UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM

10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~March 31,~~September 30, 2021

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from
to

Commission File Number

001-39267

BENITEC BIOPHARMA INC.

(Exact name of registrant as specified in its charter)


Delaware		~~84-462-0206~~ 84-462-0206
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)

3940 Trust Way, Hayward, California 94545

(Address of principal executive offices & zip code)

(510)

780-0819

(Registrant’s telephone number including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.0001	BNTC	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90

days.

Yes

☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation

S-T (§

(§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a

non-accelerated

filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule

12b-2

of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒

☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule

12b-2

of the Exchange Act). Yes ☐ or No ☒

We had ~~7,854,416~~8,171,690 shares of our common stock outstanding as of the close of business on ~~May 6,~~November 15, 2021.

Table of Contents

BENITEC BIOPHARMA INC.

INDEX TO FORM

10-Q


SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS		2

PART I-FINANCIAL INFORMATION		4

~~ITEM 1.~~
ITEM 1.	Financial Statements (unaudited)	4


	Consolidated Balance Sheets as of ~~March 31,~~September 30, 2021 (Unaudited) and June 30, ~~2020~~2021	4


	Consolidated Statements of Operations and Comprehensive Loss for the Three ~~and Nine~~ Months Ended ~~March 31,~~September 30, 2021 and 2020 (Unaudited)	5


	Consolidated Statements of Stockholders’ Equity for the Three ~~and Nine~~ Months Ended ~~March 31,~~September 30, 2021 and 2020 (Unaudited)	6


	Consolidated Statements of Cash Flows for the ~~Nine~~Three Months Ended ~~March 31,~~September 30, 2021 and 2020 (Unaudited)	8


	Notes to Consolidated Financial Statements (Unaudited)	9

~~ITEM 2.~~
ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2423

~~ITEM 3.~~
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	40

~~ITEM 4.~~
ITEM 4.	Controls and Procedures	40

PART II-OTHER INFORMATION

~~ITEM 1.~~

ITEM 1.	Legal Proceedings	41

~~ITEM 1A.~~
ITEM 1A.	Risk Factors	41

~~ITEM 2.~~
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	41

~~ITEM 3.~~
ITEM 3.	Defaults Upon Senior Securities	41

~~ITEM 4.~~
ITEM 4.	Mine Safety Disclosures	41

~~ITEM 5.~~
ITEM 5.	Other Information	41

~~ITEM 6.~~
ITEM 6.	Exhibits	42

SIGNATURES		43

Table of Contents

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Report contains forward-looking statements that are subject to a number of risks and uncertainties, many of which are beyond our control. Our forward-looking statements relate to future events or our future performance and include, but are not limited to, statements concerning our business strategy, future commercial revenues, market growth, capital requirements, new product introductions, expansion plans and the adequacy of our funding. All statements, other than statements of historical fact included in this Report, are forward-looking statements. When used in this Report, the words “could,” “believe,” “anticipate,” “intend,” “estimate,” “expect,” “may,” “continue,” “predict,” “potential,” “project,” or the negative of these terms, and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. These statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, levels of activity, performance or achievements to be materially different from the information expressed or implied by these forward-looking statements.

Some of the risks and uncertainties that may cause our actual results, performance or achievements to differ materially from those expressed or implied by forward-looking statements include the following:

the success of our plans to develop and potentially commercialize our product candidates;

the timing of the initiation and completion of preclinical studies and clinical trials;

the timing and sufficiency of patient enrollment and dosing in any future clinical trials;

the timing of the availability of data from clinical trials;

the timing and outcome of regulatory filings and approvals;

unanticipated delays;

sales, marketing, manufacturing and distribution requirements;

market competition and the acceptance of our products in the marketplace;

regulatory developments in the United States of America;

the development of novel AAV vectors;

the plans of licensees of our technology;

the clinical utility and potential attributes and benefits of ddRNAi and our product candidates,

including the potential duration of treatment effects and the potential for a “one shot” cure;

our dependence on our relationships with collaborators and other third parties;

expenses, ongoing losses, future revenue, capital needs and needs for additional ~~financing;~~

financing, and our ability to access additional financing given market conditions and other factors, including our capital structure;

the length of time over which we expect our cash and cash equivalents to be sufficient to execute on our business plan;

our intellectual property position and the duration of our patent portfolio;

the impact of local, regional, and national and international economic conditions and events; and

the impact of the

current COVID-19 pandemic,

the disease caused by

the SARS-CoV-2 virus,

which may adversely impact our business and preclinical and future clinical trials;

as well as other risks detailed under the caption “Risk Factors” in this Report and in other reports filed with the SEC. Although we believe that we have a reasonable basis for each forward-looking statement contained in this Report, we caution you that these statements are based on a combination of facts and important factors currently known by us and our expectations of the future, about which we cannot be certain.

Table of Contents

We have based the forward-looking statements included in this Report on information available to us on the date of this Report or on the date thereof. Except as required by law we undertake no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise. You are advised to consult any additional disclosures that we may make directly to you or through reports that we, in the future, may file with the SEC, including annual reports on

Form 10-K, quarterly

reports

on Form 10-Q and

current reports

on Form 8-K.

All forward-looking statements included herein or in documents incorporated herein by reference are expressly qualified in their entirety by the cautionary statements contained or referred to elsewhere in this Report.

Table of Contents

PART I – FINANCIAL INFORMATION

ITEM 1.

Financial Statements

BENITEC BIOPHARMA INC.

Consolidated Balance Sheets

(in thousands, except par value and share amounts)

   March 31, June 30,
   2021 2020
   (Unaudited)
Assets

Current assets:

Cash and cash equivalents
   $ 11,988 $ 9,801
Trade and other receivables
   10 59
Other current assets
   409 949


Total current assets
   12,407 10,809
Property and equipment, net
   563 374
Deposits
   9 9
Other assets
   197 —
Right-of-use assets
   252 395


Total assets
   $ 13,428 $ 11,587


Liabilities and Stockholders’ Equity

Current liabilities:

Trade and other payables
   $ 2,005 $ 741
Accrued employee benefits
   231 203
Lease liabilities, current portion
   208 192


Total current liabilities
   2,444 1,136
Lease liabilities, less current portion
   54 213


Total liabilities
   2,498 1,349


Commitments and contingencies (Note 12)

Stockholders’ equity:

Common stock, $0.0001 par value—10,000,000 shares authorized; 4,818,050 and 1,108,374 shares issued and outstanding at March 31, 2021 and June 30, 2020, respectively
   5 1
Additional paid-in capital
   138,632 128,826
Accumulated deficit
   (126,116 ) (116,636 )
Accumulated other comprehensive loss
   (1,591 ) (1,953 )


Total stockholders’ equity
   10,930 10,238


Total liabilities and stockholders’ equity
   $ 13,428 $ 11,587

September 30,

June 30,


2021

2021


(Unaudited)

Assets

Current assets:

Cash and cash equivalents    $ 15,727 $ 19,769
Trade and other receivables    3 25
Prepaid and other assets    642 814

Total current assets    16,372 20,608
Property and equipment, net    323 375
Deposits    25 9
Other assets    169 185
Right-of-use
assets
   947 202

Total assets    $ 17,836 $ 21,379

Liabilities and Stockholders’ Equity

Current liabilities:
Trade and other payables    $ 1,106 $ 880
Accrued employee benefits    301 276
Lease liabilities, current portion    194 213

Total current liabilities    1,601 1,369
Lease liabilities, less current portion    760 0

Total liabilities    2,361 1,369

Commitments and contingencies (Note 12)    0 0
Stockholders’ equity:
Common stock, $0.0001 par value—10,000,000 shares authorized; 8,171,690 shares issued and outstanding at September 30, 2021 and June 30, 2021, respectively    1 1
Additional
paid-in
capital
   151,854 151,583
Accumulated deficit    (135,164 ) (130,119 )
Accumulated other comprehensive loss    (1,216 ) (1,455 )

Total stockholders’ equity    15,475 20,010

Total liabilities and stockholders’ equit
y
   $ 17,836 $ 21,379

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

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BENITEC BIOPHARMA INC.
Consolidated Statements of Operations and Comprehensive Loss
(Unaudited)
(in thousands, except share and per share amounts)

   Three Months Ended Nine Months Ended
   March 31, March 31,
   2021 2020 2021 2020
Revenue:

Revenues from customers
   $ 1 $ 28 $ 57 $ 137


Total revenues
   1 28 57 137
Operating expenses

Royalties and license fees
   7 47 122 (233 )
Research and development
   2,758 805 4,700 2,095
General and administrative
   1,029 1,287 4,976 3,669


Total operating expenses
   3,794 2,139 9,798 5,531


Loss from operations
   (3,793 ) (2,111 ) (9,741 ) (5,394 )
Other income (loss):

Foreign currency transaction gain (loss)
   (112 ) (7 ) (167 ) 4
Interest income (expense), net
   (2 ) 16 (5 ) 52
Other income, net
   —   —   37 —
Unrealized loss on investment
   (2 ) —   (3 ) (1 )


Total other income (loss), net
   (116 ) 9 (138 ) 55


Net loss
   $ (3,909 ) $ (2,102 ) $ (9,879 ) $ (5,339 )


Other comprehensive income (loss):

Unrealized foreign currency translation gain (loss)
   (24 ) (901 ) 362 (869 )


Total other comprehensive income (loss)
   (24 ) (901 ) 362 (869 )


Total comprehensive loss
   $ (3,933 ) $ (3,003 ) $ (9,517 ) $ (6,208 )


Net loss
   $ (3,909 ) $ (2,102 ) $ (9,879 ) $ (5,339 )


Net loss per share:

Basic and diluted
   $ (0.82 ) $ (1.96 ) $ (2.93 ) $ (5.36 )


Weighted average number of shares outstanding: basic and diluted
   4,747,059 1,070,957 3,375,228 995,246



Three Months Ended September 30,


2021

2020

Revenue:

Revenues from customers    $ 0   $ 55

Total revenues    0   55
Operating expenses
Royalties and license fees    0   134
Research and development    2,780 774
General and administrative    2,042 1,837

Total operating expenses    4,822 2,745

Loss from operations    (4,822 ) (2,690 )
Other income (loss):
Foreign currency transaction loss    (240 ) (54 )
Interest expense, net    (1 ) (1 )
Other income, net    —   27
Unrealized gain on investment    18 —

Total other loss, net    (223 ) (28 )

Net loss    $ (5,045 ) $ (2,718 )

Other comprehensive income:
Unrealized foreign currency translation gain    239 178

Total other comprehensive income    239 178

Total comprehensive loss    $ (4,806 ) $ (2,540 )

Net loss    $ (5,045 ) $ (2,718 )

Net loss per share:
Basic and diluted    $ (0.62 ) $ (2.45 )

Weighted-average shares outstanding:
Basic and diluted    8,171,690 1,108,374

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

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BENITEC BIOPHARMA INC.
Consolidated Statements of Stockholders’ Equity
(Unaudited)
(in thousands, except share amounts)

   Common Stock
Additional
Paid-in
Accumulated Accumulated
Other
Comprehensive Total
Stockholders’
   Shares    Amount    Capital Deficit Loss Equity
Balance at June 30, 2019
   856,765    $ 1    $ 127,327 $ (108,870 ) $ (1,864 ) $ 16,594
Common stock sold for cash, net of issuance costs of $240
   186,666    —      1,720 —   —   1,720
Issuance of pre-purchased warrants, net of issuance costs of $240
   —      —      50 —   —   50
Share-based compensation
   —      —      55 —   —   55
Forfeiture of share-based payments
   —      —      (61 ) 61 —   —
Foreign currency translation loss
   —      —      —   —   (304 ) (304 )
Net loss
   —      —      —   (1,147 ) (1,147 )






Balance at September 30, 2019
   1,043,431    $ 1    $ 129,091 $ (109,956 ) $ (2,168 ) $ 16,968






Exercise of pre-funded warrants
   27,526    —      —   —   —   —






Share-based compensation
   —      —      37 —   —   37






Forfeiture of share-based payments
   —      —      (319 ) 319 —   —






Foreign currency translation gain
   —      —      —   —   336 336






Net loss
   —      —      —   (2,090 ) —   (2,090 )






Balance at December 31, 2019
   1,070,957    $ 1    $ 128,809 $ (111,727 ) $ (1,832 ) $ 15,251






Share-based compensation
   —      —      88 —   —   88
Foreign currency translation gain
   —      —      —   —   (901 ) (901 )






Net loss
   —      —      —   (2,102 ) —   (2,102 )






Balance at March 31, 2020
   1,070,957    $ 1    $ 128,897 $ (113,829 ) $ (2,733 ) $ 12,336







Common Stock

Additional
Paid-in

Accumulated

Accumulated
Other
Comprehensive

Total
Stockholders’


Shares

Amount

Capital

Deficit

Loss

Equity

Balance at June 30, 2020    1,108,374    $ 1    $ 128,826 $ (116,636 ) $ (1,953 ) $ 10,238
Share-based compensation    —      —      38 —   —   38
Forfeiture of share-based payments    —      —      (14 ) 14 —   —
Foreign currency translation gain    —      —      —   —   178 178
Net loss    —      —      —   (2,718 ) (2,718 )

Balance at September 30, 2020    1,108,374    $ 1    $ 128,850 $ (119,340 ) $ (1,775 ) $ 7,736

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

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BENITEC BIOPHARMA INC.
Consolidated Statements of Stockholders’ Equity
(Unaudited)
(in thousands, except share amounts)

   Common Stock
Additional
Paid-in
Accumulated Accumulated
Other
Comprehensive Total
Stockholders’
   Shares    Amount    Capital Deficit Loss Equity
Balance at June 30, 2020
   1,108,374    $ 1    $ 128,826 $ (116,636 ) $ (1,953 ) $ 10,238
Share-based compensation
   —      —      38 —   —   38
Forfeiture of share-based payments
   —      —      (14 ) 14 —   —
Foreign currency translation gain
   —      —      —   —   178 178
Net loss
   —      —      —   (2,718 ) (2,718 )






Balance at September 30, 2020
   1,108,374    $ 1    $ 128,850 $ (119,340 ) $ (1,775 ) $ 7,736






Issuance of common stock and pre-funded warrants sold for cash, net of issuance costs of $1,643
   3,150,514    3    9,848 —   —   9,851






Exercise of pre-funded warrants
   281,581    —      —   —   —   —






Share-based compensation
   —      —      82 —   —   82






Forfeiture of share-based payments
   —      —      (385 ) 385 —   —






Foreign currency translation gain
   —      —      —   —   208 208






Net loss
   —      —      —   (3,252 ) —   (3,252 )






Balance at December 31, 2020
   4,540,469    $ 4    $ 138,395 $ (122,207 ) $ (1,567 ) $ 14,625






Exercise of pre-funded warrants
   277,581    1    2 —   —   3






Share-based compensation
   —      —      235 —   —   235






Foreign currency translation loss
   —      —      —   —   (24 ) (24 )






Net loss
   —      —      —   (3,909 ) —   (3,909 )






Balance at March 31, 2021
   4,818,050    $ 5    $ 138,632 $ (126,116 ) $ (1,591 ) $ 10,930







Common Stock

Additional
Paid-in

Accumulated

Accumulated
Other
Comprehensive

Total
Stockholders’


Shares

Amount

Capital

Deficit

Loss

Equity

Balance at June 30, 2021    8,171,690    $ 1    $ 151,583    $ (130,119 ) $ (1,455 ) $ 20,010
Share-based compensation    —      —      271    —   —   271
Foreign currency translation gain    —      —      —      —   239 239
Net loss    —      —      —      (5,045 ) —   (5,045 )

Balance at September 30, 2021    8,171,690    $ 1    $ 151,854    $ (135,164 ) $ (1,216 ) $ 15,475

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

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BENITEC BIOPHARMA INC.
Consolidated Statements of Cash Flows
(Unaudited)
(in thousands)

   Nine Months Ended
   March 31,
   2021 2020
Cash flows from operating activities:

Net loss
   $ (9,879 ) $ (5,339 )
Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation and amortization
   179 150
Amortization of right-of-use assets
   143 138
Loss on disposal of fixed assets
   —   1
Unrealized loss on investment
   3 1
Share-based compensation expense
   355 180
Changes in operating assets and liabilities:

Trade and other receivables
   21 2,494
Other assets
   377 (69 )
Trade and other payables
   1,214 (1,197 )
Accrued employee benefits
   55 —
Lease liabilities
   (143 ) (749 )


Net cash used in operating activities
   (7,675 ) (4,390 )


Cash flows from investing activities:

Purchases of property and equipment
   (362 ) (82 )
Proceeds from disposal of property and equipment
   —   1


Net cash used in investing activities
   (362 ) (81 )


Cash flows from financing activities:

Proceeds from issues of shares and pre-funded warrants
   11,497 2,250
Shares and pre-funded warrant issuance costs
   (1,643 ) (480 )


Net cash provided by financing activities
   9,854 1,770


Effects of exchange rate changes on cash and cash equivalents
   370 (1,617 )


Net increase (decrease) in cash and cash equivalents
   2,187 (4,318 )


Cash and cash equivalents, beginning of period
   9,801 15,718


Cash and cash equivalents, end of period
   $ 11,988 $ 11,400


Supplemental disclosure of cash flow information:

Initial measurement of operating lease right-of-use assets and liabilities
   $ —   $ (579 )



Three Months Ended


September 30,


2021

2020

Cash flows from operating activities:

Net loss    $ (5,045 ) $ (2,718 )
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization    52 45
Amortization of
right-of-use
assets
   50 47
Unrealized loss on investment    (18 ) 0
Share-based compensation expense    271 38
Changes in operating assets and liabilities:
Trade and other receivables    0   27
Other assets    179 374
Trade and other payables    293 (119 )
Accrued employee benefits    (8 ) (8 )
Lease liabilities    (52 ) (46 )

Net cash used in operating activities    (4,278 ) (2,360 )

Cash flows from investing activities:

Purchases of property and equipment    0   (173 )

Net cash used in investing activities    0   (173 )

Effects of exchange rate changes on cash and cash equivalents    236 182

Net decrease in cash and cash equivalents    (4,042 ) (2,351 )

Cash and cash equivalents, beginning of period    19,769 9,801

Cash and cash equivalents, end of period    $ 15,727 $ 7,450

Supplemental disclosure of cash flow information:

Re-measurement
of operating
lease right-of-use assets
and liabilities
   $ 794 $ 0

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

Table of Contents
BENITEC BIOPHARMA INC.
Notes to Consolidated Financial Statements
(Unaudited)
1. Business
Benitec Biopharma Inc. (the “Company”) is a corporation formed under the laws of Delaware, United States of America, on November 22, 2019 and listed on the Nasdaq Capital Market (“Nasdaq”) under the symbol “BNTC”. Benitec Biopharma Inc. is the parent entity of a number of subsidiaries including the previous parent entity Benitec Biopharma Limited (“BBL”). BBL was incorporated under the laws of Australia in 1995 and was listed on the Australian Securities Exchange, or ASX, from 1997 until April 15, 2020. On August 14, 2020, BBL reorganized as a Proprietary Limited company and changed its name to Benitec Biopharma Proprietary Limited. The Company’s business focuses on the development of novel genetic medicines. Our proprietary platform, called
DNA-directed
RNA interference, or ddRNAi, combines RNA interference, or RNAi, with
gene therapy to create medicines that facilitate sustained silencing of disease-causing genes.
~~On November 27, 2019, BBL announced~~
During the year ended June 30, 2021, the Company completed an organization res
t
ructuring as part of the commercial desire to provide a more efficient structure for the future as the Company continues to transition its ~~intention to~~ ~~re-domicile~~ ~~from Australia~~operations to the ~~United States of America. BBL implemented a Scheme of Arrangement pursuant to which Benitec Biopharma Inc, a newly incorporated company for the purpose of effecting the~~ ~~re-domiciliation,~~ acquired all BBL shares and BBL became a wholly-owned subsidiary of Benitec Biopharma Inc.. BBL shareholders received one Benitec Biopharma Inc. share for every 300 BBL shares. Holders of BBL’s American Depository Shares, or ADSs (each of which represented 200 ordinary shares), received two shares of the Company’s common stock for every three ADSs held. The ~~re-domiciliation~~ ~~was completed on April 15, 2020 following approval by BBL shareholders at a Scheme Meeting held on March 26, 2020 and by the Supreme Court of Queensland on March 30, 2020.~~
In accordance with the U.S. Securities and Exchange Commission’s (“SEC”) Staff Accounting Bulletin Topic 4C, all issued and outstanding shares of the Company’s common stock have been retroactively adjusted in these consolidated financial statements to reflect the 300:1 ratio and share consolidation as if it occurred on July 1, 2019.
~~The terms the “Company,” “we,” “us,” “our” and similar terms used herein refer (i), prior to the~~ ~~re-domiciliation~~ ~~to BBL, an Australian corporation, and its subsidiaries, and (ii), following the~~ ~~re-domiciliation,~~ ~~to Benitec Biopharma Inc., a Delaware corporation, and its subsidiaries (including BBL).~~
US.
The Company’s fiscal year end is June 30. References to a particular “fiscal year” are to our fiscal year end June 30 of that calendar year.
The consolidated financial statements of Benitec Biopharma Inc. are presented in United States dollars and consist of Benitec Biopharma Inc. and its wholly owned subsidiaries:

   Principal place of
business/country of
incorporation    Ownership
Fiscal Year
2020 Ownership
Fiscal Year
2019
Benitec Biopharma Proprietary Limited (“BBL”)
   Australia    100 % —
Benitec Australia Proprietary Limited
   Australia    100 % 100 %
Benitec Limited
   United Kingdom    100 % 100 %
Benitec, Inc.
   USA    100 % 100 %
Benitec LLC
   USA    100 % 100 %
RNAi Therapeutics, Inc.
   USA    100 % 100 %
Tacere Therapeutics, Inc.
   USA    100 % 100 %


		Principal place of business/country of incorporation
Benitec Biopharma Proprietary Limited (“BBL”)		Australia
Benitec Australia Proprietary Limited		Australia
Benitec Limited		United Kingdom
Benitec, Inc.		USA
Benitec LLC		USA
RNAi Therapeutics, Inc.		USA
Tacere Therapeutics, Inc.		USA
Benitec IP Holdings, Inc.		USA

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BENITEC BIOPHARMA INC.
Notes to Consolidated Financial Statements
(Unaudited)
~~The Company is continuing to monitor the impact of the pandemic of the novel strain of coronavirus~~ ~~COVID-19 (“COVID-19”)~~ ~~on all aspects of its business, including how it will impact our employees, suppliers, vendors and business partners. While the Company did experience some disruption from~~ ~~COVID-19~~ ~~including disruption of the timing and completion of certain~~ ~~pre-clinical~~ ~~trials we are unable to predict the overall impact that~~ ~~COVID-19~~ ~~will have on our financial position and operating results due to numerous uncertainties.~~
2. Basis of Presentation and Summary of Significant Accounting Policies
Basis of Presentation
The Company’s consolidated financial statements contained in this Quarterly Report on Form
10-Q
have been prepared in accordance with generally accepted accounting principles in the U.S. (“GAAP”) for interim financial information and with the instructions to Form
10-Q
and Article 8 of ~~SEC~~U.S. Securities and Exchange Commission “SEC”) Regulation
S-X.
Accordingly, certain information and disclosures required by GAAP for annual financial statements have been omitted. In the opinion of management, all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation have been included. Interim financial results are not necessarily indicative of results anticipated for the full year. These consolidated financial statements should be read in conjunction with the Company’s audited financial statements and accompanying notes included in the Company’s Annual Report on Form
10-K
for the year ended June 30, ~~2020.~~
2021.
Reference is frequently made herein to the Financial Accounting Standards Board (the “FASB”) Accounting Standards Codification (“ASC”). This is the source of authoritative US GAAP recognized by the FASB to be applied to
non-governmental
entities.
Principles of Consolidation
The consolidated financial statements include the Company’s accounts and the accounts of its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated.
Use of Estimates
The preparation of the Company’s consolidated financial statements requires management to make estimates and assumptions that impact the reported amounts of assets, liabilities and expenses and the disclosure of contingent assets and liabilities in the Company’s consolidated financial statements and accompanying notes. The most significant estimates and assumptions in the Company’s consolidated financial statements include the estimates of useful lives of property and equipment, valuation of the operating lease liability and related
right-of-use
asset, allowance for uncollectable receivables, valuation of equity based instruments issued for other than cash, the valuation allowance on deferred tax assets and foreign currency translation due to certain average exchange rates applied in lieu of spot rates on transaction dates. These estimates and assumptions are based on current facts, historical experience and various other factors believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the recording of expenses that are not readily apparent from other sources. Actual results may differ materially and adversely from these estimates. To the extent there are material differences between the estimates and actual results, the Company’s future results of operations will be affected.

Table of Contents
BENITEC BIOPHARMA INC.
Notes to Consolidated Financial Statements
(Unaudited)
Risks and Uncertainties
The Company is subject to risks and uncertainties common to early-stage companies in the biotechnology industry, including, but not limited to, development by competitors of new technological innovations, protection of proprietary technology, dependence on key personnel, reliance on single-source vendors and collaborators, availability of raw materials, patentability of the Company’s products and processes and clinical efficacy and safety of the Company’s products under development, compliance with
government regulations and the need to obtain additional financing to fund operations.
There can be no assurance that the Company’s research and development will be successfully completed, that adequate protection for the Company’s intellectual property will be obtained or maintained, that any products developed will obtain necessary government regulatory approval or that any approved products will be commercially viable. Even if the Company’s product development efforts are successful, it is uncertain when, if ever, the Company will generate revenue from product sales. The Company operates in an environment of rapid technological change and substantial competition from other pharmaceutical and biotechnology companies. In addition, the Company is dependent upon the services of its employees, consultants and other third parties.
Moreover,
the current COVID-19 pandemic, which
is impacting worldwide economic activity, poses risks that the Company or its employees, contractors, suppliers, and other partners may be prevented or inhibited from conducting business activities for an indefinite period of time which may
delay the start-up and conduct
of the Company’s clinical trials, and negatively impact manufacturing and testing activities performed by third parties. Any significant delays may impact the use and sufficiency of the Company’s existing cash reserves, and the Company may be required to raise additional capital earlier than it had previously planned. The Company may be unable to raise additional capital if and when needed, which may result in delays or suspension of its development plans. The extent to which the pandemic will impact the Company’s business will depend on future developments that are highly uncertain and cannot be predicted at this time.
Segment Reporting
Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker in making decisions regarding resource allocation and assessing performance. The Company views its operations and manages its business in one operating segment.
Foreign Currency Translation and Other Comprehensive Income (Loss)
The Company’s functional currency and reporting currency is the United States dollar. BBL’s functional currency is the Australian dollar (AUD). Assets and liabilities are translated at the exchange rate in effect at the balance sheet date. Revenues and expenses are translated at the average rate of exchange prevailing during the reporting period. Equity transactions are translated at each historical transaction date spot rate. Translation adjustments arising from the use of different exchange rates from period to period are included as a component of stockholders’ equity as “Accumulated other comprehensive ~~income (loss).~~loss.” Gains and losses resulting from foreign currency translation are included in the consolidated statements of operations and comprehensive ~~income (loss)~~loss as other comprehensive income (loss).
Other ~~Comprehensive Income (Loss)~~comprehensive income for all periods presented includes only foreign currency translation ~~gains (losses).~~
gains.
11

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BENITEC BIOPHARMA INC.
Notes to Consolidated Financial Statements
(Unaudited)
Fair Value Measurements
The Company measures its financial assets and liabilities in accordance with US GAAP using ASC 820,
Fair Value Measurements.
For certain financial instruments, including cash and cash equivalents, accounts receivable, and accounts payable, the carrying amounts approximate fair value due to their short maturities.
The Company follows accounting guidance for financial assets and liabilities. ASC 820 defines fair value, provides guidance for measuring fair value and requires certain disclosures. The guidance utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels:
Level 1:
Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2:
Inputs, other than quoted prices that are observable, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.
Level 3:
Unobservable inputs in which little or no market data exists, therefore developed using estimates and assumptions developed by us, which reflect those that a market participant would use.
As of ~~March 31,~~September 30, 2021, and June 30, ~~2020,~~2021, the Company had no0 financial assets or liabilities measured at fair value on a recurring basis.

~~BENITEC BIOPHARMA INC.~~

~~Notes to Consolidated Financial Statements~~

~~(Unaudited)~~

Cash and Cash Equivalents

Cash and cash equivalents include cash on hand and at banks, short-term deposits with an original maturity of three months or less with financial institutions, and bank overdrafts. Bank overdrafts are reflected as a current liability on the consolidated balance sheets.

Concentrations of Risk

Financial instruments that potentially subject the Company to significant concentration of credit risk consist primarily of cash and cash equivalents. The Company maintains deposits at federally insured financial institutions in excess of federally insured limits. The Company has not experienced any losses in such accounts, and management believes that the Company is not exposed to significant credit risk due to the financial position of the depository institutions in which those deposits are held.

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

Table of Contents
BENITEC BIOPHARMA INC.
Notes to Consolidated Financial Statements
(Unaudited)
Property and Equipment
Property and equipment are stated at cost, net of accumulated depreciation and amortization. Expenditures for maintenance and repairs are expensed as incurred; additions, renewals, and improvements are capitalized. When property and equipment are retired or otherwise disposed of, the related cost and accumulated depreciation and amortization are removed from the respective
accounts, and any gain or loss is included in operations. Depreciation and amortization of property and equipment is calculated using the straight-line basis over the following estimated useful lives:
Software
3-4
years
Lab equipment
3-7
years
Computer hardware
3-5
years
Leasehold improvements    shorter of the lease term or estimated useful lives

~~BENITEC BIOPHARMA INC.~~

~~Notes to Consolidated Financial Statements~~

~~(Unaudited)~~

Impairment of Long-Lived Assets

Property and equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of long-lived assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the assets. Fair value is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable.

Trade and other payables

These amounts represent liabilities for goods and services provided to the Company prior to the end of the period and which are unpaid. Due to their short-term nature, they are measured at amortized cost and are not discounted. The amounts are unsecured and are usually paid within 30 days of recognition.

Leases

At lease commencement, the Company records a lease liability based on the present value of lease payments over the expected lease term. The Company calculates the present value of lease payments using the discount rate implicit in the lease, unless that rate cannot be readily determined. In that case, the Company uses its incremental borrowing rate, which is the rate of interest that the Company would have to pay to borrow on a collateralized basis an amount equal to the lease payments over the expected lease term. The Company records a corresponding
right-of-use
lease asset based on the lease liability, adjusted for any lease incentives received and any initial direct costs paid to the lessor prior to the lease commencement date.

After lease commencement, the Company measures its leases as follows: (i) the lease liability based on the present value of the remaining lease payments using the discount rate determined at lease commencement; and (ii) the
right-of-use
lease asset based on the remeasured lease liability, adjusted for any unamortized lease incentives received, any unamortized initial direct costs and the cumulative difference between rent expense and amounts paid under the lease agreement. Any lease incentives received and any initial direct costs are amortized on a straight-line basis over the expected lease term. Rent expense is recorded on a straight-line basis over the expected lease term.

Table of Contents
BENITEC BIOPHARMA INC.
Notes to Consolidated Financial Statements
(Unaudited)
Basic and Diluted Net ~~Income (Loss)~~Loss Per Share
Basic net ~~income (loss)~~loss per share is calculated by dividing net ~~income (loss)~~loss by the weighted-average number of common shares outstanding during the period. Diluted net ~~income (loss)~~loss per share is calculated by dividing net ~~income (loss)~~loss by the weighted-average number of common shares outstanding plus potential common shares. Stock options, warrants and convertible instruments are considered potential common shares and are included in the calculation of diluted net ~~income (loss)~~loss per share using the treasury stock method when their effect is dilutive. Potential common shares are excluded from the calculation of diluted net income (loss) per share when their effect is anti-dilutive. As of ~~March 31,~~September 30, 2021, and ~~2020,~~June 30, 2021, there were ~~694,388 and 324,903~~809,159 potential common shares, respectively, that were excluded from the calculation of diluted net ~~income (loss)~~loss per share because their effect was anti-dilutive.

~~BENITEC BIOPHARMA INC.~~

~~Notes to Consolidated Financial Statements~~

~~(Unaudited)~~

Revenue Recognition

The Company recognizes revenue in accordance with that core principle by applying the following steps:

Step 1: Identify the contract(s) with a customer.

Step 2: Identify the performance obligations in the contract.

Step 3: Determine the transaction price.

Step 4: Allocate the transaction price to the performance obligations in the contract.

Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation.

The Company applies judgement in determining whether contracts entered into fall within the scope of ASC 606 –
Revenue from Contracts with Customers (“
(“ASC 606”). In doing so, management considers the commercial substance of the transaction and how risks and benefits of the contract accrue to the various parties to the contract.

Management has also made the judgement that the grant of the license and transfer of associated
know-how
and materials are accounted for as one performance obligation as they are not considered to be distinct; they are highly interrelated and could not provide benefits to the customer independently from each other. Judgements were made in relation to the transfer of the license and
know-how
and whether this should be recognized over time or a point in time. The point in time has been determined with regard to the point at which the transfer of
know-how
has substantially been completed and the customer has control of the asset and the ability to direct the use of and receive substantially all of the remaining benefits.

Licensing revenues

Revenue from licensees of the Company’s intellectual property reflects the transfer of a right to use the intellectual property as it exists at the point in time in which the license is transferred to the customer. Consideration can be variable and is estimated using the most likely amount method. Subsequently, the estimate is constrained until it is highly probable that a significant revenue reversal will not occur when the uncertainty is resolved. Revenue is recognized as or when the performance obligations are satisfied.

Table of Contents
BENITEC BIOPHARMA INC.
Notes to Consolidated Financial Statements
(Unaudited)
The Company recognizes contract liabilities for consideration received in respect of unsatisfied performance obligations and reports these amounts as other liabilities in the consolidated balance sheet. Similarly, if the Company satisfies a performance obligation before it receives the consideration, the Company recognizes either a contract asset or a receivable in its consolidated balance sheet, depending on whether something other than the passage of time is required before the consideration is due.
Royalties
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.~~

~~Notes to Consolidated Financial Statements~~

~~(Unaudited)~~

Services revenue

Revenue is earned (constrained by variable considerations) from the provision of research and development services to customers. Services revenue is recognized when performance obligations are either satisfied over time or at a point in time. Generally, the provision of research and development services under a contract with a customer will represent satisfaction of a performance obligation over time where the Company retains the right to payment for services performed but not yet completed.
~~Government Research and Development Grants~~
Government grants are recognized at fair value where there is reasonable assurance that the grant will be received, and all grant conditions will be met. Grants relating to expense items are recognized as income over the periods necessary to match the grant costs they are compensating.
Grant income is generated through the Australian federal government’s Research and Development Tax Incentive program, under which the government provides a cash refund for 43.5% of eligible research and development expenditures. This grant is available for our research and development activities in Australia, as well as activities in the United States to the extent such U.S.-based expenses relate to our activities in Australia, do not exceed half the expenses for the relevant activities and are approved by the Australian government. Grants are recorded when a reliable estimate can be made.
~~The Company will not be claiming the Australian Government research and development grants going forward.~~

Research and Development Expense

Research and development costs are expensed when incurred. These costs have been recognized as an expense when incurred. 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. Estimates have been used in determining the expense liability under certain clinical trial contracts where services have been performed but not yet invoiced. Generally, the costs, and therefore estimates, associated with clinical trial contracts are based on the number of patients, drug administration cycles, the type of treatment and the outcome being that the length of time before actual amounts can be determined will vary depending on length of the patient cycles and the timing of the invoices by the clinical trial partners.

Table of Contents
BENITEC BIOPHARMA INC.
Notes to Consolidated Financial Statements
(Unaudited)
Share-based Compensation Expense
The Company records share-based compensation in accordance with ASC 718,
Stock Compensation
. ASC 718 requires the fair value of all share-based ~~employee~~ compensation awarded to employees and
non-employees
to be recorded as an expense over the shorter of the service period or the vesting period. The Company values employee and
non-employee
share-based compensation at fair value using the Black-Scholes Option Pricing Model.
~~The Company adopted FASB Accounting Standard Update (“ASU”)~~ ~~2018-07~~ ~~and accounts for~~ ~~non-employee~~ ~~share-based awards in accordance with the measurement and recognition criteria of ASC 718 and recognizes the fair value of such awards over the service period.~~

~~BENITEC BIOPHARMA INC.~~

~~Notes to Consolidated Financial Statements~~

~~(Unaudited)~~

Income Taxes

The Company is ~~governed by~~subject to Australia and United States income tax laws. The Company follows ASC 740
Accounting for Income Taxes
, when accounting for income taxes, which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed annually for temporary differences between the financial statements and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount more likely than not to be realized.

For uncertain tax positions that meet a “more likely than not” threshold, the Company recognizes the benefit of uncertain tax positions in the consolidated financial statements. The Company’s practice is to recognize interest and penalties, if any, related to uncertain tax positions in income tax expense in the consolidated statements of operations.

Recent Accounting Pronouncements

In June 2016, the FASB issued ASU
No. 2016-13:
Financial Instruments – Credit Losses ~~(Topic~~
(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 has determined that it has met the criteria of a smaller reporting company (“SRC”) as of November 15, 2019. As such, ASU
2019-10:
Financial Instruments-Credit Losses, Derivatives and Hedging, and Leases: Effective Dates
amended the effective date for the Company to be for reporting periods beginning after December 15, 2022. The Company will adopt this ASU effective July 1, 2023.

3. Going Concern

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. For the ~~nine~~three months ended ~~March 31,~~September 30, 2021, and 2020, the Company incurred a net loss of ~~$9.9~~$5.0 million and ~~$5.3~~$2.7 million and used net cash of ~~$7.7~~$4.3 million and ~~$4.4~~$2.4 million in operations, respectively. The Company expects to continue to incur additional operating losses in the foreseeable future.

As of ~~March 31,~~September 30, 2021, the Company had ~~$12~~$15.7 million in cash and cash equivalents. The Company has performed a review of the cash flow forecasts and believes that the current funding will be sufficient for a period of at least twelve months from the date of this Report.

Table of Contents
BENITEC BIOPHARMA INC.
Notes to Consolidated Financial Statements
(Unaudited)
The Company’s ability to continue as a going concern is dependent upon its ability to generate revenue and obtain adequate financing. While the Company believes in its ability to generate revenue and raise additional funds, there can be no assurances to that effect. The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary if the Company is unable to continue as a
going concern due to unsuccessful product development or commercialization, or the inability to obtain adequate financing in the future.

4. Revenue

Revenues from customers (US$’000)

Three

Months

ended
September 30,

2021

Three

Months

ended
September 30,

2020

Licensing revenue from services transferred overtime    $ —      $ 55

5. Cash and Cash equivalents

(US$’000)
September 30,

2021

June 30,

2021

Cash at Bank    $ 15,727    $ 19,769

Total    $ 15,727    $ 19,769

6. Prepaid and other assets

(US$’000)
September 30,

2021

June 30,

2021

Prepaid expenses    $ 763    $ 967
Security deposit    14    15
Market value of listed shares    34    17

Total other assets    811    999
Less:
non-current
portion
   (169 )    (185 )

Current portion    $ 642    $ 814

17
Table of Contents
BENITEC BIOPHARMA INC.
Notes to Consolidated Financial Statements
(Unaudited)
~~4. Revenue~~

   Three Months Ended    Nine Months Ended
Revenues from customers (US$’000)
   March
31,
2021    March
31,
2020    March
31,
2021    March
31,
2020
Licensing revenue
   $ 1    $ —      $ 57    $ 60
Royalty revenue
   —      28    —      73
Service revenue
   —      —      —      4








Total
   $ 1    $ 28    $ 57    $ 137








   Three Months Ended March 31, 2021
Disaggregated revenue (US$’000)
   Licensing    Royalties    Development activities    Total
Services transferred at a point in time
   $ —      $ —      $ —      $ —
Services transferred over time
   1    —      —      1








Total
   $ 1    $ —      $ —      $ 1








   Nine Months Ended March 31, 2021
Disaggregated revenue (US$’000)
   Licensing    Royalties    Development activities    Total
Services transferred at a point in time
   $ —      $ —      $ —      $ —
Services transferred over time
   57    —      —      57








Total
   $ 57    $ —      $ —      $ 57

~~BENITEC BIOPHARMA INC.~~

~~Notes to Consolidated Financial Statements~~

~~(Unaudited)~~

   Three Months Ended March 31, 2020
Disaggregated revenue (US$’000)
   Licensing    Royalties    Development activities    Total
Services transferred at a point in time
   $ —      $ —      $ —      $ —
Services transferred over time
   —      28    —      28








Total
   $ —      $ 28    $ —      $ 28








   Nine Months Ended March 31, 2020
Disaggregated revenue (US$’000)
   Licensing    Royalties    Development activities    Total
Services transferred at a point in time
   $ —      $ 73    $ —      $ 73
Services transferred over time
   60    —      4    64








Total
   $ 60    $ 73    $ 4    $ 137








~~5. Cash and Cash equivalents~~

(US$’000)
   March 31,
2021    June 30,
2020
Cash at Bank
   $ 11,988    $ 5,231
Term Deposit
   —      4,570




Total
   $ 11,988    $ 9,801

~~BENITEC BIOPHARMA INC.~~

~~Notes to Consolidated Financial Statements~~

~~(Unaudited)~~

~~6. Other current assets~~

(US$’000)
   March
31,
2021    June 30,
2020
Prepaid expenses
   $ 587    $ 861
Security deposit
   15    69
Other deposit
   —      18
Market value of listed shares
   4    1




Total other assets
   606    949
Less: non-current portion
   (197 )    —




Current portion
   $ 409    $ 949




7. Property and equipment, net

(US$’000)
   March 31, 2021    June 30,
2020
Software
   $ 14    $ 11
Lab equipment
   1,471    1,109
Computer hardware
   26    26
Leasehold improvements
   24    24




Total property and equipment, gross
   1,535    1,170
Accumulated depreciation and amortization
   (972 )    (796 )




Total property and equipment, net
   $ 563    $ 374

(US$’000)
September 30,

2021

June 30,

2021

Software    $ 14    $ 14
Lab equipment    1,328    1,329
Computer hardware    26    26
Leasehold improvements    24    24

Total property and equipment, gross    1,392    1,393
Accumulated depreciation and amortization    (1,069 )    (1,018 )

Total property and equipment, net    $ 323    $ 375

Depreciation expense was ~~$67,000 and $179,000~~$0.1 million for the three months ended September 30, 2021, and ~~nine months ended March 31, 2021, respectively, and $48,000 and $150,000,~~$45 thousand, respectively, for the
same ~~periods~~
period in 2020.
8. Trade and other payables

(US$’000)
   March 31, 2021    June 30,
2020
Trade payable
   $ 1,640    $ 282
Accrued license fees
   142    54
Accrued professional fees
   42    155
Other payables
   181    250




Total
   $ 2,005    $ 741

~~BENITEC BIOPHARMA INC.~~

~~Notes to Consolidated Financial Statements~~

~~(Unaudited)~~

(US$’000)
September 30,

2021

June 30,

2021

Trade payable    $ 323    $ 274
Accrued license fees    135    140
Accrued professional fees    99    13
Accrued
OPMD project costs
   351    279
Accrued bonuses

112

—

Other payables    86    174

Total    $ 1,106    $ 880

9. Leases
The Company has entered into an operating lease for office space under an agreement that expires in 2022. The lease requires the Company to pay utilities, insurance, taxes and other operating expenses. The Company’s lease does not contain any residual value guarantees or material restrictive covenants.
During August 2021, the Company extended the lease thr
o
ugh June 2025.
The tables below show the changes during the three months ended September 30, 2021:
(US$’000)

Operating
lease
right-of-

use assets

Balance at July 1, 2021    $ 202
Re-measurement
during the period
   794
Amortization of right of use asset    (49 )

Operating lease
right-of-use
asset at September 30, 2021
   $ 947

18
Table of Contents
BENITEC BIOPHARMA INC.
Notes to Consolidated Financial Statements
(Unaudited)

(US$’000)

Operating
lease
liabilities

Balance at July 1, 2021    $ 213
Re-measurement
during the period
   794
Principal payments on operating lease liabilities    (51 )

Operating lease liabilities at September 30, 2021    954
Less:
non-current
portion
   (760 )

Current portion at September 30, 2021    $ 194

As of ~~March 31,~~September 30, 2021, the Company’s operating lease has a
remaining lease term of ~~1.21~~3.71 years and a discount rate of 4.67%. The maturities of the operating lease liabilities are as follows:

(US$’000)
   March
31,
2021
2021
   $ 52
2022
   218


Total operating lease payments
   270
Less imputed interest
   (8 )


Present value of operating lease liabilities
   $ 262


(US$’000)    September 30,
2021
2022    235
2023    287
2024    297
2025    228

Total operating lease payment
s
   1,047
Less imputed interest    (93 )

Present value of operating lease liabilities    $ 954

The Company recorded lease liabilities and
right-of-use
lease assets for the lease based on the present value of lease payments over the expected lease term, discounted using the Company’s incremental borrowing rate. Rent expense was ~~$52,000 and $156,000~~$0.1 million for the three months ended September 30, 2021 and ~~nine months ended March 31, 2021,~~2020, respectively, of which $7 thousand was recorded in the general and ~~$52,000~~administrative expense and ~~$156,000, respectively, for the same periods~~$45 thousand was record in ~~2020.~~
research and development expenses.
19
Table of Contents
BENITEC BIOPHARMA INC.
Notes to Consolidated Financial Statements
(Unaudited)
10. Stockholders’ equity
Common Stock
On October 6, 2020, the Company announced the closing of an underwritten public offering of 2,666,644 shares of its common stock at a price to the public of $3.10 per share. The Company also announced that the underwriter fully exercised its over-allotment option to purchase 483,870 additional shares of its common stock at the offering price of $3.10 per share.
The gross and net proceeds were $11.5 million and $9.9 million, respectively.
On April 30, 2021, the Company announced the closing of an underwritten public offering of 3,036,366 shares of its common stock at a price to the public of $4.25 per share. The Company also announced that the underwriter exercised the over-allotment option to purchase 317,274 additional shares of its common stock at the offering price of $4.25 per share. The gross and net proceeds were $14.3 million and $12.7 million, respectively.
Warrants
On October 6, 2020, the Company announced the closing of an underwritten public offering of 559,162 shares of common stock underlying
pre-funded
warrants initially purchased for $3.09 per share and immediately exercisable at $0.01 per share
(“Pre-Funded
Warrants”). All 559,162
Pre-Funded
Warrants issued had been exercised as of ~~March 31,~~June 30, 2021.

~~BENITEC BIOPHARMA INC.~~

~~Notes to Consolidated Financial Statements~~

~~(Unaudited)~~

The activity related to warrants during for the three ~~and nine~~ months ended ~~March 31,~~September 30, 2021, is summarized as follows:

   Common Stock
from Warrants    Weighted-
average
Exercise Price
(per share)
Outstanding at July 1, 2020
   145,424    $ 29.48
Granted
   —      —
Exercised
   —      —
Forfeited
   (38,326 )    82.50




Outstanding and exercisable at September 30, 2020
   107,098    $ 10.50
Granted
   559,162    3.09
Exercised
   (281,581 )    3.10
Forfeited
   —      —




Outstanding and exercisable at December 31, 2020
   384,679    $ 5.15
Granted
   —      —
Exercised
   (277,581 )    3.10
Forfeited
   —      —




Outstanding and exercisable at March 31, 2021
   107,098    $ 10.50

   Common Stock
from Warrants    Weighted-
average
Exercise Price
(per share)
Outstanding at July 1, 2021    107,095    $ 10.50

Outstanding and exercisable at September 30, 2021    107,095    $ 10.50
20
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BENITEC BIOPHARMA INC.
Notes to Consolidated Financial Statements
(Unaudited)
Equity Incentive Plan
Employee Share Option Plan
Upon the
re-domiciliation,
the Company assumed BBL’s obligations with respect to the settlement of options that were issued by BBL prior to the
re-domiciliation
pursuant to the Benitec Officers’ and Employees’ Share Option Plan (the “Share Option Plan”). This includes the Company’s assumption of the Share Option Plan and all award agreements pursuant to which each of the options were granted. Each option when exercised entitles the option holder to one share in the Company. Options are exercisable on or before an expiry date, do not carry any voting or dividend rights and are not transferable except on death of the option holder or in certain other limited circumstances. 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 Company and certain exercise conditions have been satisfied, generally, the employee has 12 months to
exercise their options or the options are cancelled. After the
re-domiciliation,
no new options have been or will be issued under the Share Option Plan.
Equity and Incentive Compensation Plan
On December 9, 2020, the Company’s stockholders approved the Company’s 2020 Equity and Incentive Compensation Plan (the “2020 Plan”). The 2020 Plan provides for the grant of various equity awards. Currently, only stock options are outstanding under the 2020 Plan. Each option when exercised entitles the option holder to one share of the Company’s common stock. Options are exercisable on or before an expiry date, do not carry any voting or dividend rights, and are not transferable except on death of the option holder or in certain other limited circumstances. Employee stock options vest in increments of
one-third
on each anniversary of the applicable grant date for three years.
Non-employee
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) and certain exercise conditions have been satisfied, generally, the option holder has 12 months to exercise their 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) and certain exercise conditions have been satisfied, generally, the option holder has 90 days to exercise their options or the options are cancelled. Any future equity grants will be made under the 2020 Plan.

~~BENITEC BIOPHARMA INC.~~

~~Notes to Consolidated Financial Statements~~

~~(Unaudited)~~

Equity Awards

The activity related to equity awards, which are comprised of stock options during the three ~~and nine~~ months ended ~~March 31,~~September 30, 2021, is summarized as follows:

   Stock
Options    Weighted-
average
Exercise
Price    Weighted-
average
Remaining
Contractual Term    Aggregate
Intrinsic Value
Outstanding at June 30, 2020
   70,154    $ 60.42    2.89 years    $ —
Granted
   —      —
Exercised
   —      —
Forfeited
   (444 )    69.32





Outstanding at September 30, 2020
   69,710    $ 60.00    2.65 years    —








Granted
   525,547    2.98    9.95 years
Exercised
   —      —
Forfeited
   (7,967 )    153.78








Outstanding at December 31, 2020
   587,290    7.64    9.2 years    —








Outstanding at March 31, 2021
   587,290    7.64    8.9 years    —
Exercisable at March 31, 2021
   41,686    $ 47.34    2.3 years    $ —

   Stock
Options    Weighted-
average
Exercise
Price    Weighted-
average
Remaining
Contractual Term    Aggregate
Intrinsic Value
Outstanding at June 30, 2021    702,064    $ 7.16    8.07 years    $ —
Outstanding at September 30, 2021    702,064    7.16    7.82 years    $ —
Exercisable at September 30, 2021    54,158    $ 47.90    1.84 years    $ —

21
Table of Contents
BENITEC BIOPHARMA INC.
Notes to Consolidated Financial Statements
(Unaudited)
Share-Based Compensation Expense
The classification of share-based compensation expense is summarized as follows:

   Three Months Ended
March 31,    Nine Months Ended
March 31,
(US$’000)
   2021    2020    2021    2020
Research and development
   $ 18    $ 18    $ 33    $ 53
General and administrative
   217    70    322    127








Total share-based compensation expense
   $ 235    $ 88    $ 355    $ 180









Three Months Ended

September 30,

(US$’000)
2021

2020

Research and development    $ 81    $ 9
General and administrative    190    29

Total share-based compensation expense    $ 271    $ 38

As of ~~March 31,~~September 30, 2021, there was ~~$1,159,000~~$1 million of unrecognized share-based compensation expense related to stock options issued under the Share Option Plan and the 2020 Plan.

~~BENITEC BIOPHARMA INC.~~

~~Notes to Consolidated Financial Statements~~

~~(Unaudited)~~

11. Income taxes

For the three ~~and nine~~ months ended ~~March 31,~~September 30, 2021, and 2020, the Company did not recognize a provision or benefit for income taxes as it has incurred net losses. In addition, the net deferred tax assets generated from net operating losses are fully offset by a valuation allowance as the Company believes it is more likely than not that the benefit will not be realized.

12. Commitments and contingencies

Contract commitments

The Company enters into contracts in the normal course of business with third-party contract research organizations, contract development and manufacturing organizations and other service providers and vendors. These contracts generally provide for termination on notice and, therefore, are cancellable contracts and not considered contractual obligations and commitments.

Contingencies

From time to time, the Company may become subject to claims and litigation arising in the ordinary course of business. The Company is not a party to any material legal proceedings, nor is it aware of any material pending or threatened litigation.

13. ~~Subsequent events~~
~~On April~~Related party transactions

During the three months ended September 30, 2021, the Company ~~closed an underwritten, firm commitment public offering of 3,036,366 shares~~had entered into a related party transaction with Francis Abourizk Lightowlers for legal fees totaling $1 thousand. Peter Francis, a
non-executive
director of the ~~Company’s common stock~~Company is a partner at ~~a public offering price~~Francis Abourizk Lightowlers. As of ~~$4.25 per share resulting~~September 30, 2021 and June 30, 2021 there were amounts due to this related party of $1 thousand and $2 thousand, respectively, included in ~~gross proceeds to~~trade and other payables on the Company of approximately $12.9 million. In addition, the Company granted the underwriter an option for a period of 30 days to purchase up to an additional 455,454 shares of the Company’s common stock at the public offering price. On May 11, 2021, the underwriter partially exercised the overallotment option by purchasing 317,274 shares resulting in approximately $1.35 million of additional gross proceeds to the Company. accompanying consolidated balance sheet.

14. Subsequent events

The Company ~~intends to use~~has evaluated subsequent events through the ~~net proceeds from~~filing of this ~~offering for~~Quarterly Report on
Form 10-Q,
and determined that there have been no events that have occurred that would require adjustments or disclosures in the ~~continued advancement~~consolidated financial statements.

Table of ~~development activities for it’s product pipeline, general corporate purposes, and strategic growth opportunities.~~
Contents

~~Item 2.~~

~~Management’s Discussion and Analysis of Financial Condition and Results of Operations~~

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion and analysis of financial condition and operating results together with our consolidated financial statements and the related notes and other financial information included elsewhere in this document.

Overview

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

Benitec Biopharma Inc. (“Benitec” or the “Company” or in the third person, “we” or “our”) is a development-stage biotechnology company focused on the advancement of novel genetic medicines with headquarters in Hayward, California. The proprietary platform, called
DNA-directed
RNA interference, or ddRNAi, combines RNA interference, or RNAi, with gene therapy to create medicines that facilitate sustained silencing of disease-causing genes following a single administration. The Company is developing ddRNAi-based therapeutics for chronic and life-threatening ~~human conditions~~clinical indications including Oculopharyngeal Muscular Dystrophy (OPMD), and Chronic Hepatitis B.

BB-301

is the most advanced ddRNAi-based genetic medicine currently under development by Benitec.
BB-301
is an ~~internally~~ ~~optimized,~~
AAV-based
gene therapy ~~agent that is~~ designed to both silence the expression of mutated, disease-causing genes (to slow, or halt, the underlying mechanism of disease progression) and simultaneously replace the mutant genes with normal, “wild type” genes (to drive restoration of function in diseased cells). This fundamental therapeutic approach to disease management is called “silence and replace” and this biological mechanism offers the potential to restore the underlying physiology of the treated tissues and, in the process, improve treatment outcomes for patients suffering from the chronic and, potentially, fatal effects of Oculopharyngeal Muscular Dystrophy (OPMD).
BB-301
has been granted Orphan Drug Designation in the United States and the European Union.

Through the combination of the targeted gene silencing effects of RNAi and the durable transgene expression achievable via the use of modified viral vectors, the silence and replace approach has the potential to produce long-term silencing of disease-causing genes along with simultaneous replacement of wild type gene function following a single administration of the proprietary genetic medicine. We believe this novel attribute of the investigational agents under development by Benitec may facilitate the achievement of robust clinical activity while greatly reducing the dosing frequencies traditionally expected for medicines employed for the management of chronic diseases. Additionally, the ~~establishment~~achievement of ~~chronic~~long-term 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.
~~Unless otherwise indicated, all dollar amounts in this section are provided in thousands.~~

Re-domiciliation

On April 15, 2020, (the “Implementation Date”),
the re-domiciliation of
Benitec Biopharma Limited (the
“Re-domiciliation”),
a public company incorporated under the laws of the State of Western Australia, or BBL, was completed in accordance with the Scheme Implementation Agreement, as amended and restated as of January 30, 2020, between BBL and us. As a result of
the Re-domiciliation, the
jurisdiction of incorporation was changed from Australia to Delaware, and BBL became our wholly owned subsidiary.

The Re-domiciliation was

effected pursuant to a statutory scheme of arrangement under Australian law, or the Scheme, whereby on the Implementation Date, all of the issued and outstanding ordinary shares of BBL were exchanged for newly issued shares of our common stock, on the basis of one share of our common stock, par value $0.0001 per share, for every 300 ordinary shares of BBL issued and outstanding. Holders of BBL’s American Depository Shares, or ADSs (each of which represented 200 ordinary shares), received two shares of our common stock for every three ADSs held.

~~COVID-19~~

~~In December 2019, an outbreak~~

Table of ~~a novel strain of coronavirus was identified in Wuhan, China. This virus continues to spread globally,~~Contents
COVID-19
COVID-19 has
been declared a pandemic by the World Health Organization and has spread to nearly every country, including Australia and the United States. The impact of this pandemic has been and will likely continue to be extensive in many aspects of society, which has resulted in and will likely continue to result in significant disruptions to businesses and capital markets around the world. The extent to which the coronavirus impacts us will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of the coronavirus and its variants, and the actions to contain the coronavirus or treat its impact, including the effectiveness and adoption of vaccines for the virus, among others.
Certain of our research and development efforts are conducted globally, including the ongoing development of our silence and replace therapeutic for the treatment of Oculopharyngeal Muscular Dystrophy (OPMD), and will be dependent upon our ability to initiate preclinical and clinical studies despite the
ongoing COVID-19 pandemic.
As we continue to actively advance our preclinical programs, including our ongoing ~~tissue transduction studies~~ Toxicology and Biodistribution study
for BB-301, we
are in close contact with our principal investigators and preclinical trial sites, which are primarily located in ~~the~~ France, and are assessing the impact
of COVID-19 on
our studies and the expected development timelines and costs, ~~of all of our product candidates,~~ on an ongoing basis. In light of ~~recent~~ developments relating to
the COVID-19 global
pandemic since the beginning of the outbreak, the focus of healthcare providers and hospitals on fighting the virus, and consistent with the FDA’s ~~updated~~ industry guidance for conducting clinical trials, ~~issued on March 18, 2020,~~ we have experienced delays to the original timeline regarding the initiation and anticipated completion of the
ongoing BB-301 ~~IND-enabling~~
Clinical Trial Application (CTA)-enabling and Investigational New Drug Application (IND)-enabling development work. The initiation of
the BB-301 ~~tissue~~ ~~transduction study,~~Pilot
Dosing Study in Beagle dogs, which represents a key component of the
CTA-enabling
and IND-enabling work,
was delayed by several months, however, the study has been ~~recently initiated~~completed without incident. The acquisition of chemical reagents, biological reagents and laboratory supplies which are essential for the ~~dosing~~conduct of basic laboratory research, nonclinical studies and GMP manufacturing of
BB-301,
has also become challenging due to the ~~initial preclinical cohorts has proceeded without incident.~~disruption of global supply chains inherent to the production of these materials. We will continue to evaluate the impact of
the COVID-19 pandemic
on our business and expect to reevaluate the timing of our anticipated preclinical and clinical milestones as we learn more and the impact
of COVID-19 on
our industry becomes ~~more clear.~~
clearer.
We ~~had~~have also implemented ~~work-from-home measures for some of our employees between March 2020~~a rotation system whereby staff work from home and ~~March 2021, resulting~~attend the laboratory on designated days which may result in a reduction of laboratory work and a halt
of non-essential business
travel. As we transition our employees back to our premises, there is a risk
that COVID-19 infections
occur at our offices or laboratory facilities and significantly affect our operations. Additionally, if any of our critical vendors are impacted, our business could be affected if we become unable to timely procure essential equipment, supplies or services in adequate quantities and at acceptable prices.
~~Axovant Termination~~
~~Benitec’s License and Collaboration Agreement, dated July 9, 2018, with Axovant Sciences GmbH, or Axovant, was terminated as~~
24
Table of ~~September 3, 2019. As a result, all rights and licenses which Benitec had granted to Axovant to develop and~~ ~~commercialize BB-301 and~~ ~~related gene therapy product candidates terminated.~~
~~Prior to such termination, the Benitec team endeavored to conduct several additional exploratory nonclinical analyses in order to potentially improve the biological efficacy~~ ~~of BB-301 via~~ ~~further optimization of the route of administration employed to dose the target muscle tissues.~~
~~Nonclinical data derived from~~ ~~in vivo~~ ~~evaluations~~ ~~of BB-301 in~~ two distinct large animal species suggested the existence of an opportunity to further improve the biological efficacy of the compound via additional optimization of the proprietary delivery method employed to dose key target tissues that underlie the morbidity and mortality associated with the natural history of OPMD. The initial biological efficacy profile observed ~~for BB-301 following~~ ~~in vivo~~ testing in the A17 mouse model of OPMD, including full correction of the disease phenotype, remained unchanged. However, the Benitec management team desired to complete a series of exploratory analyses prior to the formal IND filing and the subsequent initiation of clinical testing.
~~Completion of the experimental work noted above would have delayed the initiation of~~ ~~the BB-301 clinical~~ study beyond the timelines that were initially outlined by Axovant following the execution of the License and Collaboration Agreement between Benitec and Axovant. As such, Axovant elected to terminate the License and Collaboration Agreement between Benitec and Axovant, and all rights and licenses granted to Axovant terminated, including the rights ~~to BB-301, which~~ ~~was in preclinical development for the treatment of OPMD, and all other early stage research collaboration programs that were governed by the agreement.~~
Contents

Nonclinical Programs

Our Pipeline

The following table sets forth our current product candidates and their development status:

Table 1. Pipeline: Oculopharyngeal Muscular Dystrophy and Chronic Hepatitis B Virus Infection

BB-301

is ~~a late-stage nonclinical investigational agent currently in~~under development for the treatment of Oculopharyngeal Muscular ~~Dystrophy.~~ Dystrophy and is currently undergoing evaluation in
CTA-enabling
and
IND-enabling
studies.
BB-301
is the lead pipeline program for Benitec, and ~~IND-enabling~~ ~~studies~~ the key attributes of
BB-301
are ~~currently being conducted. A summary of the~~ ~~BB-301~~ ~~program is provided~~outlined in in Figure 3.

Figure 3. Overview of the
BB-301
Program

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BB-301
is a
first-in-class
genetic medicine employing the “silence and replace” approach for the treatment of OPMD. OPMD is ~~a chronic, life-threatening genetic~~an insidious, autosomal-dominant, late-onset, degenerative muscle disorder ~~affecting approximately 15,000~~that typically presents in patients ~~in the United States, Canada, Western Europe,~~at
40-to-50
years of age. The disease is characterized by progressive swallowing difficulties (dysphagia) and ~~Israel.~~eyelid drooping (ptosis). OPMD is caused by a specific mutation in the ~~gene encoding~~ poly(A) ~~binding~~-binding protein nuclear 1 gene (PABPN1). ~~Patients~~OPMD is a rare disease, however, patients have been diagnosed with OPMD ~~lose~~in at least 33 countries. Patient populations suffering from OPMD are well-identified, and significant geographical clustering has been noted for patients with this disorder, which could simplify clinical development and global commercialization efforts.
PABPN1 is a ubiquitous factor that promotes the ~~ability~~interaction between the poly(A) polymerase and CPSF (cleavage and polyadenylation specificity factor) and, thus, controls the length of mRNA poly(A) tails, mRNA export from the nucleus, and alternative poly(A) site usage. The characteristic genetic mutation underlying OPMD results in trinucleotide repeat expansion(s) within exon 1 of PABPN1 and results in an expanded poly-alanine tract at the
N-terminal
end of PABPN1. The mutation generates a protein with an
N-terminal
expanded poly-alanine tract of up to ~~swallow liquids and solids,~~18 contiguous alanine residues, and the ~~natural history~~mutant protein is prone to the formation of aggregates called intranuclear inclusions (INIs). The INIs that sequester wildtype PABPN1 could also contribute to loss of the ~~disorder is characterized by chronic malnutrition, aspiration, and fatal episodes of aspiration pneumonia.~~
function phenotype associated with OPMD.
Currently, no therapeutic agents are approved for the treatment of OPMD. Additionally, no surgical interventions capable of altering the long-term natural history of OPMD are available.
BB-301
has received Orphan Drug Designation in the United States and the European Union which provides commercial exclusivity independent of intellectual property protection. While OPMD is a rare disorder, we believe the commercial opportunity for a safe and efficacious therapeutic agent in this clinical indication exceeds $1 billion over the course of the commercial life of the product.
Benitec has previously outlined the core
CTA-enabling
and
IND-enabling
studies required by global regulatory agencies to support the initiation of
BB-301
clinical trials in OPMD patients, and these ~~IND-enabling~~studies include a
BB-301
Pilot Dosing Study (the “Pilot Dosing Study”) in large animals and a classical
12-week
GLP Toxicology and Biodistribution Study.
BB-301
is directly injected into the pharyngeal muscles known to underlie the morbidity and mortality characterizing the natural history of OPMD. ~~Against~~
The
BB-301
Pilot Dosing Study is the first of two planned
CTA-enabling
and
IND-enabling
studies that were designed to be conducted in large animals. These studies continue to be carried out under the guidance of the scientific team at Benitec, with key elements of the study design and execution conducted in close collaboration with a team of leading experts in both medicine and surgery that have been deeply engaged in the treatment of OPMD patients for several decades. The
BB-301
Pilot Dosing Study, along with the subsequent GLP Toxicology and Biodistribution Study, will be conducted in canine subjects and will support the validation and optimization of the newly designed method of
BB-301
administration, confirm the efficiency of vector transduction and transgene expression in the key tissue compartments underlying the natural history of OPMD, confirm the optimal drug doses in advance of initiation of human clinical studies, and facilitate observation of key toxicological data-points.
The
BB-301
Pilot Dosing Study was designed as an
8-week
study in Beagle dogs to confirm the transduction efficiency of
BB-301
upon administration via direct intramuscular injection into specific anatomical regions of the pharynx through the use of an open surgical procedure. This new route of
BB-301
administration was developed in collaboration with key surgical experts in the field of Otolaryngology, and this ~~backdrop,~~ novel method of
BB-301
dosing will significantly enhance the ability of a treating physician to accurately administer the
AAV-based
investigational agent to the muscles that underlie the characteristic deficits associated with the progression of OPMD. It is important to note that prior
non-clinical
studies of
BB-301
have reproducibly validated the robust biological activity achieved following direct intramuscular injection. As an example, direct injection of
BB-301
into the tibialis anterior muscles of A17 mice facilitated robust transduction of the targeted skeletal muscle cells and supported complete remission of the OPMD disease phenotype in this animal model.
26
Table of Contents
Benitec ~~recently~~ conducted the
BB-301
Pilot Dosing Study in Beagle dog subjects to demonstrate that direct intramuscular injection of
BB-301
via the use of a proprietary dosing device in an open surgical procedure could safely achieve the following goals:
Biologically significant ~~highly-consistent,~~and dose-dependent levels of
BB-301
tissue transduction (i.e., delivery of the multi-functional
BB-301
genetic construct into the target pharyngeal muscle cells);
~~Durable, broad-based,~~
Broad-based and dose-dependent expression ~~within the pharyngeal muscle cells~~ of the three distinct genes comprising the
BB-301
gene ~~construct;~~construct within the pharyngeal muscle cells; and
Durable and biologically significant levels of target gene knock-down (i.e., inhibition of the expression of the gene of interest) within the pharyngeal muscle cells.
The Pilot Dosing Study evaluated the safety and biological activity of two concentrations of
BB-301 ~~(1.0+~~
(1.0+E13 vg/mL and 3.0+E13 vg/mL) across three distinct doses (1.0+E13 vg/mL and 3.0+E13 vg/mL with a low injection volume, and 3.0+E13 vg/mL with a high injection volume) following direct intramuscular injection into the Hypopharyngeus (HP) muscles and the Thyropharyngeus (TP) muscles of Beagle dogs via the use of a proprietary delivery device employed in an open surgical procedure. The HP muscle in Beagle dogs corresponds to the Middle Pharyngeal Constrictor muscle in human subjects, and the TP muscle in Beagle dogs corresponds to the Inferior Pharyngeal Constrictor muscle in human subjects.~~BB-~~ ~~301~~
BB-301
was injected only on Day 1 of the Pilot Dosing Study, and the corresponding canine pharyngeal muscles were harvested for analysis after 8 weeks ~~on study.~~ of observation post-dosing.
BB-301
dosing was carried out by both a veterinary surgeon and a practicing Otolaryngologist who has extensive experience with the provision of palliative surgical care for OPMD patients.
Further data analyses are ongoing for the canine subjects treated in the
BB-301
Pilot Dosing Study, and the interim data-points highlighted here are derived from completed analyses of pharyngeal muscle tissues isolated from ~~the 6~~16 Beagle dog subjects ~~to date~~ (of the
24-subject
study population). The
data-set
derived from the Pilot Dosing Study and the ~~initial~~formal conclusions will be updated as additional study subjects are analyzed.

The key preliminary results are summarized here:

Figure 4. Pharyngeal Muscle Tissue Transduction Levels for
BB-301

Regarding Gene Expression Levels Observed for
BB-301
Within the Pharyngeal Muscle Tissues (Figure 5, Figure 6, Figure 7):

Table of Contents
BB-301
encodes two distinct siRNA species (i.e., siRNA13 and siRNA17) which are each, independently, capable of inhibiting (i.e., “silencing”) the expression of the mutant form of the PABPN1 protein and the wildtype (i.e., endogenous) form of the PABPN1 protein (importantly, the mutant form of the PABPN1 protein underlies the development and progression of OPMD).
BB-301
also codes for a wildtype version of the PABPN1 protein whose intracellular expression is unaffected by the inhibitory activities of siRNA13 and siRNA17, and this codon optimized PABPN1 protein (i.e., coPABPN1) serves to replenish the endogenous form of the PABPN1 protein and to replace the mutant form of PABPN1 that underlies the development and progression of OPMD in diseased tissues.
For comparative purposes, is should be noted that the average ~~level~~range of expression for wild type PABPN1 within the pharyngeal muscle cells of Beagle dogs is 4.5 copies per ~~cell to 7.8~~
cell-to-7.8
copies per cell.

Figure 5. siRNA13 Expression Levels for
BB-301
within Pharyngeal Muscle Tissues

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Figure 6. siRNA17 Expression Levels for
BB-301
within Pharyngeal Muscle Tissues

Figure 7. coPABPN1 Expression Levels for
BB-301
within Pharyngeal Muscle Tissues

Table of Contents
Regarding WildType PABPN1 Silencing (i.e. target “knock-down”) Observed for
BB-301
Within the Pharyngeal Muscle Tissues (Figure 8):
As noted above,
BB-301
encodes two distinct siRNA species (i.e. siRNA13 and siRNA17) which are each, independently, capable of inhibiting (i.e., “silencing”) the expression of all forms of the PABPN1 protein (siRNA13 and siRNA17 silence the expression of both wildtype PABPN1 ~~wtPABPN1~~[wtPABPN1] and mutant PABPN1).
While the Beagle dog subjects treated in the current BB-301 Pilot Dosing Study do not express mutant PABPN1, the level of BB-301-driven gene silencing for the PABPN1 target can be ~~accurately~~indirectly assessed due to the equivalent inhibitory effects of siRNA13 and siRNA17 on both wtPABPN1 and mutant PABPN1.

Thus, the wtPABPN1 silencing activity observed in the current
BB-301
Pilot Dosing Study serves as a surrogate for the activity that would be anticipated in the presence of mutant PABPN1.
BB-301
has been evaluated in prior
non-clinical
studies in animals that express mutant PABPN1 and, as a consequence, manifest the key signs and symptoms of ~~OPMD and,~~OPMD; in these animal models of OPMD, the achievement of PABPN1 silencing levels of 31% inhibition or higher led to complete resolution of OPMD disease symptoms and correction of the histological hallmarks of OPMD.

Figure 8. PABPN1 Silencing (i.e. “target knock-down”) within Pharyngeal Muscle Tissues

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Finally, it is critical to highlight the key methodological distinctions between the current
BB-301
Pilot Dosing Study ~~in Beagle dogs~~ conducted by Benitec ~~and~~as compared to the prior
BB-301
Beagle dog dosing study carried out independently by the previous
BB-301 ~~licensee of Benitec.~~
licensee. The
BB-301
dosing study conducted by the prior
BB-301
licensee employed
non-ideal
routes and methods of
BB-301
administration to the target pharyngeal muscle tissues and employed similarly limited analytical methods at the completion of the dosing phase of the study. The Benitec team worked to optimize the route and method of administration of
BB-301
and to refine the core analytical methods employed following the completion of dosing.
~~Following these methodological improvements, Benitec~~
The newly developed proprietary methods of
BB-301
delivery, as well as the analytical methods developed to assay the key target tissues of the Beagle dog subjects, led to the observation of broad-based transduction of the pharyngeal muscle target tissues (
Figure 9
,
individual sections of the TP muscle following
BB-301
dosing
) and demonstrated a~~248-fold~~
228-fold
improvement (+~~24,650%~~22,647%) in
BB-301
transduction of the HP muscle and a~~111-fold~~
113-fold
improvement (+~~11,027%~~11,163%) in
BB-301
transduction of the TP muscle relative to the levels of
BB-301
transduction observed by the previous
BB-301
licensee ~~(Figure 9)~~(
Figure 10
).

Figure 9.
BB-301
Transduction Levels Achieved for Individual Sections of the TP Muscle Following
BB-301
dosing

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Figure 10. Impact of Benitec-Initiated Methodological Improvements to the
BB-301
Large Animal Study Design on the Relative Pharyngeal Muscle Tissue Transduction Levels Achieved
Following the disclosure of the positive
BB-301
Pilot Dosing Study data, Benitec ~~has scheduled~~completed a Scientific Advice ~~Meeting~~meeting with The National Agency for the Safety of Medicines and Health Products in France (L’Agence nationale de sécurité du médicament et des produits de santé or “ANSM”) in ~~May 2021~~the first half of 2021.
The Scientific Advice meeting was conducted to review and confirm the ~~interim~~adequacy of:
The
non-clinical
data derived from the evaluation of
BB-301
in both the murine
proof-of
concept studies and the Pilot Dosing study in Beagle dogs
The experimental, analytical, and statistical methods comprising the
12-week
BB-301
GLP Toxicology and Biodistribution study in Beagle dogs
The large-scale manufacturing plan for clinical grade
BB-301
drug product for use in the Phase 1b/2a clinical study in OPMD patients
The design of the Phase 1b/2a clinical study slated for initiation in 2022
The
BB-301
Pilot Dosing Study was viewed as an appropriate dose range finding study. The preliminary data derived from the Pilot Dosing Study regarding
BB-301
pharyngeal muscle tissue transduction,
BB-301
transgene expression, and the resulting knock-down of wild type PABPN1 supported the adequacy of the data derived from this study to inform the choice of
BB-301
doses for use in the GLP Toxicology and Biodistribution Study. The design of the GLP Toxicology and Biodistribution study was viewed as appropriate to support
first-in-human
testing of
BB-301.
Pending the final results of the ongoing GLP Toxicology and Biodistribution study, the
BB-301
Pilot Dosing Study data and the murine
proof-of-concept
study data are sufficient to inform the choice of the
BB-301
drug doses employed in the upcoming Phase 11b/2a study. As
BB-301
drug product has been reproducibly manufactured at large-scale in the past, the manufacturing plan for clinical grade
BB-301
drug product can be conducted under GMP conditions with a production process analogous to that that employed in prior large-scale production runs. Finally, the design of the Phase 1b/2a clinical trial ~~design,~~can support the evaluation of
BB-301
safety and clinical efficacy in key populations of OPMD patients.
Regarding our regulatory interactions with the ~~Company~~FDA, Benitec has been granted a Type C meeting in the fourth quarter of 2021.
Regarding our regulatory interactions with Health Canada, Benitec has been granted a
pre-CTA
meeting in the fourth quarter of 2021.
Benitec continues to plan for the initiation of the~~first-in-human~~
First-in-Human
clinical study of
BB-301
in OPMD patients in 2022.
32

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BB-103
BB-103
has demonstrated robust nonclinical activity during the evaluation of this agent for the treatment of Chronic Hepatitis B Virus infection. Benitec is currently seeking strategic partners to advance
BB-103
through
IND-enabling
studies.
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.
In December 2016, we entered into an exclusive sublicense agreement with NantWorks, LLC, pursuant to which we agreed to make certain milestone and royalty payments, as well as periodic payments for so long as the agreement remained in effect. In December of 2018, the Company accrued a milestone payment of USD 300k (AUD 425,411), which was anticipated to be paid to NantWorks, LLC under the sublicense agreement. It was later determined that the milestone was not required to be paid and, therefore, the accrual was reversed in December of 2019. We terminated the exclusive sublicense agreement for convenience, with the termination effective as of June 2020.
We have collaborated with Biomics Biotechnologies Co., Ltd., or Biomics, pursuant to several collaboration agreements in relation to single-stranded RNA and shRNA sequences for treatment of hepatitis B. In July 2015, we entered into
an earn-out agreement
with Biomics which confirmed Benitec’s ownership of certain patents resulting from the collaboration in exchange for an upfront payment and equity issuance to Biomics and a share of certain future licensing revenue received by Benitec.

Table of Contents
Foreign Currency Translation and Other Comprehensive Income (Loss)
The Company’s functional currency and reporting currency is the United States dollar. BBL’s functional currency is the Australian dollar (AUD). Assets and liabilities are translated at the exchange rate in effect at the balance sheet date. Revenues and expenses are translated at the average rate of exchange prevailing during the reporting period. Equity transactions are translated at each historical transaction date spot rate. Translation adjustments arising from the use of different exchange rates from period to period are included as a component of stockholders’ equity as “Accumulated other comprehensive ~~income (loss).~~loss.” Gains and losses resulting from foreign currency translation are included in the consolidated statements of operations and comprehensive ~~income (loss)~~loss as other comprehensive income (loss).
Other comprehensive income ~~(loss)~~ for all periods presented includes only foreign currency translation ~~gains (losses).~~
gains.
October 2020 Capital Raise
On October 6, 2020, the Company announced the closing of an underwritten public offering of common stock and common stock ~~equivalents (the “October 2020 Capital Raise”).~~equivalents. The Company received gross proceeds of approximately $11.5 million and net proceeds of approximately $9.9 million from the offering.
~~Results of Operations~~
~~Revenues~~
In the past BBL has generated revenue from its operations through two activities: revenue from customers and revenue from government research and development grants. For the three-month period ended March 31,
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 Company received ~~$1 in revenue relating to licensing fees.~~gross proceeds of approximately $14.3 million and net proceeds of approximately $12.7 million from the offering.
Results of Operations
Revenues
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). There were no Research and Development Tax Incentive payments received during this period.~~
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:

   Three Months Ended
March 31,    Nine Months Ended
March 31,
   2021    2020    2021    2020
   (US$’000)
Revenues:

Revenues from customers
   $ 1    $ 28    $ 57    $ 137








Total revenues
   $ 1    $ 28    $ 57    $ 137








   Three Months Ended
September 30,

2021

2020



(US$’000)

Revenues:

Revenues from customers
   $ —      $ 55




Total revenues
   $ —      $ 55




Revenues from customers
During the three ~~and nine~~ months ended ~~March 31,~~September 30, 2021 and 2020, respectively, the Company recognized $1$0 and ~~$57~~$0.1 million in customer ~~revenues, as compared to $28 and $137 for the comparable periods ended March 31, 2020.~~revenues. The decrease in revenues from customers is due to the decrease in licensing and royalty revenues in the current period.
34

Table of Contents
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. ~~Estimates have been used~~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 ~~expense liability under certain clinical trial contracts where services have been performed but~~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 ~~yet invoiced. Generally, the~~experienced any material differences between accrued costs and ~~therefore estimates, associated with clinical trial contracts are based on the number of patients, drug administration cycles, the type of treatment and the outcome being the length of time before~~ actual ~~amounts can be determined will vary depending on length of the patient cycles and the timing of the invoices by the clinical trial partners.~~
costs incurred.

General and Administrative Expenses

General and administrative expenses consist primarily of salaries, related benefits, travel, and equity-based compensation expense. 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
pre-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 after the
Re-domiciliation.

Operating Expenses

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

   Three Months Ended
March 31,    Nine Months Ended
March 31,
   2021    2020    2021    2020
   (US$’000)
Operating Expenses:

Royalties and license fees
   $ 7    $ 47    $ 122    $ (233 )
Research and development
   2,758    805    4,700    2,095
General and administrative
   1,029    1,287    4,976    3,669








Total operating expenses
   $ 3,794    $ 2,139    $ 9,798    $ 5,531

   Three Months Ended
September 30,

2021

2020



(US$’000)

Operating Expenses:

Royalties and license fees
   $ —      $ 134
Research and development
   2,780    774
General and administrative
   2,042    1,837




Total operating expenses
   $ 4,822    $ 2,745




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During the three ~~and nine~~ months ended ~~March 31,~~September 30, 2021 and 2020, respectively, we incurred $7$0 and ~~$122~~$0.1 million in royalties and license fees, as compared to $47 and ($233) for the comparable periods ended March 31, 2020. The change is primarily due to a reversal of an accrual which created the negative balance in the nine months ended March 31, 2020. Infees.
During the three months ended ~~March 31,~~September 30, 2021 and 2020, ~~included a payable license fee, resulting in the balance of $47 as opposed to the nine month balance which included a reversed accrual.~~
~~During the three and nine months ended March 31, 2021,~~respectively, we incurred ~~$2,758~~$2.8 million and ~~$4,700~~$0.8 million in research and development ~~expenses, as compared to $805 and $2,095 for the comparable periods ended March 31, 2020.~~expenses. The increase in research and development expenses ~~are~~is primarily related to the ~~pre-clinical~~ ~~trials associated~~commencement of the
BB-301
Regulatory Toxicology Study in Beagles at Charles River Laboratories in Evreux, France. As planned, the Company began incurring more costs related to the execution of two large nonclinical studies in Beagles, along with ~~BB-301.~~
the commercial-scale
GMP-grade
manufacturing of
BB-301,
all of which is required to facilitate the CTA filing and the IND filing for
BB-301
in 2022.
General and administrative expense was ~~$1,029~~$2.0 million and ~~$4,976~~$1.8 million for the three ~~and nine~~ months ended ~~March 31,~~September 30, 2021 ~~as compared to $1,287~~ and ~~$3,669 for the comparable periods ended March 31,~~ 2020. The increase for the ~~nine~~three month period was due to the ~~increase~~small increases in insurance, consultants, legal and accounting fees. ~~The decrease in the three month period end was due to timing differences with receipt of the invoices.~~

Other Income (Expense)

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

   Three Months Ended
March 31,    Nine
Months Ended
March 31,
   2021    2020    2021    2020
   (US$’000)
Other Income (Loss):

Foreign currency transaction gain (loss)
   $ (112 )    $ (7 )    $ (167 )    $ 4
Interest income (expense), net
   (2 )    16    (5 )    52
Other income, net
   —      —      37    —
Unrealized loss on investment
   (2 )    —      (3 )    (1 )








Total other income (loss), net
   $ (116 )    $ 9    $ (138 )    $ 55

   Three Months Ended
September 30,

2021

2020

Other Income (Loss):

(US$’000)

Foreign currency transaction loss
   $ (240 )    $ (54 )
Interest expense, net
   (1 )    (1 )
Other income, net
   —      27
Unrealized gain on investment
   18    —




Total other loss, net
   $ (223 )    $ (28 )




The other loss, net during the three ~~and nine~~ months ended ~~March 31,~~September 30, 2021 and 2020, respectively, totaled ~~$(116)~~$0.2 million and ~~($138),~~$28 thousand, which consists of foreign currency transaction loss, interest expense, other income, and unrealized ~~loss~~gain on investment. ~~During the three and nine months ended March 31, 2020, respectively, other income, net totaled $9 and $55.~~ Foreign currency transaction gain has ~~decreased~~increased due to a change in foreign exchange rates. ~~Interest~~Other income, ~~(expense),~~ net ~~has~~ decreased due to ~~fewer transactions with interest. Other income, net increased due~~ to no longer receiving
COVID-19 stimulus
incentives from the Australian ~~government.~~government in 2021. Unrealized ~~loss~~gain on investment had a minor increase for the three ~~and nine~~ months ended ~~March 31,~~September 30, 2021, compared to the three ~~and nine~~ months ended ~~March 31,~~September 30, 2020.
Liquidity and Capital Resources
The Company has incurred cumulative losses and negative cash flows from operations since our predecessor’s inception in 1995. The Company had accumulated losses of ~~$126.1~~$135.2 million as of ~~March 31,~~September 30, 2021. We expect that our research and development expenses may 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 as a result of
the Re-domiciliation.
We had no borrowings as at ~~March 31,~~September 30, 2021 and do not currently have a credit facility.
As of ~~March 31,~~September 30, 2021, we had cash and cash equivalents of approximately ~~$12~~$15.7 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.

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

   Nine Months Ended
March 31,
   2021    2020
   (US$’000)
Net cash provided by (used in):

Operating activities
   $ (7,675 )    $ (4,390 )
Investing activities
   (362 )    (81 )
Financing activities
   9,854    1,770
Effects of exchange rate changes on cash and cash equivalents
   370    (1,617 )




Net increase (decrease) in cash
   $ 2,187    $ (4,318 )




   Three Months Ended
September 30,

2021

2020



(US$’000)

Net cash provided by (used in):

Operating activities
   $ (4,278 )    $ (2,360 )
Investing activities
   —      (173 )
Effects of exchange rate changes on cash and cash equivalents
   236    182




Net decrease in cash
   $ (4,042 )    $ (2,351 )




Operating activities
Net cash used in operating activities for the ~~nine~~three months ended ~~March 31,~~September 30, 2021 and 2020 was ~~$7,675~~$4.3 million and ~~$4,390,~~$2.4 million, respectively. Net cash used in operating activities was primarily the result of our net loss and change in working capital and a decrease in payables.
Investing activities
Net cash used in investing activities for the ~~nine~~three months ended ~~March 31,~~September 30, 2021 and 2020 was ~~$362~~$0 and ~~$81,~~$0.2 million, respectively. The change was primarily related to ~~an increase~~a decrease in purchases of equipment in 2021 as there were none compared to purchases of $0.2 million in the same period inof 2020.
~~Financing activities~~
Net cash provided by financing activities was $9,854 and $1,770 for the nine months ended March 31, 2021 and 2020, respectively. Cash from financing activities related to the issuance of common stock, including $11,497 in gross proceeds which includes the October 2020 Capital Raise and exercise of ~~pre-funded~~ warrants. This was partially offset by $1,643 in share issuance costs for the nine months ended March 31, 2021. For the same period in 2020, cash from financing activities related to the issuance of common stock of BBL, including gross proceeds of $2,250 from a public offering, partially offset by $480 in share issuance costs.
The future of the Company as an operating business will depend on its ability to ~~generate revenues mostly from licensing, strategic alliances~~manage operating costs and ~~collaboration arrangements with pharmaceutical companies.~~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.
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. We do not know when, or if, we will generate any revenue from product sales. 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. We estimate that our cash and cash equivalents will be sufficient to fund the Company’s operations at least for the next twelve months.

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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. Because of the numerous risks and uncertainties associated with research, development and commercialization of pharmaceutical products, we are unable to estimate the exact amount of our operating capital requirements. 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 number and characteristics of product candidates that we pursue;
the outcome, timing and costs of seeking regulatory approvals;
revenue received from commercial sales of any of our product candidates that may receive regulatory approval;
the terms and timing of any future collaborations, licensing, consulting or other arrangements that we may establish;
the amount and timing of any payments we may be required to make, or that we may receive, in connection with the licensing, filing, prosecution, defense and enforcement of any patents or other intellectual property rights;
the costs of preparing, filing and prosecuting patent applications, maintaining and protecting our intellectual property rights and defending against intellectual property related claims; and
the extent to which we need
to in-license or
acquire other products and technologies.
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 ~~2022.~~
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. These contracts generally provide for termination on notice and, therefore, are cancellable contracts and not considered contractual obligations and commitments.
Off-Balance Sheet
Arrangements
The Company had no
material off-balance sheet
arrangements as of ~~March 31,~~September 30, 2021.
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 the Notes to Consolidated Financial Statements included in this Quarterly Report on Form
10-Q
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.
38
Table of Contents
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. 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.

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 Americaand provide a meaningful presentation of the Company’s financial condition and results of operations.

Management believes that the following are critical accounting policies:
~~Revenue Recognition~~
~~The Company recognizes revenue in accordance with that core principle by applying the following steps:~~
~~Step 1: Identify the contract(s) with a customer.~~
~~Step 2: Identify the performance obligations in the contract.~~
~~Step 3: Determine the transaction price.~~
~~Step 4: Allocate the transaction price~~

Research and Development Expense

Research and development expenses relate primarily to the ~~performance obligations in the contract.~~
~~Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation.~~
~~The Company applies judgement in determining whether contracts entered into fall within the scope~~cost of ~~ASC 606 –~~ ~~Revenue from Contracts with Customers~~ ~~(“ASC 606”). In doing so, management considers the commercial substance of the transaction~~conducting clinical and ~~how risks~~
pre-clinical
trials.
Pre-clinical
and ~~benefits of the contract accrue to the various parties to the contract.~~
~~Management has also made the judgement that the grant of the license and transfer of~~ ~~associated know-how and~~ ~~materials~~clinical development costs are accounted for as one performance obligation as they are not considered to be distinct; they are highly interrelated and could not provide benefits to the customer independently from each other. Judgements were made in relation to the transfer of the license ~~and know-how and~~ ~~whether this should be recognized over time or a point in time. The point in time has been determined with regard to the point at which the transfer~~ ~~of know-how has~~ ~~substantially been completed and the customer has control of the asset and the ability to direct the use of and receive substantially all of the remaining benefits.~~
~~Licensing revenues~~
Revenue from licensees of the Company’s intellectual property reflects the transfer of a right to use the intellectual property as it exists at the point in time in which the license is transferred to the customer. Consideration can be variable and is estimated using the most likely amount method. Subsequently, the estimate is constrained until it is highly probable that a significant ~~revenue reversal will not occur when the uncertainty is resolved. Revenue is recognized as or when the performance obligations are satisfied.~~
The Company recognizes contract liabilities for consideration received in respect of unsatisfied performance obligations and reports these amounts as other liabilities in the consolidated balance sheet. Similarly, if the Company satisfies a performance obligation before it receives the consideration, the Company recognizes either a contract asset or a receivable in its consolidated balance sheet, depending on whether something other than the passage of time is required before the consideration is due.

~~Royalties~~

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 product occurs.

~~Services revenue~~

~~Revenue is earned (constrained by variable considerations) from the provision~~component of research and development ~~services to customers. Services revenue is recognized when performance obligations are either satisfied over time or at a point in time. Generally, the provision~~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 ~~under a contract with a customer will represent satisfaction of a performance obligation over time where the Company retains the right to payment for services performed~~provided but not yet ~~completed.~~
~~Share-Based~~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.

Share-based Compensation
Expense

The Company records share-based compensation in accordance with ASC 718, “
Stock Compensation”
. ASC 718 requires the fair value of all share-based employee compensation awarded to employees
and non-employees
to be recorded as an expense over the shorter of the service period or the vesting period. The Company values employee
and non-employee share-based
compensation at fair value using the Black-Scholes Option Pricing Model.
~~The Company adopted~~ ~~ASU 2018-07 and~~ ~~accounts~~ ~~for non-employee share-based~~ ~~awards in accordance with the measurement and recognition criteria of ASC 718 and recognizes the fair value of such awards over the service period.~~

Recent Accounting Pronouncements

Accounting Standards recently adopted

None.

New Accounting Standards and Interpretations not yet mandatory or early adopted

ASU

2016-13

—In June 2016, the FASB issued
ASU No. 2016-13: “
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 has determined that it has met the criteria of a smaller reporting company (“SRC”) as of November 15, 2019. As such,
ASU 2019-10: “
Financial Instruments-Credit Losses, Derivatives and Hedging, and Leases: Effective Dates”
amended the effective date for the Company to be for reporting periods beginning after December 15, 2022. The Company will adopt this ASU effective July 1, 2023.

Table of Contents
~~Item 3.~~
~~Quantitative and Qualitative Disclosures About Market Risk~~
Item 3. Quantitative and Qualitative Disclosures About Market Risk
As a smaller reporting company, we are not required to provide the information pursuant to this Item.
~~Item 4.~~
~~Controls and Procedures~~
Item 4. Controls and Procedures
We have established disclosure controls and procedures (as defined in
Rules 13a-15(e)
and
15d-15(e)
under the Securities Exchange Act of 1934, as amended). As of the end of the period covered by this Report we carried out an evaluation under the supervision and with the participation of our management, including our principal executive officer and principal financial and accounting officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to
Rule 13a-15
of the Securities and Exchange Act of 1934, as amended. Based upon that evaluation, our principal executive officer and principal financial and accounting officer concluded that our disclosure controls and procedures are effective.
There were no changes in our internal controls over financial reporting during the quarter ended ~~March 31,~~September 30, 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
We do not expect that our disclosure controls and procedures or our internal controls will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected.

Table of Contents
PART II
OTHER INFORMATION
~~Item 1.~~
~~Legal Proceedings~~
Item 1. Legal Proceedings
We are currently not a party to any material legal proceedings.
~~Item 1A.~~
~~Risk Factors~~
Item 1A. Risk Factors
There have been no material changes to the risk factors disclosed in Item 1A of the Company’s Annual Report on Form
10-K
for the fiscal year ended June 30, ~~2020.~~
2021.
~~Item 2.~~
~~Unregistered Sales of Equity Securities and Use of Proceeds~~
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None.
~~Item 3.~~
~~Defaults Upon Senior Securities~~
Item 3. Defaults Upon Senior Securities
None.
~~Item 4.~~
~~Mine Safety Disclosures~~
Item 4. Mine Safety Disclosures
None.
~~Item 5.~~
~~Other Information~~
Item 5. Other Information
None.

Table of Contents
~~Item 6.~~
~~Exhibits.~~
Item 6. Exhibits.
Number    Description of Document
  31.1    Statement of CEO Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*
  31.2    Statement of CFO Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*
  32.1    Statement of CEO Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002**
  32.2    Statement of CFO Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002**
101.INS    Inline XBRL Instance Document*
101.SCH    Inline XBRL Taxonomy Extension Schema Document*
101.CAL    Inline XBRL Calculation Linkbase Document*
101.DEF    Inline XBRL Taxonomy Extension Definition Linkbase Document*
101.LAB    Inline XBRL Label Linkbase Document*
101.PRE    Inline XBRL Taxonomy Presentation Linkbase Document*
104 Cover Page Interactive Data File – the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
*
Filed herewith.
**
Furnished, not filed.

Table of Contents
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on our behalf by the undersigned thereunto duly authorized.
      Benitec Biopharma Inc.
Dated: ~~May 12,~~November 15, 2021
/s/ Megan Boston
      Megan Boston
      Executive Director (principal financial and accounting officer)

/s/ Jerel Banks
      Jerel Banks

~~President~~
Executive Chairman and Chief Executive Officer
(principal executive officer)
43


	March 31,			June 30,
	2021			2020
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	11,988		$	9,801
Trade and other receivables		10			59
Other current assets		409			949

Total current assets		12,407			10,809
Property and equipment, net		563			374
Deposits		9			9
Other assets		197			—
Right-of-use assets		252			395

Total assets	$	13,428		$	11,587

Liabilities and Stockholders’ Equity
Current liabilities:
Trade and other payables	$	2,005		$	741
Accrued employee benefits		231			203
Lease liabilities, current portion		208			192

Total current liabilities		2,444			1,136
Lease liabilities, less current portion		54			213

Total liabilities		2,498			1,349

Commitments and contingencies (Note 12)
Stockholders’ equity:
Common stock, $0.0001 par value—10,000,000 shares authorized; 4,818,050 and 1,108,374 shares issued and outstanding at March 31, 2021 and June 30, 2020, respectively		5			1
Additional paid-in capital		138,632			128,826
Accumulated deficit		(126,116	)		(116,636	)
Accumulated other comprehensive loss		(1,591	)		(1,953	)

Total stockholders’ equity		10,930			10,238

Total liabilities and stockholders’ equity	$	13,428		$	11,587


	September 30,				June 30,
	2021				2021
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	15,727			$	19,769
Trade and other receivables		3				25
Prepaid and other assets		642				814

Total current assets		16,372				20,608
Property and equipment, net		323				375
Deposits		25				9
Other assets		169				185
Right-of-use assets		947				202

Total assets	$	17,836			$	21,379

Liabilities and Stockholders’ Equity
Current liabilities:
Trade and other payables	$	1,106			$	880
Accrued employee benefits		301				276
Lease liabilities, current portion		194				213

Total current liabilities		1,601				1,369
Lease liabilities, less current portion		760				0

Total liabilities		2,361				1,369

Commitments and contingencies (Note 12)	0			0
Stockholders’ equity:
Common stock, $0.0001 par value—10,000,000 shares authorized; 8,171,690 shares issued and outstanding at September 30, 2021 and June 30, 2021, respectively		1				1
Additional paid-in capital		151,854				151,583
Accumulated deficit		(135,164	)			(130,119	)
Accumulated other comprehensive loss		(1,216	)			(1,455	)

Total stockholders’ equity		15,475				20,010

Total liabilities and stockholders’ equit y	$	17,836			$	21,379


	Three Months Ended						Nine Months Ended
	March 31,						March 31,
	2021			2020			2021			2020
Revenue:
Revenues from customers	$	1		$	28		$	57		$	137

Total revenues		1			28			57			137
Operating expenses
Royalties and license fees		7			47			122			(233	)
Research and development		2,758			805			4,700			2,095
General and administrative		1,029			1,287			4,976			3,669

Total operating expenses		3,794			2,139			9,798			5,531

Loss from operations		(3,793	)		(2,111	)		(9,741	)		(5,394	)
Other income (loss):
Foreign currency transaction gain (loss)		(112	)		(7	)		(167	)		4
Interest income (expense), net		(2	)		16			(5	)		52
Other income, net		—			—			37			—
Unrealized loss on investment		(2	)		—			(3	)		(1	)

Total other income (loss), net		(116	)		9			(138	)		55

Net loss	$	(3,909	)	$	(2,102	)	$	(9,879	)	$	(5,339	)

Other comprehensive income (loss):
Unrealized foreign currency translation gain (loss)		(24	)		(901	)		362			(869	)

Total other comprehensive income (loss)		(24	)		(901	)		362			(869	)

Total comprehensive loss	$	(3,933	)	$	(3,003	)	$	(9,517	)	$	(6,208	)

Net loss	$	(3,909	)	$	(2,102	)	$	(9,879	)	$	(5,339	)

Net loss per share:
Basic and diluted	$	(0.82	)	$	(1.96	)	$	(2.93	)	$	(5.36	)

Weighted average number of shares outstanding: basic and diluted		4,747,059			1,070,957			3,375,228			995,246


	Three Months Ended September 30,
	2021			2020
Revenue:
Revenues from customers	$	0		$	55

Total revenues		0			55
Operating expenses
Royalties and license fees		0			134
Research and development		2,780			774
General and administrative		2,042			1,837

Total operating expenses		4,822			2,745

Loss from operations		(4,822	)		(2,690	)
Other income (loss):
Foreign currency transaction loss		(240	)		(54	)
Interest expense, net		(1	)		(1	)
Other income, net		—			27
Unrealized gain on investment		18			—

Total other loss, net		(223	)		(28	)

Net loss	$	(5,045	)	$	(2,718	)

Other comprehensive income:
Unrealized foreign currency translation gain		239			178

Total other comprehensive income		239			178

Total comprehensive loss	$	(4,806	)	$	(2,540	)

Net loss	$	(5,045	)	$	(2,718	)

Net loss per share:
Basic and diluted	$	(0.62	)	$	(2.45	)

Weighted-average shares outstanding:
Basic and diluted		8,171,690			1,108,374


	Common Stock				Additional Paid-in			Accumulated			Accumulated Other Comprehensive			Total Stockholders’
	Shares		Amount		Capital			Deficit			Loss			Equity
Balance at June 30, 2019		856,765	$	1	$	127,327		$	(108,870	)	$	(1,864	)	$	16,594
Common stock sold for cash, net of issuance costs of $240		186,666		—		1,720			—			—			1,720
Issuance of pre-purchased warrants, net of issuance costs of $240		—		—		50			—			—			50
Share-based compensation		—		—		55			—			—			55
Forfeiture of share-based payments		—		—		(61	)		61			—			—
Foreign currency translation loss		—		—		—			—			(304	)		(304	)
Net loss		—		—		—			(1,147	)					(1,147	)

Balance at September 30, 2019		1,043,431	$	1	$	129,091		$	(109,956	)	$	(2,168	)	$	16,968

Exercise of pre-funded warrants		27,526		—		—			—			—			—

Share-based compensation		—		—		37			—			—			37

Forfeiture of share-based payments		—		—		(319	)		319			—			—

Foreign currency translation gain		—		—		—			—			336			336

Net loss		—		—		—			(2,090	)		—			(2,090	)

Balance at December 31, 2019		1,070,957	$	1	$	128,809		$	(111,727	)	$	(1,832	)	$	15,251

Share-based compensation		—		—		88			—			—			88
Foreign currency translation gain		—		—		—			—			(901	)		(901	)

Net loss		—		—		—			(2,102	)		—			(2,102	)

Balance at March 31, 2020		1,070,957	$	1	$	128,897		$	(113,829	)	$	(2,733	)	$	12,336


	Common Stock				Additional Paid-in			Accumulated			Accumulated Other Comprehensive			Total Stockholders’
	Shares		Amount		Capital			Deficit			Loss			Equity
Balance at June 30, 2020		1,108,374	$	1	$	128,826		$	(116,636	)	$	(1,953	)	$	10,238
Share-based compensation		—		—		38			—			—			38
Forfeiture of share-based payments		—		—		(14	)		14			—			—
Foreign currency translation gain		—		—		—			—			178			178
Net loss		—		—		—			(2,718	)					(2,718	)

Balance at September 30, 2020		1,108,374	$	1	$	128,850		$	(119,340	)	$	(1,775	)	$	7,736


	*Principal place of* *business/country of* *incorporation*	Ownership Fiscal Year 2020			Ownership Fiscal Year 2019
Benitec Biopharma Proprietary Limited (“BBL”)	Australia		100	%		—
Benitec Australia Proprietary Limited	Australia		100	%		100	%
Benitec Limited	United Kingdom		100	%		100	%
Benitec, Inc.	USA		100	%		100	%
Benitec LLC	USA		100	%		100	%
RNAi Therapeutics, Inc.	USA		100	%		100	%
Tacere Therapeutics, Inc.	USA		100	%		100	%


Level 1:		Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.


Level 2:		Inputs, other than quoted prices that are observable, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.


Level 3:		Unobservable inputs in which little or no market data exists, therefore developed using estimates and assumptions developed by us, which reflect those that a market participant would use.


Software		3-4 years
Lab equipment		3-7 years
Computer hardware		3-5 years
Leasehold improvements		shorter of the lease term or estimated useful lives


Revenues from customers (US$’000)	Three Months ended September 30, 2021		Three Months ended September 30, 2020
Licensing revenue from services transferred overtime	$	—	$	55


(US$’000)	September 30, 2021		June 30, 2021
Cash at Bank	$	15,727	$	19,769

Total	$	15,727	$	19,769


	Three Months Ended March 31, 2020
Disaggregated revenue (US$’000)	Licensing		Royalties		Development activities		Total
Services transferred at a point in time	$	—	$	—	$	—	$	—
Services transferred over time		—		28		—		28

Total	$	—	$	28	$	—	$	28


	Nine Months Ended March 31, 2020
Disaggregated revenue (US$’000)	Licensing		Royalties		Development activities		Total
Services transferred at a point in time	$	—	$	73	$	—	$	73
Services transferred over time		60		—		4		64

Total	$	60	$	73	$	4	$	137


(US$’000)	March 31, 2021		June 30, 2020
Cash at Bank	$	11,988	$	5,231
Term Deposit		—		4,570

Total	$	11,988	$	9,801


(US$’000)	March 31, 2021			June 30, 2020
Prepaid expenses	$	587		$	861
Security deposit		15			69
Other deposit		—			18
Market value of listed shares		4			1

Total other assets		606			949
Less: non-current portion		(197	)		—

Current portion	$	409		$	949


(US$’000)	March 31, 2021			June 30, 2020
Software	$	14		$	11
Lab equipment		1,471			1,109
Computer hardware		26			26
Leasehold improvements		24			24

Total property and equipment, gross		1,535			1,170
Accumulated depreciation and amortization		(972	)		(796	)

Total property and equipment, net	$	563		$	374

(US$’000)	Operating lease right-of- use assets
Balance at July 1, 2021	$	202
Re-measurement during the period		794
Amortization of right of use asset		(49	)

Operating lease right-of-use asset at September 30, 2021	$	947


(US$’000)	Operating lease liabilities
Balance at July 1, 2021	$	213
Re-measurement during the period		794
Principal payments on operating lease liabilities		(51	)

Operating lease liabilities at September 30, 2021		954
Less: non-current portion		(760	)

Current portion at September 30, 2021	$	194


(US$’000)	March 31, 2021
2021	$	52
2022		218

Total operating lease payments		270
Less imputed interest		(8	)

Present value of operating lease liabilities	$	262


(US$’000)	September 30, 2021
2022		235
2023		287
2024		297
2025		228

Total operating lease payment s		1,047
Less imputed interest		(93	)

Present value of operating lease liabilities	$	954


	Common Stock from Warrants			Weighted- average Exercise Price (per share)
Outstanding at July 1, 2020		145,424		$	29.48
Granted		—			—
Exercised		—			—
Forfeited		(38,326	)		82.50

Outstanding and exercisable at September 30, 2020		107,098		$	10.50
Granted		559,162			3.09
Exercised		(281,581	)		3.10
Forfeited		—			—

Outstanding and exercisable at December 31, 2020		384,679		$	5.15
Granted		—			—
Exercised		(277,581	)		3.10
Forfeited		—			—

Outstanding and exercisable at March 31, 2021		107,098		$	10.50


	Common Stock from Warrants		Weighted- average Exercise Price (per share)
Outstanding at July 1, 2021		107,095	$	10.50

Outstanding and exercisable at September 30, 2021		107,095	$	10.50


	Stock Options			Weighted- average Exercise Price		Weighted- average Remaining Contractual Term		Aggregate Intrinsic Value
Outstanding at June 30, 2020		70,154		$	60.42		2.89 years	$	—
Granted		—			—
Exercised		—			—
Forfeited		(444	)		69.32

Outstanding at September 30, 2020		69,710		$	60.00		2.65 years		—

Granted		525,547			2.98		9.95 years
Exercised		—			—
Forfeited		(7,967	)		153.78

Outstanding at December 31, 2020		587,290			7.64		9.2 years		—

Outstanding at March 31, 2021		587,290			7.64		8.9 years		—
Exercisable at March 31, 2021		41,686		$	47.34		2.3 years	$	—


	Three Months Ended March 31,				Nine Months Ended March 31,
(US$’000)	2021		2020		2021		2020
Research and development	$	18	$	18	$	33	$	53
General and administrative		217		70		322		127

Total share-based compensation expense	$	235	$	88	$	355	$	180


	Three Months Ended September 30,
(US$’000)	2021		2020
Research and development	$	81	$	9
General and administrative		190		29

Total share-based compensation expense	$	271	$	38


	Three Months Ended March 31,				Nine Months Ended March 31,
	2021		2020		2021		2020
	(US$’000)
Revenues:
Revenues from customers	$	1	$	28	$	57	$	137

Total revenues	$	1	$	28	$	57	$	137


	Three Months Ended September 30,
	2021		2020

	(US$’000)
Revenues:
Revenues from customers	$	—	$	55

Total revenues	$	—	$	55


	Three Months Ended March 31,						Nine Months Ended March 31,
	2021			2020			2021			2020
	(US$’000)
Other Income (Loss):
Foreign currency transaction gain (loss)	$	(112	)	$	(7	)	$	(167	)	$	4
Interest income (expense), net		(2	)		16			(5	)		52
Other income, net		—			—			37			—
Unrealized loss on investment		(2	)		—			(3	)		(1	)

Total other income (loss), net	$	(116	)	$	9		$	(138	)	$	55


Number		Description of Document

31.1		Statement of CEO Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*

31.2		Statement of CFO Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*

32.1		Statement of CEO Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002**

32.2		Statement of CFO Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002**

101.INS		Inline XBRL Instance Document*

101.SCH		Inline XBRL Taxonomy Extension Schema Document*

101.CAL		Inline XBRL Calculation Linkbase Document*

101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document*

101.LAB		Inline XBRL Label Linkbase Document*

101.PRE		Inline XBRL Taxonomy Presentation Linkbase Document*

104		Cover Page Interactive Data File – the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

Large accelerated filer

Accelerated filer

Non-accelerated
filer

Smaller reporting company

Emerging growth company