Next Science Limited

2020 //  ANNUAL REPORTTABLE OF  
CONTENTS

1. Our Purpose 

2. Patient Stories 

3. Case Studies 

4. Physician and Nurse Testimonials 

5. New in 2021 

6. Community Involvement  

7. Chairman’s Letter

8. Managing Director’s Report

9. Directors’ Report

10. Lead Auditor’s Independence Declaration

11. Consolidated Statement of Profit or Loss and Other Comprehensive Income

12. Consolidated Statement of Financial Position

13. Consolidated Statement of Changes in Equity

14. Consolidated Statement of Cash Flows

15. Notes to Financial Statements

16. Directors’ Declaration

17.

18.

Independent Auditor’s Report

Investor Information

19. Corporate Directory

1

3

5

7

9

11

13

15

17

41

43

44

45

47

48

88

89

95

100

#NextScienceHealsOUR PURPOSE

1 

2020 //  ANNUAL REPORTOUR PURPOSE

Our 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 unique opportunity to change the trajectory of the war 

on infection by providing solutions that eliminate biofilms, and 

their incumbent bacteria, fungi and viruses.

2 

#NextScienceHeals#NextScienceHeals

JAMES 

Vehicle Crash // Knee Surgery

THE ROAD TO RECOVERY 

In July 2019, James, a 52-year-old runner and cycling enthusiast 

was involved 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 underwent 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 

underlying 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 Science’s BACTISURE™ and 
SURGX® microbial gel.” 

In May 2020, James received his third surgery to replace all 
implants. Next Science’s BACTISURE™ was 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 healing power of our BACTISURE ™ and SURGX® 
Technology, James became a shareholder in Next Science.

3 

2020 //  ANNUAL REPORTPATIENTSTORIES

MARY 

Debilitating Stroke // Unresponsive Pressure Ulcer

HOPE AND HEALING  

A 67-year-old woman suffered a debilitating stroke which left 

her hospitalized for many months undergoing treatment. During 

her 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 assigned to this patient, Nurse 

Karlene went through the patient’s 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 prescribed. Karlene, who had recently heard 
about Next Science’s 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 patient’s 
stage 3 pressure ulcer. I was able to get the MD 
onboard for orders to implement treatment with 
BLASTX®. 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. 

4 

#NextScienceHeals#NextScienceHeals

CASE 
STUDY  

Podiatry

How 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 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 Anthony 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 polymicrobial 
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 
11 June 20 
Patient 
transferred 
care to 
wound clinic

14 May 20 
Initial wound 
clinic visit

16 July 20 
Follow-up 
wound clinic 
treatment

27 August 20 
Treatment 
scheduled

14 September 20 
Surgery performed

•  MRI confirmed underlying 
osteomyelitis and venous 
stasis ulcer to left 
malleolus.

•  Amputation recommended 
because of 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 substitute.

•  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.

5 

2020 //  ANNUAL REPORTCASE STUDY

On 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 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 Iorio’s use of SURGX® in the post-
operative environment demonstrates the value of SURGX® for any phase of surgical intervention.   

CLOSURE BEFORE

CLOSURE AFTER

17 September 20 
First post-
operative visit

08 October 20 
Second  
post-op visit

15 October 20 
Third  
post-op visit

22 October 20 
Fourth  
post-op visit

05 November 20 
Final  
post-op visit

•  Continued weekly 

•  Improvement 

application of SURGX® 
to surgical site and left 
venous stasis ulcer.

to hallux 
wound.

REFERENCES

•  Continued using 
SURGX®; 33% 
reduction of 
hallux wound in 
8 days.

•  Hallux wound 
closed in 38 
days. 

•  Venous stasis 
ulcer healed. 

Atkin L, Bućko 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): S1–S49  https://www.magonlinelibrary.com/doi/
pdf/10.12968/jowc.2019.28.Sup3a.S1

Milller, K. T. H. (2014). Next Science wound gel technology, 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/24637684

Thomas N, Brook I (2011). Animal bite-associated Infections. Expert Rev Anti Infect Ther 9(2): 215-226.  
https://www.medscape.com/viewarticle/739023_4

6 

#NextScienceHeals#NextScienceHeals

“Since beginning SURGX®, I have had no 
incisional complications, any incision site 
treated with SURGX® after development 
of a post-operative infection responded 
rapidly with less drainage/inflammation.” 

Dr Jon Minter
Orthopedic 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 Harrison
RN, BSN, CWOCN

“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 Wood
RN, WCC, CWS

7 

2020 //  ANNUAL REPORTPHYSICIAN AND NURSE 

TESTIMONIALS

“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 Crispin
Board Certified  
Plastic Surgeon

“Out of 15 cases where SURGX® 
was applied immediately post-op,  
I have had 0% surgical site 
infections.” 

Dr David Strom
Board Certified  
Orthopedic Surgeon

“In my experience any 
incision site treated with 
SURGX® has not developed 
the typical surgical infection 
complications”  

Dr Matthew Regulski
Podiatric Surgery 
Specialist 

8 

#NextScienceHeals#NextScienceHeals

Once FDA cleared, XPERIENCE™ 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 together—destroying 

enveloped bacteria and defending against recolonization. 

LEARN MORE AT: nextscience.com/xperience

9 

2020 //  ANNUAL REPORTNEW IN 2021

Surgical Need  
for XPERIENCE™:

3.3  Billion
1.5  Million
3%

COST OF SURGICAL 
SITE INFECTIONS  
ANNUALLY

SURGICAL SITE 
INFECTIONS IN 
THE US PER
YEAR

MORTALITY RATE 
DUE TO SURGICAL 
SITE INFECTIONS 

The key to  
winning the 
battle  
against 
infection

10 

#NextScienceHealsCOMMUNITY 
INVOLVEMENT

At Next Science, we believe it is our responsibility 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 driver 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 are making strides in changing this trajectory. 

150,000

PATIENTS HEALED FROM CHRONIC WOUNDS 
OR PREVENTED SURGICAL INFECTIONS

1,623  

HOSPITALS AND AMBULATORY SURGICAL 
CENTRES IN THE US USING XBIO 
PRODUCTS

Next Science’s purpose to heal patients and save lives has never been more apparent – and 

needed – as our world continues its collective fight against the coronavirus.

11 

2020 //  ANNUAL REPORT#NextScienceHeals

During 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 that 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 
from 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 evidence-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 Florida’s 

working, low-income, uninsured adults.

Each day we make progress on improving our products and 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 health 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). Pathogenesis of surgical site infection (SSI) – The 3rd Edition: Prevention & Management. 

Retrieved from, http://laparoscopy.blogs.com/prevention_management_3/2010/07/pathogenesisofsurgicalsiteinfectionssi.html

12 

#NextScienceHeals7 .   C H A I R M A N ’ S   L E T T E R

Dear Shareholders

In this 2020 Annual Report the company has provided an operational overview and audited 

financial results for our shareholders. The board and executive 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 being 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 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 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, 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 approval. 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 

commercial 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 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 Medical 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 significantly 

13 

2020 //  ANNUAL REPORT7 .   C H A I R M A N ’ S   L E T T E R

improve 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 expanded 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 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 provide 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 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 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 Director 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 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 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 Savvides
Chairman 

A Different Approach, Superior Results

14 

#NextScienceHeals8 .   M A N A G I N G   D I R E C T O R ‘ S   R E P O R T

2020 was a challenging but fruitful year for Next Science with significant progress made on further 

extending Next Science’s 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 capabilities 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 Science’s key platforms in 2020 with reduced 

access to health care professionals and the hospital channel. Throughout this period, the very strong 

support for Next Science’s 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 year 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 Gel

While revenue decreased 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, outpatient 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 through 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 BLASTX® 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 Solution

Our product development efforts were focused 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-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 2021. 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 FDA’s 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. Successful 
commercial launch of XPERIENCE™ is the number one priority for the Company in 2021. 

15 

2020 //  ANNUAL REPORT  
8 .   M A N A G I N G   D I R E C T O R ‘ S   R E P O R T

Build up of the commercial organisation to support XPERIENCE™  
No Rinse Antimicrobial Solution 

To support this launch and ensure a strong marketing and sales program 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 from 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 Commercial 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 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.  

Outlook

We have a confident outlook for 2021. BACTISURE™ continues 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 and 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 XPERIENCE™ 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 number 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 our 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 people’s lives. #NextScienceHeals

Judith Mitchell
Managing Director

16 

#NextScienceHealsDIRECTORS’ 
REPORT

17 

2020 //  ANNUAL REPORT#NextScienceHeals

18 

#NextScienceHeals9 .   D I R E C T O R S ’   R E P O R T

The Directors present their report together with the consolidated financial statements of the 

Group comprising of Next Science 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. 

Directors 

The Directors of the Company at any time 
during or since the end of the financial year are: 

George  
Savvides 
(Chair) 

Judith  
Mitchell 

Bruce 
Hancox

Daniel 
Spira

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 elective 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, Next 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, 

Mark 
Compton

Aileen 
Stockburger

infection and the role of biofilm to drive 

increased demand for its products.

Dividends 

No dividends were paid or declared since the 

In January 2020, Next Science’s XPERIENCE™ 

No Rinse Antimicrobial Solution was submitted 

for regulatory approval to the FDA. Following 

the FDA’s initial review and requested additional 

information, the dossier was resubmitted to the 

FDA in December 2020. 

commencement of the year and the directors do 

In March 2020, Next Science launched its Acne 

not recommend the declaration of a dividend.

cream via online skincare direct marketer, tbh 

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 is 

headquartered in Sydney, Australia and has a 

Skincare (www.tbhskincare.com) to consumers 

mainly based in Australia. 

In April 2020, Next Science received CE Mark 
for BACTISURE™, authorising future sales in 
Europe through Next Science’s distribution 

partner, Zimmer Biomet. Next Science also 

received notification from the US Environmental 

Protection Agency (EPA) that its Hospital 

Cleaner Surface Disinfectant had been 

research and development centre and sales  
and marketing functions located in Florida, USA. 

accepted for registration with clearance for 

inclusion on the product labelling of a claim

19 

2020 //  ANNUAL REPORT9 .   D I R E C T O R S ’   R E P O R T

for effectiveness against biofilm. Commercial 

On 23 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. 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 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 the 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.

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 

Science’s distribution partner, 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 marketer, tbh Skincare  

(www.tbhskincare.com) 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. 

SHAREHOLDER RETURNS

Revenue

2020

2019

$3,440,975

$4,060,800

Loss attributable to owners of the company

($11,912,004)

($14,351,828)

Basic earnings per share (EPS) (cents)

Share price as at 31 Dec (A$)

Return on capital employed

($6.36)

AUD$1.25

(59.7%)

($8.65)

AUD$1.88

(59.6%)

20 

#NextScienceHeals9 .   D I R E C T O R S ’   R E P O R T

Operating 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 $3,440,975, 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 $615,216 compared 

development activity including associated 

product validation costs, regulatory spend and 

two additional staff appointments in the 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 December 

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 

with $6,285,900 in the prior corresponding 

in the operations of the Group and the 

period. In the prior year, $48,147 of the expenses 

expected results of those operations in future 

related to IPO investor relations activity. The 

financial years has not been included in this 

decrease in spend in 2020 mainly relates to a 

report because disclosure of the information 

reduction in travel expenditure due to Covid 

travel restrictions as well as a reduction in 

would be likely to result in unreasonable 
prejudice to the Group. 

headcount. Such reductions have been partially 

offset by increased partner marketing spend and 

increased donations and sampling efforts. 

Matters subsequent to the end of the 
financial year  
There has not arisen in the interval between 

Administration expenses were $3,343,044, 

the end of the financial year and the date of 

a decrease of $1,027,317 compared with 

this report any item, transaction or event of 

$4,370,361 in the prior corresponding period. 

a material and unusual nature likely, in the 

$129,310 of the reduction in the current 

opinion of the directors of the Group, to affect 

period is related to reduced travel expenses 

significantly the operations of the Group, the 

in 2020 resulting from COVID-19. Prior period 

results of those operations, or the state of 

administration expenses included $312,106 

affairs of the Group, in future financial years.

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 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 

Environmental regulation 

The Group’s 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. 

21 

2020 //  ANNUAL REPORT9 .   D I R E C T O R S ’   R E P O R T

Government 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 industries 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 amounts 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 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 Group’s products. 

Information on Directors 

NAME:

Title:

GEORGE SAVVIDES AM

Chair and Independent Non-Executive Director 

Special 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. 

Experience and expertise:

Other current directorships:

Fellow of the Australian Institute of Company Directors.

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 Pty 
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.  

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 provider in New Zealand (since 2013).  

Former listed directorships  
(last 3 years):

None

22 

#NextScienceHeals9 .   D I R E C T O R S ’   R E P O R T

Information on Directors (cont.) 

NAME:

Title:

JUDITH MITCHELL 

Managing Director and Chief Executive Officer 

Special Responsibilities:

None 

Qualifications:

MBA, University of Hull 

Experience and expertise:

Graduate of the Australian Institute of Company Directors 

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 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 directorships:

Former listed directorships  
(last 3 years):

None  

None

NAME:

Title:

BRUCE HANCOX 

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 experience 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 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:

Director of Walker Group Holdings Pty Limited.  

Former listed directorships  
(last 3 years):

Carbonxt Group Limited (ASX:CG1) and BTC Health Limited  
(ASX: BTC) 

23 

2020 //  ANNUAL REPORT9 .   D I R E C T O R S ’   R E P O R T

NAME:

Title:

DANIEL SPIRA

Independent Non-Executive Director 

Special Responsibilities:

Chair, People, Culture and Remuneration 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 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 roles 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:

Former listed directorships  
(last 3 years):

None  

None

NAME:

Title:

AILEEN STOCKBURGER

Independent Non-Executive Director 

Special Responsibilities:

Member, Audit and Risk Committee 

Qualifications:

Bachelor of Science and MBA, The Wharton School, University of 
Pennsylvania  

Experience and expertise:

Graduate of the Australian Institute of Company Directors, Certified 
Public Accountant (CPA – USA). 

Prior to joining Next Science, Aileen was the Worldwide Vice President 
of Business Development for the DePuy Synthes Group of Johnson 
& Johnson, where she oversaw the group’s merger and acquisition 
activities, including deal structuring, negotiations, contract design 
and review, and deal terms. She led Johnson & Johnson’s efforts to 
acquire Synthes for approximately $21 billion, Johnson & Johnson’s 
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$16.5 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):

None

24 

#NextScienceHeals9 .   D I R E C T O R S ’   R E P O R T

Information on Directors (cont.) 

NAME:

Title:

MARK COMPTON AM 

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 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 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 Luke’s Care Limited, a 
not-for-profit health and aged care organisation and Chairman of 
Integrated Clinical Oncology Network Pty Ltd trading as Icon Cancer 
Centre. Mark has held various CEO and managing director roles, 
including at St Luke’s 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 leadership 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 Luke’s Care Limited and Integrated 
Clinical Oncology Network Pty Ltd trading as Icon Cancer Centre.  

Former listed directorships  
(last 3 years):

None

Company Secretary

Gillian 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 and in various company 

secretarial roles, predominantly with listed entities, in a variety of sectors including 
manufacturing, oil and gas, professional services and education. 

25 

2020 //  ANNUAL REPORT9 .   D I R E C T O R S ’   R E P O R T

Meetings of directors 

The number of meetings held and attended by each of the Directors of the Company 

during the year ended 31 December 2020 were as follows: 

NAME OF DIRECTOR

BOARD MEETINGS

PEOPLE, CULTURE 
& REMUNERATION 
COMMITTEE

AUDIT AND RISK 
COMMITTEE

TRANSACTION 
COMMITTEE

George Savvides

Judith Mitchell

Bruce Hancox

Daniel Spira

Mark Compton 

Aileen Stockburger

A

20

20

20

20

20

20

B

20

20

19

20

20

20

A

3

–

–

3

3

–

B

3

–

–

3

3

–

A

7

–

7

–

–

7

B

7

–

7

–

–

7

A

3

–

3

–

3

–

B

3

–

3

–

3

–

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 

Directors’ interests

The 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 is as follows:

NAME OF DIRECTOR

FULLY PAID ORDINARY SHARES

SHARE OPTIONS

George Savvides

Judith Mitchell

Bruce Hancox

Daniel Spira

Mark Compton 

Aileen Stockburger

Total

Number

649,876 

5,000,000 

530,000 

49,266 

137,438 

44,837 

6,411,417

Number

650,000 

2,340,000 

520,000

1,300,000 

520,000 

520,000 

5,850,000

Shares under option

At 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 Company’s 
undiluted total share capital, granted to employees and directors under an equity incentive plan. 

26 

#NextScienceHeals9 .   D I R E C T O R S ’   R E P O R T

Indemnity and insurance of officers 

general standard of independence for auditors 

The Group has indemnified the directors and 

executives of the Group for costs incurred, 

in their capacity as a director or executive, 

imposed by the Corporations Act 2001. 

The Directors are of the opinion that the 

services as disclosed in note 31 to the 

for which they may be held personally liable, 

financial statements do not compromise the 

except where there is a lack of good faith. 

external auditor’s independence requirements 

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. The contract of 

under the Corporations Act 2001 for the 

following reasons:
 · All non-audit services have been reviewed 
and approved to ensure that they do not 

impact the integrity and objectivity of the 

insurance prohibits disclosure of the nature of 

auditor; and

the liability and the amount of the premium.

 · None of the services undermine the general 
principles relating to auditor independence 

Indemnity and insurance of auditor 

as set out in APES 110 Code of Ethics 

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 related entity 

against a liability incurred by the auditor. 

During the financial year, the Company has 

not paid a premium in respect of a contract 

to insure the auditor of the Company or any 
related entity. 

Proceedings on behalf of  
the company 

No person has applied to a court under section 

237 of the Corporations Act 2001 for leave to 

bring proceedings on behalf of the Company, 

or to intervene in any proceedings to which the 

Company is a party for the purpose of taking 

responsibility on behalf of the Company for all 

or part of those proceedings. 

Non-audit services 

Details of the amounts paid or payable to the 

for Professional Accountants issued by 
the Accounting Professional and Ethical 

Standards Board, including reviewing or 

auditing the auditor’s 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 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. 

Auditor’s independence 
declaration 

The auditor’s independence declaration is 

set out on page 42 and forms part of the 

Directors’ Report for the financial year ended 
31 December 2020. 

auditor for non-audit services provided during 

the financial year by the auditor are outlined in 

Auditor 

note 31 to the financial statements. 

KPMG continues in office in accordance with 

The Directors are satisfied that the provision of 

non-audit services by the auditor during  

the financial year is compatible with the 

section 327 of the Corporations Act 2001.

27 

2020 //  ANNUAL REPORT 
 
 
 
 
9 .   D I R E C T O R S ’   R E P O R T

Remuneration Report (audited) 

Key management personnel (KMP) 

This Remuneration Report forms part of 

The KMP of the Group during the financial year 

the Directors’ Report for the year ended 31 

and the positions held are summarised below: 

December 2020. This Report outlines the 

details of the remuneration arrangements for 

the key management personnel of the Group, 

including remuneration strategy, framework 

and practices, in accordance with the 

requirements of the Corporations Act 2001 and 

its Regulations. 

For the purposes of this Report, key 
management personnel (KMP) are defined 
as those persons having authority and 

responsibility for planning, directing and 

controlling the activities of the Group, directly 

or indirectly, including any Director of the 
Company (non-executive or executive). 

Non-Executive Directors 

George Savvides

Bruce Hancox 

Daniel Spira 

Mark Compton 

Aileen Stockburger 

Managing Director 

Judith Mitchell 

Other KMP 

The information in this Remuneration Report is 

Jacqueline Butler

Chief Financial Officer

Matthew Myntti 

Chief Technology Officer

Jon Swanson 

Dustin Haines 

Chief Operating Officer

Chief Commercial Officer

set out under the following 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 holdings

28 

#NextScienceHeals9 .   D I R E C T O R S ’   R E P O R T

Remuneration governance 

The Board established a Remuneration 
and Nomination Committee (Committee) in 
August 2018 to assist the Board in fulfilling 

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  

its responsibilities to shareholders and other 

the Board. 

stakeholders in respect of remuneration 

policies and practices, succession planning, 

diversity policies and practices, performance 

The Charter requires the Committee to meet  

at least twice each year. 

evaluation processes and board composition 

All of the current members of the People, 

including mix of skills. 

During the financial year, on the 

recommendation of the Committee and in 

recognition of the close connection between 

culture, governance and remuneration 

highlighted by various stakeholders 

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.

including the ASX Corporate Governance 
Council and Australian Securities and 

Service agreements and 
remuneration policy 

Investments Commission (ASIC), the Board: 
i.  extended the scope of the Committee’s 
role to reviewing and overseeing Next 

Science’s key people and organisational 

culture strategies, talent and succession 

and their alignment with Next Science’s 

values, mission and strategy; and
ii. changed the name of the Committee 
to ‘People, Culture and Remuneration 

Committee’.

The People, Culture and Remuneration 

Committee currently comprises of:

Daniel 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 

www.nextscience.com/corp-governance. 

The People, Culture and Remuneration Charter 

provides that the Committee should comprise 

of at least three members, all of whom are 

Executives are employed under executive 

employment agreements with the Group. 

In determining remuneration, the Group 

considers:
 · industry based remuneration 

benchmaking (Australia and USA);

 · market developments affecting  

remuneration practices;

 · the remuneration expectations of an 
executive whom the Company wants  

to employ;

 · future outlook for the Group and  

market generally;

 · the Company’s performance over a 

performance period; and

 · the link between remuneration and 

the successful implementation of the 

Company’s strategy and achievement  

of strategic objectives.

Executive incentives comprise fixed and 

variable elements linked to Company  

and individual performance as detailed  

in this Report.

29 

2020 //  ANNUAL REPORTEmployment Agreements

9 .   D I R E C T O R S ’   R E P O R T

NAME:

Title:

Details:

NAME:

Title:

Details:

NAME:

Title:

Details:

JUDITH MITCHELL 

Managing Director

Ongoing service agreement inclusive of superannuation and to be 
reviewed annually by the Company. 

The Company may terminate the service agreement: 

i.  by giving a 3-month termination notice; or

ii. 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 Company’s short-term and 
long-term incentive plans.

JACQUELINE BUTLER 

Chief Financial Officer (CFO)

Ongoing service agreement inclusive of superannuation and to be 
reviewed annually by the Company.  

The Company may terminate the service agreement: 

i.  by giving a 3-month termination notice; or

ii. without notice, in the event of serious misconduct or for any 

other reason that enables summary dismissal at law.

Jacqueline is entitled to participate in the Company’s short-term 
and long-term incentive plans. 

DR. MATTHEW MYNTTI 

Chief Technology Officer (CTO)

Ongoing employment agreement to be reviewed annually by  
the Company.  

The Company may terminate the employment agreement: 

i.  by giving 90 days written notice; or

ii. 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 Company’s short-term and 
long-term incentive plans. 

30 

#NextScienceHeals 
9 .   D I R E C T O R S ’   R E P O R T

Employment Agreements (cont.)

JON SWANSON

Chief Operating Officer (COO) 

Ongoing employment agreement to be reviewed annually by  
the Company. 

The Company may terminate the employment agreement: 

i.  by giving 90 days written notice; or

ii. without notice, in the event of serious misconduct or for any 

other reason that enables summary dismissal at law.

Jon is entitled to participate in the Company’s short-term and long-
term incentive plans. 

DUSTIN HAINES

Chief Commercial Officer (CCO)

Ongoing employment agreement to be reviewed annually by  
the Company. 

The Company may terminate the employment agreement: 

i.  by giving 90 days written notice; or

ii. 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 Company’s short-term and 
long-term incentive plans. 

BYRON DARROCH 

Executive Vice President Partnerships

Employment agreement ceased on 31 August 2019.

NAME:

Title:

Details:

NAME:

Title:

Details:

NAME:

Title:

Details:

31 

2020 //  ANNUAL REPORT9 .   D I R E C T O R S ’   R E P O R T

Non-Executive Directors’ 
Remuneration

Each of the Non-Executive Directors 

have entered into appointment letters 

with Next Science confirming the terms 

of their appointment and their roles and 

responsibilities. 

Under the Constitution, the Board decides the 

amount paid to 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 

owned subsidiary of the Company, for at least 

six months during the plan year and still be 

employed until after the announcement of the 

Group’s 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 end 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 

services (excluding, the salary of any Executive 

ensuring that the Group achieves its annual 

Director) must not exceed in aggregate in 

financial performance targets;

any financial year the amount fixed by the 

Company’s shareholders in general meeting. 
This amount has been fixed initially in the 

Company’s Constitution at A$750,000 per 

annum and may only be varied by ordinary 

resolution in general meeting. 

The annual fee for Non-Executive Directors 

is AUD$90,000 per annum (inclusive 

of superannuation) and for the Chair is 

AUD$250,000 per annum (inclusive of 

superannuation). The Chair’s 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 per 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 participate in the Company’s 

short-term incentive plan (STI Plan), effective 

 · enhance the Group’s opportunity to attract, 
motivate and retain high calibre and high 
performing executives; and

 · link part of executive remuneration directly 

to the achievement of the Group and 

individual KPIs.

The making of any payment under the STI plan 

is subject to the achievement of three gateway 

hurdles; at least 90% of a base consolidated 

revenue target; 100% of a base consolidated 

EBITDA target; and an individual performance 

rating of a least 3 out of 5. 

The maximum STI opportunity is 100% 

of Total Fixed Remuneration (TFR) for the 

Managing Director and 80% of TFR for 

the CFO, CTO, COO and CCO. To receive 

the maximum STI opportunity, executives 

must achieve performance targets for 

consolidated revenue, consolidated EBITDA 

and individual performance. 

As a number of the members of the executive 

team already have significant security holdings 

in Next Science, all payments under the STI 

Plan will be paid in cash to ensure that STI 

opportunities operate as true incentives. 

from the Company’s admission to the ASX in 

No STI payments were made in respect of 

April 2019. The CCO was invited to participate 

the financial year ended 31 December 2020 

in the STI plan following his appointment in 

(2019: Nil) as revenue and EBITDA targets 

June 2020. Participants of the plan, must 

were not achieved.

be employed with the Company, or wholly 

32 

#NextScienceHeals9 .   D I R E C T O R S ’   R E P O R T

Employee incentive arrangements 
and link between performance and 
reward (cont.)

Rights will automatically lapse. Participants 

must still be employed by the Company or a 

wholly owned subsidiary at the date of vesting. 

Long-Term Incentive (LTI) Plan for Executives 

At the time of the Company’s 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 participate 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 performance rights worth 

150% of their TFR. 

There will be no Performance Rights issued 

in relation to the financial year ending 31 

December 2020 (2019: Nil) due to targets 

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 CCO’s extensive work in 

2020 to 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 Company’s admission to ASX, the 

Company granted the CCO USD$315,000 

The number of Performance Rights granted 

worth of performance rights in February 2021. 

will be based on the volume weighted average 

The vesting of the performance rights is subject 

price (VWAP) of shares in the Company for 

to continued tenure and the rights will vest over 

the period 1 January until the day before the 

three years with 1/3 vesting in 1 year, 1/3 in 2 

release on ASX of the Company’s relevant 

years and 1/3 in 3 years from the grant date.

preliminary full year results. 

The vesting of Performance 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% 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 

been satisfied by this date, the Performance 

33 

2020 //  ANNUAL REPORT9 .   D I R E C T O R S ’   R E P O R T

Share Option Plan

Prior to the Company being 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 to 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 over ordinary shares granted to KMP in the 
previous years and their status are set out below: 

KMP

GRANT DATE EXPIRY DATE

VESTING 
DATE

FAIR VALUE  
AT GRANT DATE

EXERCISE 
PRICE (USD)

Executive Director

Pre-share  
Split (USD)

Post-share  
Split (USD)

Judith Mitchell

16-Apr-2018 

16-April-2021 

Various (i)

1,284

0.20

0.42

Non-Executive Directors

George Savvides

17-Dec-2018 

17-Dec-2023

17-Dec-2021 

Bruce Hancox

17-Dec-2018 

17-Dec-2023 

17-Dec-2021

Daniel Spira (Tranche 1) 

16-Apr-2018 

16-Apr-2021 

16-Apr-2018

Daniel Spira (Tranche 2)

17-Dec-2018 

17-Dec-2023

17-Dec-2021

Mark Compton

17-Dec-2018

17-Dec-2023

17-Dec-2021

Aileen Stockburger

17-Dec-2018

17-Dec-2023

17-Dec-2021

Other KMP

Matthew Myntti

Jon Swanson

–

–

–

17-Dec-2018

17-Dec-2023

17-Dec-2020

Jacqueline Butler

16-Apr-2018

16-Apr-2021

16-Apr-2019

Dustin Haines

–

–

–

2,138

2,138

1,284 

2,138

2,138

2,138

–

2,138

1,284

–

0.33

0.33

0.20

0.33

0.33

0.33

–

0.33

0.20

–

0.56

0.56

0.42

0.56

0.56

0.56

–

0.56

0.42

–

i.  There are various vesting conditions, financial and non-financial, applicable to the options granted to Judith Mitchell  

as Managing Director, under the Group’s pre-IPO share option plan.

34 

#NextScienceHeals9 .   D I R E C T O R S ’   R E P O R T

Share Option Plan (cont.)

The table below provides details of movements in share options for KMP for the year ended  

31 December 2020.

KMP

BALANCE AS  
AT 1 JAN  
2020 No.

GRANTED 
No.

EXERCISED 
No.

LAPSED 
No.

BALANCE AS 
AT 31 DEC 
2020 No.

VESTED 
DURING THE 
YEAR

VESTED AND 
EXERCISABLE 
No. 

UN-VESTED 
No.

Executive Director

Judith Mitchell

2,340,000 

Non-Executive Directors

George Savvides

Bruce Hancox

Daniel Spira 

Mark Compton

Aileen Stockburger

Other KMP

Matthew Myntti

Jon Swanson

Jacqueline Butler

Dustin Haines

650,000 

520,000 

1,300,000 

520,000 

520,000 

–

650,000 

650,000 

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

2,340,000 

1,560,000

–

–

–

–

–

–

–

–

–

650,000 

520,000 

1,300,000 

520,000 

520,000 

–

650,000 

650,000 

–

–

–

–

–

–

–

–

–

–

–

–

–

780,000

650,000

520,000

1,040,000

260,000

–

–

–

650,000

650,000

–

520,000

520,000

–

–

–

–

35 

2020 //  ANNUAL REPORT9 .   D I R E C T O R S ’   R E P O R T

Share Option Plan (cont.)

The table below provides details of movements in share options for KMP for the year ended  

31 December 2019.

KMP

BALANCE 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 Director

Judith Mitchell

Non-Executive Directors

George Savvides

Bruce Hancox

Daniel Spira 

Mark Compton

Aileen Stockburger

Other KMP

Matthew Myntti

Jon Swanson

Jacqueline Butler

Byron Darroch

360

2,340,000

–

2,340,000 

1,560,000

780,000

100 

80

200

80

80

–

100

100 

–

650,000

520,000

1,300,000

520,000

520,000

–

650,000

650,000

–

–

–

–

–

–

–

–

–

–

650,000 

520,000 

–

–

650,000

520,000

1,300,000 

1,040,000

260,000

520,000 

520,000 

–

650,000 

–

–

–

–

650,000 

650,000

–

–

520,000

520,000

–

650,000

–

–

i.  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 granted 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.

36 

#NextScienceHeals9 .   D I R E C T O R S ’   R E P O R T

KMP Remuneration

The 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 2020

KMP

CASH 
SALARY 
AND FEES (i)

OTHER 
CASH 
SERVICE 
(ii)(iii)

LONG 
SERVICE 
LEAVE

SUPER-
ANNUATION

SHARE-BASED PAYMENTS

TOTAL

PERFORMANCE 
RELATED (VI)

Options  
(iv)

Shares in lieu  
of fees (v)

$

Executive Director

Judith Mitchell

261,606

Non-Executive Directors

George Savvides

161,960

Bruce Hancox

Daniel Spira 

Mark Compton

Aileen Stockburger

Other KMP

Matthew Myntti

Jon Swanson

Jacqueline Butler

Dustin Haines

63,098 

51,302 

62,183

48,810 

350,000 

250,000

171,124

173,250

1,593,333

$

–

–

–

–

–

–

–

–

–

20,879

20,879

$

–

–

–

–

–

–

–

–

–

–

–

$

%

$

$

14,676

960

10,771 

69,878 

55,902 

$

–

–

–

277,242

242,609

124,994

5,994

1,421

–

–

–

–

14,751

–

27,951 

15,547 

96,221

55,902

–

118,085

55,902 

13,992 

118,704

–

115,338 

– 

–

–

–

–

–

350,000

365,338

185,875

194,129

47,613

381,833

29,539

2,073,197

–

–

–

–

–

–

–

–

–

–

i.  Dustin Haines was appointed Chief Commercial Officer and commenced employment on 10 June 2020.

ii.  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 respect of his engagement.

iv.  The value of the share options granted to KMP is calculated at the grant date using the Black-Scholes formula. 
This value is allocated to each reporting period evenly over the period from grant date to vesting date. The 
value disclosed is the portion of the fair value of the options recognised as an expense in each reporting period.

v.  Amounts included under share-based payments for Daniel Spira and Aileen Stockburger are 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 for the first 12 months after the Company’s admission to the ASX.

vi.  Disclosed above are the relative proportions of each individual’s remuneration that are related to performance; 

the remaining proportion being fixed remuneration.

37 

2020 //  ANNUAL REPORT  
9 .   D I R E C T O R S ’   R E P O R T

KMP 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 2019

KMP

CASH 
SALARY 
AND FEES

OTHER 
CASH 
SERVICE 
(i)(ii)(iii)

LONG 
SERVICE 
LEAVE

SUPER-
ANNUATION

SHARE-BASED PAYMENTS

TOTAL

PERFORMANCE 
RELATED (VI)

$

Executive Director

Judith Mitchell

254,461 

Non-Executive Directors

George Savvides

159,577 

Bruce Hancox

Daniel Spira 

Mark Compton

Aileen Stockburger

Other KMP

56,216 

10,751

50,685 

10,751 

$

–

–

–

–

–

–

Matthew Myntti

304,911 

44,665 

Jon Swanson

Jacqueline Butler

250,000 

166,817 

–

–

Byron Darroch

120,447 

69,057

1,384,616 

113,722 

$

–

–

–

–

–

–

–

–

–

–

–

–

–

–

14,453 

14,649

66,820

Options  
(iv)

Shares in lieu  
of fees (v)

$

$

14,467

162,985

14,454 

52,022 

3,982 

41,618 

$

–

–

–

–

20,809 

49,326 

4,815 

41,618 

–

431,913

226,053

101,816

80,886

97,118

41,618

44,749 

97,118 

$

%

–

–

–

–

–

–

–

91,736 

29,022 

–

–

–

–

–

349,576 

13%

341,736

210,292

204,153

–

–

–

481,428

94,075 

2,140,661

i.  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 agreed 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 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 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 been 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 Company’s admission to the ASX.

vi.   Disclosed above are the relative proportions of each individual’s remuneration that are related to performance; the 

remaining proportion being fixed remuneration.

38 

#NextScienceHeals 
9 .   D I R E C T O R S ’   R E P O R T

KMP Equity Holdings

The movement during the reporting period in the number of shares in Next Science Limited held 

directly, indirectly or beneficially, by each KMP, including their related parties, is as follows:

Year ended 31 December 2020

KMP

Executive Director

Judith Mitchell

Non-Executive Directors

George Savvides

Bruce Hancox

Daniel Spira 

Mark Compton

Aileen Stockburger

Other KMP

Matthew Myntti

Jon Swanson

Jacqueline Butler

Dustin Haines

BALANCE AS AT  
1 JAN 2020 No.

RECEIVED ON 
EXERCISE OF 
OPTIONS No.

SHARES RECEIVED IN 
LIEU OF DIRECTORS 
FEES No. (i)

OTHER CHANGES 
DURING THE YEAR 
No.*

BALANCE AS AT  
31 DEC 2020 No.

4,732,000 

625,000 

– 

36,729 

125,000 

33,554 

20,657,000 

70,000

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

12,537

–

11,283 

–

–

–

–

268,000 

5,000,000

24,876 

530,000 

–

12,438

–

–

–

–

–

649,876 

530,000 

49,266 

137,438 

44,837 

20,657,000 

70,000

– 

–

  * 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 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 Company’s 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 Company’s 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 quarter.

39 

2020 //  ANNUAL REPORT  
9 .   D I R E C T O R S ’   R E P O R T

KMP Equity Holdings (cont.)

 Year ended 31 December 2019

BALANCE 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.

KMP

Executive Director

Judith Mitchell

Non-Executive Directors

George Savvides

Bruce Hancox

Daniel Spira (iv) 

Mark Compton

Aileen Stockburger (iv)

Other KMP

Matthew Myntti

Jon Swanson

Jacqueline Butler

Byron Darroch (v)

– 

4,732,000

625,000 

625,000 

728

4,732,000 

–

– 

–

–

–

–

–

–

–

–

3,178 

20,657,000 

–

–

100

–

–

650,000 

–

–

–

36,729 

– 

–

–

125,000 

33,554 

–

–

–

–

–

–

70,000 

–

–

i.  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 Mark 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 Stockburger and Daniel Spira, in lieu of directors’ 
fees for the first 12 months after the Company’s 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 Company’s 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 quarter.

v.  Byron Darroch held 650,000 ordinary shares which were funded through a shareholder loan. The balance 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.

This concludes the remuneration report (audited). 

This report is made in accordance with a resolution of directors, pursuant to section 298(2)(a)  
of the Corporations Act 2001. 

On behalf of the directors:

George Savvides 
Chair 

Dated at Sydney this 22nd day of February 2021

–

36,729

125,000 

33,554

20,657,000 

70,000

– 

650,000

40 

#NextScienceHealsLEAD AUDITOR’S 
INDEPENDENCE 
DECLARATION

41 

#NextScienceHeals

2020 //  ANNUAL REPORT1 0 .   L E A D   A U D I T O R ’ S   I N D E P E N D E N C E   D E C L A R AT I O N

Lead Auditor’s Independence Declaration under  
Section 307C of the Corporations Act 2001 

To the Directors of Next Science Limited 

I declare that, to the best of my knowledge and 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 requirements as set out in the Corporations 

Act 2001 in relation to the audit; and

ii. no contraventions of any applicable code of professional conduct in relation to the audit.

KPMG

Tony Nimac  
Partner 

Sydney 

22 February 2021

KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms 
affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The 
KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global 
organisation. Liability limited by a scheme approved under Professional Standards Legislation. 

42 

#NextScienceHeals1 1 .   C O N S O L I D AT E D   S TAT E M E N T   O F   P R O F I T   O R   L O S S  
A N D   O T H E R   C O M P R E H E N S I V E   I N C O M E
For the Year Ended 31 December 2020

IN USD

NOTES

Revenue

Cost of sales

Gross profit

Other income

Selling and distribution expenses

Research and development expenses

Administration expenses

Other expenses

Operating loss

Finance income

Finance costs

Net finance income / (costs)

Loss before income tax

Income tax expense

Loss for the year

5

5

7

9

10

11

2020

$

3,440,975

(524,134)

2,916,841

356,574

2019

$

4,060,800

(550,480)

3,510,320

35,365

(5,670,684)

(6,285,900)

(6,434,414)

(5,327,575)

(3,343,044)

(4,370,361)

(13,352)

(62,971)

(12,188,079)

(12,501,122)

297,254

(21,179)

276,075

278,718

(2,129,424)

(1,850,706)

(11,912,004)

(14,351,828)

– 

– 

(11,912,004)

(14,351,828)

Other comprehensive income, net of income tax

Foreign currency translation differences for foreign operations

396,838

(971,282)

Total comprehensive loss for the year

(11,515,166)

(15,323,110)

Earnings per share

From continuing operations

Basic earnings

Diluted earnings

32

32

Cents

(6.36)

(6.36)

Cents

(8.65)

(8.65)

The accompanying notes form part of these financial statements.

43 

2020 //  ANNUAL REPORT1 2 .   C O N S O L I D AT E D   S TAT E M E N T   O F   F I N A N C I A L   P O S I T I O N
As at 31 December 2020

IN USD

ASSETS 
Current assets

Cash and cash equivalents

Trade and other receivables

Inventories

Other current assets - term deposits

Other current assets - other

Total current assets

Non-current assets

Trade and other receivables

Property, plant and equipment

Intangible assets

Right-of-use assets

Total non-current assets

Total assets

LIABILITIES
Current liabilities

Trade and other payables

Contract liabilities

Lease liabilities

Employee benefits

Total current liabilities

Non-current liabilities

Contract liabilities

Lease liabilities

Employee benefits

Total non-current liabilities

Total liabilities

Net assets

Equity

Share capital

Common control reserve

Foreign currency translation reserve

Share option reserve

Accumulated losses

Total equity

The accompanying notes form part of these financial statements.

NOTES

12

13

14

15

15

13

16

17

18

19

21

22

23

21

22

23

24

24

24

24

2020

$

8,100,416

3,388,045

1,071,979

7,238,986

452,458

20,251,884

36,656

788,133

2,334,936

227,265

3,386,990

23,638,874

1,064,365

1,909,554

170,946

81,231

3,226,096

1,374,510

115,889

9,385

1,499,784

4,725,880

2019

$

6,556,808

1,640,382

400,360

10,353,797

332,504

19,283,851

36,656

812,587

2,164,345

402,291

3,415,879

22,699,730

1,076,672

375,106

196,442

69,552

1,717,772

1,328,809

286,012

3,691

1,618,512

3,336,284

18,912,994

19,363,446

101,281,467

(42,596,715)

(801,736)

2,125,541

(41,095,563)

18,912,994

90,693,590

(42,596,715)

(1,198,574)

1,648,704

(29,183,559)

19,363,446

44 

#NextScienceHeals1 3 .   C O N S O L I D AT E D   S TAT E M E N T   O F   C H A N G E S   I N   E Q U I T Y
For the Year Ended 31 December 2020

2020 IN USD

SHARE CAPITAL

COMMON 
CONTROL 
RESERVE

FOREIGN 
CURRENCY 
TRANSLATION 
RESERVE

SHARE OPTION 
RESERVE

ACCUMULATED 
LOSSES

TOTAL EQUITY

$

$

$

$

$

$

90,693,590

(42,596,715)

(1,198,574)

1,648,704

(29,183,559)

19,363,446

Balance at  
1 January 2020

Loss for the year

Other comprehensive 
income

Foreign currency 
translation differences

Total other 
comprehensive income

Total comprehensive  
loss for the year

Transactions with owners  
in their capacity as owners

Share-based payment

Foreign exchange impact

–

–

–

–

–

–

Issue of ordinary shares

11,175,615

Conversion of partly paid 
shares to ordinary shares

(199,999)

Capital raising costs

(387,739)

10,587,877

Total transactions  
with owners

Balance at  
31 December 2020

–

–

–

–

–

–

–

–

–

–

–

–

(11,912,004)

(11,912,004)

396,838

396,838

396,838

–

–

–

–

–

–

–

–

–

482,973

(6,136)

–

–

–

476,837

–

–

396,838

396,838

(11,912,004)

(11,515,166)

–

–

–

–

–

–

482,973

(6,136)

11,175,615

(199,999)

(387,739)

11,064,714

101,281,467

(42,596,715)

(801,736)

2,125,541

(41,095,563)

18,912,994

The accompanying notes form part of these financial statements.

45 

2020 //  ANNUAL REPORT1 3 .   C O N S O L I D AT E D   S TAT E M E N T   O F   C H A N G E S   I N   E Q U I T Y
For the Year Ended 31 December 2020

2019 IN USD

Balance at  
1 January 2019

AASB 16 adjustment  
(net of tax)

Restated total at the 
beginning of the year

Loss for the year

Other comprehensive 
income

Foreign currency 
translation differences

Total other 
comprehensive income

Total comprehensive  
loss for the year

Transactions with owners  
in their capacity as owners

Share-based payment

Foreign exchange impact

Converting notes 
converted to equity

SHARE 
CAPITAL

COMMON 
CONTROL 
RESERVE

FOREIGN 
CURRENCY 
TRANSLATION 
RESERVE

SHARE OPTION 
RESERVE

CONVERTING 
NOTES 
RESERVE

ACCUMULATED 
LOSSES

TOTAL EQUITY

$

$

$

$

$

$

$

56,589,405 (42,596,715)

(227,292)

968,831

415,562 (14,746,054)

403,737

–

–

–

–

–

(85,677)

(85,677)

56,589,405 (42,596,715)

(227,292)

968,831

415,562 (14,831,731)

318,060

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

(971,282)

(971,282)

(971,282)

–

–

–

–

– (14,351,828)

(14,351,828)

–

–

–

–

(971,282)

(971,282)

– (14,351,828)

(15,323,110)

–

–

–

–

–

–

652,826

27,047

–

–

–

–

–

(415,562)

–

–

679,873

(415,562)

–

–

–

–

–

–

652,826

27,047

(415,562)

35,626,554

(1,522,369)

34,368,496

Issue of ordinary shares

35,626,554

Capital raising costs

(1,522,369)

34,104,185

Total transactions  
with owners

Balance at  
31 December 2019

90,693,590 (42,596,715)

(1,198,574)

1,648,704

– (29,183,559)

19,363,446

The accompanying notes form part of these financial statements.

46 

#NextScienceHeals1 4 .   C O N S O L I D AT E D   S TAT E M E N T   O F   C A S H   F L O W S
For the Year Ended 31 December 2020

NOTES

12

16

17

24

20

IN USD

Operating Activities

Receipts from customers

Payments to suppliers and employees

Payments for research and development

Interest received

Grant income and COVID-19 government assistance

Net cash used in operating activities

Investing Activities

Payments for property, plant and equipment

Payments for intangible assets

Net cash used in investing activities

Financing Activities

Proceeds from issue of ordinary shares

Proceeds from issue of converting notes

Proceeds from conversion of options to ordinary shares

Capital raising costs

Payment of lease liabilities

Net cash provided by financing activities

Net (decrease) / increase in cash and cash equivalents held

Cash and cash equivalents at beginning of year

Effects of exchange rate changes on cash and cash equivalents

Cash and cash equivalents at end of the year
(including bank term deposits)

2020

$

2,950,430

(12,210,609)

(3,119,907)

117,735

355,707

2019

$

3,262,752

(13,202,785)

(2,651,188)

224,299

35,365

(11,906,644)

(12,331,557)

(213,244)

(473,555)

(686,799)

(374,683)

(1,233,341)

(1,608,024)

10,831,275

25,231,169

–

489,125

(387,740)

(222,609)

10,710,051

(1,883,392)

16,910,605

312,189

70,798

310,700

(1,717,999)

(210,334)

23,684,334

9,744,753

7,211,102

(45,251)

15,339,402

16,910,605

Less bank term deposits classified as other current assets 

Cash and cash equivalents at end of the year

15

12

(7,238,986)

8,100,416

(10,353,797)

6,556,808

The accompanying notes form part of these financial statements.

47 

2020 //  ANNUAL REPORT1 5 .   N O T E S   T O   T H E   C O N S O L I D AT E D   F I N A N C I A L   S TAT E M E N T S
For the Year Ended 31 December 2020

1. 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 

related 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 Preparation

a.  Statement of compliance 

The 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 

the Group’s 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 these financial statements, 

management has made judgements, 

estimates and assumptions that affect 

the application of the Group’s accounting 

policies and the reported amounts of 

assets, liabilities, income, expenses and 

disclosure of contingent liabilities. Actual 

results may differ from these estimates. 
Estimates and underlying assumptions 

are reviewed on an ongoing basis. 

Revisions to accounting estimates are 

recognised prospectively.  

The key judgements, estimates and 
assumptions are discussed below: 

Impairment of non-financial assets 
The Group assesses impairment of 

non-financial assets at each reporting 

date by evaluating conditions specific 

to the Group and to the particular asset 

that may lead to impairment. If an 

impairment trigger exists at balance date, 

Financial Reporting Standards (“IFRS”) 

the recoverable amount of the asset is 

adopted by the International Accounting 

determined. This involves value-in-use 

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 basis. 

calculations, which incorporate a number 

of key estimates and assumptions.

Recoverable amount being the net 

amount of discounted future cash flows 

materially exceeds the carrying value 

of non-current assets. The recoverable 

amount of these cash generating units, at 

balance date, was estimated based  

on its value in use.

c.  Functional and presentation currency 

Value in use for the cash-generating units 

The financial statements are presented 

in United States Dollars, which is 

(‘CGU’) was determined by discounting 

the future cashflows to be generated

48 

#NextScienceHeals1 5 .   N O T E S   T O   T H E   C O N S O L I D AT E D   F I N A N C I A L   S TAT E M E N T S
For the Year Ended 31 December 2020

d.  Use of judgements and estimates 

Recovery of deferred tax assets

(cont.) 

from the CGUs and is based on the 

following key assumptions:
 · Cashflows were projected based on 

Deferred tax assets for tax losses are  

only recognised if the Group considers  

it is probable that future taxable 

amounts will be available to utilise 

forecast operating results over a 5 year 

those tax losses against.

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 of assets

The 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 depreciation and 

amortisation charge will increase where 

Management has considered all the 

facts and circumstances and believe 

there is no material uncertainty over the 
availability of the tax losses. 

e.  Comparative Amounts

The 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 

Group. When required by Accounting 

Standards, comparative figures have 

been adjusted to conform to changes in 

presentation for the current year.

the useful lives are less than previously 

f.  Going concern

estimated lives, or technically obsolete 

or non-strategic assets that have been 

abandoned or sold will be written off or 

written down.

Leases

For the purpose of measuring the 

right-of-use asset lease term, duration 

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 

The financial report has been prepared 

on a going concern basis, which 

assumes continuity of normal business 

activities and the realisation of assets 

and settlement of liabilities in the 

ordinary course of business for a period 

of at least twelve months from the date 

this financial report is approved.

For the financial year ended 31 

December 2020, the Group incurred 

a loss of $11,912,004 and had net 

cash outflows from operations of 

$11,906,644. As at 31 December 2020, 

includes a lease under AASB 16 and the 

the Group had net current asset and 

incremental borrowing rate is estimated.

net asset positions of $17,025,788 and 

$18,912,994 respectively.

49 

2020 //  ANNUAL REPORT1 5 .   N O T E S   T O   T H E   C O N S O L I D AT E D   F I N A N C I A L   S TAT E M E N T S
For the Year Ended 31 December 2020

The Group raised $25,052,313 (AUD $35 

the identifiable net assets acquired. Any 

million) after successfully completing 

goodwill that arises is tested annually 

an Initial Public Offering (‘IPO’) in 

for impairment. Any gain on a bargain 

April 2019. The Group raised a further 

purchase is recognised in profit or loss 

$10,631,274 (AUD $15 million) over 

immediately. Transaction costs are 

the period September to November 

expensed as incurred, except if related 

2020 completing two Placements 

to the issue of debt or equity securities.

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 which 

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.

Common control transactions record 

assets and liabilities acquired at their 

book value at the date of acquisition, 

rather than their fair value. The 

difference between the fair value of the 

consideration given and the carrying 

value of the assets and liabilities 
acquired is recognised as a common 

After considering the above, the 

control reserve.

Directors have concluded that the Group 

will be able to fulfil all obligations as and 

when they fall due for the 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 

The consideration transferred does 

not include amounts related to the 

settlement of pre-existing relationships. 

Such amounts are generally recognised 

in profit or loss.

ii. Subsidiaries

Subsidiaries 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 

In accordance with the Corporations 

affect those returns through its power 

Act 2001, these financial statements 

over the entity. The financial statements 

present the results of the Group only. 

of subsidiaries are included in the 

Supplementary information about the 
parent entity is disclosed in note 25. 

b.  Basis of consolidation

i. Business combinations 
The Group accounts for business 

combinations using the acquisition 

method when control is transferred to 

the Group, unless it is a combination 

involving entities or businesses under 

common control. The consideration 

transferred in the acquisition is 

generally measured at fair value, as are 

consolidated financial statements from 

the date on which control commences 

until the date on which control ceases.

iii. Loss of control

When the Group loses control over a 

subsidiary, it derecognises the assets 

and liabilities of the subsidiary, and any 

related non-controlling interest and other 

components of equity. Any resulting gain 

or loss is recognised in profit or loss. Any 

interest retained in the former subsidiary is 

measured at fair value when control is lost.

50 

#NextScienceHeals1 5 .   N O T E S   T O   T H E   C O N S O L I D AT E D   F I N A N C I A L   S TAT E M E N T S
For the Year Ended 31 December 2020

b.  Basis of consolidation (cont.)

iv. Transactions eliminated  
  on consolidation

Intra-group balances and transactions, 

and any unrealised income and expenses 

arising from intra-group transactions, 

are eliminated. Unrealised gains arising 

from transactions with equity-accounted 

investees are eliminated against the 

investment to the extent of the Group’s 

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. 

are translated into the presentation 

currency at the exchange rates at the 

reporting date. The income and expenses 

of foreign operations are translated into 

the functional currency at the average 

exchange rates for the period, unless 

exchange rates fluctuated significantly 

during that period, in which case the 

exchange rates at the dates of the 

transaction are used.

Foreign currency differences are 

recognised in OCI and accumulated in 

the translation reserve.

c.  Foreign currency

customers

d.  Revenue from contracts with 

i.  Foreign currency transactions

Transactions in foreign currencies are 

translated to the functional currency of 

the Group at exchange rates at the dates 

of the transactions.

Monetary assets and liabilities 

denominated in foreign currencies are 

translated into the functional currency 

at the exchange rate at the reporting 

date. Non-monetary assets and liabilities 

that are measured at fair value in a 

foreign currency are translated into the 

functional currency at the exchange rate 

when the fair value was determined. 

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 differences are 

generally recognised in profit or loss and 

presented within finance costs.

ii.  Foreign currency operations

The assets and liabilities of foreign 

operations, including goodwill and fair 

value adjustments arising on acquisition, 

Revenue from contracts with customers 

is recognised when a customer obtains 

control of the goods or services and 

when performance obligations have been 

satisfied assessing the following criteria:

i.  Identification of distinct elements and 
  separate performance obligations

In 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 contracts held, whilst a license 

to specific IP has been given related to 

the Group’s 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 exists to 

transfer product to the distributor.

ii.  Transfer of goods

Title and control pass to the distribution 

customer at the point when the Group 

fulfils its obligation to deliver and goods 

are available at the customer’s premises.

51 

2020 //  ANNUAL REPORT1 5 .   N O T E S   T O   T H E   C O N S O L I D AT E D   F I N A N C I A L   S TAT E M E N T S
For the Year Ended 31 December 2020

As such, the performance obligation 

be transitioned back to Next Science 

(including the license) transfers at 

in the first half of 2021. Discussions are 

the point in time when each good 

progressing smoothly, and Next  

is delivered. Therefore, revenue is 

Science anticipates the transition will  

recognised at the point in time when the 

be complete prior to the end of the first 

product is delivered. For product sold 

half 2021.

directly to hospitals, title and control 

pass when the product is delivered 

to the courier, with revenue being 

recognised at this point in time.

iii. Measurement of transaction price

Consideration of the contract can 

comprise a fixed element (upfront 
payment plus minimum annual 

purchase amounts) and variable 

elements (milestone payments).

Under AASB 15 the variable 

consideration is only included in the 

transaction price if it is ‘highly probable 

that a significant reversal in the amount 

of cumulative revenue recognised will  

not occur’.

In the case where milestone payments 

are received upon signing the contract 

and are not subject to regulatory 

approval, these amounts will be initially 

recognised as contract liabilities to be 

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 once 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 

As a result of this, there has been a 

change in the time frame for recognition 

of the performance obligation in 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 that 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 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 costs

Finance income 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.

52 

#NextScienceHeals1 5 .   N O T E S   T O   T H E   C O N S O L I D AT E D   F I N A N C I A L   S TAT E M E N T S
For the Year Ended 31 December 2020

f.  Finance income and finance costs 

(cont.)

The ‘effective interest rate’ is the rate 

that exactly discounts estimated future 

cash payments or receipts through the 

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. 

expected life of the financial instruments 

g.  Income tax 

to the gross carrying amount of the 

financial asset or the amortised cost of 

the financial asset.

In calculating income and 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 

Income tax expense comprises current 

and deferred tax. It is recognised in profit 

or loss except to the extent that it relates 

to a business combination, or items 

recognised directly in equity or in OCI.

The amount of current tax payable or 

receivable is the best estimate of the tax 
amount expected to be paid or received.

credit impaired subsequent to initial 

i. Current tax 

recognition interest income is calculated 

by applying the effective interest rate to 

the amortised cost of the financial asset. 

If the asset is no longer credit impaired, 

then the calculation of interest income 

reverts to the gross basis.

Finance costs comprise interest expense 

on borrowings, lease liabilities and 

converting notes, foreign currency losses 

and impairment losses recognised on 

financial assets. Foreign exchange gains 

and losses on intercompany assets 

Current tax comprises the expected tax 

payable or receivable on the taxable 

income or loss for the year and any 

adjustment to tax payable or receivable 

in respect of previous years. It is 

measured using tax rates enacted or 

substantively enacted at the reporting 

date. Current tax also includes any tax 

liability arising from dividends.

Current tax assets and liabilities are 

offset only if certain criteria are met.

and liabilities that are not eliminated 

ii.  Deferred tax 

upon consolidation are recognised 

in OCI. Borrowing costs that are not 

directly attributable to the acquisition, 

construction or production of a qualifying 

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 currency gains and losses are 

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 differences on the initial 

recognition of assets or liabilities in 

a transaction that is not a business 

combination and that affects neither 

accounting nor taxable profit or loss, or 

on taxable temporary differences arising 

on the initial recognition of goodwill.

53 

2020 //  ANNUAL REPORT1 5 .   N O T E S   T O   T H E   C O N S O L I D AT E D   F I N A N C I A L   S TAT E M E N T S
For the Year Ended 31 December 2020

Deferred tax assets are recognised 

after the reporting period; or the asset is 

for unused tax losses, tax credits and 

cash or cash equivalent unless restricted 

deductible temporary differences, to 

from being exchanged or used to settle 

the extent that it is probable that future 

a liability for at least 12 months after the 

taxable profits will be available against 

reporting period. All other assets are 

which they can be utilised. Deferred tax 

classified as non-current.

assets 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.

A liability is classified as current when: 

it is either expected to be settled in the 

Group’s normal operating cycle; it is 

held primarily for the purpose of trading; 

it is due to be settled within 12 months 

after the reporting period; or there is no 

Unrecognised deferred tax assets are 

unconditional right to defer the settlement 

reassessed at each reporting date and 
recognised to the extent that it has 

of the liability for at least 12 months after 
the reporting period. All other liabilities 

become probable that future taxable 

are classified as non-current.

profits will be available against which they 

can be used.

Deferred tax is measured at the tax 

rates that are expected to be applied to 

temporary differences when they reverse, 

using tax rates enacted or substantively 

enacted at the reporting date.

The measurement of deferred 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 criteria 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 

Group’s normal operating cycle; it is held 

primarily for the purpose of trading; it is 

expected to be realised within 12 months 

Deferred tax assets and liabilities are 
always classified as non-current. 

i.  Cash and cash equivalents 

Cash and cash equivalents includes 

cash on hand, deposits held at call with 

financial institutions, other short-term, 

highly liquid 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 cash 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 amortised cost using the 

effective interest method, less any 

allowance for expected credit losses.

54 

#NextScienceHeals1 5 .   N O T E S   T O   T H E   C O N S O L I D AT E D   F I N A N C I A L   S TAT E M E N T S
For the Year Ended 31 December 2020

j.  Trade and other receivables (cont.)

ii.  Subsequent expenditure   

Trade receivables are generally due for 

Subsequent expenditure is capitalised 

settlement within 30 days.

The Group has applied the simplified 

approach to measuring expected credit 

losses, which uses a lifetime expected 

loss allowance. To measure the expected 

credit losses, trade receivables have 

been grouped based on days overdue.

Other receivables are recognised at 

amortised cost, less any allowance for 
expected credit losses. 

k.  Inventories 

only when it is probable that the future 

economic benefits associated with the 
expenditure will flow to the Group.

iii.  Depreciation 
Depreciation is calculated 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 

Inventories are measured at the lower 

obtain ownership by the end of the lease 

of cost and net realisable value. The 

term. Land is not depreciated.

cost of inventories is based on the 
first in, first out principle. 

The estimated useful lives of property, 

plant and equipment are as follows:

l.  Property, plant and equipment 

FIXED ASSET CLASS

USEFUL LIFE

i. Recognition and measurement  

Items of property, plant and equipment 

are measured at cost less accumulated 

depreciation and accumulated 

impairment losses. Cost includes 

Leasehold improvements

5-15 years

Plant and equipment

Furniture and fittings

5 years

5 years

expenditure that is directly attributable to 

Depreciation methods, useful lives 

the acquisition of the asset. If significant 

and residual values are reviewed at 

parts of an item of property, plant and 

equipment have different useful lives, 

they are accounted for as separate items 

(major components) 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 reserve 

relating to the item disposed of is 

transferred directly to retained profits.

each reporting date and adjusted if 
appropriate. 

m.  Right-of-use assets  

i. Recognition and measurement  

A right-of-use asset is recognised at 

the commencement date of a lease. 

The right-of-use asset is measured at 

cost, which comprises the initial amount 

of the lease liability, adjusted for, as 

applicable, any lease payments made at 

or before the commencement date net 

of any lease incentives received, 

55 

2020 //  ANNUAL REPORT1 5 .   N O T E S   T O   T H E   C O N S O L I D AT E D   F I N A N C I A L   S TAT E M E N T S
For the Year Ended 31 December 2020

any initial direct costs incurred, and, 

amortisation and any accumulated 

except where included in the cost 

impairment losses.

of inventories, an estimate of costs 

expected to be incurred for dismantling 

and removing the underlying asset, and 

restoring the site or asset.

Right-of-use assets are depreciated on 

a straight line basis over the unexpired 

period of the lease or the estimated 

useful life of the asset, whichever is 

the shorter. Where the Group expects 

to obtain ownership of the leased 

Patents

Expenditure is capitalised in relation to 

patent application costs and amortised 

over the remaining life of the base patent as 

relevant. Costs will be no longer capitalised 

in the event that a patent application is 

no longer being pursued with any existing 

capitalised costs being impaired as an 
expense in the profit or loss. 

asset at the end of the lease term, the 

Computer software

depreciation is over its estimated useful 
life. Right-of-use assets are subject 

to impairment or adjusted for any 

remeasurement of lease liabilities. 

The Group has elected not to recognise 

a right-of-use asset and corresponding 

lease liability for short-term leases with 

terms of 12 months or less and leases 

of low value assets. Lease payments on 

these assets are expensed to profit or 
loss as incurred. 

n.  Intangibles 

Computer software comprises computer 

application system software and 

licenses. Costs incurred in developing 

products or systems and costs incurred 

in acquiring software and licenses 

that will contribute to future period 

financial benefits through revenue 

generation and/or cost reduction are 

capitalised to computer software. Costs 

capitalised include external direct costs 

of materials and services, direct payroll 

and payroll related costs.

ii.   Subsequent expenditure 

i. Recognition and measurement   

Subsequent expenditure is capitalised 

Research and development expenditure

Expenditure on research activities 

is recognised in profit or loss as 

incurred. Development expenditure is 

capitalised only if development costs 

can be measured reliably, the product or 

only when it increases the future 

economic benefits embodied in the 

specific asset to which it relates. All other 

expenditure, including expenditure on 

internally generated goodwill and brands, 

is recognised in profit or loss as incurred.

process is technically and commercially 

iii.  Amortisation 

feasible, future economic benefits are 

probable, and the Group intends to and 

has sufficient resources to complete 

development and to use or sell the asset. 

Otherwise it is recognised in profit or 

loss as incurred. Subsequent to initial 

recognition, development expenditure 

is measured at cost less accumulated 

Amortisation is calculated based on 

the cost of intangible assets less 

their estimated residual values using 

the straight line method over their 

estimated useful lives, and is generally 

recognised in profit or loss.

56 

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For the Year Ended 31 December 2020

iii.  Amortisation (cont.) 

q.  Leases 

The estimated useful lives of 
intangible assets are as follows: 

Development expenditure

8 years

i. Definition of a new lease 

The determination of whether a 

contract contains a lease is on the 

basis of whether the customer has 

Computer software

2-3 years

the right to control the use of an 

Patents

8-15 years

Amortisation methods, useful lives 

and residual values are reviewed at 

each reporting date and adjusted if 

appropriate. 

Intangible assets, other than goodwill, 

have finite useful lives. 

o.  Trade and other payables 

These amounts represent liabilities  

for goods and services provided to 

the Group prior to the end of the 

financial year and which are unpaid. 

Due to their short-term nature they are 

measured at amortised cost and are not 

discounted. The amounts are unsecured 

and are usually paid within 30 days of 

recognition.

p.  Contract liabilities 

Contract liabilities represent the 

consolidated entity’s obligation 

to transfer goods or services to a 

customer and are recognised when a 

customer pays consideration, or when 

the Group recognises a receivable 

to reflect its unconditional right to 

consideration (whichever is earlier) 

before the Group has transferred the 

goods or services to the customer.

identified asset for a period of time in 

exchange for consideration. The Group 

has applied this definition to all lease 

contracts currently held.

ii.  Lessee accounting 

For all contracts determined to 
constitute a lease, right-of-use assets 

and lease liabilities are recognised in 

the consolidated statement of financial 

position, initially measured at the 

present value of future lease payments. 

When measuring these lease liabilities, 

the Group discounted lease payments 

using the interest rate implicit in the 

lease contract.

Right-of-use assets are tested for 

impairment in accordance with AASB 

136 Impairment of assets. Lease 

incentives, if relevant, are recognised 

as part of the measurement of the 

right-of-use assets and lease liabilities. 

Depreciation is expensed on right-

of-use assets and interest on lease 

liabilities, both recognised in the 

consolidated statement of profit or loss.

For presentation purposes, the total 

amount of cash paid in relation to 

leases is separated into a principal 

portion (presented within financial 

activities) and interest on lease 

liabilities, both recognised in the 

consolidated statement of profit or loss.

57 

2020 //  ANNUAL REPORT 
 
 
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For the Year Ended 31 December 2020

For short-term leases (lease term of 12 

benefits are measured at the present value 

months or less) and leases of low value 

of the expected future payments to be made 

assets, the Group has opted to recognise  

to employees. Expected future payments 

a lease expense on a straight line basis. 

incorporate anticipated future wage and 

This expense is presented within other 

salary levels, duration of service and 

expenses in the consolidated statement 
of profit or loss.  

employee departures and are discounted 

at rates determined by reference to market 

r.  Provisions 

A provision is recognised if, as a result 

of a past event, the Group has a present 

legal or constructive obligation that can be 

estimated reliably and if it is probable that 

an outflow of economic benefits will be 

required to settle the obligation. Provisions 

are determined by discounting the 

expected future cash flows at a pre-tax rate 

that reflects current market assessments 

of the time value of money and the risks 

specific to the liability. The unwinding of the 
discount is recognised as a finance cost. 

s.  Employee benefits 

i.  Short-term employee benefits 

Short-term employee benefits are benefits 

(other than termination benefits) that are 

expected to be settled within 12 months 

of the end of the financial year in which 

employees render the related service. Short-

term employee benefits include salaries 

and wages plus related on costs such as 

payroll tax, superannuation and workers 

compensation insurance and are measured 

at the undiscounted amounts expected to 

be paid when the obligation is settled.

ii.  Long-term employee benefits 

Long-term employee benefits include 

employees’ long service leave and annual 

leave entitlements not expected to be 

settled within 12 months of the end of the 

yields at the end of the reporting period 

on corporate bonds that have maturity 

dates that approximate the terms of the 

obligations. Any remeasurements for 

changes in assumptions of obligations for 

long-term employee benefits are recognised 

in profit or loss in the periods in which the 
changes occur.

iii.  Defined contribution plans 

A defined contribution plan is a post- 

employment benefit plan under which 

an entity pays fixed contributions into 

a separate entity and will have no legal 

or constructive obligation to pay further 

amounts. Obligations for contributions to 

employees’ defined contribution plans are 

recognised as an expense as the related 

service is provided. Prepaid contributions 

are recognised as an asset to the extent 

that a cash refund or a reduction in future 

payments is available.

iv.  Share-based payment arrangements 

The grant date fair value of options 

granted to employees (equity settled) is 

recognised as an employee expense, 

with a corresponding increase in equity, 

over the period in which the employees 

become entitled to the options. The amount 

recognised as an expense is adjusted to 

reflect the number of options for which the 

related service and non market performance 

conditions are expected to be met, such that 

the amount ultimately recognised is based 

on the number of options that meet the 

financial year in which employees render the 

related service and non market performance 

related service. Other long-term employee 

conditions at the vesting date.

58 

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For the Year Ended 31 December 2020

t.  Financial instruments 

i.  Recognition and initial measurement 

the effective interest method. Interest 

expense and foreign exchange gains and 

losses are recognised in profit or loss. 

The Group initially recognises trade 

Any gain or loss on derecognition is also 

receivables issued on the date that they 

recognised in profit or loss.

are originated. All other financial assets 

and financial liabilities are recognised 

initially on the trade date.

iii. Derecognition 

Financial assets

ii.  Classification and subsequent  
   measurement 

Financial assets 

On initial recognition, a financial asset 

is classified as measured at amortised 
cost or fair value through profit or loss 

(“FVTPL”).

Financial assets at amortised cost are 

subsequently measured at amortised 

cost using the effective interest method. 

The amortised cost is reduced by 

impairment losses. Interest income, 

foreign exchange gains and losses and 

impairment are recognised in profit or 

The Group derecognises a financial 

asset when the contractual rights to 

the cash flows from the asset expire, 

or it transfers the rights to receive the 

contractual cash flows in a transaction 

in which substantially all the risks and 
rewards of ownership of the financial 

asset are transferred or it neither transfers 

nor retains substantially all of the risks 

and rewards of ownership and does not 

retain control over the transferred asset. 

Any interest in transferred financial assets 

that is created or retained by the Group is 
recognised as a separate asset or liability. 

loss. Any gain or loss on derecognition is 

Financial liabilities

recognised in profit or loss.

Financial assets at FVTPL are 

subsequently measured at fair value. Net 

gains and losses, including any interest 

or dividend income, are recognised in 

profit or loss.

Financial liabilities 

Financial liabilities are classified as 

measured at amortised cost or FVTPL. A 

financial liability is classified as at FVTPL 

if it is classified as held for trading, it is a 

derivative or it is designated as such on 

initial recognition. Financial liabilities at 

FVTPL are measured at fair value and net 

gains and losses, including any interest 

expense, are recognised in profit or loss. 

Other financial liabilities are subsequently 

measured at amortised cost using 

The Group derecognises a financial 

liability when its contractual obligations 

are discharged or cancelled, or expired.

iv. Offsetting 

Financial assets and financial liabilities 

are offset and the net amount presented 

in the statement of financial position 

when, and only when, the Group 

currently has a legally enforceable right 

to set off the amounts and it intends 

either to settle them on a net basis or to 

realise the asset and settle the liability 

simultaneously.

59 

2020 //  ANNUAL REPORT 
1 5 .   N O T E S   T O   T H E   C O N S O L I D AT E D   F I N A N C I A L   S TAT E M E N T S
For the Year Ended 31 December 2020

u.  Impairment 

The Group recognises loss allowances 

for expected credit losses (“ECL”) on 

financial assets and contract assets. Loss 

allowances where relevant are measured at 

an amount equal to a 12 month ECL.

When determining whether the credit 

risk of a financial asset has increased 

significantly since initial recognition 

and when estimating ECL’s, the Group 

considers reasonable and supportable 

information that is relevant and available 

without undue cost or effort. This 

includes both quantitative and qualitative 

information and analysis, based on the 

Group’s historical experience and informed 

credit assessment and including forward 

looking information.

The Group assumes that the credit risk on 

a financial asset has increased significantly 

if it is more than 90 days past due.

The Group considers a financial asset to 

be in default when the borrower is unlikely 

to pay its obligations to the Group in full or 

the financial asset is more than 130 days 

past due.

ECLs are a probability weighted estimate 

of credit losses and are measured as 

the present value of all cash shortfalls 

discounted at the effective interest rate. 

Loss allowances for financial assets 

measured at amortised cost are deducted 

from the gross carrying amount.

An impairment loss in respect of a financial 

asset measured at amortised cost is 

calculated as the difference between its 

carrying amount and the present value of 

the estimated future cash flows discounted 

at the asset’s original effective interest 

rate. Losses are recognised in profit or 

loss and reflected in an allowance account 
against loans and receivables. Interest 

on the impaired asset continues to be 

recognised. When a subsequent event 

causes the amount of impairment loss 

to decrease, the decrease in impairment 

loss is reversed through profit or loss.

v.  Share capital 

Ordinary shares 

Incremental costs directly attributable 

to the issue of ordinary shares, net of 

any tax effects, are recognised as a 

deduction from equity. 

w. Converting notes 

Converting notes issued by the Company 

were converted to ordinary shares in 

accordance with the terms detailed in 

Note 20.

The liability component of the converting 

notes is initially recognised at fair value. 

Any directly attributable transaction costs 

are allocated against the liability.

Subsequent to initial recognition, the 

liability component of a converting note 

is measured at amortised cost using the 

effective interest method. 

Interest related to the financial liability 

is recognised in profit or loss. On 

conversion, the financial liability is 

reclassified to equity and no gain or loss 

is recognised.

x.  Fair value measurement 

‘Fair value’ is the price that would be 

received to sell an asset or paid to 

transfer a liability in an orderly transaction 

between market participants at the 

measurement date in the principal or, in 

its absence, the most advantageous

60 

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For the Year Ended 31 December 2020

x.  Fair value measurement (cont.) 

market to which the Group has access 

at that date. The fair value of a liability 

reflects its non-performance risk.

A number of the Group’s accounting 

policies and disclosures require the 

measurement of fair values, for both 

financial and non-financial assets and 

liabilities. When one is available, the Group 

measures the fair value using the quoted 

price in an active market. A market is 

regarded as ‘active’ if transactions for the 

asset or liability take place with sufficient 

frequency and volume to provide pricing 

information on an ongoing basis.

bonus elements in ordinary shares 

issued during the financial year.

ii. Diluted earnings per share 

Diluted earnings per share adjusts the 

figures used in the determination of basic 

earnings per share to take into account 

the after income tax effect of interest 

and other financing costs associated 

with dilutive potential ordinary shares 

and the weighted average number of 

shares assumed to have been issued for 

no consideration in relation to dilutive 

potential ordinary shares.

aa. Goods and Services Tax (‘GST’)  

If there is no quoted price in an active 

and other similar taxes 

market, then the Group uses valuation 

techniques that maximise the use of 

relevant observable inputs and minimise 

the use of unobservable inputs. 

The chosen valuation technique 

incorporates all of the factors that market 

participants would take into account in 

pricing a transaction.

y.  Segment reporting 

Operating segments are reported in 

a manner consistent with the internal 

reporting provided to the Chief Operating 

Decision Maker (“CODM”). The CODM is 

Revenues, expenses and assets 

are recognised net of the amount 

of associated GST, unless the GST 

incurred is not recoverable from the tax 

authority. In this case it is recognised as 

part of the cost of the acquisition of the 

asset or as part of the expense.

Receivables and payables are stated 

inclusive of the amount of GST 

receivable or payable. The net amount 

of GST recoverable from, or payable 

to, the tax authority is included in other 

receivables or other payables in the 

statement of financial position.

responsible for allocating resources and 

Cash flows are presented on a gross 

assessing performance of the operating 

basis. The GST components of cash 

segments.

i.  Basic earnings per share 

flows arising from investing or financing 

activities which are recoverable from, 

or payable to the tax authority, are 

Basic earnings per share is calculated 

presented as operating cash flows.

by dividing the profit or loss attributable 

to the owners of the Company excluding 

any costs of servicing equity other than 

ordinary shares, by the weighted average 

number of ordinary shares outstanding 

during the financial year, adjusted for 

Commitments and contingencies are 

disclosed net of the amount of GST 

recoverable from, or payable to, the  

tax authority.

61 

2020 //  ANNUAL REPORT1 5 .   N O T E S   T O   T H E   C O N S O L I D AT E D   F I N A N C I A L   S TAT E M E N T S
For the Year Ended 31 December 2020

4. Standards issued but not yet effective 

A number of new standards are effective for annual periods beginning after 1 January 

2020 and earlier application is permitted; however, the Group has not early adopted the 

new or amended standards in preparing these consolidated financial statements.

The Group plans to apply the amendments when they become effective and they are not 

expected to have a significant impact on the Group’s consolidated financial statements:

i. 

Interest Rate Benchmark Reform – Phase 2 (Amendments to AASB 9, IAS 39, AASB 7, 

AASB 4 and AASB 16)

ii.  COVID 19 – Related rent concessions (Amendment to AASB 16)
iii.  Property, plant and equipment: proceeds before intended use (Amendments to IAS 16)
iv.  Reference to Conceptual Framework (Amendments to AASB 3)
v.  Classification of liabilities as current or non-current (Amendments to IAS 1)

62 

#NextScienceHeals1 5 .   N O T E S   T O   T H E   C O N S O L I D AT E D   F I N A N C I A L   S TAT E M E N T S
For the Year Ended 31 December 2020

5. Revenue and Other Income

In USD

Revenue from contracts with customers

2020

$

3,440,975

2019

$

4,060,800

Identification of reporting operating segments
The Group operates in one segment, based on the internal reports that are reviewed and used by the 
Board of Directors (who are identified as the Chief Operating Decision Makers (CODM)) in assessing 
performance and in determining the allocation of resources.

In USD

United States of America

Australia

REVENUE FROM CONTRACTS  
WITH CUSTOMERS

GEOGRAPHICAL  
NON-CURRENT ASSETS

2020

$

3,353,331

87,644

3,440,975

2019

$

3,973,254

87,546

4,060,800

2020

$

1,486,004

1,900,986

3,386,990

2019

$

1,681,987

1,733,892

3,415,879

Major customers
Revenues from two major customers of the Group represented 91% (2019: 97%) of the Group’s total revenue.

OTHER INCOME

In USD

Grant income

Government assistance – COVID-19

Other income

2020

$

–

318,077

38,497

356,574

2019

$

35,365

–

–

35,365

Income received in relation to grants will only be recognised when there is reasonable assurance 
when all conditions attaching to the grant have been complied with.

63 

2020 //  ANNUAL REPORT1 5 .   N O T E S   T O   T H E   C O N S O L I D AT E D   F I N A N C I A L   S TAT E M E N T S
For the Year Ended 31 December 2020

6. Individually Significant Items

The loss from ordinary activities before income tax includes the following expenses:

In USD

Included in selling and distribution expenses
Depreciation and amortisation

Included in research and development expenses 
Depreciation and amortisation

Included in administrative expenses 
Depreciation and amortisation

7. Other Expenses

In USD

Loss on sale of fixed asset

Impairment loss on intangibles

Impairment loss on property, plant and equipment

8. Employee Expenses

In USD

Salaries and wages

Contributions to defined contribution funds

Share-based payments

9. Finance Income

In USD

Interest income

Interest income (loan to shareholder)

Net foreign exchange gain

2020

$

22,735  

480,139  

198,726  

2020

$

2,796

7,605

2,951

13,352

2020

$

7,034,911

41,157

482,973

7,559,041

2020

$

105,983

1,266

190,005

297,254

2019

$

31,119

336,697

197,424

2019

$

2,368

60,603

–

62,971

2019

$

7,186,191

67,134

652,826

7,906,151

2019

$

235,821

4,567

38,330

278,718

64 

#NextScienceHeals 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1 5 .   N O T E S   T O   T H E   C O N S O L I D AT E D   F I N A N C I A L   S TAT E M E N T S
For the Year Ended 31 December 2020

10. Finance Costs

In USD

Interest expense on converting note

Notional interest expense – converting notes

Interest expense on lease liabilities

2020

$

–

–

21,179

21,179

2019

$

183,275

1,917,869

28,280

2,129,424

11. Income Tax Expense

Income tax expense comprises current and deferred tax expense and is recognised in profit or 

loss, except to the extent that it relates to a business combination or items recognised directly  

in equity or other comprehensive income. The components of tax expense comprise:

In USD

Current tax

Deferred tax

2020

2019

$

–

–

–

$

–

–

–

Reconciliation of income tax to accounting profit:

Loss before income tax 

(11,912,004)

(14,351,828)

Prima facie tax benefit on profit from ordinary activities 
before income tax at 27.5% (2019: 27.5%) 

(3,275,801)

(3,946,753)

Tax effect of:

Permanent differences

Effect of tax rate in foreign jurisdictions

Tax losses not brought to account

Total income tax expense

242,329

(251,448)

3,284,920

–

993,799

68,203

2,884,751

–

The unused tax losses as at 31 December were as follows:

Australia unused tax losses (in AUD)

USD unused tax losses (in USD)

2020

$

30,652,663

21,503,856

2019

$

22,594,311

17,653,432

Tax losses are recognised only to the extent that it is probable that the future taxable profit will be 
available against which the benefits can be utilised. Management has considered all the facts and 
circumstances and believe there is no material uncertainty over the availability of the tax losses.

65 

2020 //  ANNUAL REPORT 
 
 
 
 
 
 
 
 
 
 
 
 
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For the Year Ended 31 December 2020

Australian entities

Movement in deferred tax assets and liabilities using the Company’s  

domestic Australian tax rate of 27.5%

In USD

2020 cost

Intangibles

Employee benefits

Accrued expenses

Deferred revenue

OPENING 
BALANCE

RECOGNISED IN 
PROFIT OR LOSS

CLOSING 
BALANCE

$

$

$

(459,833)

(60,272)

(520,105)

15,890

18,512

468,577

7,913

(9,257)

23,803

9,255

434,541

903,118

Unused tax losses carried forward

4,619,568

1,530,402

6,149,970

Other items

(28,185)

(11,299)

(39,484)

Deferred tax assets not recognised

(4,634,529)

(1,892,028)

(6,526,557)

Deferred tax assets/(liabilities)

–

–

–

2019 cost

Intangibles

Employee benefits

Accrued expenses

Deferred revenue

(169,542)

(290,291)

(459,833)

11,563

42,004

520,582

4,327

(23,492)

(52,005)

15,890

18,512

468,577

Unused tax losses carried forward

1,323,725

3,295,843

4,619,568

Other items

(48,596)

20,411

(28,185)

Deferred tax assets not recognised

(1,679,736)

(2,954,793)

(4,634,529)

Deferred tax assets/(liabilities)

–

–

–

66 

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For the Year Ended 31 December 2020

11. Income Tax Expense (cont.)

US entities

Movement in deferred tax assets and liabilities using the US tax rate of 26.5%

In USD

2020 cost

Intangibles

Employee benefits

Accrued expenses

OPENING 
BALANCE

RECOGNISED IN 
PROFIT OR LOSS

CLOSING 
BALANCE

$

$

$

(130,439)

4,097

77,307

12,873

(3,022)

26,811

(117,566)

1,075

104,118

Unused tax losses carried forward

4,673,389

1,025,132

5,698,521

Other items

(8,892)

(31,397)

(40,289)

Deferred tax assets not recognised

(4,615,462)

(1,030,397)

(5,645,859)

Deferred tax assets/(liabilities)

–

–

–

2019 cost

Intangibles

Employee benefits

Accrued expenses

(150,248)

19,809

(130,439)

18,267

86,627

(14,170)

(9,320)

4,097

77,307

Unused tax losses carried forward

4,951,447

(278,058)

4,673,389

Other items

(29,259)

20,367

(8,892)

Deferred tax assets not recognised

(4,876,834)

261,372

(4,615,462)

Deferred tax assets/(liabilities)

–

–

–

12. Cash and Cash Equivalents

In USD

Cash at bank

2020

$

8,100,416

8,100,416

2019

$

6,556,808

6,556,808

Term deposits have been reclassified from cash to other current assets for the prior financial 
year. Refer to note 15.

67 

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For the Year Ended 31 December 2020

12. Cash and Cash Equivalents (cont.) 

Reconciliation of cash flows from operating activities 

In USD

Loss for the year

Adjustments for:

Depreciation and amortisation

Interest income (Note 9)

Accrued interest on converting notes (Note 10)

Share-based payments (Note 8)

Unrealised foreign currency translation (gain) / loss

Directors fees paid as shares (Note 24)

Notional interest expense on converting notes (Note 20)

Interest expense on right-of-use assets (Note 18)

Loss on sale of fixed asset (Note 16)

Impairment of intangible assets (Note 17)

Impairment of property, plant and equipment (Note 16)

Amortisation element of capital raising fee

Operating loss before changes in working capital  
and provisions

Change in operating assets and liabilities

Change in trade and other receivables

Change in inventories

Change in other current assets

Change in trade and other payables

Change in employee benefits

Change in contract liabilities

2020

$

2019

$

(11,912,004)

(14,351,828)

701,600

(1,266)

–

482,973

(72,143)

30,520

–

21,179

2,796

7,606

2,951

–

565,239

(4,567)

183,275

652,826

8,612

93,096

1,917,869

28,281

2,367

60,603

–

273,798

(10,735,788)

(10,570,429)

(2,097,048)

(629,516)

28,300

(28,011)

(24,730)

1,580,149

(1,170,856)

(578,351)

(223,094)

(833,790)

(30,736)

93,955

(189,111)

(1,761,127)

Net cash from operating activities

(11,906,644)

(12,331,556)

68 

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For the Year Ended 31 December 2020

13. Trade and Other Receivables

In USD

Current

Trade receivables

Loan to shareholders

Non-Current

Security deposit

2020

$

3,388,045

–

3,388,045

36,656

36,656

2019

$

1,460,025

180,357

1,640,382

36,656

36,656

The carrying value of receivables is considered a reasonable approximation of fair value due to the 
short term nature of the balances. The Group has assessed any potential credit risk associated 
with these counterparties and deemed ECL to be insignificant.

14. Inventories

In USD

Finished goods - at cost

Raw materials - at cost

Less: provision for obsolete stock

15. Other Current Assets

In USD

Current

Prepayments and other assets

Term deposits (i)

2020

$

631,644

539,923

1,171,567

(99,588)

1,071,979

2020

$

452,458

7,238,986

7,691,444

2019

$

380,112

161,939

542,051

(141,691)

400,360

2019

$

332,504

10,353,797

10,686,301

i.  Term deposits with a maturity of greater than 3 months have been reclassified from cash to 

other current assets for the prior financial year.

69 

2020 //  ANNUAL REPORT 
 
 
 
 
 
 
 
 
 
 
 
 
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For the Year Ended 31 December 2020

16. Property, Plant and Equipment

In USD

Plant and equipment

At cost

Accumulated depreciation

Total plant and equipment

Furniture, fixtures and fittings

At cost

Accumulated depreciation

Total furniture, fixtures and fittings

Leasehold Improvements

At cost

Accumulated amortisation

Total leasehold improvements

Total property, plant and equipment

2020

$

1,120,117

(572,261)

547,856

236,866

(135,140)

101,726

201,121

(62,570)

138,551

788,133

2019

$

954,375

(412,124)

542,251

207,025

(95,603)

111,422

198,975

(40,061)

158,914

812,587

Reconciliations of the written down values at the beginning and end of the current financial  

year and previous financial period are set out below.

In USD

Balance at 1 January 2020

Additions

Disposals

Depreciation expense

Impairment loss

Foreign exchange movements

PLANT AND 
EQUIPMENT

FURNITURE  
AND FITTINGS

LEASEHOLD 
IMPROVEMENTS

$

$

$

542,251

174,056

(1,144)

111,422

158,914

39,188

(1,652)

–

–

TOTAL

$

812,587

213,244

(2,796)

(167,307)

(44,281)

(20,381)

(231,969)

–

–

(2,951)

–

–

18

(2,951)

18

Balance at the end of the year

547,856

101,726

138,551

788,133

Balance at 1 January 2019

Additions

Disposals

352,322

332,422

(1,967)

106,280

180,032

42,261

–

–

(400)

638,634

374,683

(2,367)

Depreciation expense

(140,524)

(37,119)

(20,528)

(198,171)

Foreign exchange movements

(2)

–

(190)

(192)

Balance at the end of the year

542,251

111,422

158,914

812,587

An impairment loss of $2,951 (2019: Nil) was recognised during the financial year in relation to 
water damage of cabinet countertops in the Jacksonville office, Florida USA.

70 

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For the Year Ended 31 December 2020

17. Intangible Assets

In USD

Patents and trademarks

Cost

Accumulated amortisation

Net book value

Research and development expenditure

Cost

Accumulated amortisation

Net book value

Computer software

Cost

Accumulated amortisation

Net book value

Total Intangibles

2020

$

1,288,497

(326,387)

962,110

1,623,330

(252,141)

1,371,189

125,646

(124,009)

1,637

2,334,936

PATENTS AND 
TRADEMARKS

RESEARCH AND 
DEVELOPMENT

COMPUTER 
SOFTWARE

2019

$

1,078,679

(231,058)

847,621

1,369,252

(81,388)

1,287,864

121,276

(92,416)

28,860

2,164,345

TOTAL

$

In USD

Balance at 1 January 2020

Additions

Impairment loss

Amortisation expense

Foreign exchange movements

$

847,621

219,477

(7,605)

(97,383)

–

$

$

1,287,864

28,860

2,164,345

254,078

–

–

–

473,555

(7,605)

(170,753)

(26,379)

(294,514)

–

(844)

1,637

(844)

2,334,936

Closing value at 31 December 2020

962,110

1,371,189

Balance at 1 January 2019

Additions

Impairment loss

Amortisation expense

Foreign exchange movements

738,944

254,269

(60,603)

(85,122)

133

378,979

976,072

–

65,567

1,183,490

3,000

1,233,341

–

(60,603)

(67,395)

(39,108)

(191,625)

208

(599)

(258)

Closing value at 31 December 2019

847,621

1,287,864

28,860

2,164,345

An impairment loss of $7,606 (2019: $60,603) was recognised during the financial year in relation  
to legal costs previously capitalised for patents under application now no longer being pursued.

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For the Year Ended 31 December 2020

18. Right-of-use Assets

The Group holds leases for properties with lease terms ranging from 3 to 4.6 years. AASB 

16, Leases, has been adopted with a modified retrospective transition approach.

In USD

Property – right-of-use asset

Accumulated depreciation

Amounts recognised in profit or loss 

Depreciation expensed 

Interest expense

Expense relating to variable lease payments not included in 
the measurement of the lease liability

Total property, plant and equipment

2020

$

587,668

(360,403)

227,265

175,116

21,179

89,390

285,685

2019

$

577,734

(175,443)

402,291

175,443

28,281

84,290

288,014

The total cash outflow in relation to lease payments amounted to USD $222,609 (2019: USD $210,334).

Movement

In USD

Balance at 1 January 2020

Additions

Depreciation expense

Foreign exchange movements

Closing value at 31 December 2020

Balance at 1 January 2019

Additions

Depreciation expense

Foreign exchange movements

PROPERTY

$

402,291

–

(175,116)

90

227,265

–

577,734

(175,443)

–

Closing value at 31 December 2019

402,291

19. Trade and Other Payables

In USD

Current

Trade payables

Other payables and accrued expenses

2020

$

571,460

492,905

1,064,365

2019

$

628,035

448,637

1,076,672

All amounts are short-term and the carrying values are considered to be a reasonable approximation of fair value.

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For the Year Ended 31 December 2020

20. Loans and Borrowings

Converting notes

In USD

Balance at 1 January 2019

Proceeds from issue of convertible notes

Interest expense accrued

Transaction costs recognised in profit or loss

Notional interest on converting notes

Effect of movement in exchange rates

Issue of ordinary shares upon conversion in April 2019

Carrying amount of liability at 31 December 2019

2019

$

7,069,417

70,798

183,275

289,493

1,917,869

285,433

(9,816,285)

–

On 8 April 2019, the non-redeemable converting notes converted to ordinary shares following the Initial 
Public Offering (IPO). The conversion price of converting notes to ordinary shares was AUD$0.80.

21. Contract Liabilities

In USD

Current

Contract liabilities

Non-Current

Contract liabilities

2020

$

2019

$

1,909,554

375,106

1,374,510

1,328,809

Contract liabilities relate to consideration received in advance from customers for which revenue 
will be recognised as and when products are delivered or other performance obligations met.

73 

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For the Year Ended 31 December 2020

22. Lease Liabilities 

In USD

Current

Lease liabilities

Non-Current

Lease liabilities

Maturity analysis

Not later than 1 year

Later than 1 year but not later than 5 years

Later than 5 years

23. Employee Benefits 

In USD

Current

Liability for annual leave

Non-Current

2020

$

2019

$

170,946

196,442

115,889

286,835

170,946

115,889

–

286,835

286,012

482,454

196,442

286,012

–

482,454

2020

$

2019

$

81,231

69,552

Liability for long service leave

9,385

3,691

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1 5 .   N O T E S   T O   T H E   C O N S O L I D AT E D   F I N A N C I A L   S TAT E M E N T S
For the Year Ended 31 December 2020

24. Capital and Reserves

a.  Share capital

In number of shares

FULLY PAID

PARTLY PAID

TOTAL

Share split on 24 January 2019

129,376,000

650,000

130,026,000

Shares issued in February 2019  
(on conversion of employee share options)

Shares issued in April 2019 on conversion  
of converting notes to shares

Shares issued in April 2019 upon IPO

Shares issued in September 2019  
(on conversion of employee share options) 

Shares issued in September 2019 in lieu  
of Non-Executive Director fees 

Shares issued in December 2019  
(on conversion of employee share options)

Shares issued in December 2019 in lieu  
of Non-Executive Director fees 

Shares issued in December 2019  
(on conversion of employee share options)

314,502

13,824,063

35,000,010

650,000

53,441

565,500

16,842

260,000

–

–

–

–

–

–

–

–

314,502

13,824,063

35,000,010

650,000

53,441

565,500

16,842

260,000

Balance as at 31 December 2019

180,060,358

650,000

180,710,358

Shares issued in March 2020  
(on conversion of employee share options) (i)

Partly paid shares converted into fully paid  
shares in April 2020

Shares issued in May 2020 in lieu of Non-Executive  
Director fees (ii)

Shares issued in July 2020  
(on conversion of employee share options) (iii)

Shares issued in July 2020  
(on conversion of employee share options) (iv)

Placement in September 2020 (v)

Share purchase plan in October 2020 (vi)

Shares issued in October 2020  
(on conversion of employee share options) (vii)

Placement in November 2020 (viii)

Balance as at 31 December 2020

162,500

–

162,500

650,000

(650,000)

–

23,820

325,000

325,000

6,666,666

4,236,898

84,500

1,666,667

194,201,409

–

–

–

–

–

–

–

–

23,820

325,000

325,000

6,666,666

4,236,898

84,500

1,666,667

194,201,409

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2020 //  ANNUAL REPORT1 5 .   N O T E S   T O   T H E   C O N S O L I D AT E D   F I N A N C I A L   S TAT E M E N T S
For the Year Ended 31 December 2020

24. Capital and Reserves (cont.)

In USD

FULLY PAID

PARTLY PAID

TOTAL

$

$

$

Balance at 1 January 2019

56,389,406

199,999

56,589,405

Shares issued in February 2019  
(on conversion of employee share options)

Shares issued in April 2019 on conversion  
of converting notes to shares

Shares issued in April 2019 upon IPO

Shares issued in September 2019  
(on conversion of employee share options) 

Shares issued in September 2019 in lieu  
of Non-Executive Director fees 

Shares issued in December 2019  
(on conversion of employee share options)

Shares issued in December 2019 in lieu  
of Non-Executive Director fees 

Shares issued in December 2019  
(on conversion of employee share options)

Capital raising costs

178,856

9,816,285

25,052,313

201,500

60,443

175,305

32,652

109,200

(1,522,369)

–

–

–

–

–

–

–

–

–

178,856

9,816,285

25,052,313

201,500

60,443

175,305

32,652

109,200

(1,522,369)

Balance as at 31 December 2019

90,493,591

199,999

90,693,590

Shares issued in March 2020  
(on conversion of employee share options) (i)

Partly paid shares converted into fully paid  
shares in April 2020

Shares issued in May 2020 in lieu of Non-Executive  
Director fees (ii)

Shares issued in July 2020  
(on conversion of employee share options) (iii)

Shares issued in July 2020  
(on conversion of employee share options) (iv)

Placement in September 2020 (v)

Share purchase plan in October 2020 (vi)

Shares issued in October 2020  
(on conversion of employee share options) (vii)

Placement in November 2020 (viii)

Capital raising costs

50,377

199,999

30,520

100,750

136,500

5,627,879

3,550,085

26,195

1,453,310

(387,739)

Balance as at 31 December 2020

101,281,467

–

(199,999)

–

–

–

–

–

–

–

–

–

50,377

–

30,520

100,750

136,500

5,627,879

3,550,085

26,195

1,453,310

(387,739)

101,281,467

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For the Year Ended 31 December 2020

24. Capital and Reserves (cont.)  

i.  On 2 March 2020, 162,500 round 2 Equity Incentive Plan (ECP) employee share options 

converted to 162,500 ordinary shares at a price of AUD$0.47.

ii.  On 6 May 2020, the following ordinary shares were issued in lieu of non-executive directors fees:

 ‧ 12,537 ordinary shares were issued at a price of AUD$1.99 to Daniel Spira
 ‧ 11,283 ordinary shares were issued at a price of AUD$1.99 to Aileen Stockburger

iii.  On 2 July 2020, 325,000 round 2 Equity Incentive Plan (ECP) employee share options converted 

to 325,000 ordinary shares at a price of AUD$0.45.

iv.  On 2 July 2020, 325,000 round 2 Equity Incentive Plan (ECP) employee share options converted 

to 325,000 ordinary shares at a price of AUD$0.61.

v.  On 24 September 2020, Next Science raised A$7,999,999 via a Placement at A$1.20 per share.

vi.  On 19 October 2020, Next Science raised A$4,999,663 via a Share Purchase Plan at A$1.18 per share.

vii.  On 23 October 2020, 84,500 round 2 Equity Incentive Plan (ECP) employee share options 

converted to 84,500 ordinary shares at a price of AUD$0.44.

viii.  On 19 November 2020, Next Science raised A$2,000,000 via a Placement at A$1.20, approved 

by shareholders at a general meeting held on 18 November 2020.

Ordinary shares

Fully paid ordinary shares

Ordinary shares participate in dividends and the proceeds on winding up of the Company 

in proportion to the number of shares held. At shareholders’ meetings, each ordinary 

share is entitled to one vote when a poll is called.

Partly paid ordinary shares

The partly paid ordinary shares are called on in accordance with their underlying 

arrangements (due for payment April 2020) and as required by the Company. In any case, 

on winding up the company, the balance of partly paid shares, if any, may be called up. The 

proceeds on winding up are proportional to the amounts paid on partly paid shares. Partly 

paid shares carry equal dividend participation and voting rights as fully paid shares, although 
any dividends must be first be applied to the unpaid balance on the shares. 

b.  Reserves

In USD

2020

$

2019

$

Foreign currency translation reserve

(801,736)

(1,198,574)

Common control reserve

(42,596,715)

(42,596,715)

Share option reserve

2,125,541

1,648,704

(41,272,910)

(42,146,585)

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For the Year Ended 31 December 2020

Foreign currency translation reserve

The translation reserve comprises all foreign currency differences arising from the 

translation of the financial statements of foreign operations where their functional 

currency is different to the Group’s presentation currency.

Common control reserve

The acquisition of the share capital of Microbial Defense Systems Holdings Inc (“MDS”) by 

the Company on 22 December 2017 was accounted for as a common control transaction. As 

a consequence, the difference between the fair value of the consideration paid ($43,862,500) 

and the existing book values of assets and liabilities of MDS ($1,265,785) were debited to a 

common control reserve, directly within equity.

Share option reserve

The share option reserve comprises the value of the share-based payment arrangements 

recognised in equity.

c.  Dividends 

No dividends were paid or declared by the Company during the financial year.

d.  Dividend franking account 

The Company has franking credits available to shareholders of Nil.

e.  Capital management 

The Group’s objectives when managing capital are to safeguard its ability to continue as a 

going concern so that it can continue to provide returns for shareholders and benefits for 

other stakeholders, maintain sufficient financial flexibility to pursue its growth objectives 

and maintain an optimal capital structure to reduce the cost of capital.

78 

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For the Year Ended 31 December 2020

25. Parent Entity Information 

As at, and throughout, the financial year to 31 December 2020 the parent entity of the 

Group was Next Science Limited.

Statement of profit or loss and other comprehensive income 

In USD

Loss after income tax

Other comprehensive income / (loss)

Total comprehensive loss

PARENT 2020

PARENT 2019

$

(6,081,965)

598,176

(5,483,789)

$

(13,864,920)

(1,042,968)

(14,907,888)

Statement of financial position

In USD

Assets

Total current assets

Total non-current assets

Total assets

Liabilities

Total current liabilities

Total non-current liabilities

Total liabilities

Total net assets

Equity

Share capital

Common control reserve

Foreign currency translation reserve

Share option reserve

Accumulated losses

Total equity

79 

PARENT 2020

PARENT 2019

$

$

2,469,478

24,305,150

26,774,628

(423,201)

–

(423,201)

26,351,427

101,281,467

(27,257,549)

(518,738)

2,125,541

(49,279,294)

26,351,427

1,407,127

19,363,446

20,770,573

(70)

–

(70)

20,770,503

90,693,590

(27,257,549)

(1,116,913)

1,648,704

(43,197,329)

20,770,503

2020 //  ANNUAL REPORT 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1 5 .   N O T E S   T O   T H E   C O N S O L I D AT E D   F I N A N C I A L   S TAT E M E N T S
For the Year Ended 31 December 2020

Guarantees entered into by the parent entity in relation to the debts of its subsidiaries 

The parent entity had no guarantees as at 31 December 2020 and 31 December 2019.

Contingent liabilities

The parent entity had no contingent liabilities as at 31 December 2020 and 31 December 2019.

Capital commitments - Property, plant and equipment

The parent entity had no capital commitments for property, plant and equipment as at 31 

December 2020 and 31 December 2019.

Significant accounting policies

The accounting policies of the parent entity are consistent with those of the consolidated entity, 

as disclosed in note 3, except for the following:

 · Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity.

26. Group Entities 

Set out below is the Group structure listing all subsidiaries as at 31 December 2020. 

NEXT SCIENCE LIMITED
(Australian Parent Entity)

NEXT SCIENCE TECHNOLOGIES PTY LTD 
(FORMALLY NEXT SCIENCE PTY LTD)

(Australian Entity)

100%

NEXT SCIENCE IP  
HOLDINGS PTY LTD

(Australian Entity)

100%

MICROBIAL DEFENSE SYSTEMS  
HOLDINGS INC 

(USA Entity)

100%

NEXT SCIENCE  
MANUFACTURING, LLC

(USA Entity)

100%

NEXT  
SCIENCE, LLC

(USA Entity)

100%

NEXT SCIENCE  
HEALTH CARE, LLC
(USA Entity)
100%

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For the Year Ended 31 December 2020

27. Related Parties 

a.  Key management personnel compensation 

Key management personnel (“KMP”) are defined as those persons having authority and 

responsibility for planning, directing and controlling the activities of the Group, directly and 

indirectly, and include the Directors, executive and non executive, as well as certain other 

senior executives. The totals of remuneration of the KMP of the Company included within 

employee expenses are as follows:

In USD

Short-term employee benefits

Post-employment benefits

Share-based payment benefits

2020

$

1,614,212

47,613

411,372

2,073,197

2019

$

1,498,338

66,820

575,503

2,140,661

Short-term employee benefits

Short-term employee benefits include fees and benefits paid to the executive directors and other 

KMP as well as salary, fringe benefits and cash bonuses awarded to the non-executive directors.

Post-employment benefits

Post-employment benefits are the cost of superannuation contributions made during the year.

b.  Key management personnel transactions 

KMP’s of the Company hold 13.9% (2019: 14.6%) of the issued capital of the Company as 

at 31 December 2020.

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For the Year Ended 31 December 2020

28. Share-based Employee Incentive Arrangements 

Equity Incentive Plan (equity settled)

Prior to listing on the ASX, the Group established an Equity Incentive Plan (ECP) and an 

Employee Share Option Plan (ESOP). The purpose of the Plans is to attract and retain the 

types of employees, consultants and directors who will contribute to the Company’s long-

term success; provide incentives that align the interests of Employees, Consultants and 

Directors with those of the shareholders of the Company; and promote the success of the 

Company’s business. As at 31 December 2020, there are 8,092,500 options over ordinary 

shares on issue (2019: 9,249,500 options), representing 4.17% (2019: 5.12%) of the 

Company’s total share capital, granted to the employees and Directors of the Company. 

The grant dates, vesting dates and exercise prices vary and are as follows:

GRANTED

EXERCISED (II)

LAPSED

NO OF  
OPTIONS AS AT 
31 DEC 2020

VESTED AS AT  
31 DEC 2020

–

–

–

–

–

–

–

–

–

–

–

(247,000)

(325,000)

(162,500)

(162,500)

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

734,500

734,500

2,340,000

1,560,000

1,040,000

1,040,000

78,000

78,000

2,470,000

–

(260,000)

1,430,000

1,430,000

(897,000)

(260,000)

8,092,500

4,842,500

GRANT DATE
AND VESTING 
CONDITIONS (I)

EXPIRY DATE

NO OF  
OPTIONS AS AT 
31 DEC 2019

9-Nov-16 (2)

9-Nov-20

1-Mar-7 (2)

1-Mar-21

1-Sep-17 (1)

1-Sep-20

1-Sep-17 (2)

1-Sep-21

247,000

325,000

162,500

162,500

16-Apr-18 (1)

16-Apr-21

734,500

16-Apr-18 (5)

16-Apr-21

2,340,000

16-Apr-18 (4)

16-Apr-21

1,040,000

16-Apr-18 (2)

16-Apr-22

78,000

17-Dec-18 (3)

17-Dec-23

2,470,000

17-Dec-18 (2)

17-Dec-23

1,690,000

Totals

9,249,500

i.  Vesting conditions are as follows: 

1.  1 year service from grant date

2.  2 years service from grant date

3.  3 years service from grant date

4.  Immediately upon grant

5.  Various, including financial and non-financial conditions; relating to Judith Mitchell’s share options

ii.  The weighted average share price for the options exercised during the year was USD $0.35 (2019: USD $0.37). 

82 

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For the Year Ended 31 December 2020

28. Share-based Employee Incentive Arrangements (cont.)

As at 31 December 2020, 4,842,500 options have vested (2019: 4,231,500 post share split). 

The fair value has been measured using the Black-Scholes formula. Service and non-market 

performance conditions attached to the arrangements were not taken into account in 

measuring fair value.

The inputs used in the measurement of the fair values at grant date and measurement date 

were as follows:

FV at grant date (USD)

Share price at grant date (USD)

Exercise price (USD)
Expected volatility 

Expected life 

Expected dividends 

Risk free interest rate 

16-APR-18

0.20-0.22

0.42

0.42

GRANT DATE 
17-DEC-18

19-FEB-19

0.02

0.57

0.57

0.33

0.56

0.56

91%

3-4 years

0%

2.25%-5.0%

Expected volatility is measured based on peer companies and expected life is the number 

of days until expiry.

29. Commitments and Contingencies 

The Group has no capital commitments or contingencies as at 31 December 2020 (2019: nil).

30. Events Occurring After the Reporting Date  

There has not arisen in the interval 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 the Group, in future financial years.

83 

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For the Year Ended 31 December 2020

31. Auditors’ Remuneration

In USD

Audit and assurance related services 
KPMG Australia

Audit of financial statements

Total audit and assurance services

Other services 
KPMG Australia

Taxation services

Other services

Total other services

Total auditor’s remuneration

 2020

$

80,372

80,372

2,432

19,230

21,662

102,034

2019

$

72,825

72,825

43,335

95,829

139,164

211,989

32. Earnings Per Share 

a.  Reconciliation of earnings to profit or loss from continuing operations

In USD

Loss after tax

Basic and diluted earnings per share (USD cents)

Earnings used to calculate basic EPS  
from discontinuing operations

 2020

$

2019

$

(11,912,004)

(14,351,828)

(6.36)

(6.00)

(8.65)

(9.00)

Weighted average number of shares

187,185,169

165,978,735

33. Financial Risk Management 

a.  Overview

The Group’s activities expose it to various financial risks including: credit risk, liquidity 

risk and market risk.

This note presents information about the Group’s exposure to each of these risks, its 

objectives, policies and processes for measuring and managing risk.

84 

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1 5 .   N O T E S   T O   T H E   C O N S O L I D AT E D   F I N A N C I A L   S TAT E M E N T S
For the Year Ended 31 December 2020

33. Financial Risk Management (cont.) 

b.  Risk management framework 

The Company’s board of directors has overall responsibility for the establishment and oversight of the 

Group’s risk management framework with advice from the Audit and Risk Committee (as detailed below). 

The Group’s risk management policies have been established to identify and analyse the risks faced by 

the Group, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk 

management policies and systems are reviewed regularly to reflect changes in market conditions and 

the Group’s activities. The Group, through its standards and procedures, aims to maintain an effective 

control environment in which all employees understand their roles and obligations.

Audit and Risk Committee

The purpose of the Audit and Risk Committee is to assist the Board with:
 · oversight of financial reporting and internal and external audit functions;
 · oversight of accounting, business, clinical and patient risk policies and practices;
 · oversight of legal and regulatory compliance;
 · oversight of internal control structure and risk management procedures;
 · promoting a culture of compliance across the Group companies; and
 · providing a forum of communication between the Board and the Company’s external auditor, 
internal auditor (if any) and Company’s management in relation to audit and risk matters.

The Audit and Risk Committee Charter has responsibility pursuant to its Charter for oversight of 

the Company’s financial and risk management procedures. The Board currently considers these 

processes appropriate for the size and level of operations of the Company.

c.  Credit risk  

Cash and cash equivalents

The Group held cash and cash equivalents of USD $8,100,416 and USD $7,238,986 in 

term deposits at 31 December 2020 (2019: USD $6,556,808 in cash and USD $10,353,798 

in term deposits). The cash and cash equivalents are held with credit worthy bank and 

financial counterparties. The ECL of each of these banks and counterparties are considered 

to be extremely low; accordingly any expected credit losses are deemed to be insignificant.

d.  Liquidity risk   

Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated 

with its financial liabilities that are settled by delivering cash or another financial asset. The Group’s 

approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to 

meet its liabilities when they are due, under both normal and stressed conditions, without incurring 

unacceptable losses or risking damage to the Group’s reputation. The Group manages liquidity risk 

by monitoring net cash balances, actual and forecast operating cash flows.

Exposure to liquidity risk

The following are the remaining contractual maturities of financial liabilities at the reporting date. 

The amounts are gross and undiscounted and include estimated interest payments and exclude 

the impact of netting agreements.

85 

2020 //  ANNUAL REPORT1 5 .   N O T E S   T O   T H E   C O N S O L I D AT E D   F I N A N C I A L   S TAT E M E N T S
For the Year Ended 31 December 2020

In USD

As 31 December 2020 
Trade and other payables

As 31 December 2020 
Trade and other payables 

LESS THAN 6 
MONTHS

BETWEEN  
1 AND 5 YEARS

TOTAL CONTRACTED 
AMOUNTS

$

1,064,365

$

–

$

1,064,365

1,076,672

–  

1,076,672

The cash flows in the maturity analysis are not expected to occur significantly earlier or 

be for a significantly different amount than contractually disclosed above.

e.  Market risk  

Market risk is the risk that changes in market prices, such as foreign exchange rates 

and interest rates, will affect the Group’s income or the value of its holdings of financial 

instruments. The objective of market risk management is to manage and control market 

risk exposures within acceptable parameters, while optimising the return.

Interest rate risk

The Group is not exposed to any significant interest rate risk. There is minimal exposure to 

the impact of adverse changes in benchmark interest rates. The Group is exposed to variable 

interest rate risks at the reporting date on cash and short-term deposits. A reasonably 

possible change of 100 basis points in interest rates at the reporting date would have 

increased or decreased profit after tax by $122,864 (2019: $166,849). This analysis assumes 

that all other variables, in particular foreign currency rates, remain constant.

Currency risk

Currency risk is the risk that the fair value of future cash flows of a financial instrument 

will fluctuate because of changes in foreign exchange rates. The source and nature of this 

risk arise from operations and translation risks. The Group’s reporting currency is United 

States Dollars (“USD”). However, the international operations give rise to an exposure 

to changes in foreign exchange rates as amounts of expenditure are from Australia and 

denominated in currencies other than USD.

86 

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1 5 .   N O T E S   T O   T H E   C O N S O L I D AT E D   F I N A N C I A L   S TAT E M E N T S
For the Year Ended 31 December 2020

e.  Market risk (cont.)  

The carrying amounts of the Group’s foreign currency denominated financial assets (trade 

and other receivables including accrued income) and financial liabilities (trade and other 

payables) at the reporting date were as follows:

In USD

AUD financial assets converted to USD

AUD financial liabilities converted to USD

Net exposure in statement of financial position

2020

$

7,282,214

(137,932)

7,144,282

2019

$

3,160,154

(229,180)

2,930,974

A reasonably possible strengthening (weakening) of the Unites States Dollar against 
all other currencies at 31 December would have affected the measurement of financial 

instruments denominated in a foreign currency and affected profit or loss and equity by 

the amounts shown below. This analysis assumes that all other variables, in particular 

interest rates, remain constant and ignores any impact of forecast sales and purchases.

In USD

2020 
Australian Dollars

2019 
Australian Dollars

% CHANGE

PROFIT  
BEFORE TAX 
STRENGTHEN

PROFIT  
BEFORE TAX 
WEAKEN

EQUITY  
STRENGTHEN

$

$

$

$

10%

(714,428)

714,428

(714,428)

EQUITY  
WEAKEN

$

714,428

10%

(293,097)

293,097

(293,097)

293,097

The percentage change is the expected overall volatility of the significant currencies, 

which is based on management’s assessment of reasonable possible fluctuations 

taking into consideration movements over the last 12 months and the spot rate at each 

reporting date.

87 

2020 //  ANNUAL REPORT 
 
 
 
 
1 6 .   D I R E C T O R S ’   D E C L A R AT I O N

1. 

In the opinion of the directors of Next Science Limited (the “Company”):

a.  The consolidated financial statements and notes that are set out on pages 48 to 

87 and the Remuneration report on pages 28 to 40 in the Directors’ report, are in 

accordance with the Corporations Act 2001, including:

i. 

 giving a true and fair view of the financial position of the Group as at 31 

December 2020 and of its performance for the financial year ended on that 

date; and

ii.  complying with Australian Accounting Standards and the Corporations 

Regulations 2001; and

b.  there are reasonable grounds to believe that the Company will be able to pay its 

debts as and when they become due and payable.

2.  The directors have been given the declarations required by Section 295A of the 

Corporations Act 2001 from the chief executive officer and chief financial officer for 

the financial year ended 31 December 2020.

3.  The directors draw attention to Note 2(a) to the consolidated financial statements, 

which includes a statement of compliance with International Financial Reporting 

Standards.

Signed in accordance with a resolution of directors:

George Savvides 
Chair 

Dated: 22nd February 2021

88 

#NextScienceHealsINDEPENDENT  
AUDITOR’S REPORT

89 

2020 //  ANNUAL REPORT#NextScienceHeals

90 

#NextScienceHeals1 7 .   I N D E P E N D E N T   A U D I T O R ’ S   R E P O R T

Independent Auditor’s Report 

To the shareholders of Next Science Limited  

Report on the audit of the Financial Report 

Opinion 

We have audited the Financial Report of 
Next Science Limited (the Company). 

In our opinion, the accompanying Financial 
Report of the Company is in accordance 
with the Corporations Act 2001, including:  





giving a true and fair view of the 
Group’s financial position as at 31 
December 2020 and of its financial 
performance for the year ended on 
that date; and 

complying with Australian Accounting 
Standards and the Corporations 
Regulations 2001. 

The Financial Report comprises: 

 Consolidated statement of financial position as at 31 

December 2020 

 Consolidated statement of profit or loss and other 

comprehensive income, Consolidated statement of 
changes in equity, and Consolidated statement of 
cash flows for the year then ended 

 Notes including a summary of significant accounting 

policies 

 Directors’ Declaration. 

The Group consists of the Company and the entities it 
controlled at the year-end or from time to time during 
the financial year. 

Basis for opinion 

We conducted our audit in accordance with Australian Auditing Standards. We believe that the audit 
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. 

Our responsibilities under those standards are further described in the Auditor’s responsibilities for 
the audit of the Financial Report section of our report.  

We are independent of the Group in accordance with the Corporations Act 2001 and the ethical 
requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics 
for Professional Accountants (including Independence Standards) (the Code) that are relevant to our 
audit of the Financial Report in Australia. We have fulfilled our other ethical responsibilities in 
accordance with the Code.  

74 
KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated 

with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and 

logo are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by 

a scheme approved under Professional Standards Legislation. 

91 

2020 //  ANNUAL REPORT 
 
 
 
1 7 .   I N D E P E N D E N T   A U D I T O R ’ S   R E P O R T

Key Audit Matters 

Key Audit Matters are those matters that, in our professional judgement, were of most significance in 
our audit of the Financial Report of the current period. 

This matter was addressed in the context of our audit of the Financial Report as a whole, and in 
forming our opinion thereon, and we do not provide a separate opinion on this matter. 

Revenue recognition – USD 3,440,975 

Refer to Note 5 to the Financial Report 

The key audit matter 

How the matter was addressed in our audit 

We focused on revenue recognition as a 
key audit matter due to the significant 
audit effort required by us to test the 
Group’s revenue given the: 







Significance of revenue to the 
financial statements; 

Varying terms and conditions within 
each customer contract such as 
product sales, advance deposits, 
true up payments and milestone 
payments.  This increases the effort 
required by the audit team to 
evaluate the timing and 
measurement of revenue recognised 
by the Group, and associated 
contract liabilities; 

Earlier termination of a key customer 
contract increasing the risk of error 
in the deferred revenue calculation;  

 Group has manual processes and 

controls which may increase the risk 
of bias in recognition of revenue at 
the end of the reporting period due 
to differing terms of trade and 
extended delivery periods of 
customer contracts. 

Our procedures included: 









Evaluated the appropriateness of the Group’s 
revenue recognition policies against the 
requirements of AASB 15 Revenue from Contracts 
with Customers. 

For a sample of transactions, across customer 
contracts including product sales, advance deposits, 
true up payments and milestone payments, we: 

o

o

checked the terms and conditions of the 
customer contract for consistency to the Group’s 
policy for timing and measurement of revenue 
recognition; 

checked the amount, nature and date of revenue 
recognition through evaluation of the terms and 
conditions in the underlying customer contract, 
date of completion of freight forwarding services 
from underlying freight documents such as the 
waybill, underlying sales invoices and bank 
statement cash receipts. 

For the calculation of deferred revenue, we checked 
the remaining life of the contract in the calculation of 
deferred revenue to the underlying key customer 
contract. 

Selected a sample of revenue transactions across 
differing terms of trade and extended delivery 
periods for the last two weeks of the reporting 
period and the first two weeks of the next reporting 
period. For each sample selected, we checked the 
amount and timing of revenue recorded by the Group 
to the underlying customer contracts, sales invoice 
and to freight documents. 



Assessed the disclosures in the financial report using 
our understanding obtained from our testing and 
against the requirements of the accounting standards. 

75 

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1 7 .   I N D E P E N D E N T   A U D I T O R ’ S   R E P O R T

Other Information 

Other Information is financial and non-financial information in Next Science Limited’s annual reporting 
which is provided in addition to the Financial Report and the Auditor's Report. The Directors are 
responsible for the Other Information.  

The Other Information we obtained prior to the date of this Auditor’s Report was the Directors’ 
Report and Remuneration Report. The Our Purpose page, Overview, Chairman’s Letter, Managing 
Director’s Report, Our Journey page, Investor Information and Corporate Directory are expected to be 
made available to us after the date of the Auditor's Report. 

Our opinion on the Financial Report does not cover the Other Information and, accordingly, we do not 
and will not express an audit opinion or any form of assurance conclusion thereon, with the exception 
of the Remuneration Report and our related assurance opinion. 

In connection with our audit of the Financial Report, our responsibility is to read the Other 
Information. In doing so, we consider whether the Other Information is materially inconsistent with 
the Financial Report or our knowledge obtained in the audit, or otherwise appears to be materially 
misstated. 

We are required to report if we conclude that there is a material misstatement of this Other 
Information, and based on the work we have performed on the Other Information that we obtained 
prior to the date of this Auditor’s Report we have nothing to report. 

Responsibilities of the Directors for the Financial Report 

The Directors are responsible for: 

 preparing the Financial Report that gives a true and fair view in accordance with Australian 

Accounting Standards and the Corporations Act 2001 





implementing necessary internal control to enable the preparation of a Financial Report that 
gives a true and fair view and is free from material misstatement, whether due to fraud or 
error 

assessing the Group and Company’s ability to continue as a going concern and whether the 
use of the going concern basis of accounting is appropriate. This includes disclosing, as 
applicable, matters related to going concern and using the going concern basis of accounting 
unless they either intend to liquidate the Group and Company or to cease operations, or have 
no realistic alternative but to do so.  

93 

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2020 //  ANNUAL REPORT 
 
 
 
 
 
1 7 .   I N D E P E N D E N T   A U D I T O R ’ S   R E P O R T

Auditor’s responsibilities for the audit of the Financial Report 

Our objective is: 





to obtain reasonable assurance about whether the Financial Report as a whole is free from 
material misstatement, whether due to fraud or error; and  

to issue an Auditor’s Report that includes our opinion.  

Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in 
accordance with Australian Auditing Standards will always detect a material misstatement when it 
exists. 

Misstatements can arise from fraud or error. They are considered material if, individually or in the 
aggregate, they could reasonably be expected to influence the economic decisions of users taken on 
the basis of the Financial Report. 

A further description of our responsibilities for the audit of the Financial Report is located at the 
Auditing and Assurance Standards Board website at: 
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf This description forms part of our 
Auditor’s Report. 

Report on the Remuneration Report 

Opinion 

Directors’ responsibilities 

In our opinion, the Remuneration Report 
of Next Science Limited for the year 
ended 31 December 2020, complies with 
Section 300A of the Corporations Act 
2001. 

The Directors of the Company are responsible for the 
preparation and presentation of the Remuneration 
Report in accordance with Section 300A of the 
Corporations Act 2001. 

Our responsibilities 

We have audited the Remuneration Report included in 
pages 10 to 25 of the Directors’ report for the year 
ended 31 December 2020.  

Our responsibility is to express an opinion on the 
Remuneration Report, based on our audit conducted in 
accordance with Australian Auditing Standards. 

KPM_INI_01 

PAR_SIG_01 

PAR_NAM_01 

PAR_POS_01 

PAR_DAT_01 

PAR_CIT_01 

KPMG

KPMG 

Tony Nimac  
Partner 

Sydney 

22 February 2021

Tony Nimac 
Partner 
Sydney 
22 February 2021 

77 

94 

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95 

2020 //  ANNUAL REPORTINVESTOR  
INFORMATION

96 

#NextScienceHeals1 8 .   I N V E S T O R   I N F O R M AT I O N
As at 19 February 2021

Number of securityholders  

At the specified date, there were 5,552 holders of ordinary shares (quoted and unquoted) 

and 14 holders of options (unquoted) over ordinary shares. These were the only classes of 

equity securities on issue.

SIZE OF  
SHAREHOLDING

1 – 1,000

1,001 – 5,000

5,001 – 10,000

10,001 – 100,000

100,000 and above

Total

NUMBER OF 
 HOLDERS

NUMBER OF  
SHARES

% OF ISSUED 
CAPITAL

98

1,082

874

1,988

1,510

5,552

865,220

5,732,109

7,065,120

28,996,223

151,542,737

194,201,409

0.45

2.95

3.64

14.93

78.03

100

Twenty largest holders of ordinary shares*  

NAME

Auckland Trust Company Ltd ATF Secord Pacific Master Superannuation Fund

Walker Group Holdings Pty Limited

Matthew Myntti

HSBC Custody Nominees (Australia) Limited – A/C 2

Merrill Lynch (Australia) Nominees Pty Limited

Judith Mitchell

HSBC Custody Nominees (Australia) Limited

UBS Nominees Pty Ltd 

Mr Charles Robert Dirck Wittenoom

National Nominees Limited 

Citicorp Nominees Ply Limited

Scone Investments Pty Ltd

G & N Lord Superannuation Pty Ltd 

Mr Byron James Darroch

Ka-tet Pty Ltd 

Donald Ayers

Insync Investments Pty Ltd 

Authentics Australia Pty Ltd 

Tsunami Ventures Pty Ltd 

Honne Investments Pty Limited

Total

SHARES HELD

% OF ISSUED 
CAPITAL

56,019,938

21,719,667

20,657,000

6,299,588

5,130,056

4,744,438

3,534,393

3,464,130

2,825,000

2,443,875

1,637,135

1,159,452

965,000

962,500

890,500

672,394

625,000

512,438

500,938

500,000

28.85

11.18

10.64

3.24

2.64

2.44

1.82

1.78

1.45

1.26

0.84

0.60

0.50

0.50

0.46

0.35

0.32

0.26

0.26

0.26

135,263,442

69.65

 * The top 20 listed in this table are the top 20 shareholders as shown on the register as at 19 February 2021 without 

consolidation of beneficial holdings. We note that as at 19 February 2021, George Savvides and his related parties held 
649,876 shares, Judith Mitchell and her related parties held 5,000,000 shares and Bruce Hancox and his related parties 
held 530,000 shares (as detailed in Appendix 3Ys released to ASX on 22 October 2020 and 25 November 2020).

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2020 //  ANNUAL REPORT1 8 .   I N V E S T O R   I N F O R M AT I O N
As at 19 February 2021

Substantial holders  

Substantial holders as disclosed in substantial holding notices given to the Company were  

as follows:

NAME OF  
SUBSTANTIAL HOLDER

Walker Group Holdings Pty Limited & others

Matthew Myntti

NUMBER OF SHARES  
OVER WHICH RELEVANT 
INTEREST IS HELD

76,072,938

20,657,000

% OF ISSUED 
CAPITAL

39.53

11.53

Unquoted restricted securities  

There were 72,847,807 unquoted ordinary shares and 5,850,000 unquoted options over 

ordinary shares subject to a restriction period as follows:

RESTRICTION PERIOD

24 months ASX restriction 

24 months ASX restriction

Options

5,850,000

ORD

72,847,807

7

6

18 April 2021

18 April 2021

CLASS  
OF SECURITY

NUMBER

NUMBER OF 
HOLDERS

DATE ESCROW 
PERIOD ENDS

Option holding distribution

SIZE OF  
SHAREHOLDING

1 – 1,000

1,001 – 5,000

5,001 – 10,000

10,001 – 100,000

100,000 and above

Total

NUMBER OF  
HOLDERS

NUMBER OF  
OPTIONS

% OF ISSUED  
OPTIONS

0

0

0

0

12

12

0

0

0

0

8,092,500

8,092,500

0

0

0

0

100%

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#NextScienceHeals1 8 .   I N V E S T O R   I N F O R M AT I O N
As at 19 February 2021

Unquoted options over ordinary shares  

There were 9,249,500 unquoted options over ordinary shares on issue, 5,850,000 of which 

were restricted securities as follows:

UNQUOTED OPTIONS - DESCRIPTION

Options exercisable at US $0.56 per option expiring 17 December 2023  
(subject to 24 month ASX escrow restriction ending 18 April 2021)

Options exercisable at US $0.56 per option expiring 17 December 2023

Options exercisable at US $0.42 per option expiring 16 April 2022

Options exercisable at US $0.42 per option expiring 16 April 2021  
(includes 3,380,000 securities subject to 24 month ASX escrow  
restriction ending 18 April 2021)

Total options on issue

NUMBER OF  
OPTIONS

NUMBER OF 
HOLDERS

2,470,000

1,430,000

78,000

4,114,500

8,092,500

5

4

1

4

14

The Managing Director of the Company is the only person who holds 20% or more of the 

unquoted options on issue and the options issued to her were issued under an employee 

incentive scheme.

Voting rights

Ordinary shares (inducing party paid shares) carry voting rights on a one for one basis and 

options do not carry voting rights.

Unmarketable parcels

There no holders of an unmarketable parcel of shares based on the closing market price 

of $1.23 at the specified date. 

Other ASX required information

During the period between admission to the Official List of ASX and the end of the 

reporting period, the Company used the cash and assets in a form readily convertible to 

cash that it had at the time of admission to the ASX, in away consistent with its business 

objectives. This statement is made pursuant to ASX Listing Rule 4.10.19.

99 

2020 //  ANNUAL REPORT1 9 .   C O R P O R AT E   D I R E C T O R Y
31 December 2020

Independent Non-Executive Chair:

George Savvides

Managing Director:

Judith Mitchell

Non-Executive Directors:

Bruce Hancox
Daniel Spira
Mark Compton 
Aileen Stockburger

Company Secretary

Gillian Nairn

Registered office

Share register

Auditor

Solicitors

Suite 1902
Level 19, Tower A
The Zenith Building
821 Pacific Highway
Chatswood NSW 2067

Link Market Services Limited
Level 12, 680 George Street
Sydney NSW 2000

KPMG Australia
300 Barangaroo Avenue
Sydney NSW 2000

HWL Ebsworth Lawyers 
Level 14, Australia Square 
264-278 George Street
Sydney NSW 2000

Stock exchange listing

Next Science Limited shares are listed on the  
Australian Securities Exchange (ASX:NXS)

Website

www.nextscience.com

Corporate governance statement

www.nextscience.com/corp-governance/

100 

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