Next Science Limited (NXS) 2020年年度報告「ASX」.pdf

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1、2020/ANNUAL REPORT#NextScienceHealsTABLE OF CONTENTS1.Our Purpose 12.Patient Stories 33.Case Studies 54.Physician and Nurse Testimonials 75.New in 2021 96.Community Involvement 117.Chairmans Letter138.Managing Directors Report159.Directors Report1710.Lead Auditors Independence Declaration4111.Consol

2、idated Statement of Profit or Loss and Other Comprehensive Income4312.Consolidated Statement of Financial Position4413.Consolidated Statement of Changes in Equity4514.Consolidated Statement of Cash Flows4715.Notes to Financial Statements4816.Directors Declaration8817.Independent Auditors Report8918.

3、Investor Information9519.Corporate Directory1001 2020/ANNUAL REPORTOUR PURPOSE2#NextScienceHealsOur 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 shareholders.We have a un

4、ique opportunity to change the trajectory of the war on infection by providing solutions that eliminate biofilms,and their incumbent bacteria,fungi and viruses.OUR PURPOSE3 2020/ANNUAL REPORT#NextScienceHealsTHE ROAD TO RECOVERY In July 2019,James,a 52-year-old runner and cycling enthusiast was invo

5、lved in a multi-trauma motorcycle accident and suffered a compound tibial fracture.James had surgery on his leg and the fracture was treated by placement of a tibial nail and an additional plate.However,rather than healing properly,the wound oozed and bled for two months post-surgery.James then unde

6、rwent a second surgery,only to have the wound reopen again for another three months.Finally,James was diagnosed with a non-union,meaning the fracture did not heal and James would require further surgery using a graft of his own bones to try and fix the fracture.The non-union was a result of an under

7、lying infection which stopped the bone from healing.“I was terrified I would lose my life or my leg to the infection,so I did my own research and discovered Next Sciences BACTISURE and SURGX microbial gel.”In May 2020,James received his third surgery to replace all implants.Next Sciences BACTISURE w

8、as used to wash out the surgery site and Intramedullary canal and SURGX was used under the dressing to prevent bacteria from entering the skin.By August 2020,James was back to cycling and is slowly building up strength to start running his favourite marathons again.*After experiencing firsthand the

9、healing power of our BACTISURE and SURGX Technology,James became a shareholder in Next Science.JAMES Vehicle Crash/Knee Surgery4#NextScienceHealsPATIENTSTORIESHOPE AND HEALING A 67-year-old woman suffered a debilitating stroke which left her hospitalized for many months undergoing treatment.During h

10、er hospital stay,she developed a pressure ulcer that would not respond to treatment.After being placed in four different treatment facilities,and exhausting all other healthcare options,the patient was sent home to be with her daughter on end-of-life care(hospice).As the home healthcare worker assig

11、ned to this patient,Nurse Karlene went through the patients history records and did a thorough assessment of her wound.She discovered that the patient had been living with this wound for more than two years and the wound did not respond to any of the previous antibacterial ointments that she was pre

12、scribed.Karlene,who had recently heard about Next Sciences BLASTX decided to give it a try as a last-ditch attempt to bring this patient overdue relief.“BLASTX was our last hope to heal this patients stage 3 pressure ulcer.I was able to get the MD onboard for orders to implement treatment with BLAST

13、X.I am amazed how quickly BLASTX healed this 2-year-old chronic wound,”said Karlene.In just 28 days,the patient saw an 86%wound reduction and went on to heal completely over time.But most importantly,her daughter no longer has to fear the idea of losing her mother at such a young age.MARY Debilitati

14、ng Stroke/Unresponsive Pressure Ulcer5 2020/ANNUAL REPORT#NextScienceHealsHow SURGX treatment helped prevent an amputation A 51-year-old woman requested a second opinion when her physician recommended amputating her left lower extremity due to her toe appearing non-viable.She had an unresolving left

15、 malleolus venous statis ulcer and a left hallux wound with underlying osteomyelitis.Additionally,she faced major barriers to healing,including poor blood flow collateral to previous surgical attempts to reduce varicosities and recalcitrant bone infection in her left foot.She was referred to Dr Anth

16、ony Iorio,DPM,MPH,Director of the Surgical Department at Metropolitan Hospital,Manhattan,NY,who ultimately helped to restore the healing trajectory and helped her avoid amputation with an enhanced treatment approach that included SURGX.SURGX is uniquely effective against biofilm as well as polymicro

17、bial bacterial bioburden(Miller,2015;Thomas,2011).The presence of biofilm is considered ubiquitous in all diabetic ulcers and hard-to-heal chronic wounds(Atkin,2019).TREATMENT TIMELINE MRI confirmed underlying osteomyelitis and venous stasis ulcer to left malleolus.Amputation recommended because of

18、non-healing hallux wound.Patient started topical oxygen therapy with concomitant allograft to toe wound.Continued topical oxygen to left hallux and allograft to venous stasis ulcer.Patient scheduled for left 1st MPJ Keller arthroplasty(bunionectomy)with application of antibiotic coated bone substitu

19、te.Bone biopsy,left hallux resection with application of bone allograft(PBA)and OSTEOSET(a synthetic bone graft substitute made of calcium sulfate).SURGX applied to both dorsal and plantar wounds.14 May 20 Initial wound clinic visit11 June 20 Patient transferred care to wound clinic16 July 20 Follow

20、-up wound clinic treatment27 August 20 Treatment scheduled14 September 20 Surgery performedCASE STUDY Podiatry6#NextScienceHealsCASE STUDYOn 14 September 2020,the patient received a bone biopsy,left hallux resection with application of bone allograft and OSTEOSET.SURGX was applied to both dorsal and

21、 plantar wounds.Within 8 days after surgery,the patient saw a 33%reduction of hallux wound and a complete closure in 38 days.In less than two months,the venous statis ulcer healed completely.Developed for use in operative incision management,Dr Iorios use of SURGX in the post-operative environment d

22、emonstrates the value of SURGX for any phase of surgical intervention.REFERENCESAtkin L,Buko Z,Conde Montero E,Cutting K,Moffatt C,Probst A,Romanelli M,Schultz GS,Tettelbach W.(2019).Implementing TIMERS:the race against hard-to-heal wounds.J Wound Care 28(3 Suppl 3):S1S49 https:/ Science wound gel t

23、echnology,a novel agent that inhibits biofilm development by gram-positive and gram-negative wound pathogens.Antimicrobial Agents and Chemotherapy June 58(6),3060-3072.https:/www.ncbi.nlm.nih.gov/pubmed/24637684Thomas N,Brook I(2011).Animal bite-associated Infections.Expert Rev Anti Infect Ther 9(2)

24、:215-226.https:/ Continued weekly application of SURGX to surgical site and left venous stasis ulcer.Improvement to hallux wound.Continued using SURGX;33%reduction of hallux wound in 8 days.Hallux wound closed in 38 days.Venous stasis ulcer healed.17 September 20 First post-operative visit08 October

25、 20 Second post-op visit15 October 20 Third post-op visit22 October 20 Fourth post-op visit05 November 20 Final post-op visitCLOSURE BEFORECLOSURE AFTER7 2020/ANNUAL REPORT“Since beginning SURGX,I have had no incisional complications,any incision site treated with SURGX after development of a post-o

26、perative infection responded rapidly with less drainage/inflammation.”Dr Jon MinterOrthopedic Specialist“This patient had been taken to surgery 2 different times to have surgical debridement.Once the BLASTX was started,the tissue grew and the biofilm did not,and she closed quickly”Janis HarrisonRN,B

27、SN,CWOCN#NextScienceHeals“I was so excited to heal this chronic wound!I was able to get the MD onboard for orders to implement treatment with BLASTX.She too was extremely pleased that the wound healed,and we were able to meet our goals”Karlene WoodRN,WCC,CWS8#NextScienceHealsPHYSICIAN AND NURSE TEST

28、IMONIALS“On the cases I have used SURGX directly after closure,I have had 0%surgical site infections;no split sutures on breast and/or abdominal incisions,and 0%complications rate.”Dr Mark CrispinBoard Certified Plastic Surgeon“Out of 15 cases where SURGX was applied immediately post-op,I have had 0

29、%surgical site infections.”Dr David StromBoard Certified Orthopedic Surgeon“In my experience any incision site treated with SURGX has not developed the typical surgical infection complications”Dr Matthew RegulskiPodiatric Surgery Specialist 9 2020/ANNUAL REPORT#NextScienceHealsOnce FDA cleared,XPERI

30、ENCE will be the only no rinse antimicrobial solution that helps prevent surgical site and post-operative infections.This non-toxic technology breaks the metallic bonds that holds biofilm togetherdestroying enveloped bacteria and defending against recolonization.LEARN MORE AT: IN 2021The key to winn

31、ing the battle against infectionCOST OF SURGICAL SITE INFECTIONS ANNUALLYMORTALITY RATE DUE TO SURGICAL SITE INFECTIONS SURGICAL SITE INFECTIONS IN THE US PERYEAR3%1.5 Million3.3 BillionSurgical Need for XPERIENCE:11 2020/ANNUAL REPORTCOMMUNITY INVOLVEMENTAt Next Science,we believe it is our respons

32、ibility to address the triple aim of healthcare:improving patient outcomes,improving population health and reducing healthcare costs.We achieve this by leveraging our innovative XBIO Technology to address a significant problem impacting both patients and healthcare infection.Infections are a key dri

33、ver of morbidity,mortality and increased healthcare spending.1 In the US alone,17 million patients suffer from biofilm-related infections and the overall direct costs are an estimated$94 Billion.2 Alongside infection rates and healthcare spending,antimicrobial resistance is also on the rise,but we a

34、re making strides in changing this trajectory.Next Sciences purpose to heal patients and save lives has never been more apparent and needed as our world continues its collective fight against the coronavirus.PATIENTS HEALED FROM CHRONIC WOUNDS OR PREVENTED SURGICAL INFECTIONS150,000HOSPITALS AND AMB

35、ULATORY SURGICAL CENTRES IN THE US USING XBIO PRODUCTS1,623 12#NextScienceHeals#NextScienceHealsDuring the early days of the COVID-19 pandemic,we recognized that we could make a difference.We moved quickly to set up a donation program to serve patients who were unable to get to wound care clinics th

36、at were temporarily shut down.We also worked directly with healthcare providers,like Hampton Ridge Healthcare and Rehabilitation,a nursing and rehabilitative care facility in Toms River,New Jersey,where we donated$300,000 worth of BLASTX.This enabled caregivers to better treat patients suffering fro

37、m chronic wounds.We also supported our local community in Jacksonville,Florida,by donating another$300,000 worth of BLASTX to the Save A Leg,Save A Life Foundation(SALSAL),a non-profit organization whose mission is to reduce lower extremity amputations and improve wound healing outcomes through evid

38、ence-based methodology and community outreach.SALSAL in turn gave BLASTX to Volunteers in Medicine,a free healthcare clinic that provides outpatient primary and specialty medical services to Northeast Floridas working,low-income,uninsured adults.Each day we make progress on improving our products an

39、d expanding our community outreach with organizations whose mission aligns with our purpose.The work that our non-profit,research and philanthropic partners perform is not easy,which is why it is essential that Next Science continue to support organizations who are making a difference in improving h

40、ealth outcomes for the people in their communities.1.SenCK,Gordillo GM,Roy S,Kirsner R,Lambert L,Hunt TK,Gottrup F,Gurtner GC,Longaker MT.Human skin wounds:a major and snowballing threat to public health and the economy.Wound Repair Regen.2009 Nov-Dec;17(6):763-71.2.Dorion,H.&Gruber,B.(2018).Pathoge

41、nesis of surgical site infection(SSI)The 3rd Edition:Prevention&Management.Retrieved from,http:/ 2020/ANNUAL REPORT7.CHAIRMANS LETTERDear ShareholdersIn this 2020 Annual Report the company has provided an operational overview and audited financial results for our shareholders.The board and executive

42、 team remain incredibly excited by our purpose that underpins the opportunity that our strong and differentiated technology platform has for healing people and saving lives.We remain dedicated to making our suite of patented products available to doctors and patients all around the world.Despite bei

43、ng a year of challenge and constraints on the development of our commercial revenue,especially for our key distribution partners,2020 for Next Science was also a year of focused product development,regulatory achievements and preparation for our significant commercial product launch of XPERIENCE in

44、mid-2021.Our financial performance is a story in two parts.Like many peer group healthcare companies in the US,we had significantly reduced year-over-year(YOY)revenue in Q1,Q2 and Q3 due to the Covid-19 pandemic.As those restrictions were relaxed,however,we had a very strong rebound of revenue in Q4

45、 through a strong 75%YOY growth for the quarter,well above the full-year revenue growth.We have been pleased to see the Q4 revenue run rate continue into the first half of 2021.Against the backdrop of this extraordinary year of constraints,our Managing Director and our R&D team based in Jacksonville

46、,Florida,maintained throughout 2020 a busy and productive workflow focused on our product development and regulatory approval priorities.We were pleased to finish the year with our highest potential product opportunity to date,XPERIENCE,now in front of the US Food and Drug Administration(FDA)for app

47、roval.The H1 2021 approval timeline for XPERIENCE remains on track pending the anticipated clearance by the FDA.The planned launch of this unique“no rinse antimicrobial solution”provides a milestone opportunity for Next Science,marking what the board believes could be a significant pivot toward comm

48、ercial revenues alongside a high-potential funnel of product research and development for our medium-and long-term journey.As a board we understand that launching a high-potential product needs to be founded on leadership talent and bench strength.We invested heavily throughout 2020 in building our

49、leadership bench strength and capability in the US.We recruited sales,marketing and commercial leadership.We invested in a senior HR capability to support our expanded organisation.We appointed additional clinical and research team members,restructured regulatory and built up our Clinical and Medica

50、l Advisory Boards so that we are well positioned to take XPERIENCE to market.Our commercial progress rests on expanding amongst the clinical community,the education,knowledge and advocacy of our patented XBIO Technology and demonstrating the impact that it offers the broader health system to signifi

51、cantly 14#NextScienceHeals7.CHAIRMANS LETTERimprove the standard of care for patients by eliminating surgical infection and the associated improvement on wound healing.The Board has appreciated the leadership shown by our senior executives Dr Matt Myntti and Dustin Haines in engaging with our expand

52、ed advisory boards throughout 2020.A further achievement in the year was strengthening the Next Science balance sheet to support the future commercialisation of our products through a successful capital raising and a shareholder SPP offer.Both investor opportunities were over subscribed with the new

53、 funds fully banked by November 2020.As we exited 2020 we undertook a recalibration of our distribution strategy for BLASTX our antimicrobial wound gel.We decided to in-source our wound care market presence in the US.This,along with our surgical sales team,will expand our addressable market and prov

54、ide Next Science with greater control of our product revenues over the coming years.2020 year was quite a busy year for the Board due to the elevated risk issues relating to the Covid-19 pandemic and the preparation required to support the capital raising in the second half.This resulted in 20 board

55、 meetings during the year.I wish to thank each board member for their diligent contribution to the governance of Next Science.A special thank you to our US based board member Aileen Stockburger who has made an extraordinary effort to travel on a regular basis to our operations centre in Jacksonville

56、 to represent the board and retain a personal point of connection with our US team.As we move into 2021,we look forward to replacing video conference calls with face-to-face meetings along with the opportunity to directly engage our teams in the US.Finally,I wish to congratulate our Managing Directo

57、r Judith Mitchell for her tireless work in leading the organisation and building and expanding our executive team.I also extend on behalf of the board our appreciation for the tireless work of all our employees in the US and Australia.They have been able to maintain their focus and successfully move

58、 more of our product development portfolio through regulatory approvals in readiness for commercialisation.Next Science enters 2021 with anticipation and excitement.The Next Science board and executive team are dedicated to expanding the market presence of our suite of patented products,that support

59、 our purpose of healing people and saving lives.We look forward to updating you on these plans at the forthcoming AGM on May 5th,2021.George SavvidesChairman A Different Approach,Superior Results15 2020/ANNUAL REPORT8.MANAGING DIRECTORS REPORT2020 was a challenging but fruitful year for Next Science

60、 with significant progress made on further extending Next Sciences proprietary XBIO technology into new product platforms with large market potential and increasing the clinical evidence base for our existing products.The organisation also invested in new US commercial leadership.We extended our cap

61、abilities to enable strong in-market execution to support key new product launches in 2021 and our existing product portfolio priorities.COVID-19 impacted the uptake of several of Next Sciences key platforms in 2020 with reduced access to health care professionals and the hospital channel.Throughout

62、 this period,the very strong support for Next Sciences unique technologies and its ability to solve many of the challenging areas in surgical wound management and infection control and biofilm remained unchanged.Encouragingly,we are seeing positive signs of recovery.We look forward to 2021 being a y

63、ear of more open access to our customers and sales channels to support further revenue growth.As we look across the Next Science business in 2020,we can examine our activities in three streams.Partner Distributed Products BACTISURE Wound Lavage and BLASTX Antimicrobial Wound GelWhile revenue decreas

64、ed 15%on prior year,the partnership programs were two different situations.Sales of BACTISURE,through Zimmer Biomet,although impacted by COVID-19 particularly in Q2 and Q3,bounced back in Q4 and grew year over the year.We have strong forward orders through the first half of 2021.Conversely,outpatien

65、t wound clinics(which are the sites of care that 3M KCI targeted with BLASTX)were not considered an essential service and were closed for many months of 2020 due to COVID-19.Additionally,our partner 3M KCI sequestered its US Advanced Wound Care sales force at home from mid March until part way throu

66、gh December.The end result being a decline in sales for BLASTX.In November we advised the market that 3M KCI and Next Science have agreed that the distribution of BLASTX will return to Next Science.I am pleased to report this transition was finished by 1 April 2021 and the sales and marketing of BLA

67、STX is now being carried out by Next Science.By taking direct control of BLASTX distribution we can target an expanded market opportunity and have greater ability to meet clients specific needs.New Product Development XPERIENCE No Rinse Antimicrobial SolutionOur product development efforts were focu

68、sed on our XPERIENCE No Rinse Antimicrobial Solution.The recommendation for use is as the last rinse in surgery prior to the closure of the surgical site.The product shows extensive effectiveness against a broad range of gram positive and gram negative bacteria,viruses and fungus like golden staph,e

69、-coli,candida and coronavirus.At the same time,it combines the unique advantages of being active for 5 hours,non toxic and requires no change to current surgical protocol.It can be used as a replacement for the last rinse which is currently usually saline.We anticipate securing FDA clearance in H1 2

70、021.The product is submitted for FDA clearance as a 510(k)Medical Device.We have completed extensive testing in the lab,in humans and in animals as per the FDAs request and now await their final review.Subject to FDA clearance,we expect to launch this product by the end of the first half of 2021.Suc

71、cessful commercial launch of XPERIENCE is the number one priority for the Company in 2021.16#NextScienceHeals8.MANAGING DIRECTORS REPORTBuild up of the commercial organisation to support XPERIENCE No Rinse Antimicrobial Solution To support this launch and ensure a strong marketing and sales program

72、and that the necessary working capital was available for inventory build-up and related cash requirements,we successfully completed a$A15M capital raise in October that was a combination of institutional placements and a Shareholder Purchase Plan.We appreciate the support for our growth strategy fro

73、m existing shareholders and we welcome new investors to the Company.XPERIENCE No Rinse Antimicrobial Solution will be marketed and distributed by Next Science directly.Accordingly,we have built up the commercial infrastructure to support a direct to market operation including recruiting a Chief Comm

74、ercial Officer(Mr Dustin Haines)based in Jacksonville,Florida,developed all of the marketing materials,marketing websites and ordering portals to support the product and built up and trained our surgical sales network a combination of employees and contracted staff.We are confident in our ability to

75、 launch XPERIENCE despite impacted hospital processes and restrictions from COVID-19,as the sales network already has daily access to surgeons and other key health care professionals who will be key decision makers in new product adoption.OutlookWe have a confident outlook for 2021.BACTISURE continu

76、es to grow market support the product launched in Australia in Q4 of 2020 and has already launched in Europe in 2021.Additionally,BLASTX is now being distributed directly by Next Science with strategies for all four sites of care in Wound Care in the US(acute care,outpatient wound care,home health a

77、nd long-term acute care).We will also take advantage of the CE Mark we received in December and we will make the product available through specialist distribution partners in Europe.As we move to the second half of 2021,the focus of the business will primarily be on the execution of a successful XPE

78、RIENCE launch.Our first target market segment is the 5.4 million orthopaedic surgeries that take place annually in the US market.We will then tackle additional indications,specialty by specialty,as we grow our clinical evidence and market presence.Despite COVID-19 restrictions,we increased the numbe

79、r of hospitals using XBIO products and increased our patient treatment base to over 150,000 people.With XPERIENCE and the return of BLASTX,we expect that number will grow significantly across the year.My sincere thanks to our customers,our research partners,our business partners,our employees and ou

80、r board of directors.2020 showed the value of resilience for all of us and we emerge a stronger,smarter and more motivated group,knowing the benefits our technologies can bring to healthcare and the difference we can make in peoples lives.#NextScienceHealsJudith MitchellManaging Director17 2020/ANNU

81、AL REPORTDIRECTORS REPORT18#NextScienceHeals#NextScienceHeals19 2020/ANNUAL REPORT9.DIRECTORS REPORTDirectors The Directors 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 d

82、o not recommend the declaration of a dividend.Operating and financial review Principal activities The principal activities 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

83、is headquartered in Sydney,Australia and has a research and development centre and sales and marketing functions located in Florida,USA.Significant changes in the state of affairs and COVID-19 impact Revenues in the year to 31 December 2020 were impacted by the COVID-19 shutdown in the USA of electi

84、ve medical procedures and closure of outpatient wound care clinics.Revenue recovered in the fourth quarter of 2020 and this run rate is expected to continue through the first half of 2021 based on the sales of existing products(excluding any additions from new product launches).During the pandemic,N

85、ext Science set up a donations program to service patients who were unable to get to wound care clinics during the COVID-19 shut down.Over the longer term,Next Science expects the increase in awareness around the spread of viruses,infection and the role of biofilm to drive increased demand for its p

86、roducts.In January 2020,Next Sciences XPERIENCE No Rinse Antimicrobial Solution was submitted for regulatory approval to the FDA.Following the FDAs initial review and requested additional information,the dossier was resubmitted to the FDA in December 2020.In March 2020,Next Science launched its Acne

87、 cream via online skincare direct marketer,tbh Skincare()to consumers mainly based in Australia.In April 2020,Next Science received CE Mark for BACTISURE,authorising future sales in Europe through Next Sciences distribution partner,Zimmer Biomet.Next Science also received notification from the US En

88、vironmental Protection Agency(EPA)that its Hospital Cleaner Surface Disinfectant had been accepted for registration with clearance for inclusion on the product labelling of a claimThe Directors present their report together with the consolidated financial statements of the Group comprising of Next S

89、cience Limited(the“Company”),and the entities it controlled at the end of,or during,the year ended 31 December 2020.All amounts are presented in US dollars(USD)unless otherwise stated.George Savvides(Chair)Bruce HancoxMark ComptonJudith Mitchell Daniel SpiraAileen Stockburger20#NextScienceHeals9.DIR

90、ECTORS REPORTSHAREHOLDER RETURNS20202019Revenue$3,440,975$4,060,800Loss attributable to owners of the company($11,912,004)($14,351,828)Basic earnings per share(EPS)(cents)($6.36)($8.65)Share price as at 31 Dec(A$)AUD$1.25AUD$1.88Return on capital employed(59.7%)(59.6%)for effectiveness against biofi

91、lm.Commercial discussions regarding the licensing of this product are ongoing,although lower in priority to our human health product commercialisations.In June 2020,Next Science received TGA approval for its BACTISURE product authorising future sales in Australia through Next Sciences distribution p

92、artner,Zimmer Biomet.On 24 September 2020,Next Science raised A$7,999,999 via a Placement at A$1.20 per share.On 19 October 2020,Next Science raised A$5,000,000 via a Share Purchase Plan at A$1.18 per share.On 18 November 2020,Next Science launched its Acne cleanser via online skincare direct market

93、er,tbh Skincare ()to consumers based in Australia,New Zealand,the UK and parts of Europe.On 19 November 2020,Next Science raised A$2,000,000 via a Placement at A$1.20 per share,following shareholder approval at a general meeting held on 18 November 2020.On 23 November 2020,Next Science announced to

94、the ASX that the distribution agreement with 3M for BLASTX,would not be renewed at the end of 2021.Discussions are progressing smoothly,and Next Science anticipates the transition will be complete prior to the end of the first half 2021.As a result of this,there has been a change in the time frame f

95、or recognition of the milestone payments received from 3M.The payments which previously would have been recognised as revenue over the period until the end of the contract period of 31 Dec 2021,will now be recognised as revenue over a shorter time period ending 1H 2021,when it is anticipated that th

96、e full transition of BLASTX back to Next Science will be complete.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 during the financial year.21 2020/ANNUAL REPORT9.DIRECTORS REPORTOper

97、ating and financial review(cont.)Review of operations The loss for the Group for the financial year to 31 December 2020 after providing for income tax amounted to$11,912,004(2019:$14,351,828).Revenue decreased by 15%for the period,decreasing from$4,060,800 in the prior corresponding period to$3,440,

98、975,primarily due to the impact of the COVID-19 pandemic.Gross profit was$2,916,841 compared to$3,510,320 in the prior corresponding period.Gross margin as a percent of sales was 85%compared with 86%in the prior corresponding period.Selling and distribution expenses were$5,670,684,a decrease of$615,

99、216 compared with$6,285,900 in the prior corresponding period.In the prior year,$48,147 of the expenses related to IPO investor relations activity.The decrease in spend in 2020 mainly relates to a reduction in travel expenditure due to Covid travel restrictions as well as a reduction in headcount.Su

100、ch reductions have been partially offset by increased partner marketing spend and increased donations and sampling efforts.Administration expenses were$3,343,044,a decrease of$1,027,317 compared with$4,370,361 in the prior corresponding period.$129,310 of the reduction in the current period is relat

101、ed to reduced travel expenses in 2020 resulting from COVID-19.Prior period administration expenses included$312,106 related directly to IPO associated expenses and increases in compliance costs associated with becoming a listed entity and$273,798 of brokerage costs related to the issue of converting

102、 notes.Research and development expenses were$6,434,414 an increase of$1,106,839 compared with$5,327,575 in the prior corresponding period,reflecting an increase in product development activity including associated product validation costs,regulatory spend and two additional staff appointments in th

103、e research and development department.Finance expenses of$2,129,424 in the prior period are mainly attributable to interest expense recognised in the profit and loss on the converting notes,for the period prior to their conversion to ordinary shares on 8 April 2019.Cash and cash equivalents at 31 De

104、cember 2020 amounted to$8,100,416 compared to$6,556,808 at 31 December 2019.Term deposits at 31 December 2020 amounted to$7,238,986 compared to$10,353,797 at 31 December 2019.Likely developments and expected results of operations Further information about likely developments in the operations of the

105、 Group and the expected results of those operations in future financial years has not been included 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 There has not arisen in the in

106、terval between the end of the financial year and the date of this report any item,transaction or event of a material and unusual nature likely,in the opinion of the directors of the Group,to affect significantly the operations of the Group,the results of those operations,or the state of affairs of t

107、he Group,in future financial years.Environmental regulation The 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 its environmental requirements

108、.22#NextScienceHeals9.DIRECTORS REPORTGovernment regulation The Group is subject 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 US,the drug,device,diagnostics and cosmetic indus

109、tries have long been subject to regulation by various federal and state agencies,primarily as to product safety,efficacy,manufacturing,advertising,labelling and safety reporting.The exercise of broad regulatory powers by the US Food and Drug Administration(the“FDA”)results in increases in the amount

110、s of testing and documentation required for FDA clearance of 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 US.The Group relies on global supply chains,and production and distribution processes

111、 that are complex and are subject to increasing regulatory requirements and lengthy regulatory approval processes that may affect sourcing,supply and pricing of materials used in the Groups products.Information on Directors NAME:GEORGE SAVVIDES AMTitle:Chair and Independent Non-Executive Director Sp

112、ecial Responsibilities:Member of the Audit and Risk Committee and Member of the Peo-ple,Culture and Remuneration Committee Qualifications:Bachelor of Engineering(Honours),University of New South Wales and MBA,University of Technology,Sydney.Fellow of the Australian Institute of Company Directors.Exp

113、erience 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 served as Chairman of Kings Consolidated Group P

114、ty Ltd(2016 to 2018)and Macquarie University Hospital(2016 to 2018)and retired as Chairman 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 period as Deputy President,retiring in 2016.O

115、ther current directorships:He currently serves as Non-Executive Chairman of the public broadcaster,SBS having been appointed a Non-Executive Director in 2017 and Chairman in 2020.He is also a Non-Executive Director of IAG(since 2019)and NZX listed Ryman Healthcare,a large residential aged care provi

116、der in New Zealand(since 2013).Former listed directorships (last 3 years):None23 2020/ANNUAL REPORT9.DIRECTORS REPORTInformation on Directors(cont.)NAME:JUDITH MITCHELL Title:Managing Director and Chief Executive Officer Special Responsibilities:None Qualifications:MBA,University of Hull Graduate of

117、 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 leaders in

118、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 directors

119、hips: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 over 35 years of corporate experien

120、ce 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.Bruce has

121、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 Pty Ltd and works with the Walker group of companies to pursue investment opportunities outside the property market.Other current directorships:Dir

122、ector of Walker Group Holdings Pty Limited.Former listed directorships (last 3 years):Carbonxt Group Limited(ASX:CG1)and BTC Health Limited (ASX:BTC)24#NextScienceHeals9.DIRECTORS REPORTNAME:DANIEL SPIRATitle:Independent Non-Executive Director Special Responsibilities:Chair,People,Culture and Remune

123、ration Committee Qualifications:Bachelor of Commerce,University of New South 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

124、he was at Bausch Health(2011-2015)as Vice President and GM-North America(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 r

125、oles including Vice President,Country Manager,Chief Marketing Officer and 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):NoneNAME:AILEEN STOCKBURGERTitle:Independent Non

126、-Executive Director Special Responsibilities:Member,Audit and Risk Committee Qualifications: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 expertise:Prior to joini

127、ng 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 Johnson&Johnsons eff

128、orts to acquire Synthes for approximately$21 billion,Johnson&Johnsons largest medical device acquisition.She also led the efforts to divest the DePuy Trauma business and acquire Micrus Endovascular.Aileen was also involved in numerous other M&A transactions including Pfizer Consumer Healthcare(US$16

129、.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):None25 2020/ANNUAL REPORT9.DIRECTORS REPORTInformation on Directors(cont

130、.)NAME:MARK COMPTON AM Title:Independent Non-Executive Director Special Responsibilities:Member,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

131、 Directors,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 Chairman of the Board of Trustees of St John International.Mark is

132、 Chairman of Sonic Healthcare Limited,a global medical diagnostics and healthcare organisation which is a Top 50 ASX listed entity.He is also Chairman of St Lukes Care Limited,a not-for-profit health and aged care organisation and Chairman of Integrated Clinical Oncology Network Pty Ltd trading as I

133、con Cancer Centre.Mark has held various CEO and managing director roles,including at St Lukes Care Limited,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 leadersh

134、ip and management(since 2012).Other current directorships:Chairman and Non-Executive Director of Sonic Healthcare Limited(ASX:SHL).Chairman of the Board of Trustees of St John International,Chairman of St Lukes Care Limited and Integrated Clinical Oncology Network Pty Ltd trading as Icon Cancer Cent

135、re.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 an experienced corporate governance professional with more than 20 years legal and governance experience gained in private practice an

136、d in various company secretarial roles,predominantly with listed entities,in a variety of sectors including manufacturing,oil and gas,professional services and education.26#NextScienceHealsMeetings of directors The number of meetings held and attended by each of the Directors of the Company during t

137、he year ended 31 December 2020 were as follows:Directors 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 Corporations Act 2001 at the date of this report i

138、s as follows:Shares under optionAt the date of this report,and following the share split,there are 8,092,500 options over ordinary shares on issue(2019:9,249,500 options),representing 4.17%(2019:5.1%)of the Companys undiluted total share capital,granted to employees and directors under an equity inc

139、entive plan.A Number of meetings held when Director was eligible to attend during the year B Number of meetings attended during the time the Director held office during the year NAME OF DIRECTORBOARD MEETINGSPEOPLE,CULTURE&REMUNERATION COMMITTEEAUDIT AND RISK COMMITTEETRANSACTION COMMITTEEABABABABGe

140、orge Savvides2020337733Judith Mitchell2020Bruce Hancox20197733Daniel Spira202033Mark Compton 20203333Aileen Stockburger202077NAME OF DIRECTORFULLY PAID ORDINARY SHARESSHARE OPTIONSNumberNumberGeorge Savvides649,876 650,000 Judith Mitchell5,000,000 2,340,000 Bruce Hancox530,000 520,000Daniel Spira49,

141、266 1,300,000 Mark Compton 137,438 520,000 Aileen Stockburger44,837 520,000 Total6,411,4175,850,0009.DIRECTORS REPORT27 2020/ANNUAL REPORTIndemnity and insurance of officers The Group has indemnified the directors and executives of the Group for costs incurred,in their capacity as a director or exec

142、utive,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 the Corporations Act 2001

143、.The contract of insurance prohibits disclosure of the nature of the liability and the amount of the premium.Indemnity and insurance of auditor The Company and the Group have not,during or since the end of the financial year,indemnified or agreed to indemnify the auditor of the Company or any relate

144、d 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 section 237 of the Corpora

145、tions 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 amounts paid or payable t

146、o the auditor for non-audit services provided during the financial year by the auditor are outlined in note 31 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 general standard of independ

147、ence for auditors imposed by the Corporations Act 2001.The Directors are of the opinion that the services as disclosed in note 31 to the financial statements do not compromise the external auditors independence requirements under the Corporations Act 2001 for the following reasons:All non-audit serv

148、ices 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 as set out in APES 110 Code of Ethics for Professional Accountants issued by the Accounting P

149、rofessional 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.Officers of the Company who are former partners of KPMG No

150、 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 page 42 and forms part of the Directors Report for t

151、he financial year ended 31 December 2020.Auditor KPMG continues in office in accordance with section 327 of the Corporations Act 2001.9.DIRECTORS REPORT28#NextScienceHealsRemuneration Report(audited)This Remuneration Report forms part of the Directors Report for the year ended 31 December 2020.This

152、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.For the purposes of this Report,key management perso

153、nnel(KMP)are defined as those persons having authority and responsibility for planning,directing and controlling the activities of the Group,directly or indirectly,including any Director of the Company(non-executive or executive).The information in this Remuneration Report is set out under the follo

154、wing headings:Key management personnel(KMP)Remuneration governance Service agreements and remuneration policy Non-Executive Directors remuneration Employee incentive arrangements and link between performance and reward Share option plan KMP Remuneration KMP equity holdingsKey management personnel(KM

155、P)The KMP of the Group during the financial year and the positions held are summarised below:Non-Executive Directors George SavvidesBruce Hancox Daniel Spira Mark Compton Aileen Stockburger Managing Director Judith Mitchell Other KMP Jacqueline ButlerChief Financial OfficerMatthew Myntti Chief Techn

156、ology OfficerJon Swanson Chief Operating OfficerDustin Haines Chief Commercial Officer9.DIRECTORS REPORT29 2020/ANNUAL REPORTRemuneration governance The Board established a Remuneration and Nomination Committee(Committee)in August 2018 to assist the Board in fulfilling its responsibilities to shareh

157、olders and other stakeholders in respect of remuneration policies and practices,succession planning,diversity policies and practices,performance evaluation processes and board composition including mix of skills.During the financial year,on the recommendation of the Committee and in recognition of t

158、he close connection between culture,governance and remuneration highlighted by various stakeholders including the ASX Corporate Governance Council and Australian Securities and Investments Commission(ASIC),the Board:i.extended the scope of the Committees role to reviewing and overseeing Next Science

159、s key people and organisational culture strategies,talent and succession and their alignment with Next Sciences values,mission and strategy;andii.changed the name of the Committee to People,Culture and Remuneration Committee.The People,Culture and Remuneration Committee currently comprises of:Daniel

160、 Spira(Chair)George Savvides Mark Compton The role and responsibilities,composition,structure and membership requirements of the People,Culture and Remuneration Committee are documented in the People,Culture and Remuneration Committee Charter available at People,Culture and Remuneration Charter prov

161、ides that the Committee should comprise of 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 is not Chair of the Board.The Charter requires the Committee to meet at least tw

162、ice 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 Board.Service agreements and remuneration policy Executives are employed under exe

163、cutive 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 expectations of an executive whom the Company wants to employ;future outlook fo

164、r 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.Executive incentives comprise fixed and variable elements linked to Company and ind

165、ividual performance as detailed in this Report.9.DIRECTORS REPORT30#NextScienceHealsNAME:JUDITH MITCHELL Title:Managing DirectorDetails: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-mon

166、th 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 BUTLER Title:Chief Financial Officer(CFO)Details:Ongoi

167、ng 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 other reason that enables summary dismissal at law.Ja

168、cqueline is entitled to participate in the Companys short-term and long-term incentive plans.NAME:DR.MATTHEW MYNTTI Title:Chief Technology Officer(CTO)Details:Ongoing employment agreement to be reviewed annually by the Company.The Company may terminate the employment agreement:i.by giving 90 days wr

169、itten notice;orii.without notice,in the event of serious misconduct or for any other reason that enables summary dismissal at law.Matthew is entitled to participate in the Companys short-term and long-term incentive plans.Employment Agreements9.DIRECTORS REPORT31 2020/ANNUAL REPORTNAME:JON SWANSONTi

170、tle: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 notice,in the event of serious misconduct or for any other reason that enables summary dismis

171、sal 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 annually by the Company.The Company may terminate the employment agreement:i.by giving 90 days w

172、ritten 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 incentive plans.NAME:BYRON DARROCH Title:Executive Vice President PartnershipsDetails:Employme

173、nt agreement ceased on 31 August 2019.Employment Agreements(cont.)9.DIRECTORS REPORT32#NextScienceHealsNon-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 respons

174、ibilities.Under the Constitution,the Board decides the amount paid to each Non-Executive Director as remuneration for their services as a Director.However,under the ASX Listing Rules,the amount of fees paid to all Directors for their services(excluding,the salary of any Executive Director)must not e

175、xceed in aggregate in any financial year the amount fixed by the Companys shareholders in general meeting.This 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 Directo

176、rs is AUD$90,000 per annum(inclusive of superannuation)and for the Chair is AUD$250,000 per annum(inclusive of superannuation).The Chairs fees reflect the additional responsibilities of the role particularly leading up to,and in the short-term after,admission to ASX.An additional fee of AUD$10,000 p

177、er annum is paid for performing the role of Chair of the Audit and Risk Committee and People,Culture and Remuneration Committee.Employee incentive arrangements and link between performance and reward Short-Term Incentive(STI)Plan for Executives The Managing Director,CFO,CTO and COO were invited to p

178、articipate 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 plan following his appointment in June 2020.Participants of the plan,must be employed with the Company,or wholly owned subsidiar

179、y 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 plan year.Participation is by invitation from the Board and is not automatic.Participants who resign or are terminated before the e

180、nd of the 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 executives for their contribution in ensuring that the Group achieves its annual financial performance targets;enhance the Groups op

181、portunity 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 individual KPIs.The making of any payment under the STI plan is subject to the achievement of three gateway hurdles;at least 90%of

182、 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%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 op

183、portunity,executives must achieve performance targets for consolidated revenue,consolidated EBITDA and individual performance.As a number of the members of the executive team already have significant security holdings in Next Science,all payments under the STI Plan will be paid in cash to ensure tha

184、t STI opportunities operate as true incentives.No STI payments were made in respect of the financial year ended 31 December 2020(2019:Nil)as revenue and EBITDA targets were not achieved.9.DIRECTORS REPORT33 2020/ANNUAL REPORTEmployee incentive arrangements and link between performance and reward(con

185、t.)Long-Term Incentive(LTI)Plan for Executives At the time of the Companys IPO in April 2019,the Board of the Company established a long-term incentive plan,to be paid by way of Performance Rights to eligible participants (LTI plan).The Managing Director,CFO,CTO,CCO and COO are entitled to participa

186、te in the LTI plan.Subject to Group performance hurdles being achieved in the financial year ending 31 December 2021,and thereafter,the Managing Director will be granted performance rights worth 200%of her Total Fixed Remuneration(TFR)and the other participants in the LTI plan will be granted perfor

187、mance rights worth 150%of their TFR.The number 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 Perform

188、ance Rights issued under the LTI Plan is dependent on satisfaction of the following vesting conditions:if the compound total shareholder return(TSR)is less than 15%per annum,no Performance Right will vest;50%of Performance Rights will vest if the compound annual TSR is at least 15%per annum;and 100%

189、of Performance Rights will vest if the compound annual TSR is at least 30%per annum.Subject to vesting conditions being satisfied,the Performance Rights will automatically convert to shares,on a one-for one basis,three years after the date on which they are granted.If the vesting conditions have not

190、 been satisfied by this date,the Performance Rights will automatically lapse.Participants must still be employed by the Company or a wholly owned subsidiary at the date of vesting.There will be no Performance Rights issued in relation to the financial year ending 31 December 2020(2019:Nil)due to tar

191、gets not having been achieved.The LTI plan will operate in future years with grants based on the relevant revenue 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

192、prepare the Company for the launch of XPERIENCE in 2021,and to provide longer term upside opportunity to the CCO similar to that available to other key management personnel from the options awarded to them prior to the Companys admission to ASX,the Company granted the CCO USD$315,000 worth of perfor

193、mance rights in February 2021.The vesting of the performance rights is subject to continued tenure and the rights will vest 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.9.DIRECTORS REPORT34#NextScienceHealsShare Option PlanPrior to the Company bei

194、ng admitted to the ASX,the Group established an Equity Incentive Plan(ECP)for US employees and an Employee Share Option Plan(ESOP)for Australian employees and directors(see note 28).With the exception of the Managing Director,Judith Mitchell,as described below,the only vesting condition applicable t

195、o the options granted 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 2020.All remaining options o

196、ver ordinary shares granted to KMP in the previous years and their status are set out below:i.There are various vesting conditions,financial and non-financial,applicable to the options granted to Judith Mitchell as Managing Director,under the Groups pre-IPO share option plan.KMPGRANT DATEEXPIRY DATE

197、VESTING DATEFAIR VALUE AT GRANT DATEEXERCISE PRICE(USD)Executive DirectorPre-share Split(USD)Post-share Split(USD)Judith Mitchell16-Apr-2018 16-April-2021 Various(i)1,2840.200.42Non-Executive DirectorsGeorge Savvides17-Dec-2018 17-Dec-202317-Dec-2021 2,1380.330.56Bruce Hancox17-Dec-2018 17-Dec-2023

198、17-Dec-20212,1380.330.56Daniel Spira(Tranche 1)16-Apr-2018 16-Apr-2021 16-Apr-20181,284 0.200.42Daniel Spira(Tranche 2)17-Dec-2018 17-Dec-202317-Dec-20212,1380.330.56Mark Compton17-Dec-201817-Dec-202317-Dec-20212,1380.330.56Aileen Stockburger17-Dec-201817-Dec-202317-Dec-20212,1380.330.56Other KMPMat

199、thew MynttiJon Swanson17-Dec-201817-Dec-202317-Dec-20202,1380.330.56Jacqueline Butler16-Apr-201816-Apr-202116-Apr-20191,2840.200.42Dustin Haines9.DIRECTORS REPORT35 2020/ANNUAL REPORTShare Option Plan(cont.)The table below provides details of movements in share options for KMP for the year ended 31

200、December 2020.KMPBALANCE AS AT 1 JAN 2020 No.GRANTED No.EXERCISED No.LAPSED No.BALANCE AS AT 31 DEC 2020 No.VESTED DURING THE YEARVESTED AND EXERCISABLE No.UN-VESTED No.Executive DirectorJudith Mitchell2,340,000 2,340,000 1,560,000780,000Non-Executive DirectorsGeorge Savvides650,000 650,000 650,000B

201、ruce Hancox520,000 520,000 520,000Daniel 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 Haines9.DIRECTORS REPORT36#NextScienc

202、eHealsShare Option Plan(cont.)The table below provides details of movements in share options for KMP for the year ended 31 December 2019.KMPBALANCE AS AT 1 JAN 2019 No.POST SHARE SPLIT No.(i)(ii)GRANTED/EXERCISED/LAPSED No.BALANCE AS AT 31 DEC 2019 No.VESTED AND EXERCISABLE No.UN-VESTED No.Executive

203、 DirectorJudith Mitchell3602,340,0002,340,000 1,560,000780,000Non-Executive DirectorsGeorge Savvides100 650,000650,000 650,000Bruce Hancox80520,000520,000 520,000Daniel Spira 2001,300,0001,300,000 1,040,000260,000Mark Compton80520,000520,000 520,000Aileen Stockburger80520,000520,000 520,000Other KMP

204、Matthew MynttiJon Swanson100650,000650,000 650,000Jacqueline Butler100 650,000650,000 650,000Byron Darrochi.On 24 January 2019,a share split was completed on the basis that every one ordinary share option on issue in the Company be divided into 6,500 ordinary options.ii.There were no share options g

205、ranted or exercised from 1 January 2019 until the share spl it on 24 January 2019.Exercise of options granted as compensation During the reporting period,there were no shares issued on the exercise of options previously granted as compensation,to KMP.9.DIRECTORS REPORT37 2020/ANNUAL REPORTKMP Remune

206、rationThe table below details remuneration for KMP based on the policies discussed in this report for the year ended 31 December 2020.Year ended 31 December 2020KMPCASH SALARY AND FEES(i)OTHER CASH SERVICE(ii)(iii)LONG SERVICE LEAVESUPER-ANNUATIONSHARE-BASED PAYMENTSTOTALPERFORMANCE RELATED(VI)Optio

207、ns (iv)Shares in lieu of fees(v)$%Executive DirectorJudith Mitchell261,60614,676960277,242Non-Executive DirectorsGeorge Savvides161,96010,771 69,878 242,609Bruce Hancox63,098 5,99455,902 124,994Daniel Spira 51,302 1,42127,951 15,547 96,221Mark Compton62,18355,902118,085Aileen Stockburger48,810 55,90

208、2 13,992 118,704Other KMPMatthew Myntti350,000 350,000Jon Swanson250,000115,338 365,338Jacqueline Butler171,12414,751 185,875Dustin Haines173,25020,879194,1291,593,33320,87947,613381,83329,5392,073,197i.Dustin Haines was appointed Chief Commercial Officer and commenced employment on 10 June 2020.ii.

209、For the year ended 31 December 2020 threshold Group performance targets were not met and hence no amounts were awarded to KMP under the STI plan or the LTI 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 res

210、pect 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 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

211、options recognised as an expense in each reporting period.v.Amounts included under share-based payments for Daniel Spira and Aileen Stockburger are in relation to shares paid in lieu of their Directors fees.The Company received confirmation from the ASX that a waiver of ASX Listing Rule 10.11 had be

212、en given 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 to the ASX.vi.Disclosed above are the relative proportions of each individuals remuneration that are related to performance;the remai

213、ning proportion being fixed remuneration.9.DIRECTORS REPORT38#NextScienceHealsKMP Remuneration(cont.)The table below details remuneration for KMP based on the policies discussed in this report for the year ended 31 December 2019.Year ended 31 December 2019KMPCASH SALARY AND FEESOTHER CASH SERVICE(i)

214、(ii)(iii)LONG SERVICE LEAVESUPER-ANNUATIONSHARE-BASED PAYMENTSTOTALPERFORMANCE RELATED(VI)Options (iv)Shares in lieu of fees(v)$%Executive DirectorJudith Mitchell254,461 14,467162,985431,913Non-Executive DirectorsGeorge Savvides159,577 14,454 52,022 226,053Bruce Hancox56,216 3,982 41,618 101,816Dani

215、el Spira 10,75120,809 49,326 80,886Mark Compton50,685 4,815 41,618 97,118Aileen Stockburger10,751 41,61844,749 97,118 Other KMPMatthew Myntti304,911 44,665 349,576 13%Jon Swanson250,000 91,736 341,736Jacqueline Butler166,817 14,453 29,022 210,292Byron Darroch120,447 69,05714,649204,1531,384,616 113,

216、722 66,820481,42894,075 2,140,661i.For the year ended 31 December 2019 threshold Group performance targets were not met and hence no amounts were awarded to KMP under the STI plan or the LTI plan.ii.Other cash benefits include an amount of$69,057 paid to Byron Darroch as part of the arrangements agr

217、eed in respect of the termination of his engagement on 31 August 2019.iii.Prior to the existence of the STI plan,Matthew Myntti was awarded a discretionary bonus of$44,665 during the year,paid in November 2019.iv.The value of the share options granted to KMP is calculated at the grant date using the

218、 Black-Scholes formula.This value is 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 Danie

219、l Spira and Aileen Stockburger are in relation to shares paid in lieu of their Directors fees.The Company received confirmation from the ASX that a waiver of ASX Listing Rule 10.11 had been given to allow Aileen and Daniel,as Non-Executive Directors,to elect to be issued shares in lieu of their fees

220、 for the first 12 months after the Companys admission 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.9.DIRECTORS REPORT39 2020/ANNUAL REPORTKMP Equity HoldingsThe movement d

221、uring 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 2020KMPBALANCE AS AT 1 JAN 2020 No.RECEIVED ON EXERCISE OF OPTIONS No.SHARES RECEIVED IN LIEU OF DIRECT

222、ORS FEES No.(i)OTHER CHANGES DURING THE YEAR No.*BALANCE AS AT 31 DEC 2020 No.Executive DirectorJudith Mitchell4,732,000 268,000 5,000,000Non-Executive DirectorsGeorge Savvides625,000 24,876 649,876 Bruce Hancox 530,000 530,000 Daniel Spira 36,729 12,53749,266 Mark Compton125,000 12,438137,438 Ailee

223、n Stockburger33,554 11,283 44,837 Other KMPMatthew Myntti20,657,000 20,657,000 Jon Swanson70,00070,000Jacqueline Butler Dustin Haines *Other changes represent shares that were purchased during the year.i.The Company has been granted a waiver from Listing Rule 10.11 to the extent necessary to permit

224、the Company to issue shares without shareholder approval to non-executive directors,Aileen Stockburger and Daniel Spira,in lieu of directors fees for the first 12 months after the Companys admission to the official list of the ASX.The shares issued are fully paid ordinary shares in the capital of th

225、e Company on the same terms and conditions as the Companys existing shares and issued at the Offer Price of AUD$1 for the first quarter after admission.For later quarters,the shares are being issued at the 10 day Volume Weighted Average Price(VWAP)for the first 10 trading days of the relevant quarte

226、r.9.DIRECTORS REPORT40#NextScienceHealsKMP Equity Holdings(cont.)Year ended 31 December 2019KMPBALANCE AS AT 1 JAN 2019 No.POST SHARE-SPLIT No.(i)(ii)SHARES RECEIVED IN LIEU OF DIRECTORS FEES No.(iv)OTHER CHANGES DURING THE YEAR No.(iii)BALANCE AS AT 31 DEC 2019 No.Executive DirectorJudith Mitchell7

227、284,732,000 4,732,000Non-Executive DirectorsGeorge Savvides625,000 625,000 Bruce Hancox Daniel Spira(iv)36,729 36,729Mark Compton125,000 125,000 Aileen Stockburger(iv)33,554 33,554Other KMPMatthew Myntti3,178 20,657,000 20,657,000 Jon Swanson70,000 70,000Jacqueline Butler Byron Darroch(v)100650,000

228、650,000i.On 24 January 2019,a share split was completed on the basis that every one ordinary share on issue in the Company be divided into 6,500 ordinary shares.ii.There were no other movements in equity holdings from 1 January 2019 until the share split on 24 January 2019.iii.George Savvides and Ma

229、rk Compton received shares on the conversion of their converting notes(see note 20)post the share-split.iv.The Company has been 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 Stockb

230、urger and Daniel Spira,in lieu of directors fees for the first 12 months after the Companys admission to the official list of the ASX.The shares issued are fully paid ordinary shares in the capital of the Company on the same terms and conditions as the Companys existing shares and issued at the Offe

231、r Price of AUD$1 for the first quarter after admission.For later quarters,the shares are being issued at the 10 day Volume Weighted Average Price(VWAP)for the first 10 trading days of the relevant quarter.v.Byron Darroch held 650,000 ordinary shares which were funded through a shareholder loan.The b

232、alance of$180,357 outstanding as at 31 December 2019(see note 13)was paid in April 2020.Byron Darroch employment ceased on 31 August 2019.9.DIRECTORS REPORTThis concludes the remuneration report(audited).This report is made in accordance with a resolution of directors,pursuant to section 298(2)(a)of

233、 the Corporations Act 2001.On behalf of the directors:George Savvides Chair Dated at Sydney this 22nd day of February 202141 2020/ANNUAL REPORTLEAD AUDITORS INDEPENDENCE DECLARATION#NextScienceHeals42#NextScienceHeals10.LEAD AUDITORS INDEPENDENCE DECLARATIONLead Auditors Independence Declaration und

234、er Section 307C of the Corporations Act 2001 To the Directors of Next Science Limited I declare that,to the best of my knowledge and belief,in relation to the audit of Next Science Limited for the financial year ended 31 December 2020 there have been:i.no contraventions of the auditor independence r

235、equirements as set out in the Corporations Act 2001 in relation to the audit;andii.no contraventions of any applicable code of professional conduct in relation to the audit.Tony Nimac Partner Sydney 22 February 2021KPMGKPMG,an Australian partnership and a member firm of the KPMG global organisation

236、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 under license by the independent member firms of the KPMG global organisation.Liability limited by a scheme approved un

237、der Professional Standards Legislation.43 2020/ANNUAL REPORT11.CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOMEIN USDNOTES20202019$Revenue53,440,9754,060,800Cost of sales(524,134)(550,480)Gross profit2,916,8413,510,320Other income5356,57435,365Selling and distribution expenses

238、(5,670,684)(6,285,900)Research and development expenses(6,434,414)(5,327,575)Administration expenses(3,343,044)(4,370,361)Other expenses7(13,352)(62,971)Operating loss(12,188,079)(12,501,122)Finance income9297,254278,718Finance costs10(21,179)(2,129,424)Net finance income/(costs)276,075(1,850,706)Lo

239、ss before income tax(11,912,004)(14,351,828)Income tax expense11 Loss for the year(11,912,004)(14,351,828)Other comprehensive income,net of income taxForeign currency translation differences for foreign operations396,838(971,282)Total comprehensive loss for the year(11,515,166)(15,323,110)Earnings p

240、er shareFrom continuing operationsCentsCentsBasic earnings32(6.36)(8.65)Diluted earnings32(6.36)(8.65)The accompanying notes form part of these financial statements.For the Year Ended 31 December 202044#NextScienceHeals12.CONSOLIDATED STATEMENT OF FINANCIAL POSITIONIN USDNOTES20202019ASSETS Current

241、assets$Cash and cash equivalents128,100,4166,556,808Trade and other receivables133,388,0451,640,382Inventories141,071,979400,360Other current assets-term deposits157,238,98610,353,797Other current assets-other15452,458332,504Total current assets20,251,88419,283,851Non-current assetsTrade and other r

242、eceivables1336,65636,656Property,plant and equipment16788,133812,587Intangible assets172,334,9362,164,345Right-of-use assets18227,265402,291Total non-current assets3,386,9903,415,879Total assets23,638,87422,699,730LIABILITIESCurrent liabilitiesTrade and other payables191,064,3651,076,672Contract lia

243、bilities211,909,554375,106Lease liabilities22170,946196,442Employee benefits2381,23169,552Total current liabilities3,226,0961,717,772Non-current liabilitiesContract liabilities211,374,5101,328,809Lease liabilities22115,889286,012Employee benefits239,3853,691Total non-current liabilities1,499,7841,61

244、8,512Total liabilities4,725,8803,336,284Net assets18,912,99419,363,446EquityShare capital24101,281,46790,693,590Common control reserve24(42,596,715)(42,596,715)Foreign currency translation reserve24(801,736)(1,198,574)Share option reserve242,125,5411,648,704Accumulated losses(41,095,563)(29,183,559)

245、Total equity18,912,99419,363,446The accompanying notes form part of these financial statements.As at 31 December 202045 2020/ANNUAL REPORT13.CONSOLIDATED STATEMENT OF CHANGES IN EQUITYThe accompanying notes form part of these financial statements.2020 IN USDSHARE CAPITALCOMMON CONTROL RESERVEFOREIGN

246、 CURRENCY TRANSLATION RESERVESHARE OPTION RESERVEACCUMULATED LOSSESTOTAL EQUITY$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 differences396,838396,838Total othe

247、r comprehensive income396,838396,838Total comprehensive loss for the year396,838(11,912,004)(11,515,166)Transactions with owners in their capacity as ownersShare-based payment482,973482,973Foreign exchange impact(6,136)(6,136)Issue of ordinary shares11,175,61511,175,615Conversion of partly paid shar

248、es to ordinary shares(199,999)(199,999)Capital raising costs(387,739)(387,739)Total transactions with owners10,587,877476,83711,064,714Balance 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 202046#NextScienceHeals13.CONSOLIDATED STATE

249、MENT OF CHANGES IN EQUITYThe accompanying notes form part of these financial statements.2019 IN USDSHARE CAPITALCOMMON CONTROL RESERVEFOREIGN CURRENCY TRANSLATION RESERVESHARE OPTION RESERVECONVERTING NOTES RESERVEACCUMULATED LOSSESTOTAL EQUITY$Balance at 1 January 201956,589,405(42,596,715)(227,292

250、)968,831415,562(14,746,054)403,737AASB 16 adjustment (net of tax)(85,677)(85,677)Restated total at the beginning of the year56,589,405(42,596,715)(227,292)968,831415,562(14,831,731)318,060Loss for the year(14,351,828)(14,351,828)Other comprehensive incomeForeign currency translation differences(971,

251、282)(971,282)Total other comprehensive income(971,282)(971,282)Total comprehensive loss for the year(971,282)(14,351,828)(15,323,110)Transactions with owners in their capacity as ownersShare-based payment652,826652,826Foreign exchange impact27,04727,047Converting notes converted to equity(415,562)(4

252、15,562)Issue of ordinary shares35,626,55435,626,554Capital raising costs(1,522,369)(1,522,369)Total transactions with owners34,104,185679,873(415,562)34,368,496Balance at 31 December 201990,693,590(42,596,715)(1,198,574)1,648,704(29,183,559)19,363,446For the Year Ended 31 December 202047 2020/ANNUAL

253、 REPORT14.CONSOLIDATED STATEMENT OF CASH FLOWSThe accompanying notes form part of these financial statements.IN USDNOTES20202019Operating Activities$Receipts from customers2,950,4303,262,752Payments to suppliers and employees(12,210,609)(13,202,785)Payments for research and development(3,119,907)(2,

254、651,188)Interest received117,735224,299Grant income and COVID-19 government assistance355,70735,365Net cash used in operating activities12(11,906,644)(12,331,557)Investing ActivitiesPayments for property,plant and equipment16(213,244)(374,683)Payments for intangible assets17(473,555)(1,233,341)Net c

255、ash used in investing activities(686,799)(1,608,024)Financing ActivitiesProceeds from issue of ordinary shares2410,831,27525,231,169Proceeds from issue of converting notes2070,798Proceeds from conversion of options to ordinary shares489,125310,700Capital raising costs(387,740)(1,717,999)Payment of l

256、ease liabilities(222,609)(210,334)Net cash provided by financing activities10,710,05123,684,334Net(decrease)/increase in cash and cash equivalents held(1,883,392)9,744,753Cash and cash equivalents at beginning of year16,910,6057,211,102Effects of exchange rate changes on cash and cash equivalents312

257、,189(45,251)Cash and cash equivalents at end of the year(including bank term deposits)15,339,40216,910,605Less bank term deposits classified as other current assets 15(7,238,986)(10,353,797)Cash and cash equivalents at end of the year128,100,4166,556,808For the Year Ended 31 December 202048#NextScie

258、nceHeals15.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS1.Corporate Information Next Science Limited(the“Company”)is a company domiciled in Australia.The Group is a for-profit entity and primarily involved in the research,development and commercialisation of technologies which solve bacterial relat

259、ed issues.These consolidated financial statements comprise the Company and its subsidiaries(collectively the“Group”and individually“Group companies”)for the year ended 31 December 2020 and comparative information for the year ended 31 December 2019.2.Basis of Preparationa.Statement of compliance The

260、 consolidated financial statements are general purpose financial statements which have been prepared in accordance with accounting standards adopted by the Australian Accounting Standards Board(“AASB”)and the Corporations Act 2001.The consolidated financial statements comply with International Finan

261、cial Reporting Standards(“IFRS”)adopted by the International Accounting Standards Board(“IASB”).The financial statements were approved by the Board of Directors and authorised for issue on 22nd February 2021.b.Basis of measurement The financial statements have been prepared on a historical cost basi

262、s.c.Functional and presentation currency The financial statements are presented in United States Dollars,which is the Groups presentation 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

263、 these financial statements,management has made judgements,estimates and assumptions that affect the application of the Groups accounting policies and the reported amounts of assets,liabilities,income,expenses and disclosure of contingent liabilities.Actual results may differ from these estimates.Es

264、timates and underlying assumptions are reviewed on an ongoing basis.Revisions to accounting estimates are recognised prospectively.The key judgements,estimates and assumptions are discussed below:Impairment of non-financial assets The Group assesses impairment of non-financial assets at each reporti

265、ng date by evaluating conditions specific to the Group and to the particular asset that may lead to impairment.If an impairment trigger exists at balance date,the recoverable amount of the asset is determined.This involves value-in-use calculations,which incorporate a number of key estimates and ass

266、umptions.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 its value in use.Value in use for the cash-generating units(CGU)wa

267、s determined by discounting the future cashflows to be generatedFor the Year Ended 31 December 202049 2020/ANNUAL REPORT15.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSd.Use of judgements and estimates(cont.)from the CGUs and is based on the following key assumptions:Cashflows were projected based

268、on forecast operating results over a 5 year period plus a terminal value.Average annual revenue growth rates agreed in revenue contracts with customers and approved budgets were used for revenue projections.Discount rate of 12%based on the weighted average cost of capital.Estimation of useful lives

269、of assetsThe 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 dep

270、reciation 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.LeasesFor the purpose of measuring the right-of-use asset lease term,du

271、ration is estimated.This requires judgement and is based on an assessment as to whether an option to extend or terminate a lease will be exercised.The Group must also consider each contract held to assess whether a contract includes a lease under AASB 16 and the incremental borrowing rate is estimat

272、ed.Recovery of deferred tax assetsDeferred 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.Management has considered all the facts and circumstances and believe there is no material

273、uncertainty over the availability of the tax losses.e.Comparative AmountsThe presentation of the consolidated statement of profit or loss and other comprehensive has been changed such that expenses are now classified based on their function,as this provides information that is more relevant to the G

274、roup.When required by Accounting Standards,comparative figures have been adjusted to conform to changes in presentation for the current year.f.Going concernThe financial report has been prepared on a going concern basis,which assumes continuity of normal business activities and the realisation of as

275、sets 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 2020,the Group incurred a loss of$11,912,004 and had net cash outflows from operations of$11,906,644.A

276、s at 31 December 2020,the Group had net current asset and net asset positions of$17,025,788 and$18,912,994 respectively.For the Year Ended 31 December 202050#NextScienceHeals15.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSThe Group raised$25,052,313(AUD$35 million)after successfully completing an I

277、nitial Public Offering(IPO)in April 2019.The Group raised a further$10,631,274(AUD$15 million)over the period September to November 2020 completing two Placements and a Share Purchase plan.As at 31 December 2020,the Group has cash and cash equivalents of$8,100,000 and term deposits of$7,238,986 whic

278、h is expected to be sufficient to fund its operations and activities for a period of at least twelve months from the date of signing this financial report.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

279、foreseeable future,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.a.Parent entity information In accordance with the Corpor

280、ations Act 2001,these financial statements present the results of the Group only.Supplementary information about the parent entity is disclosed in note 25.b.Basis of consolidationi.Business combinations The Group accounts for business combinations using the acquisition method when control is transfe

281、rred to the Group,unless it is a combination involving entities or businesses under common control.The consideration transferred in the acquisition 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

282、 bargain purchase is recognised in profit or loss immediately.Transaction costs are expensed as incurred,except if related to the issue of debt or equity securities.Common control transactions record assets and liabilities acquired at their book value at the date of acquisition,rather than their fai

283、r value.The difference between the fair value of the consideration given and the carrying value of the assets and liabilities acquired is recognised as a common control reserve.The consideration transferred does not include amounts related to the settlement of pre-existing relationships.Such amounts

284、 are generally recognised in profit or loss.ii.SubsidiariesSubsidiaries are entities controlled by the Group.The Group controls an entity when it 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 th

285、e entity.The financial statements of subsidiaries are included in the consolidated financial statements from the date on which control commences 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

286、subsidiary,and any related non-controlling interest and other components of equity.Any resulting gain or loss is recognised in profit or loss.Any interest retained in the former subsidiary is measured at fair value when control is lost.For the Year Ended 31 December 202051 2020/ANNUAL REPORTb.Basis

287、of consolidation(cont.)iv.Transactions eliminated on consolidationIntra-group balances and transactions,and any unrealised income and expenses arising from intra-group transactions,are eliminated.Unrealised gains arising from transactions with equity-accounted investees are eliminated against the in

288、vestment 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 transactionsTransactions in foreign currencies are translated to the

289、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 reporting date.Non-monetary assets and liabilities that are measured at fair v

290、alue in a foreign currency are translated into the functional currency at the exchange rate when the fair value was determined.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 transaction.Foreign currency diffe

291、rences 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 currency at the exchange rates

292、 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 transaction are used.Fo

293、reign currency differences are recognised in OCI 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 have been satisfied assessi

294、ng 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 each element.For current cont

295、racts 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 one performance obligation ex

296、ists to transfer product to the distributor.ii.Transfer of goodsTitle and control pass to the distribution customer at the point when the Group fulfils its obligation to deliver and goods are available at the customers premises.For the Year Ended 31 December 202015.NOTES TO THE CONSOLIDATED FINANCIA

297、L STATEMENTS52#NextScienceHealsAs such,the performance obligation(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 product sold directly to hospitals,title and control pass when the

298、 product is delivered to the courier,with revenue being recognised at this point 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 var

299、iable consideration is only included in the transaction price if it is highly 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,thes

300、e amounts will be initially recognised as contract liabilities to be recognised over 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 o

301、nce regulatory approval has been received and 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 transitio

302、ned back to Next Science in the first half of 2021.Discussions are progressing smoothly,and Next Science anticipates the transition will be complete prior to the end of the first half 2021.As a result of this,there has been a change in the time frame for recognition of the performance obligation in

303、relation to the milestone payments received from 3M.The milestone payments which previously would have been recognised as revenue over the period until the end of the contract period of 31 Dec 2021,will now be recognised as revenue over a shorter time period ending 1H 2021,when it is anticipated tha

304、t the full transition of BLASTX back to Next Science will be complete.e.Government grants Government grants are recognised where there is reasonable assurance 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

305、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 asset,it is recognised as income in equal amounts over the expected useful life of the related asset.f.Finance income and finance costsFinance inco

306、me comprises interest income,dividend income and foreign currency gains.Interest income is recognised in profit or loss as it accrues using the effective interest method.For the Year Ended 31 December 202015.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS53 2020/ANNUAL REPORTf.Finance income and fina

307、nce costs(cont.)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 and

308、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 ap

309、plying 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 l

310、osses 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 q

311、ualifying asset are recognised in profit or loss using the effective interest method.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 range of 5.4%to 5.5%on current leases held.Foreign

312、 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.It is recognised in profit or loss except to the e

313、xtent 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 comprises the expected tax payable or receivable on the ta

314、xable 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 from dividends.Current tax assets and liabilities a

315、re 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 purposes.Deferred tax is not recognised for temporary di

316、fferences 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 goodwill.For the Year Ended 31 December 202015.NO

317、TES TO THE CONSOLIDATED FINANCIAL STATEMENTS54#NextScienceHealsDeferred 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 ass

318、ets are reviewed at each reporting date and are reduced 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 dat

319、e and recognised to the extent that it has become probable 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 enacte

320、d at the reporting date.The measurement of deferred tax 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 cr

321、iteria are met.h.Current and non-current classification Assets and liabilities are presented in the statement 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 Gr

322、oups normal operating cycle;it is held primarily for the purpose of trading;it is expected to be realised 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 reportin

323、g period.All other assets are classified as non-current.A liability is classified as current when:it is either 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 n

324、o unconditional right to defer the settlement of the liability for at least 12 months after the reporting 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

325、 cash on hand,deposits held at call with financial institutions,other short-term,highly liquid investments 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 ca

326、sh flows presentation purposes,cash and cash equivalents also includes bank overdrafts,which are shown within 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 a

327、mortised cost using the effective interest method,less any allowance for expected credit losses.For the Year Ended 31 December 202015.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS55 2020/ANNUAL REPORTj.Trade and other receivables(cont.)Trade receivables are generally due for settlement within 30 da

328、ys.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 receivables are recognised at amortised cost,less any allowance for

329、 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 Items of property,plant and equipment are measured at cost le

330、ss 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 lives,they are accounted for as separate items(major components)

331、of property,plant and equipment.An item of property,plant and equipment is derecognised upon disposal or when there is no future economic benefit to the consolidated entity.Gains and losses between the carrying amount and the disposal proceeds are taken to profit or loss.Any revaluation surplus rese

332、rve relating to the item disposed of is transferred 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.Depreciation Depreciation is calculat

333、ed based on the cost of property,plant and equipment 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 ownership by the end of the lease term.Land is