Pacific Edge : FY24 Full Year Financial Statements

24CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 MARCH 2024

PACIFIC EDGE LIMITED CONSOLIDATED FINANCIAL STATEMENTS 2024

Consolidated Financial Statements
Consolidated Statement of Comprehensive Income	3
Consolidated Statement of Changes in Equity	4
Consolidated Balance Sheet	5
Consolidated Statement of Cash Flows	6
Notes to the Consolidated Financial Statements	7
Independent Auditor's Report	37
Company Directory	42

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PACIFIC EDGE LIMITED CONSOLIDATED FINANCIAL STATEMENTS 2024

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the year ended 31 March 2024

		2024	2023
	Notes	($000)	($000)
REVENUE
Operating Revenue	5	23,907	19,616
Total Operating Revenue		23,907	19,616
Other Income	5	1,322	1,417
Interest Income	9	3,433	2,761
Foreign Exchange Gain		631	2,330
Total Revenue and Other Income		29,293	26,124
OPERATING EXPENSES
Laboratory Operations		11,751	9,349
Research	6	12,089	8,484
Sales and Marketing		25,590	25,123
General and Administration	7	9,398	10,133
Total Operating Expenses		58,828	53,089
NET LOSS BEFORE TAX		(29,535)	(26,965)
Income Tax Expense	16	-	-
LOSS FOR THE YEAR AFTER TAX		(29,535)	(26,965)
Items that may be reclassified to profit	or loss:
Translation of Foreign Operations		142	(99)
Disposal of Foreign Operation		(20)	-
TOTAL COMPREHENSIVE LOSS attributable to	(29,413)	(27,064)
equity holders of the Company
Earnings per share for loss attributable to the equity
holders of the Company during the year
Basic and Diluted Earnings per share	3	(0.036)	(0.033)

Note: These Consolidated Financial Statements are to be read in conjunction with the Notes to the Consolidated Financial Statements

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PACIFIC EDGE LIMITED CONSOLIDATED FINANCIAL STATEMENTS 2024

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the year ended 31 March 2024

	Share	Accumulated	Share	Foreign	Total
	Capital	Losses	Based	Currency	Equity
			Payments	Translation
			Reserve	Reserve
Notes	($000)	($000)	($000)	($000)	($000)
Balance as at 31 March 2022	294,139	(189,849)	3,145	941	108,376

Loss after tax		-	(26,965)		-	-	(26,965)
Other Comprehensive Income		-	-		-	(99)	(99)
TOTAL COMPREHENSIVE LOSS
attributable to equity holders of the		-	(26,965)		-	(99)	(27,064)
Company
Transactions with owners in their
capacity as owners:
Issue of Share Capital	18	(4)	-		-	-	(4)
Share Based Payments- Employee	8	182	-		-	-	182
Remuneration
Share Based Payment- Employee	8	-	-	1,273		-	1,273
Share Options
Balance as at 31 March 2023		294,317	(216,814)	4,418		842	82,763
Balance as at 31 March 2023		294,317	(216,814)	4,418		842	82,763
Loss after tax		-	(29,535)		-	-	(29,535)
Other Comprehensive Income		-	-		-	122	122
TOTAL COMPREHENSIVE LOSS
attributable to equity holders of the		-	(29,535)		-	122	(29,413)
Company
Transactions with owners in their
capacity as owners:
Share Based Payments- Employee	8	83	-		-	-	83
Remuneration
Share Based Payment- Employee	8	-	-	1,189		-	1,189
Share Options
Balance as at 31 March 2024		294,400	(246,349)	5,607		964	54,622

Note: These Consolidated Financial Statements are to be read in conjunction with the Notes to the Consolidated Financial Statements

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PACIFIC EDGE LIMITED CONSOLIDATED FINANCIAL STATEMENTS 2024

CONSOLIDATED BALANCE SHEET

As at 31 March 2024

		2024	2023
	Notes	($000)	($000)
CURRENT ASSETS
Cash and Cash Equivalents	9	29,261	33,229
Short Term Deposits	9	21,000	44,562
Receivables	10	4,698	5,493
Inventory	11	1,688	1,287
Other Assets	12	1,228	1,400
Total Current Assets		57,875	85,971
NON-CURRENT ASSETS
Property, Plant and Equipment	13	2,925	2,768
Right of Use Assets	23	3,698	1,143
Intangible Assets	14	950	1,031
Total Non-Current Assets		7,573	4,942
TOTAL ASSETS		65,448	90,913
CURRENT LIABILITIES
Payables and Accruals	17	6,753	6,928
Borrowings		300	-
Lease Liabilities	23	1,264	811
Total Current Liabilities		8,317	7,739
NON-CURRENT LIABILITIES
Lease Liabilities	23	2,509	411
Total Non-Current Liabilities		2,509	411
TOTAL LIABILITIES		10,826	8,150
NET ASSETS		54,622	82,763
Represented by:
EQUITY
Share Capital	18	294,400	294,317
Accumulated Losses		(246,349)	(216,814)
Share Based Payments Reserve		5,607	4,418
Foreign Translation Reserve		964	842
TOTAL EQUITY		54,622	82,763
FURTHER INFORMATION
Net Tangible Assets per share ($)		0.066	0.101

For and on behalf of the Board of Directors dated the 20th day of May 2024:

Director

Note: These Consolidated Financial Statements are to be read in conjunction with the Notes to the Consolidated Financial Statements

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PACIFIC EDGE LIMITED CONSOLIDATED FINANCIAL STATEMENTS 2024

CONSOLIDATED STATEMENT OF CASH FLOWS

For the year ended 31 March 2024

		2024	2023
	Notes	($000)	($000)
CASH FLOWS TO OPERATING ACTIVITIES
Cash was provided from:
Receipts from Customers		24,137	18,468
Receipts from Grant Providers		1,856	1,066
Interest Received		3,441	2,716
		29,434	22,250
Cash was disbursed to:
Payments to Suppliers and Employees		55,196	47,869
Net GST (inflow)		(12)	(44)
		55,184	47,825
Net Cash Flows To Operating Activities	20	(25,750)	(25,575)
CASH FLOWS FROM INVESTING ACTIVITIES:
Cash was provided from:
Proceeds from Short Term Deposits		83,084	143,490
		83,084	143,490
Cash was disbursed to:
Purchase of Short Term Deposits		59,523	118,107
Capital Expenditure on Plant and Equipment		832	1,870
Capital Expenditure on Intangible Assets		540	1,039
		60,895	121,016
Net Cash Flows From Investing Activities		22,189	22,474
CASH FLOWS TO FINANCING ACTIVITIES:
Cash was provided from:
Proceeds from Borrowings		300	-
Ordinary Shares Issued	18	-	(4)
		300	(4)
Cash was disbursed to:
Repayment of Leases- Principal	23	1,268	1,195
Repayment of Leases- Interest	23	138	83
		1,406	1,278
Net Cash Flows To Financing Activities		(1,106)	(1,282)
Net (Decrease) in Cash Held		(4,667)	(4,383)
Add Opening Cash Brought Forward		33,229	35,412
Effect of exchange rate changes on net cash		699	2,200
Ending Cash Carried Forward	9	29,261	33,229

Note: These Consolidated Financial Statements are to be read in conjunction with the Notes to the Consolidated Financial Statements

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PACIFIC EDGE LIMITED CONSOLIDATED FINANCIAL STATEMENTS 2024

Notes to the Consolidated Financial Statements

For the year ended 31 March 2024

1. MATERIAL ACCOUNTING POLICY INFORMATION

Reporting Entity

The consolidated financial statements (hereafter referred to as the 'financial statements') presented for the year ended 31 March 2024 are for Pacific Edge Limited (the 'Company') and its subsidiaries (collectively referred to as the 'Group'). The Group's purpose is to research, develop and commercialise new diagnostic and prognostic tools for the early detection and management of cancers.

Pacific Edge Limited is registered in New Zealand under the Companies Act 1993 and is a Financial Markets Conduct (FMC) reporting entity under Part 7 of the Financial Markets Conduct Act 2013. The financial statements of the Group have been prepared in accordance with the requirements of the Financial Markets Conduct Act 2013 and the NZX Listing Rules. The financial statements presented are those of the Group, consisting of the Parent entity, Pacific Edge Limited and its subsidiaries. The Company is dual listed, with its primary listing of ordinary shares quoted in New Zealand on the NZX Main Board, and a secondary listing in Australia as a Foreign Exempt Entity on the ASX.

These financial statements have been approved for issue by the Board of Directors on the 20th May 2024.

Basis of Preparation

These financial statements of the Group have been prepared in accordance with Generally Accepted Accounting Practice in New Zealand (NZ GAAP). The Group is a for-profit entity for the purposes of complying with NZ GAAP. The financial statements comply with New Zealand equivalents to International Financial Reporting Standards (NZ IFRS), other New Zealand accounting standards and authoritative notices that are applicable to entities that apply NZ IFRS. The financial statements also comply with International Financial Reporting Standards Accounting Standards ("IFRS Accounting Standards") as issued by the IASB.

The financial statements are presented in New Zealand Dollars, which is the Company's functional currency and Group's presentation currency, and all values are rounded to the nearest thousand dollars ($000). The accounting principles recognised as appropriate for the measurement and reporting of earnings, cash flows and financial position on a historical cost basis have been used.

The Consolidated Statement of Comprehensive Income and Consolidated Statement of Cash Flows have been prepared so that all components are stated net of GST. All items in the Consolidated Balance Sheet are stated net of GST, with the exception of receivables and payables.

Management of Capital

The capital structure of the Group consists of equity raised by the issue of ordinary shares in the Company.

The Company's objectives when managing capital are to safeguard the Company's ability to continue as a going concern in order to provide returns for shareholders, provide benefit for other stakeholders and to maintain an optimal capital structure to support the development of its business. The Company meets these objectives through closely managing revenue and expenditure, and where required issues new shares.

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PACIFIC EDGE LIMITED CONSOLIDATED FINANCIAL STATEMENTS 2024

Notes to the Consolidated Financial Statements

For the year ended 31 March 2024

Basis of Consolidation

The following entities and the basis of their inclusion for consolidation in these Financial Statements are as follows:

		Place of		Ownership Interests
			& Voting Rights
		Incorporation
Name of Subsidiary	Principal Activity	31 March	31 March
(or registration)
			2024	2023
		& Operation
			%	%
Pacific	Edge Diagnostics	New Zealand	Commercial Sales and Diagnostic	100	100
New Zealand Limited	Laboratory Operation
Pacific	Edge (Australia) Pty		Commercial Sales and
Australia	Biotechnology Research	100	100
Limited
	& Development
Pacific	Edge Diagnostics USA	USA	Commercial Sales and Diagnostic	100	100
Limited	Laboratory Operation
			Commercial Sales and
Pacific	Edge Diagnostics		Biotechnology Research
Singapore	& Development.	100	100
Singapore Pte Limited
	In the process of being
			dissolved as at 31 March 2024
Pacific	Edge Analytical Services	New Zealand	Dormant Company	100	100
Limited

The financial statements incorporate the assets, liabilities and results of all subsidiaries of Pacific Edge Limited as at 31 March 2024 and for the year then ended. All subsidiaries have the same balance date as the Company of 31 March.

Pacific Edge Limited consolidates all entities over which Pacific Edge Limited has control. Control is achieved when the Group:

• has power to direct the activities of the entity;
• is exposed, or has rights, to variable returns from involvement with the entity; and
• has the ability to use its power to affect its returns.

Subsidiaries which form part of the Group are consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date that control ceases.

The acquisition method of accounting is used to account for business combinations by the Group. The consideration transferred for the acquisition of a subsidiary is the fair value of the assets transferred, the liabilities incurred and the equity interest issued by the Group.

The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Acquisition-related costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. On an acquisition-by-acquisition basis, the Group recognises any non-controlling interest in the acquiree either at fair value or at the non-controlling interest's proportionate share of the acquiree's net assets. Inter-company transactions, balances and unrealised gains on transactions between Group companies are eliminated. Unrealised losses are also eliminated. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.

Critical Accounting Estimates and Assumptions

In preparing these financial statements, the Group made estimates and assumptions concerning the future. These estimates and assumptions may differ from the subsequent actual results. Estimates and assumptions are continually evaluated and are based on historical experience and other factors including expectations or future events that are believed to be reasonable under the circumstances.

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PACIFIC EDGE LIMITED CONSOLIDATED FINANCIAL STATEMENTS 2024

Notes to the Consolidated Financial Statements

For the year ended 31 March 2024

The Group has performed an assessment of potential climate related risks and considered the location of laboratories and other key operations in each region that it operates in and concluded that there is no material impact on the current financial statements.

All other material accounting policy information has been applied on a basis consistent with those used in the audited fiinancial statements of Pacifiic Edge Limited for the year ended 31 March 2023.

2. NEW STANDARDS

NEW DISCLOSURE REQUIREMENTS AND CHANGES IN ACCOUNTING STANDARDS ADOPTED BY THE GROUP

On 14 December 2022 the External Reporting Board (XRB) published its climate-related disclosure standard. The mandatory reporting regime is for reporting periods beginning after 1 January 2023. Climate-related disclosures will be reported at the time of issuance of the Annual Report.

There are other no new disclosures, standards or interpretations material to the Group to be applied during the year.

NEW STANDARDS AND INTERPRETATIONS NOT YET ADOPTED BY THE GROUP

The following new accounting standards and interpretations have been published that are not mandatory for 31 March 2024 reporting periods and have not been early adopted by the Group.

IFRS 18 Presentation and Disclosure in Financial Statements (IFRS 18)

IFRS 18 Presentation and Disclosure in Financial Statements (IFRS 18) was issued in April 2024 as replacement for IAS 1 Presentation of Financial Statements (IAS 1). Most of the presentation and disclosure requirements would largely remain unchanged together with other disclosures carried forward from IAS 1 IFRS 18 primarily introduces the following:

• a defined structure for the consolidated statement of comprehensive income by classifying items into one of the five categories: operating, investing, financing, income taxes and discontinued operations. Entities will also present expenses in the operating category by nature, function, or a mix of both, based on facts and circumstances
• disclosure of management-defined performance measures non-GAAP measures in a single note together with reconciliation requirements, and
• additional guidance on aggregation and disaggregation principles (applied to all primary financial statements and notes).

IFRS 18 also made limited change to certain presentation and disclosure requirements in the financial statements; as well as consequential changes to various IFRS Accounting Standards.

IFRS 18 will be effective for annual reporting periods beginning on or after 1 January 2027 and entities could early adopt this accounting standard. The Group expects to adopt IFRS 18 and relevant consequential changes of other accounting standards in the 2028 financial statements. The Group is currently assessing the impact and will disclose more detailed assessments in the future.

Disclosure of Fees for Audit Firms' Services (Amendments to FRS-44)

The amendments to FRS-44 aim to address concerns about the quality and consistency of disclosures an entity provides about fees paid to its audit firm for different type of services.

Application of this amendment is required for accounting periods beginning on or after 1 January 2024. The Group expects to adopt amendments to FRS-44 in the 2025 financial statements. The Group is currently assessing the impact and will disclose more detailed assessment in the future.

There are no other NZ IFRS or NZ IFRIC interpretations that are not yet effective that would be expected to have a material impact on the Group.

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PACIFIC EDGE LIMITED CONSOLIDATED FINANCIAL STATEMENTS 2024

Notes to the Consolidated Financial Statements

For the year ended 31 March 2024

3. EARNINGS PER SHARE

1. Basic

Basic earnings per share is calculated by dividing the profit (or loss) attributable to equity holders of the Company by the weighted average number of ordinary shares on issue during the year excluding ordinary shares purchased by the Company (Note 18).

		GROUP
	2024	2023
	($000)	($000)
Loss attributable to equity holders of the Company	(29,535)	(26,965)
Weighted average number of ordinary shares on issue	810,727	810,226
Earnings per share	(0.036)	(0.033)

1. Diluted

Diluted earnings per share is calculated by adjusting the weighted average number of shares outstanding to assume conversion of all dilutive potential ordinary shares. The Group's dilutive potential ordinary shares are in the form of share options. As the Group made a loss during the current year and losses cannot be diluted, basic and diluted earnings per share are the same.

4. LABORATORY THROUGHPUT AND COMMERCIAL TESTS - NON-GAAP REPORTING

Laboratory Throughput is a key metric for the Group: Laboratory Throughput provides evidence of the usage of Cxbladder products globally and the rates of adoption between different customer segments. The inclusion of this non-GAAP reporting is considered helpful to readers of these financial statements, as it allows readers to compare the current period to prior periods and assess usage trends on a consistent basis. Total laboratory throughput includes commercial tests, which are invoiced to customers (including tests for patients covered by the US government's medical program through the Centers for Medicare and Medicaid Services (CMS)), and tests which are not considered to be commercial as these tests relate to Research Tests or other non-chargeable activities.

Commercial Test numbers are also a key metric for the Group: Commercial Tests are those tests for which the Company is actively seeking reimbursement and cash receipts, and tests performed at no charge in order to gain new customers. The inclusion of this non-GAAP reporting is considered helpful to readers of these financial statements as it allows readers to compare the current period to prior periods and assess trends on a consistent basis.

Laboratory Throughput and Commercial Tests per financial year are shown below.

	FY24	FY23
Total Laboratory Throughput (tests)	32,633	31,565
Increase in Total Laboratory Throughput (%)	3%	37%
Increase in Throughput from previous year (tests)	1,068	8,479
Total Commercial Tests (tests)	27,347	26,691
Increase in Commercial Tests from previous year (%)	2%	39%
Increase in Commercial Tests from previous year (tests)	656	7,495
Commercial Tests as a percentage of Total Laboratory	84%	85%
Throughput (%)

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