Next Science Limited (NXS) 2021年年度報告「ASX」.pdf

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1、#NextScienceHealsNEXT SCIENCE LIMITED ACN 622 382 5492021/ANNUAL REPORT#NextScienceHeals2021/ANNUAL REPORTTABLE OF CONTENTS1.Our Purpose 12.Patient Case Study 33.Physician Testimonials 54.XPERIENCETM Launch 75.New Partnerships 96.Chair Message117.CEO Message138.Directors Report159.Lead Auditors Inde

2、pendence Declaration3910.Consolidated Statement of Profit or Loss and Other Comprehensive Income4111.Consolidated Statement of Financial Position4212.Consolidated Statement of Changes in Equity4313.Consolidated Statement of Cash Flows4514.Notes to Financial Statements4615.Directors Declaration8916.I

3、ndependent Auditors Report9017.Investor Information9518.Corporate Directory1001 2#NextScienceHeals2021/ANNUAL REPORTOur primary purpose at Next Science is to heal patients and save lives by addressing the impacts of biofilms on human health,and to commercialise our XBIO technology platform for share

4、holders.We have a unique opportunity to change the trajectory of the war on infection by providing solutions that eliminate biofilms,and their incumbent bacteria,fungi and viruses.See the innovative Next Science team in actionOUR PURPOSE3 4#NextScienceHeals2021/ANNUAL REPORTPATIENTCASE STUDY#NextSci

5、enceHealsSURGX:A Practical Application in a Post-Operative SettingApproximately 4.5 million dog bites occur each year in the U.S.,accounting for 1%of injury-related emergency department(ED)visits and$53.9 million in estimated inpatient costs(Holmquist,2008).Nearly 1 in 5 of these wounds becomes infe

6、cted(CDC,2015).When patients wait more than 24 hours to visit the ED,they often have clinically evident infection and inflammation(Kramer,2010),which typically include a polymicrobial mixture of animal oral flora(Thomas,2011).The biofilm forming bacteria in the oral cavity of dogs can be inoculated

7、into the bite wound and plays a major factor in delayed wound healing(Zambori,2013).SURGX has proven uniquely effective for mitigating the risks of these types of surgical infections.The patient,a frail 61-year-old female tripped over her elderly dog and was bitten on her left foot at the site of a

8、previous bunion surgery.She attempted self-care at home,exceeding the 24-hour window to obtain early anti-biofilm intervention.By day four,the bacteria had developed into an infection,when she went to the ED for urgent care.By this time,the patient was in pain,her foot red,swollen,and filled with fl

9、uid.The ED team performed an incision and drained the wound infection,because of her age and poor health state,admitting the patient to hospital for management and IV antibiotics.The initial treatment failed to resolve the infection,the patient was transferred to the surgery team for further interve

10、ntion to clean and drain the wound.Two additional bedside incision and drainage attempts were performed.However,by day seven her condition had worsened,requiring a more thorough wound debridement and irrigation under anesthesia.Post-operative treatment included 14 days of Augmentin and topical EO2 o

11、xygen therapy,tissue grafting(Epi-Fix).She was discharged to home.However,by the end of the month during outpatient follow-up,her wound had begun to degrade despite multiple types of therapies,including surgical debridement,IV and oral antibiotics,topical oxygen,and wound grafting.This cycle,where a

12、 wound appears to respond,then leads to a worsening infection,is a cardinal sign of a biofilm infection.In mid-Sept.more than one month after the dog bite Dr.Anthony Iorio,DPM,MPH,Director of Surgical Department applied SURGX to the patients wound and continued each week during her follow-up wound v

13、isits,noting clinical improvement each week until by October 22,the wound was completely closed.Developed for incision management,Dr.Iorios use of SURGX in the post-operative environment demonstrates the value of SURGX as a compelling resource in surgical infection management.TREATMENT TIMELINE 25 J

14、uly 20 Patient sustains dog bite29 July 20 Patient went to the ED for urgent care Initial wound incision and drainage attempt Patient admitted to the hospital for management and IV antibiotics30 July 20 Infection unresolved Patient transferred to surgery team for surgical intervention31 July 20 Seco

15、nd and third wound incision and drainage attempts Infection unresolved1 August 20 Surgical wound debridement and irrigation under anesthesia10 August 20 Patient discharged 10 days after surgical debridement Clinical improvements with only redness remaining at the incision site26 August 20 Outpatient

16、 follow-up visits revealed degradation of the wound,a clinical photo of a biofilm infection17 September 20 Weekly applications of SURGX begin in mid-Sept.22 October 20 Wound healed and completely closed CASE STUDY Podiatry5 6#NextScienceHeals2021/ANNUAL REPORT“I use SURGX on my polytrauma patients a

17、nd have seen a tremendous difference in the outcome of both surgical and open wounds.Several of the patients I see also have co-morbidities such as diabetes and hypertension,that can delay healing and increase the risk for infection.With the use of SURGX Ive been able to prevent biofilms and bioburd

18、ens on incisions and deep wound.”Dr.Robert M Harris,MDOrthopedic traumatologist“Chronic ulcerations can have serious negative consequences to patients.Patients with diabetic foot ulcers have 47%mortality rate and if they have the comorbid condition of peripheral vascular disease,mortality rises up t

19、o 64%.BLASTX is an amazing product that has no known antimicrobial resistance,it attacks biofilm and prevents it from reforming.Importantly,it destroys biofilm without harming healthy human tissue.I have applied BLASTX to over 20,000 patients with no adverse effects.As a physician it is important to

20、 me to have the best tools in my toolkit so that I can treat these problems,because when we save their limbs,we save their lives.”Dr.Matthew Regulski Podiatric Surgery SpecialistPHYSICIAN TESTIMONIALS#NextScienceHeals“Patients come to see me and have an expectation that I can help improve their situ

21、ation,whether that be a hip replacement or a knee replacement.There is an expectation that I can help improve their quality of life.I take this responsibility very seriously and look to do everything within my powers to provide this outcome.All surgical procedures come with an element of risk,and as

22、 a surgeon I do everything I can to minimize this risk.My biggest concern with any procedure is infection,my second biggest concern is infection,and my third biggest concern is infection.While there are often a number of risk factors outside of a physicians control,such as co-morbidities,BMI,smoking

23、 etc,we typically control all other factors to ensure a successful outcome.XPERIENCETM is a product that I routinely use during my surgical procedures to help reduce the risk of infection.I know that with XPERIENCETM my patients receive ongoing protection against bacteria over an extended period of

24、time compared to other irrigation solutions.My personal view is that the irrigation landscape has evolved and I that with the new technologies available,physicians need to irrigate with purpose.”Dr.Ravi BashyalOrthopaedic Surgeon7 8#NextScienceHeals2021/ANNUAL REPORTXPERIENCE LAUNCH#NextScienceHeals

25、In April 2021,XPERIENCE No Rinse Antimicrobial Solution received FDA clearance to be sold as a medical device in the United States.This non-toxic technology does not need to be rinsed from the surgical site after closure,offering up to five hours of protection in helping to prevent surgical site and

26、 post-operative infections.XPERIENCE is designed for use in virtually every open orthopedic surgical case,with an initial focus on shoulder,hip,knee,trauma and podiatry.XPERIENCE is being championed by leading orthopaedic surgeons,four of whom hosted a panel discussion at the American Academy of Ort

27、hopaedic Surgeons(AAOS)annual conference in September 2021.This novel irrigant demonstrates high efficacy against both planktonic bacteria and bacterial biofilmsRavi K.Bashyal,MD Orthopaedic Surgeon,NorthShore University HealthSystem,Chicago,ILUSED BYINSURGEONSHOSPITALS*As of 17 Feb.2022196100IMMEDI

28、ATE IMPACT (APRIL TO FEBRUARY 2021):LEARN MORE AT: a presentation from Dr.Ravi Bashyal,Orthopaedic Surgeon,at AAOS9 10#NextScienceHeals2021/ANNUAL REPORTNEW PARTNERSHIPS#NextScienceHealsIn 2021,Next Science announced two additional partnerships:Tela Bio,Inc.and Triad Life Sciences,Inc.The distributi

29、on agreement grants TELA Bio,Inc.exclusive rights across the US plastic reconstructive surgery market for the sale and marketing of a white labelled version of XPERIENCETM(Site Guard Surgical Solution).The agreement also grants TELA Bio,Inc.a first right of negotiation for the EU market,upon success

30、ful CE approval for XPERIENCETM.The agreement includes an annual licensing fee plus transfer price arrangements and minimum purchase amounts to retain exclusivity.The agreement term is 10 years and automatically extends for an additional period of 10 years unless notice is given by either party that

31、 they do not wish to extend.In the US alone,over 5 million plastic reconstructive procedures are done each year.TELA Bio,Inc.s immediate point of focus will be the breast augmentation and reconstruction market of over 400,000 procedures per year.The agreement grants Triad Life Sciences,Inc.exclusive

32、 rights for the sale and marketing of a white labelled version of TORRENTXTM(TridentXTM Wound Wash)across the US wound care market,excluding use in a sterile operating environment.The agreement term is 5 years and includes minimum purchase amounts to retain exclusivity.11 12#NextScienceHeals2021/ANN

33、UAL REPORT6.CHAIR MESSAGE6.CHAIR MESSAGEDear Fellow Shareholders,I am pleased to present Next Sciences Annual Report for the financial year ended 31 December 2021.It was an honour for me to be elected by the Board as Chair of Next Science Limited in May 2021.Next Science has a unique opportunity to

34、make a real difference to the lives of people across the globe with its unique patented products proven to be effective in preventing and treating biofilm-based bacteria.Our people(including the Board)are committed to our purpose,to heal people and save lives,and they are dedicated in pursuing our o

35、bjective of making our products available worldwide.2021 was a record sales year for us with sales contributions across all Next Science in-market products.We made good progress in executing our strategy to accelerate market adoption of our products despite disruptions resulting from the Covid-19 pa

36、ndemic including significant reductions in the number of surgical procedures conducted in our principal market of the United States.The securing of FDA approval for XPERIENCETM our advanced no rinse surgical irrigation solution,in April 2021,was an important milestone for Next Science.The Board cont

37、inues to believe that XPERIENCETM offers Next Science the greatest product opportunity to date with the potential to accelerate the Companys revenue growth.Optimising our distribution partnerships as well as our manufacturing relationships was a significant focus during 2021 and in early 2022.The co

38、mpany was able to convert a legal complaint from our longstanding distribution partner,Zimmer Inc.over commercialisation and distribution rights to XPERIENCETM,into an improved and enhanced relationship encompassing a new US distribution arrangement for XPERIENCETM as well as a refreshed BactisureTM

39、 distribution arrangement.The new US distribution arrangement for XPERIENCETM means Zimmers 2,600 specialist joint reconstruction sales team will be selling XPERIENCETM.In the second half of 2021,we established a new exclusive distribution relationship with TELA Bio,Inc.,a NASDAQ listed company focu

40、sed on commercial stage medical technologies in the soft tissue reconstruction market,for the sale of XPERIENCETM in the US plastic surgery market.Combined with our contracted commissioned sales force primarily focused on the orthopaedic market,we are well placed to generate an uplift in the represe

41、ntation of Next Sciences products to the US market.To support anticipated sales growth,we supplemented our manufacturing capacity and diversified our supply chains by broadening our relationship with Holopak in Germany to include XPERIENCETM.We also focused on developing all our manufacturing relati

42、onships to ensure they continue to meet our business requirements as we grow.We successfully transitioned BLASTX distribution back to Next Science in April 2021 creating opportunities for us to sell to a wider customer set.Customer responses have been positive,enabling us to expand the BLASTX custom

43、er base under the direct sales model.As we move through 2022,we are expanding our BLASTX coverage into acute care using our direct sales network.Throughout 2021,and continuing into 2022,Next Science has prioritised minimising the impacts of COVID19 on the business and safeguarding the health and wel

44、fare of our staff.With the US healthcare sector playing such an important role for our business and our main office being located in Jacksonville,Florida we were delighted that travel restrictions eased during 2021 allowing our CEO and Managing Director,Judith Mitchell,to temporarily relocate to the

45、 US and be present on the ground in leading our US team.The Board is greatly appreciative to Judy for making this commitment.With the emerging recovery in the US surgery market,there is much to be excited about for Next Science in 2022.We expect to benefit from our significantly expanded sales cover

46、age in the US for XPERIENCETM and SURGX as well as the launch of TORRENTXTM in the US under the TridentX Wound Wash brand and the launches of XPERIENCETM and BLASTX in Australia and New Zealand.We have recently strengthened our balance sheet,having successfully completed a placement of new shares to

47、 institutional and sophisticated investors supplemented by a share purchase plan,to enable all eligible shareholders to participate at the same offer price.These funds ensure we have the working capital to support our growth plans.We are also looking forward to further strengthening our US leadershi

48、p structure in 2022 with the anticipated recruitment of a President,US to lead the US business.In 2022,the company will be focused on continuing to expand doctor and patient access to our suite of patented products and accelerate broader market adoption,as we pursue our purpose of healing people and

49、 saving lives.On behalf of the Board,I wish to thank all our employees for their continued loyalty and dedication during a challenging year.I also wish to thank our shareholders,many of whom have been with us since our listing on the ASX,for their continued encouragement,excitement and support.In ad

50、dition to expressing thanks to our people,I would like to add my thanks to my colleague Directors on the Board for their dedicated commitment to Next Science,its shareholders and our purpose of healing people and saving lives.A Different Approach,Superior ResultsProfessor Mark Compton AMChair13 14#N

51、extScienceHeals2021/ANNUAL REPORT7.CEO MESSAGE7.CEO MESSAGEIn 2021,Next Science achieved record sales with revenues increasing by 160%on the prior year.This result was driven primarily by growth in Bactisure TM sales and a combination of surgical market recovery,the return to Next Science of distrib

52、ution responsibility for BLASTX,and the new product launch of XPERIENCETM which was approved by the FDA for sale in the US in late April.We also made further progress in building market awareness for our prevention and treatment products for the health care market.The benefits of our product range a

53、re compelling.Our products deliver better patient outcomes,without driving up antimicrobial resistance(ie.their use does not contribute to the development of medicine resistant superbugs)and allow physicians to treat more patients and reduce complications such as surgical site infection.As a result,

54、we reduce the overall cost of healthcare.To support sales of BLASTX and launch XPERIENCETM,we expanded our sales and marketing resources to more than 20 full time employees in field sales,sales administration and marketing.Throughout 2021,additional regulatory approvals were received a 510(k)clearan

55、ce for TORRENTXTM in the US,a wound wash that will go to market with Triad Life Sciences in Q2 of 2022,and TGA clearance for XPERIENCETM in Australia which will also be launched in 2022.Our core research efforts continued in 2021 and we expanded our patent assets to 42 patents across a range of tech

56、nologies.As the year progressed,Next Science faced into a contract dispute with Zimmer,Inc(our BactisureTM distributor),a wholly owned Zimmer Biomet subsidiary.This dispute was resolved in January of 2022,and we announced the execution of a distribution contract with Zimmer for XPERIENCETM in the US

57、.The XPERIENCETM product will be sold through their 2600 hip and knee reconstruction sales force.Zimmer expect to launch in H2 of 2022.To further strengthen the distribution network for XPERIENCETM,the company granted US distribution rights for plastics and reconstruction to TELA Bio,Inc.This partne

58、rship is in line with our strategy to drive wide market adoption across many surgical specialities while expanding our own direct sales force which currently focuses on orthopaedics.These partnerships provide outstanding representation for XPERIENCETM in the surgical irrigation market in the US.Movi

59、ng into 2022,the rate of adoption of XPERIENCETM has continued to grow and we now have 100 hospitals online with over 196 surgeons using the product.A key goal for us now is to move the XPERIENCETM product into the position of standard of care.To deliver on this,we have a series of clinical studies

60、underway and in planning,designed to provide the evidence needed to support our position as a market leading advanced irrigation brand.To ensure adequate resources are available to execute on our plans and provide for a very expanded selling network through Zimmer,we successfully undertook a capital

61、 raise of A$10M in February 2022 and followed this with a share purchase plan for eligible shareholders.OutlookThe outlook for Next Science is positive and exciting.We continue to grow our customer base through our presence in the market.With an expanded distribution force,we expect this base to mul

62、tiply and move to accelerated growth when our planned clinical studies are completed.Key highlights of our outlook for 2022 include:we expect surgery activity to continue to grow back to pre-pandemic levels,increasing demand for our products the activation of new arrangements with Zimmer where their

63、 2600 sales force can sell XPERIENCETM and BactisureTM and provide a strong,well-connected channel to thousands of joint reconstruction surgeons across the US further expansion of the Next Science direct sales team rounding out any coverage gaps and the Next Science marketing and science team leadin

64、g the messaging and driving the clinical study activity across the US market a series of product launches in Australia and New Zealand and then ASEANWe know the difference our technologies can make in peoples lives.I give my sincere thanks to our customers,research partners,business partners,employe

65、es,investors and Board of Directors for your roles in supporting the pursuit of our mission of healing patients and saving lives.Judith MitchellCEO and Managing Director15 16#NextScienceHeals2021/ANNUAL REPORTDIRECTORS REPORT#NextScienceHeals17 18#NextScienceHeals2021/ANNUAL REPORTDirectors The Dire

66、ctors of the Company at any time during or since the end of the financial year are:Dividends No dividends were paid or declared since the commencement of the year and the Directors do not recommend the declaration of a dividend.Operating and financial review Principal activities The principal activi

67、ties of the Group during the course of the year were the research,development and commercialisation of technologies which solve issues in human health caused by biofilms.The Company is headquartered in Sydney,Australia and has a research and development centre and sales and marketing functions locat

68、ed in Florida,USA.Significant changes in the state of affairs and COVID-19 impact Revenues grew by 160%in 2021 with sales contributions across all of Next Sciences products in market and good progress was made in building market awareness for our XBIO brand as an answer to the biofilms and bacteria

69、that directly lead to the need for revision(repeat)joint replacement surgeries and for our newly launched product,XPERIENCE.Revenues showed some early signs of recovery from the negative impacts during 2020 brought about by the COVID-19 shutdown in the USA of elective medical procedures and closure

70、of outpatient wound care clinics.COVID-19 continued to have impact on revenues and establishing relationships with clients,distributors and others in 2021.Whilst COVID-19 is likely to continue to provide a level of disruption during 2022,we expect our customer following to continue to grow across al

71、l of our direct product lines as we continue to partner with our customers to provide them with the best tools to serve their patients.George Savvides Chair Retired 5 May 2021 8.DIRECTORS REPORT8.DIRECTORS REPORTBruce HancoxNon-Executive DirectorMark Compton ChairJudith Mitchell CEO and Managing Dir

72、ectorDaniel SpiraNon-Executive DirectorAileen StockburgerNon-Executive DirectorThe Directors present their report together with the consolidated financial statements of the Group comprising of Next Science Limited(Next Science/Company),and the entities it controlled at the end of,or during,the year

73、ended 31 December 2021(Group).All amounts are presented in US dollars(USD)unless otherwise stated.The Group made progress in expanding our addressable market opportunities and taking more direct control of distribution.During March/April 2021,the global distribution rights to BLASTX transitioned bac

74、k to Next Science from 3M and Next Science resumed a direct distribution model,selling BLASTX directly to US hospitals and wound care clinics.On 23 April 2021,Next Science received 510(k)clearance from the U.S.Food and Drug Administration(FDA)for the sale of XPERIENCE in the USA and soon thereafter,

75、Next Science began selling XPERIENCE directly to US hospitals and Ambulatory Service Centres.The former Chair of Next Science,George Savvides AM,did not seek re-election at the Companys 2021 Annual General Meeting on 5 May 2021 and retired at the conclusion of the meeting.Mark Compton AM was elected

76、 by the Board to the role of Chair thereafter.On 26 May 2021,Next Science received Therapeutic Goods Administration(TGA)clearance for BLASTX permitting sales in Australia.In June 2021,Next Science agreed to open negotiations with Zimmer,Inc(Zimmer),Next Sciences distribution partner for the Bactisur

77、e product,in relation to the commercialisation and distribution rights to XPERIENCE.The negotiations followed the filing of a complaint by Zimmer in the United States District Court,Northern District of Indiana,alleging that they had global commercial exclusivity rights over XPERIENCE.Next Science d

78、enied the allegations and advised that it would defend the complaint if and when it was served on Next Science by Zimmer.Next Science and Zimmer reached agreement in January 2022,in respect of a new US distribution agreement in relation to the supply of a white labelled version of XPERIENCE under Zi

79、mmers own labelling(excluding the US plastic reconstructive surgery market which is covered by TELA Bio,Incs distribution agreement detailed below).The distribution agreement with Zimmer for XPERIENCE has a 5 year term plus a 5 year renewal option and confirms Next Sciences intellectual property own

80、ership and rights in respect of XPERIENCE.In conjunction with the signing of the new distribution agreement,Zimmer withdrew its District Court proceedings.The complaint was dismissed“with prejudice”(meaning that Zimmer cannot reassert the claims)with each party paying its own costs.Zimmers joint rep

81、lacement sales team of approximately 2600 staff are responsible for selling Zimmers white label version of XPERIENCE,with Zimmers US product launch expected in H2 2022.Next Sciences commercial team is continuing its own XPERIENCE commercialisation efforts as is their partner,TELA Bio,Inc.,in the US

82、plastic surgery market with its white labelled product Site Guard Surgical Solution.On 30 August 2021,Irrimax Corporation,a competitor of Next Science in the wound irrigation sector,served a complaint on Next Science which it had filed in the United States District Court for the Northern District of

83、 Georgia alleging common law unfair competition and false advertising regarding XPERIENCE.Next Science denies the allegations and is vigorously defending Irrimaxs complaint.On 8 November 2021,Next Science received TGA clearance for XPERIENCE permitting sales in Australia.In November 2021,Next Scienc

84、e signed a 10 year exclusive distribution agreement with NASDAQ listed medical technology company,TELA Bio,Inc.,in relation to the supply of a white labelled version of Next Sciences proprietary XPERIENCETM across the US plastic reconstructive surgery market.19 20#NextScienceHeals2021/ANNUAL REPORT8

85、.DIRECTORS REPORT8.DIRECTORS REPORTOperating and financial review(cont.)Significant changes in the state of affairs and COVID-19 impact(cont.)TELA Bio,Inc.has begun marketing and selling the white labelled version of XPERIENCETM under a proprietary brand name Site Guard Surgical Solution.The agreeme

86、nt includes an annual licensing fee plus transfer price arrangement and minimum purchase amounts that must be met to retain exclusivity.In the opinion of the Directors,other than the events previously stated,there were no further significant changes in the state of affairs of the Group that occurred

87、 during the financial year.SHAREHOLDER RETURNS20212020Revenue$8,947,591$3,440,975Loss attributable to owners of the company($9,349,639)($11,912,004)Basic earnings per share(EPS)(cents)($4.75)($6.36)Share price as at 31 Dec(A$)AUD$1.245AUD$1.25Return on capital employed(77.8%)(59.7%)Review of operati

88、ons The loss for the Group for the financial year to 31 December 2021 after providing for income tax amounted to$9,349,639(2020:$11,912,004).Revenue increased by 160%for the period,increasing from$3,440,975 in the prior corresponding period to$8,947,591,reflecting some of the recovery from the impac

89、ts of the COVID-19 pandemic during the 2020 financial year across surgical procedures and in wound care clinics.Gross profit for FY21 was$6,940,122 compared to$2,916,841 in the prior corresponding period.Gross margin as a percent of sales was 78%compared with 85%in the prior corresponding period as

90、a result of a change in composition of revenue.Selling and distribution expenses were$7,394,871,an increase of$1,724,187 compared with$5,670,684 in the prior corresponding period.The increase in spend in 2021 mainly related to an increase in headcount,with corresponding increases in travel and other

91、 employee related expenditure as well as increases in advertising and promotional spend on BLASTX(associated with the resumption of direct sales of BLASTX following the termination of the 3M distribution agreement),as well as promotional spend associated with the launch of XPERIENCE in April 2021 an

92、d the post launch awareness campaign thereafter.Administration expenses were$4,105,918,an increase of$762,874 compared with$3,343,044 in the prior corresponding period.$524,564 of the increase related to legal fees with the majority of the increase related to defending the legal suits brought by Zim

93、mer,Inc and Irrimax Corporation referred to above.Research and development expenses were$5,046,875 a decrease of$1,387,539 compared with$6,434,414 in the prior corresponding period.2020 was a year of significant research and development and regulatory investment to bring XPERIENCE through the FDA 51

94、0(k)clearance process,with FDA 510(k)clearance being successfully obtained in April 2021.Cash and cash equivalents at 31 December Cash and cash equivalents at 31 December 2021 amounted to$7,000,869 compared to$8,100,416 at 31 December 2020.Term deposits at 31 December 2021 amounted to$367,129 compar

95、ed to$7,238,986 at 31 December 2020 as a result of capital raisings in Q4 2020.Likely developments and expected results of operations Further information about likely developments in the operations of the Group and the expected results of those operations in future financial years has not been inclu

96、ded in this report because disclosure of the information would be likely to result in unreasonable prejudice to the Group.Matters subsequent to the end of the financial year As detailed above,in January 2022,Next Science and Zimmer reached agreement in respect of a new US distribution agreement in r

97、elation to the supply of a white labelled version of XPERIENCE under Zimmers own labelling(excluding the US plastic reconstructive surgery market which is covered by TELA Bio,Incs distribution agreement detailed below),and Zimmer withdrew its District Court proceedings.In conjunction with agreeing t

98、he new XPERIENCE distribution agreement,Next Science and Zimmer also agreed a refreshed distribution arrangement for Bactisure.The revised Bactisure arrangements include a revised agreement term.The agreement term will end on 31 December 2026 with Zimmer having the option to extend the agreement for

99、 an additional five year period by providing 6 months prior notice.The Group announced on 23 February 2022 that it was undertaking a capital raising by way of placement and a share purchase plan.There has not arisen in the interval between the end of the financial year and the date of this report an

100、y item,transaction or event,other than those matters detailed above,of a material and unusual nature likely,in the opinion of the directors of the Company,to affect significantly the operations of the Group,the results of those operations,or the state of affairs of the Group,in future financial year

101、s.Environmental regulationThe Groups operations are not subject to significant environment regulations under either Commonwealth or State legislation.The Board believes that the Group has adequate systems in place for the management of environmental requirements.Government regulationThe Group is sub

102、ject to varying degrees of governmental regulation in the countries in which operations are conducted,and the general trend is toward increasingly stringent regulation.In the U.S.,the drug,device,diagnostics and cosmetic industries have long been subject to regulation by various federal and state ag

103、encies,primarily as to product safety,efficacy,manufacturing,advertising,labelling and safety reporting.The exercise of broad regulatory powers available to the U.S.Food and Drug Administration(the“FDA”)can result in increases in the amounts of testing and documentation required for FDA clearance of

104、 new drugs and devices and a corresponding increase in the expense of product introduction.Similar trends are also evident in major markets outside of the U.S.The Group relies on global supply chains,and production and distribution processes that are complex and are subject to lengthy regulatory app

105、roval processes and ongoing regulatory requirements which can affect sourcing,supply and pricing of materials used in the Groups products.21 22#NextScienceHeals2021/ANNUAL REPORT8.DIRECTORS REPORT8.DIRECTORS REPORTInformation on Directors NAME:MARK COMPTON AM Title:Chair and Independent Non-Executiv

106、e DirectorSpecial Responsibilities:Member of the Audit and Risk Committee and Member of the People,Culture and Remuneration Committee Qualifications:Bachelor of Science(Pharmacology,Physiology and Biochemistry)and an MBA,University of New South Wales.Fellow of the Australian Institute of Company Dir

107、ectors,the Australasian College of Health Services Management and The Australian Institute of Management and the Royal Society(New South Wales).Experience and expertise:Mark is Lord Prior of the International Order of St John and Chair of the Board of Trustees of St John International.Mark is Chair

108、of Sonic Healthcare Limited,a global medical diagnostics and healthcare organisation which is a Top 50 ASX listed entity.He is also Chair of St Lukes Care Limited,a not-for-profit health and aged care organisation.Mark has held various CEO and managing director roles,including at St Lukes Care Limit

109、ed,Immune System Therapeutics Limited,Royal Flying Doctor Service of Australia,SciGen Limited and Alpha Healthcare Limited.He is an Adjunct Professor at Macquarie University in healthcare leadership and management(since 2012).Other current directorships:Chair and Non-Executive Director of Sonic Heal

110、thcare Limited(ASX:SHL).Chair of the Board of Trustees of St John International,Chair of St Lukes Care Limited.Former listed directorships (last 3 years):NoneNAME:JUDITH MITCHELL Title:Chief Executive Officer and Managing DirectorSpecial Responsibilities:None Qualifications:MBA,University of Hull Gr

111、aduate of the Australian Institute of Company Directors Experience and expertise:Prior to joining Next Science in 2017,Judith served as President of DePuy Synthes Asia Pacific,the Orthopaedics Division of Johnson&Johnson,before which Judith was President of Asia Pacific for Synthes GmbH,the world le

112、aders in orthopaedic trauma care.Judith commenced her medical technology career at GE Medical Systems,where over 14 years,she held positions in sales,marketing and management.She also held a variety of positions at Cochlear Limited in Product Development,Global Marketing and Education.Other current

113、directorships:None Former listed directorships (last 3 years):NoneNAME:BRUCE HANCOX Title:Non-Executive Director Special Responsibilities:Chair,Audit and Risk Committee Qualifications:Bachelor of Commerce,Canterbury University New Zealand Experience and expertise:Bruce has many years of corporate ex

114、perience across a broad spectrum of commerce,including 16 years with Brierley Investments Limited in New Zealand.He held a number of senior roles at Brierley Investments as general manager and Chairman and served on the board of a number of their subsidiaries in New Zealand,Australia and the US.Bruc

115、e has been a financial advisor to interests of Mr Langley Walker since 2008.He serves as a director of investments and wealth management at Walker Corporation and works with the Walker group of companies to pursue investment opportunities outside the property market.Other current directorships:Direc

116、tor of Walker Group Holdings Pty Limited.Former listed directorships (last 3 years):Carbonxt Group Limited(ASX:CG1)23 24#NextScienceHeals2021/ANNUAL REPORT8.DIRECTORS REPORT8.DIRECTORS REPORTInformation on Directors(cont.)NAME:AILEEN STOCKBURGERTitle:Independent Non-Executive Director Special Respon

117、sibilities:Member,Audit and Risk Committee,Member of the People,Culture and Remuneration CommitteeQualifications:Bachelor of Science and MBA,The Wharton School,University of Pennsylvania,Graduate of the Australian Institute of Company Directors,Certified Public Accountant(CPA USA).Experience and exp

118、ertise:Prior to joining Next Science,Aileen was the Worldwide Vice President of Business Development for the DePuy Synthes Group of Johnson&Johnson,where she oversaw the groups merger and acquisition activities,including deal structuring,negotiations,contract design and review,and deal terms.She led

119、 Johnson&Johnsons efforts to acquire Synthes for approximately$21 billion,Johnson&Johnsons largest medical device acquisition.She also led the efforts to drive the DePuy Trauma business and acquire Micrus Endovascular.Aileen was also involved in numerous other M&A transactions including Pfizer Consu

120、mer Healthcare(US$16.5 billion),Aveeno,BabyCenter,OraPharma,DePuy,DePuy Miket,Kodak Clinical Diagnostics and Neutrogena.Other current directorships:Non-Executive Director,Microbot Medical Inc.(NASDAQ:MBOT)Former listed directorships (last 3 years):NoneNAME:GEORGE SAVVIDES AM(RETIRED 5 MAY 2021)Title

121、:Chair and Independent Non-Executive Director Special Responsibilities:Member of the Audit and Risk Committee and Member of the People,Culture and Remuneration Committee Qualifications:Bachelor of Engineering(Honours),University of New South Wales and MBA,University of Technology,Sydney.Fellow of th

122、e Australian Institute of Company Directors.Experience and expertise:George has 30 years of experience in the Australian&New Zealand healthcare sector.He was CEO of two successful IPO listings on the ASX,being Sigma in 1999 and Medibank Private in 2014.He served as Medibank CEO for 14 years.George s

123、erved as Chair of Kings Consolidated Group Pty Ltd(2016 to 2018)and Macquarie University Hospital(2016 to 2018)and retired as Chair of World Vision Australia after 18 years of service in February 2018.He was a board member of the International Federation of Health Plans for 10 years including a peri

124、od as Deputy President,retiring in 2016.Other current directorships:He currently serves as Non-Executive Chair of the public broadcaster,SBS having been appointed a Non-Executive Director in 2017 and Chair in 2020.He is also a Non-Executive Director of IAG(since 2019)and NZX listed Ryman Healthcare,

125、a large residential aged care provider in New Zealand(since 2013).Former listed directorships (last 3 years):NoneNAME:DANIEL SPIRATitle:Independent Non-Executive Director Special Responsibilities:Chair,People,Culture and Remuneration Committee Qualifications:Bachelor of Commerce,University of New So

126、uth Wales Experience and expertise:Daniel is the CEO of iNova Pharmaceuticals(since 2017)which is a leading multinational consumer healthcare and pharmaceutical company with operations across Asia Pacific and Africa.Previously he was at Bausch Health(2011-2015)as Vice President and GM-North America(

127、with responsibility for a portfolio of businesses spanning Vision Care,Dermatology and Aesthetic Devices)and was also Managing Director,Pacific region.Prior to that,Daniel spent over 15 years at Johnson&Johnson Inc in various roles including Vice President,Country Manager,Chief Marketing Officer and

128、 other sales and marketing roles across the Asia Pacific,Europe/Middle East and North American regions.Other current directorships:None Former listed directorships (last 3 years):NoneCompany SecretaryGillian Nairn,BA/LLB,LLM,FGIA,has held the role of Company Secretary since 21 June 2018.Gillian is a

129、n experienced corporate governance professional with more than 20 years legal and governance experience gained in private practice and in various company secretarial roles,predominantly with listed entities,in a variety of sectors including healthcare,manufacturing,oil and gas,professional services

130、and education.25 26#NextScienceHeals2021/ANNUAL REPORT8.DIRECTORS REPORT8.DIRECTORS REPORTDirectors interestsThe relevant interest of each Director in shares and options over such instruments issued by the Group,as notified by the Directors to the ASX in accordance with section 205G(1)of the Corpora

131、tions Act 2001 at the date of this report is as follows:NAME OF DIRECTORFULLY PAID ORDINARY SHARESSHARE OPTIONSNumberNumberMark Compton137,438520,000Judith Mitchell6,560,000-Bruce Hancox530,000520,000Daniel Spira723,437260,000Aileen Stockburger44,837520,000Total7,995,7121,820,000Meetings of director

132、s The number of meetings held and attended by each of the Directors of the Company during the year ended 31 December 2021 were as follows:A Number of meetings held when Director was eligible to attend B Number of meetings attended during the time the Director held office NAME OF DIRECTORBOARD MEETIN

133、GSPEOPLE,CULTURE&REMUNERATION COMMITTEEAUDIT AND RISK COMMITTEEABABABMark Compton19192233Judith Mitchell1919Bruce Hancox191966Daniel Spira191822Aileen Stockburger19181166George Savvides771133Shares under optionAt the date of this report,there are 2,890,000 options over ordinary shares on issue(2020:

134、8,092,500 options),representing 1.46%(2020:4.17%)of the Companys undiluted total share capital,granted to employees and directors under an equity incentive plan.Indemnity and insurance of officers The Group has indemnified the directors and executives of the Group for costs incurred,in their capacit

135、y as a director or executive,for which they may be held personally liable,except where there is a lack of good faith.During the financial year,the Group has paid a premium in respect of a contract to insure the directors and executives of the Company against a liability to the extent permitted by th

136、e Corporations Act 2001.The contract of insurance prohibits disclosure of the nature of the liability and the amount of the premium.Indemnity and insurance of auditorThe Company and the Group have not,during or since the end of the financial year,indemnified or agreed to indemnify the auditor of the

137、 Company or any related entity against a liability incurred by the auditor.During the financial year,the Company has not paid a premium in respect of a contract to insure the auditor of the Company or any related entity.Proceedings on behalf of the company No person has applied to a court under sect

138、ion 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of the Company,or to intervene in any proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the Company for all or part of those proceedings.Non-audit services Details of the amo

139、unts paid or payable to the auditor for non-audit services provided during the financial year by the auditor are outlined in note 30 to the financial statements.The Directors are satisfied that the provision of non-audit services by the auditor during the financial year is compatible with the genera

140、l standard of independence for auditors imposed by the Corporations Act 2001.The Directors are of the opinion that the services as disclosed in note 30 to the financial statements do not compromise the external auditors independence requirements under the Corporations Act 2001 for the following reas

141、ons:All non-audit services have been reviewed and approved to ensure that they do not impact the integrity and objectivity of the auditor;and None of the services undermine the general principles relating to auditor independence set out in APES 110 Code of Ethics for Professional Accountants(includi

142、ng Independence Standards)issued by the Accounting Professional and Ethical Standards Board,including reviewing or auditing the auditors own work,acting in a management or decision-making capacity for the Company,acting as advocate for the Company or jointly sharing economic risks and rewards.Office

143、rs of the Company who are former partners of KPMG No officer of the Company was an audit partner of KPMG,being the auditors during the financial year,at a time when the audit firm undertook an audit of the Company.Auditors independence declaration The auditors independence declaration is set out on

144、page 40 and forms part of the Directors Report for the financial year ended 31 December 2021.Auditor KPMG continues in office in accordance with section 327 of the Corporations Act 2001.Remuneration Report(audited)This Remuneration Report forms part of the Directors Report for the year ended 31 Dece

145、mber 2021.This Report outlines the details of the remuneration arrangements for the key management personnel of the Group,including remuneration strategy,framework and practices,in accordance with the requirements of the Corporations Act 2001 and its Regulations.27 28#NextScienceHeals2021/ANNUAL REP

146、ORT8.DIRECTORS REPORT8.DIRECTORS REPORTRemuneration Report(audited)(cont.)For the purposes of this Report,key management personnel(KMP)are defined as those persons having authority and responsibility for planning,directing and controlling the activities of the Group,directly or indirectly,including

147、any Director of the Company(non-executive or executive).The information in this Remuneration Report is set out under the following headings:Key management personnel(KMP)Remuneration governance Service agreements and remuneration policy Non-Executive Directors remuneration Employee incentive arrangem

148、ents and link between performance and reward Share option plans and performance rights over equity instruments KMP Remuneration KMP Equity HoldingsKey management personnel(KMP)The KMP of the Group during the financial year and the positions held are summarised below:Non-Executive Directors Mark Comp

149、tonBruce HancoxDaniel SpiraAileen StockburgerGeorge Savvides Retired 5 May 2021CEO and Managing Director Judith Mitchell Other KMP Jacqueline ButlerChief Financial OfficerMatthew Myntti Chief Technology OfficerJon Swanson Chief Operating OfficerDustin Haines Chief Commercial OfficerRemuneration gove

150、rnance The People,Culture and Remuneration Committee currently comprises of:Daniel Spira(Chair)Mark ComptonAileen StockburgerThe role and responsibilities,composition,structure and membership requirements of the People,Culture and Remuneration Committee are documented in the People,Culture and Remun

151、eration Committee Charter available at People,Culture and Remuneration Charter provides that the Committee should comprise at least three members,all of whom are Non-Executive Directors and a majority of whom are independent Directors.The Chair of the Committee should be an independent Director who

152、is not Chair of the Board.The Charter requires the Committee to meet at least twice each year.All of the current members of the People,Culture and Remuneration Committee have been assessed by the Board as being independent Non-Executive Directors and the Chair of the Committee is not Chair of the Bo

153、ard.Service agreements and remuneration policyExecutives are employed under executive employment agreements with the Group.In determining remuneration,the Group considers:industry based remuneration benchmaking(Australia and USA);market developments affecting remuneration practices;the remuneration

154、expectations of an executive whom the Company wants to employ;future outlook for the Group and market generally;the Companys performance over a performance period;and the link between remuneration and the successful implementation of the Companys strategy and achievement of strategic objectives.Exec

155、utive incentives comprise fixed and variable elements linked to Company and individual performance as detailed in this Report.NAME:JUDITH MITCHELL Title:CEO and Managing DirectorDetails:Ongoing service agreement inclusive of superannuation and to be reviewed annually by the Company.The Company may t

156、erminate the service agreement:i.by giving a 3-month termination notice;orii.without notice,in the event of serious misconduct or for any other reason that enables summary dismissal at law.Judith is entitled to participate in the Companys short-term and long-term incentive plans.NAME:JACQUELINE BUTL

157、ER Title:Chief Financial Officer(CFO)Details:Ongoing service agreement inclusive of superannuation and to be reviewed annually by the Company.The Company may terminate the service agreement:i.by giving a 3-month termination notice;orii.without notice,in the event of serious misconduct or for any oth

158、er reason that enables summary dismissal at law.Jacqueline is entitled to participate in the Companys short-term and long-term incentive plans.Employment Agreements29 30#NextScienceHeals2021/ANNUAL REPORT8.DIRECTORS REPORTEmployment AgreementsNAME:DR.MATTHEW MYNTTI Title:Chief Technology Officer(CTO

159、)Details:Ongoing employment agreement to be reviewed annually by the Company.The Company may terminate the employment agreement:i.by giving 90 days written notice;orii.without notice,in the event of serious misconduct or for any other reason that enables summary dismissal at law.Matthew is entitled

160、to participate in the Companys short-term and long-term incentive plans.NAME:JON SWANSONTitle:Chief Operating Officer(COO)Details:Ongoing employment agreement to be reviewed annually by the Company.The Company may terminate the employment agreement:i.by giving 90 days written notice;orii.without not

161、ice,in the event of serious misconduct or for any other reason that enables summary dismissal at law.Jon is entitled to participate in the Companys short-term and long-term incentive plans.NAME:DUSTIN HAINESTitle:Chief Commercial Officer(CCO)Details:Ongoing employment agreement to be reviewed annual

162、ly by the Company.The Company may terminate the employment agreement:i.by giving 90 days written notice;orii.without notice,in the event of serious misconduct or for any other reason that enables summary dismissal at law.Dustin is entitled to participate in the Companys short-term and long-term ince

163、ntive plans.8.DIRECTORS REPORTNon-Executive Directors RemunerationEach of the Non-Executive Directors have entered into appointment letters with Next Science confirming the terms of their appointment and their roles and responsibilities.Under the Constitution,the Board decides the amount paid to eac

164、h Non-Executive Director as remuneration for their services as a Director.However,the Constitution and the ASX Listing Rules stipulate that the total amount of fees paid to Non-Executive Directors(excluding any special exertion fees)must not exceed the amount approved by the Companys shareholders.Th

165、is amount has been fixed initially in the Companys Constitution at A$750,000 per annum and may only be varied by ordinary resolution in general meeting.The annual fee for Non-Executive Directors is AUD$90,000 per annum(inclusive of superannuation)and for the Chair is AUD$250,000 per annum(inclusive

166、of superannuation).The Chairs fees reflect the additional responsibilities of the role.An additional fee of AUD$10,000 per annum is paid for performing the role of Chair of the Audit and Risk Committee or People,Culture and Remuneration Committee.The Company paid special exertion fees to Aileen Stoc

167、kburger during 2021.These exertions were to assist the Board in ensuring the Companys activities in the US received appropriate oversight and support whilst the Managing Director was unable to visit the US due to COVID-19 travel and isolation restrictions.Employee incentive arrangements and link bet

168、ween performance and reward Short-Term Incentive(STI)Plan for Executives The Managing Director,CFO,CTO and COO were invited to participate in the Companys short-term incentive plan(STI Plan),effective from the Companys admission to the ASX in April 2019.The CCO was invited to participate in the STI

169、plan following his appointment in June 2020.Participants in the STI Plan,must be employed with the Company,or wholly owned subsidiary of the Company,for at least six months during the Plan year and still be employed until after the announcement of the Groups results to the ASX following the relevant

170、 Plan year.Participation is by invitation from the Board and is not automatic.Participants who resign or are terminated before the end of a Plan year are not eligible for any payments under the Plan unless the Board determines otherwise,in its sole discretion.The STI plan objectives are to:reward ex

171、ecutives for their contribution in ensuring that the Group achieves its annual financial performance targets;enhance the Groups opportunity to attract,motivate and retain high calibre and high performing executives;and link part of executive remuneration directly to the achievement of the Group and

172、individual KPIs.The making of any payment under the STI Plan is subject to the achievement of three gateway hurdles;at least 90%of a base consolidated revenue target;100%of a base consolidated EBITDA target;and an individual performance rating of a least 3 out of 5.The maximum STI opportunity is 100

173、%of Total Fixed Remuneration(TFR)for the Managing Director and 80%of TFR for the CFO,CTO,COO and CCO.To receive the maximum STI opportunity,executives must achieve performance targets for consolidated revenue,consolidated EBITDA and individual performance.As a number of the members of the executive

174、team already have significant security holdings in Next Science,any payments under the STI Plan will be paid in cash to ensure that the STI opportunities operate as true incentives.No STI payments were made in respect of the financial year ended 31 December 2021 (2020:Nil)as revenue and EBITDA targe

175、ts were not achieved.31 32#NextScienceHeals2021/ANNUAL REPORT8.DIRECTORS REPORT8.DIRECTORS REPORTThere were 340,602 rights over ordinary shares issued as compensation to KMP during the year ended 31 December 2021(2020:Nil).There were no previous rights issues.The rights were to vest over three years

176、 with 1/3 vesting after 1 year,1/3 after 2 years and 1/3 after 3 years from the grant date.However,due to employment ceasing on 20 April 2022 the performance rights in year 2 and 3 will not vest.The movement for the year ended 31 December 2021,in the number of rights and options over ordinary shares

177、 in Next Science Limited held,directly,indirectly or beneficially,by each KMP,including their related parties was as follows:Employee incentive arrangements and link between performance and reward(cont.)Long-Term Incentive(LTI)Plan for Executives At the time of the Companys IPO in April 2019,the Boa

178、rd of the Company established a long-term incentive plan under which incentives are issued in the form of Performance Rights to eligible participants(LTI Plan).The Managing Director,CFO,CTO,CCO and COO are entitled to participate in the LTI Plan.If Group performance hurdles are achieved in the finan

179、cial year ending 31 December 2022,and thereafter,the Managing Director has the opportunity to be granted performance rights worth 200%of her Total Fixed Remuneration(TFR)and the other participants in the LTI Plan have the opportunity to be granted performance rights worth 150%of their TFR.The number

180、 of Performance Rights granted will be based on the volume weighted average price(VWAP)of shares in the Company for the period 1 January until the day before the release on ASX of the Companys relevant preliminary full year results.The vesting of Performance Rights issued under the LTI Plan is depen

181、dent on satisfaction of the following vesting conditions:50%of Performance Rights will vest if the compound annual TSR is at least 15%per annum;and 100%of Performance Rights will vest if the compound annual TSR is at least 30%per annum.If compound TSR is less than 15%per annum,no Performance Right w

182、ill vest.Subject to vesting conditions being satisfied,Performance Rights automatically convert to shares,on a one-for one basis,three years after the date on which they are granted.If vesting conditions have not been satisfied,the Performance Rights will automatically lapse.Participants must be emp

183、loyed by the Company or a wholly owned subsidiary at the date of vesting.No Performance Rights have been issued in relation to the financial year ending 31 December 2021(2020:Nil)as vesting conditions were not met.The Companys LTI Plan will operate in future years with grants based on the relevant r

184、evenue and/or other Group performance measures.It is not intended to change the size of the grant to participants or the vesting conditions.In recognition of the CCOs extensive work in 2020 to prepare the Company for the launch of XPERIENCE in 2021,and to provide longer term upside opportunity to th

185、e CCO similar to that available to the other executive KMPs from the options awarded to them prior to the Companys admission to ASX,in February 2021,the Company granted the CCO USD$315,000 worth of performance rights.The vesting of the CCOs performance rights was subject to continued tenure and was

186、to be over three years with 1/3 vesting in 1 year,1/3 in 2 years and 1/3 in 3 years from the grant date.However,due to employment ceasing on 20 April 2022 the performance rights in year 2 and 3 will not vest.Options and rights over equity instrumentsPrior to the Company being admitted to the ASX,the

187、 Group established an Equity Incentive Plan(ECP)for US employees and an Employee Share Option Plan(ESOP)for Australian employees and directors(see note 27).With the exception of the CEO and Managing Director,Judith Mitchell,as described below,the only vesting condition applicable to the options gran

188、ted under these earlier plans was that the individual be employed by the Company,or any wholly owned subsidiary of the Company at the vesting date.There were no options over ordinary shares issued as compensation to KMP during the year ended 31 December 2021(2020:Nil).Details of the options over ord

189、inary shares issued under the ECP or ESOP which were held by KMP as at 31 December 2021 are set out on the following page:KMPGRANT DATEEXPIRY DATEVESTING DATEFAIR VALUE AT GRANT DATEEXERCISE PRICE(USD)Non-Executive DirectorsPre-share Split(USD)Post-share Split(USD)Mark Compton17-Dec-201817-Dec-20231

190、7-Dec-20212,1380.330.56Bruce Hancox17-Dec-201817-Dec-202317-Dec-20212,1380.330.56Daniel Spira17-Dec-201817-Dec-202317-Dec-20212,1380.200.56Aileen Stockburger17-Dec-201817-Dec-202317-Dec-20212,1380.330.56Other KMPJon Swanson17-Dec-201817-Dec-202317-Dec-20202,1380.330.56KMPNUMBER OF RIGHTS GRANTEDGRAN

191、T DATEEXPIRY DATEVESTING CONDITIONFAIR VALUE AT GRANT DATEOther KMPDustin Haines340,60222-Feb-202122-Feb-2024Continued employment0.92KMPBALANCE AS AT 1 JAN 2021 No.GRANTED No.EXERCISED No.LAPSED No.BALANCE AS AT 31 DEC 2021 No.VESTED DURING THE YEARVESTED AND EXERCISABLE No.UN-VESTED No.Executive Di

192、rectorJudith Mitchell2,340,000 (1,560,000)(780,000)Non-Executive DirectorsGeorge Savvides650,000(650,000)Bruce Hancox520,000 520,000 520,000 520,000Daniel Spira 1,300,000 (1,040,000)260,000 260,000 260,000Mark Compton520,000 520,000 520,000 520,000Aileen Stockburger520,000 520,000 520,000 520,000Oth

193、er KMPMatthew MynttiJon Swanson650,000 650,000650,000Jacqueline Butler650,000(650,000)Dustin HainesRightsDustin Haines340,602340,602N/A340,60233 34#NextScienceHeals2021/ANNUAL REPORT8.DIRECTORS REPORT8.DIRECTORS REPORTAnalysis of movements in options and performance rights The value of rights or opt

194、ions over ordinary shares in the Company granted and exercised by each KMP during the reporting period is detailed below.Exercise of options granted as compensationDuring the reporting period,there were 3,250,000 shares issued upon the exercise of options previously granted as compensation,to KMP:De

195、tails of equity incentives affecting current and future remunerationOptions and rights over equity instruments(cont.)The movement for the year ended 31 December 2020,by number options over ordinary shares in Next Science Limited held,directly,indirectly or beneficially,by each KMP,including their re

196、lated parties was as follows:KMPBALANCE AS AT 1 JAN 2020 No.GRANTED No.EXERCISED No.LAPSED No.BALANCE AS AT 31 DEC 2020 No.VESTED AND EXERCISABLE No.UN-VESTED No.Executive DirectorJudith Mitchell2,340,000 2,340,000 1,560,000780,000Non-Executive DirectorsGeorge Savvides650,000 650,000 650,000Bruce Ha

197、ncox520,000 520,000 520,000Daniel Spira 1,300,000 1,300,000 1,040,000260,000Mark Compton520,000 520,000 520,000Aileen Stockburger520,000 520,000 520,000Other KMPMatthew MynttiJon Swanson650,000 650,000 650,000Jacqueline Butler650,000 650,000 650,000Dustin HainesKMPINSTRUMENT NUMBERGRANT DATE%VESTED

198、IN YEARFINANCIAL YEARS IN WHICH GRANT VESTSNon-Executive DirectorsMark ComptonOptions520,00017-Dec-2018100%2021Bruce HancoxOptions520,00017-Dec-2018100%2021Aileen StockburgerOptions520,00017-Dec-2018100%2021Daniel SpiraOptions260,00017-Dec-2018100%2021Other KMPJon SwansonOptions650,00017-Dec-2018100

199、%2020Dustin HainesRights113,53422-Feb-2021%2022Dustin HainesRights22-Feb-2021%2023Dustin HainesRights22-Feb-2021%2024KMPGRANTED IN YEAR$(I)VALUE OF RIGHTS OR OPTIONS EXERCISED IN YEAR$(II)Judith Mitchell913,941Daniel Spira 703,870Jacqueline Butler439,918Dustin Haines315,000-USDNUMBER OF SHARESAMOUNT

200、 PAID$/SHAREVALUE OF OPTIONS EXERCISED$(I)VALUE OF SHARES RECEIVED UPON EXERCISE OF OPTIONS$Judith Mitchell1,560,0000.42913,9411,569,141Daniel Spira 1,040,0000.42703,8701,140,670Jacqueline Butler650,0000.42439,918712,918i.The value of rights granted during the financial year is the fair value of the

201、 rights calculated at grant date.The total value of the rights granted is included in the table above.This amount is allocated to remuneration over the vesting period.ii.The value of options exercised during the year is calculated as the market price of shares of the Company as at the close of tradi

202、ng on the date the options were exercised less the price paid to exercise the options.i.The value of the options exercised during the year is calculated as the market price of shares of the Company as at the close of trading on the date the options were exercised less the price paid to exercise the

203、option.ii.There are no amounts unpaid on the shares issued as a result of the exercise of the options in the 2021 financial year.There were no other share options held by KMP granted,exercised or lapsed during the reporting period other than as disclosed above.35 36#NextScienceHeals2021/ANNUAL REPOR

204、T8.DIRECTORS REPORT8.DIRECTORS REPORTKMP Remuneration(cont.)The table below details the remuneration of KMP for the year ended 31 December 2020.Year ended 31 December 2020KMP RemunerationThe table below details the remuneration of the KMP based on the remuneration policies discussed in this report f

205、or the year ended 31 December 2021.Year ended 31 December 2021KMP(USD)CASH SALARY AND FEES(i)OTHER CASH SERVICE(ii)LONG SERVICE LEAVESUPER-ANNUATIONSHARE-BASED PAYMENTSTOTALPERFORMANCE RELATED(V)Options (iii)Rights (iv)$%Executive DirectorJudith Mitchell283,2393,69617,051(101,211)202,775Non-Executiv

206、e DirectorsMark Compton144,57071,729216,299Bruce Hancox68,3886,66371,729146,780Daniel Spira 73,3851,66735,865110,917Aileen Stockburger83,86071,729155,589George Savvides 66,493(132,471)(65,978)Other KMPMatthew Myntti350,0006,516356,516Jon Swanson254,155651254,806Jacqueline Butler198,2313,12616,990218

207、,347Dustin Haines320,23510696,250416,5911,842,5567,2736,82242,37117,37096,2502,012,642KMP(USD)CASH SALARY AND FEES(i)OTHER CASH SERVICE(ii)(iii)LONG SERVICE LEAVESUPER-ANNUATIONSHARE-BASED PAYMENTSTOTALPERFORMANCE RELATED(VI)Options (iv)Shares in lieu of fees(v)$%Executive DirectorJudith Mitchell261

208、,6063,03814,676960280,280Non-Executive DirectorsGeorge Savvides161,96010,77169,878242,609Bruce Hancox63,0985,99455,902124,994Daniel Spira 51,3021,42127,95115,54796,221Mark Compton62,18355,902118,085Aileen Stockburger48,81055,90213,992118,704Other KMPMatthew Myntti350,000350,000Jon Swanson250,000115,

209、338365,338Jacqueline Butler171,1241,98514,751187,860Dustin Haines173,25020,879194,1291,593,33320,8795,02347,613381,83329,5392,078,220i.On 5 May 2021,George Savvides,AM retired as Chair and Mark Compton assumed the role of Chair.ii.Other cash service includes motor vehicle allowance and/or other mino

210、r benefits.For the year ended 31 December 2021 threshold Group performance targets were not met and hence no amounts were awarded to KMP under the STI Plan.iii.The value of the share options granted to KMP is calculated at the grant date using the Black-Scholes formula.This value is allocated to eac

211、h reporting period evenly over the period from grant date to vesting date.The value disclosed is the portion of the fair value of the options recognised as an expense in each reporting period.Certain tranches of previous options awarded did not vest and lapsed during the year as vesting conditions w

212、ere not met.In accordance with Australian Accounting Standards previous expenses related to the lapsed portion of options were reversed in the current year.iv.The fair value of the right is calculated at the date of grant using the 60 day volume weighted average price of Next Science shares in the p

213、eriod immediately prior to the offer date.The rights disclosed is the portion of the fair value of the rights recognised as an expense in the reporting period.v.Disclosed above are the relative proportions of each individuals remuneration that are related to performance;the remaining proportion bein

214、g fixed remuneration.i.Dustin Haines was appointed Chief Commercial Officer and commenced employment on 10 June 2020.Mr Haines employment will end on 20 April 2022.ii.For the year ended 31 December 2020 threshold Group performance targets were not met and hence no amounts were awarded to KMP under t

215、he STI Plan.iii.Other cash benefits include an amount of$20,879 for relocation expenses paid to Dustin Haines as part of the arrangements agreed in respect of his engagement.iv.The value of the share options granted to KMP is calculated at the grant date using the Black-Scholes formula.This value is

216、 allocated to each reporting period evenly over the period from grant date to vesting date.The value disclosed is the portion of the fair value of the options recognised as an expense in each reporting period.v.Amounts included under share-based payments for Daniel Spira and Aileen Stockburger are i

217、n relation to shares paid in lieu of their Director fees.The Company received a waiver from the ASX that in respect of ASX Listing Rule 10.11 to allow Aileen and Daniel,as Non-Executive Directors,to elect to be issued shares in lieu of their fees for the first 12 months after the Companys admission

218、to the ASX.vi.Disclosed above are the relative proportions of each individuals remuneration that are related to performance;the remaining proportion being fixed remuneration.37 38#NextScienceHeals2021/ANNUAL REPORTThis concludes the remuneration report(audited).This report is made in accordance with

219、 a resolution of directors,pursuant to section 298(2)(a)of the Corporations Act 2001.On behalf of the directors:Mark Compton AMChair 8.DIRECTORS REPORT8.DIRECTORS REPORTDated at Sydney this 23rd day of February 2022 KMP Equity Holdings(cont.)Year ended 31 December 2020KMP Equity HoldingsThe movement

220、 during the reporting period in the number of shares in Next Science Limited held directly,indirectly or beneficially,by each KMP,including their related parties,is as follows:Year ended 31 December 2021KMPBALANCE AS AT 1 JAN 2021 No.RECEIVED ON EXERCISE OF OPTIONS No.OTHER CHANGES DURING THE YEAR N

221、o.*BALANCE AS AT 31 DEC 2021 No.Executive DirectorJudith Mitchell5,000,0001,560,0006,560,000Non-Executive DirectorsMark Compton 137,438137,438Bruce Hancox530,000530,000Daniel Spira 49,2661,040,000*(365,829)723,437Aileen Stockburger44,83744,837George Savvides 649,876(180,000)469,876Other KMPMatthew M

222、yntti20,657,000(7,302,011)*13,354,989Jon Swanson70,000(20,000)50,000Jacqueline Butler650,000*(239,804)410,196Dustin HainesKMPBALANCE AS AT 1 JAN 2020 No.RECEIVED ON EXERCISE OF OPTIONS No.SHARES RECEIVED IN LIEU OF DIRECTORS FEES No.(i)OTHER CHANGES DURING THE YEAR No.*BALANCE AS AT 31 DEC 2020 No.E

223、xecutive DirectorJudith Mitchell4,732,000268,0005,000,000Non-Executive DirectorsGeorge Savvides625,00024,876649,876Bruce Hancox530,000530,000Daniel Spira 36,72912,53749,266Mark Compton125,00012,438137,438Aileen Stockburger 33,55411,28344,837Other KMPMatthew Myntti20,657,00020,657,000Jon Swanson70,00

224、070,000Jacqueline ButlerDustin Haines*Other changes represent shares that were purchased,sold or transferred to another party during the year.*In respect of these options,in order to facilitate the exercise of these options the Company provided a short term loan to the option holder which was repaid

225、 within 15 days.*As announced to ASX on 6 September 2021i.The Company was granted a waiver from Listing Rule 10.11 to the extent necessary to permit the Company to issue shares without shareholder approval to Non-Executive Directors,Aileen Stockburger and Daniel Spira,in lieu of director fees for th

226、e first 12 months after the Companys admission to the official list of the ASX.The shares issued were fully paid ordinary shares in the capital of the Company on the same terms and conditions as the Companys existing shares and were issued at the Offer Price of A$1 for the first quarter after admiss

227、ion.For later quarters,the shares were issued at the 10 day Volume Weighted Average Price(VWAP)of the Companys shares for the first 10 trading days of the relevant quarter.*Other changes represent shares that were purchased during the year.39 40#NextScienceHeals2021/ANNUAL REPORT9.LEAD AUDITORS INDE

228、PENDENCE DECLARATIONTony Nimac Partner Sydney 23 February 2022KPMGLEAD AUDITORS INDEPENDENCE DECLARATION#NextScienceHealsLead Auditors Independence Declaration under Section 307C of the Corporations Act 2001 To the Directors of Next Science Limited I declare that,to the best of my knowledge and beli

229、ef,in relation to the audit of Next Science Limited for the financial year ended 31 December 2021 there have been:i.no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the audit;andii.no contraventions of any applicable code of profession

230、al conduct in relation to the audit.KPMG,an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited,a private English company limited by guarantee.All rights reserved.The KPMG name and logo are trademarks used un

231、der license by the independent member firms of the KPMG global organisation.Liability limited by a scheme approved under Professional Standards Legislation.41 42#NextScienceHeals2021/ANNUAL REPORT10.CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME11.CONSOLIDATED STATEMENT OF F

232、INANCIAL POSITIONIN USDNOTES20212020$Revenue58,947,5913,440,975Cost of sales(2,007,469)(524,134)Gross profit6,940,1222,916,841Other income5147,112356,574Selling and distribution expenses(7,394,871)(5,670,684)Research and development expenses(5,046,875)(6,434,414)Administration expenses(4,105,918)(3,

233、343,044)Other expenses7(15,633)(13,352)Operating loss(9,476,063)(12,188,079)Finance income9142,900297,254Finance costs10(16,476)(21,179)Net finance income126,424276,075Loss before income tax(9,349,639)(11,912,004)Income tax expense11 Loss for the year(9,349,639)(11,912,004)Other comprehensive income

234、,net of income taxForeign currency translation differences for foreign operations(547,407)396,838Total comprehensive loss for the year(9,897,046)(11,515,166)Earnings per shareFrom continuing operations Cents CentsBasic earnings31(4.75)(6.36)Diluted earnings31(4.75)(6.36)IN USDNOTES20212020ASSETS Cur

235、rent assets$Cash and cash equivalents127,000,8698,100,416Trade and other receivables13887,2113,388,045Inventories141,500,5221,071,979Other current assets-term deposits15367,1297,238,986Other current assets-other15476,049452,458Total current assets10,231,78020,251,884Non-current assetsTrade and other

236、 receivables1336,65636,656Property,plant and equipment16683,562788,133Intangible assets172,532,4912,334,936Right-of-use assets18232,456227,265Total non-current assets3,485,1653,386,990Total assets13,716,94523,638,874LIABILITIESCurrent liabilitiesTrade and other payables191,172,9961,064,365Contract l

237、iabilities2091,1771,909,554Lease liabilities21166,235170,946Employee benefits22109,61181,231Total current liabilities1,540,0193,226,096Non-current liabilitiesContract liabilities201,283,3341,374,510Lease liabilities21109,802115,889Employee benefits2217,2959,385Total non-current liabilities1,410,4311

238、,499,784Total liabilities2,950,4504,725,880Net assets10,766,49518,912,994EquityShare capital23102,921,007101,281,467Common control reserve23(42,596,715)(42,596,715)Foreign currency translation reserve23(1,349,143)(801,736)Share option reserve232,140,2982,125,541Performance rights reserve96,250 Accum

239、ulated losses23(50,445,202)(41,095,563)Total equity10,766,49518,912,994The accompanying notes form part of these financial statements.The accompanying notes form part of these financial statements.For the Year Ended 31 December 2021As at 31 December 202143 44#NextScienceHeals2021/ANNUAL REPORT12.CON

240、SOLIDATED STATEMENT OF CHANGES IN EQUITY12.CONSOLIDATED STATEMENT OF CHANGES IN EQUITYThe accompanying notes form part of these financial statements.The accompanying notes form part of these financial statements.2021 IN USDSHARE CAPITALCOMMON CONTROL RESERVEFOREIGN CURRENCY TRANSLATION RESERVESHARE

241、OPTION RESERVEPERFORMANCE RIGHTS RESERVEACCUMULATED LOSSESTOTAL EQUITY$Balance at 1 January 2021101,281,467(42,596,715)(801,736)2,125,541(41,095,563)18,912,994Loss for the year (9,349,639)(9,349,639)Other comprehensive incomeForeign currency translation differences (547,407)(547,407)Total other comp

242、rehensive income (547,407)(547,407)Total comprehensive loss for the year (547,407)(9,349,639)(9,897,046)Transactions with owners in their capacity as ownersShare-based payments 17,37096,250 113,620Foreign exchange impact (2,613)(2,613)Issue of ordinary shares1,645,770 1,645,770Capital raising costs(

243、6,230)(6,230)Total transactions with owners1,639,540 14,75796,250 1,750,547Balance at 31 December 2021102,921,007(42,596,715)(1,349,143)2,140,29896,250(50,445,202)10,766,4952020 IN USDSHARE CAPITALCOMMON CONTROL RESERVEFOREIGN CURRENCY TRANSLATION RESERVESHARE OPTION RESERVEACCUMULATED LOSSESTOTAL E

244、QUITY$Balance at 1 January 202090,693,590(42,596,715)(1,198,574)1,648,704(29,183,559)19,363,446Loss for the year (11,912,004)(11,912,004)Other comprehensive incomeForeign currency translation differences 396,838 396,838Total other comprehensive income 396,838 396,838Total comprehensive loss for the

245、year 396,838(11,912,004)(11,515,166)Transactions with owners in their capacity as ownersShare-based payment 482,973 482,973Foreign exchange impact (6,136)(6,136)Issue of ordinary shares11,175,615 11,175,615Conversion of partly paid shares to ordinary shares(199,999)(199,999)Capital raising costs(387

246、,739)(387,739)Total transactions with owners10,587,877 11,064,714Balance at 31 December 2020101,281,467(42,596,715)(801,736)2,125,541(41,095,563)18,912,994For the Year Ended 31 December 2021For the Year Ended 31 December 202145 46#NextScienceHeals2021/ANNUAL REPORT13.CONSOLIDATED STATEMENT OF CASH F

247、LOWS14.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSThe accompanying notes form part of these financial statements.IN USDNOTES20212020Operating Activities$Receipts from customers9,512,6352,950,430Payments to suppliers and employees(16,268,131)(12,210,609)Payments for research and development(1,672,

248、278)(3,119,907)Interest received16,515117,735COVID 19 government assistance and other income146,905355,707Net cash used in operating activities12(8,264,354)(11,906,644)Investing ActivitiesPayments for property,plant and equipment16(140,492)(213,244)Payments for intangible assets17(576,266)(473,555)N

249、et cash used in investing activities(716,758)(686,799)Financing ActivitiesProceeds from issue of ordinary shares23 10,831,275Proceeds from conversion of options to ordinary shares231,645,770489,125Capital raising costs(6,230)(387,740)Payment of lease liabilities(212,759)(222,609)Net cash provided by

250、 financing activities1,426,78110,710,051Net(decrease)/increase in cash and cash equivalents held(7,554,331)(1,883,392)Cash and cash equivalents at beginning of year15,339,40216,910,605Effects of exchange rate changes on cash and cash equivalents(417,073)312,189Cash and cash equivalents at end of the

251、 year(including bank term deposits)7,367,99815,339,402Less bank term deposits classified as other current assets 15(367,129)(7,238,986)Cash and cash equivalents at end of the year127,000,8698,100,4161.Corporate Information Next Science Limited(the“Company”)is a company domiciled in Australia.The Gro

252、up is a for profit entity and primarily involved in the research,development and commercialisation of technologies which solve bacterial related issues.These consolidated financial statements comprise the Company and its subsidiaries(collectively the“Group”and individually“Group companies”)for the y

253、ear ended 31 December 2021 and comparative information for the year ended 31 December 2020.2.Basis of Preparationa.Statement of compliance The consolidated financial statements are general purpose financial statements which have been prepared in accordance with accounting standards adopted by the Au

254、stralian Accounting Standards Board(“AASB”)and the Corporations Act 2001.The consolidated financial statements comply with International Financial Reporting Standards(“IFRS”)adopted by the International Accounting Standards Board(“IASB”).The financial statements were approved by the Board of Directo

255、rs and authorised for issue on 23 February 2022.b.Basis of measurement The financial statements have been prepared on a historical cost basis unless otherwise stated.c.Functional and presentation currency The financial statements are presented in United States Dollars,which is the Groups presentatio

256、n currency.Entities within the Group hold functional currencies of AUD or USD as appropriate to the individual entity.d.Use of judgements and estimates In preparing these financial statements,management has made judgements,estimates and assumptions that affect the application of the Groups accountin

257、g policies and the reported amounts of assets,liabilities,income,expenses and disclosure of contingent liabilities.Actual results may differ from these estimates.Estimates and underlying assumptions are reviewed on an ongoing basis.Revisions to accounting estimates are recognised prospectively.The k

258、ey judgements,estimates and assumptions are discussed below:Impairment of non-financial assets The Group assesses impairment of non financial assets at each reporting date by evaluating conditions specific to the Group and to the particular asset that may lead to impairment.This involves value in us

259、e calculations,which incorporate a number of key estimates and assumptions.Recoverable amount being the net amount of discounted future cash flows materially exceeds the carrying value of non current assets.The recoverable amount of these cash generating units,at balance date,was estimated based on

260、its value in use.Value in use for the cash-generating units(CGU)was determined by discounting the future cashflows to be generated from the CGUs and is based on the following key assumptions:For the Year Ended 31 December 2021For the Year Ended 31 December 202147 48#NextScienceHeals2021/ANNUAL REPOR

261、T14.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS14.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSa.Parent entity information In accordance with the Corporations Act 2001,these financial statements present the results of the Group only.Supplementary information about the parent entity is disclosed

262、in note 24.b.Basis of consolidationi.Business combinations The Group accounts for business combinations using the acquisition method when control is transferred to the Group,unless it is a combination involving entities or businesses under common control.The consideration transferred in the acquisit

263、ion is generally measured at fair value,as are the identifiable net assets acquired.Any goodwill that arises is tested annually for impairment.Any gain on a bargain purchase is recognised in profit or loss immediately.Transaction costs are expensed as incurred,except if related to the issue of debt

264、or equity securities.Common control transactions record assets and liabilities acquired at their book value at the date of acquisition,rather than their fair value.The difference between the fair value of the consideration given and the carrying value of the assets and liabilities acquired is recogn

265、ised as a common control reserve.The consideration transferred does not include amounts related to the settlement of pre existing relationships.Such amounts are generally recognised in profit or loss.ii.SubsidiariesSubsidiaries are entities controlled by the Group.The Group controls an entity when i

266、t is exposed to,or has rights to,variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.The financial statements of subsidiaries are included in the consolidated financial statements from the date on which control commences

267、 until the date on which control ceases.iii.Loss of controlWhen the Group loses control over a subsidiary,it derecognises the assets and liabilities of the subsidiary,and any related non controlling interest and other components of equity.Any resulting gain or loss is recognised in profit or loss.An

268、y interest retained in the former subsidiary is measured at fair value when control is lost.iv.Transactions eliminated on consolidation Intra group balances and transactions,and any unrealised income and expenses arising from intra group transactions,are eliminated.Unrealised gains arising from tran

269、sactions with equity accounted investees are eliminated against the investment to the extent of the Groups interest in the investee.Unrealised losses are eliminated in the same way as unrealised gains,but only to the extent that there is no evidence of impairment.c.Foreign currencyi.Foreign currency

270、 transactionsTransactions in foreign currencies are translated to the functional currency of the Group at exchange rates at the dates of the transactions.Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rate at the reportin

271、g date.Non monetary assets and liabilities that are measured at fair value in a foreign currency are translated into the functional currency at the exchange rate when the fair value was determined.d.Use of judgements and estimates(cont.)Cashflows were projected based on forecast operating results ov

272、er a 5 year period plus a terminal value.Average annual revenue growth rates and approved budgets were used for revenue projections.Discount rate of 12%based on the weighted average cost of capital.Changes in key assumptions would impact recoverable amount calculationsEstimation of useful lives of a

273、ssetsThe consolidated entity determines the estimated useful lives and related depreciation and amortisation charges for its property,plant and equipment and finite life intangible assets.The useful lives could change significantly as a result of technical innovations or some other event.The depreci

274、ation and amortisation charge will increase where the useful lives are less than previously estimated lives,or technically obsolete or non strategic assets that have been abandoned or sold will be written off or written down and the incremental borrowing rate is estimated.Recovery of deferred tax as

275、setsDeferred tax assets for tax losses are only recognised if the Group considers it is probable that future taxable amounts will be available to utilise those tax losses against.e.Going concern The financial report has been prepared on a going concern basis,which assumes continuity of normal busine

276、ss activities and the realisation of assets and settlement of liabilities in the ordinary course of business for a period of at least twelve months from the date this financial report is approved.For the financial year ended 31 December 2021,the Group incurred a loss of$9,349,639 and had net cash ou

277、tflows from operations of$8,264,354.As at 31 December 2021,the Group had net current asset and net asset positions of$8,691,761 and$10,766,495 respectively.The Group continues the commercialisation of its product range through distribution/royalty agreements with its partners.Alongside this,the Grou

278、p directly commercialises its product range by marketing its products and investing in sales capability and infrastructure as well as developing further products.The Groups commercialisation strategy means that the Group will continue to use its cash reserves and in order to continue to execute its

279、strategy the Group announced on 23 February 2022 that it was undertaking a capital raising by way of placement and a share purchase plan.After considering the above,the Directors have concluded that the Group will be able to fulfil all obligations as and when they fall due for the foreseeable future

280、,being at least twelve months from the date of signing this financial report.3.Significant Accounting Policies The Group has consistently applied the following accounting policies to all periods in these financial statements.For the Year Ended 31 December 2021For the Year Ended 31 December 202149 50

281、#NextScienceHeals2021/ANNUAL REPORTover the life of the contract once product sales have commenced.However,where the milestone payments are subject to regulatory approval,for the variable consideration to be deemed most likely,this will only be included once regulatory approval has been received and

282、 recognised over the remaining life of the contract.iv.Change in estimate On 23rd November 2020,Next Science announced to the ASX that the distribution agreement with 3M for BLASTX,would not be renewed at the end of 2021 and that BLASTX would be transitioned back to Next Science in the first half of

283、 2021.As a result of the non renewal of the 3M contract,a change has been made to the time frame for recognition of the performance obligation in relation to the milestone payments received from 3M.The milestone payments would previously have been recognised as revenue over the period until the end

284、of the 3M contract on 31 December 2021.The milestone payments have now been recognised as revenue over a shorter time period ending 1H 2021,as the transition of BLASTX back to Next Science was completed during 1H 2021.e.Government grants Government grants are recognised where there is reasonable ass

285、urance that the grant will be received and all attached conditions will be complied with.When the grant relates to an expense item,it is recognised as income on a systematic basis over the periods that the related costs,for which it is intended to compensate,are expensed.When the grant relates to an

286、 asset,it is recognised as income in equal amounts over the expected useful life of the related asset.f.Finance income and finance costsFinance income comprises interest income,dividend income and foreign currency gains.Interest income is recognised in profit or loss as it accrues using the effectiv

287、e interest method.The effective interest rate is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial instruments to the gross carrying amount of the financial asset or the amortised cost of the financial asset.In calculating income an

288、d expense,the effective interest rate is applied to the gross carrying amount of the asset(when the asset is not credit impaired)or to the amortised cost of the liability.However,for financial assets that have become credit impaired subsequent to initial recognition interest income is calculated by

289、applying the effective interest rate to the amortised cost of the financial asset.If the asset is no longer credit impaired,then the calculation of interest income reverts to the gross basis.Finance costs comprise interest expense on borrowings,lease liabilities and converting notes,foreign currency

290、 losses and impairment losses recognised on financial assets.Foreign exchange gains and losses on intercompany assets and liabilities that are not eliminated upon consolidation are recognised in OCI.Borrowing costs that are not directly attributable to the acquisition,construction or production of a

291、 qualifying asset are recognised in profit or loss using the effective interest method.c.Foreign currency(cont.)i.Foreign currency transactions (cont.)Non monetary items that are measured based on historical cost in a foreign currency are translated at the exchange rate at the date of the transactio

292、n.Foreign currency differences are generally recognised in profit or loss and presented within finance costs.ii.Foreign currency operationsThe assets and liabilities of foreign operations,including goodwill and fair value adjustments arising on acquisition,are translated into the presentation curren

293、cy at the exchange rates at the reporting date.The income and expenses of foreign operations are translated into the functional currency at the average exchange rates for the period,unless exchange rates fluctuated significantly during that period,in which case the exchange rates at the dates of the

294、 transaction are used.Foreign currency differences are recognised in equity and accumulated in the translation reserve.d.Revenue from contracts with customersRevenue from contracts with customers is recognised when a customer obtains control of the goods or services and when performance obligations

295、have been satisfied assessing the following criteria:i.Identification of distinct elements and separate performance obligationsIn the case where the customer contract includes a sublicense and transfer of goods,the assessment must be made as to whether a separate performance obligation exists for ea

296、ch element.For current contracts held,whilst a license to specific IP has been given related to the Groups product,this only includes rights to distribute,not to use the IP to manufacture the product.Therefore,the licence transferred is not deemed to be a distinct element of the contract and only on

297、e performance obligation exists to transfer product to the distributor.ii.Transfer of goodsTitle and control pass to some of Next Sciences customers at the point when the Group fulfils its obligation to deliver,and goods are available at the customers premises.For these customers,the performance obl

298、igation(including the license)transfers at the point in time when each good is delivered.Therefore,revenue is recognised at the point in time when the product is delivered.For other customers,title and control pass when the product is delivered to the courier,with revenue being recognised at this po

299、int in time.iii.Measurement of transaction priceConsideration of the contract can comprise a fixed element(upfront payment plus minimum annual purchase amounts)and variable elements(milestone payments).Under AASB 15 the variable consideration is only included in the transaction price if it is highly

300、 probable that a significant reversal in the amount of cumulative revenue recognised will not occur.In the case where milestone payments are received upon signing the contract and are not subject to regulatory approval,these amounts will be initially recognised as contract liabilities to be recognis

301、edFor the Year Ended 31 December 2021For the Year Ended 31 December 202114.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS14.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS51 52#NextScienceHeals2021/ANNUAL REPORTh.Current and non-current classification Assets and liabilities are presented in the state

302、ment of financial position based on current and non current classification.An asset is classified as current when:it is either expected to be realised or intended to be sold or consumed in the Groups normal operating cycle;it is held primarily for the purpose of trading;it is expected to be realised

303、 within 12 months after the reporting period;or the asset is cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least 12 months after the reporting period.All other assets are classified as non current.A liability is classified as current when:it is e

304、ither expected to be settled in the Groups normal operating cycle;it is held primarily for the purpose of trading;it is due to be settled within 12 months after the reporting period;or there is no unconditional right to defer the settlement of the liability for at least 12 months after the reporting

305、 period.All other liabilities are classified as non current.Deferred tax assets and liabilities are always classified as non current.i.Cash and cash equivalents Cash and cash equivalents includes cash on hand,deposits held at call with financial institutions,other short term,highly liquid investment

306、s with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.For the statement of cash flows presentation purposes,cash and cash equivalents also includes bank overdrafts,which are shown wi

307、thin borrowings in current liabilities on the statement of financial position.j.Trade and other receivables Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective interest method,less any allowance for expected credit losses.Trade rec

308、eivables are generally due for settlement between 30 and 60 days.The Group has applied the simplified approach to measuring expected credit losses,which uses a lifetime expected loss allowance.To measure the expected credit losses,trade receivables have been grouped based on days overdue.Other recei

309、vables are recognised at amortised cost,less any allowance for expected credit losses.k.Inventories Inventories are measured at the lower of cost and net realisable value.The cost of inventories is based on the first in,first out principle.l.Property,plant and equipment i.Recognition and measurement

310、 Items of property,plant and equipment are measured at cost less accumulated depreciation and accumulated impairment losses.Cost includes expenditure that is directly attributable to the acquisition of the asset.If significant parts of an item of property,plant and equipment have different useful li

311、ves,they are accounted for as separate items(major components)of property,plant and equipment.f.Finance income and finance costs(cont.)Interest expenses includes interest in relation to lease liabilities and is calculated based on the bank borrowing rate as appropriate for the lease contract,with a

312、range of 5.4%to 5.5%on current leases held.Foreign currency gains and losses are reported on a net basis as either finance income or finance cost depending on whether foreign currency movements are in a net gain or net loss position.g.Income tax Income tax expense comprises current and deferred tax.

313、It is recognised in profit or loss except to the extent that it relates to a business combination,or items recognised directly in equity or in OCI.The amount of current tax payable or receivable is the best estimate of the tax amount expected to be paid or received.i.Current tax Current tax comprise

314、s the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to tax payable or receivable in respect of previous years.It is measured using tax rates enacted or substantively enacted at the reporting date.Current tax also includes any tax liability arising f

315、rom dividends.Current tax assets and liabilities are offset only if certain criteria are met.ii.Deferred tax Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purpos

316、es.Deferred tax is not recognised for temporary differences on the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss,or on taxable temporary differences arising on the initial recognition of

317、 goodwill.Deferred tax assets are recognised for unused tax losses,tax credits and deductible temporary differences,to the extent that it is probable that future taxable profits will be available against which they can be utilised.Deferred tax assets are reviewed at each reporting date and are reduc

318、ed to the extent that it is no longer probable that the related tax benefit will be realised;such reductions are reversed when the probability of future taxable profits improves.Unrecognised deferred tax assets are reassessed at each reporting date and recognised to the extent that it has become pro

319、bable that future taxable profits will be available against which they can be used.Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse,using tax rates enacted or substantively enacted at the reporting date.The measurement of deferred t

320、ax reflects the tax consequences that could follow the manner in which the Group expects,at the reporting date,to recover or settle the carrying amount of its assets and liabilities.Deferred tax assets and liabilities are offset only if certain criteria are met.For the Year Ended 31 December 2021For

321、 the Year Ended 31 December 202114.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS14.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS53 54#NextScienceHeals2021/ANNUAL REPORTDevelopment expenditure is capitalised only if development costs can be measured reliably,the product or process is technically an

322、d commercially feasible,future economic benefits are probable,and the Group intends to and has sufficient resources to complete development and to use or sell the asset.Otherwise it is recognised in profit or loss as incurred.Subsequent to initial recognition,development expenditure is measured at c

323、ost less accumulated amortisation and any accumulated impairment losses.PatentsExpenditure is capitalised in relation to patent application costs and amortised over the remaining life of the base patent as relevant.Costs will be no longer capitalised in the event that a patent application is no long

324、er being pursued with any existing capitalised costs being impaired as an expense in the profit or loss.Computer softwareComputer software comprises computer application system software and licenses.Costs incurred in developing products or systems and costs incurred in acquiring software and license

325、s that will contribute to future period financial benefits through revenue generation and/or cost reduction are capitalised to computer software.Costs capitalised include external direct costs of materials and services,direct payroll and payroll related costs.ii.Subsequent expenditure Subsequent exp

326、enditure is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates.All other expenditure,including expenditure on internally generated goodwill and brands,is recognised in profit or loss as incurred.iii.Amortisation Amortisation is calculat

327、ed based on the cost of intangible assets less their estimated residual values using the straight line method over their estimated useful lives,and is generally recognised in profit or loss.The estimated useful lives of intangible assets are as follows:Development Expenditure8 yearsComputer Software

328、2-3yearsPatents8-15 yearsAmortisation methods,useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.Intangible assets,other than goodwill,have finite useful lives.o.Trade and other payables These amounts represent liabilities for goods and services provided

329、 to the Group prior to the end of the financial year and which are unpaid.Due to their short term nature they are measured at amortised cost and are not discounted.The amounts are unsecured and are usually paid within 30 days of recognition.i.Recognition and measurement (cont.)An item of property,pl

330、ant and equipment is derecognised upon disposal or when there is no future economic benefit to to the consolidated entity.Gains and losses between the carrying amount and the disposal proceeds are taken to profit or loss.Any revaluation surplus reserve relating to the item disposed of is transferred

331、 directly to retained profits.ii.Subsequent expenditure Subsequent expenditure is capitalised only when it is probable that the future economic benefits associated with the expenditure will flow to the Group.iii.DepreciationDepreciation is calculated based on the cost of property,plant and equipment

332、 less their estimated residual values using the straight line basis over their estimated useful lives,and is generally recognised in profit or loss.Right of use assets are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that the Group will obtain

333、 ownership by the end of the lease term.Land is not depreciated.The estimated useful lives of property,plant and equipment are as follows:FIXED ASSET CLASSUSEFUL LIFELeasehold improvements5-15 yearsPlant and equipment5 yearsFurniture and fittings5 yearsDepreciation methods,useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.m.Right-of-use assets A right