10-Q

Large accelerated filer

Accelerated filer

Non-accelerated
filer

Smaller reporting company

Emerging growth company

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, 2025

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

For the transition period from

Commission File Number

001-39267

BENITEC BIOPHARMA INC.

(Exact name of registrant as specified in its charter)


Delaware		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 25,600,210 shares of our common stock outstanding as of the close of business on May 14, 2025.

BENITEC BIOPHARMA INC.

INDEX TO FORM 10-Q


SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS		3

PART I-FINANCIAL INFORMATION		5

ITEM 1.	Financial Statements	5
	Consolidated Balance Sheets as of March 31, 2025 (Unaudited) and June 30, 2024	5
	Consolidated Statements of Operations and Comprehensive Loss for the Three and Nine Months Ended March 31, 2025 and 2024 (Unaudited)	6
	Consolidated Statements of Stockholders’ Equity for the Three and Nine Months Ended March 31, 2025 and 2024 (Unaudited)	7
	Consolidated Statements of Cash Flows for the Nine Months Ended March 31, 2025 and 2024 (Unaudited)	9
	Notes to Consolidated Financial Statements (Unaudited)	10
ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	46
ITEM 4.	Controls and Procedures	47

PART II-OTHER INFORMATION

ITEM 1.	Legal Proceedings	48
ITEM 1A.	Risk Factors	48
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	48
ITEM 3.	Defaults Upon Senior Securities	48
ITEM 4.	Mine Safety Disclosures	48
ITEM 5.	Other Information	48
ITEM 6.	Exhibits	49

SIGNATURES		50

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 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 our clinical trials;

•

the timing and outcome of regulatory filings and approvals;

•

the development of novel AAV vectors;

•

our potential future out-licenses and collaborations;

•

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 intellectual property position and the duration of our patent portfolio;

•

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

•

unanticipated delays;

•

further research and development and the results of clinical trials possibly being unsuccessful or insufficient to meet applicable regulatory standards or warrant continued development;

•

the ability to enroll sufficient numbers of subjects in clinical trials;

•

determinations made by the U.S. Food and Drug Administration and other governmental authorities;

•

regulatory developments in the United States of America;

•

our ability to protect and enforce our patents and other intellectual property rights;

•

our dependence on our relationships with our collaboration partners and other third parties;

•

the efficacy or safety of our products and the products of our collaboration partners;

•

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

•

sales, marketing, manufacturing and distribution requirements;

•

greater than expected expenses, expenses relating to litigation or strategic activities;

•

the impact of, and our ability to remediate, the identified material weakness in our internal controls over financial reporting;

•

our ability to satisfy our capital needs through increasing revenue and obtaining additional financing; and

•

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

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. Such statements are based on assumptions and the actual outcome will be affected by known and unknown risks, trends, uncertainties and factors that are beyond our control or ability to predict. 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.

PART I—FINANCIAL INFORMATION

ITEM 1. Financial Statements

BENITEC BIOPHARMA INC.

Consolidated Balance Sheets

(in thousands, except par value and share amounts)


	March 31, 2025			June 30, 2024
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	103,583		$	50,866
Restricted cash		63			63
Trade and other receivables		3			229
Prepaid and other assets		361			516

Total current assets		104,010			51,674
Property and equipment, net		145			179
Deposits		55			25
Prepaid and other assets		35			62
Right-of-use assets		964			270

Total assets	$	105,209		$	52,210

Liabilities and stockholders’ equity
Current liabilities:
Trade and other payables	$	6,254		$	4,165
Accrued employee benefits		426			475
Lease liabilities, current portion		346			284

Total current liabilities		7,026			4,924
Non-current accrued employee benefits		—			38
Lease liabilities, less current portion		613			—

Total liabilities		7,639			4,962

Stockholders’ equity:
Preferred stock, $0.0001 par value—5,000,000 shares authorized; no shares issued and outstanding at March 31, 2025 and June 30, 2024, respectively		—			—
Common stock, $ 0.0001 par value—160,000,000 shares authorized; 25,546,288 shares and 10,086,119 shares issued and outstanding at March 31, 2025 and June 30, 2024, respectively		2			1
Additional paid-in capital		310,313			238,398
Accumulated deficit		(212,029	)		(190,259	)
Accumulated other comprehensive loss		(716	)		(892	)

Total stockholders’ equity		97,570			47,248

Total liabilities and stockholders’ equity	$	105,209		$	52,210

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,
	2025			2024			2025			2024

Revenue:
	$	—		$	—		$	—		$	—

Total revenues		—			—			—			—
Operating expenses
Royalties and license fees		—			(3	)		—			(108	)
Research and development		5,980			2,566			14,637			12,097
General and administrative		4,208			1,578			9,952			4,953

Total operating expenses		10,188			4,141			24,589			16,942

Loss from operations		(10,188	)		(4,141	)		(24,589	)		(16,942	)
Other income (loss):
Foreign currency transaction gain (loss)		11			(118	)		(190	)		(22	)
Interest income (expense), net		823			(4	)		2,250			(16	)
Other expense, net		—			(16	)		(5	)		(50	)
Gain on extinguishment of liabilities		—			—			764			—
Unrealized loss on investment		—			—			—			(1	)

Total other income (loss), net		834			(138	)		2,819			(89	)

Net loss	$	(9,354	)	$	(4,279	)	$	(21,770	)	$	(17,031	)

Other comprehensive income:
Unrealized foreign currency translation gain (loss)		(28	)		117			176			(5	)

Total other comprehensive income (loss)		(28	)		117			176			(5	)

Total comprehensive loss	$	(9,382	)	$	(4,162	)	$	(21,594	)	$	(17,036	)

Net loss	$	(9,354	)	$	(4,279	)	$	(21,770	)	$	(17,031	)

Deemed dividends		—			—			—			(619	)

Net loss attributable to common shareholders	$	(9,354	)	$	(4,279	)	$	(21,770	)	$	(17,650	)

Net loss per share:
Basic and diluted	$	(0.24	)	$	(0.23	)	$	(0.63	)	$	(1.11	)

Weighted average number of shares outstanding: basic and diluted		38,599,453			18,281,896			34,559,870			15,876,753

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, 2023		1,671,485	$	—	$	168,921	$	(167,889	)	$	(830	)	$	202
Issuance of common stock, pre-funded warrants, and common warrants sold for cash, net of offering costs of $2,964		875,949		—		27,919		—			—			27,919
Anti-dilution adjustment to warrants		—		—		619		(619	)		—			—
Share-based compensation		—		—		91		—			—			91
Foreign currency translation gain		—		—		—		—			50			50
Net loss		—		—		—		(5,954	)		—			(5,954	)

Balance at September 30, 2023		2,547,434		—		197,550		(174,462	)		(780	)		22,308
Exercise of pre-funded warrants		25,000		—		—		—			—			—
Exercise of Series 2 warrants		20,000		—		39		—			—			39
Share-based compensation		—		—		93		—			—			93
Foreign currency translation loss		—		—		—		—			(172	)		(172	)
Net loss		—		—		—		(6,798	)		—			(6,798	)

Balance at December 31, 2023		2,592,434	$	—	$	197,682	$	(181,260	)	$	(952	)	$	15,470
Exercise of pre-funded warrants		132,360		—		—		—			—			—
Share-based compensation		—		—		192		—			—			192
Foreign currency translation loss		—		—		—		—			117			117
Net loss		—		—		—		(4,279	)		—			(4,279	)

Balance at March 31, 2024		2,724,794	$	—	$	197,874	$	(185,539	)	$	(835	)	$	11,500

Balance at June 30, 2024		10,086,119	$	1	$	238,398	$	(190,259	)	$	(892	)	$	47,248
Exercise of pre-funded warrants		1,768,454		—		—		—			—			—
Exercise of Series 2 warrants		857,845		—		1,655		—			—			1,655
Exercise of common warrants		5,181,347		—		20,002		—			—			20,002
Share-based compensation		—		—		435		—			—			435
Foreign currency translation loss		—		—		—		—			(101	)		(101	)
Net loss		—		—		—		(5,059	)		—			(5,059	)

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	Common Stock				Additional Paid-in		Accumulated			Accumulated Other Comprehensive			Total Stockholders’
	Shares		Amount		Capital		Deficit			Loss			Equity
Balance at September 30, 2024		17,893,765		1		260,490		(195,318	)		(993	)		64,180
Exercise of pre-funded warrants		606,129		—		—		—			—			—
Exercise of Series 2 warrants		642,160		—		1,240		—			—			1,240
Exercise of common warrants, net of issuance costs of $2		4,309,421		—		16,630		—			—			16,630
Share-based compensation		—		—		943		—			—			943
Foreign currency translation gain		—		—		—		—			305			305
Net loss		—		—		—		(7,357	)		—			(7,357	)

Balance at December 31, 2024		23,451,475	$	1	$	279,303	$	(202,675	)	$	(688	)	$	75,941
Issuance of common stock and pre-funded warrants sold for cash, net of offering costs of $2,245		2,043,000		1		28,212		—			—			28,213
Exercise of common warrants		51,813		—		201		—			—			201
Share-based compensation		—		—		2,597		—			—			2,597
Foreign currency translation gain		—		—		—		—			(28	)		(28	)
Net loss		—		—		—		(9,354	)		—			(9,354	)

Balance at March 31, 2025		25,546,288	$	2	$	310,313	$	(212,029	)	$	(716	)	$	97,570

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,
	2025			2024
Cash flows from operating activities:
Net loss	$	(21,770	)	$	(17,031	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		52			61
Amortization of right-of-use assets		226			191
Unrealized loss on investment		—			1
Gain on extinguishment of liabilities		(764	)		—
Share-based compensation expense		3,975			376
Changes in operating assets and liabilities:
Trade and other receivables		226			—
Prepaid and other assets		147			1,051
Trade and other payables		2,862			(602	)
Accrued employee benefits		(82	)		48
Lease liabilities		(247	)		(205	)

Net cash used in operating activities		(15,375	)		(16,110	)

Cash flows from investing activities:
Purchase of property and equipment		(18	)		(179	)

Net cash used in investing activities		(18	)		(179	)
Cash flows from financing activities:
Proceeds from issuance of common stock, pre-funded warrants, and common warrants		30,459			30,883
Proceeds from exercise of pre-funded warrants, Series 2 warrants common warrants		39,729			39
Share and pre-funded warrants issuance transaction costs		(2,247	)		(2,964	)

Net cash provided by financing activities		67,941			27,958

Effects of exchange rate changes on cash, cash equivalents, and restricted cash		169			(3	)

Net increase in cash, cash equivalents, and restricted cash		52,717			11,666
Cash, cash equivalents, and restricted cash, beginning of period		50,929			2,490

Cash, cash equivalents, and restricted cash, end of period	$	103,646		$	14,156

Supplemental disclosure of cash flow information
Initial measurement of operating lease right-of-use assets and liabilities	$	255		$	—
Re-measurement of operating lease right-of-use assets and liabilities	$	666		$	—
Deemed dividend	$	—		$	619

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

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BENITEC BIOPHARMA INC.

Notes to Consolidated Financial Statements

(Unaudited)

1. Business

Benitec Biopharma Inc. (the “Company”, “we”, “our”) 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 is called “Silence and Replace”

DNA-directed

RNA interference. The proprietary “Silence and Replace”

DNA-directed

RNA interference platform combines RNA interference, or RNAi, with gene therapy to create medicines that simultaneously facilitate sustained silencing of disease-causing genes and concomitant delivery of wildtype replacement genes following a single administration of the therapeutic construct.

During the year ended June 30, 2021, the Company completed an organization restructuring as part of the commercial desire to provide a more efficient structure for the future as the Company transitioned its operations to the United States.

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 as listed below. Aside from Benitec Biopharma Proprietary Limited, the international subsidiaries are dormant.


		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

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 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, 2024.

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

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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 relate to accrued research and development expense and valuation of equity-based instruments issued for other than cash. These estimates and assumptions are based on current facts, historical experience and various other factors believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the recording of expenses that are not readily apparent from other sources. Actual results may differ materially and adversely from these estimates. To the extent there are material differences between the estimates and actual results, the Company’s future results of operations will be affected.

Risks and Uncertainties

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

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

Other comprehensive income (loss) for all periods presented consists entirely of foreign currency translation gains and losses.

Fair Value Measurements

The Company measures its financial assets and liabilities in accordance with 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.

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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. There were no cash equivalents as of March 31, 2025 and June 30, 2024.

Restricted cash balances of $63 thousand and $63 thousand as of March 31, 2025 and June 30, 2024, respectively, are used to secure the Company’s credit card.

Concentrations of Risk

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

Trade and Other Receivables

The Company adopted ASC 326—

Financial Instruments—Credit Losses (Topic 326

) as of July 1, 2023. As such, the Company estimates current expected credit losses (CECL) on trade and other receivables on an ongoing basis, and will recognize those expected credit losses immediately. Estimates of current expected credit losses will be based on analyses of individual customer circumstances and historical

write-off

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

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

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 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.

Table of Contents

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.

SEC Form 10-Q filed by Benitec Biopharma Inc.