Rua Releases Annual Report for Year Ended 30 June 2024
FOR PUBLIC RELEASE
NZX Limited
Wellington
Tuesday, 1
st
October 2024
Rua Bioscience has today released its Annual Report.
Highlights: Q1 FY25 sales are double the total sales of FY24.
Tairawhiti, New Zealand – Rua Bioscience Limited (NZX:RUA) has today
released its Annual Report for the 12 months ended 30 June 2024 (FY24).
The Annual Report is attached and available now on Rua’s website:
www.ruabio.com/annual-report.
The Annual Report provides an overview of Rua’s year, focused on the delivery of
its differentiated strategy – anchored in genetics and distribution – to prepare
the business for its next phase of growth and sustainable revenue generation.
The report shows the continuity of our strategy and the progress we have made
in establishing sales pipelines in key markets that will be filled with unique East
Coast genetics.
The financial performance was discussed alongside our unaudited financial
statements, released on 29 August 2024. Despite the receipt of $150,000 of equity
from existing shareholders and the sale of our manufacturing facility now
unconditional there remains uncertainty around the ability of the business to
continue as a going concern. For further information and context please refer to
the Going Concern Disclosure (Note 2(f)) in the Financial Statements, including
the disclaimer of opinion that has been provided by the auditors.
MARKET ANNOUNCEMENT
Notwithstanding the uncertainty over our going concern status, the Directors’
continue to believe the business has a positive future.
Subsequent operational and financial update
Rua has started the financial year well with sales in the first quarter of 2024
already over double the total sales of the previous year at approximately
$240,000. This strong result reflects the success of Rua’s export-led strategy,
particularly in Germany and Australia, where new distribution channels are
driving revenue growth. The sales momentum is expected to continue over the
remainder of the year.
As noted above Rua has secured an unconditional sales and purchase agreement
for its manufacturing facility, providing operational flexibility to support its
ongoing expansion. The sale is to Awa Ora Genesis Kaitiaki Harakeke Trust of
Te Araroa.
Rua has also received critical support through a share placement with key
shareholders, further underlining investor confidence in the company’s future.
Rua’s Directors have expressed their confidence in the company’s trajectory,
reaffirming the strategic plan and steps being taken towards achieving positive
cash flow by the end of 2025.
Rua is at an extremely exciting time in its journey. Our portfolio of regulatory
approvals have enabled sales pipelines to be established in three key markets
and soon be to four with UK sales beginning at the end of this year. Two of our
key markets, Germany and Australia are the largest medicinal cannabis markets
in the world. This allows us the opportunity to increase our revenue
considerably. With our unique Tairawhiti East Coast kaupapa we are well
positioned to build on our brand and fill these distribution channels with our own
taonga genetics from the East Coast.
Mediation process with Cann Group in Australia has concluded without a final
resolution at this stage. However, both parties remain engaged in negotiations to
reach a potential resolution. Further updates will be provided as the process
unfolds.
Capital Raise Announcement
Although sales and performance have significantly improved and we have an
unconditional agreement for the sale of our manufacturing facility in place,
further funding is still needed to fuel Rua’s growth ambitions. As a result, we will
soon be initiating a capital raise to ensure the Company has the required level of
working capital to optimise and scale operations in key markets.
Details of the structure of the capital raise will be made available in the coming
weeks.
“Rua is in three key markets with Rua branded products. Our first quarter
performance and the strategic sale of our manufacturing facility place Rua in a
strong position to capitalize on global opportunities,” said Anna Stove Chair of
Rua Bioscience. “A further capital raise is an essential next step as we focus on
growing revenues to give us the cash flow we need to deliver sustainable long-
term value for our shareholders.”
The Board is optimistic about the Company’s future, with the support of key
stakeholders, strategic partnerships in export markets, and its commitment to
producing high-quality medicinal cannabis that enhances lives.
ENDS
For more information, please visit www.ruabio.com or contact:
Paul Naske
Chief Executive Officer
+64 (21) 445 154
www.ruabio.com
---
Rua Bioscience
Annual Report 2024
Te Ripoata a Ta u
2
Maori founded, Tairawhiti based Rua Bioscience Limited
is a pioneering medicinal cannabis business with global
ambitions. We are nimble operators at both ends of
the value chain, continuing R&D and genetic discovery
in Ruatorea while establishing distribution channels in
export markets around the world.
I whakapumautia te pakihi o Rua ki roto o te Tairawhiti,
a, he pakihi Maori tenei e tipu rautini ana. Ko nga
ringaringa o te pakihi e toro atu ana ki nga topito o te
ao whanui. He kakama matou, e toia ana i nga taha e
rua o te taura whai hua, he rangahau tonu te whai, he
whakahura i nga momo ira ki Ruatorea tonu te whai, me
te whakau i nga makete ara hokohoko ki te Ao whanui.
―
Front Cover Koru Design from Rau Hiwa Brand Identity.
Designed by Maia Gibbs.
―
Tolaga Bay - Aotearoa
―
Germany
3Rua Bioscience ― Annual Report 2024
Local
Global
4
Nau mai haere mai e nga Iwi
katoa, anei nga korero mo
Rua Bioscience
Welcome to Rua Bioscience
We are proud to share Rua Bioscience’s
FY24 Annual Report.
Within this report, we provide a progress
update on the key milestones achieved
over the past 12 months, outline our
financial performance, and highlight
the developments within our key global
markets and distribution partnerships.
We showcase how we are working towards
our goal of achieving sustainable revenue
under our differentiated export-led
strategy, and the operational changes
we have implemented to achieve this.
We’ll also provide insight into our local
focuses, including our impact programmes
and sustainability efforts, highlighting
how we continue to prioritise wellbeing
in Tairawhiti.
Rua is committed to reporting openly and
honestly on our performance, providing
information that is clear and easily
understood. If you have any feedback
on this Annual Report, please email
info@ruabio.com
5Rua Bioscience ― Annual Report 2024
―
Sunrise over Mangaoporo
Photo credit: Eruera Walker
6
Anna Stove
Chair
Tony Barclay
Chair Audit, Finance and Risk
Nga korero a nga Ringatohu
Directors’ statement
The Directors are pleased to present Rua Bioscience Limited’s Annual
Report and consolidated financial statements for the year ended 30
June 2024.
The Directors are not aware of any circumstances since the end of
the year that have significantly affected or may significantly affect
the operations of Rua Bioscience. This Annual Report is dated
30 September 2024 and is signed on behalf of the Board by:
Directors’ statement
―
Sunrise over Hikurangi
Photo credit: Josie McClutchie
7Rua Bioscience ― Annual Report 2024
Rarangi korero
Table of contents
Directors’ statement6
Achievements at a glance8
Board of Directors12
Results at a glance9
Chair & CEO’s report10
Our people15
Senior management14
Rua’s unique growth strategy20
Financial commentary23
Global progress24
Rua's key markets26
Impact programmes30
Towards sustainability36
Financial statements38
Shareholder information78
Who we are16
Our values18
Contact directory90
8
Mawhiti mai ki nga whakatutukitanga
Achievements at a glance
Subsequent activity
In July 2024, Rua launched new dried flower products
for the German and New Zealand markets.
Extended the distribution contract with Nimbus
Health in Germany for an additional three years
and to include many other European countries.
Established short-term revenue pipelines to fill
with unique legacy genetics.
Achieved first revenues in Australia, and developed
solid sales and distribution channels for a
comprehensive product range.
Secured agreements to undertake cultivation trials in
Portugal, to supply the European market.
Signed an offtake agreement with a New Zealand
cultivator to export Rua’s legacy genetics to Australia.
Signed a distribution agreement with Target
Healthcare in the United Kingdom.
Received approval from Ministry of Health NZ for
two new products for the New Zealand market.
Achievements at a glance
9Rua Bioscience ― Annual Report 2024
Mawhiti mai ki nga hua nui
Results at a glance
Revenue from customers
$86k
Cash and investments
$895k
Total revenue and other income
$322k
Loss before tax
-$13.7m
Net assets
$6.8m
10
Te ripoata a te Heamana
Chair & CEO’s Report
To the supporters of this
business, those who have held
faith in our mission, greetings
to you. We continue to progress
toward our goals, to benefit
our business.
Chair and CEO’s report
Our values, firmly rooted in the Tairawhiti
community, have continued to drive us
forward, and this year we reached a pivotal
point in our journey with our medicinal
cannabis products now being sold in three
high-value growth markets around
the world.
In the previous reporting year, we were
focused on getting our new competitive
commercial model and export-led strategy
right. The challenges of the New Zealand
regulatory environment had not allowed us
to export, which drove our refocus. This year,
we have delivered against this new strategy
by further developing our genetics, building
distribution channels, and securing supplier
partnerships in growth markets.
Delivering on our strategy
With our strategy now solely focused on
genetics and distribution, we have made
good progress in key global markets over
the past 12 months, which included key
appointments locally and internationally.
Having appointed Paul Naske as Chief
Executive Officer in early 2023, the reporting
year saw Paul deliver some critical runs on
the board, which included getting our team
behind our differentiated strategy and into
delivery mode.
Reflective of our shift into an expansion
phase, in December 2023 we warmly
welcomed our first Australian-based
employee. He has been focused on growing
our presence, establishing distribution
channels, and driving sales in the
Australian market.
Australia is one of the world’s largest
medicinal cannabis markets, and Rua
was one of the first New Zealand brands
to launch there, and market directly
to Australian patients. This year, we
secured our first revenues in Australia and
established strong sales and distribution
channels for a wide range of products.
We also signed an offtake agreement with
a New Zealand cultivator to export our
genetics to Australia.
Further afield, our supply and distribution
agreements across the United Kingdom
and Europe remain core pillars of our
operational model, and in the last 12
months we have scaled up our distribution
agreements in these markets.
11Rua Bioscience ― Annual Report 2024
The United Kingdom is an exciting new market
for medicinal cannabis. In December, we signed
a two-year distribution agreement with Target
Healthcare and are looking forward to having a
portfolio of products available to this emerging
market in the near term.
Looking to Europe, we are proud to have
secured cultivation and manufacturing
agreement with companies, who we are in
the process of establishing cultivation trials in
Portugal to supply the European market. We
have also continued to make considerable
progress in Germany, a market which is firmly
establishing itself as the largest in Europe.
This expansion has been further fuelled by
regulatory changes implemented earlier this
year, which reclassified medicinal cannabis,
removing its narcotic status and allowing
it to be easily prescribed alongside other
pharmaceuticals. This year, we were pleased
to extend our distribution contract with Nimbus
Health in Germany for an additional three
years, providing security for our products in this
competitive and dynamic market, as well as
other European markets.
Locally, we received approval from Medsafe
for two new dried flower products for the New
Zealand market with one product generating
revenue in July 2024.
Our Compassionate Access Programme
continues to make a positive impact in the
Tairawhiti community. The programme supplies
medicinal cannabis to people facing financial
constraints. We are proud to currently supply up
to 52 patients every month and aim to increase
this number over time with the support of
partners. We also offer five dedicated places
to palliative care patients in the region.
Financial results
Rua reported a loss before tax for the year
to 30 June 2024 of $13.72m (FY23 $5.96m).
This loss is in line with expectations and is
primarily because of one-off impairments to
goodwill, suppliers' contracts and other assets,
the majority of which was reported at the 31
December 2023 half year report. The loss before
these impairments was $4.50m.
As previously announced, the business has
required additional funding to support ongoing
operations. We have recently undertaken a
targeted capital raise and have secured funds
that will allow the business to meet its short-
term working capital requirements. These
funds will bridge the business to the finalisation
of our manufacturing facility sale, allowing
Rua to focus on scaling our sales efforts
in key international markets. We appreciate
the ongoing commitment of our existing
shareholders, who contributed much of
these funds.
Outlook
The next 12 months will be one of the most
significant periods for the business since Rua’s
inception. We are entering a new revenue
growth phase as we leverage our expertise and
partnerships to benefit more patients around the
world and deliver value to our shareholders.
As markets in Europe, the United Kingdom and
Australia continue to mature and grow, we are
well-positioned to scale-up our activity and
product portfolio. We have the right strategy, the
right genetics, and the right global distribution
partners, as well as a team of skilled and
passionate individuals to achieve our goals.
Specific focuses for FY25 include:
• Achieve sustainable revenue generation.
• Launch products into new markets,
prioritising the United Kingdom (sales
expected by the end of 2024).
• Introduce our legacy genetics into new
markets, including Germany and Australia.
We look forward to updating the market on
progress in due course.
Thank you
We take great pride in our team's hard mahi and
commitment to our mission. Their agility and
ability to adapt to various organisational changes
has been remarkable. We want to recognise
and thank each of them for their continued
dedication and outstanding contributions.
And lastly, a special thank you to our
shareholders. You have shown unwavering
support as we have been building a sustainable
business for the future. We appreciate the
commitment and encouragement you have
shown us, and we look forward to delivering
results for you over the next 12 months
and beyond.
Ahakoa nga piki me nga heke o te wa, e
whakapono tonu ana matou ki tenei kaupapa,
ki a koutou hoki.
Anna Stove
Chair
Paul Naske
Chief Executive
12
Te Poari Ringatohu
Board of Directors
Rua Bioscience’s Board of
Directors are deeply invested
in the Rua kaupapa. They
possess a wealth of domestic
and international business,
pharmaceutical and strategic
expertise.
Co-founder of Rua Bioscience,
Panapa established New
Zealand’s first tertiary
training course for cannabis
cultivation via the Eastern
Institute of Technology. From
Ruatorea, with a degree in
management, Panapa is
a co-founder of numerous
social enterprises and holds
governance roles across a
wide range of for-profit and
charitable organisations.
Panapa lives in Te Tairawhiti
and focuses on developing
economic opportunities
alongside his people. He has
been a Director of Rua since
its inception in October 2017.
Panapa Ehau
Executive Director,
Co-Founder
Kaiwhakau / Ringatohu
Ngati Uepohatu, Ngati Porou
Anna Stove
Chair
Heamana
Board of Directors
Anna has been a Director
of Rua since May 2019, and
was elected Board Chair. She
also served as the company’s
Managing Director from August
2022 until March 2023. Anna
has a successful 25+ year track
record leading and driving
transformational change within
the pharmaceutical sector. She
has held various senior executive
roles within NZ, Asia Pacific
and Europe, most recently
as NZ General Manager for
GlaxoSmithKline. Anna has a
strong passion for improving
the quality of life for all through
driving business’ strategic growth.
Anna is also a Director of Pacific
Edge Ltd and Chair of TAB NZ.
Her previous governance roles
include Chair of Global Women
NZ, Director of Medicines NZ,
Vice-Chair of Pukekohe Park
and Vice Chair of Shooting Star
Children’s Hospice London, UK.
13Rua Bioscience ― Annual Report 2024
Teresa has an exceptional
background in innovation,
commercialisation, marketing,
and business development
in the primary sector. She
has significant international
business experience, having
held a variety of senior roles for
Danone based in both North
America and France focusing
on their domestic and global
markets. Teresa has also advised
a number of internationally-
focused businesses on their
growth strategies and brings
strong governance capability
having served on the Boards of
Firstlight Foods Ltd, AgResearch,
Prolife Foods, Food Standards
Australia and New Zealand,
and Zespri. Teresa has a track
record of helping develop highly
capable leaders, strong brands,
accumulation of IP, and seeing
organisations flourish through
continuous improvement. Teresa
joined the Board in August 2022.
Tony brings over 30 years’
experience in business and 22
years of healthcare experience.
Tony was CFO at medical
device company Fisher &
Paykel Healthcare from the
time of separation from Fisher
& Paykel Appliances in 2001
until retiring from full-time
employment in 2018. Prior to
Fisher & Paykel Healthcare,
Tony worked for Price
Waterhouse and Arnott &
Biscuits in finance roles. Tony
holds a number of Directorships
in private companies, all in
MedTech. Tony holds a BCom
from the University of Otago
and is a Chartered Accountant
and a member of the New
Zealand Institute of Directors
and INFINZ. Tony joined the
Board in May 2023.
Kale is the managing director
of K&J Growth and Rugby
Bricks. K&J Growth operates
out of US and NZ-based
offices, working from Los
Angeles and Dunedin. They
have built scalable ROI-focused
digital marketing campaigns
for over 100+ companies
globally from TikTok to the
New Zealand government.
Kale was the 2022 winner of
the Matariki Waitā Business &
Innovation Award, the winner
of the 2023 Matahiko Whiua
ki te Ao & Pakihi awards and is
the only New Zealand member
of the Forbes Agency Council.
Kales sponsors multiple
programs that are focused
on helping more Māori into
entrepreneurship.
Teresa Ciprian
Non-Executive Director
Ringatohu Whakatu Pu
Tony Barclay
Non-Executive Director
Ringatohu Whakatu Pu
Kale Panoho
Board Observer
Kaimatakitaki Poari
Ngāpuhi
14
Liam Walker
Virtual Chief
Financial Officer
Apiha Kaiwhakahaere Putea
Mai Tawhiti
Our Senior Management Team is charged with delivering
operational excellence, executing Rua’s strategy, and leading
Rua’s expansion into global medicinal cannabis markets.
Nga pou Matua
Senior Management
Paul has held a range of
leadership positions in business
strategy and development,
including roles as General
Manager of Corson Grain and
as a Business Unit Manager
at Fletcher Building. Paul has
been overseeing Rua’s topline
business operations since the
beginning of 2019 and has
been vital to the design and
efficient execution of Rua’s
global strategy. His knowledge
of the commercial environment
ensures Rua’s alignment with
the business needs of our global
clients. Paul was promoted
to the role of Chief Executive
Officer in February 2023.
Liam is a BDO Partner based
in Auckland. He joined BDO in
2007. Liam provides proactive
financial advice to a wide range
of clients in the healthcare,
construction, freight and logistics
industries. He delivers a blend
of commercial, financial and
strategic knowledge to identify
a business’ impediments, and
solutions to help them grow. A
strong believer in innovation, he
aims to help clients spend more
time on their business, rather
than in it. Liam plays an active
role as vCFO with a number of
his clients, including Rua.
Emma has been with Rua
since October 2019 and was
instrumental in establishing the
GMP standards and agreements
necessary for Rua to operate.
Emma holds a Masters of
Science (MSc) in Forensic
Chemistry from the University
of Strathclyde, Scotland as well
as a Bachelor of Science (BSc)
majoring in Medicinal Chemistry
from the University of Auckland.
Emma came to Rua from ESR
where she was part of the
Forensic Drug Chemistry Team.
Paul Naske
Chief Executive Officer
Kaiwhakahaere Matua
Emma McIldowie
Quality and
Corporate Affairs
Kaiwhakahaere Kounga Me Nga
Take Rangatopu
Our people
15Rua Bioscience ― Annual Report 2024
We’re a unique collective of dual
forces: science and nature, land and
people, commerce and community,
modern innovation and ancestral
wisdom. These connections bring
balance and integrity to our
business and our team.
Our vision, to create cannabis-
derived medicines that change
people’s lives, connects us and this is
what Rua’s team strive for every day.
Te tira o Rua
Our people
16
Te pakihi o Rua
Who we are
Rua is a pioneering medicinal cannabis business
with global ambitions. Maori-founded in Ruatorea,
we provide medicinal cannabis products for local
and export markets. We remain focused on creating
intergenerational social impact in Te Tairawhiti.
Our purpose
To deliver cannabis-based medicines that change people’s lives.
How we will achieve our purpose
Develop a financially sustainable business that inspires the
next generation, establishes high value career pathways, and
provides cannabis-based medicines for our community.
Who we are
―
Pete Sollitt - Ngati Porou
Grower Technician
17Rua Bioscience ― Annual Report 2024
18
Nga uara
Our values
Since our earliest days, Rua has held true to our
four key values. These values define who we are
and underpin everything we do as a successful,
sustainable and trusted partner.
Ponotanga
We respect diversity. We have integrity in all relationships.
Whakawhanaungatanga
We collaborate for success.
Mauitanga
We do “business as unusual”. We celebrate learning and curiosity, innovation
and courage. We have hope for the future.
Oranga
We work for healthy whanau and healthy whenua. We prioritise the
wellbeing of our customers, staff, family and the wider industry.
Our values
19Rua Bioscience ― Annual Report 2024
―
Kevin Pewhairangi
Pharmacist
Growth strategy20
Te rautaki whakatupu ahurea o Rua
Rua’s unique growth strategy
Rua is doing medicinal cannabis differently.
With the right differentiated, capital-light strategy
now in place, Rua is focused on delivery and working
towards building a sustainable business in the global
medicinal cannabis industry, that is resilient and can
deliver into the future – both for shareholders and for
the people of Tairawhiti.
Rua’s high-value, low-cost model is strategic, scalable
and sustainable. In the past year, Rua removed all
the capital-intensive aspects of the business and
now outsources all cultivation and manufacturing to
trusted, best-in-class partners closer to key markets.
This means the business can scale without requiring
significant capital.
Rua has supply and distribution agreements Australia,
Europe and the United Kingdom, which are core pillars
of its operational model. Rua is the only medicinal
cannabis business in New Zealand with distribution
agreements at this scale in these key growth markets.
Unique genetics
selected at Ruatorea
Germany | Australia
Aotearoa New Zealand
UK | Poland | Czechia
Through strategic
partnerships with cultivation
and manufacturing industry
leaders, Rua outsources the
capital-intensive parts of its
value chain.
1. Genetics
2. Cultivation
3. Manufacturing
4. Distribution
21Rua Bioscience ― Annual Report 2024
―
Rau Hiwa
Premium Export Product
Sourced under New Zealand's unique regulatory framework, which permits the
inclusion of legacy genetics in the medicinal cannabis sector, Rau Hiwa T23 pays
homage to the safekeepers of distinctive cannabis genetics in our community
and Aotearoa, New Zealand.
22Financial commentary
―
Rua Flower
23Rua Bioscience ― Annual Report 2024
Nga korero mo nga putea
FY24 financial commentary
In FY24 Rua has focused on the delivery of our
differentiated strategy – anchored in genetics and
distribution – to prepare the business for the next
phase of growth and sustainable revenue generation.
Income
Revenue was recorded as $0.32m (FY23 $6.53m). FY23 revenue was
significantly higher due to a $5.85m non-cash fair value gain as a result
of a reduction in the payment liability to ex-Zalm shareholders. Revenue
from customers was $86k (FY23 $358k). This reduction is a result of lack
of sales in Germany for FY23 following the partial recall of product due to
poor quality from suppliers, which has now been addressed.
Loss for the year
Rua’s loss before tax for the year to 30 June 2024 was $13.72m (FY23
$5.96m). This loss is in line with expectations and is primarily because of
one-off impairments to goodwill, supplier contracts and other assets, the
majority of which was reported at the 31 December 2023 half-year report.
This is non-cash in nature and does not affect the groups cash flows or
operational liquidity. The loss before these impairments was $4.50m.
Balance sheet
At the end of FY24, the business has cash, cash equivalents and
investments of $0.9m (FY23 $4.56m). Rua’s total assets were $7.7m, with
total liabilities of $0.97m, resulting in net assets of $6.77m. During the
year, Rua recorded total impairments of $9.23m.
Post balance date, key Rua shareholders provided equity funds of $0.15m
to assist the business with working capital purchases until proceeds from
the sale of the Gisborne manufacturing facility for $1.3m are received.
24
Kokiri ki te ao
Global progress
From the outset, Rua has
understood we must go global
to support local. FY24 saw Rua
advancing its genetics, expand
distribution channels, and secure
key supplier partnerships in growth
markets. These critical milestones
have built a strong foundation to
achieve sustainable revenue in
FY25 and beyond.
Global progress
United
Kingdom
Czechia
Poland
Germany
25Rua Bioscience ― Annual Report 2024
United KingdomSigned distribution agreement with Target Healthcare.
GermanyExpansion of agreement with Nimbus Health.
PolandContinuing to explore opportunities in market.
CzechiaRetained exclusive agreement with Motagon.
AustraliaExpansion of distribution channels.
Aotearoa New ZealandTwo new products approved.
Australia
Aotearoa
New Zealand
26
Australia
Australia is one of the world’s largest
medicinal cannabis markets, estimated to
be worth around $450 million, with over
300 prescribers. Australia imported over
42 tonnes of medicinal cannabis in 2023,
a 69% increase compared to the previous
year. Its regulatory environment makes it
one of the fastest growing and competitive
markets in the world.
Rua was one of the first New Zealand
brands to launch in Australia, and market
directly to patients and prescribers. The
business believes this provides a competitive
edge in the market capitalising on New
Zealand’s strong horticultural heritage and
high-quality products. This will be a key
focus of sales and marketing initiatives to
firmly establish Rua products in Australia in
the years ahead.
Within the reporting year, Rua made
significant progress in the Australian market.
John Sanders was employed as Rua’s first
Australian-based employee as Chief of
Sales and Marketing, the business secured
its first revenues in Australia and established
strong sales and distribution channels for
a wide range of products. Rua also signed
an offtake agreement with a New Zealand
cultivator to export its genetics to Australia.
Rua products are now established in four
distributors, and the business expects to
bring new products to the market using New
Zealand legacy genetics in the latter part
of 2024. This will be the first market where
the business establishes itself for distribution
of products using Rua sourced genetics,
aligning with its strategic priorities.
Beyond this, Rua commenced proceedings
in the Supreme Court of Victoria in February
2024 against Cann Group in respect of
a claim by Rua that Cann breached an
exclusive supply term provided for in the
supply contract.
Key Markets
―
Sydney Harbour
Nga makete
Rua’s key markets
Germany
Germany remains the largest medicinal cannabis market in Europe, growing to
approximately $550m over the last calendar year.
This growth has been accelerated by significant regulatory changes
implemented in April 2024, which reclassified medicinal cannabis, removing
its narcotic status and allowing it to be easily prescribed alongside other
pharmaceuticals.
Following Rua’s launch in Germany last year, the business experienced
strong sales of its branded product, and the market response was positive.
Unfortunately, subsequent batches could not be supplied because of a
pharmacy level partial recall.
Rua has since worked alongside another supplier, AlphaFarma, to establish a
new product range for the German market. This new product was launched in
July 2024 and initial sales are strong.
This year, Rua was also pleased to extend its distribution contract with Nimbus
Health in Germany for an additional three years, providing security for Rua
products in this competitive and dynamic market, as well as other European
markets.
To fulfill the other end of its business strategy, Rua now looks forward to
introducing its legacy genetics into the German market in FY25.
―
Brandenburg Gate in Berlin, Germany
27Rua Bioscience ― Annual Report 2024
Key Markets28
United Kingdom
The United Kingdom is an exciting new
market for Rua to establish itself and is
widely considered to be an emerging
growth market for medicinal cannabis.
This growth, like in other markets, has
been driven by increasing awareness
and acceptance of medicinal cannabis,
leading to an increased number of
prescriptions particularly for chronic
pain and mental health conditions.
In December 2023, Rua signed a two-
year agreement with Target Health, a
pharmaceutical distribution company
specialising in unlicensed medicines.
The business expects to launch a product
portfolio into the United Kingdom in the
latter part of 2024.
Czechia and Poland
Rua has retained its exclusive distribution
agreement with Motagon for Czechia and
Poland, where the markets remain strong
and like others in Europe, are growing.
Following the submission of Rua’s first
product dossier to Polish authorities in
March 2023, the regulator has sought
clarification on some matters, and it is
likely Rua will be required to submit an
updated dossier.
While Rua continues work to progress
its products in these markets, and they
remain part of its long-term strategy, the
German and United Kingdom markets
are the business's focus for the upcoming
financial year.
―
The Elizabeth Tower, also known as
Big Ben, in central London
29Rua Bioscience ― Annual Report 2024
Aotearoa New Zealand
While the priority markets for Rua’s export-led strategy are
overseas due to their high-growth potential, the business has
continued to introduce new products into the New Zealand
market.
This year, Rua received approval from Medsafe for two new dried
flower products, and in July 2024 the first of these products was
sold. These two products will be sold throughout FY25.
The New Zealand market continues to grow, and it was pleasing
to see the recent changes to regulation, which will make it easier
for medicinal cannabis products to move in and out of the
country. This change is great news for the local industry and will
provide additional opportunities for Rua to explore, aligned with
its strategy.
Rua’s Compassionate Access Programme in Tairawhiti continues
to serve its local community, and up to 52 patients every month
are currently supplied with medicinal cannabis. More information
on this programme can be found on page 34.
―
East Cape Lighthouse
30
Nga hotaka whakaawe
Impact programmes
Impact programmes
31Rua Bioscience ― Annual Report 2024
Impact areas Target
EnvironmentalIdentify ways to mitigate our emissions, with a particular focus on
travel emissions.
Set emissions reduction targets and work towards achieving them.
Complete our third annual GHG emissions report.
Continue to improve the quality of data captured for GHG
emsissions reporting while simplyfying data collection.
Investigation into renewable energy utilisation.
SocialContinue providing scholarships and further education and training
opportunities to local rangatahi, aligned with Rua kaupapa.
Expand Rua’s Compassionate Access Programme, which provides
fully subsidised medicinal cannabis products to those in Te Tairawhiti
who are most in need.
Monitor worker health and wellbeing, and support staff in managing
their health and wellness.
Continue to contribute to cannabis law and regulations reform.
Continue developing opportunities for NZ cannabis genetics to enter
international research and development pathways.
GovernanceConduct an annual review of the Board to ensure alignment of
capabilities with the skills matrix.
Further strengthen the Board’s approach to ethical governance and
set objectives for diversity in the management team and Board.
Continue commitment to Aspiring Maori Directors Development
Programme.
This year, we are proud to have expanded
our social impact programmes, reaching more
people across Tairawhiti with a special focus
on supporting rangatahi - the next generation.
As Rua prospers, our community benefits as well.
With our products now available in international
markets—and more to come—we are enhancing
value for our shareholders while also deepening
our commitment to making a lasting difference
through these initiatives.
Paul Naske
Chief Executive
―
Photo credit: Josie McClutchie
32
Impact programmes
Scholarships
Nurturing Health, Empowering Communities
The Rua Bioscience Scholarship Programme is
a grass roots initiative dedicated to advancing
health and environmental sciences while
enhancing economic development community
capability, and skill diversity in Tairawhiti.
Nga toa whiwhi karahipi o te tau
2023 Rua Bioscience Scholarship Recipients
The purpose of this programme is to invest in
education for young people to inspire hope
and ambition, empower personal growth, and
encourage the return of talent to Tairawhiti.
Since its inception in 2020, in collaboration
with Trust Tairawhiti and other external
partners, we have awarded $64,250 to
39 students, supporting them to pursue
higher education.
Orlando Bonica, Ngata Memorial College – Studying Digital
Creativity through the Digital Media School.
Tomairangi Haua-Huhu, Tolaga Bay Area School – pursuing
Criminology at AUT.
Reagan Habib-Mitchell, Tolaga Bay Area School – studying
Politics and Education at Victoria University. Reagan's Rua
Bioscience Scholarship was matched through our partnership
with Victoria University via the Taihonoa programme.
Lucky Goel, Gisborne Boys High School – studying Surveying
at Otago University.
Sam Flynn Koll-Haertel, Gisborne Boys High School –
pursuing a Bachelor of Horticulture Science at Massey
University.
Silke McNaught, Gisborne Girls High School – beginning Law
studies at Canterbury University.
Issy Allen, Gisborne Girls High School – studying for a
Bachelor of Land and Property Management at Lincoln
University.
Wayan Parfit, Lytton High – pursuing a Bachelor of Business
at Waikato University.
Dannielle van Aswegen, Campion College – Chiropractic
Studies.
Eve Hampton, Campion College – studying for a Bachelor of
Biomedical Sciences at Victoria University.
Te Ariki Beach – moving into Civil Infrastructure studies via
Connexis.
Raiha Brooking – studying Toi Maori at Toihoukura.
E tautoko, e whakaawe ana i nga tauira
Supporting and inspiring students
In calendar year 2023, we
secured support from three
external partners and aim to
expand this network further in
the coming year.
Total investment
made through
2023 scholarships:
$16,250
―
Orlando Bonica of Ngata Memorial College.
33Rua Bioscience ― Annual Report 2024
External Industry Exposure
Broadening Horizons for Tairawhiti Secondary
School Students
The External Industry Exposure Programme
supported by Trust Tairawhiti provides Tairawhiti
secondary students with exposure to the health and
environmental science industries. Through first-
hand interactions with scientists and collaborations
with universities, our programme aims to spark
interest, encourage career aspirations, and inspire
students to return to Tairawhiti equipped with new
expertise.
In 2024, Rua supported ten students from Ngata
Memorial College on a trip to Te Whanganui-a-Tara
(Wellington) to visit industry partners and Victoria
University. Principal Peter Heron said the trip aimed
to inspire students to pursue higher education
and to see the opportunities available beyond
Tairawhiti. For many of the students, this was their
first trip outside Tairawhiti, and the trip provided
them with valuable exposure to tertiary education.
The trip connected students with expat Ngati
Porou members—MP Cushla Tangaere Manuel
from Rangitukia, Mero Rokx from Tokomaru Bay,
kaimahi at Te Papa, Cecilia Tuiomanufili from
Whangaparaoa at Victoria University—allowing
them to build whanau networks and realise the
variety of pathways open to them. Our hosts also
offered advice and information on courses and
scholarships. The students returned home with a
newfound understanding that Wellington, science,
and University are possibilities within their grasp.
A second trip is currently being planned for another
kura in Tairawhiti.
Internal Industry Exposure
Fostering Connection, Inspiring Futures
Rua’s Internal Industry Exposure Programme
provides Tairawhiti students, community members,
and stakeholders with internal industry exposure.
By providing guided tours, information sessions,
and insights into our industry, we aim to inspire
participants to explore the career pathways
available within Rua Bioscience.
Internship
Cultivating Knowledge, Fostering Growth
The internship Programme supported by Rua
alongside Trust Tairawhiti is central to our
commitment to develop Tairawhiti community
members. In June 2024, we welcomed Casey
Kaiwai from Ruatorea as an intern at our
Mangaoporo facility. Casey quickly proved
himself as a key member of the team, taking on
significant challenges and demonstrating a strong
commitment to learning. As part of this internship,
Casey 'learned by doing'. He participated in all
tasks within the facility, taking every opportunity
for growth that presented itself with particularly
interest in seed propagation and plant health.
Casey reports that the internship had a positive
impact on him and his whanau. His progress
and enthusiasm over the term of the internship
illustrates the success of our Internship Programme
in nurturing and developing local talent. Casey’s
internship concluded in August.
In September we welcomed our second intern to
the facility, Mahuta Morice also of Ruatorea. We
are very early into this second internship, but
Mahuta has shown great enthusiasm, which will
be harnessed and fostered by the team at Rua.
His internship will end in February 2025.
Since 2021, we have welcomed over 60 students
and 120 community members to our facility,
offering them a glimpse into the latest technical
and scientific innovations in their region and
showcasing the career opportunities available in
Tairawhiti. In 2024, we guided two groups through
our Mangaoporo Genetics Centre and plan to host
two more groups before the end of 2024.
34Compassionate Access Programme
He Putanga Aroha
Compassionate Access Programme
Closing Equity Gaps, Transforming Lives
Rua’s Compassionate Access Programme is focused on closing equity
gaps and transforming lives by offering accessible medicinal cannabis
options to individuals in Tairawhiti facing financial challenges. This
initiative reflects our commitment to healing and equality, striving
to eliminate health disparities and create a more inclusive and
compassionate healthcare environment.
Since May 2022, Rua has supported 30 patients each month who
would otherwise be unable to afford medicinal cannabis prescriptions.
This year, with the generous support of Trust Tairawhiti, an anonymous
donor, and our supply partner’s AlphaFarma and Schroll, we are proud
to have expanded the programme's capacity to support up to 52
patients (as at September 2024).
This year, we have introduced designated places in the programme
for patients receiving palliative care, ensuring that we can extend
our support to the most vulnerable members of our community. Our
goal is to support 300 patients per month, and we are determined to
achieve this while continuing to advocate for accessible and equitable
healthcare for everyone.
Impact in action
People Profile – Karanga Te Ataahaea Marsh
Karanga Te Ataahaea Marsh, a 29-year-old from Uawa (Tolaga
Bay), has faced a long journey living with drug-resistant epilepsy,
a challenging condition that doesn’t respond to typical
medications. Diagnosed at 17, Karanga has navigated a
challenging journey.
Alongside his battle with seizures, he’s also had to cope with
anxiety and depression. Over the past two years, he has found
some relief through cannabidiol (CBD) oil, which has helped him
manage these symptoms where other treatments have failed.
When Karanga discovered Rua’s Compassionate Access
Programme, he quickly applied through his GP and joined other
patients in Tairawhiti who are benefiting from this transformative
programme.
For Karanga, this programme isn’t just about managing a
condition—it has changed his life. He hopes that more people
can access medicinal cannabis to experience the same benefits.
35Rua Bioscience ― Annual Report 2024
Our ultimate
goal is to support
300 patients per
month, and we
are determined to
achieve this as we
continue to advocate
for accessible and
equitable healthcare
for all.
―
Karanga Te Ataahaea Marsh
Compassionate Access Recipient
Te ripoata GHG o Rua mo FY24
Rua’s FY24 GHG report
GHG emissions are a key contributor to climate
change. The New Zealand Government has set a
2050 target of net zero emissions of all GHGs other
than biogenic methane.
The first step in taking impactful climate action is to
understand the amount and type of GHG emissions
a business generates. Informed decisions can then
be made to implement effective reductions.
For this purpose, we measured our emissions
inventory for FY24, and have committed to
managing and reducing our GHGs.
Scope ➀ and ➁ emissions reduced by 40%
Rua's core emissions have reduced 40% year on year
which is a result of a conscious decision to reduce our
manufacturing footprint in New Zealand. This has
resulted in continued reductions in fuel and electricity
consumption.
Additional Scope ➂ emissions measured
Rua continues to expand its operations and business
internationally and this is the main reason for the
signficant contribution of Scope 3 emissions to
our business.
FY24 is the first year we have measured Purchased
Goods and Services.
During FY25 Rua will set targets for reduction
and consider some innovative ideas to help us
achieve this.
Scope
➀
Direct GHG emissions from sources owned or
controlled by Rua, or emissions released into the
atmosphere as the direct result of the business’s
activities.
Scope
➁
Indirect GHG emissions from the generation of
purchased electricity, heat and steam.
Scope
➂
Indirect GHG emissions that occur as a consequence
of Rua’s activities but from sources not owned or
controlled by the business, such as air travel. This
year, Scope 3 emissions include Purchased Goods
and Services.
36Towards sustainability
Whai hua mo apopo
Towards sustainability
As a business with a deep sense of
kaitiakitanga, we believe Rua has a
responsibility to protect and nurture
the environment, and share the
benefits of a successful business
with our community.
We have developed a bespoke
Rua Sustainability Framework that
aligns with the United Nations Global
Compact Sustainable Development
Goals. It underpins our dedication
to being an ethical and sustainable
medicinal cannabis business.
This Framework informs business
strategy, shapes how we engage with
stakeholders, supports sustainable
decision-making processes and
creates value.
In FY22 we undertook our first
comprehensive carbon audit, to set a
base year from which to benchmark
our greenhouse gas (GHG) emissions
year on year.
In FY24, our third year of GHG
measuring and reporting, we have
further improved our reporting by the
addition of measured GHG emissions
from Purchased Goods and Services.
Whilst our total reported emissions
have increased from FY23, our year
on year emissions have reduced.
This is another important step for us
in our journey to become a genuinely
sustainable business.
Total GHG emissions tCO2-e
Total GHG emissions by scope tCO2-e
GHG emissions by source (%) FY24
Scope
➀
14231243320174278214
Scope
➁
Scope
➂
217129 255
55% Purchased Goods and Services
24% Business Travel
9% Fleet Fuels - Diesel
7% Electricity
5% Other
■ FY22 | ■ FY23 | ■ FY24
■ FY22 | ■ FY23 | ■ FY24
One off
refrigerant
leak
Purchased
Goods and
Services
Not
previously
measured
37Rua Bioscience ― Annual Report 2024
55%
7%
5%
24%
9%
38
Nga ripoata putea
Financial statements
Financial statements
39Rua Bioscience ― Annual Report 2024
Rarangi purongo putea
Index to the consolidated financial statements
Independent Auditor’s Report
Consolidated Statement of Profit or Loss and Other Comprehensive Income
Consolidated Statement of Changes in Equity
Consolidated Statement of Financial Position
Consolidated Statement of Cash Flows
Notes Forming Part of the Consolidated Financial Statements
Shareholder Information
Contact Directory
40
42
43
44
45
46
78
90
OTHER INFORMATION
40Financial statements
Independentauditor’sreport
To the shareholders of Rua Bioscience Limited
Disclaimer of opinion
We were engaged to audit the consolidated financial statements of Rua Bioscience Limited (the
Company), including its subsidiaries (the Group) which comprise:
●the consolidated statement of financial position as at 30 June 2024;
●the consolidated statement of profit or loss and other comprehensive income for the year then
ended;
●the consolidated statement of change
s 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, comprising material accounting policy
information and other explanatory information.
We do not express an opinion on the accompanying consolidated financial statements of the Group.
Because of the significance of the matters described in the Basis for disclaimer of opinion section of
our report, we have not bee
n able to obtain sufficient appropriate audit evidence to provide a basis for
an audit opinion on these consolidated financial statements.
Basis for disclaimer of opinion
As described in Note 2(f)
to the consolidated financial statements, the Group has incurred a net less of
$13.7m and had net operating cash outflows of $3.7m for the year ended 30 June 2024. The Board
and management have prepared cash flow forecasts for the next 12 months. These forecasts indicate
that wit
hout an additional capital raise, the Group will not have sufficient cash to meet its minimum
expenditure commitments and support its
current level of activity for at least a 12 month period from
the date the financial statements are authorised. Note 2(f) describes the assumptions made by the
Group, including planned revenue growth, receipt of proceeds from
the disposal of assets, and future
capital raising initiatives.
In addition, the Group has reported goodwill of $2
.2m, property, plant and equipment (PPE) of $2.5m
and right of use assets (RoU) of $0.1m (collectively the “assets”). In assessing the recoverable value
of the assets, the Directors have prepared a discounted cash flow model on a value in use basis. The
cash flow forecasts used in the model involve subjective estimates about future business performance,
including key assumptions relating to expected future revenues and margins. The model is
underpinned by the assumptio
n that the business has access to sufficient cash to fund the business
growth. In performing the impairment assessment, the Directors recognised an impairment expense of
$8.25m against the goodwill balance, $0.3m against other intangible assets, and $0.2m against PPE.
In addition, assets held for sale have been impaired by $0.5m.
Due to the level of uncertainty associated with forecasting the Group’s future cash flows, the Group’s
challenges in securing sales in recen
t years, and the absence of adequate committed capital to deliver
the forecast, we were unable to obtain sufficient appropriate audit evidence to enable us to form
an
opinion as to whether the going concern assumption is appropriate. In addition, we were unable to
obtain sufficient appropriate audit evidence to support the assumptions made by the Directors on the
impairment recognised and the carrying values of the assets. As a result, we were unable to determine
whether a
ny adjustments might have been necessary to the value of the Group’s assets, as recorded
in the consolidated statement of financial position, the impairment charge and loss after tax in the
consolidated statement of profit or loss and other comprehensive income, and the related movements
in the consolidated statement of changes in equity.
PricewaterhouseCoopers, Corner Ward and Anglesea Streets, PO Box 191, Hamilton 3240, New Zealand
T: +64 7 838 3838, pwc.co.nz
41Rua Bioscience ― Annual Report 2024
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 Accounting Standards,
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 responsibility is to conduct an audit of the Group’s consolidated financial statements in
accordance with International Standards on Auditing (New Zealand) (ISAs (NZ)) and International
Standards on Auditing (ISAs) and issue an auditor’s report. However, because of the matters
described in the Basis for disclaimer of opinion section of our report, we were not able to obtain
sufficient appropriate audit evidence to provide a basis for an audit opinion on these consolidated
financial statements.
We are independent of the Group in accordance with Professional and Ethical Standard 1International
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.
Other than in our capacity as auditor we have no relationship with, or interests in, the Group.
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 Matthew White.
For and on behalf of:
Chartered Accountants
30 September 2024
Hamilton
PwC
4242Financial statements
Consolidated Statement of Profit or Loss
and Other Comprehensive Income
For the year ended 30 June 2024
Note2024
$
2023
$
Revenue from contracts with customers 585,837357,675
Other income6235,841323,905
Net fair value gains/(losses)4-5,851,032
Total revenue and other income321,6786,532,612
Changes in inventories of finished goods 7(204,143)(339,551)
Research and development costs7(1,176,153)(1,587,704)
Impairment of intangible assets14(8,533,342)(4,726,907)
Impairment of property, plant and equipment12(153,623)(841,811)
Impairment of assets held for sale24(527,010)-
Other expenses7(3,554,710)(5,178,195)
Total expenses before operating loss(14,148,981)(12,674,168)
Operating loss before net financing income(13,827,303)(6,141,556)
Interest income125,423202,129
Interest expense - leases(16,874)(19,079)
Net finance income108,549183,050
Loss before tax (13,718,754)(5,958,506)
Income tax (expense)/credit8-(774)
Loss after tax(13,718,754)(5,959,280)
Other comprehensive income
Items that will or may be reclassified to profit or loss:
Exchange gains arising on translation of foreign operations
(6,334)38
Other comprehensive income for the year, net of tax(6,334)38
Total comprehensive loss for the year
attributable to shareholders
(13,725,088)(5,959,242)
Earnings per share attributable to the
ordinary equity holders of the Company
Loss from operations
Basic ($)10(0.09)(0.04)
Diluted ($)10(0.09)(0.04)
The above statements should be read in conjunction with the accompanying notes.
4343Rua Bioscience ― Annual Report 2024
Consolidated Statement of Changes in Equity
For the year ended 30 June 2024
Note
Share
capital
Foreign
currency
translation
reserve
Share
option
reserve
Accumulated
losses
Total
equity
$$$$$
Opening balance at
1 July 2022
41,891,677-141,686(17,835,272)24,198,091
Total comprehensive loss
for the year
- Loss for the year---(5,959,280)(5,959,280)
- Other comprehensive income-38--38
Total comprehensive loss
for the year
-38-(5,959,280)(5,959,242)
Transactions with owners
- Issue of share capital201,790,800---1,790,800
- Employee share options
expense
23--90,616-90,616
- Share options vested and
exercised
2320,240-(20,240)--
Total transactions
with owners
1,811,040-70,376-1,881,416
Balance at 30 June 202343,702,71738212,062(23,794,552)20,120,265
Opening balance at
1 July 2023
43,702,71738212,062(23,794,552)20,120,265
Total comprehensive loss
for the year
- Loss for the year---(13,718,754)(13,718,754)
- Other comprehensive income-(6,334)--(6,334)
Total comprehensive loss
for the year
-(6,334)-(13,718,754)(13,725,088)
Transactions with owners
- Issue of share capital-----
- Employee share options
expense
23--371,481-371,481
- Share options vested and
exercised
20, 23250,219-(250,219)--
Total transactions
with owners
250,219-121,262-371,481
Balance at 30 June 202443,952,936(6,296)333,324(37,513,306)6,766,658
The above statements should be read in conjunction with the accompanying notes.
44Financial statements
Consolidated Statement of Financial Position
As at 30 June 2024
Note2024
$
2023
$
Current assets
Cash and cash equivalents 4895,1312,529,338
Trade and other receivables 16276,608862,991
Prepayments17487,907163,361
Investments4-2,032,055
Inventory 11277,53414,319
Assets in disposal groups held for sale24879,781-
Total current assets 2,816,9615,602,064
Non-current assets
Property, plant and equipment 122,517,6994,438,681
Goodwill13, 142,194,94710,448,082
Intangible assets14-286,168
Right-of-use lease assets 15135,176100,577
Other receivables1675,00075,000
Total non-current assets 4,922,822 15,348,508
Total assets 7,739,78320,950,572
Current liabilities
Trade and other payables 18554,237522,544
Employee benefit liabilities19195,902180,083
Lease liabilities 4, 1548,71346,722
Deferred grant income 69,21813,103
Liabilities in disposal groups held for sale245,988-
Total current liabilities 874,058762,452
Non-current liabilities
Lease liabilities4, 1599,06767,855
Total non-current liabilities 99,06767,855
Total liabilities973,125830,307
Net assets 6,766,65820,120,265
Equity
Share capital 2043,952,93643,702,717
Accumulated losses (37,513,306)(23,794,552)
Foreign currency translation reserve(6,296)38
Share option reserve 333,324212,062
Total equity 6,766,65820,120,265
The consolidated financial statements on pages 42 to 77 were approved and authorised for issue by the
Board of Directors on 30 September 2024 and were signed on its behalf by:
______________________ (Director) ______________________ (Director)
The above statements should be read in conjunction with the accompanying notes.
45Rua Bioscience ― Annual Report 2024
Consolidated Statement of Cash Flows
For the year ended 30 June 2024
Note2024
$
2023
$
Cash flows from operating activities
Receipts from customers170,015278,085
Grant income received755,237104,378
Payments to suppliers and employees(4,661,731)(6,302,684)
Net cash inflows/(outflows) from operating activities9(3,736,479)(5,920,221)
Cash flows from investing activities
Interest income157,475211,567
Proceeds from sale of plant and equipment51,15134,854
Proceeds from maturing investments3,500,00013,000,000
Proceeds from contingent consideration receivable-500,000
Investment deposits made(1,500,000)(7,000,000)
Purchase of property, plant and equipment(1,208)(73,772)
Net cash inflows/(outflows) from investing activities2,207,4186,672,649
Cash flows from financing activities
Principal elements of lease payments(77,854)(101,296)
Interest paid (16,925)(19,079)
Net cash inflows/(outflows) from financing activities (94,779)(120,375)
Net increase/(decrease) in cash and cash equivalents(1,623,840)632,053
Cash and cash equivalents at beginning of year2,529,3381,897,285
Exchange (loss)/gains on cash and cash equivalents(10,367)-
Cash and cash equivalents at end of year4895,1312,529,338
The above statements should be read in conjunction with the accompanying notes.
46Financial statements
Notes Forming Part of the Financial Statements
For the year ended 30 June 2024
1. Reporting entity
The consolidated financial statements comprise the results of Rua Bioscience Limited and its subsidiaries
(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.
The Company is principally engaged in the business of research and development, and pharmaceutical
distribution and marketing.
2. Basis of preparation
(a) Statement of compliance
The consolidated financial statements have been prepared in accordance with New Zealand Generally
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 Accounting Standards (IFRS Accounting Standards). They comply with interpretations issued
by the IFRS Interpretations Committee (IFRS IC) applicable to companies reporting under IFRS. The
consolidated 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.
The Group is a for-profit entity for the purposes of complying with NZ GAAP.
These 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 26. The Group 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.
The consolidated financial statements are presented in New Zealand dollars ($), which is also the Group’s
functional currency. All financial information presented has been rounded to the nearest dollar.
(b) Material accounting policies
Material accounting policies have been disclosed alongside the related notes in the consolidated financial
statements.
(c) Basis of measurement
The consolidated financial statements have been prepared on a historical cost basis, except for the items
detailed in note 2(g).
(d) New standards, interpretations and amendments
(i) New standards mandatorily effective during the period
New standards that have become mandatorily effective in the annual consolidated financial statements for
the year ended 30 June 2024,
• NZ IFRS 17 Insurance Contracts;
• Disclosure of Accounting Policies (Amendments to NZ IAS 1 Presentation of Financial Statements and
IFRS Practice Statement 2 Making Materiality Judgements);
47Rua Bioscience ― Annual Report 2024
• Definition of Accounting Estimates (Amendments to NZ IAS 8 Accounting Policies, Changes in Accounting
Estimates and Errors);
• Deferred Tax related to Assets and Liabilities arising from a Single Transaction (Amendments to NZ IAS 12
Income Taxes); and
• International Tax Reform – Pillar Two Model Rules (Amendment to NZ IAS 12 Income Taxes) (effective from
10 August 2023).
Except for the standards detailed below, none of these new standards effective during the period have had a
significant effect on the Group.
Disclosure of Accounting Policies (Amendments to NZ IAS 1 Presentation of Financial Statements and IFRS
Practice Statement 2 Making Materiality Judgements)
The amendments aim to make accounting policy disclosures more informative by replacing the requirement
to disclose ‘significant accounting policies’ with ‘material accounting policy
information’. The amendments also provide guidance under what circumstance, the accounting policy
information is likely to be considered material and therefore requiring disclosure.
These amendments have no effect on the measurement or presentation of any items in the
consolidated financial statements of the Group but affect the disclosure of accounting policies of the Group.
(ii) 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 2024:
• Liability in a Sale and Leaseback (Amendments to NZ IFRS 16 Leases);
• Classification of Liabilities as Current or Non-Current (Amendments to NZ IAS 1 Presentation of Financial
Statements);
• Non-current Liabilities with Covenants (Amendments to NZ IAS 1 Presentation of Financial Statements);
• Supplier Finance Arrangements (Amendments to NZ IAS 7 Statement of Cash Flows and NZ IFRS 7
Financial Instruments: Disclosures); and
• Disclosure of Fees for Audit Firms' Services (Amendments to FRS 44)
The following amendments are effective for the periods beginning 1 January 2025 and onwards:
• Lack of Exchangeability (Amendments to NZ IAS 21 The Effects of Changes in Foreign Exchange Rates)
(effective 1 January 2025)
• Amendments to the Classification and Measurement of Financial Instruments (Amendments to NZ IFRS 9
and NZ IFRS 7) (effective 1 January 2026)
• NZ IFRS 18 Presentation and Disclosure of Financial Statements (effective 1 January 2027)
The Group does not believe that the amendments to NZ IAS 1 will have a significant impact as the Group is
not party to significant non-current borrowings. In addition, the Group does not hold any financial instruments
which would be significantly impacted by the amendments to NZ IFRS 9 and NZ IFRS 7.
The Group has not yet assessed the impact of NZ IFRS 18 Presentation and Disclosure in Financial Statements.
It is expected that the standard will impact the presentation of the financial statements.
Besides the items above, the Group does not expect these new and amended standards to have a material
impact on the Group.
(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.
2. Basis of preparation (continued)
48Financial statements
2. Basis of preparation (continued)
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 in the current period include:
Judgements
− Recognition (or not) of deferred tax assets related to carried forward tax losses (note 8).
− Useful life of externally acquired intangible assets (note 14).
− Recognition of research and development tax credits and research and development expenses
(notes 6, note 7 and note 16).
− Determination of non-current assets held for sale (note 24).
− Preparation of the financial statements on a going concern basis (note 2(f)).
Estimates
− Assessment of impairment for non-financial assets (note 12 and note 14 and note 24)
The Group assess the potential climate related risks associated with the location of its facilities and other
key operations in the regions it operates in and considers that there are no material impacts on the current
consolidated financial statements.
(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 a period of at least 12 months from the date
of signing these consolidated financial statements.
Given the Group’s net operating loss of $13,718,754 and net operating cash outflow of $3,736,479 for the year
ended 30 June 2024, in addition to its reduced liquid net asset position, the Board and management have
prepared cash flow forecasts for the next 12 months. These indicated that the Group will not have sufficient cash
to meet its minimum expenditure commitments and support its current levels of activity without undertaking
additional action.
Accordingly, the Directors have developed plans to respond to the cash flow pressures and have evaluated the
following factors in determining that the going concern assumption is appropriate:
(i) Subsequent to reporting date, the Group has entered into an agreement with a third party for the sale
of its Gisborne facility which includes the leasehold buildings held as available for sale (refer to note 24) in
addition to manufacturing and extraction equipment. The final agreed selling price is $1,300,000. The Directors
have accommodated a deferral of the payment date for the deposit to allow the Purchaser to more explicitly
secure land ownership rights once the lease has been transferred.
The Directors remain confident of the Purchaser’s ability and willingness to both pay the deposit and to
complete the contract as planned.
The sale is expected to settle on 30th October 2024.
(ii) Management and the Board have engaged in dialogue with the Group’s existing shareholders to secure
additional funding to meet immediate operational cashflow requirements, with $150,000 being received under
a placement offer on 23 September 2024. Further shareholder funding will be required and plans for further
capital raising are progressed.
(iii)The Group’s operational forecasts include assumptions regarding a number of opportunities in key
markets. As at the date of signing these financial statements, the Group has achieved the following:
- Successfully launched an additional product into Germany, a market in which it has had positive past sales
revenues in;
- Introduced New Zealand grown genetics into products sold in Australia; and
- Obtained approval for the introduction of new products into the New Zealand market and established
sales revenues for one product.
49Rua Bioscience ― Annual Report 2024
2. Basis of preparation (continued)
The Group has also forecast a number of significant potential operating milestones over the coming 12 months
including:
- Product sales into the UK market under existing distribution agreements;
- Continued expansion of product offerings in Australia, Germany and New Zealand; and
- Establishment of Rua genetics in several countries including:
o In Canada under licence with Apollo Green; and
o Ongoing trial crops in both Australia and Portugal.
These would further the Group’s plans to achieve a sustainable operating model in line with its projections.
The Directors believe that the Group will be sufficiently successful in achieving the above, and on this basis, are
of the view that it is appropriate to continue to adopt the going concern assumption in the preparation of these
consolidated financial statements.
In the immediate term, the Group is dependent on cash proceeds from the sale of its facility and committed
shareholder support received to date as well as current and ongoing engagement with shareholders for
significant additional capital which is expected to be resolved and formalised over the coming months.
Should this additional funding be less than expected, the Group may be unable to manage its minimum cash
expenditure commitments and enact on its forecasted revenue targets as outlined above.
Furthermore, should the Group be unsuccessful in achieving its revenue forecasts, or if actual revenue growth is
lower than projected, the proceeds from the sale of the facility or the planned capital contributions alone may
be insufficient to accommodate the Group’s operational demands.
These events and conditions identified indicate that material uncertainties exist that may cast significant doubt
on the Group’s ability to continue as a going concern and, therefore, that it may be unable to realise its assets
and discharge its liabilities in the normal course of business.
These consolidated financial statements do not include any adjustments relating to the classification and
recoverability of recorded asset amounts or to the amounts and classification of liabilities that may be necessary
should the Group be unable to continue as a going concern.
(g) 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.
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)
- Assets in disposal groups held for sale (note 24)
- Impairment of non-financial assets (notes 12 and 24)
(h) Impairment of non-financial assets and Goodwill
The cash-generating unit to which Goodwill is allocated to is tested for impairment at each reporting date and, at
any other time in which there are indicators of impairment (refer to note 13). 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.
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 (being
the higher of value-in-use and fair value less costs of disposal). Impairment losses directly reduce the carrying
amount of assets and are recognised in profit or loss.
50Financial statements
2. Basis of preparation (continued)
(i) Change in comparatives
For the year ended 30 June 2024, the following expenses have been disaggregated and presented separately
from “Other expenses” in the Consolidated Statement of Profit or Loss and Other Comprehensive Income:
- Impairment of intangible assets.
- Impairment of property, plant and equipment.
- Impairment of assets held for sale.
Comparative amounts for these expenses for the year ended 30 June 2023 have also been presented.
According, for the value of “Other expenses” for the year ended 30 June 2023 has been restated to reflect
this disaggregated presentation.
3. Segment reporting
The Group operates in one segment, its primary business being research and development and the sale of
pharmaceutical products in Australia, Germany and 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 in Australia, Germany and
New Zealand. The Group’s revenues are analysed by geography on the basis of the jurisdiction in which the
goods are sold and have been disaggregated in this way in note 5.
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 comprise cash and cash equivalents, certain trade and 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.
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.
51Rua Bioscience ― Annual Report 2024
Categories and fair values of the Group’s financial instruments
Financial assets
at amortised cost
Financial liabilities at
amortised cost
Total
carrying amount
Fair
value
FY24$$$$
Cash and cash equivalents895,131-895,131(a)
Trade and other receivables101,163-101,163(a)
Trade and other payables-(419,504)(419,504)(a)
Lease liabilities-(147,780)(147,780)(b)
Total996,294(567,284)
Financial assets
at amortised cost
Financial liabilities at
amortised cost
Total
carrying amount
Fair
value
FY23$$$$
Investments2,032,0552,032,055(a)
Cash and cash equivalents2,529,3382,529,338(a)
Trade and other receivables173,620173,620(a)
Trade and other payables(276,801)(276,801)(a)
Lease liabilities(114,577) (114,577)(b)
Total4,735,013(391,378)
(a) Due to their short-term nature, the carrying value of these financial instruments approximates their fair value.
(b) Not required to be disclosed per NZ IFRS 7.
Financial liabilities at fair value through profit or loss relates to contingent consideration from past business
combinations:
Note30 June 202430 June 2023
$$
Opening balance-7,641,832
Arising on business combination--
Change in fair value estimate-(5,851,032)
Consideration settled (shares)20-(1,790,800)
Closing balance--
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 profit or loss and other
comprehensive income.
Other financial liabilities at amortised cost
These include trade and other payables 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.
52Financial statements
4. Financial instruments - risk management (continued)
(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 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 Company is exposed to the following financial risks:
(a) Credit risk
(b) Market risk
i. Interest rate risk, and
ii. Foreign exchange risk
(c) Liquidity risk
(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, trade and 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.
If wholesale customers are independently rated, these ratings are used. Otherwise, if there is no independent
rating, risk control assesses the credit quality of the customer, taking into account its financial position, past
experience and other factors. Individual risk limits are set based on internal or external ratings in accordance
with limits set by the board. The compliance with credit limits by wholesale customers is regularly monitored
by line management.
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:
(a) Standard & Poor’s, Moody’s, Fitch.
Credit
rating
(a)
Cash and cash
equivalentsInvestmentsTotal
30 June 2024$$$
KiwibankA1, AA715,905-715,905
ANZAA-, Aa2179,226179,226
Total895,131-895,131
30 June 2023$$$
KiwibankA1, AA2,529,3382,032,0554,561,393
Total2,529,3382,032,0554,561,393
Interest rates on interest bearing cash and cash equivalents and investments range between 4.80% - 5.00%
(2023: 1.15% - 5.00%).
53Rua Bioscience ― Annual Report 2024
4. Financial instruments - risk management (continued)
Cash and cash equivalents above comprise the following:
20242023
$$
Cash on hand571,2082,529,338
Demand deposits323,923-
Total cash and cash equivalents895,1312,529,338
(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 only exposed to fixed rate interest rates on its interest-bearing liabilities (lease liabilities).
ii. Foreign exchange risk
The Group is exposed to movements in foreign exchange rates through transactions and balances
denominated in foreign currencies. The Group’s exposures to foreign exchange risk are as follows:
− Sales transactions of $83,588 (2023: $268,207) denominated in foreign currencies, which are mainly
denominated in Australian Dollar (2023: Euro).
− Inventory purchase transactions of $199,094 (2023: $208,222) denominated in foreign currencies, which
are mainly denominated in Australian Dollar amounts.
− Net investments in foreign operations of $(416,445) (2023: $2,457).
The Group has an Audit, Finance & Risk Committee that monitors foreign exchange risk as part of its wider
duties.
There are no open forward exchange contracts at the end of the reporting period (2023: no open forward
exchange contracts).
The net foreign exchange gain recognised for the year was $4,556 (2023: $3,136 loss) (2024: note 6, 2023:
note 7).
Sensitivity analysis
The following table presents the Group’s sensitivity from a reasonably possible strengthening or weakening
NZD against foreign currencies, with all other variables held constant.
30 June 202430 June 2023
Equity
$
Profit
$
Equity
$
Profit
$
10% strengthening of the NZD6,6855,0135,7277,954
10% weakening of the NZD(6,685)(5,013)(13,564)18,839
54Financial statements
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 (refer to note 2(f)).
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:
As at 30 June 2024
Up to 3
months
Between
3 and 12
months
Between
1 and 2
years
Between
2 and 5
years
Over
5 yearsTotal
$$$$$$
Trade and other payables419,503----419,503
Lease liabilities21,04844,84759,97648,716-174,587
Total440,55144,84759,97648,716-594,090
As at 30 June 2023$$$$$$
Trade and other payables276,801----276,801
Lease liabilities13,67439,46321,09945,00011,250130,486
Total290,47539,46321,09945,00011,250407,287
(C) Capital management
The Group’s objectives when managing capital are to safeguard the entity's ability to continue as a going
concern (refer to note 2(f)), so that it can continue to fund activities for the purposes of deriving sustainable
returns to its shareholders and other stakeholders.
The Group’s capital structure consists of Equity of the Group (comprising issued capital and retained
earnings). The Group is not subject to any externally imposed capital requirements.
The Board continually reviews the capital structure of the Group. As part of this review, the Board considers
the availability and cost of capital and the risks associated therein.
55Rua Bioscience ― Annual Report 2024
5. Revenue from contracts with customers
The Group recognises revenue from the sale of pharmaceutical goods at a point-in-time when control of the
goods has transferred to the customer. This is typically upon physical delivery of the goods to the customer’s
premise. The transaction price is set by the Group and is as per the agreed contracts in place with customers.
Where goods are sold through distributors, judgement is required to assess which party the Group passes
control of the goods such that they are considered the Group’s “customer” for accounting purposes (i.e., the
distributer, or, the end-purchaser).
Consideration is given to which party has the substantive: (i) responsibility to fulfil the promise to provide
goods (including obligations with respect to any returns); (ii) inventory risk over the goods; and, (iii) Rights to
set pricing.
Typically, distributors in Australia and Germany are considered to be the Group’s agents. Distributors in New
Zealand are considered to be the Group’s customers.
20242023
Performance obligations satisfied at a point-in-time$$
Sale of goods – New Zealand2,24989,467
Sale of goods – Australia83,588-
Sale of goods – Germany-268,208
Total Revenue from Contracts with Customers85,837 3 57, 675
56Financial statements
20242023
$$
Research and development grant income129,886289,204
NZTE grant income65,071-
Other government grants26,524-
Total government grant income221,481289,204
Gain on sale of property, plant and equipment772-
Net foreign exchange gains4,556-
Gain on early termination of leases-13,096
Other income9,03221,605
Total other income235,841323,905
6. Other income
(i) Government grants
The Group recognises government grants as other income rather than reducing the costs that they are
intended to compensate.
The Group primarily receives government grants from the following entities:
- Inland Revenue Department (IRD), in the form of R&D tax incentive credits; and
- New Zealand Trade and Enterprise (NZTE).
R&D tax incentive credits are accounted for as government grant income as opposed to income tax credits
as the benefit is independent of the taxable profit or tax liability where the Group is eligible for a cash refund;
specific conditions exist for the Group, the R&D activities and the expenditure to be eligible for the tax credits;
and the tax credits are not structured as an additional deduction in computing taxable profit.
The Group has reasonable assurance at the reporting date that the R&D tax incentive will be received and all
attached conditions will be complied with. The Group expects to receive the tax credit when the return is
filed subsequent to the end of the reporting period.
The Group also receives grant funding from NZTE in relation to promotion and export activities which it
undertakes. Typically, grant funding is approved and paid only upon proof of eligible expenditure.
Other income streams recognised by the Group include:
57Rua Bioscience ― Annual Report 2024
20242023
Note
$$
Specific expenses included in operating loss
before net financing costs for the year:
Cultivation costs456,173520,011
Extraction and manufacturing25,899437,849
Changes in inventories of finished goods
and work in progress
11204,143339,551
Impairment expense12, 14, 249,213,9755,568,718
Accommodation and travel78,296116,300
Communications133,55785,002
Depreciation of property, plant and equipment 331,527580,764
Depreciation of right-of-use lease assets63,189101,260
Distribution27,123-
Amortisation – intangible assets5,1062,960
Direct research and development expenses46,168290,324
General149,785275,238
Professional services1,207,0401,009,625
Insurance180,463157,050
Motor vehicle expenses40,17839,890
Charitable expenses48,69457,417
Licenses45,55651,324
Office expenses32,86568,690
Selling and marketing438,955935,047
Employee benefit expense1,420,2892,043,766
Foreign exchange loss-3,136
Total expenses14,148,98112,683,922
Included in the above:
Employee benefit expense
- Short term benefits (wages and salaries)1,014,7731,869,596
- Defined contribution plan34,03583,554
- Share-based payment expense371,48190,616
Total employee benefit expense1,420,2892,043,766
Research and development expenses
- Direct costs419,770290,324
- Indirect costs756,3831,297,380
Total research and development expenses1,176,1531,587,704
7. Expenses
58Financial statements
7. Expenses (continued)
(i) Research and development
As a result of the Group’s recent strategic restructure, the Group’s research and development operations are
not actively in pursuit of commercial licenses and as such, the Group does not consider itself to be in the
development phase. Accordingly, all research and development costs are expensed as incurred.
(ii) Fees paid to auditors
Fees paid to auditors include payments to PricewaterhouseCoopers for the following:
20242023
$$
Audit and review of the financial statements
- Audit of the financial statements142,633135,775
- Review of half year financial statements-30,149
Total audit and review fees142,633165,924
8. Income tax
Tax expense/(credit) comprises current and deferred tax.
In determining the amount of current and deferred tax the Group takes into account the impact of uncertain
tax positions and whether additional taxes and interest may be due. The Group believes that its accruals
for tax liabilities are adequate for all open tax years based on its assessment of many factors, including
interpretations of tax law and prior experience. This assessment relies on estimates and assumptions and
may involve a series of judgements about future events. New information may become available that causes
the Group to change its judgement regarding the adequacy of existing tax liabilities; such changes to tax
liabilities will impact tax expense in the period that such a determination is made.
A deferred tax asset is recognised for unused tax losses, tax credits and deductible temporary differences,
to the extent that it is probable that future taxable profits will be available against which they can be utilised.
Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer
probable that the related tax benefit will be realised.
(i) Income tax recognised in profit or loss
The income tax expense/(credit) recognised for the year includes current and deferred tax as
presented below:
20242023
$$
Current tax on profits for the year-774
Total current tax-774
Origination and reversal of temporary differences(167,282)(1,351,212)
Prior year tax losses not recognised167,2821,351,212
Prior period adjustments--
Total deferred tax (income)/expense--
Total income tax (income)/expense-774
59Rua Bioscience ― Annual Report 2024
8. Income tax (continued)
(ii) Reconciliation of income tax expense
The reconciliation of income tax expense is presented below:
20242023
$$
Loss before income tax expense(13,718,754)(5,958,506)
Tax expense/(income) @28%(3,841,251)(1,668,382)
Add/(less) reconciling items
- Expenses not deductible for tax purposes2,629,70022,428
- Non-assessable income(42,436)(1,704,973)
- Tax losses not recognised for deferred tax 1,253,9873,351,701
- Prior period adjustments--
Total income tax expense-774
(iii) Imputation credits
The Company has $11,789 of imputation credits as at 30 June 2024 (2023: $769,357).
(iv) Deferred tax
Deferred tax is calculated in full on temporary differences under the liability method using a tax rate of 28%.
Significant management judgement has been exercised to determine that future taxable profits for the Group
are beyond a reliable forecast horizon and that no net deferred tax asset should be recognised.
An amount of deferred tax asset of $7,911,205 (2023: $6,664,656) has not been recognised. The unrecognised
deferred tax asset is comprised of tax losses of $7,865,566 (2023: $6,451,736) and other temporary
differences of $45,639 (2023: $212,920).
60Financial statements
8. Tax expense (continued)
(iv) Deferred tax (continued)
Details of the deferred tax asset and liability amounts recognised in profit or loss are as follows:
Employee
entitle-
ments
Property,
plant
and
equip-
mentAccruals
Intangible
assets
Lease
liabilities
Right-
of-use
assets
Share-
based
payments
– equity
settled
Carried
forward
tax
lossesTotal
$$$$$$$$$
As at 1 July
2022
44,908(17,310)- (1,404,490)230,720(223,097)18,0571,351,212-
Amounts recognised
- In profit or
loss
(16,404)25,527-1,325,465(198,638)194,93520,327(1,351,212)-
- Arising on
business
combinations
---------
- In OCI---------
At 30 June
2023
28,5048,217-(79,025)32,082(28,162)38,384--
As at 1 July
2023
28,5048,217-(79,025)32,082(28,162)38,384--
Amounts recognised
- In profit or
loss
(28,504)(6,099)(1,927)79,02510,973(15,084)(38,384)--
- Arising on
business
combinations
---------
- In OCI---------
At 30 June
2024
-2,118(1,927)-43,055(43,246)---
61Rua Bioscience ― Annual Report 2024
9. Notes Supporting Statement of Cash Flows
(i) Reconciliation of net operating cash flows to profit/(loss)
20242023
$$
Net loss for the year (13,718,754)(5,959,280)
Adjustments for non-cash and non-operating activity items:
- Add back: Depreciation – property, plant & equipment
(3)
331,526580,764
- Add back: Depreciation – RoU lease asset
(3)
63,171101,265
- Add back: Amortisation – intangible asset5,1062,960
- Add back: Impairment expense9,213,9755,568,720
- Deduct: Gain on sale of property, plant & equipment(771)-
- Add back: Loss on sale of property, plant & equipment-11,347
- Deduct: Gain on early termination of leases-(13,199)
- Add back: Share-based payment expense 371,48190,616
- Add back: Interest expense16,92519,079
- Deduct: Interest income(125,420)(202,129)
- Add back: Cost of goods given away under CAS-52,268
- Deduct: Fair value gain on contingent consideration-(5,851,032)
9,875,993360,659
Movements in working capital:
- (Increase)/decrease in other receivables
(1)
589,469(292,629)
- (Increase)/decrease in prepayments(320,655)3,160
- (Increase)/decrease in inventories(260,810)152,218
- Increase/(decrease) in trade and other payables
(2)
26,59893,763
- Increase/(decrease) in contract liabilities-(2,062)
- Increase/(decrease) in employee benefit liabilities15,565(279,652)
- Increase/(decrease) in deferred grant income56,1153,603
106,282(321,600)
Net cash outflows from operating activities(3,736,479)(5,920,221)
(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 $nil (2023: $5,790) and amortisation of $5,106 (2023: $3,583) related to building facilities, plant and equipment and
intangible assets used to manufacture and procure is included in changes in inventories of finished goods and work in progress.
62Financial statements
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 2024NON-CASHNON-CASHNON-CASHCASH
Opening
New
leases
Lease
remeasure-
ments
Transferred
to disposal
groupsPaymentClosing
$$$$$$
Lease liabilities 114,577 116,514 529 (5,988)(77,852) 147,780
114,577 116,514 529 (5,988)(77,852) 147,780
30 June 2023NON-CASHNON-CASHNON-CASHCASH
Opening
New
leases
Lease
remeasure-
ments
Transferred
to disposal
groupsPaymentClosing
$$$$$$
Lease liabilities824,002-608,129-(101,296)114,577
824,002-608,129-(101,296)114,577
10. Earnings per share
In both years, the Group has not adjusted the weighted average number of shares used in diluted EPS to
reflect the impact of outstanding share-options granted, because as the Group is loss-making, the impact of
the outstanding share options granted is “anti-dilutive” (i.e. decreases the loss per share).
Numerator20242023
$$
(Loss) for the year and earnings (basic and diluted EPS) (13,725,088)(5,959,280)
20242023
DenominatorNo. sharesNo. shares
Weighted average number of shares (basic and diluted EPS)158,264,526153,728,201
63Rua Bioscience ― Annual Report 2024
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.
Amounts recognised in profit or loss
Inventories recognised as an expense during the year amounted to $61,350 (2023: $242,285).
The Group reported write-downs of inventory to net realisable value of $142,793 (2023: $97,266) in the
consolidated statement of profit or loss and other comprehensive income.
20242023
$$
Finished goods277,53414,319
Total277,53414,319
12. Property, plant and equipment
Property, plant and equipment are stated at historical cost less any accumulated depreciation and impairment
losses. Costs includes expenditure directly attributable to the acquisition of assets.
Depreciation is calculated on a diminishing value basis over the estimated useful life of the asset based on
estimates by management. Assets' estimated useful life is reassessed annually. The following estimated
depreciation rates have been used:
− Buildings and fitout 2% to 50% (2023: 2% to 50%)
− Cultivation Containers 10% (2023: 10%)
− Office Equipment 13% to 67% (2023: 13% to 67%)
− Plant and Equipment 8% to 100% (2023: 8% to 100%)
− Vehicles 13% to 40% (2023: 13% - 40%)
Impairment
The plant and equipment was also written down to its recoverable amount of $400,000 (2023: $517,040),
which was determined in reference to the fair value less costs of disposal of the various assets. The level 3 fair
value of these assets was derived using the sales comparison approach. The key input under this approach
was the recent observable selling prices for assets of similar nature, adjusted for condition and location.
64Financial statements
12. Property, plant and equipment (continued)
Note
Buildings
and fitout
Cultivation
containers
Office
equipment
Plant and
equipmentVehicles
Capital
worksTotal
Year ended
30 June 2024
$$$$$$$
Opening net
book value
3,358,327104,65277,307854,95343,442-4,438,681
Additions1,208-----1,208
Depreciation charge(181,262)(10,465)(12,654)(116,879)(10,267)-(331,527)
Impairment charge---(153,623)--(153,623)
Disposals--(3,860)(40,358)(5,305)-(49,523)
Classified as held
for sale
24(1,387,517)-----(1,387,517)
Closing net
book value
1,790,75694,18760,793544,0932 7, 8 70-2,517,699
Cost 3,441,979 159,196140,6481,783,739160,473-5,686,035
Accumulated
impairment
(486,230)--(509,204)--(995,434)
Accumulated
depreciation
(1,164,993)(65,009) (79,855)(730,442)(132,603)-(2,172,902)
Net book
amount
1,790,756 94,187 60,793544,0932 7, 8 70-2,517,699
Buildings
and fitout
Cultivation
containers
Office
equipment
Plant and
equipmentVehicles
Capital
worksTotal
Year ended
30 June 2023
$$$$$$$
Opening net
book value
4,146,968 116,281 112,777 1,418,068 39,989 9,201 5,843,284
Additions11,488-8,32124,16920,591-64,569
Acquired on business
combination
-------
Depreciation charge(313,899)(11,629)(24,497)(213,600)(17,138)-(580,763)
Impairment charge(486,230)--(355,581)--(841,811)
Disposals--(19,294)(27,304)--(46,598)
Transfers---9,201-(9,201)-
Closing net
book value
3,358,327104,65277,307854,95343,442-4,438,681
Cost4,828,288159,196151,4391,874,337181,786-7,195,046
Accumulated
impairment
(486,230)--(355,581)--(841,811)
Accumulated
depreciation
(983,731)(54,544)(74,132)(663,803)(138,344)-(1,914,554)
Net book
amount
3,358,327104,65277,307854,95343,442-4,438,681
65Rua Bioscience ― Annual Report 2024
13. Goodwill
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) Impairment testing of goodwill
Goodwill is monitored at a company level, of a single cash-generating-unit (CGU).
The Group tests whether goodwill has suffered any impairment on an annual basis or where there are specific
indicators of impairment in the period. For the year to 30 June 2024, goodwill was tested for impairment as
at 31 December 2023, and again as at 30 June 2024 (2023: 30 June 2023).
Year to 30 June 2024: Goodwill impairment testing (Value-in-use)
The recoverable amount of the CGU has been determined based on its value-in-use (2023: Fair value less
costs of disposal).
Value-in-use calculations require the use of various estimates and judgements. The calculations use cash flow
projections based on financial budgets approved by management covering a five-year period which include
consideration of the following:
• The existing competitive environment in the key markets which the Group currently operates in, including
the Group’s existing and projected market share, and indicators of overall growth in those markets.
• The current life-cycle stage of the medicinal cannabis industry and the continued trajectory towards
maturity.
• The maturation of supply chains in the industry, as well as the Group’s ability to exploit these going
forward.
• The Group’s current loss-making position, reflecting its early commercial phase, and operating cashflow
requirements as well as the steps taken to date to address these.
Cash flows beyond the five-year period are extrapolated using the estimated growth rates stated below.
These growth rates are consistent with forecasts in industry reports specific to the industry in which the
CGU operates:
Assumptions and approach used to determine values
As at
31 December
2023
As at
30 June
2024
Forecasted sales and costs of sales
This is based on current market share in existing sales channels as well as
industry trends as at the reporting date.
Cash flows for the next five-year period are extrapolated using annual
estimated growth rates comprising a compound annual growth rate (‘CAGR’).
The CAGR reflects the low base the business is beginning with, growth rates
consistent with forecasts in industry reports specific to the industry in which
the CGU operates, the supply agreements the business has in place and the
markets in which the business currently has distribution agreements in place
or employees in market.
110%39.04%
Pre-tax discount rate
Reflects specific risks relating to the relevant activities of the Group.25.13%21.86%
Long-term growth rate
This is the weighted average growth rate used to extrapolate cash flows
beyond the budget period.
2%2%
66Financial statements
13. Goodwill (continued)
As at 31 December 2023, the carrying value of the entire CGU was $13,354,348 which exceeded the
recoverable amount of the CGU by $5,101,213 and as a result, the Group recognised an impairment loss of
$8,253,135 against the carrying value of goodwill.
This goodwill impairment, a significant portion of which was attributed to the historical acquisition of Zalm
Therapeutics, stems from a comprehensive analysis conducted by Management and the Board. Through this
analysis, which evaluated various growth scenarios, it became apparent that the acquisition had not delivered
the expected financial returns.
Goodwill was tested again for impairment as at 30 June 2024 based on internal indicators of impairment due
to the Group not meeting its short-term forecasts predominantly as a result of regulatory delays. As at 30
June 2024, the recoverable amount of the entire CGU was $5,044,236 which exceeds its carrying amount by
$1,145. Management believe that the headroom at 30 June 2024 reflects the fact that significant impairment
has already been recognised at 31 December 2023.
If any one of the following changes were made to the above key assumptions, the carrying amount and
recoverable amount would be equal:
The directors and management have considered and assessed reasonably possible changes for other key
assumptions and have not identified any instances that could cause the carrying amount of the CGU to
exceed its recoverable amount.
Year to 30 June 2023: Goodwill impairment testing (Fair value less costs of disposal)
The recoverable amount of the CGU as at 30 June 2023 was determined based on 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 was based on an estimate of market value at the reporting date based on the quoted
share price of $0.15 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 had headroom of $4,232,720 (2022: $25,262,067)
over the carrying value. No impairment of goodwill was recognised as at 30 June 2023.
Key assumptionSensitivity
Forecasted sales and costs of sales/’CAGR’Reduction from 39.04% to 39.02%
Pre-tax discount rateIncrease from 21.86% to 21.87%
Long-term growth rate Reduction from 2.00% to 1.99%
67Rua Bioscience ― Annual Report 2024
14. Intangible assets
Intangible assets are stated at historical cost (being their acquisition date fair value if acquired in a business
combination) less any accumulated amortisation and impairment losses.
The following estimated amortisation rates have been used:
Intangible asset Useful economic life
Supplier contracts Finite – based on units of production (refer below)
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.
Goodwill
Supplier
contractsTotal
$$$
(i) Cost
At 1 July 202310,448,082
5,016,03515,464,117
At 30 June 202410,448,0825,016,03515,464,117
At 1 July 202210,448,0825,016,03515,464,117
At 30 June 202310,448,0825,016,03515,464,117
(ii) Accumulated amortisation and impairment
At 1 July 2023-(4,729,867)(4,729,867)
Amortisation charge-(5,961)(5,961)
Impairment charge(8,253,135)(280,207)(8,533,342)
At 30 June 2024(8,253,135)(5,016,035)(13,269,170)
At 1 July 2022---
Amortisation charge-(2,960)(2,960)
Impairment charge-(4,726,907)(4,726,907)
At 30 June 2023-(4,729,867)(4,729,867)
(iii) Net book value
At 1 July 202210,448,0825,016,03515,464,117
At 30 June 202310,448,082286,16810,734,250
At 30 June 20242,194,947-2,194,947
Impairment
During the year ended 30 June 2024, the Group was notified by Cann Group that they had given notice to
terminate its existing in-place supply agreement. There is a 12-month notice period under the terms of the
contract. As a result, an impairment charge of $280,207 has been recognised against the supply contract to
reflect the remaining estimated volumes that the Group expects to purchase under the contract across the
remaining period.
68Financial statements
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.
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)
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.
(i) 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, one 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 $692 cash outflow (2023:
$244) 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 one property lease (2023: has one property lease) where the Group has assessed it is does not
reasonably expect to exercise all available renewal options, resulting in a potential additional lease term of 2
years (2023: 2 years) and potential future lease payments of $48,792 (2023: $48,792) that are not currently
included in measurement of the lease liability recognised for these leases.
69Rua Bioscience ― Annual Report 2024
15. Leases (continued)
(ii) Lease related balances as at period end, and amounts for the period
Note20242023
Expenses and income in the period$$
Depreciation
- Leases of property (land and buildings)50,67847,545
- Vehicles12,51132,383
- Plant-21,333
Interest expense16,87419,087
Balance sheet and cash flow statements
Carrying amount of right-of-use asset
- Leases of property (land and buildings)135,17688,606
- Vehicles-11,978
- Plant--
Lease liabilities9(ii)147,780114,577
Additions to right-of-use assets117,045-
Total cash outflow related to leases94,740120,379
70Financial statements
16. Trade and other receivables
20242023
Note$$
Financial assets classified as amortised cost – current
Trade receivables
26,16398,620
Less: provision for impairment of trade receivables
--
Trade receivables – net
26,16398,620
Financial assets classified as amortised cost –
non-current
Non-trade receivables75,00075,000
Financial assets classified as amortised cost - total4101,163173,620
GST receivable75,28736,416
Withholding tax receivable11,78986,945
Government grants receivable
- Research and development tax credit163,369641,010
- Other--
Other receivables250,445764,371
Total other receivables351,608937,991
The Group applies the NZ IFRS 9 simplified approach to measuring expected credit losses using a lifetime
expected credit loss provision for trade receivables. This is based on a provision matrix which measures
expected credit loss on a collective basis where trade receivables are grouped based on similar credit risk
and rating.
The expected loss rates are based on the Group’s historical credit losses. The historical loss rates are then
adjusted for current and forward-looking information on macroeconomic factors affecting the Group’s
customers. At reporting date, none of the Group’s trade receivables were past 30 days due.
71Rua Bioscience ― Annual Report 2024
17. Prepayments
20242023
$$
Prepaid inventory333,844104,247
Other prepayments154,06359,115
Total prepayments487,907163,362
20242023
Note$$
Trade payables4419,503276,801
Audit fee accrual110,78361,750
Other payables23,951183,993
Total trade and other payables554,237522,544
Prepayments for future goods and services are recognised in the consolidated statement of profit or loss and
comprehensive income when the Group obtains control of the associated good or service.
18. Trade and other payables
19. Employee benefit liabilities
20242023
$$
Short term employee benefits payable
- Wages and salaries65,69673,780
- Accrual for annual and sick leave 127,857104,840
193,553178,620
Defined contribution plan payable2,3491,463
Total employee benefit liabilities195,902180,083
72Financial statements
20. Share Capital and Reserves
At 30 June 2024, share capital comprised 159,750,579 authorised and issued ordinary shares (2023:
158,136,265). 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.
Reserves
Exchange differences arising on the retranslation of the foreign operation are accumulated in the foreign
currency translation reserve.
Share-based payments (refer to note 23) are recognised as an expense, with a corresponding increase in
equity (share-based payment reserve), over the vesting period of the awards.
20242023
No. sharesNo. shares
Opening shares158,136,265149,879,267
Shares issued*
’
**1,614,3148,256,998
Total share capital 159,750,579158,136,265
* During the year ended 30 June 2024:
- 1,614,314 vested share options were exercised into ordinary shares.
** During the year ended 30 June 2023:
- 116,998 vested share options were exercised into ordinary shares.
- 8,140,000 ordinary shares were issued as part of the Milestone 1 consideration paid the acquisition of Zalm Therapeutics Limited.
21. 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
Sale/
(purchase)
amount
Amounts
receivable
(payable)
$$
30 June 2024
EECOMS LimitedSales3,000-
Hikurangi Enterprises LimitedSales209-
Zenoch Management LimitedPurchases(52,500)(4,744)
30 June 2023
Alvarium Investments (NZ) LimitedPurchases(2,300)-
Ciprian ConsultingPurchases(4,337)-
Hikurangi Enterprises LimitedSales1,000-
Mitchell Family TrustPurchases(1,087)-
73Rua Bioscience ― Annual Report 2024
21. Related party transactions (continued)
(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:
20242023
$$
Directors fees237,000261,462
Short-term employee benefits271,5421,164,683
Defined contribution plan payments7,65539,996
Share-based payment expense135,087127,426
Total key management personnel compensation 651,2841,593,567
Share-based payment expense21,70344,170
22. Contingent liabilities
There were no contingent liabilities at balance date that would affect the consolidated financial statements.
23. Share-based payments
(a) Key features and balances of ESOPs
The Group grants options to certain employees under a number of employee share option schemes which are
classified and accounted for as equity-settled share-based payments.
In the prior period:
- ESOP Issue #4 was issued and is subject to the following conditions:
• 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
- ESOP Issue #5 was issued and is subject to the following conditions:
• Are subject to a general service vesting condition (i.e., if the party terminates their employment with the
Company, the unvested share options are forfeited);
• Have a $nil exercise price; and
• Vest to the participating employees daily such that each award constitutes a separate tranche with an
equal number of options and identical terms and conditions.
- ESOP Issue #6 was issued and is subject to the following conditions:
• Are subject to a general service vesting condition (i.e., if the party terminates their employment with the
company, the unvested share options are forfeited); and
• Have a $nil exercise price.
74Financial statements
23. Share-based payments (continued)
(b) Key features and balances of ESOPs (continued)
(i) Balance of share options issued that are still yet to vest
(ii) Balance of vested share options yet to be exercised
Issue #4
No.
Issue #5
No.
Issue #6
No.
Total
No.
At 1 July 20222,317,200--2,317,200
- Options issued-2,450,0002,100,0004,550,000
- Options vested-(272,721)-(272,721)
- Options forfeited(1,617,800)(933,002)-(2,550,802)
At 30 June 2023699,4001,244,2772,100,0004,043,677
At 1 July 2023699,4001,244,2772,100,0004,043,677
- Options issued----
- Options vested-(468,403)(1,614,314)(2,082,717)
- Options forfeited(699,400)-(485,686)(1,185,086)
At 30 June 2024-775,874-775,874
Issue #4
No.
Issue #5
No.
Issue #6
No.
Total
No.
At 1 July 2022----
- New options vested-272,721-272,721
- Options exercised -(116,998)-(116,998)
At 30 June 2023-155,723-155,723
At 1 July 2023-155,723-155,723
- New options vested-468,4031,614,3142,082,717
- Options exercised --(1,614,314)(1,614,314)
At 30 June 2024-624,126-624,126
75Rua Bioscience ― Annual Report 2024
23. Share-based payments (continued)
(c) Specific ESOP details
Equity settled
ESOP Issue #4 20242023
Option pricing model usedMonte-CarloMonte-Carlo
Weighted average share price$0.23$0.23
Exercise price $nil$nil
Weighted average contractual life (in days)-366
Volatility85%85%
Equity settled
ESOP Issue #5 20242023
Option pricing model usedBinomialBinomial
Weighted average share price$0.17$0.17
Exercise price $nil$nil
Weighted average contractual life (in days)122488
Volatility78%78%
Equity settled
ESOP Issue #6 20242023
Option pricing model usedBinomialBinomial
Weighted average share price$0.16$0.16
Exercise price $nil$nil
Weighted average contractual life (in days)-187
Volatility81%81%
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.
76Financial statements
24. Assets held for sale
Non-current assets are classified as held for sale when their sale is highly probable within 12 months of
meeting the criteria for that classification. Following the classification as held for sale, non-current assets are
not depreciated.
In October 2023, the Group engaged real estate agent Bayleys to market its manufacturing facility for sale
which resulted in the associated property, plant and equipment and right-of-use assets meeting the criteria
for held for sale from that date.
The following assets and liabilities were reclassified as held for sale as at 30 June 2024 in relation to the
Group’s decision to market its manufacturing facility for sale as part of its wider operational restructure:
Assets classified as held for sale during the period ended 30 June 2024 were measured at the lower of
their carrying value and fair value less costs to sell at the time of the reclassification.
Property, plant and equipment held for sale was written down to its fair value less costs of disposal of
$860,507 as at reporting date. The level 3 fair value of these assets was derived using the sales comparison
approach. The key input under this approach was the recent observable selling prices for assets of similar
nature, adjusted for condition and location.
Note
Net book value
transferred to
assets held
for sale
Fair value/
impairment
loss
30 June
2024
Assets classified as held for sale
Property, plant and equipment121,387,517(527,010)860,507
Right-of-use assets19,274-19,274
Total assets held for sale1,406,791(527,010)879,781
Liabilities classified as held for sale
Lease liabilities(5,988)-(5,988)
Total liabilities classified as held for sale(5,988)-(5,988)
Total net assets held for sale1,400,803(527,010)873,793
77Rua Bioscience ― Annual Report 2024
25. Events after the reporting date
As outlined in note 2(f), the Group has entered into an agreement for the sale of its Gisborne manufacturing
facility for $1.3 million. The sale is unconditional and will settle on 30th October, 2024.
Shareholder funding of $150,000 was received under a placement offer from existing shareholders on 23
September 2024.
There were no other events subsequent to reporting date that would materially affect these consolidated
financial statements.
26. 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
2024202320242023
Zalm Therapeutics Limited*New Zealand-100%--
Rua Bioscience Australia Pty Ltd Australia100%100%--
*On 13 September 2023, the net assets of Zalm Therapeutics Limited were transferred by way of a
distribution to the Company, and then deregistered.
27. 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:
20242023
$$
Total assets7,739,78320,950,572
(less): Intangible assets(2,194,947)(10,734,250)
(less): Total liabilities(973,125)(830,307)
Net tangible assets4,571,7119,386,015
Number of shares issued at balance date 159,750,579158,136,265
Net tangible assets per share0.030.06
7878
Nga Korero mo nga
kaipupuri hea
Shareholder information
Shareholder Information
79Rua Bioscience ― Annual Report 202479Rua Bioscience ― Annual Report 2024
80Shareholder information
RangeTotal HoldersShareholding% Shares
1 - 499361111,6640.07
500 - 999218161,5340.10
1,000 - 1,999358461,8210.29
2,000 - 4,9997372,344,8321.47
5,000 - 9,9993682,544,5181.59
10,000 - 49,99966513,143,2198.23
50,000 - 99,999855,773,7443.61
100,000 - 499,9997816,140,12210.10
500,000 - 999,999117,798,2584.88
1,000,000 Over21111,270,86769.65
Rounding0.01
Total2,902159,750,579100.00
Shareholder Information
Spread of Shareholders
As at 31st July 2024
Rua’s Statement of Corporate Governance as at 30th September, 2024 can be found
here: www.ruabio.com/investors
81Rua Bioscience ― Annual Report 2024
Name
Shareholding% Shares
NEW ZEALAND DEPOSITORY NOMINEE LIMITED
<A/C 1 CASH ACCOUNT>
24,500,60115.34
FANG GROUP INVESTMENT LIMITED23,584,93914.76
TAILORSPACE CAPITAL LIMITED11,129,3756.97
HIKURANGI ENTERPRISES LIMITED10,532,6206.59
FNZ CUSTODIANS LIMITED <DTA NON RESIDENT A/C>6,768,1144.24
MICHAEL JOHN WILDING6,720,0004.21
RIDINGS BROTHERS LIMITED4,492,1962.81
PATHFINDER NOMINEES LIMITED - NZCSD2,513,1391.57
MARTIN WALTER SMITH & ANETA LISA BIRD & SARA MAREE LUNAM
<WAKAROMA A/C>
2,438,3371.53
CUSTODIAL SERVICES LIMITED <A/C 4>2,208,3421.38
ENQUIRE LIMITED2,200,0001.38
ROBERT IAN FYFE2,006,0601.26
SIMON SY LUO1,829,0771.14
AORAKI HOLDINGS (NO 2) LIMITED1,536,1230.96
FORSYTH BARR CUSTODIANS LIMITED <1-CUSTODY>1,485,7440.93
JOSEPH DAVENPORT1,387,2700.87
BOTANITECH PTY LIMITED1,361,0080.85
GREG ANTONY ANDERSON & NICOLA MARIE ANDERSON
<THE ORANGE A/C>
1,273,5100.80
YANLING HUANG1,210,0000.76
FNZ CUSTODIANS LIMITED1,094,4120.69
Top 20 holders of ORDINARY SHARES total110,270,86769.03
Total remaining holders balance49,479,71230.97
Top 20 Shareholders
The names and holdings of the 20 largest registered shareholders in Rua as at 31st July 2024 were:
82Shareholder information
Substantial Product Holders
According to notices given under the Financial Markets Conduct Act 2013, the following were substantial
product holders of Rua as at 30 June 2024. The total number of voting securities (fully paid ordinary shares)
of Rua as at 30 June 2024 was 159,750,579.
Directors’ Shareholdings Interests
As at 30 June 2024 the Directors of the Company had the following relevant interests in Rua’s shares.
Directors’ Share Dealings
In accordance with the Companies Act 1993 between 1 July 2023 and 30 June 2024 the Board received the
following disclosures from Directors of acquisitions and dispositions of relevant interests in shares issued by
the Company and details of such dealings were entered in the Company’s interests register.
NameShareholdingOptions
Anna Stove763,896nil
Panapa Ehau473,49859,800
Tony Barclay50,000nil
Teresa Farac-Ciprian100,000nil
DirectorTransactionNumber of securitiesPrice per securityDate
Teresa Farac-CiprianPurchase of Shares100,000$0.1815 December 2023
NameShareholdings
FANG GROUP INVESTMENT LIMITED23,584,939
TAILORSPACE CAPITAL LIMITED11,129,375
MICHAEL JOHN WILDING8,509,556
HIKURANGI ENTERPRISES LIMITED10,532,620
ANDREW CHARLES WILLIAMS7,756,838
83Rua Bioscience ― Annual Report 2024
Directors' Interests
The following are details of general disclosures of interest by Directors holding office as at 30 June 2024,
pursuant to section 140(2) of the Companies Act 1993. The Director will be regarded as interested in all
transactions between Rua and the disclosed entities. Includes past and present Board member.
Current DirectorsCompanyPosition
Anna StovePacific Edge LimitedDirector and Shareholder
TAB NZChair
Progressive FarmsDirector and Shareholder
Panapa EhauHikurangi Enterprises LtdDirector
Hikurangi Huataukina TrustTrustee
Hikurangi Bioactives GP LtdDirector
Kaenga Hou Charitable Trust Trustee
Tairawhiti Kanuka LtdDirector
He Toutou mo te Ahika Trust Trustee
Te Papatipu O Uepohatu Charitable Trust Trustee
Teresa CiprianFirstlight Foods LtdDirector
Aspeq LtdDirector
Goodfood Group LtdDirector
Superthriller Jetsprint LtdDirector and Shareholder
Food Standards Australia and New ZealandDirector
Garden to Table TrustTrustee
Zenoch Management LimitedDirector and Shareholder
Tony BarclayBaymatob Pty LtdChair and Shareholder
Pacific Edge LimitedDirector and Shareholder
84Shareholder information
Independent Directors
In order for a Director to be independent, the Board has determined that they must not be an employee of
Rua or any of its subsidiaries and must have no disqualifying relationships. Independence is determined by
the Board, in accordance with the independence requirements of the NZX Listing Rules and having regard to
the factors described in the Code. Director independence is monitored by the Board on an ongoing basis.
NZX Listing Rules require that there must at all times be at least three Directors of whom two are ordinarily
resident in New Zealand and at least two are independent Directors.
Rua has four Directors of whom three were considered to be independent as at 30 June 2024. Those three
are: the Chair, Anna Stove; Teresa Ciprian and Tony Barclay. Panapa Ehau is a Director, employee and co-
founder of Rua and Director of Hikurangi Enterprises Ltd. which is a substantial shareholder in Rua.
In addition, the Directors of Rua's Australian subsidiary company, Rua Bioscience Australia Pty Ltd, are,
Anna Stove and Dean Steer.
Board and Officer Gender Composition
The gender composition of Directors and the Officers as at 30 June 2024 was as follows:
F 30 June 2024 30 June 2023
PositionFemaleMaleFemaleMale
Director2222
Officers*5571
* An officer is a person who is concerned or takes part in the management of Rua’s business and who reports directly to the
Board or the Chief Executive Officer.
85Rua Bioscience ― Annual Report 2024
Evaluation of Performance Against Diversity Policy
Rua’s approach to diversity is outlined in its Diversity and Inclusion Policy, which is available on Rua’s website.
Key areas of focus are:
• Attracting, selecting and retaining qualified and diverse applicants and aiming to have a focus on ethnic
and gender diversity.
• Remunerating and rewarding in an equitable manner on the basis of skill, knowledge and merit.
• Maintaining a workplace that is accommodating of diverse and changing life situations and enables
employees to manage their work and lives through flexible working arrangements.
• Striving for a diverse representation of different groups in society across all levels of Rua’s business and
based on Rua’s origins and values (see the Code of Ethics for a description of Rua’s values).
The Board recognises the critical nature of diversity and inclusion and has ensured this is a key consideration
when making the skill-based appointments required to ensure robust governance as Rua transitions from
start-up to commercialisation. The Board has reviewed Rua’s diversity profile and considers that, at this time,
there is good diversity on the factors that are most relevant to Rua and its employees:
• Understanding and adoption of a bi-cultural working environment is deeply embodied within Rua’s culture.
All recent company publications include content in English and Maori.
• The make-up of the Board is sufficiently diverse for the purposes of forming a strong team, providing
specialised knowledge and expertise in relevant markets, and driving strong business performance.
• Of the 13 employees, 6 are female and 7 are male.
The Board have set a gender diversity objective for the Board of 40% men, 40% women and 20% of
any gender. The Company currently meet this objective.
Meeting Attendance
Board
Audit, Finance and
Risk Management
Remuneration and
Nominations
Current DirectorsAttendedAttendedAttended
Tony Barclay9 of 104 of 43 of 3
Teresa Ciprian10 of 103 of 43 of 3
Panapa Ehau10 of 10N /AN /A
Anna Stove10 of 104 of 43 of 3
86
Remuneration rangeEmployees
100,000-110,0001
110,001-120,0001
120,001-130,0000
130,001-140,0000
140,001-150,0000
150,001-160,0000
160,001-170,0000
170,001-180,0001
180,001-190,0001
190,001-200,0000
200,001-210,0000
210,001-220,0000
220,001-230,0000
230,001-240,0001
240,001-250,0000
250,001-260,0000
260,001-270,0000
270,001-280,0000
Shareholder information
The table above includes the equity settled ESOP issues.
Employee Remuneration
In addition to his Director’s fee, Panapa Ehau also receives a salary as an employee of Rua. In FY24, his salary was
$46,504 and Director's Fee was $45,000 for a total remuneration of $91,504. There was no short term incentive
(STI) and no long term incentive (LTI) paid to Panapa Ehau in FY24.
The number of employees of Rua (not being Directors) who received remuneration and other benefits in their
capacity as employees during the year ended 30 June 2024 that exceeded $100,000 per annum is set out in
the table below.
Directors’ Remuneration
Director remuneration is made up of an annual base fee, an additional Chair fee (if applicable) and some
Directors are participants in Rua’s share option plan.
A Director fee pool of $324,000 per annum has been approved by shareholders. Any increase to that pool
requires shareholder approval. The base fee for the Chair is $90,000 and for a Director is $45,000. Committee
Chairs are paid a fee for the additional work the role requires. Members of Committees are not paid an
additional fee. The full Director fee pool was not used.
Current DirectorsPositionDirectors' feesCommittee fees
Total
remuneration
Tony BarclayChair - ARC$45,000$4,500$49,500
Teresa CiprianChair - Rems$45,000$7,500$52,500
Panapa Ehau$45,000$45,000
Anna StoveChair - Board$90,000$90,000
87Rua Bioscience ― Annual Report 2024
Single figure
remuneration
Percentage STI
against
maximum
Percentage LTI
against
maximum
Span of LTI
performance
period
2024CEO$232,6930%0%N /A
2023CEO$560,29180%0%N /A
* Salary and Fees includes Kiwisaver and Employer Superannuation Contribution Tax (ESCT).
** Other benefits include the use of a company car only.
CEO Remuneration
For the financial year ended 30 June 2024, the CEO received a total of $232,693 in fixed annual remuneration.
The CEO is a participant in the Employee Share Options programme (which includes both equity and cash
settled components) and received no vesting of any interests in the financial year.
Two-year summary – CEO remuneration
CEO remuneration FY24
Salary andOther Pay for performanceTotal
2024fees*benefits**SubtotalSTILT ISubtotalremuneration
Paul Naske$216,313$16,380$232,693---$232,693
Total CEO
remuneration
$216,313$16,380$232,693--- $232,693
Donations
The following donations were made by Rua and its subsidiaries in the year to 30 June 2024.
Compassionate Access Programme$48,195
Medical Cannabis Awareness New Zealand$500
Total$48,695
88Shareholder information
Auditor Fees
Fees paid to the auditors include payments to PricewaterhouseCoopers for the following:
There were no other fees payable by the company for other services provided by that firm for FY24.
Dividend Policy
The payment of dividends is not guaranteed, will be at the discretion of the Board, and dependent on a
number of factors.
These factors include the general business environment, operating results and the financial condition of Rua,
future funding requirements, any contractual, legal or regulatory restrictions on the payment of dividends by
Rua and any other factors the Board may consider relevant.
20242023
Audit and review of the financial statements
- Audit of the financial statements$142,633 $135,775
- Review of half year financial statements$0 $30,149
Total fees paid to auditors$142,633$165,924
NZX Disclosures
Rua has not applied for nor relied on any NZX waivers during the financial year ending 30 June 2024.
89Rua Bioscience ― Annual Report 2024
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tena koutou i tautoko i
tenei kaupapa, i tenei
kamupene.
9090
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Contact directory
Company Number
6484092
Issued Capital
159,750,579 Ordinary Shares
Registered Office
Rua Bioscience Limited
1 Commerce Place,
Awapuni, Gisborne 4071
Phone: 0800 RUABIO (782 246)
Share Registrar
Computershare Investor Services Limited
Level 2, 159 Hurstmere Road,
Takapuna, Auckland 0622
Phone: +64 (9) 488 8700
Website
ruabio.com
Facebook
facebook.com/ruabioscience
Instagram
instagram.com/ruabioscience
LinkedIn
linkedin.com/company/rua-bioscience
Contact directory
―
This document is printed on an environmentally responsible paper, produced
using Elemental Chlorine Free (ECF), FSC
®
certified, Mixed Source pulp
from Responsible Sources, and manufactured under the strict ISO14001
Environmental Management System.
Rua has printed, to order, a limited quantity of the FY24 Annual Report.
It is also available to view at ruabio.com.
Directors
Anna Stove
Panapa Ehau
Teresa Ciprian
Tony Barclay
Chief Executive Officer
Paul Naske
Auditors
PricewaterhouseCoopers
Legal Advisers
Lowndes Jordan
Level 15, 188 Quay Street
Auckland 1010
Phone: +64 (9) 309 2500
91Rua Bioscience ― Annual Report 202491Rua Bioscience ― Annual Report 2024
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.