The contingent consideration liability arose from the equity consideration issued by the Company to the vendors as part of the deal
terms for the acquisition of MGC Pharma (UK) Limited in the previous nancial year.
The performance shares meet the denition of a nancial liability where a variable amount of performance shares, contingent upon
meeting the milestone, convert into fully paid ordinary shares at a rate of one ordinary share for every performance share that
converts or consolidates into one performance share and converts to one ordinary share if no conversion occurs on or before the
expiry date (3 years from completion of acquisition).
The determination of the fair value is based on a probability weighted payout approach. The key assumptions take into consideration
the probability of meeting the performance targets. As part of accounting for the acquisition of MGC UK, the contingent consideration
was initially measured at acquisition with a probability of 50%, at which date the share price was $0.026.
30 June 2018
As at 30 June 2018 the share price as at that date was $0.066, and the probability of 95% was consistent with prior year; the increase
in value of $1,900,000 (2017: $1,290,000) was taken to the consolidated statement of prot or loss and other comprehensive income
Future developments may require further revisions to the estimate.
Notes to the Financial Statements
| Annual Report 2018