“investment grade” financial institutions and are deemed to have no significant increase in
credit risk in terms of impairment.
− Derecognised when the contractual rights to the cash flows from the financial asset expire or
are transferred.
20
Rua Bioscience Limited
Notes forming part of the consolidated financial statements
For the year ended 30 June 2022
4. Financial instruments - Risk Management (continued)
Financial liabilities
The Group classifies its financial liabilities depending on whether (or not) it meets the definition
of a financial liability at fair value.
Financial liabilities at fair value through profit and loss
These comprise contingent consideration recognised in the consolidated statement of financial
position and are carried at fair value. Changes in fair value are recognised in the consolidated
statement of comprehensive income.
Other financial liabilities at amortised cost
These include trade and other payables, borrowings, and lease liabilities recognised in the
consolidated statement of financial position.
These financial liabilities are:
− Initially measured at fair value, plus directly attributable transaction costs.
− Subsequently measured at amortised cost using the effective interest rate method.
− Derecognised when the contractual obligation to settle the obligation is discharged,
cancelled, or expires.
Categories and fair values of the Group’s financial instruments
2022
Financial Assets
at Amortised
Cost
Financial
Liabilities
At Amortised
Cost
Financial
Liabilities at
Fair Value
through Profit
or Loss
Total Carrying
Amount
Fair
Value
$ $ $ $ $
Investments 8,041,493 8,041,493 (a)
Cash and cash
equivalents
1,897,285
1,897,285
(a)
Other
Receivables
575,000
575,000
(a)
Trade and
other payables
(438,378)
(438,378)
(a)
Lease liabilities
(824,002)
(824,002)
(b)
Contingent
consideration
(7,641,832)
(7,641,832)
n/a
Total 10,513,778 (1,262,380) (7,641,832)
(a) Due to their short-term nature, the carrying value of these financial instruments approximates their fair value
(b) Not required to be disclosed per NZ IFRS 7.
21
Rua Bioscience Limited
Notes forming part of the consolidated financial statements
For the year ended 30 June 2022
4. Financial instruments - Risk Management (continued)
2021 Financial
Assets at
Amortised Cost
Financial
Liabilities at
Amortised
Cost
Total Carrying
Amount
Fair
Value
$ $ $ $
Investments 13,041,549 13,041,549 (a)
Cash and cash
equivalents
3,359,479
3,359,479
(a)
Other Receivables
75,000
75,000
(a)
Trade payables
(510,167)
(510,167)
(a)
Borrowings
(10,762)
(10,762)
(b)
Lease liabilities
(944,078)
(944,078)
(c)
Total 16,476,028 (1,465,007)
(a) Due to their short-term nature, the carrying value of these financial instruments approximates their fair value.
(b) Due to the market rate of lending for the remaining term and outstanding balance not being materially different
from the current effective interest rate, the carrying value of these financial instruments approximates their fair
value.
(c) Not required to be disclosed per NZ IFRS 7.
(B) Financial risk management
The Board has overall responsibility for the determination of the Group’s risk management
objectives and policies and, whilst retaining ultimate responsibility for them, it has delegated the
authority for designing and operating processes that ensure the effective implementation of the
objectives and policies to the Group's finance function. The Board receives monthly reports from
the Chief Financial Officer through which it reviews the effectiveness of the processes put in place
and the appropriateness of the objectives and policies it sets. The Group's internal finance team
also review the risk management policies and processes and report their findings to the Audit,
Finance & Risk Committee.
The overall objective of the Board is to set policies that seek to reduce risk as far as possible
without unduly affecting the Group’s competitiveness and flexibility. Further details regarding
these policies as they relate to the specific financial risks that the Group is exposed to are set out
below:
Through its operations, the Group is exposed to the following financial risks:
(a) Credit risk
(b) Market risk
i. Interest rate risk
ii. Foreign exchange risk, and
iii. Price risk
(c) Liquidity risk.
22
Rua Bioscience Limited
Notes forming part of the consolidated financial statements
For the year ended 30 June 2022
4. Financial instruments - Risk Management (continued)
(a) Credit risk
Credit risk is the risk of financial loss to the Group if a counterparty to a financial asset fails to
meet their contractual obligations. The Group’s exposure to credit risk is represented by the
carrying amount of cash and cash equivalents, other receivables and investments.
The Group only holds cash and cash equivalents and investments with financial institutions that
are independently determined credit ratings of "A" or higher. Other receivables comprise
contingent consideration receivable held in escrow with the Group’s lawyers in relation to the
acquisition of Zalm Therapeutics Limited (refer to note 13 for details).
The Group has an Audit, Finance & Risk Committee that monitors credit risk as part of its wider
duties.
Cash and cash equivalents and investments held with financial institutions are presented in the
table below:
30 June 2022
Credit
rating
(a)
Cash and cash
equivalents
Investments Other
receivables
Total
$ $ $
Kiwibank A1, AA 1,897,285 8,041,493 - 9,938,778
ANZ AA, A+ - - 500,000 500,000
Total 1,897,285 8,041,493 500,000 10,438,778
30 June 2021
Credit
rating
(a)
Cash and cash
equivalents
Investments Total
$ $ $
Kiwibank A1, AA 3,359,479 13,041,549 16,401,028
Total 3,359,479 13,041,549 16,401,028
(a) Standard & Poor’s, Moody’s, Fitch
Interest rates on interest bearing cash and cash equivalents and investments range between 0.35%
- 1.80% (2021: 0.35% - 1.00%).
23
Rua Bioscience Limited
Notes forming part of the consolidated financial statements
For the year ended 30 June 2022
4. Financial instruments - Risk Management (continued)
(b) Market risk
Market risk arises from the Group’s:
− Use of interest-bearing borrowings (interest rate risk)
− Credit sales and purchases in foreign currencies (foreign currency risk), and
− Prices of key commodity inputs (price risk)
i. Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will
fluctuate because of changes in market interest rates.
The Group is exposed to fair value interest rate risk from its fixed-rate borrowings and lease
liabilities, with rates between 4.00% - 7.50% (2021: 3.90% - 7.50%).
The Group manages its interest rate risk by placing surplus funds on medium term interest-
returning investments with financial institutions (per above).
ii. Foreign exchange risk
The Group currently does not have any sales transactions denominated in foreign currencies,
however this is likely to change in subsequent reporting periods.
There are no open forward exchange contracts at the end of the reporting period (2021: no open
forward exchange contracts).
The net foreign exchange loss recognised for the year was $2,993 (2021: $1,266).
24
Rua Bioscience Limited
Notes forming part of the consolidated financial statements
For the year ended 30 June 2022
4. Financial instruments - Risk Management (continued)
(c) Liquidity risk
Liquidity risk arises from the Group’s management of working capital. It is the risk that the
Group will encounter difficulty in meeting its financial obligations as they fall due.
The Group's policy is to ensure that it will always have sufficient cash to allow it to meet its
liabilities when they become due. To achieve this the Group maintains a monthly forecast on
its future cash position to ensure it can meet financial obligations when they fall due.
The Board receives monthly financial statements which include statements of financial position,
performance, and cash flow, as well as budget/forecast variance reports, to ensure it holds or
will hold cash equivalents to meet its obligations.
The following table sets out the contractual maturities (representing undiscounted contractual
cash-flows) of financial liabilities:
Up to 3 Between Between Between Over Total
Months 3 and 12 1 and 2 2 and 5 5 years
As at 30 June 2022 months year years
$ $ $ $ $ $
Trade and other
payables
319,488 - - - - 319,488
Lease liabilities 47,585 113,981 119,464, 317,169 374,021 972,220
Total 367,073 113,981 119,464 317,169 374,021 1,291,708
As at 30 June 2021
Trade and other
payables
510,167 - - - - 510,167
Borrowings 10,832 - - - - 10,832
Lease liabilities 43,367 130,102 147,470 330,910 479,744 1,131,593
Total 564,366 130,102 147,470 330,910 479,744 1,652,592
(C) Capital Management
The Group’s objectives when managing capital are to safeguard the entity's ability to continue as
a going concern, so that it can continue to fund activities for the purposes of deriving sustainable
returns to its shareholders and other stakeholders.
The Group’s capital structure consists of Equity of the Group (comprising issued capital and
retained earnings). The Group is not subject to any externally imposed capital requirements.
The Board continually reviews the capital structure of the Group. As part of this review, the Board
considers the availability and cost of capital and the risks associated therein.
25
Rua Bioscience Limited
Notes forming part of the consolidated financial statements
For the year ended 30 June 2022
5. Revenue from contracts with customers
The Group recognises revenue from the sale of goods at a point-in-time when control of the
goods has transferred to the customer. The Group identifies the point which control passes
based on the following indicators:
− Whether physical delivery of the products to the agreed location has occurred;
− Whether the Group no longer has physical possession;
− Whether the Group has a present right to payment;
− Whether the Group has transferred legal title to the customer;
− Whether the customer has accepted the goods; and
− Whether the Group retains any of the significant risks and rewards of the goods in question.
Where goods are sold through distributors, judgement is required to assess whether control
passes:
(i) When the goods are delivered to the distributor (in which case, the distributor is the
Group’s customer, and is acting as a “principal” in its own right), or instead
(ii) To a party further in the supply chain (in which case, the distributor is acting as the Group’s
“agent”, rather than as a “principal”, and the Group’s “customer” (referred to as the ‘end
customer’) may be a retailer, wholesaler or approved prescriber).
The Group has assessed that control passes to the distributor, and therefore is acting as a
“principal” in its own right and as such the Group’s customer, based on the assessment of the
following indicators:
− The Distributor is responsible for fulfilling the promise to provide goods to the end
customer;
− The Distributor takes physical possession of the goods before they are delivered to the end
customer, and assumes all substantive inventory risk associated with the goods; and
− The Distributor has discretion to set the price for goods sold to the end customer.
Determining the transaction price - Variable consideration
The terms of the Group’s contracts with customers include elements of variable consideration
which constrain the amount of revenue recognised at a point in time:
− Certain contracts provide customers with a limited right of return over expired products
(products typically have an expiry of no more than 9 months from the date of purchase).
Payment terms are 60 days from invoice.
The Group estimates the value of goods that are expected to be returned using the
expected value method such that it is highly probable that there will not be a reversal of
previously recognised revenue when goods are returned.
A refund liability is recognised where cash received exceeds the revenue recognised.
− Contracts containing pricing adjustments, rebates and other fees paid to customers are
recognised as a reduction in revenue at the time that the related sale is recognised.
These arrangements include instances where the Group reimburses its distributors for
discounts provided to their customers.
26
Rua Bioscience Limited
Notes forming part of the consolidated financial statements
For the year ended 30 June 2022
5. Revenue from contracts with customers (continued)
Repurchase agreements
The Group’s arrangements also include clauses allowing the Group to repurchase goods
transferred to customers giving rise to a call option. These call options are not conditional.
Because goods are repurchased at the original selling price, this constitutes a financing
arrangement and the Group recognises a contract liability for the amounts which it expects
to repay. Revenue is recognised once the call option expires or is recognised. Because these
arrangements are short-term in nature, the Group does not consider this to be a significant
financing arrangement and does not account for the time value of money.
2022 2021
$ $
Sale of goods – point in time 24,226 -
Total Revenue from Contracts with Customers 24,226 -
Contract Balances
Contract
Liability
Contract
Liability
2022 2021
$ $
As at 1 July - -
Amounts included in opening contract liabilities that were
recognised as revenue during the period
- -
Cash received and/or trade debtors recognised in advance of
performance and not recognised as revenue as at period end
2,062 -
As at 30 June 2,062 -
6. Other income
(i) Government grants
Government grants are recognised at their fair value where there is reasonable assurance that
the grant will be received and the Group will comply with all attached conditions. Government
grants relating to costs are deferred and recognised in profit or loss over the period necessary
to match them with the costs that they are intended to compensate. They are recognised as
other income rather than reducing the costs that they are intended to compensate.
The Group currently receives government grants in the form of R&D tax incentive credits,
received from the Inland Revenue Department (IRD).
R&D tax incentive credits are accounted for as government grant income as opposed to income
tax credits as the benefit is independent of the taxable profit or tax liability where the Group
is eligible for a cash refund; specific conditions exist for the Group, the R&D activities and the
expenditure to be eligible for the tax credits; and the tax credits are not structured as an
additional deduction in computing taxable profit.
The Group has reasonable assurance at the reporting date that the R&D tax incentive will be
received and all attached conditions will be complied with. The Group expects to receive the
tax credit when the return is filed subsequent to the end of the reporting period.
27
Rua Bioscience Limited
Notes forming part of the consolidated financial statements
For the year ended 30 June 2022
6. Other income (continued)
Other income streams recognised by the Group include:
2022 2021
$ $
Research and development grant income 584,180 357,366
NZTE grant income 36,689 -
COVID-19 wage subsid
y - 91,636
Total government grant income 620,869 449,002
Gain on sale of property, plant and equipment 1,003 -
Other Income - 1,969
Total other income 621,872 450,971
7. Expenses
2022 2021
Note $ $
Specific expenses included in operating loss before
net financing costs for the year:
Cultivation costs 875,738 611,045
Extraction and manufacturing 578,740 584,502
Changes in inventories of finished goods and work in
progress
128,643
-
Accommodation and travel 36,665 58,740
Communications 236,278 32,253
Depreciation of property, plant and equipment 645,502 596,698
Depreciation of right-of-use lease assets 171,101 97,904
Direct research and development expenses 628,023 308,433
General 256,811 204,315
Professional services 1,378,464 1,133,268
Insurance 132,788 126,180
Motor vehicle expenses 55,738 57,193
Charitable expenses 18,782 24,670
Licenses 46,515 22,670
Office expenses 64,737 69,267
Selling and marketing 131,959 57,741
Personnel costs 2,842,067 2,479,916
Marketing costs related to IPO - 175,147
Foreign exchange loss 2,993 1,266
8,231,544 6,641,208
28
Rua Bioscience Limited
Notes forming part of the consolidated financial statements
For the year ended 30 June 2022
7. Expenses (continued)
Included in the above:
Employee benefit expense
- Short term benefits (wages and salaries) 2,556,773 2,406,567
- Defined contribution plan 96,662 64,935
- Share-based payment expense 188,632 602,466
Total employee benefit expense 2,842,067 3,073,968
Research and development expenses
- Direct costs 628,023 296,803
- Indirect costs 2,349,499 1,600,323
Total research and development expenses 2,977,522 1,897,126
(i) Research and development
Research and development expenditure that do not meet the development criteria in NZ IAS
38 Intangible Assets for recognition as intangible assets are expensed as incurred.
Development costs previously recognised as an expense are not recognised as an asset in a
subsequent period.
Currently the Group is still in the research phase (refer to note 22 Biological assets) and
related costs are recognised in profit or loss accordingly until such time as the Group moves
into the development phase and the relevant recognition criteria are met.
(ii) Fees paid to auditors
Fees paid to auditors include payments to PricewaterhouseCoopers for the following:
2022 2021
$ $
Audit and review of the financial statements
- Audit of the financial statements 131,250 60,132
- Review of half year financial statements 27,143 27,635
Total fees paid to auditors 158,393 87,767
29
Rua Bioscience Limited
Notes forming part of the consolidated financial statements
For the year ended 30 June 2022
8. Income tax
Tax expense/(credit) comprises current and deferred tax.
Current tax is the expected tax payable or receivable on the taxable income or loss for the
year, using tax rates enacted or substantively enacted at the reporting date, and any
adjustment to tax payable in respect of previous years.
Deferred tax is recognised in respect of temporary differences between the carrying amounts
of assets and liabilities for financial reporting purposes and the amounts used for taxation
purposes. Deferred tax is measured at the tax rates that are expected to be applied to
te mporary differences when they reverse, using tax rates enacted or substantively enacted
at the reporting date.
In determining the amount of current and deferred tax the Group takes into account the
impact of uncertain tax positions and whether additional taxes and interest may be due. The
Group believes that its accruals for tax liabilities are adequate for all open tax years based
on its assessment of many factors, including interpretations of tax law and prior experience.
This assessment relies on estimates and assumptions and may involve a series of judgements
about future events. New information may become available that causes the Group to change
its judgement regarding the adequacy of existing tax liabilities; such changes to tax liabilities
will impact tax expense in the period that such a determination is made.
A deferred tax asset is recognised for unused tax losses, tax credits and deductible temporary
differences, to the extent that it is probable that future taxable profits will be available
against which they can be utilised. Deferred tax assets are reviewed at each reporting date
and are reduced to the extent that it is no longer probable that the related tax benefit will
be realised.
30
Rua Bioscience Limited
Notes forming part of the consolidated financial statements
For the year ended 30 June 2022
8. Income Tax (continued)
(i) Income tax recognised in profit or loss
The income tax expense/(credit) recognised for the year includes current and deferred tax as
presented below:
2022 2021
$ $
Current tax on profits for the year - -
Total current tax - -
Origination and reversal of temporary differences 190,642 (62,089)
Current year tax losses - (1,673,717)
Prior year tax losses not recognised 959,348 -
Prior period adjustments 77 (20,469)
Total deferred tax expense/(credit) 1,150,067 (1,756,275)
Total income tax expense/(credit) 1,150,067 (1,756,275)
(ii) Reconciliation of income tax expense/(credit)
The reconciliation of income tax expense/(credit) is presented below:
2022 2021
$ $
Loss before income tax expense/(credit)
(7,485,985) (6,174,235)
Tax expense/(income) @28% (2,096,075) (1,728,786)
Add/(less) reconciling items
- Expenses not deductible for tax purposes 54,406 116,953
- Tax losses reinstated (R&D cash out credit adjustment) - (20,469)
- Non-assessable income (121,826) (123,973)
- Tax losses not recognised for deferred tax 3,313,485 -
- Prior period adjustments 77 -
Total income tax expense/(credit) 1,150,067 (1,756,275)
(iii) Imputation credits
The Company has $310,713 of imputation credits as at 30 June 2022 (2021: $194,087).
31
Rua Bioscience Limited
Notes forming part of the consolidated financial statements
For the year ended 30 June 2022
8. Income Tax (continued)
(iv) Deferred tax
Deferred tax is calculated in full on temporary differences under the liability method using a
tax rate of 28%.
The movement on the deferred tax account is as shown below:
2022 2021
$ $
Opening as at 1 July 2,554,480 798,205
Recognised in profit and loss
- Recognition of temporary difference (190,642) 62,089
- Recognition of tax losses 1,240,099 1,673,717
- Tax losses derecognised (2,199,447) -
- Adjustments from prior years -
20,469
(1,149,990) 1,756,275
Arising on business combination (1,404,490) -
Closing as at 30 June - 2,554,480
32
Rua Bioscience Limited
Notes forming part of the consolidated financial statements
For the year ended 30 June 2022
8. Tax expense (continued)
(iv) Deferred tax (continued)
Details of the deferred tax asset and liability amounts recognised in profit or loss are as follows:
Employee
entitlements
Buildings Intangible
assets
Lease liabilities and
Right-of-use lease
assets
Share-based
payments –
cash settled
Share-based
payments –
equity settled
Carried
forward tax
losses
Total
$ $ $ $ $ $ $ $
As at 1 July 2020 30,922 37,692 - 1,934 38,397 72,886 616,374 798,205
Amounts recognised
- In profit or loss 937 (53,075) - 2,036 50,798 61,393 1,694,186 1,756,275
- In OCI - - - - - - - -
At 30 June 2021 31,859 (15,383) - 3,970 89,195 134,279 2,310,560 2,554,480
As at 1 July 2021 31,859 (15,383) - 3,970 89,195 134,279 2,310,560 2,554,480
Amounts recognised
- In profit or loss 13,049 (1,927) - 3,653 (89,195) (116,222) (959,348) (1,149,990)
- Arising on business
combinations
-
-
(1,404,490)
-
-
-
-
(1,404,490)
- In OCI - - - - - - - -
At 30 June 2022 44,908 (17,310) (1,404,490) 7,623 - 18,057 1,351,212 -
33
Rua Bioscience Limited
Notes forming part of the consolidated financial statements
For the year ended 30 June 2022
8. Income Tax (continued)
Significant management judgement has been exercised to determine that future taxable profits for
the Group are beyond a reliable forecast horizon and that no net deferred tax asset should be
recognised.
An amount of deferred tax asset of $959,348 (net) (2021: $nil) has been derecognised in the current
year. The unrecognised deferred tax asset is comprised of tax losses of $3,494,307 (2021: $nil).
The Group offsets assets and liabilities if, and only if, it has a legal enforceable right to set off current
tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to
income taxes levied by the same tax authority.
9. Notes supporting statement of cash flows
(i) Reconciliation of net operating cash flows to profit/loss
2022 2021
$ $
Net loss for the year (8,636,052) (4,417,960)
Adjustments for non-cash and non-operating activity items:
-
Add back: Depreciation – Property, Plant &
Equipment
(3)
643,571 596,698
- Add back: Depreciation – RoU lease asset
(3)
170,894 97,904
- Deduct: Deferred tax income - (1,756,275)
- Add back: Deferred tax expense 1,150,067 -
- Deduct: Gain on sale of Property, Plant & Equipment (1,003) -
- Add back: Loss on sale of Property, Plant & Equipment - 4,396
- Deduct: Share-based payment credit (139,373) -
- Add back: Share-based payment expense - 535,879
- Deduct: Cash settled portion of salary sacrifice - (66,587)
- Add back: Interest expense 40,822 31,558
- Deduct: Interest income (138,145) (47,560)
- Add back: Cost of goods given away under CAS 18,782 -
- Deduct: Costs capitalised into ROU assets (793) -
1,744,822 (603,987)
Movements in working capital:
- (Increase)/decrease in other receivables
(1)
99,119 370,451
- (Increase)/decrease in prepayments (55,994) (28,529)
- (Increase)/decrease in inventories (237,587) -
- Increase/(decrease) in trade and other payables
(2)
3,335 260,033
- Increase/(decrease) in contract liabilities 2,062 -
- Increase/(decrease) in employee benefit liabilities 225,873 64,457
- Increase/(decrease) in deferred grant income 9,500 (91,636)
46,308 574,776
Net cash outflows from operating activities (6,844,922) (4,447,171)
(1)
Excludes accruals for interest income (investing activity)
(2)
Excludes accruals for interest expense (financing activity), and payables related to property, plant & equipment
(investing activity)
(3)
Depreciation of $1,931 (2021: nil) and amortisation of $ 207 (2021: nil) related to building facilities and plant and
equipment used to manufacture products is included in changes in inventories of finished goods and work in progress.
34
Rua Bioscience Limited
Notes forming part of the consolidated financial statements
For the year ended 30 June 2022
9. Notes supporting statement of cash flows (continued)
(ii) Changes in the Group’s liabilities arising from financing activities (cash and non-cash)
30 June 2022 NON-CASH NON-CASH CASH CASH CASH
Opening New leases Unpaid
accrued
lease
payments
Payment
of prior
year
accrued
interest
Drawdown Payment Closing
$ $ $ $ $ $ $
Borrowings 10,762 - - - - (10,762) -
Lease
liabilities
944,078
36,977
-
(3,769)
-
(153,284)
824,002
954,840 36,977 - (3,769) - (164,046) 824,002
30 June 2021 NON-CASH NON-CASH CASH CASH CASH
Opening New leases Unpaid
accrued
lease
payments
Payment
of prior
year
accrued
interest
Drawdown Payment Closing
$ $ $ $ $ $ $
Borrowings 88,931 - - - - (78,169) 10,762
Lease
liabilities
259,863
774,846
(7,717)
-
-
(82,914)
944,078
348,794 774,846 (7,717) - - (161,083) 954,840
35
Rua Bioscience Limited
Notes forming part of the consolidated financial statements
For the year ended 30 June 2022
10. Earnings per share
Basic earnings per share (EPS) is calculated by dividing the profit attributable to
shareholders of the Group by the weighted average number of ordinary shares on issue
during the year, excluding shares held as treasury stock.
Diluted earnings per share assumes conversion of all dilutive potential ordinary shares in
determining the denominator.
In both years, the Group has not adjusted the weighted average number of shares used in
diluted EPS to reflect the impact of outstanding share-options granted, because as the
Group is loss-making, the impact of the outstanding share options granted is “anti-dilutive”
(i.e. decreases the loss per share).
2022 2021
Numerator $ $
(Loss) for the year and earnings (basic and diluted EPS) (8,636,052) (4,417,960)
2022 2021
Denominator No. shares No. shares
Weighted average number of shares (basic and diluted EPS)
144,166,088 127,393,230
11. Inventory
Inventories are recognised at the lower of cost and net realisable value. Cost comprises all costs
of purchase, costs of conversion and other costs incurred in bringing the inventories to their
present location and condition. All inventories are held at their net realisable value at reporting
date.
Inventories are measured on a first-in-first-out basis to determine the cost of ordinarily
interchangeable items.
2022 2021
$ $
Raw Materials 166,028 -
Consumables 8,098 -
Work in progress 20,967 -
Finished Goods 23,712 -
Total 218,805 -
Amounts recognised in profit or loss
Inventories recognised as an expense during the year amounted to $39,727 (2021: nil). The
Group reported write-downs of inventory to net realisable value of $88,916 (2021: nil) in the
statement of profit or loss and other comprehensive income.
Consignment stock
The Group operates a Compassionate Access Scheme (‘CAS’) whereby quantities of finished
goods are held with distributors, and then distributed free of charge to eligible end consumers
under direction of the Group. Because the distributor does not control these finished goods,
the Group recognises consignment stock for the quantity of finished goods subject to the CAS
at reporting date. The cost of goods distributed under the CAS are recognised as a charitable
expense (refer note 7) within the consolidated statement of profit or loss and other
comprehensive income, when the consumer receives the goods.
36
Rua Bioscience Limited
Notes forming part of the consolidated financial statements
For the year ended 30 June 2022
12. Property, plant and equipment
Property, plant and equipment are stated at historical cost less any accumulated depreciation
and impairment losses. Costs includes expenditure directly attributable to the acquisition of
assets, and includes the cost of replacements that are eligible for capitalisation when these are
incurred.
Where self-constructed items take a substantial period of time to construct for their intended
use (“qualifying asset”) borrowing costs are capitalised to the initial cost of item, with
associated cash flows presented within interest expense paid in the consolidated statement of
cash flows.
Where material parts of an item of property, plant and equipment have different useful lives,
they are accounted for as separate items (major components) of property, plant and
equipment.
The cost of property, plant and equipment constructed by the Group, including capital work in
progress, includes the cost of all materials used in construction, associated direct labour and
an appropriate proportion of variable and fixed overheads, and where applicable borrowing
costs. Costs cease to be capitalised as soon as the asset is ready for productive use.
Depreciation is calculated on a diminishing value basis over the estimated useful life of the
asset based on estimates by management. Assets' estimated useful life is reassessed annually.
The following estimated depreciation rates have been used:
− Buildings and fitout 2% to 50% (2021: 0% to 50%)
− Cultivation Containers 10% (2021: 10%)
− Office Equipment 13% to 67% (2021: 8% to 67%)
− Plant and Equipment 8% to 100% (2021: 8% to 100%)
− Vehicles 40% (2021: 20% to 40%)
Any gain or loss on disposal of an item of property, plant and equipment (calculated as the
difference between the net proceeds from disposal and the carrying amount of the item) is
recognised in profit or loss.
Subsequent expenditure is capitalised only when it is probable that the future economic
benefits associated with the expenditure will flow to the Group. Ongoing repairs and
maintenance is expensed as incurred.
37
Rua Bioscience Limited
Notes forming part of the consolidated financial statements
For the year ended 30 June 2022
12 . Property, plant and equipment (continued)
Buildings
and fitout
Cultivation
Containers
Office
Equipment
Plant and
equipment
Vehicles Capital
works
Total
Year ended 30 June 2022 $ $ $ $ $ $ $
Opening net book value 4,399,586 129,202 124,993 1,273,642 61,297 185,890 6,174,610
Additions - - 16,121 - 3,321 296,911 316,353
Acquired on business combination - - 524 - - - 524
Depreciation charge (351,214) (12,921) (39,798) (216,939) (24,629) - (645,501)
Disposals - - (2,702) - - - (2,702)
Transfers 98,596 - 13,639 361,365 - (473,600) -
Closing net book value 4,146,968 116,281 112,777 1,418,068 39,989 9,201 5,843,284
Cost 4,816,799 159,197 206,617 1,901,808 161,195 9,201 7,254,817
Accumulated depreciation (669,831) (42,916) (93,840) (483,740) (121,206) - (1,411,533)
Net book amount 4,146,968 116,281 112,777 1,418,068 39,989 9,201 5,843,284
The assets under capital work-in-progress relate to the Group’s plant and equipment. The cost of the plant and equipment will be depreciated once the assets are
commissioned and available for use. There are no (additional) costs to completion to which the Group is contractually committed to.
38
Rua Bioscience Limited
Notes forming part of the consolidated financial statements
For the year ended 30 June 2022
12 . Property, plant and equipment (continued)
Buildings
and fitout
Cultivation
Containers
Office
Equipment
Plant and
equipment
Vehicles Capital
works
Total
Year ended 30 June 2021 $ $ $ $ $ $ $
Opening net book value 2,103,929 160,781 79,227 920,254 77,116 2,317,053 5,658,360
Additions - - 73,028 - 19,503 1,040,553 1,133,084
Depreciation charge (303,192) (14,356) (33,216) (213,317) (32,617) - (596,698)
Disposals (net book value) - (17,223) (208) - (2,705) - (20,136)
Transfers 2,598,849 - 6,162 566,705 - (3,171,716) -
Closing net book value 4,399,586 129,202 124,993 1,273,642 61,297 185,890 6,174,610
Cost 4,718,203 159,197 185,219 1,540,443 157,874 185,890 6,946,826
Accumulated depreciation (318,617) (29,995) (60,226) (266,801) (96,577) - (772,216)
Net book amount 4,399,586 129,202 124,993 1,273,642 61,297 185,890 6,174,610
39
Rua Bioscience Limited
Notes forming part of the consolidated financial statements
For the year ended 30 June 2022
13. Goodwill and Business Combinations
The consolidated financial statements incorporate the results of business combinations using
the acquisition method, as at the acquisition date.
Goodwill resulting from business combinations represents the excess between:
● The fair value of (i) the consideration paid, (ii) any previous held interest, and (iii) any
remaining non-controlling interest, and
● The fair value of the net identifiable assets, and their associated acquisition date
deferred tax balances.
● Acquisition-related costs are expensed as incurred.
On initial recognition, goodwill is allocated to the cash generating units ('CGU') that are
expected to benefit from a business combination that gives rise to the goodwill (a CGU being
the smallest group of assets for which there are separately identifiable cash flows).
Subsequently, a CGU to which goodwill has been allocated is tested for impairment on an
annual basis, and at any other time where there is an indicator of impairment, by comparing
the CGU’s carrying amount to its recoverable amount.
Any impairment recognised against goodwill is not subsequently reversed in future periods
where the recoverable amount of a CGU increases above its carrying amount.
(i) Business combinations during the year
Acquisition of Zalm Therapeutics Limited
(a) Summary of the acquisition
On 4 February 2022, the Company acquired 100% of the voting equity instruments of Zalm
Therapeutics Limited (“Zalm”).
Zalm is a New Zealand-based medicinal cannabis business with supply and distribution
arrangements for Good Manufacturing Practice (“GMP”)-grade cannabis products to New Zealand
and global markets.
The acquisition provides the Company with significantly earlier access to cannabis derived
medicines at scale, through Zalm’s in-place supply agreement with one of Australia’s leading
listed medical cannabis companies (Cann Group Limited) who during the reporting period have
finalised the commissioning of one of Australasia’s largest and most technologically advanced
indoor growing facilities.
Acquisition costs of $77,717 have been recognised as general expenses in profit or loss, and
operating cash outflows in the consolidated statement of cash flows.
40
Rua Bioscience Limited
Notes forming part of the consolidated financial statements
For the year ended 30 June 2022
13. Goodwill and Business Combinations (continued)
(b) Purchase consideration
Details of the purchase consideration are as follows:
$
Purchase consideration:
Ordinary shares issued $3,820,916
Contingent consideration payable - shares $7,641,832
Contingent consideration payable – cash -
Total purchase consideration $11,462,748
(i) Ordinary shares issued
The fair value of the 8,140,000 ordinary shares issued as part of the consideration paid
for Zalm ($3,820,916) was based on the volume-weighted average-price (VWAP) price on
acquisition date, of $0.4694 share.
(ii) Contingent consideration payable - shares
The contingent consideration payable is made up of an additional 16,280,000 ordinary
shares split into two equal tranches (8,140,000 ordinary shares each), that are contingent
upon achieving two critical milestones (“Milestone 1”, and “Milestone 2”).
Achievement of Milestone 1 and Milestone 2 are not interdependent, such that both, one,
or neither Milestone could ultimately be achieved.
As the conditions attached to Milestones result in potential contractual obligations to
issue a variable number of ordinary shares, the contingent consideration is classified as
a financial liability.
Milestone 1
The conditions attached to 8,140,000 Milestone 1 ordinary shares result in potentially,
100%, 75%, 50%, or 0% of the shares being issued (“Milestone 1 threshold”) at 30 December
2022 (or earlier, if the conditions are met).
The potential undiscounted amount of future payments the Group could be required to
make in respect of Milestone 1 ranges from $0 to $3,820,916 based upon the targets being
met (or partially met) around technical documentation and quantity by Zalm’s supplier,
Cann Group.
The fair value of the Milestone 1 contingent consideration payable of $3,820,916 has
been estimated by applying the probability weighted expected Milestone 1 threshold of
100% against the estimated ordinary share price of $0.4694 at the estimated expected
Milestone 1 achievement date (December 2022).
Refer to (iv) below for further details on valuation inputs and relationships to determining
the level 3 fair value of Milestone 1 contingent consideration payable.
41
Rua Bioscience Limited
Notes forming part of the consolidated financial statements
For the year ended 30 June 2022
13. Goodwill and Business Combinations (continued)
(ii) Contingent consideration payable – shares (continued)
Milestone 2
The conditions attached to 8,140,000 Milestone 2 ordinary shares result in potentially,
100%, 75%, 50%, 25%, or 0% of the shares being issued (“Milestone 2 threshold”) at 31
March 2024 (or earlier, if the conditions are met).
The potential undiscounted amount of future payments the Group could be required to
make in respect of Milestone 2 ranges from $0 to $3,820,916 based upon the targets being
met (or partially met) around technical documentation, price and quatity by Zalm’s
supplier, Cann Group.
The fair value of the Milestone 2 contingent consideration payable of $3,820,916 has
been estimated by applying the probability weighted expected Milestone 2 threshold of
100% against the estimated ordinary share price of $0.4694 at the estimated expected
Milestone 2 achievement date (March 2024).
Refer to (iv) below for further details on valuation inputs and relationships to determining
the level 3 fair value of Milestone 2 contingent consideration payable.
(iii) Contingent consideration payable - cash
An amount of $500,000 of Zalm’s pre-acquisition cash is currently held in escrow by the
Vendors’ solicitors and will be released to Rua if, and only if, either Milestone 1 or
Milestone 2 are met (including any and all accumulated interest). In all other
circumstances, the amount is transferred to the Vendors (including any and all
accumulated interest).
The $500,000 cash in escrow has not been recognised as part of the cash and cash
equivalents balance acquired (refer (c) below).
The fair value of the contingent consideration payable of $0 has been estimated by
applying the sum of the inverse of the probability weighted expectations of achieving
Milestone 1 and Milestone 2 against the gross $500,000 cash amount potentially
receivable as at the last Milestone achievement date (March 2024).
42
Rua Bioscience Limited
Notes forming part of the consolidated financial statements
For the year ended 30 June 2022
13. Goodwill and Business Combinations (continued)
(iv) Contingent consideration at reporting date
Fair value Fair value Fair value
$ $ $
Level 3 fair values Acquisition
Remeasurement
gain / (loss)
30 June 2022
Milestone 1 (3,820,916) - (3,820,916)
Milestone 2 (3,820,916) - (3,820,916)
Cash payable - - -
Total (7,641,832) - (7,641,832)
Valuation inputs and relationships to fair value
The following table summarises the quantitative information about the significant
unobservable inputs used in level 3 fair value measurements for the contingent
consideration payable in the Zalm acquisition:
Item
Unobservable
inputs
Range of inputs Relationship of
unobservable inputs
to fair value
Acquisition 30 Jun 2022
Milestone 1
Probability of
achievement
100% 100% A decrease in the
achievement
probability of 25%
would result in a fair
value change of
$955,229.
Milestone 2
Probability of
achievement
100% 100% A decrease in the
achievement
probability of 25%
would result in a fair
value change of
$955,229.
Cash payable
Inverse of the
higher of
Milestone 1 and
Milestone 2
0% 0% As change in the
inverse probability
by +/- 25% results in
a fair value change
of $125,000.
(v) Net cash flow from acquisition
$ $
2022 2021
Cash acquired at acquisition 13(c) $876,452 -
Cash paid at acquisition 13(b) - -
Net cash inflow – investing activity $876,452 -
43
Rua Bioscience Limited
Notes forming part of the consolidated financial statements
For the year ended 30 June 2022
13. Goodwill and Business Combinations (continued)
(c) Net identifiable assets acquired
Details of the assets and liabilities recognised as a result of the acquisition are as follows:
Fair value
$
Cash and cash equivalents
876,452
Non-trade receivables
524,026
GST receivable
14,649
Withholding tax receivable
77
Property, plant, and equipment.
524
Trade and other current payables
(12,607)
Intangible – Supplier contract (CANN)
5,016,035
NET IDENTIFIABLE ASSETS AND LIABILITIES
6,419,156
Deferred tax liability
(1,404,490)
Total net identifiable assets acquired
5,014,666
Valuation inputs and relationships to fair value
The identification and initial recognition and measurement of identifiable intangible assets
acquired in a business combination requires the use of judgement and estimation. The Group
uses valuation specialists in establishing an initial range of fair values based on estimates of
various input parameters, to which judgement is then applied to select the most appropriate
value within that range to be recognised in the Consolidated Statement of Financial Position.
The fair value of the Supplier Contract was determined using the comparative income
differential method. This method involves comparing and assessing the difference in future
earnings with or without the benefit of future access to or use of the intangible asset being
valued. Key inputs are the expected sales volumes, preferential supplier pricing, alternative
supplier pricing and the discount rate (which is based on the Group’s weighted average cost of
capital).
A 5% change in the inputs outlined above would have the following impact on the fair value,
holding all other variables constant:
Key unobservable input +5% movement -5% movement
Expected sales volumes 250,802 (250,802)
Preferential supply price
difference
250,802
(250,802)
Discount rate (578,988) 687,717
44
Rua Bioscience Limited
Notes forming part of the consolidated financial statements
For the year ended 30 June 2022
13. Goodwill and Business Combinations (continued)
(d) Goodwill recognised
Goodwill from the acquisition of Zalm has been determined as follows:
Fair value
$
Purchase consideration
13(b) 11,462,748
Plus: Previous interest
-
Plus: Remain non-controlling interest
-
Less: Net identifiable assets acquired
13(c) (5,014,666)
Goodwill recognised
6,448,082
Goodwill represents and is attributable to the workforce acquired and the expected future
profitability that the acquisition will bring to the Company’s overall operations.
Goodwill is not deductible for tax purposes.
(e ) Revenue and profit contribution
The impact of the acquisition of Zalm Therapeutics Limited on the results of the Group for the
period ended 30 June 2022 are not considered material and are therefore not disclosed in the
consolidated financial statements.
45
Rua Bioscience Limited
Notes forming part of the consolidated financial statements
For the year ended 30 June 2022
13. Goodwill and Business Combinations (continued)
(iii) Impairment testing of goodwill
Goodwill is monitored at a company level, of a single cash-generating-unit (CGU).
The recoverable amount of the CGU has been determined based on fair value less costs of
disposal, being the price that would be received between market participants at the
measurement date, less any directly incremental transaction costs and costs to bring the CGU
to a saleable condition.
The recoverable value is based on an estimate of market value at the reporting date based
on the quoted share price of $0.33 per share. The share issue price at reporting date is based
on the quoted price on the NZX listed exchange and represents a “level 1” fair value
measurement per the fair value hierarchy.
In 2021, determination of the recoverable value of the Group (being the CGU) was based on
an estimate of market value at the reporting date based on the quoted share price of $0.41
per share. The share issue price at reporting date is based on the quoted price on the NZX
listed exchange and represents a “level 1” fair value measurement per the fair value
hierarchy.
In determining the recoverable value of the CGU, the Group has headroom of $25,262,067
(2021: 28,689,821) over the carrying value. No impairment of goodwill has been recognised
as at 30 June 2022 (2021: nil).
46
Rua Bioscience Limited
Notes forming part of the consolidated financial statements
For the year ended 30 June 2022
14. Intangible assets
Intangible assets are recognised on business combinations if they are separate from the acquired
entity or give rise to other contractual/legal rights. The amounts ascribed to such intangibles are
arrived at by using the appropriate valuation techniques (refer to note 13).
The significant intangibles recognised by the Group, their useful lives and the methods used to
determine the cost of intangibles acquired in a business combination are as follows:
Intangible asset
Useful economic life
Valuation method
Supplier contracts Finite – based on units of
production (refer below)
Estimated discounted cash flow
(comparative income
differential method)
Supplier contracts are amortised on a units-of -supply basis, being the actual volume of units
purchased for production relative to the expected volumes purchased over the life of the contract.
(i) Cost
Goodwill
$
Supplier
Contracts
$
Total
$
At 1 July 2021 4,000,000 - 4,000,000
Acquired through business combinations 6,448,082 5,016,035 11,464,117
At 30 June 2022 10,448,082 5,016,035 15,464,117
At 1 July 2020 4,000,000 - 4,000,000
At 30 June 2021 4,000,000 - 4,000,000
(ii) Accumulated amortisation and impairment
At 1 July 2021 - - -
Amortisation charge - - -
At 30 June 2022 - - -
At 1 July 2020 - - -
Amortisation charge - - -
At 30 June 2021 - - -
(iii) Net book value
At 1 July 2020
4,000,000 - 4,000,000
At 30 June 2021
4,000,000 - 4,000,000
At 30 June 2022
10,448,082 5,016,035 15,464,117
47
Rua Bioscience Limited
Notes forming part of the consolidated financial statements
For the year ended 30 June 2022
15 . Leases
All leases are accounted for by recognising a right-of -use asset and a lease liability except for:
− Leases of low value assets; and
− Leases with a duration of 12 months or less.
Initial measurement
Lease liabilities are measured at the present value of the contractual payments due to the
lessor over the lease term, with the discount rate determined by reference to the rate inherent
in the lease unless (as is typically the case) this is not readily determinable, in which case the
Group’s incremental borrowing rate on commencement of the lease is used. Variable lease
payments are only included in the measurement of the lease liability if they depend on an index
or rate, however in such cases the initial present value determination assumes that the variable
element will remain unchanged throughout the lease term.
Other variable lease payments are expensed in the period to which they relate.
On initial recognition, the carrying value of the lease liability also includes:
− amounts expected to be payable under any residual value guarantee;
− the exercise price of any purchase option granted in favour of the Group if it is reasonably
certain to assess that option;
− any penalties payable for terminating the lease, if the term of the lease has been
estimated on the basis of termination option being exercised.
Right-of -use assets are initially measured at the amount of the lease liability, reduced for any
lease incentives received, and increased for:
− lease payments made at or before commencement of the lease;
− initial direct costs incurred; and
− the amount of any provision recognised where the Group is contractually required to
dismantle, remove or restore the leased asset (typically make-good provisions on buildings)
Subsequent measurement
Subsequent to initial measurement lease liabilities increase as a result of interest charged at a
constant rate on the balance outstanding and are reduced for lease payments made.
Right-of -use assets are depreciated on a straight-line basis over the remaining term of the lease
or over the remaining economic life of the asset if, rarely, this is judged to be shorter than the
lease term. Right-of -use assets are also subject to impairment assessment at reporting date.
Remeasurement
When the Group revises its determination of the use (or non-use) of renewal and/or termination
options, the carrying amount of the lease liability is adjusted to reflect the payments to make
over the revised term, which are discounted at the revised discount rate.
The carrying value of lease liabilities is similarly revised when the variable element of future
lease payments dependent on a rate or index is revised, however this is discounted at the
original discount rate.
In both cases an equivalent adjustment is made to the carrying value of the right-of -use asset,
with the revised carrying amount being depreciated over the remaining (revised) lease term.
The Group did not receive (nor is it expected to receive) any COVID-19 related lease payment
reductions during the year.
48
Rua Bioscience Limited
Notes forming part of the consolidated financial statements
For the year ended 30 June 2022
15. Leases (continued)
As discussed in Note 1, the Group has elected to apply the practical expedient introduced by the
amendments to IFRS 16 to all rent concessions that satisfy the criteria.
The application of the practical expedient results in a reduction of the lease liabilities with
reduction being recorded in profit or loss in the period in which the event or condition that triggers
those payments occurred.
(i) Lease related balances as at period end, and amounts for the period
2022 2021
Expenses and income in the period $ $
Depreciation
- Leases of property (land and buildings) 114,247 68,722
- Vehicles 32,383 29,182
- Plant 24,472
Interest expense 44,535 21,859
Balance sheet and cash flow statements
Carrying amount of Right-of-use asset
- Leases of property (land and buildings) 738,908 853,155
- Vehicles 44,362 76,742
- Plant 13,502 -
Additions to Right-of-use assets 37,977 774,846
Total cash outflow related to leases 209,304 101,010
(ii) Information regarding the Group’s leases and leasing activity
The Group leases a number of properties including land, buildings, including commercial office
premises, in the jurisdiction from which it operates.
As standard industry practice, several of the Group’s property leases are subject to periodic
CPI increases and/or market rent reviews. A 1% increase in these payments would result in an
additional $907 cash outflow (2021: $907) compared to the current period’s cash outflow.
The Group’s property leases typically include renewal and termination options. The Group must
assess whether it reasonably expects (or not) to exercise these when determining the lease
term.
The Group has two property leases (2021: tw o property leases) where the Group has assessed
it is does not reasonably expect to exercise all available renewal options, resulting in a potential
lease term in the range of 10 - 2 0 years (2021: 10 - 20 years) and potential future lease payments
of between $109,020 - $689,160 (2021: $109,020 - $689,160) that are not currently included in
measurement of the lease liability recognised for these leases.
49
Rua Bioscience Limited
Notes forming part of the consolidated financial statements
For the year ended 30 June 2022
16. Other receivables
2022 2021
Note $ $
Financial assets classified as amortised cost – current
Cash consideration held in Escrow 13 500,000 -
Financial assets classified as amortised cost –
non-current
Non-trade receivables 75,000 75,000
Financial assets classified as amortised cost - total 4 575,000 75,000
GST receivable 89,210 85,861
Other receivables 2,008 -
Withholding tax receivable 26,524 1,683
Government grants receivable
- Research and development tax credit 398,408 508,581
- Other 54,173 9,802
Other receivables 570,323 605,927
Total other receivables 1,145,323 680,927
17 . Trade and other payables
2022 2021
Note $ $
Trade payables 317,427 453,388
Other payables 120,951 56,779
Financial liabilities classified as amortised cost 4 438,378 510,167
50
Rua Bioscience Limited
Notes forming part of the consolidated financial statements
For the year ended 30 June 2022
18 . Employee benefit liabilities
Short-term employee benefit liabilities represent those that are expected to be settled wholly within 12
months after the end of the period in which the employees render the related service.
For defined contribution plans (Kiwisaver), the Group has no further payment obligations once the
contributions have been paid. The contributions are recognised as an employee benefit expense when
they are due.
2022 2021
$ $
Short term employee benefits payable
- Wages and salaries 287,768 99,837
- Accrual for annual and sick leave 168,419 130,475
456,187 230,312
Defined contribution plan payable 3,548 3,550
Total employee benefit liabilities 459,735 233,862
19. Share Capital
The Group’s ordinary shares are classified as equity instruments. Incremental costs directly attributable
to the issue of ordinary shares are recognised as a deduction from equity, net of any tax effects, including
costs related to shares still to be issued.
2022 2021
Number Number
Opening shares 140,262,591 17,003,096
Effect of share split* - 83,009,129
Shares issued** 9,616,676 40,250,366
Total share capital 149,879,267 140,262,591
* On 15 September 2020, the Company completed a 5.882:1 share split.
** On 22 October 2020, the Company issued 40,000,000 shares by way of listing on the NZX. They also
issued a further 250,366 shares through the vesting of the ESOP issue 3. During the year ended 30 June
2022:
− 1,476,676 vested share options were exercised into ordinary shares.
− 8,140,000 ordinary shares were issued as part of the consideration paid for the acquisition
of Zalm Therapeutics Limited (see note 13).
At 30 June 2022, share capital comprised 149,879,267 authorised and issued ordinary shares (2021:
140,262,591). All issued shares are fully paid and have no par value. The holders of ordinary shares are
entitled to receive dividends as declared from time to time and are entitled to one vote per share at
meetings of the Group, and rank equally with regard to the Group’s residual assets. Dividends are unlikely
to be declared whilst the Group is in the growth phase.
51
Rua Bioscience Limited
Notes forming part of the consolidated financial statements
For the year ended 30 June 2022
20. Related party transactions
(i) Company information
The Group has no ultimate parent entity. There are no individual shareholders holding more than 20% of
the ordinary shares of the Group at reporting date.
(ii) Transactions and balances with related parties
During the year the Group entered into the below transactions with entities related to key management
personnel.
Nature of
transactions
Transaction
amount
Amounts receivable
(payable)
$ $
30 June 2022
Alvarium Investments (NZ)
Limited
Purchases 6,900 -
EECOMS Ltd Purchases 314 -
Mitchel Family Trust Purchases 4,752 -
30 June 2021
Alvarium Investments (NZ)
Limited
Purchases 1,492 -
EECOMS Ltd Purchases 22,778 -
Hikurangi Enterprises
Limited Purchases 27,000 27,000
Mitchel Family Trust Purchases 6,735 1,250
(iii) Key management personnel compensation
Compensation of key management personnel (being those persons having authority and responsibility for
planning, directing and controlling the activities of the Group, including the directors) was as follows:
2022 2021
$ $
Directors fees 270,000 248,700
Short-term employee benefits 1,425,080 961,677
Defined contribution plan payments 36,931 23,747
Share-based payment expense 138,641 500,128
Total key management personnel compensation 1,870,652 1,734,252
52
Rua Bioscience Limited
Notes forming part of the consolidated financial statements
For the year ended 30 June 2022
21. Contingent liabilities
There were no contingent liabilities at balance date that would affect the consolidated financial
statements.
22. Biological assets
The Group currently still undertakes significant research and development activities and as such the plants
and produce currently resulting from these operations are not being developed for sale, or for
transformation into agricultural produce or additional biological assets. Under the Group’s licensing
requirements, plants must be destroyed and therefore hold no value at balance date. The plants are
destroyed by way of being composted and as they are not able to be traded, they have no value from a
product manufacturing perspective.
Accordingly, related costs are recognised in profit or loss rather than in the recognition of a biological
asset in accordance with NZ IAS 41 Agriculture, until such time as the Group moves past the research and
development phase. The agricultural assets will be recognised at fair value once the regulations allow
commercial production and they are used for commercial production.
23 . Share-based payments
(a) Accounting policy
Equity-settled share-based payments
The grant‑date fair value of equity‑settled share‑based payment arrangements granted to employees and
directors is recognised as an expense, with a corresponding increase in equity (share-based payment
reserve), over the vesting period of the awards.
The share-based payment cost recognised is generally determined by multiplying a value component to a
number component. The value component reflects the possibility of not meeting market performance
conditions. No adjustments are made for the likelihood of not meeting any service and/or non-market
performance conditions. The number component reflects the number of equity instruments for which the
service and any non-market performance conditions are expected to be satisfied.
Cash-settled share-based payments
Cash-settled share-based payments are measured at fair value and presented as a liability, with a
corresponding amount recognised as an expense.
53
Rua Bioscience Limited
Notes forming part of the consolidated financial statements
For the year ended 30 June 2022
23. Share-based payments (continued)
(b ) Key features and balances of ESOPs
The Group grants options to certain employees under a number of employee share option schemes (Issues
#1 and #2).
− ESOP Issue #1 was subject to the following conditions:
Tranche [Vesting period] Vesting conditions
Tranche 3A [25 months]
Non-market performance conditions relating to the Company receiving NZ Medsafe
“Good Manufacturing Practice” (GMP) within a prescribed time frame.
Tranche 3B [25 months]
Non-market performance conditions relating to the Company completing its first
commercial harvest in relation to sales agreement with a specified customer within a
prescribed timeframe.
Tranche 3C [25 months]
Non-market performance conditions relating to the Company achieving EU GMP
certification within a prescribed timeframe.
Tranche 3D [25 months]
Non-market performance conditions relating to the Company achieving sales into the
German market within a prescribed timeframe.
Tranche 4A [25 months]
Non-market performance conditions relating to the establishment of a board-approved
grower partner and collaboration agreement with a specified target party.
Tranche 4B [25 months]
Non-market performance conditions relating to establishment of a commercialisation
plan between the company and a specified target entity.
Tranche 4C [25 months]
Non-market performance conditions relating to the company achieving various medicinal
cannabis licences and authorities.
Tranche 4D [25 months]
Non-market performance conditions relating to board-approved cash-flow and funding
plans being confirmed.
Tranche 4E [25 months] Service condition.
In addition, the Group has elected to pay the PAYE tax associated with the share options granted, in
addition to the share options (i.e. no net settlement feature). Accordingly, this feature of ESOP Issue
#1 is accounted for as a cash-settled share based payment.
At reporting date, ESOP Issue #1 has fully vested and the associated number of options were awarded
to eligible employees based on the service conditions satisfied at the vesting date. All vested options
have been exercised. The weighted average share price on the exercise date was $0.40;
54
Rua Bioscience Limited
Notes forming part of the consolidated financial statements
For the year ended 30 June 2022
23. Share-based payments (continued)
(b) Key features and balances of ESOPs (continued)
− ESOP Issue #2 was subject to the following conditions:
Tranche [Vesting period] Vesting conditions
Tranche 3A [30 months]
Non-market performance conditions relating to the Company receiving NZ Medsafe
“Good Manufacturing Practice” (GMP) within a prescribed time frame.
Tranche 3B [30 months]
Non-market performance conditions relating to the Company completing its first
commercial harvest in relation to sales agreement with a specified customer within a
prescribed timeframe.
Tranche 3C [30 months]
Non-market performance conditions relating to the Company achieving EU GMP
certification within a prescribed timeframe.
Tranche 3D [30 months]
Non-market performance conditions relating to the Company achieving sales into the
German market within a prescribed timeframe.
Tranche 4 [30 months] To be confirmed for each party prior to 1 October 2021.
Tranche 5A [30 months]
Non-market performance conditions relating to the establishment of a board-approved
grower partner and collaboration agreement with a specified target party.
Tranche 5B [30 months]
Non-market performance conditions relating to establishment of a commercialisation
plan between the company and a specified target entity.
Tranche 5C [30 months]
Non-market performance conditions relating to the company achieving various
medicinal cannabis licences and authorities.
Tranche 5D [30 months]
Non-market performance conditions relating to board-approved cash-flow and funding
plans being confirmed.
Tranche 5E [30 months] Service condition.
In addition, the Group has elected to pay the PAYE tax associated with the share options granted, in
addition to the share options (i.e. no net settlement feature). Accordingly, this feature of ESOP Issue
#2 is accounted for as a cash-settled share based payment.
At reporting date, ESOP Issue #2 was modified such that portions of the share options either (i) vested
immediately or (ii) were forfeit immediately. As a result of this modification, any associated cash-
settled share-based payment liability was also (i) settled or (ii) extinguished. All vested options have
been exercised. The weighted average share price on the exercise date was $0.40 ;
− ESOP Issue #3 was subject to the following conditions:
Tranche [Vesting period] Vesting conditions
Tranche 1 [6 months] Service condition of remaining employment.
At reporting date, ESOP Issue #3 has fully vested and the associated number of options were awarded
to eligible employees based on the service conditions satisfied at the vesting date. The weighted
average share price on the exercise date was $0.54; and
55
Rua Bioscience Limited
Notes forming part of the consolidated financial statements
For the year ended 30 June 2022
23. Share-based payments (continued)
(b) Key features and balances of ESOPs (continued)
− During the current period, the Company issued an employee share option plan (ESOP) in the form of
equity-settled share options to senior management, and selected employees (“Issue #4”).
All tranches of Issue #4:
• Are subject to a general service vesting condition (i.e. if the party terminates their employment
with the company, the share options are forfeited);
• Are subject to a market condition based on the VWAP for the 10-trading-day prior to vesting
date;
• Grant a variable number of options subject to the market conditions met at the vesting date;
• Have a $nil exercise price; and
• Are subject to the following exercise dates:
o One third can be exercised one month after vesting
o One third can be exercised one year after vesting
o One third can be exercised two years after vesting
(i) Number of share options
Issue #1 Issue #2 Issue #3 Issue #4 Total
No. No. No. No. No.
At 1 July 2020 357,000 70,250 42,564 - 469,814
- Options issued 1,742,874 342,961 207,802 - 2,293,637
- Options vested - - (250,366) - (250,366)
- Options forfeited (102,935) (111,758) - - (214,693)
At 30 June 2021 1,996,939 301,453 - - 2,298,392
At 1 July 2021 1,996,939 301,453 - - 2,298,392
- Options issued - - - 2,478,400 2,478,400
- Options vested (1,298,746) (177,930) - - (1,476,676)
- Options forfeited (698,193) (123,523) - (161,200) (982,916)
At 30 June 2022 - - - 2,317,200 2,317,200
56
Rua Bioscience Limited
Notes forming part of the consolidated financial statements
For the year ended 30 June 2022
23. Share-based payments (continued)
(b) Key features and balances of ESOPs (continued)
(ii) Vested share options balances outstanding
Issue #1 Issue #2 Issue #3 Issue #4 Total
No. No. No. No. No.
At 1 July 2020 - - - - -
- New options vested - - 250,366 - 250,366
- Options exercised - - (250,366) - (250,366)
At 30 June 2021 - - - - -
At 1 July 2021 - - - - -
- New options vested 1,298,746 177,931 - - 1,476,677
- Options exercised (1,298,746) (177,931) - - (1,476,677)
At 30 June 2022 - - - - -
57
Rua Bioscience Limited
Notes forming part of the consolidated financial statements
For the year ended 30 June 2022
23. Share-based payments (continued)
(c ) Specific ESOP details
Measurement information
The following information is relevant in the determination of the fair value of share options granted:
Equity Settled Cash-settled
ESOP Issue #1: Tranche 3A – 3D, and 4A – 4E
2022 2021 2022 2021
Option pricing model used n/a Black-Scholes n/a Black-Scholes
Weighted average share price
⮚ Tranche 4A – 4E
⮚ Tranche 3A – 3D
n/a
n/a
$0.30
$0.50
n/a
n/a
0.41
0.41
Exercise price n/a $nil n/a $nil
Weighted average contractual life (in days)
⮚ Tranche 4A – 4E
⮚ Tranche 3A – 3D
n/a
n/a
93
184
n/a
n/a
184
184
Volatility
⮚ Tranche 4A – 4E
⮚ Tranche 3A – 3D
n/a
n/a
96%
80%
n/a
n/a
78%
78%
Equity-settled Cash-settled
ESOP Issue #2: Tranche 3A – 3D, 4, and 5A – 5E
2022 2021 2022 2021
Option pricing model used n/a Black-Scholes n/a Black-Scholes
Weighted average share price
⮚ Tranche 3A – 3D
⮚ Tranche 4
⮚ Tranche 5A – 5E
n/a
n/a
n/a
$0.50
$0.41
$0.36
n/a
n/a
n/a
$0.41
$0.41
$0.41
Exercise price n/a $nil n/a $nil
Weighted average contractual life (in days)
⮚ Tranche 3A – 3D
⮚ Tranche 4 (from reporting date – no confirmed conditions)
⮚ Tranche 5A – 5E
n/a
n/a
n/a
645
645
549
n/a
n/a
n/a
549
645
549
Volatility
⮚ Tranche 3A – 3D
⮚ Tranche 4
⮚ Tranche 5A – 5E
n/a
n/a
n/a
76%
78%
80%
n/a
n/a
n/a
78%
78%
78%
58
Rua Bioscience Limited
Notes forming part of the consolidated financial statements
For the year ended 30 June 2022
23. Share-based payments (continued)
(c) Specific ESOP details (continued)
Equity Settled
ESOP Issue #4
2022 2021
Option pricing model used Monte-Carlo n/a
Weighted average share price $0.23 n/a
Exercise price $nil n/a
Weighted average contractual life (in days) 731 n/a
Volatility 85% n/a
The volatility assumption, measured at the standard deviation of expected share price returns, is based on a statistical analysis of daily share prices over the last
3 years and 6 months of stock movements at the date of issue, matching the time to expiry on the options.
59
Rua Bioscience Limited
Notes forming part of the consolidated financial statements
For the year ended 30 June 2022
24 . Events after the reporting date
There were no events subsequent to reporting date that would materially affect the financial
statements.
25 . Subsidiaries
The principal subsidiary of Rua Bioscience Limited, which has been included in these
consolidated financial statements, is as follows:
Name Country of
incorporation
and principal
place of
business
Proportion of
ownership interest at
30 June
Non-Controlling
interests
ownership/voting
interest at 30 June
2022 2021 2022 2021
Zalm Therapeutics
Limited
New Zealand 100% - - -
26 . Net tangible assets
Net tangible assets per share is a non-GAAP measure that is required to be disclosed by the NZX
Listing Rules. The calculation of the Group's net tangible assets per share and its reconciliation
to the consolidated balance sheet is presented below:
2022 2021
$ $
Total assets 33,573,600
30,851,469
(less): Intangible assets (15,464,117)
(4,000,000)
(less): total liabilities (9,375,508)
(2,017,423)
Net tangible assets 8,733,975
24,834,046
Number of shares issued at
balance date
149,879,267
140,262,591
Net tangible assets per share
0.06
0.18
---
PO Box 1387, Gisborne 4040, Aotearoa New Zealand | 0800 RUABIO | www.ruabio.com
FOR PUBLIC RELEASE
NZX Limited
Wellington
Monday, 29 August 2022
Rua Bioscience Announces Full Year Result
Result in line with company’s expectations as it achieves first product sales.
FY22 Highlights:
• September 2021: Achieved GMP certification
• December 2021: Green light to distribute first product in New Zealand
• January 2022: Shareholders approve Zalm Therapeutics acquisition
• April 2022: First medicine launched in New Zealand
• June 2022: Narcotics licence received to distribute and market products in Germany
Rua Bioscience (RUA: NZX) (Rua) announces its annual financial results for the 12 months ended 30
June 2022 (FY22).
In FY22, Rua focused on preparing for market entry – securing partners and developing the
frameworks and strategies that will give the company the best chance of success both in New Zealand
and globally. By the close of FY22, Rua had launched its first product in New Zealand and established
an end-to-end cultivation and supply solution that is both at scale and scalable.
• Rua’s cultivation centre of excellence at Ruatorea continues to drive world-class R&D and
unique cultivar development.
• The company’s relationship with Cann Group, one of the largest medicinal cannabis producers
in Australasia, allows Rua access to significant volumes of product at market-leading cost. Rua
will be able to increase capacity quickly without the need for additional capital. Rua views this
is a major competitive advantage as new markets are established.
• Rua has significantly advanced key sales and marketing relationships, identifying promising
market opportunities right across Europe.
The loss before tax for the year to 30 June 2022 was $7.49m (FY21 $6.17m). Rua remains well
capitalised with cash, cash equivalents and investments on hand at the end of the period of $9.94m
(FY21 $16.4m).
The loss is largely attributable to Rua’s investment in research and development (R&D) and product
development. As an early-stage company, Rua’s $2.98m investment (FY21 $1.90m) was focused on
developing products which will support the generation of sustainable revenues. Our investment in
R&D and market development was supported by grant funding of $0.62m made up of NZTE and
Callaghan Innovation grants, as well as Research Development Tax Incentives (RDTI).
Rua Chief Executive Rob Mitchell said over the period the company met key milestones as it progresses
its entry into European markets and was pleased to launch its first product into New Zealand.
MARKET ANNOUNCEMENT
PO Box 1387, Gisborne 4040, Aotearoa New Zealand | 0800 RUABIO | www.ruabio.com
“The launch of Rua’s first medicine in New Zealand was a milestone for patients, prescribers, and the
medicinal cannabis industry. Rua will launch a range of new medicines in FY23.
The product launch was complemented by the launch of our compassionate access programme. The
programme is a meaningful way of enabling prescribers to supply medicinal cannabis to those in our
community who are most in need of it.”
Rua’s commercial strategy recognises the need to accelerate global market entry and expand patient
choice. During the period, Rua acquired Zalm Therapeutics Limited (Zalm) after receiving shareholder
approval of the acquisition in January 2022. The acquisition provides Rua with a long-term supply
contract for GMP-grade medicinal cannabis and creates a strong platform for delivery of its strategy.
“Combining speed to market with long-term preferential access to substantial volumes from our
cultivation partner Cann Group will allow Rua to build a meaningful market presence faster and with
a greater economy of scale,” said Mitchell.
Operating in a highly regulated market, obtaining the right licenses and certifications has been critical
for Rua. During the reporting period the company achieved GMP certification, enabling the
manufacture of the company’s first product. Rua also extended its narcotics licence (through Nimbus
Health) for the distribution and marketing of its first product for the German medicinal cannabis
market – believed to be a New Zealand first.
R&D is critical as the company looks to develop medicinal cannabis products that are unique to the
global market. During the year, Rua received an initial $376,000 grant from Callaghan Innovation to
underpin its $1.3m research projects. Current projects relate to plant science and product
development.
Supporting our R&D efforts, Rua’s new cultivation partner the East Coast Cannabis Company
produced Rua’s outdoor trial crop at its 3,000m2 outdoor growing facility. This complemented the
work by Rua’s indoor cultivation team who continue to establish the unique varieties which Rua will
soon be able to grow at scale in Cann’s GMP-certified facility in Mildura.
Rua Bioscience CFO, Hamish White, said “the company remains focused on investing in the
development of our product portfolio and the associated systems and processes in both our
cultivation and manufacturing operations to drive the best return on investment in a dynamic and
highly regulated industry.
“Rua has done a lot of heavy lifting to get to market and we’re proud of how far we’ve come having
built facilities, attracted world class people, secured licences and supply contracts, and developed a
cohesive product portfolio over recent years. We look forward to the year ahead as we move to invest
in sales and marketing and build our revenue streams,” said White.
Outlook
FY22 saw the realisation of commercialisation milestones for Rua with regulatory approvals enabling
the production and subsequent New Zealand launch of Rua’s first product, a CBD oil. Rua will build on
this success in FY23, increasing the volumes and range of medicines it delivers to New Zealand
patients. The company’s commercial team has a solid strategy to grow market share, develop its
product portfolio and engage Rua’s prescriber base.
PO Box 1387, Gisborne 4040, Aotearoa New Zealand | 0800 RUABIO | www.ruabio.com
The company remains focused on executing its global export strategy as it works to increase revenue,
including entering the German market via its supply agreement with Nimbus Health. In addition, Rua
expects relationships with parties in the Czech Republic, Poland and the United Kingdom to progress
in FY23.
Rua recently signed a five-year agreement with European Cannabis Distributor, Motagon. In FY23, Rua
expects the agreement will see Rua and Motagon form a manufacturing and supply agreement giving
Rua the first opportunity to supply the European distributor with a full portfolio of medicines,
including dried cannabis flower and full spectrum oils, in a range of high-value European markets.
ENDS
For more information, please visit www.ruabio.com or contact:
Investors
Hamish White
Chief Finance Officer
+64 (21) 050 5795
Hamish.white@ruabio.com
Media
Kerry Donovan
Communications Manager
+64 (21) 128 7689
kerry.donovan@ruabio.com
Data sourced from publicly available filings. Our datasets may not be complete. Automated analysis can produce errors. If you believe any data on this page is incorrect, please contact us at hello@nzxplorer.co.nz. For informational purposes only. Not investment advice.
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