What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2024-09-26 compared with 2023-09-21 · 198 added, 138 removed, 563 unchanged (37% of the section changed)

12 unchanged sentences

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

and its subsidiaries (the “Company”) as of June 30, 2023 and 2022, 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, 2023 and 2022, 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.

(the “Company”) as of June 30, 2024 and 2023, the related consolidated statements of operations and comprehensive loss, stockholders’ equity and cash flows, for the years ended June 30, 2024 and 2023, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2024 and 2023, 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 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 U.S.

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

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

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.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated 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.

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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.

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

Our audits included performing procedures to assess the risks of material misstatement of the consolidated 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 consolidated 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 consolidated financial statements.

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

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(1) relates to accounts or disclosures that are material to the 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 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.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions 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 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 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.

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.

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to a selection of cash disbursements and third-party invoices received after year-end

but prior to the issuance of the Company’s financial statements.

but prior to the issuance of the Company’s financial statements to assess the completeness of the accruals.

/s/ Baker Tilly US, LLP

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

Mountain View, California

San Jose, California

September 26, 2024

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Current assets:

Cash and cash equivalents

Restricted cash

Trade and other receivables

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Total current liabilities

Non-current accrued employee benefits

Lease liabilities, less current portion

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Loss from operations

Foreign currency transaction loss

Interest expense, net

Other income (loss):

Foreign currency transaction gain (loss)

Interest income (expense), net

Other expense, net

Unrealized loss on investment

Total other loss, net

Total other income (loss), net

Other comprehensive income (loss):

Unrealized foreign currency translation gain

Total other comprehensive income

Unrealized foreign currency translation gain (loss)

Total other comprehensive income (loss):

Total comprehensive loss

Deemed dividend

Net loss attributable to common stockholders

Net loss per share:

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Balance at June 30, 2022

Issuance of common stock and pre-funded warrants sold for cash, net of offering costs of $ 1,869

Exercise of pre-funded warrants

Share-based compensation

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Balance at June 30, 2023

Issuance of common stock and pre-funded

warrants sold for cash, net of offering costs of $ 1,869

Issuance of common stock, pre-funded

warrants, and common warrants sold for cash, net of offering costs of $ 2,964

Issuance of common stock and pre-funded warrants sold for cash, net of offering costs of $ 2,928

Exercise of pre-funded

Exercise of Series 2 warrants

Exercise of common warrants

Anti-dilution adjustment to warrants

Share-based compensation

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Trade and other payables

Accrued employee benefit payable

Accrued employee benefits

Lease liability

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Cash flows from financing activities:

Proceeds from issues of shares and pre-funded

Proceeds from issuance and exercise of common stock, pre-funded

warrants, Series 2 warrants, and common warrants

Share issue transaction costs

1 unchanged sentence

Effect of exchange rate changes on cash, cash equivalents, and restricted cash

Net decrease in cash, cash equivalents, and restricted cash

Net increase (decrease) in cash, cash equivalents, and restricted cash

Cash, cash equivalents, and restricted cash at beginning of year

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Supplemental disclosure of cash flow information

Re-measurement

of operating lease right-of-use

assets and liabilities

Deemed dividend

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

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

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

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.

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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, valuation of equity-based instruments issued for other than cash, the valuation allowance on deferred tax assets, and accrued research and development expense.

The most significant estimates and assumptions in the Company’s consolidated financial statements relate to accrued research and development expense and valuation of equity-based instruments issued for other than cash.

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.

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Moreover, the COVID-19

pandemic and any similar events, poses risks 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 Company’s clinical trials, and negatively impact manufacturing and testing activities performed by third parties.

pandemic and any similar events, pose risks 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 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.

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

There were no other forms of cash equivalents as of June 30, 2024 and 2023.

Restricted cash balances of $ 63 thousand and $ 13 thousand as of June 30, 2024 and June 30, 2023, respectively, secure the Company’s credit cards.

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Trade and Other Receivables

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.

The Company adopted ASC 326— Financial Instruments—Credit Losses

(Topic 326) as of July 1, 2023.

As such, the Company estimates current expected credit losses (CECL) on trade and other receivables on an ongoing basis, and will recognize those expected credit losses immediately.

Estimates of current expected credit losses are based on analyses of individual customer circumstances and historical write-off experience.

The Company’s analyses consider the aging of receivable accounts, customer creditworthiness, and general economic conditions.

Property and Equipment

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loss per share using the treasury stock method when their effect is dilutive.

For the year ended June 30, 2024, the Company recorded a deemed dividend, for accounting purposes, of $ 618,987 as a result of an adjustment to the exercise price of its Series 2 Warrants due to an exercise price adjustment provision in such warrants.

The deemed dividend is reflected as an increase in the net loss attributable to common stockholders in the basic and diluted earnings per share calculation.

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

As of June 30, 2023 and 2022, there were 2,456,032 and 49,716 potential common shares, respectively, that were excluded from the calculation of diluted net loss per share because their effect was anti-dilutive.

As of June 30, 2024 and 2023, there were

35,453,286 and 2,456,032 potential common shares, respectively, that were excluded from the calculation of diluted net loss per share because their effect was anti-dilutive.

Revenue Recognition

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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 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.

BENITEC BIOPHARMA INC.

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June 30, 2024 and 2023

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

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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.

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.

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In June 2016, the FASB issued ASU No.

Financial Instruments—Credit Losses (Topic 326).

2016-13, Financial

Instruments—Credit

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.

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 2016-13

effective July 1, 2023.

The Company adopted this ASU effective July 1, 2023 and determined that its impact on the accompanying consolidated financial statements is immaterial.

Recently Issued Accounting Standards Not Yet Adopted

In December 2023, the FASB issued ASU No.

(Topic 740) — Improvements

, which enhances the transparency, effectiveness, and comparability of income tax disclosures by requiring consistent categories and greater disaggregation of information related to income tax rate reconciliations and the jurisdictions in which income taxes are paid.

This guidance is effective for annual periods beginning after December 15, 2024 with early adoption permitted.

The Company is currently evaluating the impact of the ASU on its income tax disclosures within the consolidated financial statements.

In November 2023, the FASB issued ASU No.

(Topic 280) — Improvements

, which improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.

This ASU also expands disclosure requirements to enable users of financial statements to better understand the entity’s measurement and assessment of segment performance and resource allocation.

This guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted.

The Company is currently evaluating the impact of the ASU on its disclosures within the consolidated financial statements.

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, 2024 and 2023, the Company had a net loss of $ 21.8 million and $ 19.6 million, respectively, and net cash used in operations of $ 19.4 million and $ 18.0 million, respectively.

The Company expects to continue to incur additional operating losses in the foreseeable future.

The Company’s business focuses on the development of novel genetic medicines and, at this stage in the Company’s development, the Company has not established a source of revenue to cover its full operating costs, and as such, is dependent on funding operations through capital financing activities.

As of June 30, 2024, the Company had $ 50.9 million in cash and cash equivalents.

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

On August 11, 2023 we closed an underwritten public offering.

Net proceeds from the offering, including the impact of the underwriter’s partial exercise of its option and net of underwriting discounts, commissions, and other offering expenses, totaled $ 28.6 million.

We estimate that our cash and cash equivalents will be sufficient to fund the Company’s operations for at least the next twelve months after the date that this Annual Report is filed.

warrants to purchase up to an aggregate of 2,584,239 shares of common stock at a price per pre-funded

warrant of $ 4.7999 , to certain accredited institutional investors.

The pre-funded

warrants were immediately exercisable until exercised in full at an exercise price of $ 0.0001 per share

BENITEC BIOPHARMA INC.

Notes to Consolidated Financial Statements

June 30, 2024 and 2023

of common stock.

Gross proceeds from the financing totaled $ 40.0 million.

We estimate that our cash and cash equivalents will be sufficient to fund the Company’s operations for at least the next twelve months from the date of this report.

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

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The Company recognized licensing revenue over time as the performance obligations were satisfied.

BENITEC BIOPHARMA INC.

Notes to Consolidated Financial Statements

June 30, 2023 and 2022

Cash, cash equivalents, and restricted cash

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Current portion

BENITEC BIOPHARMA INC.

Notes to Consolidated Financial Statements

June 30, 2024 and 2023

Property and equipment, net

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Accrued professional fees

Accrued OPMD project costs

Accrued clinical development project costs

Accrued consultant fees

Other payables

BENITEC BIOPHARMA INC.

Notes to Consolidated Financial Statements

June 30, 2023 and 2022

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

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

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

BENITEC BIOPHARMA INC.

Notes to Consolidated Financial Statements

June 30, 2024 and 2023

The tables below show the changes during the years ended June 30, 2024 and 2023:

Initial measurement at July 1, 2021

Re-measurement

during the period

Balance at July 1, 2022

Amortization of right of use asset

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asset at June 30, 2024

Initial measurement at July 1, 2021

Re-measurement

during the period

Balance at July 1, 2022

Principal payments on operating lease liabilities

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Present value of operating lease liabilities

For the fiscal years ended June 30, 2024 and 2023, total lease expense under operating leases was approximately $ 277,000 and $ 277,000 , respectively, and was recorded in general and administrative expenses.

Stockholders’ equity

On December 8, 2021, the stockholders of the Company approved an amendment (the “Charter Amendment”) to the Company’s Amended and Restated Certificate of Incorporation to increase the total number of authorized shares of common stock of the Company from 10,000,000 to 40,000,000 , which became effective on December 17, 2021.

On December 7, 2022, the stockholders of the Company approved another amendment to the Company’s Amended and Restated Certificate of Incorporation to increase the number of authorized shares of common stock from 40,000,000 to 160,000,000 .

The Charter Amendment was filed with the Secretary of State

BENITEC BIOPHARMA INC.

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June 30, 2024 and 2023

For the fiscal years ended June 30, 2023 and 2022, total lease expense under operating leases was approximately $ 277,000 and $ 260,000 , respectively, and was recorded in general and administrative expenses.

Stockholders’ equity

of the State of Delaware and became effective December 9, 2022.

On July 26, 2023, the Company effected a

reverse stock split (the “Reverse Stock Split”) (see Note 2.

Basis of Presentation and Summary of Significant Accounting Policies — Basis of Presentation).

On December 6, 2019, the Investors were issued 4 Purchase Warrants that were exercisable into 12,600 fully paid shares of common stock should the Purchase Warrants be exercised in full (“Purchase Warrants”).

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On September 15, 2022, we closed an underwritten public offering in which we issued and sold (i) 1,037,520 shares of the Company’s common stock, (ii) 12,171,628 pre-funded

warrants, with each pre-funded

warrant immediately exercisable for one share of common stock at an exercise price of $ 0.0017 per share until exercised in full and (iii) 29,809,471 outstanding Series 2 warrants (the “Series 2 Warrants”) which are currently exercisable into 1,753,503 shares of common stock after giving effect to the Reverse Stock Split at an exercise price of $ 11.22 per share.

warrants, which, after giving effect to the Reverse Stock Split, are currently exercisable into 715,979 shares of common stock at an exercise price of $ 0.0017 per share until exercised in full, and (iii) 29,809,471 outstanding Series 2 warrants (the “Series 2 Warrants”) which are currently exercisable into 1,753,503 shares of common stock after giving effect to the Reverse Stock Split at an exercise price of $ 11.22 per share.

The Series 2 warrants sold in the offering became exercisable commencing December 9, 2022, the date on which the Company had both (a) received approval from its stockholders to increase the number of shares of common stock it is authorized to issue and (b) effected such stockholder approval by filing with the Secretary of State of the State of Delaware a certificate of amendment to its Amended and Restated Certificate of Incorporation, and will expire on the fifth anniversary of such initial exercise date.

The combined purchase price for each share of common stock and accompanying common warrant was $ 10.20 , which was allocated as $ 10.03 per share of common stock and $ 0.17 per common warrant.

The Series 2 Warrants contain an exercise price adjustment mechanism providing that certain issuances of common stock (or common stock equivalents), if made at a price lower than the then existing exercise price of such Series 2 Warrants, would reset the exercise price to such lower price.

The Series 2 Warrants agreement contains an exercise price adjustment mechanism providing that certain issuances of common stock (or common stock equivalents), if made at a price lower than the then existing exercise price of such Series 2 Warrants, would reset the exercise price to such lower price.

As a result of the August 11, 2023 public offering, the exercise price of the Series 2 Warrants has been automatically reset as of the closing time of such public offering to $ 1.9299 .

We have recorded a deemed dividend, for accounting purposes, of $ 618,987 as a result of an adjustment to the exercise price of its Series 2 Warrants due to an exercise price adjustment provision in such warrants

On October 17, 2022 and October 27, 2022, investors exercised 117,939 and 9,804 pre-funded

warrants, respectively, at an exercise price of $ 0.0017 per share.

On August 11, 2023 we closed an underwritten public offering in which we sold 875,949 shares of common stock, 15,126,226 pre-funded warrants to purchase 15,126,226 shares of common stock, and 16,002,175 common warrants to purchase up to 16,002,175 shares of common stock.

The combined purchase price for each share of common stock and accompanying common warrant was $ 1.93 , which was allocated as $ 1.9299 per share of common stock and $ 0.0001 per common warrant.

Each pre-funded warrant was sold together with one common warrant at a combined price of $ 1.9299 , which was allocated as $ 1.9298 per pre-funded warrant and $ 0.0001 per common warrant.

The pre-funded warrants were immediately exercisable until exercised in full at an exercise

BENITEC BIOPHARMA INC.

Notes to Consolidated Financial Statements

June 30, 2024 and 2023

price of $ 0.0001 per share of common stock.

The common warrants were immediately exercisable at an exercise price of $ 3.86 per share of common stock and will expire on the fifth anniversary of such initial exercisable date.

In addition, the Company granted the underwriter a 30-day option to purchase up to 2,331,606 additional shares of common stock and/or up to 2,331,606 additional common warrants.

The underwriter partially exercised this option and purchased 458,134 additional shares of common stock and 458,134 additional common warrants.

These additional shares are included in the total sold on August 11, 2023.

On October 17, 2023 an investor exercised 25,000 pre-funded warrants at an exercise price of $ 0.0001 per share.

On November 24, 2023, an investor exercised 20,000 Series 2 warrants at an exercise price of $ 1.93 per share.

On March 15, 2024 and March 18, 2024, investors exercised 105,888 and 26,472 pre-funded warrants, respectively, at an exercise price of $ 0.0001 per share.

On April 10, 2024 and April 19, 2024, investors exercised 25,000 Series 2 warrants on each date, at an exercise price of $ 1.93 per share.

On April 22, 2024, an investor exercised 28,039 Series 2 warrants at an exercise price of $ 1.93 per share.

On April 23, 2024, May 8, 2024, and May 21, 2024, investors exercised 27,500 , 697,475 , and 13,212 common warrants, respectively, at an exercise price of $ 3.86 per share.

On April 22, 2024 we closed a private investment in public equity (PIPE) financing in which we sold 5,749,152 shares of common stock at a price per share of $ 4.80 and, in lieu of shares of common stock, pre-funded warrants to purchase up to an aggregate of 2,584,239 shares of common stock at a price per pre-funded warrant of $ 4.7999 , to certain accredited institutional investors.

The pre-funded warrants were immediately exercisable until exercised in full at an exercise price of $ 0.0001 per share of common stock.

Gross proceeds from the financing totaled $ 40.0 million.

Net proceeds, net of commissions and other offering expenses, totaled approximately $ 37.1 million.

On April 26, 2024, April 28, 2024, and May 16, 2024, investors exercised 350,000 , 438,000 , and 7,947 pre-funded

warrants, respectively, at an exercise price of $ 0.0001 per share.

As of June 30, 2024, there were 34,271,146 warrants outstanding.

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Exercisable at June 30, 2023

Effective as of the closing of the August 2023 underwritten public offering conducted by the Company, the exercise price of the Series

2 warrants issued

September 16, 2022 was automatically adjusted to $ 1.9299 as required by the terms of such warrants.

Pre-funded warrants issued August 11, 2023

Common warrants issued August 11, 2023

Pre-funded warrants issued April 22, 2024

Common warrants exercised

Series 2 warrants exercised

Pre-funded warrants exercised

Outstanding and exercisable at June 30, 2024

Effective as of the closing of the August 2023 underwritten public offering conducted by the Company, the exercise price of the Series 2 warrants issued September 16, 2022 was automatically adjusted to $ 1.9299 as required by the terms of such warrants.

Equity Incentive Plan

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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.

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.

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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.

The maximum contractual term of options granted under the 2020 Plan is ten years .

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.

on the day prior to each of the Company’s next

BENITEC BIOPHARMA INC.

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June 30, 2024 and 2023

three annual stockholder meetings following the grant date.

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.

The maximum contractual term of options granted under the 2020 Plan is ten years .

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.

On December 8, 2021, the Company’s stockholders approved an amendment to the 2020 Plan, which increased the number of shares of the Company’s common stock reserved under the 2020 Plan to 108,823

(as adjusted for the Reverse Stock Split).

For the fiscal year ended June 30, 2024, our named executive officers (“NEO’s”) were each granted equity incentive awards under the 2020 Plan.

On December 6, 2023, the Company’s stockholders approved an amendment to the 2020 Plan, which increased the number of shares of the Company’s common stock reserved under the 2020 Plan to 1,204,537 .

Equity Awards

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The weighted-average grant-date fair value of stock options granted during the years ended June 30, 2024 and June 30, 2023 was $ 4.39 and $ 3.34 , respectively.

BENITEC BIOPHARMA INC.

Notes to Consolidated Financial Statements

June 30, 2024 and 2023

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

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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 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.

The Company has based its estimate of expected volatility on the historical volatility of the price of its common stock.

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

Expected Term.

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Under this approach, the expected term 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

June 30, 2023 and 2022

Interest Rate.

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Total share-based compensation expense

As of June 30, 2023 and 2022, there was $ 350,000 and $ 522,000 , respectively, of unrecognized share-based compensation expense related to stock options granted under the Plan and 2020 Plan.

As of June 30, 2024 and 2023, there was $ 4,243,676 and $ 350,000 , respectively, of unrecognized share-based compensation expense related to stock options granted under the 2020 Plan.

Unrecognized expense as of June 30, 2024 is expected to be recognized over a weighted average period of 2.65 years.

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The Company determined that this understatement is immaterial to the previously issued consolidated financial statements for the years ended June 30, 2021 and 2022, and the nine months ended March 31, 2023, and corrected it as of June 30, 2023.

Loss before provision for income taxes consisted of the following:

United States

International

BENITEC BIOPHARMA INC.

1 unchanged sentence

June 30, 2024 and 2023

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 follows:

9 unchanged sentences

Prepaid expenses

Unrealized FX

Total deferred tax liabilities

3 unchanged sentences

As of June 30, 2024 and 2023, the Company established a valuation allowance against its deferred tax assets due to the uncertainty surrounding the realization of such assets.

The valuation allowance increased $ 3.958 million

during the year ended June 30, 2023.

Net operating losses and tax credit carryforwards as of June 30, 2023 are as follows:

BENITEC BIOPHARMA INC.

Notes to Consolidated Financial Statements

June 30, 2024 and 2023

The valuation allowance decreased $ 1.329 million during the year ended June 30, 2024.

Net operating losses and tax credit carryforwards as of June 30, 202 4

are as follows:

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

3 unchanged sentences

Do not expire

BENITEC BIOPHARMA INC.

Notes to Consolidated Financial Statements

June 30, 2023 and 2022

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

4 unchanged sentences

Foreign tax rate differential

Section 382 Write-off

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

3 unchanged sentences

The Company has elected to include interest and penalties as a component of tax expense.

During the year ended June 30, 2023, the Company did no t recognize accrued interest and penalties related to unrecognized tax benefits.

During the year ended June 30, 2024, the Company did not recognize accrued interest and penalties related to unrecognized tax benefits.

The Company does not anticipate that the amount of existing unrecognized tax benefits will significantly increase or decrease during the next 12 months.

6 unchanged sentences

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 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.

BENITEC BIOPHARMA INC.

1 unchanged sentence

June 30, 2024 and 2023

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 CARES Act also provides other non-tax

1 unchanged sentence

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, 2024.

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.

On February 9, 2022, Governor Gavin Newsom signed CA SB 113 (SB 113) into law.

The legislation shortens the suspension period for deducting net operating losses (NOL) The suspension of deductions of California NOLs applied to California taxpayers with net business income of $ 1 million or more for tax years beginning on or after January 1, 2020, and before January 1, 2023.

SB 113 decreases that suspension period by one year, making the suspension applicable for tax years beginning on or after January 1, 2020, and before January 1, 2022.

On August 16, 2022, the President signed into law H.R.

5376 (commonly called the “Inflation Reduction Act of 2022”).

The primary tax provisions in the new law include an alternative minimum tax (AMT) on certain large corporations, a tax on stock buybacks and certain energy-related tax credits, each of which become effective after December 31, 2022.

The provisions of the Inflation Reduction Act are not expected to have a material effect on the Company’s financial statements and related disclosures.

On June 27, 2024, California’s Governor signed Senate Bill 167 (SB 167), which limits the use of net operating losses and business credits for tax years beginning on January 1, 2024, and before January 1, 2027.

The legislation disallows a net operating loss deduction for medium and large businesses and limits the use of tax credits to offset tax due to no more than $ 5 million for each taxable year.

The Company evaluated the impact of SB 167 and determined that the legislation did no t materially impact the Company’s income tax provision for the fiscal year ended June 30, 2024.

8 unchanged sentences

See Note 9 above for lease commitments.

BENITEC BIOPHARMA INC.

Notes to Consolidated Financial Statements

June 30, 2024 and 2023

Related party transactions

During the year ended June 30, 2023, the Company did not enter into any related party transactions.

During the year ended June 30, 2022, the Company had entered into related party transactions with Francis Abourizk Lightowlers for legal fees totaling $ 1 thousand.

Peter Francis, a non-executive

director of the Company is a partner at Francis Abourizk Lightowlers.

During the years ended June 30, 2024 and 2023, the Company did not enter into any related party transactions.

Loss per share

Net loss attributable to common stockholders (US$’000)

Net loss (US$’000)

Deemed dividend

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 35,453,286 and 2,456,032 to acquire common stock are considered anti-dilutive for the fiscal years ended June 30, 2024 and June 30, 2023, respectively.

Updated quarterly results (Unaudited)

The exercise price adjustment feature in the Company’s Series 2 warrant agreement was triggered by the Company’s August 11, 2023 public offering.

Specifically, the exercise price of the Series 2 Warrants was reset as of that date from $ 11.22 to $ 1.9299 .

The adjustment to the exercise price of such warrants results, solely for accounting purposes, in a deemed dividend totaling $ 618,987 .

This amount was not recognized in the Company’s reported results for the quarter ended September 30, 2023, the three- and six-month periods ending December 31, 2023, and the three- and nine-month periods ending March 31, 2024.

The impact of this adjustment to the exercise price will be accounted for as an increase in the Company’s accumulated deficit with an offsetting increase in Additional Paid-In Capital.

In addition, the deemed dividend will be added to the Company’s net loss, increasing loss attributable to common stockholders for purposes of computing earnings per share.

As detailed in the tables below, the update resulted in an understatement of the Company’s accumulated deficit, APIC and net loss per share for the quarter ended September 30, 2023, the six-month period ended December 31, 2023, and the nine-month period ended March 31, 2024.

There is no impact on the net loss per share for each of the three-month periods ended December 31, 2023 and March 31, 2024.

Pursuant to ASC 250 “Accounting changes and error corrections” issued by the FASB and SAB 99” Materiality” issued by the Securities and Exchange Commission, the Company determined the impact of the error was immaterial, both quantitatively and qualitatively, to the previously issued interim financial statements as presented below.

Net Loss per Share

BENITEC BIOPHARMA INC.

1 unchanged sentence

June 30, 2024 and 2023

Outstanding warrants and options amounting to 2,456,032 and 49,716 to acquire common stock are considered anti-dilutive for the fiscal years ended June 30, 2023 and June 30, 2022, respectively.

Accumulated Deficit

Subsequent events

On July 26, 2023, the Company effected a 1-for-17

reverse stock split (the “Reverse Stock Split”) of its common stock.

In accordance with the Reverse Stock Split, 17 pre-split

shares of the Company’s common were automatically converted into one issued and outstanding post-split share.

Proportional adjustments were also made to all outstanding stock options, pre-funded

warrants, and common warrants in accordance with their respective terms.

The Reverse Stock Split did not change the par value of the Company’s common stock or the authorized number of shares.

No fractional shares were issued in connection with the Reverse Stock Split.

All fractional shares were rounded up to the nearest whole share with respect to outstanding shares of common stock.

All share and earnings per share amounts presented in this Form 10-K reflect the impact of the Reverse Stock Split.

On August 11, 2023 we closed an underwritten public offering in which we sold 875,949 shares of common stock, 15,126,226 pre-funded

warrants to purchase 15,126,226 shares of common stock, and 16,002,175 common warrants to purchase up to 16,002,175 shares of common stock.

The combined purchase price for each share of common stock and accompanying common warrant was $ 1.93 , which was allocated as $ 1.9299 per share of common stock and $ 0.0001 per common warrant.

Each pre-funded

warrant was sold together with one common warrant at a combined price of $ 1.9299 , which was allocated as $ 1.9298 per pre-funded

warrant and $ 0.0001 per common warrant.

In addition, the Company granted the underwriter an option to purchase up to 2,331,606 additional shares of common stock and/or up to 2,331,606 additional common warrants.

As of August 15, 2023 the underwriter had partially exercised this option and purchased 458,134 additional shares of common stock and 458,134 additional common warrants.

The Company has 29,809,471 outstanding Series 2 warrants (the “Series 2 Warrants”) which are currently exercisable into 1,753,503 shares of common stock after giving effect to the Reverse Stock Split.

The Series 2 Warrants contain an exercise price adjustment mechanism providing that certain issuances of common stock (or common stock equivalents) if made at a price lower than the existing exercise price of $ 11.22 of such Series 2 Warrants, would reset the exercise price to such lower price.

As a result of the August 11, 2023 public offering, the exercise price of the Series 2 Warrants has been automatically reset as of the closing time of such public offering to $ 1.9299 .

On September 13, 2023, the Compensation Committee (the “Compensation Committee”) of the Company’s Board of Directors approved increases of the base salaries of Dr.

Jerel Banks, the Company’s Executive Chairman and Chief Executive Officer, and Megan Boston, the Company’s Executive Director, to $ 655,200 and $ 350,784 (Ms.

Boston’s salary as noted has been converted from AUD $ 1.00 to USD $ 0.64 , which was the conversion rate as of September 13, 2023) respectively, each adjustment being effective as of October 1, 2023.

On July 22, 2024, an investor exercised 269,609 Series 2 warrants at an exercise price of $ 1.93 per share.

On September 11, 2024, an investor exercised 200,000 pre-funded warrants at an exercise price of $ 0.0001 per share.

On July 1, 2024, the Plan and all options granted thereunder expired by its and their terms.

On August 29, 2024, the Company’s stockholders approved an amendment to the 2020 Plan, which increased the number of shares of the Company’s common stock reserved under the 2020 Plan to 8,204,537 and approved the exercise of certain existing warrants issued in April 2024, September 15, 2022 and August 11, 2023 in accordance with the rules of the Nasdaq Stock Market which otherwise would be subject to the Beneficial Ownership Limitation.

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