What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2021-09-20 compared with 2020-09-23 · 400 added, 556 removed, 308 unchanged (76% of the section changed)

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INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm Squar Milner

Report of Independent Registered Public Accounting Firm Grant Thornton

Audit Pty Ltd

Report of Independent Registered Public Accounting Firm – Baker Tilly US, LLP

Consolidated Balance Sheets

Consolidated Statements of Operations and Comprehensive Income

Consolidated Statements of Operations and Comprehensive Loss

Consolidated Statements of Stockholders’ Equity

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Opinion on the Financial Statements

We have audited the

accompanying consolidated balance sheet of Benitec Biopharma Inc.

and its subsidiaries (the Company) as of June 30, 2020, the related consolidated statements of operations and other comprehensive income (loss), stockholders

equity and cash flows for the year then ended, and the related notes to the consolidated financial statements (collectively, the financial statements).

In our opinion, the financial statements present fairly, in all material respects,

the financial position of the Company as of June 30, 2020, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the

responsibility of the Companys management.

Our responsibility is to express an opinion on the Companys financial statements based on our audit.

We are a public accounting firm registered with the Public Company Accounting Oversight

Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain

reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial

As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Companys internal control over financial

Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the

financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audit provides a reasonable basis for our opinion.

/s/ SQUAR MILNER LLP

We have served as the Companys

auditor since 2020.

Campbell, California

September 23,

Report of independent registered public accounting firm

Board of Directors and Shareholders

Benitec Biopharma

Opinion on the financial statements

have audited the accompanying consolidated balance sheets of Benitec Biopharma Limited and subsidiaries (the Company) as of June 30, 2019, the related consolidated statement of comprehensive income, changes in shareholders equity,

and cash flow for the year ended June 30, 2019, and the related notes (collectively referred to as the financial statements).

In our opinion, the financial statements present fairly, in all material respects, the financial position of

the Company as of June 30, 2019, and the results of its operations and its cash flow for the year ended June 30, 2019, in conformity with accounting principles generally accepted in the United States of America.

We have audited the accompanying consolidated balance sheets of Benitec Biopharma Inc.

and its subsidiaries (the “Company”) as of June 30, 2021 and 2020, the related consolidated statements of operations and comprehensive loss, stockholders’ equity and cash flows for the years then ended, and the related notes to the consolidated financial statements (collectively, the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2021 and 2020, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the

responsibility of the Companys management.

These financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight

Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain

reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial

As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Companys internal control over financial

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the

financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

/s/ GRANT THORNTON AUDIT PTY LTD

We have served as the

Companys auditor from 2010 to 2020.

Sydney, Australia

August 14, 2020

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

ACCRUED RESEARCH AND DEVELOPMENT COSTS

Critical Audit Matter Description

As discussed in Notes 2 and 8 to the consolidated financial statements, the Company records expenses for research and development activities based on management’s estimates of services received and efforts expended pursuant to contracts with vendors that conduct research and development on the Company’s behalf.

The financial terms vary from contract to contract and may result in uneven payment flows as compared with services performed.

As a result, the Company is required to estimate research and development expenses incurred during the period, which impacts the amount of accrued expenses related to such costs as of each balance sheet date.

Management makes significant judgments and estimates in determining the accrued balance at the end of each reporting period.

We identified the evaluation of research and development accrued costs as a critical audit matter.

The Company’s estimates are based on a number of factors, including the Company’s knowledge of the status of each of the research and development project milestones, and contract terms together with related executed change orders.

Higher degree of auditor judgment was required in evaluating the results of our audit procedures regarding the Company’s estimates, because of the subjectivity and estimation uncertainty in the significant assumptions used in the calculation.

How We Addressed the Matter in Our Audit

The primary procedures we performed to address this critical audit matter included:

Obtaining an understanding and evaluating the design of certain internal controls related to the critical audit matter.

This included controls over the development of the estimated amount of accrued costs incurred by the contract research organizations and contract manufacturing organizations (the “R&D service providers”) during the period.

Inquiring with Company personnel responsible for overseeing the research and development activities to understand progress of the activities completed to date for selected R&D service providers.

Confirming with selected R&D service providers or inspecting the key terms and conditions of the contracts between the Company and the respective R&D service providers, the documentation of the Company as to the completion status and arriving at an estimate of the accrual amounts based thereon and comparing it to the amounts recorded by the Company.

Performing an analysis by comparing the estimated accrual balances at year end to the actual amounts that were ultimately invoiced by the R&D service providers and/or paid by the Company for selected R&D service providers.

/s/ BAKER TILLY US, LLP

We have served as the Company’s auditor since 2020.

Campbell, California

September 20, 2021

BENITEC BIOPHARMA INC.

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Trade and other receivables

Prepaid and other assets

Total current assets

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Common stock, $ 0.0001 par value— 10,000,000 shares authorized;

1,108,374 and 856,765 shares

issued and outstanding at June 30, 2020 and 2019, respectively

Additional paid-in capital

8,171,690 and 1,108,374 shares issued and outstanding at June 30, 2021 and 2020, respectively

Additional paid-in

Accumulated deficit

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BENITEC BIOPHARMA INC.

Consolidated Statements of Operations and Comprehensive Income (Loss)

Consolidated Statements of Operations and Comprehensive Loss

(in thousands, except share and per share amounts)

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Total operating expenses

Income (loss) from operations

Loss from operations

Other income (loss):

Foreign currency transaction loss

Interest income, net

Interest income (expense), net

Other income, net

Unrealized loss on investment

Total other income, net

Net income (loss)

Other comprehensive loss:

Unrealized foreign currency translation loss

Total other comprehensive loss

Total comprehensive income (loss)

Net income (loss)

Net income (loss) per share:

Unrealized gain (loss) on investment

Total other income (loss), net

Other comprehensive income (loss):

Unrealized foreign currency translation gain (loss)

Total other comprehensive income (loss)

Total comprehensive loss

Net loss per share:

Basic and diluted

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Balance at June 30, 2019

Common stock sold for cash, net of offering costs

Issuance and exercise of pre-funded

warrants, net of transaction costs of $240

Cashless exercise of purchase warrants

Share-based compensation

Forfeiture of share-based payments

Forfeitures of share-based payments

Foreign currency translation loss

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Common stock sold for cash, net of offering costs of

Issuance and exercise of pre-funded warrants, net of

transaction costs of $240

Cashless exercise of purchase warrants

Exercise of pre-funded

Share-based compensation

Forfeitures of share-based payments

Foreign currency translation loss

Foreign currency translation gain

Balance at June 30, 2021

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(in thousands)

Fiscal Year Ended

Cash flows from operating activities:

Net income (loss)

Adjustments to reconcile net income (loss) to net cash from operating activities:

Adjustments to reconcile net loss to net cash from operating activities:

Depreciation and amortization

Amortization of

right-of-use assets

Amortization of right-of-use

Loss on disposal of fixed assets

Unrealized loss on investment

Unrealized (gain) loss on investment

Share-based compensation expense

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Trade and other receivables

Prepaid and other assets

Trade and other payables

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Lease liability

Net cash provided by (used in) operating activities

Net cash used in operating activities

Cash flows from investing activities:

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Cash flows from financing activities:

Proceeds from issues of shares

Proceeds from issues of shares and pre-funded

Share issue transaction costs

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Supplemental disclosure of cash flow information:

Initial measurement of operating lease right-of-use assets and liabilities

Initial measurement of operating lease right-of-use

assets and liabilities

The accompanying notes are an integral part of these consolidated financial statements.

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Benitec Biopharma Inc.

corporation formed under the laws of Delaware, United States, on November 22, 2019.

(the “Company”) is a corporation formed under the laws of Delaware, United States of America, on November 22, 2019 and listed on the Nasdaq Capital Market (“Nasdaq”) under the symbol “BNTC”.

Benitec Biopharma Inc.

is the parent entity of a number of subsidiaries including the previous parent entity Benitec Biopharma Limited (“BBL”).

was incorporated under the laws of Australia in 1995 and was listed on the Australian Securities Exchange, or ASX, since 1997.

Since then, the Company has focused on the development of novel genetic medicines.

The proprietary platform, called DNA-directed RNA interference, or ddRNAi, combines RNA interference, or RNAi, with gene therapy to create medicines that facilitate sustained silencing of disease-causing genes.

On November 27, 2019, BBL announced its intention to re-domicile from Australia to the United

States of America (the Re-domiciliation).

BBL implemented a Scheme of Arrangement pursuant to which Benitec Biopharma Inc, a newly incorporated company for the purpose of affecting the Re-domiciliation, acquired all of the outstanding BBL shares.

BBL was incorporated under the laws of Australia in 1995 and was listed on the Australian Securities Exchange, or ASX, from 1997 until April 15, 2020.

On August 14, 2020, BBL reorganized as a Proprietary Limited company and changed its name to Benitec Biopharma Proprietary Limited.

The Company’s business focuses on the development of novel genetic medicines.

Our proprietary platform, called DNA-directed

RNA interference, or ddRNAi, combines RNA interfer e

nce, or RNAi, with gene therapy to create medicines that facilitate sustained silencing of disease-causing genes.

On November 27, 2019, BBL announced its intention to re-domicile

from Australia to the United States of America.

BBL implemented a Scheme of Arrangement pursuant to which Benitec Biopharma Inc, a newly incorporated company for the purpose of effecting the re-domiciliation

(“the Re-domiciliation”),

acquired all BBL shares and BBL became a wholly-owned subsidiary of Benitec Biopharma Inc.

BBL shareholders received one Benitec Biopharma Inc.

share for every 300 BBL shares in the Re-domiciliation.

accordance with the U.S.

Securities and Exchange Commissions (SEC) Staff Accounting Bulletin Topic 4C, all issued and outstanding shares of the Companys common stock have been retroactively adjusted in these consolidated

financial statements to reflect the 300:1 exchange ratio share consolidation in the Re-domiciliation as if it occurred on July 1, 2018.

BBL announced that the transaction to redomicile from Australia to the United States was fully implemented on April 15, 2020.

The Re-domiciliation was approved by BBL shareholders at a Scheme Meeting held on March 26, 2020 and confirmed by the Supreme Court of Queensland on March 30, 2020.

The term the Company refers to (i), prior to the Re-domiciliation to BBL, an Australian

corporation, and its subsidiaries, and (ii), following the Re-domiciliation, to Benitec Biopharma Inc., a Delaware corporation, and its subsidiaries (including BBL).

The shares of Benitec Biopharma Inc.

common stock issued in connection with the Re-domiciliation trade

on The Nasdaq Capital Market LLC (Nasdaq) under the symbol BNTC, and Benitec Biopharma Inc.

continues to be subject to the reporting requirements of the SEC and applicable corporate governance rules of Nasdaq.

As a result of the Re-domiciliation, BBL became a wholly owned subsidiary of Benitec Biopharma Inc.

and delisted from the ASX on April 15, 2020.

On August 14, 2020 BBL had a change of company status and became a Proprietary Limited company.

share for every 300 BBL shares .

Holders of BBL’s American Depository Shares, or ADSs (each of which represented 200 ordinary shares), received two shares of the Company’s common stock for every three ADSs held.

The re-domiciliation

was completed on April 15, 2020 following approval by BBL shareholders at a Scheme Meeting held on March 26, 2020 and by the Supreme Court of Queensland on March 30, 2020.

In accordance with the U.S.

Securities and Exchange Commission’s (“SEC”) Staff Accounting Bulletin Topic 4C

, all issued and outstanding shares of the Company’s common stock have been retroactively adjusted in these consolidated financial statements to reflect the 300:1 ratio and share consolidation as if it occurred on July 1, 2019.

The terms the “Company,” “we,” “us,” “our” and similar terms used herein refer (i), prior to the re-domiciliation

to BBL, an Australian corporation, and its subsidiaries, and (ii), following the re-domiciliation,

to Benitec Biopharma Inc., a Delaware corporation, and its subsidiaries (including BBL).

During the year ended June 30, 2021, the Company completed an organization restructure as part of the commercial desire to provide a more efficient structure for the future as the Company continues to transition its operations to the US.

The Company’s fiscal year end is June 30.

References to a particular fiscal year are to our fiscal year ended June 30 of

that calendar year.

The consolidated financial statements of the Company are presented in United States dollars and consist of Benitec

Biopharma Inc.

and the entities it controls:

References to a particular “fiscal year” are to our fiscal year end June 30 of that calendar year.

The consolidated financial statements of Benitec Biopharma Inc.

are presented in United States dollars and consist of Benitec Biopharma Inc.

and the following wholly owned subsidiaries:

Principal place of

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Tacere Therapeutics, Inc.

Benitec Biopharma Proprietary Limited

Benitec IP Holdings, Inc.

BENITEC BIOPHARMA INC.

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Basis of Presentation

April 15, 2020, the Company implemented the transaction to redomicile from Australia to the United States and became the parent company of BBL and the wholly owned subsidiaries listed in Note 1.

The historical financial statements of BBL became

the historical financial statements of the combined company upon consummation of the Re-domiciliation.

As a result, the financial statements included in this report reflect (i) the historical operating

results of BBL and subsidiaries prior to the Re-domiciliation;

(ii) the combined results of the Company, BBL, and subsidiaries following the completion of the

Re-domiciliation;

On April 15, 2020, the Company implemented the transaction to redomicile from Australia to the United States and became the parent company of BBL and the wholly owned subsidiaries listed in Note 1.

The historical financial statements of BBL became the historical financial statements of the combined company upon consummation of the Re-domiciliation.

As a result, the financial statements included in this report reflect (i) the historical operating results of BBL and subsidiaries prior to the Re-domiciliation;

(ii) the combined results of the Company, BBL, and subsidiaries following the completion of the Re-domiciliation;

and (iii) the Company’s equity structure for all periods presented .

The Companys consolidated financial statements included in this report have been prepared in accordance with accounting principles

generally accepted in the United States of America (US GAAP) and pursuant to the rules and regulations of the SEC.

In the opinion of the Companys management, all adjustments (consisting of normal recurring adjustments and

reclassifications and non-recurring adjustments) necessary to present fairly our financial position, results of operations, and cash flows for the fiscal years ended June 30, 2020 and 2019 have been made.

Reference is frequently made herein to the Financial Accounting Standards Board (the FASB) Accounting Standards Codification

This is the source of authoritative US GAAP recognized by the FASB to be applied to non-governmental entities.

The Company’s consolidated financial statements included in this report have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) and pursuant to the rules and regulations of the SEC.

Reference is frequently made herein to the Financial Accounting Standards Board (the “FASB”) Accounting Standards Codification (“ASC”).

This is the source of authoritative US GAAP recognized by the FASB to be applied to non-governmental

Principles of Consolidation

consolidated financial statements include the Companys accounts and the accounts of its wholly-owned subsidiaries.

The consolidated financial statements include the Company’s accounts and the accounts of its wholly-owned subsidiaries.

All intercompany transactions and balances have been eliminated.

Segment Reporting

segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker in making decisions regarding resource allocation and assessing performance.

Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker in making decisions regarding resource allocation and assessing performance.

The Company views its operations and manages its business in one operating segment.

Use of Estimates

The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the

reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.

Actual results could

differ from these estimates.

Significant estimates in the accompanying consolidated financial statements include the estimates of useful lives for depreciation, valuation of the operating lease liability and related right-of-use asset, allowance for uncollectable receivables, valuation of equity based instruments issued for other than cash, the valuation allowance on deferred tax assets and foreign currency translation

due to certain average exchange rates applied in lieu of spot rates on transaction dates.

Foreign Currency Translation and Other Comprehensive

Income (Loss)

BBLs functional currency is the Australian dollar (AUD).

For financial reporting purposes, the Australian

dollar has been translated into United States dollar $ and/or USD as the reporting currency.

The preparation of financial statements requires management to make estimates and assumptions that impact the reported amounts of assets, liabilities and expenses and the disclosure of contingent assets and liabilities in the Company’s consolidated financial statements and accompanying notes.

The most significant estimates and assumptions in the Company’s consolidated financial statements include the estimates of useful lives of property and equipment, valuation of the operating lease liability and related right-of-use

asset, allowance for uncollectable receivables, valuation of equity based instruments issued for other than cash, the valuation allowance on deferred tax assets, foreign currency translation due to certain average exchange rates applied in lieu of spot rates on transaction dates, and accrued research and development expense.

These estimates and assumptions are based on current facts, historical experience and various other factors believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the recording of expenses that are not readily apparent from other sources.

Actual results may differ materially and adversely from these estimates.

To the extent there are material differences between the estimates and actual results, the Company’s future results of operations will be affected.

Risks and Uncertainties

The Company is subject to risks and uncertainties common to early-stage companies in the biotechnology industry, including, but not limited to, development by competitors of new technological innovations, protection

BENITEC BIOPHARMA INC.

Notes to Consolidated Financial Statements

liabilities are translated at the exchange rate in effect at the balance sheet date.

of proprietary technology, dependence on key personnel, reliance on single-source vendors and collaborators, availability of raw materials, patentability of the Company’s products and processes and clinical efficacy and safety of the Company’s products under development, compliance with government regulations and the need to obtain additional financing to fund operations.

There can be no assurance that the Company’s research and development will be successfully completed, that adequate protection for the Company’s intellectual property will be obtained or maintained, that any products developed will obtain necessary government regulatory approval or that any approved products will be commercially viable.

Even if the Company’s product development efforts are successful, it is uncertain when, if ever, the Company will generate revenue from product sales.

The Company operates in an environment of rapid technological change and substantial competition from other pharmaceutical and biotechnology companies.

In addition, the Company is dependent upon the services of its employees, consultants and other third parties.

Moreover, the current COVID-19 pandemic,

pacting worldwide economic activity, poses risk that the Company or its employees, contractors, suppliers, and other partners may be prevented from conducting business activities for an indefinite period of time which may delay the start-up and

conduct of the Company’s clinical trials, and negatively impact manufacturing and testing activities performed by third parties.

Any significant delays may impact the use and sufficiency of the Company’s existing cash reserves, and the Company may be required to raise additional capital earlier than it had previously planned.

The Company may be unable to raise additional capital if and when needed, which may result in delays or suspension of its development plans.

The extent to which the pandemic will impact the Company’s business will depend on future developments that are highly uncertain and cannot be predicted at this time.

Foreign Currency Translation and Other Comprehensive Income (Loss)

The Company’s functional currency and reporting currency is the United States dollar.

BBL’s functional currency is the Australian dollar (AUD).

Assets and liabilities are translated at the exchange rate in effect at the balance sheet date.

Revenues and expenses are translated at the average rate of exchange prevailing during the reporting period.

Equity transactions are translated at each historical transaction date spot rate.

Translation adjustments arising from the use of different exchange rates from period to period are included as a component of stockholders equity as

Accumulated other comprehensive income (loss). Gains and losses resulting from foreign currency transactions are included in the statements of operations and comprehensive income (loss) as other comprehensive income (loss).

Translation adjustments arising from the use of different exchange rates from period to period are included as a component of stockholders’ equity as “Accumulated other comprehensive loss.” Gains and losses resulting from foreign currency translation are included in the consolidated statements of operations and comprehensive loss as other comprehensive income (loss).

Other Comprehensive Income (Loss) for all periods presented includes only foreign currency translation gains (losses).

As of June 30, 2020, and 2019, the exchange rates used to translate amounts in Australian dollars into USD for the purposes of preparing

the consolidated financial statements were as follows:

As of June 30, 2021, and 2020, the exchange rates used to translate amounts in Australian dollars into USD for the purposes of preparing the consolidated financial statements were as follows:

Exchange rate on balance sheet dates

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AUD Exchange Rate

The exchange rate used to translate amounts in AUD into USD for the year ended June 30, 2018 is 0.7385 as of the balance

Fair Value Measurements

The Company measures its financial assets and liabilities in accordance with US GAAP using ASC 820, Fair Value Measurements.

certain financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities, the carrying amounts approximate fair value due to their short maturities.

For certain financial instruments, including cash and cash equivalents, accounts receivable,

BENITEC BIOPHARMA INC.

Notes to Consolidated Financial Statements

accounts payable and accrued liabilities, the carrying amounts approximate fair value due to their short maturities.

The Company follows accounting guidance for financial assets and liabilities.

ASC 820 defines fair value, provides guidance for measuring fair

value and requires certain disclosures.

ASC 820 defines fair value, provides guidance for measuring fair value and requires certain disclosures.

This standard does not require any new fair value measurements, but rather applies to all other accounting pronouncements that require or permit fair value measurements.

This guidance discusses valuation

techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow), and the cost approach (cost to replace the service capacity of an asset or replacement cost).

The guidance utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad

This guidance discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow), and the cost approach (cost to replace the service capacity of an asset or replacement cost).

The guidance utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels.

The following is a brief description of those three levels:

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Inputs, other than quoted prices that are observable, either directly or indirectly.

These include quoted

prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.

Unobservable inputs in which little or no market data exists, therefore developed using estimates and

assumptions developed by us, which reflect those that a market participant would use.

BENITEC BIOPHARMA INC.

Notes to Consolidated Financial Statements

The carrying amounts of the Companys cash and cash equivalents, trade and other

receivables, and trade and other payables are considered to be representative of their respective fair values because of the short-term nature of those instruments.

As of June 30, 2020, and 2019, the Company had no financial assets or

liabilities measured at fair value on a recurring basis.

These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.

Unobservable inputs in which little or no market data exists, therefore developed using estimates and assumptions developed by us, which reflect those that a market participant would use.

As of June 30, 2021, and 2020, the Company had no financial assets or liabilities measured at fair value on a recurring basis.

Cash and Cash Equivalents

Cash and cash equivalents include cash on hand and at banks, short-term deposits with an original maturity of three months or less with

financial institutions, and bank overdrafts.

Cash and cash equivalents include cash on hand and at banks, short-term deposits with an original maturity of three months or less with financial institutions, and bank overdrafts.

Bank overdrafts are reflected as a current liability on the consolidated balance sheets.

Concentrations of Risk

instruments that potentially subject the Company to significant concentration of credit risk consist primarily of cash.

Financial instruments that potentially subject the Company to significant concentration of credit risk consist primarily of cash.

The Company maintains deposits at federally insured financial institutions in excess of federally insured limits.

The Company has

not experienced any losses in such accounts, and management believes that the Company is not exposed to significant credit risk due to the financial position of the depository institutions in which those deposits are held.

The Company has not experienced any losses in such accounts, and management believes that the Company is not exposed to significant credit risk due to the financial position of the depository institutions in which those deposits are held.

Trade and Other Receivables

amounts become uncollectible, they will be charged to an allowance and operations in the period when a determination of collectability is made.

Any estimates of potentially uncollectible customer accounts receivable will be made based on an analysis

of individual customer and historical write-off experience.

As amounts become uncollectible, they will be charged to an allowance and operations in the period when a determination of collectability is made.

Any estimates of potentially uncollectible customer accounts receivable will be made based on an analysis of individual customer and historical write-off

The Company’s analysis includes the age of the receivable account, creditworthiness of the customer and general economic conditions.

Property and Equipment

and equipment are stated at cost, net of accumulated depreciation and amortization.

Property and equipment are stated at cost, net of accumulated depreciation and amortization.

Expenditures for maintenance and repairs are expensed as incurred;

additions, renewals, and improvements are capitalized.

When property and equipment are retired or

otherwise disposed of, the related cost and accumulated depreciation and amortization are removed from the respective accounts, and any gain or loss is included in operations.

BENITEC BIOPHARMA INC.

Notes to Consolidated Financial Statements

property and equipment are retired or otherwise disposed of, the related cost and accumulated depreciation and amortization are removed from the respective accounts, and any gain or loss is included in operations.

Depreciation and amortization of property and equipment is calculated using the straight-line basis over the following estimated useful lives:

Lab equipment

Furniture and fixtures

Computer hardware

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Impairment of Long-Lived Assets

Property and equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset

may not be recoverable.

Property and equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

Recoverability of long-lived assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset.

If the carrying

amount of an asset exceeds its estimated

BENITEC BIOPHARMA INC.

Notes to Consolidated Financial Statements

undiscounted future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the assets.

Fair value is generally determined

using the assets expected future discounted cash flows or market value, if readily determinable.

If the carrying amount of an asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the assets.

Fair value is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable.

Trade and other payables

These amounts represent liabilities for goods and services provided to the Company prior to the end of the period and which are unpaid.

their short-term nature, they are measured at amortized cost and are not discounted.

Due to their short-term nature, they are measured at amortized cost and are not discounted.

The amounts are unsecured and are usually paid within 30 days of recognition.

Australian Goods and Services Tax (GST) and other similar taxes

Revenues, expenses, and balance sheet items are recognized net of the amount of GST, except payable and receivable balances which are shown

inclusive of GST.

The GST incurred is payable on revenues to, and recoverable on purchases from, the Australian Taxation Office.

flows are presented in the statements of cash flow on a gross basis, except for the GST component of investing and financing activities, which are disclosed as operating cash flows.

Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the tax authority.

At lease commencement, the

Company records a lease liability based on the present value of lease payments over the expected lease term.

The Company calculates the present value of lease payments using the discount rate implicit in the lease, unless that rate cannot be readily

At lease commencement, the Company records a lease liability based on the present value of lease payments over the expected lease term.

The Company calculates the present value of lease payments using the discount rate implicit in the lease, unless that rate cannot be readily determined.

In that case, the Company uses its incremental borrowing rate, which is the rate of interest that the Company would have to pay to borrow on a collateralized basis an amount equal to the lease payments over the expected lease term.

Company records a corresponding right-of-use lease asset based on the lease liability, adjusted for any lease incentives received and any initial direct costs paid to

the lessor prior to the lease commencement date.

The Company records a corresponding right-of-use

lease asset based on the lease liability, adjusted for any lease incentives received and any initial direct costs paid to the lessor prior to the lease commencement date.

After lease commencement, the Company measures its leases as follows:

(i) the lease

liability based on the present value of the remaining lease payments using the discount rate determined at lease commencement;

and (ii) the right-of-use lease asset

based on the remeasured lease liability, adjusted for any unamortized lease incentives received, any unamortized initial direct costs and the cumulative difference between rent expense and amounts paid under the lease agreement.

Any lease incentives

received and any initial direct costs are amortized on a straight-line basis over the expected lease term.

(i) the lease liability based on the present value of the remaining lease payments using the discount rate determined at lease commencement;

and (ii) the right-of-use

lease asset based on the remeasured lease liability, adjusted for any unamortized lease incentives received, any unamortized initial direct costs and the cumulative difference between rent expense and amounts paid under the lease agreement.

Any lease incentives received and any initial direct costs are amortized on a straight-line basis over the expected lease term.

Rent expense is recorded on a straight-line basis over the expected lease term.

Basic and Diluted Net Income (Loss) Per Share

Basic net income (loss) per share is calculated by dividing net income (loss) by the weighted-average number of common shares outstanding

during the period.

Diluted net income (loss) per share is calculated by dividing net income (loss) by the weighted-average number of common shares outstanding plus potential common shares.

Stock options, warrants and convertible instruments are

considered potential common shares and are included in the calculation of diluted net income (loss) per share using the treasury stock method when their effect is dilutive.

Potential common shares are excluded from the calculation of diluted net

income (loss) per share when their effect is anti-dilutive.

As of June 30, 2020, and 2019, there were 145,421 and 38,326 potential common shares, respectively, that were excluded from the calculation of diluted net income (loss) per share

because their effect was anti-dilutive.

Basic and Diluted Net Loss Per Share

Basic net loss per share is calculated by dividing net loss by the weighted-average number of common shares outstanding during the period.

Diluted net loss per share is calculated by dividing net loss by the weighted-

BENITEC BIOPHARMA INC.

Notes to Consolidated Financial Statements

average number of common shares outstanding plus potential common shares.

Stock options

, warrants and convertible instruments are considered potential common shares and are included in the calculation of diluted net loss per share using the treasury stock method when their effect is dilutive.

Potential common shares are excluded from the calculation of diluted net loss per share when their effect is anti-dilutive.

30, 2021 and 2020, there were 809,159 and 215,578 potential common shares, respectively, that were excluded from the calculation of diluted net loss per share because their effect was anti-dilutive.

Revenue Recognition

The Company adopted ASC 606 Revenue from Contracts with Customers (ASC 606) on July 1, 2018.

The adoption of ASC

606 did not have a material impact on the consolidated financial statements.

Upon adoption of ASC 606, the Company recognizes revenue in

accordance with that core principle by applying the following steps:

The Company recognizes revenue by applying the following steps:

Identify the contract(s) with a customer.

3 unchanged sentences

Recognize revenue when (or as) the entity satisfies a performance obligation.

The Company applies judgement in determining whether contracts entered into fall within the scope of ASC 606.

In doing so, management

considers the commercial substance of the transaction and how risks and benefits of the contract accrue to the various parties to the contract.

In determining the accounting treatment of the contract with Axovant, management assessed that the

contract was within the scope of ASC 606.

Management has also made the judgement that the grant of the license and transfer of associated

know-how and materials are accounted for as one performance obligation as they are not considered to be distinct;

they are highly interrelated and could not provide benefits to the customer independently from

Judgements were made in relation to the transfer of the license and know-how and whether this should be recognized over time or a point in time.

The point in time has been determined with regard to

the point at which the transfer of know-how has substantially been completed and the customer has control of the asset and the ability to direct the use of and receive substantially all of the remaining

The Company applies judgement in determining whether contracts entered into fall within the scope of ASC 606 – Revenue from Contracts with Customers

In doing so, management considers the commercial substance of the transaction and how risks and benefits of the contract accrue to the various parties to the contract.

Management has also made the judgement that the grant of the license and transfer of associated know-how

and materials are accounted for as one performance obligation as they are not considered to be distinct;

they are highly interrelated and could not provide benefits to the customer independently from each other.

Judgements were made in relation to the transfer of the license and know-how

and whether this should be recognized over time or a point in time.

The point in time has been determined with regard to the point at which the transfer of know-how

has substantially been completed and the customer has control of the asset and the ability to direct the use of and receive substantially all of the remaining benefits.

Licensing revenues

Revenue from licensees of the Companys intellectual property reflects the transfer of a right to use the intellectual property as it

exists at the point in time in which the license is transferred to the customer.

Revenue from licensees of the Company’s intellectual property reflects the transfer of a right to use the intellectual property as it exists at the point in time in which the license is transferred to the customer.

Consideration can be variable and is estimated using the most likely amount method.

Subsequently, the estimate is constrained until it is highly probable that a

significant revenue reversal will not occur when the uncertainty is resolved.

Subsequently, the estimate is constrained until it is probable that a significant revenue reversal will not occur when the uncertainty is resolved.

Revenue is recognized as or when the performance obligations are satisfied.

The Company recognizes contract liabilities for consideration received in respect of unsatisfied performance obligations and reports these

amounts as other liabilities in the consolidated balance sheet.

Similarly, if the Company satisfies a performance obligation before it receives the consideration, the Company recognizes either a contract asset or a receivable in its consolidated

balance sheet, depending on whether something other than the passage of time is required before the consideration is due.

Revenue from licensees of the Companys intellectual property reflect a right to use the intellectual property as it exists at

the point in time in which the license is granted.

Where consideration is based on sales of product by the licensee, revenue is recognized when the customers subsequent sales of product occurs.

The Company recognizes contract liabilities for consideration received in respect of unsatisfied performance obligations and reports these amounts as other liabilities in the consolidated balance sheet.

Similarly, if the Company satisfies a performance obligation before it receives the consideration, the Company recognizes either a contract asset or a receivable in its consolidated balance sheet, depending on whether something other than the passage of time is required before the consideration is due.

BENITEC BIOPHARMA INC.

Notes to Consolidated Financial Statements

Revenue from licensees of the Company’s intellectual property reflect a right to use the intellectual property as it exists at the point in time in which the license is granted.

Where consideration is based on sales of product by the licensee, revenue is recognized when the customer’s subsequent sales of products occur.

Services revenue

Revenue is earned (constrained by variable considerations) from the provision of research and development services to customers.

revenue is recognized when performance obligations are either satisfied over time or at a point in time.

Generally, the provision of research and development services under a contract with a customer will represent satisfaction of a performance

obligation over time where the Company retains the right to payment for services performed but not yet completed.

Government Research and

Development Grants

Government grants are recognized at fair value where there is reasonable assurance that the grant will be

received, and all grant conditions will be met.

Services revenue is recognized when performance obliga t

ions are either satisfied over time or at a point in time.

Generally, the provision of research and development services under a contract with a customer will represent satisfaction of a performance obligation over time where the Company retains the right to payment for services performed but not yet completed.

Government Research and Development Grants

Government grants are recognized at fair value where there is reasonable assurance that the grant will be received, and all grant conditions will be met.

Grants relating to expense items are recognized as income over the periods necessary to match the grant costs they are compensating.

Grant income is generated through the Australian federal governments Research and Development Tax Incentive program, under which the

government provides a cash refund for the 43.5% (2019:

43.5%) of eligible research and development expenditures.

This grant is available for our research and development activities in Australia, as well as activities in the United States to the

extent such U.S.-based expenses relate to our activities in Australia, do not exceed half the expenses for the relevant activities and are approved by the Australian government.

Grant income is generated through the Australian federal government’s Research and Development Tax Incentive program, under which the government provides a cash refund for 43.5 % of eligible research and development expenditures.

This grant is available for our research and development activities in Australia, as well as activities in the United States to the extent such U.S.-based expenses relate to our activities in Australia, do not exceed half the expenses for the relevant activities and are approved by the Australian government.

Grants are recorded when a reliable estimate can be made.

The Company will not be claiming the Australian Government research and development grants going forward due to the Re-domiciliation of the Company to the United States.

The Company will not be claiming the Australian Government research and development grants going forward.

Research and Development Expense

Research and development costs are expensed when incurred.

These costs have been recognized as an expense when incurred.

development expenses relate primarily to the cost of conducting clinical and pre-clinical trials.

Clinical development costs are a significant component of research and development expenses.

Estimates have

been used in determining the expense liability under certain clinical trial contracts where services have been performed but not yet invoiced.

Generally, the costs, and therefore estimates, associated with clinical trial contracts are based on the

number of patients, drug administration cycles, the type of treatment and the outcome being the length of time before actual amounts can be determined will vary depending on length of the patient cycles and the timing of the invoices by the clinical

trial partners.

Research and development expenses relate primarily to the cost of conducting clinical and pre-clinical trials.

Pre-clinical and clinical development costs are a significant component of research and development expenses.

The Company records accrued liabilities for estimated costs of research and development activities conducted by third-party service providers, which include the conduct of pre-clinical studies and clinical trials, and contract manufacturing activities.

The Company records the estimated costs of research and development activities based upon the estimated amount of services provided but not yet invoiced and includes these costs in trade and other payables on the consolidated balance sheets and within research and development expenses on the consolidated statements of operations and comprehensive loss.

The Company accrues for these costs based on factors such as estimates of the work completed and in accordance with agreements established with its third-party service providers.

The Company makes significant judgments and estimates in determining the accrued liabilities balance at the end of each reporting period.

As actual costs become known, the Company adjusts its accrued liabilities.

The Company has not experienced any material differences between accrued costs and actual costs incurred.

Equity-based Compensation Expense

The Company records share-based compensation in accordance with ASC 718, Stock Compensation

ASC 718 requires the fair value of all

share-based employee compensation awarded to employees to be recorded as an expense over the shorter of the service period or the vesting period.

The Company values employee and non-employee share-based

compensation at fair value using the Black-Scholes Option Pricing Model.

The Company adopted FASB Accounting Standard Update

(ASU) 2018-07 and accounts for non-employee share-based awards in accordance with the measurement and recognition criteria of ASC 718 and recognizes the fair

value of such awards over the service period.

The Company is governed by Australia and United States income tax laws, which are administered by the Australian Taxation Office and the United

States Internal Revenue Service, respectively.

The Company follows

ASC 718 requires the fair value of all share-based employee compensation awarded to employees and non-employees

BENITEC BIOPHARMA INC.

Notes to Consolidated Financial Statements

ASC 740 Accounting for Income Taxes , when accounting for income taxes, which requires an asset and liability approach to financial accounting and reporting for income taxes.

income tax assets and liabilities are computed annually for temporary differences between the financial statements and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and

rates applicable to the periods in which the differences are expected to affect taxable income.

recorded as an expense over the shorter of the service period or the vesting period.

The Company values employee and non-employee

share-based compensation at fair value using the Black-Scholes Option Pricing Model.

The Company is governed by Australia and United States income tax laws.

The Company follows ASC 740 Accounting for Income Taxes

, when accounting for income taxes, which requires an asset and liability approach to financial accounting and reporting for income taxes.

Deferred income tax assets and liabilities are computed annually for temporary differences between the financial statements and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income.

Valuation allowances are established when necessary to reduce deferred tax assets to the amount more likely than not to be realized.

For uncertain tax positions that meet a more likely than not threshold, the Company recognizes the benefit of uncertain tax

positions in the consolidated financial statements.

For uncertain tax positions that meet a “more likely than not” threshold, the Company recognizes the benefit of uncertain tax positions in the consolidated financial statements.

The Company’s practice is to recognize interest and penalties, if any, related to uncertain tax positions in income tax expense in the consolidated statements of operations.

Comprehensive Loss

Comprehensive

loss is defined as a change in equity during a period from transactions and other events and circumstances from non-owner sources.

The Company records unrealized foreign currency translation loss which

qualifies as other comprehensive loss.

Accounting Standards recently adopted

In February 2016, the FASB issued ASU No.

Leases (Topic 842) whereby lessees will

need to recognize most leases on their balance sheet as a right of use asset and a lease liability.

This guidance is effective for interim and annual reporting periods beginning after December 15, 2018.

The Company adopted this ASU effective

July 1, 2019.

The determination of whether an arrangement is or contains a lease is based on the substance of the arrangement and

requires an assessment of whether the fulfilment of the arrangement is dependent on the use of a specific asset or assets and the arrangement conveys a right to use the asset.

The Companys only lease is the lease on its research and development facilities.

The Companys existing lease

commitments are set out in Note 10.

In June 2018, the FASB issued ASU 2018-07,

Compensation Stock Compensation (Topic 718).

This update is intended to reduce cost and complexity and to improve financial reporting for share-based payments issued to non-employees (for

example, service providers, external legal counsel, suppliers, etc.).

The ASU expands the scope of Topic 718, Compensation Stock Compensation, which currently only includes share-based payments issued to employees, to also include share-based

payments issued to non-employees for goods and services.

Consequently, the accounting for share-based payments to non-employees and employees will be substantially

This standard is effective for financial statements issued by public companies for the annual and interim periods beginning after December 15, 2018.

The Company adopted this ASU on July 1, 2019.

There was no effect on the

financial statements on adoption.

New Accounting Standards and Interpretations not yet mandatory or early adopted

Comprehensive loss is defined as a change in equity during a period from transactions and other events and circumstances from non-owner

The Company records unrealized foreign currency translation gain (loss) which qualifies as other comprehensive income (loss).

Recent Accounting Pronouncements

In June 2016, the FASB issued ASU No.

1 unchanged sentence

This ASU represents a significant change in the accounting for credit losses model by requiring immediate recognition of management’s estimates of current expected credit losses (CECL).

Under the prior model, losses were recognized

only as they were incurred, which FASB has noted delayed recognition of expected losses that might not yet have met the threshold of being probable.

This guidance is effective for interim and annual reporting

BENITEC BIOPHARMA INC.

Notes to Consolidated Financial Statements

periods beginning after December 15, 2019.

Under the prior model, losses were recognized only as they were incurred.

The Company has determined that it has met the criteria of a smaller reporting company (“SRC”) as of November 15, 2019.

As such, ASU 2019-10:

Financial Instruments-Credit Losses, Derivatives and Hedging, and Leases:

Effective Dates amended the effective date for the Company to be for reporting periods beginning after

December 15, 2022.

The Company will adopt this ASU effective July 1, 2023.

Going Concern

The accompanying consolidated financial statements have been prepared in conformity with US GAAP, which contemplate continuation of the

Company as a going concern.

For the fiscal years ended June 30, 2020, and 2019, the Company had a net (loss) income of $(8.3) million and $2.6 million, respectively, and net cash (used in) provided by operations of $(7.5) million and

$4.8 million, respectively.

Effective Dates

amended the effective date for the Company to be for reporting periods beginning after December 15, 2022.

The Company will adopt this ASU 2016-13

effective July 1, 2023.

The accompanying consolidated financial statements have been prepared in conformity with US GAAP, which contemplate continuation of the Company as a going concern.

For the fiscal years ended June 30, 2021, and 2020, the Company had a net loss of $ 13.9 million and $ 8.3 million, respectively, and net cash used in operations of $ 12.8 million and $ 7.5 million, respectively.

As of June 30, 2021, the Company had $ 19.8 million in cash and cash equivalents.

has incurred operating losses and negative cash flows from operations since inception, except for the year ended June 30, 2019.

Management believes the Companys existing cash together with the net proceeds of a public offering of common

stock will be sufficient to fund the Companys operations at least for the next twelve months.

In connection with the Companys public offering, on August 14, 2020, the Company filed a registration statement on Form S-1 with the SEC.

Management having performed a review of the cash flow forecasts, considering the cash

flow needs of the Company, believe that current funding and the proceeds of the upcoming capital raise will be sufficient for a period of at least twelve months from the date of this report.

Although management believes that the additional required funding will be obtained, there is no guarantee the Company will be able to obtain

the additional required funds on a timely basis or that funds will be available on acceptable terms.

If such funds are not available when required, management will be required to curtail its expenditures, which may have a material adverse effect on

its future cash flows and results of operations, and its ability to continue operating as a going concern.

The accompanying financial statements do not include any adjustments that would be necessary should the Company be unable to continue as a

going concern.

Revenue (US$000)

Revenues from customers

The Company has incurred operating losses and negative cash flows from operations since inception, except for the year ended June 30, 2019.

Management having performed a review of the cash flow forecasts, considering the cash flow needs of the Company, believe that our cash and cash equivalents will be sufficient for a period of at least twelve months from the date this Annual Report is filed.

BENITEC BIOPHARMA INC.

Notes to Consolidated Financial Statements

The Company’s ability to continue as a going concern is dependent upon its ability to generate revenue and obtain adequate financing.

While the Company believes in its ability to generate revenue and raise additional funds, there can be no assurances to that effect.

The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary if the Company is unable to continue as a going concern due to unsuccessful product development or commercialization, or the inability to obtain adequate financing in the future.

Revenues from customers (US$’000)

Licensing revenue

2 unchanged sentences

On July 9, 2018, the Company entered into a License and Collaboration Agreement with Axovant.

the Agreement, the Company granted Axovant an exclusive worldwide license to develop, manufacture, and commercialize products containing the Companys product known as BB-301, which was designed for the

potential treatment of Oculopharyngeal Muscular Dystrophy.

Licensing revenue consists of payments for the Companys intellectual property related to BB-301 and the transfer of the right to use the

intellectual property of the Companys BB-301 license to Axovant.

Pursuant to the Agreement, the Company granted Axovant an exclusive worldwide license to develop, manufacture, and commercialize products containing the Company’s product known as BB-301,

which was designed for the potential treatment of Oculopharyngeal Muscular Dystrophy.

Licensing revenue consists of payments for the Company’s intellectual property related to BB-301

and the transfer of the right to use the intellectual property of the Company’s BB-301

license to Axovant.

Service revenue consists of payments for services provided to Axovant during the term of the license agreement signed in July 2018.

June 6, 2019, the termination of the License and Collaboration Agreement with Axovant was announced.

The termination of the Agreement was

BENITEC BIOPHARMA INC.

Notes to Consolidated Financial Statements

effective as of September 3, 2019.

On June 6, 2019, the termination of the License and Collaboration Agreement with Axovant was announced.

The termination of the Agreement was effective as of September 3, 2019.

The termination discharges all future performance obligations under the contract at the termination date.

2 unchanged sentences

Disaggregated revenue (US$’000)

Fiscal year ended June 30, 2020

Services transferred at a point in time

Year ended June 30, 2021

Services transferred over time

Disaggregated revenue (US$’000)

Fiscal year ended June 30, 2019

Year ended June 30, 2020

Services transferred at a point in time

Services transferred over time

Cash and Cash equivalents

Trade and other receivables

Research & development grants

Other receivables*

The Company had a contract asset of $0 and approximately $1.7M as of June 30, 2020, and 2019,

respectively, related to the contract with Axovant which is included in other receivables on the consolidated balance sheet.

BENITEC BIOPHARMA INC.

Notes to Consolidated Financial Statements

Cash and Cash equivalents

Prepaid and other

Prepaid expenses

2 unchanged sentences

Market value of listed shares

Total other assets

Current portion

Property and equipment, net

Lab equipment

Furniture and fixtures

Computer hardware

3 unchanged sentences

Total property and equipment, net

Depreciation expense was $190,000 and $158,000 for the fiscal years ended June 30, 2020 and 2019,

respectively.

Depreciation and amortization expense was $ 231,000 and $ 190,000 for the years ended June 30, 2021 and 2020, respectively.

Trade and other payables

1 unchanged sentence

Accrued license fees

Accrued research and development fees

Accrued professional fees

Accrued CRO fees

Other payables

On July 1, 2019, the Company adopted ASC 842, Leases (ASC 842).

ASC 842 requires lessees to recognize at the

lease commencement date a lease liability, which is the lessees obligation to make lease payments arising from a lease, measured on a discounted basis, and a

right-of-use asset, which is an asset that represents the lessees right to use, or control the use of, a specified asset for the lease term.

Lessees and lessors

must either (i) apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements or (ii) recognize a

BENITEC BIOPHARMA INC.

Notes to Consolidated Financial Statements

effect adjustment to the opening balance of retained earnings in the period of adoption.

On July 1, 2019, the Company adopted ASC 842, Leases

ASC 842 requires lessees to recognize at the lease commencement date a lease liability, which is the lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis, and a right-of-use

asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term.

Lessees and lessors must either (i) apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements or (ii) recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption.

The Company elected to use the cumulative-effect transition method upon adoption.

3 unchanged sentences

The Company need not reassess whether any expired or existing contracts are or contain leases.

The Company need not reassess the lease classification for any expired or existing leases (that is, all existing

leases that were classified as operating leases in accordance with the previous guidance will be classified as operating leases, and all existing leases that were classified as capital leases in accordance with the previous guidance will be

classified as finance leases).

The Company need not reassess the lease classification for any expired or existing leases (that is, all existing leases that were classified as operating leases in accordance with the previous guidance will be classified as operating leases, and all existing leases that were classified as capital leases in accordance with the previous guidance will be classified as finance leases).

The Company need not reassess initial direct costs for any existing leases.

Hindsight practical expedient:

The Company elected the hindsight practical expedient in determining the lease term (that is, when considering

lessee options to extend or terminate the lease and to purchase the underlying asset) and in assessing impairment of the Companys right-of-use assets.

The Company elected the hindsight practical expedient in determining the lease term (that is, when considering lessee options to extend or terminate the lease and to purchase the underlying asset) and in assessing impairment of the Company’s right-of-use

The Company has entered into an operating lease for office space under an agreement that expires in 2022.

requires the Company to pay utilities, insurance, taxes and other operating expenses.

The lease requires the Company to pay utilities, insurance, taxes and other operating expenses.

The Company’s lease does not contain any residual value guarantees or material restrictive covenants.

Upon adoption of ASC 842, the Company recognized on its consolidated balance sheet as of July 1, 2019 an initial measurement of

approximately $579,000 of operating lease liabilities, and approximately $579,000 of corresponding operating right-of use assets, net of tenant improvement allowances.

There was also no cumulative effect

adjustment to retained earnings as a result of the transition to ASC 842.

Upon adoption of ASC 842, the Company recognized on its consolidated balance sheet as of July 1, 2019 an initial measurement of approximately $ 579,000 of operating lease liabilities, and approximately $ 579,000 of corresponding operating right-of

use assets, net of tenant improvement allowances.

There was also no cumulative effect adjustment to retained earnings as a result of the transition to ASC 842.

The Company recorded the initial recognition of the operating lease as a supplemental noncash financing activity on the accompanying consolidated statement of cash flows.

adoption of ASC 842 did not have a material impact on the Companys consolidated statement of operations.

The tables below show the

changes during the year ended June 30, 2020:

Operating lease right-of-use assets

Initial measurement at July 1, 2019

The adoption of ASC 842 did not have a material impact on the Company’s consolidated statement of operations.

BENITEC BIOPHARMA INC.

Notes to Consolidated Financial Statements

The tables below show the changes during the year ended June 30, 2021 and 2020:

Initial measurement

at July 1, 2019

Amortization of right of use asset

Operating lease

right-of-use asset at June 30, 2020

Operating lease liabilities

Initial measurement at July 1, 2019

Balance at June 30, 2020

Amortization of right of use asset

Operating lease right-of-use

asset at June 30, 2021

Initial measurement

at July 1, 2019

Principal payments on operating lease liabilities

Operating lease liabilities at June 30, 2020

non-current portion

Principal payments on operating lease liabilities

Operating lease liabilities at June 30, 2021

Current portion at June 30, 2021

BENITEC BIOPHARMA INC.

Notes to Consolidated Financial Statements

As of June 30, 2020, the Companys operating lease has a remaining lease term of

1.96 years and a discount rate of 4.67%.

As of June 30, 2021, the Company’s operating lease has a remaining lease term of 0.96 years and a discount rate of 4.67 %.

The maturities of the operating lease liabilities are as follows:

June 30, 2020

Total operating lease payments

Less imputed interest

Present value of operating lease liabilities

For the fiscal years ended June 30, 2020 and 2019, total lease expense under operating leases was

approximately $208,000 and $221,000, respectively, and was recorded in general and administrative expenses.

For the fiscal years ended June 30, 2021 and 2020, total lease expense under operating leases was approximately $ 208,000 and $ 208,000 , respectively, and was recorded in general and administrative expenses.

Stockholders’ equity

September 30, 2019, BBL entered into a securities purchase agreement (SPA) with certain sophisticated and professional investors (Investors) in the United States to issue 186,666 shares of common stock at a

purchase price of US$10.50 per share, in a registered direct offering.

On September 30, 2019, the Investors were issued 4 Pre-Funded Warrants that are exercisable into

27,526 fully paid shares of common stock should the Pre-Funded Warrants be exercised in full (Pre-Funded Warrants).

The exercise price for the Pre-Funded Warrants is US$10.50 per share issued on exercise of a Pre-Funded Warrant.

The Pre-Funded Warrants were exercisable at any

time from issue, in whole or in part, provided that the beneficial ownership of the relevant investor in the total number of shares on issue could not exceed 9.99%.

All of the Pre-Funded Warrants have been

On December 6, 2019, the Investors were issued 4 Purchase Warrants that were exercisable into 214,190 fully paid shares

of common stock should the Purchase Warrants be exercised in full (Purchase Warrants).

On September 30, 2019, BBL entered into a securities purchase agreement (“SPA”) with certain sophisticated and professional investors (“Investors”) in the United States to issue 186,666 shares of common stock at a purchase price of US$ 10.50 per share, in a registered direct offering.

On October 6, 2020, the Company announced the closing of an underwritten public offering 2,666,644 shares of its common stock at a price to the public of $ 3.10 per share.

The Company also announced that the underwriter fully exercised its over-allotment option to purchase 483,870 additional shares of its common stock at the offering price of $ 3.10 per

BENITEC BIOPHARMA INC.

Notes to Consolidated Financial Statements

On April 30, 2021, the Company announced the closing of an underwritten public offering of 3,036,366 shares of its common stock at a price to the public of $ 4.25 per share.

The Company also announced that the underwriter exercised the over-allotment option to purchase 317,274 additional shares of its common stock at the offering price of $ 4.25 per share.

On September 30, 2019, the Investors were issued 4 Pre-Funded

Warrants that are exercisable into 27,526 fully paid shares of common stock should the Pre-Funded

Warrants be exercised in full (“Pre-Funded

The exercise price for the Pre-Funded

Warrants is US$ 10.50 per share issued on exercise of a Pre-Funded

The Pre-Funded

Warrants were exercisable at any time from issue, in whole or in part, provided that the beneficial ownership of the relevant investor in the total number of shares on issue could not exceed 9.99 %.

All of the Pre-Funded

Warrants have been exercised.

On December 6, 2019, the Investors were issued 4 Purchase Warrants that were exercisable into 214,190 fully paid shares of common stock should the Purchase Warrants be exercised in full (“Purchase Warrants”).

The exercise price for the Purchase Warrants is US$ 10.50 per share issued on exercise of a Purchase Warrant.

The Purchase Warrants are exercisable, in

whole or in part, any time from the date of issue until the fifth anniversary of the date of issue (December 6, 2024).

On April 22, 2020, the Company issued 37,417 shares of common stock in connection with a cashless exercise of Purchase

Warrants exercisable for 107,095 shares of common stock.

The Company did not have an effective registration statement registering, the resale of the Warrant Shares by the Holder at the time the Holder wanted to exercise the warrant therefore the

Holder carried out a cashless exercise.

The Purchase Warrants are exercisable, in whole or in part, any time from the date of issue until the fifth anniversary of the date of issue ( December 6, 2024 ).

On April 22, 2020, the Company issued 37,417 shares of common stock in connection with a cashless exercise of Purchase Warrants exercisable for 107,095 shares of common stock.

The Company did not have an effective registration statement registering, the resale of the Warrant Shares by the Holder at the time the Holder wanted to exercise the warrant therefore the Holder carried out a cashless exercise.

The formula for conducting a cashless exercise was outlined in the Warrant agreement.

Based on this formula, the Holder would have been entitled to receive 107,095 shares of common stock if they had exercised

the Purchase Warrants for cash.

Based on this formula, the Holder would have been entitled to receive 107,095 shares of common stock if they had exercised the Purchase Warrants for cash.

Because of the cashless exercise, the holder received 37,417 shares.

BENITEC BIOPHARMA INC.

Notes to Consolidated Financial Statements

The activity related to warrants during for the fiscal years ended June 30, 2020 and

2019, is summarized as follows:

from Warrants

average Exercise

Price (per share)

On October 6, 2020, the Company announced the closing of an underwritten public offering of 559,162 shares of common stock underlying pre-funded

warrants initially purchased for $ 3.09 per share and immediately exercisable at $ 0.01 per share (“Pre-Funded

All 559,162 Pre-Funded

Warrants issued had been exercised as of June 30, 2021.

The activity related to warrants during for the fiscal years ended June 30, 2021 and 2020, is summarized as follows:

Outstanding at July 1, 2019

Outstanding and exercisable at June 30, 2019

Cashless exercise

Outstanding and exercisable at June 30, 2020

Outstanding and exercisable at June 30, 2021

BENITEC BIOPHARMA INC.

Notes to Consolidated Financial Statements

Equity Incentive Plan

Employee Share Option Plan

Upon the Re-domiciliation, the Company assumed BBLs obligations with respect to the settlement of options that were issued by BBL prior to the Re-domiciliation pursuant to the

Benitec Officers and Employees Share Option Plan (the Plan).

Upon the Re-domiciliation,

the Company assumed BBL’s obligations with respect to the settlement of options that were issued by BBL prior to the Re-domiciliation

pursuant to the Benitec Officers’ and Employees’ Share Option Plan (the “Plan”).

This includes the Company’s assumptions of the Plan and all award agreements pursuant to which each of the options were granted.

Each option when exercised

entitles the option holder to one share in the Company.

Options are exercisable on or before an expiry date, do not carry any voting or dividend rights and are not transferable except on death of the option holder or in certain other limited

circumstances .

Each option when exercised entitles the option holder to one share in the Company.

Options are exercisable on or before an expiry date, do not carry any voting or dividend rights and are not transferable except on death of the option holder or in certain other limited circumstances .

Employee options vest one third on each anniversary of the applicable grant date for three years.

If an employee dies, retires or otherwise leaves the organization, and certain other conditions have been satisfied, generally the

employee has 12 months to exercise their options or the options are cancelled.

After the Re-domiciliation, no new options have been or will be issued under the Plan.

BENITEC BIOPHARMA INC.

Notes to Consolidated Financial Statements

If an employee dies, retires or otherwise leaves the organization, and certain other conditions have been satisfied, generally the employee has 12 months to exercise their options or the options are cancelled.

After the Re-domiciliation,

no new options have been or will be issued under the Plan.

Equity and Incentive Compensation Plan

On December 9, 2020, the Company’s stockholders approved the Company’s 2020 Equity and Incentive Compensation Plan (the “2020 Plan”).

The 2020 Plan provides for the grant of various equity awards.

Currently, only stock options are outstanding under the 2020 Plan.

Each option when exercised entitles the option holder to one share of the Company’s common stock.

Options are exercisable on or before an expiry date, do not carry any voting or dividend rights, and are not transferable except on death of the option holder or in certain other limited circumstances.

Employee stock options vest in increments of one-third

on each anniversary of the applicable grant date over three years.

director options vest in increments of one-third

on the day prior to each of the Company’s next three annual stockholder meetings following the grant date.

If an option holder dies or terminates employment or service due to Disability (as defined in the 2020 Plan), the option holder generally has 12 months to exercise their vested options or the options are cancelled.

If an option holder otherwise leaves the Company, other than for a termination by the Company for Cause (as defined in the 2020 Plan), the option holder generally has 90 days to exercise their vested options or the options are cancelled.

Upon the consummation of a Change in Control (as defined in the 2020 Plan), all unvested stock options will immediately vest as of immediately prior to the Change in Control.

Equity Awards

The activity related to equity awards, which comprised of stock options during the fiscal years ended June 30, 2020 and 2019,

respectively, is summarized as follows:

Stock Options

Weighted-average

Exercise Price

Weighted-average

Remaining Contractual

Aggregate Intrinsic

The activity related to equity awards, which comprised of stock options during the fiscal years e n

ded June 30, 2021 and 2020, respectively, is summarized as follows:

Outstanding at July 1, 2019

3 unchanged sentences

Exercisable at June 30, 2021

BENITEC BIOPHARMA INC.

Notes to Consolidated Financial Statements

Equity-based Compensation Expense

The Company estimated the fair value of each equity award on the grant date using the Black-Scholes option-pricing model with the following

The weighted-average grant-date fair value of stock options granted during the year ended June 30, 2021 was $ 2.68 .

There were no grants during the year ended June 30, 2020.

The Company estimated the fair value of each equity award on the grant date using the Black-Scholes option-pricing model with the following assumptions:

Fiscal Year Ended

Expected volatility

Expected life

112.0 - 127.4

102.9 - 104.1

Expected term

3.5 - 6 years

Risk-free interest rate

1 unchanged sentence

Expected Volatility.

Due to the lack of Company-specific historical or implied volatility data, the

Company has based its estimate of expected volatility on the historical volatility of a group of similar public companies in the life sciences industry.

The Company selected the peer group based on comparable characteristics, including development

stage, product pipeline and enterprise value.

The Company computed historical volatility data using the daily closing prices for the selected companies shares during the equivalent period of the calculated expected term of the equity-based

Due to the lack of Company-specific historical or implied volatility data, the Company has based its estimate of expected volatility on the historical volatility of a group of similar public companies in the life sciences industry.

The Company selected the peer group based on comparable characteristics, including development stage, product pipeline and enterprise value.

The Company computed historical volatility data using the daily closing prices for the selected companies’ shares during the equivalent period of the calculated expected term of the equity-based awards.

The Company will continue to apply this process until a sufficient amount of historical information regarding the volatility of its own share price becomes available.

Expected Life.

The expected life represents the period that the equity awards are expected to be outstanding.

For stock options with

service conditions, it is based on the simplified method for developing the estimate of the expected life.

Under this approach, the expected life is presumed to be the midpoint between the average vesting date and the end of the

contractual term.

BENITEC BIOPHARMA INC.

Notes to Consolidated Financial Statements

expected term represents the period that the equity awards are expected to be outstanding.

For stock options with service conditions, it is based on the “simplified method” for developing the estimate of the expected life.

Under this approach, the expected term is presumed to be the midpoint between the average vesting date and the end of the contractual term.

Risk-free Interest Rate.

The Company bases the risk-free interest rate assumption on

The Company bases the risk-free interest rate assumption on U.S.

Treasury constant maturities with maturities similar to those of the expected term of the equity award being valued.

Dividend Yield.

The Company bases the expected dividend yield assumption on the fact that it has never paid dividends and does not expect to pay dividends in the foreseeable future.

In addition to assumptions used in the Black-Scholes option-pricing model, the Company estimates a forfeiture rate to calculate the

equity-based compensation expense for equity awards.

Expected Dividend Yield.

The Company bases the expected dividend yield assumption on the fact that it has never paid

dividends and does not expect to pay dividends in the foreseeable future.

In addition to assumptions used in the Black-Scholes option-pricing model, the Company estimates a forfeiture rate to calculate the equity-based compensation expense for equity awards.

The forfeiture rate is based on an analysis of actual and estimated forfeitures.

Share-Based Compensation Expense

The classification of share-based compensation expense for the fiscal years ended:

Fiscal Year Ended

The classification of share-based compensation expense for the years ended:

Research and development

1 unchanged sentence

Total share-based compensation expense

As of June 30, 2020, and 2019, there was $242,000 and $907,000, respectively, of unrecognized share-based

compensation expense related to shares of common stock issued under the Plan.

Income (loss) before provision for income taxes consisted of the following:

Fiscal Year Ended

United States

International

BENITEC BIOPHARMA INC.

Notes to Consolidated Financial Statements

June 30, 2021, and 2020, there was $ 1,266,000 and $ 242,000 , respectively, of unrecognized share-based compensation expense related to stock options granted under the Plan

and 2020 Plan.

Loss before provision for income taxes consisted of the following:

United States

International

The tax effects of significant items comprising the Company’s deferred taxes are as

Fiscal Year Ended

Deferred tax assets:

Net operating losses

Capital losses

Lease liability

Share-based compensation

Intangible assets

Gross deferred tax assets

1 unchanged sentence

Deferred tax liabilities:

Prepaid expenses

Total deferred tax liabilities

Net deferred taxes

ASC 740 requires that the tax benefit of net operating losses, temporary differences and credit carryforwards

be recorded as an asset to the extent that management assesses that realization is more likely than not. Realization of the future tax benefits is dependent on the Companys ability to generate sufficient taxable income within the

carryforward period.

Because of the Companys recent history of operating losses, management believes that recognition of the deferred tax assets arising from the above-mentioned future tax benefits is currently not likely to be realized and,

accordingly, has provided a valuation allowance.

As of June 30, 2020, and 2019, the Company established a full valuation allowance against its deferred tax assets due to the uncertainty surrounding the realization of such assets.

ASC 740 requires that the tax benefit of net operating losses, temporary differences and credit carryforw a

rds be recorded as an asset to the extent that management assesses that realization is “more likely than not.” Realization of the future tax benefits is dependent on the Company’s ability to generate sufficient taxable income within the carryforward period.

Because of the Company’s recent history of operating losses, management believes that recognition of the deferred tax assets arising from the above-mentioned future tax benefits is currently not likely to be realized and, accordingly, has provided a valuation allowance.

As of June 30, 2021, and 2020, the Company established a valuation allowance against its deferred tax assets due to the uncertainty surrounding the realization of such

BENITEC BIOPHARMA INC.

1 unchanged sentence

The valuation allowance increased by $ 2,933 during the year ended June 30, 2021.

operating losses and tax credit carryforwards as of June 30, 2020 are as follows:

Expiration Years

Net operating losses and tax credit carryforwards as of June 30, 2021 are as follows:

Net operating losses, federal (post-December 31, 2017)

Do not expire

Net operating losses, federal (pre-January 1,

Net operating losses, federal (post-December 31, 2017)

Net operating losses, state

Net operating losses, foreign

Net operating losses, Australia

Do not expire

Tax credits, foreign

The effective rate of the Companys provision (benefit) for income taxes differs from the federal

statutory rate as follows:

Fiscal Year Ended

The effective rate of the Company’s provision (benefit) for income taxes differs from the federal statutory rate as follows:

Statutory rate

Permanent differences

Research and development expenditures

Research and development incentive

Share-based payments

Net operating losses

Change in valuation allowance

1 unchanged sentence

The Company is subject to taxation in the U.S., various state jurisdictions and Australia.

The Companys

tax returns for the tax years 2014 through 2019 are open and are subject to examination by federal taxing authorities and the Companys tax returns for tax years 2011 through 2019 are subject to examination by state taxing authorities.

Company is not currently undergoing a tax audit in any federal, state or Australian jurisdiction.

The Company does not have any uncertain tax benefits (UTBs) as of June 30, 2020 and does not expect its UTBs to change significantly over

the next 12 months.

In the fiscal year ended June 30, 2019, the Company was domiciled in Australia where the statutory rate was 27.5%.

a result, the presentation of the tax disclosures, including effective tax rate, were based on Australian statutory rules.

In the fiscal year ended June 30, 2019, the net operating losses presented in the effective tax rate could also be viewed as a

chance in valuation allowance.

Internal Revenue Code Section 382 places a limitation (Section 382 Limitation) on

the amount of taxable income that can be offset by NOL carryforwards after a change in control (generally greater than 50% change in ownership within a three-year period) of a loss corporation.

The Company’s tax returns for the tax years 2014 through 2019 are open and are subject to examination by federal taxing authorities and the Company’s tax returns for tax years 2011 through 2019 are subject to examination by state taxing authorities.

The Company is not currently undergoing a tax audit in any federal, state or Australian jurisdiction.

The Company does no t have any uncertain tax benefits “(UTBs)” as of June 30, 2021 and does no t expect its UTBs to change significantly over the next 12 months.

Internal Revenue Code Section 382 places a limitation (“Section 382 Limitation”) on the amount of taxable income that can be offset by NOL carryforwards after a change in control (generally greater than 50 % change in ownership within a three-year period) of a loss corporation.

California has similar rules.

Generally, after a change

in control, a loss corporation cannot deduct NOL carryforwards in excess of the Section 382 Limitation.

Due to these change in ownership provisions, utilization of the NOL and tax credit carryforwards may be subject to an annual

limitation regarding their utilization against taxable income in future periods.

Under Australian income tax legislation, losses can be

utilized by the Company if it satisfies firstly the Continuity of Ownership Test (COT) or if failing that, the Similar Business Test (SBT).

Broadly, the COT requires a company to show that it maintained continuity of majority

beneficial ownership from the beginning of the year in which a loss is incurred to the end of an income year in which a tax loss is sought to be recouped.

Generally, after a change in control, a loss corporation cannot deduct NOL carryforwards in excess of the Section 382 Limitation.

Due to these “change in ownership” provisions, utilization of the NOL and tax credit carryforwards may be subject to an annual limitation regarding their utilization against taxable income in future periods.

Under Australian income tax legislation, losses can be utilized by the Company if it satisfies firstly the Continuity of Ownership Test (“COT”) or if failing that, the Similar Business Test (“SBT”).

Broadly, the COT requires a company to show that it maintained continuity of majority beneficial ownership from the beginning of the year in which a lo s

s is incurred to the end of an income year in which a tax loss is sought to be recouped.

The SBT requires a company to demonstrate that a “similar business” has been maintained from the time when the COT is failed and throughout the period until the end of the income year that the losses are being recouped.

On March 27, 2020, the Coronavirus Aid, Relief and Economic Security (“CARES”) Act was enacted and signed into law and GAAP requires recognition of the tax effects of new legislation during the reporting period that includes the enactment date.

The CARES Act includes changes to the tax provisions that benefits business entities, and makes certain technical corrections to the 2017 Tax Cuts and Jobs Act.

The tax relief measures for

BENITEC BIOPHARMA INC.

Notes to Consolidated Financial Statements

SBT requires a company to demonstrate that a similar business has been maintained from the time when the COT is failed and throughout the period until the end of the income year that

the losses are being recouped.

On March 27, 2020, the Coronavirus Aid, Relief and Economic Security (CARES) Act was enacted

and signed into law and GAAP requires recognition of the tax effects of new legislation during the reporting period that includes the enactment date.

The CARES Act includes changes to the tax provisions that benefits business entities, and makes

certain technical corrections to the 2017 Tax Cuts and Jobs Act.

The tax relief measures for businesses in the CARES Act include a five-year net operating loss carryback for certain net operating losses, suspension of the annual deduction limitation

of 80% of taxable income for certain net operating losses, changes in the deductibility of interest, acceleration of alternative minimum tax credit refunds, payroll tax relief, and a technical correction to allow accelerated deductions for qualified

improvement property.

The CARES Act also provides other non-tax benefits to assist those impacted by the pandemic.

The Company evaluated the impact of the CARES Act and determined that there is no material impact to the income tax provision for the

fiscal year ended June 30, 2020.

On June 29, 2020, California Assembly Bill 85 (AB 85) was signed into law, which suspends the use of net

operating losses and limits the use of research tax credits for 2020, 2021 and 2022, respectively.

The Company evaluated the impact of AB 85 and determined that the new legislation did not materially impact the Companys income tax provision

for the fiscal year ended June 30,2020.

CARES Act include a

five-year net operating loss carryback for certain net operating losses, suspension of the annual deduction limitation of

80 % of taxable income for certain net operating losses, changes in the deductibility of interest, acceleration of alternative minimum tax credit refunds, payroll tax relief, and a technical correction to allow accelerated deductions for qualified improvement property.

The CARES Act also provides other non-tax

benefits to assist those impacted by the pandemic.

The Company evaluated the impact of the CARES Act and determined that there is no material impact to the income tax provision for the fiscal year ended June 30, 2021.

On June 29, 2020, California Assembly Bill 85 (AB 85) was signed into law, which suspends the use of net operating losses and limits the use of research tax credits for 2020, 2021 and 2022, respectively.

The Company evaluated the impact of AB 85 and determined that the new legislation did no t materially impact the Company’s income tax provision for the fiscal year ended June 30, 2021.

Commitments and contingencies

Contract commitments

Company enters into contracts in the normal course of business with third-party contract research organizations, contract development and manufacturing organizations and other service providers and vendors.

These contracts generally provide for

termination on notice and, therefore, are cancellable contracts and not considered contractual obligations and commitments.

December 18, 2012, the Company announced the appointment of Synteract, Inc.

as its Clinical Research Organization responsible for the progression of TT-034 into Phase I/IIa clinical trials in the U.S.

Company has negotiated a contract for Synteract to continue to manage the Phase I/IIa clinical trial and the long-term patient follow up through 2016 and beyond.

The Company announced on February 20, 2016 that it was terminating the HCV

program, and at the end of the 2018 financial year had assumed all patients would remain in the study and the follow up would continue to 2021 at a maximum cost of $462,000.

However, in July 2018, the Company applied to the FDA for, and the FDA

approved, the discontinuation of the study which will result in minimal costs being incurred in the future.

There are no contingent

liabilities as of June 30, 2020 and 2019, respectively.

See Note 10 above for lease commitments.

The Company enters into contracts in the normal course of business with third-party contract research organizations, contract development and manufacturing organizations and other service providers and vendors.

These contracts generally provide for termination on notice and, therefore, are cancellable contracts and not considered contractual obligations and commitments.

Contingencies

From time to time, the Company may become subject to claims and litigation arising in the ordinary course of business.

The Company is not a

party to any material legal proceedings, nor is it aware of any material pending or threatened litigation.

BENITEC BIOPHARMA INC.

Notes to Consolidated Financial Statements

The Company is not a party to any material legal proceedings, nor is it aware of any material pending or threatened litigation.

There are no contingent liabilities as of June 30, 2021 and 2020, respectively.

See Note 9 above for lease commitments.

Related party transactions

The following transactions occurred with related parties:

Legal services paid/payable to a law firm in which a director of the Company is a partner and has

a beneficial interest.

All transactions were made on normal commercial terms and conditions and at market rates.

In December 2018, the Company accrued a milestone payment of $300,000 (AUD 425,411) payable to NantWorks, LLC pursuant to a sublicense

In December 2018, the Company accrued a milestone payment of $ 300,000 (AUD 425,411 ) payable to NantWorks, LLC pursuant to a sublicense agreement.

It was later determined that the milestone was not required to be paid and therefore the accrual was reversed in December 2019.

NantWorks, LLC is an affiliate of Nant Capital which owns 26.44% of the issued and outstanding common

stock of the Company as of June 30, 2020.

Earnings (Loss) per share

Fiscal Year Ended

Net Income (Loss) attributable to common stockholders

Weighted average number of shares used in calculating basic and diluted earnings per

Basic and diluted earnings (loss) per share

Outstanding options to acquire ordinary shares are not considered dilutive for the fiscal years ended

June 30, 2020 and June 30, 2019, because they are anti-dilutive, as the strike price was higher than the share price.

NantWorks, LLC is an affiliate of Nant Capital which owned 26.44 % of the issued and outstanding common stock of the Company as of June 30, 2020.

During the year ended June 30, 2021, the Company had entered into a related party transaction with Francis Abourizk Lightowlers for legal fees totaling $ 2

Peter Francis, a non-executive director of the Company is a partner at Francis Abourizk Lightowlers.

As of June 30, 2021 there was an amount due to this related party of $ 2

thousand included in trade and other payables on the accompanying consolidated balance sheet.

BENITEC BIOPHARMA INC.

Notes to Consolidated Financial Statements

Loss per share

Net loss attributable to common stockholders

Weighted average number of shares used in calculating basic and diluted earnings per share

Basic and diluted loss per share

Outstanding warrants and options amounting to 809,159 and 215,578 to acquire common stock are considered anti-dilutive for the fiscal years ended June 30, 2021 and June 30, 2020.

Subsequent events

The Company is closely monitoring the impact of the pandemic of the novel strain of coronavirus

COVID-19 (COVID-19) on all aspects of its business and geographies, including how it will impact its team members, suppliers, vendors and business partners.

While the Company did experience some disruption from COVID-19 through the delay of the initiation of the pre-clinical trials through the date of issuance, of these

financial statements, it is unable to predict the impact that COVID-19 will have on its financial position and operating results due to numerous uncertainties.

On August 14, 2020, the Company filed a registration statement on Form S-1 (File No.

333-246314) with the SEC.

Changes in and Disagreements with Accountants on Accounting and

Financial Disclosure.

The information required by this Item 9 was previously reported in the Companys Current Report on Form 8-K that was filed with the SEC on June 5, 2020, and amended on August 19, 2020.

The Company has evaluated subsequent events through the filing of this Annual Report on Form 10-K,

and determined that there have been no events that have occurred that would require adjustments or disclosures in the consolidated financial statements.

BENITEC BIOPHARMA INC.

Notes to Consolidated Financial Statements

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data