54 INOVIQ Limited 10 INTANGIBLE ASSETS AND GOODWILL (CONTINUED) Support for the carrying value of Goodwill relies on the values of the Group’s cash generating assets, collectively the Group’s intangible assets. As both SubB2M andMolecular NETs are at either very early-stage revenue or pre-revenue, a model predicting future revenue relies on a number of subjective assumptions. These inputs cannot be tested for reasonableness as they rely upon future events. In light of this, the Board determined that the value of Goodwill should be removed from INOVIQ’s Statement of Financial Position and an impairment charge of $11,030,560 (2021: $2,889,219) has been recognised. 11 RIGHT OF USE ASSETS As at 30 June 2022 $ As at 30 June 2021 $ Right-of-use Asset – at cost 1,510,256 1,510,256 Accumulated depreciation (643,445) (368,447) 866,811 1,141,809 At the date of this report INOVIQ had three leased properties. These leases were entered into by subsidiary Sienna Cancer Diagnostics Limited (Sienna) and its U.S subsidiary. Sienna was acquired by INOVIQ on 28 July 2020. One of the leased properties is a sub-let arrangement at 1400 Van Buren St. NE, #175, Minneapolis, Minnesota, US. The Group has a contractual commitment for this lease up until 31 March 2023, and it is therefore classified as a short-term lease for the purposes of AASB 16. The lease payments for this property are included in the Consolidated Statement of Comprehensive Income and classified as an operating expense. The Group holds two other property leases: one for a property at 23 Normanby Road, Notting Hill (the current operations base for the Group), and another for a property at 11 Howleys Road, Notting Hill. The lease at Howleys Rd commenced 1 December 2019. Before occupying the property at Howleys Rd, the Company was informed that a superior property in the same vicinity was to become available in June 2020. This property had established laboratory and small-scale manufacturing capabilities whereas these facilities were required to be custom built at the property at Howleys Rd, at an estimated cost of $400,000 to $500,000. A lease was negotiated for the Normanby Rd property and operations commenced at this property during June 2020. A sub tenancy agreement for the Howleys Rd property was subsequently entered into, matching the remaining term of the head lease for the property. During the comparative period the Group incurred lease payments for an office space at 152 St Georges Terrace, Perth, Western Australia. The final lease payments for this office space (until 31 August 2020) were included in the Consolidated Statement of Comprehensive Income. The following table provides a summary of the leases that represent the balance of the Right-of-use assets and Lease liability (see Note 13) on the Statement of Financial Position: Property Commencement Date Initial Lease TermEnd Annual Increases Further Terms 11 Howleys Rd, Notting Hill, Victoria 1 December 2019 30 November 2024 3% 2 x 5 years* 23 Normanby Rd, Notting Hill, Victoria 7 June 2020 6 June 2023 3% 1 x 3 years# * Further terms not included in the calculation of the right-of-use assets and lease liability # Further term included in the calculation of the right-of-use assets and lease liability The Group sublets a small office space at the Normanby Rd property to a private company operating in the same industry. This is a 12-month agreement which can be extended if agreed to by management. This arrangement is classified as a short-term lease for the purposes of AASB 16. 12 TRADE AND OTHER PAYABLES As at 30 June 2022 $ As at 30 June 2021 $ Trade and other payables 1,019,842 604,915 Accruals 26,409 157,227 1,046,251 762,142 Trade and other payables are generally unsecured, interest free and with terms ranging from 7 to 30 days. Notes to the Financial Statements for the year ended 30 June 2022
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