What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2025-09-22 compared with 2024-09-26 · 155 added, 129 removed, 77 unchanged (79% of the section changed)

3 unchanged sentences

As a result of many factors, such as those set forth in the section of the Annual Report captioned “Risk Factors” and elsewhere in this Annual Report, our actual results may differ materially from those anticipated in these forward- looking statements.

Restatement of Prior Period Financial Statements

We have restated our previously issued unaudited condensed consolidated financial statements for the quarterly periods and year-to-date periods ended March 31, 2025 and December 31, 2024, as contained in this Annual Report on Form 10-K.

Refer to the “Explanatory Note” Preceding Item 1, Business, for background on the restatement, the periods impacted, control considerations, and other information.

In addition, we have restated certain previously reported financial information for the quarterly periods and year-to-date periods ended March 31, 2025 and December 31, 2024 in this Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, including but not limited to information within the Results of Operations section.

See Note 3, Restatement of Prior Period Financial Statements, in the notes to the consolidated financial statements in this Annual Report on Form 10-K, for additional information related to the restatement, including descriptions of the misstatements and the impacts on our consolidated financial statements.

We endeavor to become the leader in discovery, development, and commercialization of therapeutic agents capable of addressing significant unmet medical need via the application of the silence and replace approach to the treatment of genetic disorders.

3 unchanged sentences

The unique therapeutic constructs also enable the simultaneous delivery of wildtype replacement genes, facilitating the proprietary “silence and replace” approach to the treatment of genetically defined diseases.

The Company is developing a silence and replace-based therapeutic (BB-301) for the treatment of Oculopharyngeal Muscular Dystrophy (OPMD), a chronic, life-threatening genetic disorder.

We are developing a silence and replace-based therapeutic (BB-301) for the treatment of Oculopharyngeal Muscular Dystrophy (OPMD), a chronic, life-threatening genetic disorder.

BB-301 is a silence and replace-based genetic medicine currently under development by Benitec.

4 unchanged sentences

We believe that this novel mechanistic profile of the current and future investigational agents developed by Benitec could facilitate the achievement of robust and durable clinical activity while greatly reducing the frequency of drug administration traditionally expected for medicines employed for the management of chronic diseases.

Additionally, the achievement of permanent gene silencing and gene replacement may significantly reduce the risk of patient non-compliance during the course of medical management of potentially fatal clinical disorders.

Available Information

Our telephone number is (510) 780-0819, and our Internet website is www.benitec.com.

The information on, or that can be accessed through, our website is not part of this Annual Report on Form 10-K and is not incorporated by reference herein.

Additionally, the

achievement of permanent gene silencing and gene replacement may significantly reduce the risk of patient non-compliance during the course of medical management of potentially fatal clinical disorders.

Royalties, milestone payments and other license fees

We are required to pay royalties, milestone payments and other license fees in connection with our licensing of intellectual property from third parties, including as discussed below.

We have been and in the future may be required to pay royalties, milestone payments and other license fees in connection with our licensing of intellectual property from third parties, including as discussed below.

Foreign Currency Translation and Other Comprehensive Income (Loss)

5 unchanged sentences

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 translation are included in the consolidated statements of operations and comprehensive income (loss) as other comprehensive income (loss).

April 2021 Capital Raise

On April 30, 2021, the Company announced the closing of an underwritten public offering of common stock and common stock equivalents (the “April 2021 Capital Raise”).

The Company received gross proceeds of approximately $14.3 million and net proceeds of approximately $12.7 million from the offering.

September 2022 Capital Raise

On September 15, 2022, the Company announced the closing of an underwritten public offering of common stock and common stock equivalents (the “September 2022 Capital Raise”).

The Company received gross proceeds of approximately $17.9 million and net proceeds of approximately $16.0 million from the offering.

August 2023 Capital Raise

On August 11, 2023, the Company announced the closing of an underwritten public offering of common stock and common stock equivalents (the “August 2023 Capital Raise”).

The Company received gross proceeds of approximately $30.9 million and net proceeds of approximately $27.9 million from the offering.

April 2024 Capital Raise

On April 22, 2024 we closed a private investment in public equity (PIPE) financing of common stock and common stock equivalents (the “April 2024 Capital Raise”).

The Company received gross proceeds of approximately $40.0 million and net proceeds of approximately $37.1 million from the financing.

Financing and Financing-Related Transactions During the Year Ended June 30, 2025

ATM Agreement

On October 11, 2024, we entered into a Sales Agreement (the “Sales Agreement”) with Leerink Partners LLC (the “Agent”).

Pursuant to the terms of the Sales Agreement, we may offer and sell shares of our common stock having an aggregate offering amount of up to $75 million from time to time through the Agent.

The Agent will use its commercially reasonable efforts, as the agent and subject to the terms of the Sales Agreement, to sell the shares offered.

Sales of the shares, if any, may be made in sales deemed to be an “at-the-market offering” as defined in Rule 415 under the Securities Act of 1933, as amended.

We may also agree to sell shares to the Agent as principal for its own account on terms agreed to by us and the Agent.

The Agent will be entitled to a commission from us of 3.0% of the gross proceeds from the sale of shares sold under the Sales Agreement.

In addition, we have agreed to reimburse certain expenses incurred by the Agent in connection with the offering.

Shares sold pursuant to the Sales Agreement, if any, will be sold pursuant to our shelf registration statement on Form S-3 (File No.

333-277310), that was filed with the Securities and Exchange Commission, including the related prospectus, dated March 5, 2024, as supplemented by a prospectus supplement.

As of June 30, 2025, we have not sold any shares of common stock pursuant to the Sales Agreement.

March 2025 Capital Raise

On March 25, 2025, we entered into an Underwriting Agreement with Leerink Partners LLC and TD Securities (USA) LLC, as representatives of the several underwriters named therein, pursuant to which we agreed to issue and sell, in an underwritten offering by us (the “Underwritten Offering”), (i) 1,143,000 shares of our common stock, par value $0.0001 per share (the “Common Stock”) at a purchase price to investors of $13.00 per share, and (ii) pre-funded warrants to purchase 300,000 shares of Common Stock at an exercise price of $0.0001 per share at a purchase price to investors of $12.999 per warrant.

In connection with the Underwritten Offering, we entered into a Securities Purchase Agreement with entities affiliated with each of Suvretta Capital, a greater than 5% beneficial owner prior to the offering (together, the “Purchasers”), pursuant to which we agreed to issue and sell to the Purchasers an aggregate of 900,000 shares of Common Stock at a purchase price of $13.00 per share in a registered direct offering (the “Direct Offering,” and together with the Underwritten Offering, the “Offerings”), the same price per share as the offering price in the Underwritten Offering.

We received gross proceeds of approximately $30.5 million and net proceeds of approximately $28.2 million from the Offerings.

Results of Operations

Revenues from customers

In the fiscal year ended June 30, 2024, the Company generated funds primarily from capital raising activities.

The Company has not generated any revenues from the sales of products.

Revenues from licensing fees and interest income are included in the revenue from customers line item on our statements of operations and comprehensive income (loss).

Our licensing fees have been generated through the licensing of our ddRNAi technology to biopharmaceutical companies.

The following table sets forth a summary of our revenues for each of the periods set forth below:

Year Ended June 30,

Revenues from customers

Total revenues

During the year ended June 30, 2024, the Company did not recognize any customer revenues, as compared to $75 thousand for the comparable year ended June 30, 2023.

The decrease in revenues from customers is due to the decrease in licensing revenue in the current year.

Quarterly Financial Information (Unaudited)

As a result of the restatement described above, we are restating our comparisons of expenses for the impacted periods as follows:

Operating Expenses

The following table sets forth a summary of our expenses for each of the periods:

Three Months Ended

Nine Months Ended

Operating Expenses:

Royalties and License Fees

Research and development (as restated)

General and administrative (as restated)

Total operating expenses (as restated)

During the three and nine months ended March 31, 2025, respectively, we incurred $6.5 million and $15.5 million in research and development expenses, respectively, as compared to $2.6 million and $12.1 million for the comparable periods ended March 31, 2024.

Research and development expenses relate primarily to ongoing clinical development of BB-301 for the treatment of OPMD.

The year-over-year increase for the three and nine months ended March 31, 2025, reflects the timing of contract manufacturing activity and the timing of payments for the OPMD Natural History and Dosing study.

General and administrative expense totaled $8.8 million and $16.5 million for the three and nine months ended March 31, 2025, compared to $1.6 million and $5.0 million for the comparable periods ended March 31, 2024.

The increase for the three month period, 2025 relates primarily to an increase in share-based compensation of $7.4 million, travel expenses of $176 thousand and salaries and wages of $254 thousand.

The increase in the nine month period relates to an increase in share-based compensation of $10.9 million, and higher corporate costs related to an increase in legal fees, and higher travel expenses as well as an increase in salaries and wages.

The following table sets forth a summary of our expenses for each of the periods:

Three Months Ended

Six Months Ended

Operating Expenses:

Royalties and License Fees

Research and development (as restated)

General and administrative (as restated)

Total operating expenses (as restated)

During the three and six months ended December 31, 2024, respectively, we incurred $5.4 million and $9.0 million in research and development expenses, respectively, as compared to $5.1 million and $9.5 million for the comparable periods ended December 31, 2023.

Research and development expenses relate primarily to ongoing clinical development of BB-301 for the treatment of OPMD.

The year-over-year decrease for the three and

six-month periods ended December 31, 2024 reflects the timing of contract manufacturing activity and the timing of payments for the OPMD Natural History and Dosing study.

General and administrative expense totaled $5.4 million and $7.6 million for the three and six months ended December 31, 2024, compared to $1.8 million and $3.4 million for the comparable periods ended December 31, 2023.

The increase for the three and six-month period ended December 31, 2024 relates primarily to an increase in share-based compensation of $2.7 million and $3.4 million and corporate costs related to the filing of an At-the-Market offering and related legal fees of $643 thousand and $945 thousand, respectively.

Years Ended June 30, 2025 and 2024

We did not generate or recognize any revenue during the years ended June 30, 2025 and 2024.

Royalties and License Fees

Royalties and license fees consist primarily of payments we are required to remit for royalties and other payments related to in-licensed intellectual property.

Under our in-license agreements, we may pay up-front fees and milestone payments and be subject to future royalties.

We cannot precisely predict the amount, if any, of royalties we will owe in the future, and if our calculations of royalty payments are incorrect, we may owe additional royalties, which could negatively affect our results of operations.

As our product sales increase, we may, from time to time, disagree with our third-party collaborators as to the appropriate royalties owed, and the resolution of such disputes may be costly, may consume management’s time, and may damage our relationship with our collaborators.

Furthermore, we may enter into additional license agreements in the future, which may also include royalty, milestone, and other payments.

Research and Development Expenses

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.

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

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

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

We record 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.

General and Administrative Expenses

1 unchanged sentence

General and administrative expenses also include facility expenses, professional fees for legal, consulting, accounting and audit services and other related costs.

We anticipate that our general and administrative expenses may increase as the Company focuses on the continued development of the clinical OPMD program.

The Company also anticipates an increase in expenses relating to accounting, legal and regulatory-related services associated with maintaining compliance with exchange listing and SEC requirements, director and officer insurance premiums and other costs associated with being a domestic public company.

The following table sets forth a summary of our expenses for each of the periods set forth below:

We anticipate that our general and administrative expenses may increase as we focus on the continued development of the clinical OPMD program.

We also anticipate an increase in expenses relating to accounting, legal and regulatory-related services associated with maintaining compliance with exchange listing and SEC requirements, director and officer insurance premiums and other similar costs.

Boston was appointed as our Chief Financial Officer effective January 1, 2025.

On December 9, 2024, the Compensation Committee approved increases of the base salaries of Dr.

Jerel Banks and Megan Boston to $667,000 and $415,000, respectively, each adjustment being effective as of January 1, 2025.

The Compensation Committee further determined that the target annual discretionary bonus with respect to our 2025 fiscal year for Dr.

Jerel Banks and Megan Boston will be 55% and 40% of their base salary, respectively.

On December 9, 2024, the Board of Directors appointed Sophie Mukadam as Chief Operating Officer, effective as of January 1, 2025.

Sophie Mukadam will receive a base salary of $500,000 and a target annual bonus of 40% of base salary.

On February 13, 2025, the Compensation Committee of our board of directors approved a change to the base salary of Megan Boston, CFO, from USD$415,000 to USD$531,900 to be effective March 1, 2025.

The base salary change was approved in anticipation of Ms.

Boston relocating from Australia to Los Angeles, California.

In connection with such relocation, the Compensation Committee also approved moving and transitional housing allowances in aggregate amounts of approximately $5,000 and $18,000, respectively.

Operating Expenses

The following table sets forth a summary of our expenses for each of the periods:

Year Ended June 30,

3 unchanged sentences

Total expenses

During the years ended June 30, 2024 and June 30, 2023, we incurred royalties and license fees expenses of $(108) thousand and zero, respectively.

The credit to expense during the year ended June 30, 2024 relates to the reversal of accruals for license fees no longer due.

During the years ended June 30, 2025 and 2024, we incurred royalties and license fees expenses of zero and $(108) thousand, respectively.

The credits to expense during the year ended June 30, 2024, relates to the reversal of accruals for license fees no longer due.

During the year ended June 30, 2025, we incurred $18.3 million in research and development expenses, as compared to $15.6 million for the comparable year ended June 30, 2024.

The increase in research and development expenses relates to the ongoing clinical development of BB-301 for the treatment of OPMD.

General and administrative expense totaled $7.0 million and $6.4 million for the years ended June 30, 2024 and 2023, respectively.

The year-over-year increase relates primarily to higher stock-based compensation, bonuses paid during the second quarter, and travel expenses ($300 thousand, $25 thousand, and $157 thousand, respectively).

Other Income (Loss)

The following table sets forth a summary of our other income (loss) for each of the periods set forth below:

Research and development expenses relate primarily to ongoing clinical development of BB-301 for the treatment of OPMD.

The year-over-year increase for the year ended June 30, 2025, reflects the timing of contract manufacturing activity and the timing of payments for the OPMD Natural History and Dosing study.

General and administrative expenses totaled $23.4 million for the year ended June 30, 2025, compared to $7.0 million for the comparable year ended June 30, 2024.

The increase for the year ended June 30, 2025, relates primarily to increases in share-based compensation of $14.5 million, legal fees of $492 thousand, consulting fees of $605 thousand, travel expenses of $219 thousand, and salaries and wages of $685 thousand.

Other Income (Expense)

The following table sets forth a summary of our other income (loss) for each of the periods:

Year Ended June 30,

Foreign currency transaction gain (loss)

Interest income (expense), net

Interest income, net

Other expense, net

Gain on extinguishment of liabilities

Unrealized loss on investment

Total other income (loss), net

The other income, net during the year ended June 30, 2024 totaled $739 thousand, which consists of foreign currency transaction gain, interest income, other expense, net, and unrealized loss on investment.

During the year ended June 30, 2023, other loss, net, totaled $481 thousand.

The foreign currency transaction gain for the year ended June 30, 2024, as compared to the loss for the year ended June 30, 2023, reflects a change in foreign exchange rates.

Net interest income for the year ended June 30, 2024, in comparison to the loss reported for the year ended June 30, 2023, reflects the increase in the Company’s cash and cash equivalent balances.

The increase in other expense relates to higher Delaware report filing fees ($160 thousand) and franchise taxes ($32 thousand), which are based on the Company’s stockholders’ equity.

Unrealized loss on investment was due to lower fair market values of the Company’s investments.

Other income (loss), net during the year ended June 30, 2025, which consists of foreign currency transaction gain (loss), interest income other expense, net, gain on extinguishment of liabilities, and unrealized loss on investment, totaled $3,848 thousand.

Other income (loss), net during the year ended June 30, 2024, which consists of foreign currency transaction gain (loss), interest expense, other income (expense), and unrealized loss on investment, totaled $739.

Foreign currency transaction gains and losses reflect changes in foreign exchange

Net interest income increased for year ended June 30, 2025, in comparison the year ended June 30, 2024, reflects the increase in our cash and cash equivalent balances.

Other expense, net recognized during the years ended June 30, 2025 and 2024 relate to recognition of a franchise tax expenses.

Gain on extinguishment of liabilities is due to us settling outstanding trade payables and accrued clinical development project costs of $1.2 million with a vendor for $495 thousand due to a contractual dispute regarding contract performance and deliverables.

This settlement resulted in a gain of $764 thousand in the current year.

Liquidity and Capital Resources

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.

For the years ended June 30, 2024, and 2023, the Company incurred net losses of

$21.8 million and $19.6 million, and used net cash of $19.4 million and $18.0 million in operations, respectively.

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

The Company has incurred cumulative losses and negative cash flows from operations since our predecessor’s inception in 1995, except for the year ended June 30, 2019 where we had net income of $2.6 million and generated positive cash flows of $4.8 million from operating activities.

The Company had accumulated losses of $190.3 million as of June 30, 2024.

We expect that our research and development expenses may increase due to the continued development of the OPMD program.

We had no borrowings for the years ended June 30, 2024 and 2023 and do not currently have a credit facility.

As of June 30, 2024, we had cash and cash equivalents of $50.9 million.

We have incurred cumulative losses and negative cash flows from operations since our predecessor’s inception in 1995.

We had accumulated losses of $218 million as of June 30, 2025.

We expect that our research and development expenses will increase due to the continued development of the OPMD program.

It is also likely that there will be an increase in the general and administrative expenses due to the obligations of being a domestic public company in the United States.

We had no borrowings as of June 30, 2025 and do not currently have a credit facility.

As of June 30, 2025, we had outstanding warrants to purchase 20,443,496 shares of Common Stock consisting of the following:

Purchase Warrants to purchase Common Stock

September 2022 Pre-Funded Warrants to purchase Common Stock

Series 2 Warrants to purchase Common Stock

August 2023 Pre-Funded Warrants to purchase Common Stock

Common Warrants to purchase Common Stock

April 2024 Pre-Funded Warrants to purchase Common Stock

March 2025 Pre-Funded Warrants to purchase Common Stock

As of June 30, 2025, we had cash and cash equivalents of approximately $97.7 million.

Cash in excess of immediate requirements is invested in accordance with our investment policy, primarily with a view to liquidity and capital preservation.

Currently, our cash and cash equivalents are held in bank accounts.

On October 11, 2024, we entered into the Sales Agreement as discussed above, which provides for the sale of up to $75 million of our common stock from time-to-time in “at-the-market offerings”.

On March 25, 2025, we completed a financing which raised $30.5 million.

The following table sets forth a summary of the net cash flow activity for each of the periods set forth below:

Year Ended June 30,

Net cash provided by (used in):

2 unchanged sentences

Financing activities

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

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

Effects of exchange rate changes on cash and cash equivalents

Net increase in cash, cash equivalents, and restricted cash

Operating activities

Net cash used in operating activities for the year ended June 30, 2024 was $19.4 million.

Net cash used in operating activities for the year ended June 30, 2023 was $18.0 million.

Net cash used in operating activities was primarily the result of our net loss, partially offset by share-based compensation expense, changes in working capital, and depreciation and amortization.

Net cash used in operating activities for the years ended June 30, 2025 and 2024 was $23.6 million and $19.4 million, respectively.

Net cash used in operating activities was primarily the result of our net loss, partially offset by non-cash expenses, and changes in working capital, including a decrease in payables and trade and other receivables and increases in prepaids.

Investing activities

Net cash used in investing activities for the years ended June 30, 2024 and 2023 was $179 thousand and $1 thousand, respectively, and relates to purchases of laboratory equipment.

Net cash used in investing activities for the years ended June 30, 2025 and 2024 was $18 thousand and $179 thousand, respectively.

Cash used in investing activities in the years ended June 30, 2025 and 2024 was related to the purchase of furniture and fixtures and lab equipment, respectively.

Financing activities

Net cash provided by financing activities was $70.5 million and $68.0 million for the years ended June 30, 2025 and 2024, respectively.

For the year ended June 30, 2024, cash from financing activities related primarily to the issuance of common shares, pre-funded warrants, and common warrants;

including $30.9 million and $40.0 million in gross proceeds from the August 2023 and April 2024 Capital Raises, respectively;

partially offset by $3.0 million and $2.9 million, respectively, of related issuance costs.

The future of the Company as an operating business will depend on its ability to keep operating costs and budgeted amounts and obtain adequate financing.

While we continue to progress discussions and advance opportunities to engage with pharmaceutical companies and continue to seek licensing partners for ddRNAi in disease areas that are not our focus, there can be no assurance as to whether we will enter into such arrangements or what the terms of any such arrangement could be.

On April 22, 2024, the Company closed a private

investment in public equity (PIPE) financing resulting in $37.1 million in net proceeds to the Company.

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.

While we have established some licensing arrangements, we do not have any products approved for sale and have not generated any revenue from product sales.

Cash from financing activities in the year ended June 30, 2025 was related to the issuance of common stock from the exercise of pre-funded warrants, Series 2 warrants, and common warrants, and an underwritten and direct offering with net proceeds of $72.8 million, partially offset by $2.3 million in share issuance costs.

Cash from financing activities in the year ended June 30, 2024 was related to the issuance of common stock, pre-funded warrants, and common warrants, with gross proceeds of $73.9 million, partially offset by $5.9 million in share issuance costs.

Funding Requirements

The future of us as an operating business will depend on its ability to manage operating costs and budgeted amounts and obtain adequate financing.

We do not have any products approved for sale and have not generated any revenue from product sales.

We do not know when, or if, we will generate any revenue from product sales.

We do not expect to generate revenue from product sales unless and until we obtain regulatory approval of and commercialize one of our current or future product candidates.

We do not expect to generate significant revenue from product sales unless and until we obtain regulatory approval of and commercialize one of our current or future product candidates.

Unless and until we establish significant revenues from licensing programs, strategic alliances or collaboration arrangements with pharmaceutical companies, or from product sales, we anticipate that we will continue to generate losses for the foreseeable future, and we expect the losses to increase as we continue the development of product candidates and begin to prepare to commercialize any product that receives regulatory approval.

We are subject to the risks inherent in the development of new gene therapy products, and we may encounter unforeseen expenses, difficulties, complications, delays, and other unknown factors that may adversely affect our business.

On April 22, 2024, the Company announced the closing of a private investment in public equity (PIPE) financing.

The Company received gross proceeds of approximately $40.0 million and net proceeds of approximately $37.1 million from the offering.

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

We have based our projections of operating capital requirements on assumptions that may prove to be incorrect and we may use all of our available capital resources sooner than we expect.

1 unchanged sentence

Our future funding requirements will depend on many factors, including, but not limited to:

the timing and costs of our planned clinical trials for our ddRNAi and silence and replace product candidates;

the timing and costs of our planned preclinical studies for our ddRNAi and silence and replace product candidates;

the timing and costs of our clinical trials for our ddRNAi and silence and replace product candidates;

the timing and costs of our preclinical studies for our ddRNAi and silence and replace product candidates;

the number and characteristics of product candidates that we pursue;

6 unchanged sentences

Contractual Obligations and Commercial Commitments

On October 1, 2016, the Company entered into an operating lease for office space in Hayward, California that originally expired in April 2018.

The Company has entered into lease amendments that extend the lease commitment through June 2025.

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.

On October 1, 2016, we entered into an operating lease for office space in Hayward, California that originally expired in April 2018.

We have entered into lease amendments that extended the lease through December 2027.

We also entered into a new lease in Los Angeles, California, which has an initial expiration date in July 2026.

See Note 9 of the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K.

Off-Balance Sheet Arrangements

We did not have during the periods presented, and we do not currently have, any off-balance sheet arrangements, as defined under SEC rules.

We enter 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.

Critical Accounting Policies and Significant Accounting Estimates

The preparation of consolidated financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make judgments, assumptions and estimates that affect the amounts reported.

Note 2 of Notes to the consolidated financial statements included in Item 8 in this Annual Report describes the significant accounting policies used in the preparation of the consolidated financial statements.

The preparation of consolidated financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires us to make judgments, assumptions and estimates that affect the amounts reported.

Note 2 of the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K describes the significant accounting policies used in the preparation of the consolidated financial statements.

Certain of these significant accounting policies are considered to be critical accounting policies.

A critical accounting policy is defined as one that is both material to the presentation of the Company’s consolidated financial statements and requires management to make difficult, subjective or complex judgments that could have a material effect on the Company’s financial condition or results of operations.

A critical accounting policy is defined as one that is both material to the presentation of our consolidated financial statements and requires us to make difficult, subjective, or complex judgments that could have a material effect on our financial condition or results of operations.

Specifically, these policies have the following attributes:

(1) the Company is required to make assumptions about matters that are highly uncertain at the time of the estimate;

and (2) different estimates the Company could reasonably have used, or changes in the estimate that are reasonably likely to occur, would have a material effect on the Company’s financial condition or results of operations.

(1) we are required to make assumptions about matters that are highly uncertain at the time of the estimate;

and (2) different estimates we could reasonably have used, or changes in the estimate that are reasonably likely to occur, would have a material effect on our financial condition or results of operations.

Estimates and assumptions about future events and their effects cannot be determined with certainty.

The Company bases its estimates on historical experience and on various other assumptions believed to be applicable and reasonable under the circumstances.

These estimates may change as new events occur, as additional information is obtained and as the Company’s operating environment changes.

These changes have historically been minor and have been included in the consolidated financial statements as soon as they became known.

In addition, management is periodically faced with uncertainties, the outcomes of which are not within its control and will not be known for prolonged periods of time.

These uncertainties are discussed in the section above entitled “Risk Factors.” Based on a critical assessment of its accounting policies and the underlying judgments and uncertainties affecting the application of those policies, management believes that the Company’s consolidated financial statements are fairly stated in accordance with accounting principles generally accepted in the United States of America, and provide a meaningful presentation of the Company’s financial condition and results of operations.

Management believes that the following are critical accounting policies:

Research and Development Expenses

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 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.

Share-Based Compensation

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 and non-employees to be recorded as an expense over the related requisite service period.

The Company values employee and non-employee share-based compensation at fair value using the Black-Scholes Option Pricing Model.

We base our estimates on historical experience and on various other assumptions believed to be applicable and reasonable under the circumstances.

These estimates may change as new events occur, as additional information is obtained and as our operating environment changes.

These changes have historically been minor and have been included

in the consolidated financial statements as soon as they became known.

In addition, we are periodically faced with uncertainties, the outcomes of which are not within its control and will not be known for prolonged periods of time.

These uncertainties are discussed in the section above entitled “Risk Factors.” Based on a critical assessment of its accounting policies and the underlying judgments and uncertainties affecting the application of those policies, we believe that our consolidated financial statements are fairly stated in accordance with accounting principles generally accepted in the United States of America and provide a meaningful presentation of our financial condition and results of operations.

We believe that the following are critical accounting policies:

Research and Development Expense

Preclinical and clinical trial costs are a significant component of our research and development expenses.

We accrue for preclinical and clinical development costs based on factors such as estimates of the work completed and in accordance with agreements established with our third-party service providers.

We make significant judgments and estimates in determining the accrued liabilities balance at the end of each reporting period.

As actual costs become known, we adjust our accrued liabilities accordingly on a prospective basis and will do so in the period in which the facts that give rise to the revision become reasonably certain.

Share-based Compensation Expense

We record 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 and non-employees to be recorded as an expense over the shorter of the service period or the vesting period.

We determine employee and non-employee share-based compensation based on grant-date fair value using the Black-Scholes Option Pricing Model and allocate the resulting compensation expense over the corresponding requisite service period using the graded vesting attribution method.

We account for forfeitures of share-based awards as they occur.

Recent Accounting Pronouncements

Accounting Standards recently adopted

ASU 2016-13—In June 2016, the FASB issued ASU No.

“ Financial Instruments-Credit Losses (Topic 326)”.

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 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.

2023-09, “Income Taxes (Topic 740)— Improvements to Income Tax Disclosures ”, 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.

2023-07, “ Segment Reporting (Topic 280)—Improvements to Reportable Segment Disclosures”, 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.

For a discussion of recent accounting pronouncements that we have adopted and have not yet adopted, see Note 2 to our consolidated financial statements.

Quantitative and Qualitative Disclosures about Market Risk.

1 unchanged sentence

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 7. Management’s Discussion and Analysis