Record H1 revenue of $1.61m, strong growth trajectory ... · PDF fileRecord H1 revenue of $1.61m, strong growth trajectory continues . ... MedAdvisor launched its GP Link function,

ASX ANNOUNCEMENT

17 February 2017

MedAdvisor HY17 Interim Results Record H1 revenue of $1.61m, strong growth trajectory continues

Highlights

• Revenue from continuing operations increased by 127% to $1.55 million, representing a record half year with revenues already higher than FY16 ($1.43m). Total revenue $1.61m

• Revenue has increased due to growing patient numbers, resulting in increased PEP and SMS sales: − User based revenue, (PEP and SMS) is up 668%, accounting for 32% of total revenue − Subscription (SaaS) revenue, accounting for remaining total revenue and driven by

Pharmacy subscriptions, is up 71% • MedAdvisor now boasts over 630,000 users, up 470% on H1 2016 • Gross Margin increased to 83% up from 60% in pcp • Strengthened balance sheet following successful $8 million capital raise with ample capital to

take the domestic business through to profitability, expected by end of CY 2018 • Acquisitions of Healthnotes and OzDocsOnline enhancing technology and expanding

revenue opportunities with additional customer offerings

MedAdvisor Limited (ASX: MDR, the Company) has today released its Appendix 4D and provides its Interim Financial Report for the 6 month period ended 31 December 2016.

Financial and operational performance

MedAdvisor is pleased to report record revenue from continuing ordinary activities of $1.55m, up 128% on the pcp and more than the total $1.43m reported for FY16. Total Revenue was $1.61m. MedAdvisor reported a gross profit margin of 83%, an increase on the pcp of 60%. Following the acquisition of Healthnotes, growth in the company’s fixed cost base has stabilised Results were driven by growth in two primary revenue streams:

1. User based revenue driven by Patient Engagement Programs (PEPs) and SMS services 2. Subscription (SaaS) revenue driven by Pharmacy subscriptions

User linked revenue across the business is growing, accounting for 32% in H1 2017 vs 9% in H1 2016. Average annual revenue per patient in H2 FY16 is $9.00.

H1 2016 Revenue Breakdown v H1 2017 Revenue Breakdown

FY16

User based Revenue Subscription (Saas) Revenue

H1 17

User based Revenue Subscription (Saas) Revenue

For

per

sona

l use

onl

y

User revenue is composed of revenue streams that expand as patient numbers increase, or are transactional in nature. In the half Patient Engagement Program income and SMS services drove the majority of this revenue. It will continue to increase as patient user numbers grow and as additional transactional revenue streams are added. Growth across Key Metrics

DEC 2015 DEC 2016 % Change Patients 110,000+ 630,000 +470% Average number of patients per pharmacy ~75 ~250 +240% Number of contracted PEPs 8 18 +125%

MedAdvisor reported that over 630,000 patients were using the platform as at 31 December 2016. This is a 470% increase since December 2015 and is a result of both the Healthnotes acquisition and marketing activities driving user sign-ups across the pharmacy network. Patient Engagement Programs (PEPs) increased 164% on a like for like basis and the Company is now working with 9 of Australia’s largest manufacturers including Pfizer, GlaxoSmithKline, Astra Zeneca, Novartis and Bristol Myer Squibb. Pleasingly our first customers have renewed and increased their spend with MedAdvisor. A total of 18 programs for medications are currently running on the platform, however the company is only working with 6 products in the Top 20 in Australia, suggesting further growth can occur in subsequent periods. Revenue is typically amortised across the contract period. Pharmacy subscriptions increased 124% on the prior corresponding period. Gross margin increased from 60% in the prior corresponding period, to 83%. This margin expansion has been achieved with MedAdvisor building the required infrastructure to manage the client base without a reliance on third parties. Cost Base has increased in line with MedAdvisor growth plans (up 112%), this cost base is stabilised following the acquisition of Healthnotes and the majority of incremental gross margin from revenue growth will fall to EBITDA in subsequent periods. The cost base includes ~$1.55m of growth operating expenditure. Enhanced product offering to increase variable revenue In October, MedAdvisor launched its GP Link function, enabling doctors to connect directly with their patients to help support them with their medication adherence and repeat prescriptions. The Company’s subsequent acquisitions of Healthnotes and OzDocsOnline have provided it with access to a significant network of over 4000 GPs to enable it to drive the growth of GP Link and become a leading provider of patient engagement services. In particular, the acquisition of OzDocsOnline has strengthened the GP Link offering to include new technology including specialist referrals, pathology results, secure messaging services, eConsultations and online bookings. The addition of these new services will expand the Company’s revenue opportunities and build on the variable revenue stream through the addition of transactional revenues. Importantly MedAdvisor will be able to connect its user base with the enhanced OzDocsOnline service.

For

per

sona

l use

onl

y

User Growth and Engagement Continues to Increase Whilst the Company has ~45% of all Australian pharmacies subscribed to its platform it has a significant untapped opportunity to accelerate users on the platform. There are currently an average of 2,000 patients living with a chronic disease at each pharmacy (~12m total in Australia) and the average connected MedAdvisor users per pharmacy is, 250 up from 75 a year ago. A combination of additional pharmacies and increased penetration of existing customers will increase user numbers.

The Company continued to build its relationships with leading health association partners, including Epilepsy Queensland, Glaucoma Australia, Diabetes Australia, Osteoporosis Australia and Asthma Australia. The recent announcement of Parkinson’s Australia and the Stroke Foundation joining forces with MedAdvisor further enhances the avenues for user acquisition. Through these partnerships, MedAdvisor can help these groups support approximately +5m patients. Corporate update MedAdvisor successfully raised $8 million via an institutional Placement during the period, with strong interest received from existing and new investors, including key pharmacy groups. The capital raised was used to fund the cash consideration and transaction costs associated with the acquisition of Healthnotes, completed on 31 October 2016, and to fuel further sales growth initiatives. With current cash at bank of ~$6m the business has ample funding to complete the current expansion of its service offering and is expected to take the domestic business through to profitability before the end of CY 2018. In January, MedAdvisor announced the acquisition of OzDocsOnline, bringing new services to MedAdvisor’s offering and fuelling the growth of MedAdvisor’s recently launched GP Link offering, through its relationships with over 100 clinics and over 300 General Practitioners. Robert Read, CEO of MedAdvisor commented:

“This has been a record half year for the Company, with revenues already exceeding revenues for the full 2016 financial year. I have been particularly pleased with the performance of our patient engagement programs and the demand we’ve experienced from some of Australia’s leading pharmaceutical manufacturers.

0% 20% 40% 60% 80% 100%

Pharmacy Share

Patients/Phx

Users

Patient Reach via Pharmacy

Current Penetration Potential

0

100000

200000

300000

400000

500000

600000

700000

0

50

100

150

200

250

300

H2 FY15 H1 FY16 H2 FY16 H1 FY17

MA Patients Per Pharmacy

Pts per Phx Total

For

per

sona

l use

onl

y

“As we continue to grow our user base and enhance our product offering, we will drive further growth across our existing revenue streams. Furthermore, we are working towards establishing additional revenue streams as we expand our product offering further to leverage our user base and market position.”

-ENDS-

For more information

Robert Read, CEO MedAdvisor Tel: +61 3 9095 3036 [email protected]

Andrew Ramadge Media and Capital Partners Tel: +61 475 797 471 [email protected]

About MedAdvisor

MedAdvisor is a world class medication management platform focused on addressing the gap and burden of medication adherence. Founded with a desire to simplify medication management, the highly automated and intuitive Australian software system connects patients to their local pharmacy, providing them with real time access to their personal medication records. Available free on mobile and internet devices, the platform also incorporates a variety of valuable and convenient features including reminders and pre-ordering of medications, which together improves adherence by approximately 20%.

Since launching in 2013, MedAdvisor has welcomed over 630,000 registered users through its connections with over 45% of pharmacies across Australia making it the largest provider of Pharmacy & GP services in Australia. MedAdvisor has also linked patients with their GPs and provided enhanced tools to GPs to manage their patients and scripts.

For

per

sona

l use

onl

y

mailto:[email protected]

mailto:[email protected]

MEDADVISOR LIMITED Appendix 4D Half-year Report

Page 1

1. Company Details

Name of Entity: MEDADVISOR LIMITED

ABN: 17 145 327 617 Reporting period: For the half-year ended 31 December 2016 Previous period: For the half-year ended 31 December 2015

2. Results for Announcement to the Market

$'000 Revenues from ordinary activities up 127.8% to 1,548

Loss from ordinary activities after tax attributable to the owners of MedAdvisor Limited up 84.5% to (2,043)

Loss for the half-year attributable to the owners of MedAdvisor Limited up 84.5% to (2,043)

Dividends

Not applicable

Comments:

Total Revenue Breakdown:

6 months 6 months 31-Dec-16 31-Dec-15

Ordinary revenue 1,548 680 Other income (R&D Tax Concession & Interest)

65

289

65 289 1,613 969 The Company has recently lodged its application for the R&D Tax Concession in relation the 2016 financial year. An amount of $28,386 has been received in respect of the R&D Tax Concession related to Health Enterprises 2 Pty Ltd.

Non financial metrics:

Enrolled pharmacies up > 65% > 2,450

Patients activated on MedAdvisor up > 470% > 630,000

Average patients per pharmacy up > 240% > 250

The above excludes metrics related to Chemist Warehouse stores that are currently subscribed to the Healthnotes service.

The loss of the consolidated entity after providing for income tax was $2,042,639 (31 December, 2015 $1,107,112)

For

per

sona

l use

onl

y


Page 2

3. Net Tangible Assets Reporting Previous period period Cents Cents

Net tangible assets per ordinary security 0.5296 0.6121

4. Control Gained or Lost over Entities

Control Gained

Name of entity: Health Enterprises 2 Pty Ltd Date on which control was gained: 28-Oct-16

Additional information: Health Enterprises 2 Pty Ltd is a healthcare technology business that manages patient messaging and medication adherence across multiple demographics. Its core platform known as Healthnotes, promotes medication adherence, along with pharmacy loyalty by offering prescription management services to a pharmacies patients.

Consideration for the acquisition was adjusted from $5,500,000 to $5,045,595 following working capital adjustments in accordance with the Share Sale Agreement. The consideration was paid in cash and shares to the value of $5,045,595 with $2,200,000 paid as shares in the Company.

Control Lost

Not applicable

5. Additional Dividend Information

Not applicable

6. Dividend Reinvestment Plans

Not applicable

7. Details of Associates and Joint Venture Entities

Not applicable

8. Audit Qualification or Review

The financial statements were subject to a review by the auditors and the review report is attached as part of the Interim Report.

For

per

sona

l use

onl

y


Page 3

9. Attachments

The Interim Report of MedAdvisor Limited for the half-year ended 31 December, 2016 is attached.

10. Signed

Robert Read Director Camberwell, Victoria Dated: 17 February, 2017

For

per

sona

l use

onl

y

Page | i

MEDADVISOR LIMITED ABN 17 145 327 617

CONDENSED FINANCIAL REPORT FOR HALF YEAR ENDED 31 DECEMBER 2016

For

per

sona

l use

onl

y


Page | ii

CONDENSED FINANCIAL REPORT FOR HALF YEAR ENDED 31 DECEMBER 2016

CONTENTS Page Directors’ Report 1 Auditor’s Independence Declaration 5

Condensed Statement of Profit or Loss and Other Comprehensive Income

6

Condensed Statement of Financial Position 7 Condensed Statement of Changes in Equity 8 Condensed Statement of Cash Flows 9 Notes to the Condensed Financial Statements 10 Directors' Declaration 17 Independent Auditor's Review Report 18 The Condensed financial report is presented in Australian currency. Its registered office and principal place of business is: The registered office is: The principal place of business is: MedAdvisor Limited MedAdvisor Limited Level 4 Level 4 969 Burke Road 969 Burke Road CAMBERWELL VIC 3124 CAMBERWELL VIC 3124 A description of the nature of the consolidated entity's operations and its principal activities are included in the directors' report, which is not part of the financial statements. The financial statements were authorised for issue in accordance with a resolution of directors on 16 February, 2017

For

per

sona

l use

onl

y


Page | 1

Directors’ Report

The names of the company's directors who held office during or since the end of the financial half-year are:

Mr Peter Bennetto Mr Robert Read Mr Joshua Swinnerton Mr Jim Xenos Ms Sandra Hook Principal Activities

The principal activities of the Entity continue to be the enhancement and growth of the MedAdvisor medication and adherence platform. The MedAdvisor platform is focused on improving health outcomes by connecting health professionals with their patients using mobile and web technologies. Review of Operations

During the current period the business has achieved the following important milestones:

1. In October 2016, MedAdvisor launched GP Link into the market which allows patients to request a repeat script from their GP without the need to physically attend a consultation. This is a major step forward in innovation in the convenience of the healthcare system.

2. In addition MedAdvisor also completed the acquisition of Healthnotes which provided additional scale and patient numbers to help drive the business forward. The business now boasts new technology assets and increased market share from which it can grow revenue.

3. The company raised $8m in a successful capital raising that was oversubscribed, leaving the business with ~$6m cash at the end of the period.

4. The business had the first ever quarter with over $1m in cash receipts from ordinary activities ($1.3m) in Q2FY17 indicating the revenue that is building.

5. The company exceeded 630,000 patients connected to MedAdvisor. This is a major piece of connective tissue that Pharmaceutical companies can now leverage to ensure their messages about the quality use of medicines can accurately find their way to patients who are using their products.

Revenue Drivers

• MedAdvisor now has over 630,000 patients connected to the platform. These patients can receive reminders and order their medications at their favourite pharmacies. SMS reminders generate revenue and margin.

• Growth of Patient Engagement Programs (PEPs); with a total of 18 medications now live across the platform. MedAdvisor is now being utilised by 9 of Australia’s largest pharmaceutical companies, including, Novartis, Bristol-Myers Squibb, GSK, AstraZeneca and Pfizer.

• Renewal of PEP’s from the initial clients at higher financial commitments than their first contracts.

• User based revenue is now 32% of total revenue, up from 9% on the corresponding period last year.

For

per

sona

l use

onl

y


Page | 2

• Revenue growth of [127%] is increasing faster than cost growth [75%] and fixed cost growth has stabilised post acquisition of Healthnotes.

• Acquisition of Healthnotes added 800 pharmacies to the MedAdvisor network. The Company now boasts over 2,450 connected pharmacies to its pharmacy base, a more than 65% increase on the corresponding period last year.

Sales and Marketing Progress

• Significant growth in the number of top tier Pharmaceutical companies running PEPs and the number of products

• Expansion of health association relationships now provides a marketing reach of over 5 million patients with a chronic disease, the Company’s key target audience. These relationships are also important from a credibility perspective with large pharma and other potential clients including Insurers and Governments.

• Health association relationships include: − Asthma Australia, Australia’s peak body supporting the 2.4 million Australians living with

asthma; − Osteoporosis Australia, the national not-for-profit health association helping an estimated

4.7 million Australians living with osteoporosis or poor bone health; − Diabetes Australia that supports 1.2 million people with diabetes.

MedAdvisor also extended its existing relationship with Bupa into certain Healthscope Hospitals, via the “Always Events” agreement. The MedAdvisor platform is now being offered to Bupa patients as they are discharged from certain Healthscope Hospitals to help manage their medications as they return home, providing the Company with another patient recruitment stream.

Technology Development

Launch of new consumer features including new patient engagement features such as Over the Counter (OTC) and Diabetes (NDSS) Ordering. Both features will enhance user experience and provide potential revenue streams into the future. Launch of GP Link to introduce the opportunity for new transactional revenue streams driven by users requesting repeat scripts without attending a clinic.

Significant Changes in State of Affairs

On 26 October 2016, the Company completed a capital raising of $8,000,000 through the issue of 200,000,000 shares at $0.04c. Part of the proceeds of the issue were used to fund the cash component of the Healthnotes acquisition and the balance is to be utilized to fund working capital and future expansion of the business. On 28 October, 2016 the Company completed the acquisition of 100% of the issued capital of Health Enterprises 2 Pty Ltd (Healthnotes) for a total consideration of $5,045,595 part of which was paid by the issue of 57,894,738 shares in the Company at $0.38c ($2,200,000) and the balance in cash.

For

per

sona

l use

onl

y


Page | 3

Future Developments

The company has developed leading-edge technology and IP that puts the patient at the heart of the solution, delivering to users the ability to manage and simply access health services in their hands. The connectivity that delivers this is the widest pharmacy network in Australia and links with thousands of GPs. MedAdvisor is focused on enhancing the GP offering during 2017 beginning with leveraging the technology and GP networks acquired through its Healthnotes and OzDocsOnline acquisitions. The first stage of technical integration with Healthnotes was completed in February 2017. This will see new pharmacy applications installed in MedAdvisor pharmacies to facilitate the roll out of additional services and functionality. The new functionality will officially be launched in March 2017 with further enhancements to the combined platform to continue during FY17. The Company has surrendered its interests in the two mining tenements in New South Wales, which it held and has applied for a refund of the associated Exploration Bonds, one of which has been received during the period.

Events Occurring after the Reporting Period

Post the reporting period, MedAdvisor completed the first stage of the technical integration with Healthnotes which means new pharmacy applications will be installed in MedAdvisor pharmacies to facilitate the provision of additional services. Prior to the Healthnotes acquisition, MedAdvisor utilised Guildlink’s pharmacy product GuildCare to enable and host the MedAdvisor application. As such the Guildlink Services Agreement came to an end on February 10, 2017 and MedAdvisor has no further dependency on the GuildCare Platform for its service. The Company also announced the acquisition of OzDocsOnline for a total consideration of $150,000. A highly strategic and complementary acquisition, OzDocsOnline has added new services to MedAdvisor’s offering including online consultations, appointment bookings and communication of test results. It also brings relationships with over 100 new clinics and +300 General Practitioners and introduces MedAdvisor to a patient network of +100,000. There are no other matters or circumstances that have arisen since the end of the half-year which significantly affected or could significantly affect the operations of the Company, the results of those operations, or the state of affairs of the Company in future financial years. Auditor's Independence Declaration

A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is included on the following page.

For

per

sona

l use

onl

y


Page | 4

Signed in accordance with a resolution of the Directors:

Robert Read Director Camberwell, Victoria Dated: 16 February, 2017 F

or p

erso

nal u

se o

nly

Page | 5 THE POWER OF BEING UNDERSTOOD AUDIT | TAX | CONSULTING

RSM Australia Partners is a member of the RSM network and trades as RSM. RSM is the trading name used by the members of the RSM network. Each member of the RSM network is an independent accounting and consulting firm which practices in its own right. The RSM network is not itself a separate legal entity in any jurisdiction.

RSM Australia Partners ABN 36 965 185 036

Liability limited by a scheme approved under Professional Standards Legislation

RSM Australia Partners

Level 21, 55 Collins Street Melbourne VIC 3000 PO Box 248 Collins Street West VIC 8007

T +61 (0) 3 9286 8000 F +61 (0) 3 9286 8199

www.rsm.com.au

AUDITOR’S INDEPENDENCE DECLARATION As lead auditor for the review of the financial report of MedAdvisor Limited for the half year ended 31 December 2016, I declare that, to the best of my knowledge and belief, there have been no contraventions of:

(i) the auditor independence requirements of the Corporations Act 2001 in relation to the review; and

(ii) any applicable code of professional conduct in relation to the review. RSM AUSTRALIA PARTNERS

P W FRASER Partner Melbourne, VIC 16 February 2017

For

per

sona

l use

onl

y


Page | 6

CONDENSED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

2016 201531-Dec-16 31-Dec-15

Notes $ $

Revenues from continuing operations 7 1,548,138 679,741

Other revenue 7 64,664 289,192

Direct expenses 8 (259,452) (269,956)

Development costs (67,516) (47,082)

Employee benefits expenses 8 (1,841,359) (892,084)

Marketing expense (625,178) (352,936)

Depreciation and amortisation expenses (68,711) (7,438)

Directors fees 8 (95,802) (43,685)

Other expenses (653,161) (277,227)

Finance costs 8 (44,261) (185,638)

Profit / (loss) before income tax (2,042,639) (1,107,113)

Income tax (expense) / income - -

Profit / (loss) for the year (2,042,639) (1,107,112)

Other comprehensive income - -

Total comprehensive income (loss) for the period (2,042,639) (1,107,112)

Loss per ShareBasic loss per share 4 (0.0026)$ (0.0026)$

Diluted loss per Share 4 (0.0026)$ (0.0026)$

Comparative figures are for the half year ended 31 December 2015

The above Condensed statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes.

Consolidated

For

per

sona

l use

onl

y


Page | 7

CONDENSED STATEMENT OF FINANCIAL POSITION

2016 201631-Dec-16 30-Jun-16

Notes $ $

ASSETSCurrent AssetsCash and Cash Equivalents 9 5,927,087 2,888,990 Trade and Other Receivables 10 652,284 309,008 Other Assets 11 248,726 208,114 Total Current Assets 6,828,097 3,406,112

Non-Current AssetsOther Assets 11 22,285 - Fixed Assets 12 186,837 167,536 Intangible Assets 13 5,331,508 72,140 Total Non-Current Assets 5,540,630 239,676

Total Assets 12,368,727 3,645,788

LIABILITIESCurrent LiabilitiesTrade and Other Payables 14 996,894 724,540 Income in Advance 15 670,167 296,666 Employee Benefits 16 327,109 140,427 Total Current Liabilities 1,994,170 1,161,633

Non-Current LiabilitiesEmployee Benefits 16 38,890 19,727 Total Non-Current Liabilities 38,890 19,727

Total Liabilities 2,033,060 1,181,360

Net Assets 10,335,667 2,464,428

EQUITYContributed Equity 16,171,049 6,508,117 Reserves 866,860 615,914 Retained Profits / (Losses) (6,702,242) (4,659,603) Total Equity 10,335,667 2,464,428

Comparative figures are as at 30 June 2016

The above Condensed statement of financial position should be read in conjunction with the accompanying notes.

Consolidated

For

per

sona

l use

onl

y


Page | 8

CONDENSED STATEMENT OF CHANGES IN EQUITY

Contributed Share Options Retained TotalEquity Reserve Earnings Equity

Notes $ $ $ $

Balance 1 July 2016 6,508,117 615,914 (4,659,603) 2,464,428

Ordinary Shares Issued 10,200,000 10,200,000 Capital Raising Costs (net of GST) (537,068) (537,068) Share Options Issued 250,946 250,946

(2,042,639) (2,042,639)

Balance 31 December 2016 16,171,049 866,860 (6,702,242) 10,335,667

Balance 1 July 2015 1,622,436 - (1,588,541) 33,895

Ordinary Shares Issued 6,137,871 6,137,871 Capital Raising Costs (net of GST) (1,252,191) (1,252,191) Share Options Issued 466,552 466,552

(1,107,112) (1,107,112)

Balance 31 December 2015 6,508,117 466,552 (2,695,653) 4,279,016

Consolidated

Consolidated

Transactions with owners in their capacity as owners:

Transactions with owners in their capacity as owners:

Total comprehensive income for the half-year

Total comprehensive income for the half-year

For

per

sona

l use

onl

y


Page | 9

CONDENSED STATEMENT OF CASH FLOWS

2016 201531-Dec-16 31-Dec-15

Notes $ $

Cash Flows From Operating Activities

Receipts from customers (inclusive of GST) 2,066,022 1,043,001 Payments to suppliers and employees (inclusive of GST) (3,596,706) (1,842,562) Interest received 36,009 7,840 Interest paid (924) - Income tax paid (3,924) -

Net cash inflow (outflow) from operating activities (1,499,523) (791,721)

Cash Flows From Investing Activities

Cash acquired on reverse takeover of parent - 24,537 Payments for property, plant and equipment (11,110) (164,862) Payments for acquisition of Health Enterprises 2 Pty Ltd, net of cash acquired 18 (2,819,797) -

Net cash outflow from investing activities (2,830,907) (140,325)

Cash Flows From Financing Activities

Proceeds from new share issue 8,000,000 5,100,000 Capital Raising Costs (net of GST) (537,068) (655,840) Payments to related parties (94,405) Proceeds from borrowings - 597,000

Net cash (outflow) inflow from financing activities 7,368,527 5,041,160

Net increase/(decrease) in cash held 3,038,097 4,109,114

Cash and cash equivalents at the beginning of the year 2,888,990 571,366

Cash and cash equivalents at the end of the year 9 5,927,087 4,680,479

Comparative figures are for the half year ended 31 December 2015

The above Condensed statement of cash flows should be read in conjunction with the accompanying notes.

Consolidated

For

per

sona

l use

onl

y


Page | 10

NOTES TO THE CONDENSED FINANCIAL STATEMENTS

1. General

These financial statements represent those of MedAdvisor Limited (‘MedAdvisor’ or the ‘Company’) and the entities it controls for the half-year ended 31 December 2016.

2. Basis of preparation

The half-year financial report is a general purpose financial report prepared in accordance with the requirements of the Corporations Act 2001 and AASB 134 Interim Financial Reporting. Compliance with AASB 134 ensures compliance with International Financial Reporting Standard IAS 34 ‘Interim Financial Reporting’. The half-year report does not include all of the information required in annual financial statements in accordance with Australian Accounting Standards, and should be read in conjunction with the financial statements of the Company for the year ended 30 June 2016 and any public announcements made by the Company during the half-year in accordance with continuous disclosure requirements arising under the Australian Securities Exchange Listing Rules and the Corporations Act 2001.

3. Critical accounting estimates and judgements

The directors evaluate estimates and judgments incorporated into the financial statements based on historical knowledge and best available current information. Estimates assume a reasonable expectation of future events and are based on current trends and economic data, obtained both externally and within the company.

4. Earnings per Share

Both the basic and diluted loss per share have been calculated using the loss attributable to shareholders of MedAdvisor Limited as the numerator, i.e. no adjustments to profits were necessary during the six (6) month period to 31 December 2016.

The weighted average number of shares for the purposes of the calculation of diluted earnings per share can be reconciled to the weighted average number of ordinary shares used in the calculation of basic earnings per share as follows:

6 months to 6 months to31-Dec-16 31-Dec-15

780,252,730 433,852,167

836,669,366 441,879,563

Weighted average number of shares used in basic earnings per share

Weighted average number of shares used in diluted earnings per shareF

or p

erso

nal u

se o

nly


Page | 11

NOTES TO THE CONDENSED FINANCIAL STATEMENTS – cont’d

5. Issued Capital

6. Operating segments

The Board has determined that the Company presently has two reporting segments. The first being the business activities of the MedAdvisor medication management and adherence platform, including the operations of the newly acquired Health Enterprises 2 Pty Ltd, and the second being the corporate function associated with being an ASX listed company . The Board monitors the Company based on actual versus budgeted revenue and expenditure incurred. This internal reporting framework is the most relevant to assist the Board with making decisions regarding the Company and its ongoing activities.

31-12-16 31-12-16# $

SharesBalance at 30 June, 2016 686,986,688 6,508,117 New shares issued by MedAdvisor Limited for cash 200,000,000 8,000,000

57,894,738 2,200,000 Share issue transaction costs, net of tax - (537,068) Balance at end of reporting period 944,881,426 16,171,049

OptionsBalance at 30 June, 2016 35,000,000 MedAdvisor Zero Cost Options under Employee Incentive Plan 24,110,000 MedAdvisor 4c Options issued to S Chamberlain 5,000,000 MedAdvisor 8c Options issued to S Hook & S Chamberlain 15,000,000

2,000,000 Balance at end of reporting period 81,110,000

New shares issued as consideration for Healthnotes 2 Pty Ltd

R Read Performance Rights vested

MedAdvisor Corporate Total$ $ $

2016Revenues 1,612,489 312 1,612,801

Net Loss before Tax 1,665,504 377,135 2,042,639

Segment Assets 12,228,320 140,407 12,368,727

Total Assets 12,368,727

Segment Liabilities 2,029,599 3,461 2,033,060

Total Liabilities 2,033,060 For

per

sona

l use

onl

y


Page | 12


6. Operating segments – cont’d

7. Revenue

8. Expenses

MedAdvisor Corporate Total2015

Revenues 968,877 56 968,933

Net Loss before Tax 856,161 250,951 1 1,107,112

Segment Assets 4,920,692 219,292 5,139,984

Total Assets 5,139,984

Segment Liabilities 792,155 68,813 860,968

Total Liabilities 860,968

1 The Net Loss of $250,951 attributed to Corporate in the half year ended 31 December 2015 includes a charge of $180,772 that is a non-cash expense which is classified as a Listing Cost and has resulted from the application of AASB 2 'Share-based payments'.


$ $

From continuing operationsSale of services 1,548,138 679,741

1,548,138 679,741 Other Revenue Interest received 36,278 7,978 Sundry income - R&D Tax Concession 28,386 281,214

64,664 289,192

Profit before income tax includes the following specific expenses:Direct Costs:

Distributions costs under previous GuildLink Agreement - 186,129 Distributions costs under current GuildLink Agreement - 50,613 Platform access fees 210,857 -

For

per

sona

l use

onl

y


Page | 13


8. Expenses – cont’d

9. Cash and Cash Equivalents

10. Trade and Other Receivables


$ $

Direct transaction costs 3,231 5,144 Managed services costs for the MedAdvisor Platform 45,363 28,070

259,452 269,956

Employee Benefits Expenses:Development 661,906 407,633 Marketing 600,876 190,465 Business development - international 28,925 - Administration 298,706 255,520 Governance 95,802 43,685 Share based payments 250,946 38,466

1,937,161 935,769

Finance costs:AASB 2 Listing cost - 180,772 Financing costs 41,827 - Other bank charges 1,754 4,866 Interest expense 680 -

44,261 185,638

as at as at31-Dec-16 30-Jun-16

$ $

Cash on Hand 522 303 Cash at Bank 5,872,093 2,834,215 Term Deposit 54,472 54,472

5,927,087 2,888,990

Trade Debtors 650,606 307,111 Other Debtors 1,678 1,897

652,284 309,008

For

per

sona

l use

onl

y


Page | 14



11. Other Assets

12. Property, Plant and Equipment

13. Intangible Assets

CurrentPrepayments 150,923 173,328 Work in progress 52,193 14,786 Security Deposits 25,610 - Exploration Bonds 20,000 20,000

248,726 208,114

Non CurrentPrepayments 22,285 -

22,285 -

Leasehold ImprovementsCost 151,184 124,848 Accumulated Depreciation (27,224) (16,123) Written Down Value 123,960 108,725

Office Furniture & EquipmentCost 79,996 68,320 Accumulated Depreciation (17,119) (9,509) Written Down Value 62,877 58,811

Total Written Down Value 186,837 167,536

GoodwillCost 4,013,868 -

Intellectual propertyCost 99,140 99,140 Accumulated Amortization (31,500) (27,000) Written Down Value 67,640 72,140

SoftwareCost 1,300,000 - Accumulated Depreciation (50,000) - Written Down Value 1,250,000 -

Total Written Down Value 5,331,508 72,140

For

per

sona

l use

onl

y


Page | 15


14. Trade and Other Payables

15. Net Income in Advance

16. Employee Entitlements

17. Acquisition of Health Enterprises 2 Pty Ltd

Trade Creditors 389,720 254,930 Other Creditors & Accruals 607,174 469,610

996,894 724,540

Gross Pharmacy Subscriptions in Advance 249,134 138,707 Discounts - (5,791)

249,134 132,916

Patient Engagement Programs 421,032 163,750 421,032 163,750

670,167 296,666

CurrentAccrued Annual Leave 290,554 140,427 Accrued Long Service Leave 36,555 -

327,109 140,427 Non CurrentAccrued Long Service Leave 38,890 19,727

38,890 19,727

Total Employee Entitlements 365,999 160,154

$Purchase price - cash free / debt free 5,500,000 Working capital adjustment at settlement (454,405) Net purchase price 5,045,595

On 28 October 2016 the company completed the acquisition of Health Enterprises 2 Pty Ltd. The final consideration for the acquisition was as follows:

For

per

sona

l use

onl

y


Page | 16


17. Acquisition of Health Enterprises 2 Pty Ltd – cont’d

18. Contingent Liabilities

There have been no changes to contingent liabilities or contingent assets since the last annual reporting date.

19. Events after the Reporting Date

On 9 January, 2017 the Company announced the acquisition of OzDocsOnline for a total consideration of $150,000. The acquisition is considered to be highly strategic and complementary to MedAdvisor’s current offering.

Post the reporting period, MedAdvisor completed the first stage of the technical integration with Healthnotes which means new pharmacy applications will be installed in MedAdvisor pharmacies to facilitate the provision of additional services.

Prior to the Healthnotes acquisition, MedAdvisor utilised Guildlink’s pharmacy product GuildCare to enable and host the MedAdvisor application. As such the Guildlink Services Agreement came to an end on 10 February, 2017 and MedAdvisor has no further dependency on the GuildCare Platform for its service.

There are no other matters or circumstances that have arisen since the end of the half-year which significantly affected or could significantly affect the operations of the Company, the results of those operations, or the state of affairs of the Company in future financial years.

End of Notes

$Purchase price allocation:Cash at Bank 25,798 Trade Debtors 323,548 Security Deposits 25,610 Software 1,300,000 Trade Creditors (288,461) Other Creditors & Accruals (207,914) Employee Entitlements (146,853) Goodwill 4,013,868

5,045,595

Composition of net purchase priceCash 2,845,595 Shares 2,200,000

5,045,595

Due diligence and legal fees relating to the acquisition 111,269

For

per

sona

l use

onl

y


Page | 17

DIRECTORS’ DECLARATION

The directors of the company declare that:

1. The financial statements and notes, as set out on page 6 to 16, are in accordance with the Corporations Act 2001 and:

i. comply with Accounting Standards; and ii. give a true and fair view of the financial position as at 31 December 2016 and of the performance

for the 6 months on that date of the company.

2. In the directors’ opinion, there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.

This declaration is made in accordance with a resolution of the Board of Directors.

Robert Read Director Camberwell, Victoria Dated: 16 February, 2017

For

per

sona

l use

onl

y

Page | 18 THE POWER OF BEING UNDERSTOOD AUDIT | TAX | CONSULTING

RSM Australia Partners is a member of the RSM network and trades as RSM. RSM is the trading name used by the members of the RSM network. Each member of the RSM network is an independent accounting and consulting firm which practices in its own right. The RSM network is not itself a separate legal entity in any jurisdiction.

RSM Australia Partners ABN 36 965 185 036

Liability limited by a scheme approved under Professional Standards Legislation

RSM Australia Partners

Level 21, 55 Collins Street Melbourne VIC 3000 PO Box 248 Collins Street West VIC 8007

T +61 (0) 3 9286 8000 F +61 (0) 3 9286 8199

www.rsm.com.au

INDEPENDENT AUDITOR’S REVIEW REPORT

TO THE MEMBERS OF

MEDADVISOR LIMITED

We have reviewed the accompanying half-year financial report of MedAdvisor Limited which comprises the condensed statement of financial position as at 31 December 2016, the condensed statement of profit or loss and other comprehensive income, condensed statement of changes in equity and condensed statement of cash flows for the half-year ended on that date, notes comprising a summary of significant accounting policies and other explanatory information, and the directors’ declaration of the consolidated entity comprising the company and the entities it controlled at the half-year end or from time to time during the half-year.

Directors’ Responsibility for the Half-Year Financial Report

The directors of the company are responsible for the preparation of the half-year financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the half-year financial report that is free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express a conclusion on the half-year financial report based on our review. We conducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity, in order to state whether, on the basis of the procedures described, we have become aware of any matter that makes us believe that the half-year financial report is not in accordance with the Corporations Act 2001 including: giving a true and fair view of the consolidated entity’s financial position as at 31 December 2016 and its performance for the half-year ended on that date; and complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001. As the auditor of MedAdvisor Limited, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report.

A review of a half-year financial report consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

For

per

sona

l use

onl

y

Page | 19

Independence

In conducting our review, we have complied with the independence requirements of the Corporations Act 2001. We confirm that the independence declaration required by the Corporations act 2001, which has been given to the directors of MedAdvisor Limited, would be in the same terms if given to the directors as at the time of this auditor’s report.

Conclusion

Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the half-year financial report of MedAdvisor Limited is not in accordance with the Corporations Act 2001 including:

(a) giving a true and fair view of the consolidated entity’s financial position as at 31 December 2016 and of its performance for the half-year ended on that date; and

(b) complying with Accounting Standard AASB 134 Interim Financial Reporting and Corporations Regulations 2001.

RSM AUSTRALIA PARTNERS

P W FRASER Partner Melbourne, VIC 16 February 2017

For

per

sona

l use

onl

y

Documents

Record H1 revenue of $1.61m, strong growth trajectory ... · PDF fileRecord H1 revenue of $1.61m, strong growth trajectory continues . ... MedAdvisor launched its GP Link function,