TABLE OF
CONTENTS
1. OUR MISSION
2.
3.
4.
5.
6.
7.
8.
9.
PATIENT CASE STUDY
PHYSICIAN TESTIMONIALS
PRODUCT SHOWCASE
COLLAGEN AND DME (DURABLE MEDICAL EQUIPMENT) DISTRIBUTION
RESEARCH & DEVELOPMENT
CHAIR MESSAGE
CEO MESSAGE
DIRECTORS’ REPORT
10. LEAD AUDITORS INDEPENDENCE DECLARATION
1
3
5
7
10
11
13
15
19
48
11. CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
49
12. CONSOLIDATED STATEMENT OF FINANCIAL POSITION
13. CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
14. CONSOLIDATED STATEMENT OF CASH FLOWS
15. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
16. DIRECTORS’ DECLARATION
17.
INDEPENDENT AUDITOR’S REPORT
18.
INVESTOR INFORMATION
19. CORPORATE DIRECTORY
50
51
53
54
101
102
106
109
OUR MISSION
1
Annual Report 2023 OUR MISSION
Next Science strives to significantly improve patient outcomes,
elevate physician efficacy, and create value within the overall
healthcare system through relentless innovation and commitment
to education and research on biofilm elimination, infection
prevention, and treatments for inflammatory diseases.
2
Annual Report 2023 PATIENT CASE
STUDY
Acute Septic Arthritic Knee
The patient, an 81-year-old male presented to the emergency
room 11 days post-operatively. He had undergone a revision Total
Knee Arthroplasty (TKA) due to an unstable knee and on admission
complained of knee pain, mental confusion, atrial fibrillation, elevated
liver enzymes, inability to stand, and urinary retention.
Aspiration of the knee was conducted and bacteria known as
Klebsiella Pneumonia was found. Investigation into the source of
the infection identified the cause as an infected pacemaker. Given
the patients severely declining health, the decision was made to use
arthroscopic lavage to treat the infection as a temporising measure.
Results
Arthroscopic lavage was performed using one litre of saline
and two litres of XPERIENCETM. The patient was placed on an
antibiotic regimen and the infected pacemaker was replaced during
hospitalisation.
Read the full report
by Dr. Jon Minter
At one year follow up, the patient is fully healed and did not suffer
any recurence of knee symptoms.
3
Annual Report 2023 PATIENT CASE
STUDY
#NEXTSCIENCEHEALS
Intervention in Chronic Wound
Part of a 3-patient pilot study, a 76-year-old female patient presented
with thrombocytosis from a chronic, non-healing wound that was
resistant to other therapies. The wound was appropriately debrided,
soaked in hypochlorous acid, BLASTX applied, and covered with
foam dressing with compression socks.
Results
The patient was monitored at 8 weeks and 16 weeks for signs of
healing. By the 16-week mark, the wound was fully healed.
View the full poster
by Dr. Mark Melin
TREATMENT TIMELINE
BLASTX Initiated
11/30/22
4-Week Follow-up
12/28/22
Wound Closed
3/23/2023
4
Annual Report 2023
“
I have used this product in probably a million applications and
we’re seeing really good results using BLASTX powered by the
XBIOTM Technology. We have two randomised control trials to show
that when you use that, with the Prepare the RepairTM Paradigm,
you can have tremendous amount of healing rates. The death rate
from any chronic wound is about 30%, diabetic wounds are about
50% because of all of the inflammation and the complexity of the
wounds - my own father suffered from a diabetic foot wound and I
had to cut off half of my own father’s foot. So, I’m passionate about
the evidence, I’m passionate about the science, and I’m passionate
about the results. ”
Dr. Matthew Regulsky
Podiatric Surgeon
PHYSICIAN
TESTIMONIALS
5
Annual Report 2023 Dr. Ravi K. Bashyal
Orthopedic Surgeon
#NEXTSCIENCEHEALS
“
As a hip and knee replacement surgeon, my most feared post-op
complication is infection. Patients undergoing elective and routine
hip or knee replacement are at risk for infection, but it is not their
expectation that this will occur. Further, if an infection does occur in
a hip or knee replacement, it is a serious complication that always
requires surgery to address. In even the most benign circumstance,
an infected prosthesis requires at least one repeat operation and many
weeks of IV antibiotics - more serious cases may require multiple
staged operations, each with likely worse functional final outcomes.
Anything I can do to prevent this devastating complication from
occurring is of great interest to me. Routine use of XPERIENCETM
has been shown to dramatically lower this risk, and has been a game
changer in my practice. For over the past two years and over 1000
cases, I have had ZERO infections. There is a multifactorial approach
to this, but XPERIENCETM is a big part of this formula. I visualise this
product as a paradigm shifting gamechanger. If we can educate and
inform the surgical community effectively, it has an opportunity to
change standard of care practices in surgery.
”
6
Annual Report 2023 PRODUCT
SHOWCASE
In April 2021, XPERIENCETM Advanced Surgical Irrigation received FDA
clearance to be sold as a medical device in the United States. This non-
toxic technology does not need to be rinsed from the surgical site after
closure, offering up to five hours of protection as the solution dilutes in the
body, helping to prevent surgical site and post-operative infection.
XPERIENCETM is designed for use in virtually every open orthopedic surgical
case, with an initial focus on shoulder, hip, knee, trauma and podiatry.
7
Annual Report 2023 XBIOTM TECHNOLOGY:
HOW IT WORKS
XBIOTM Technology combines a solvent, surfactant, and a high-osmolarity
buffer system to create a unique solution that Deconstructs, Destroys,
and Defends against biofilm.
Deconstruct
The buffer system (citric acid and sodium
citrate) deconstructs the EPS structure while
the citric acid removes the metal ions (chelation)
holding together the polymers while the sodium
citrate prevents the reformation of the bonds.
Destroy
After deconstructing the EPS, the high
osmolarity of the buffer system increases
osmotic pressure on the bacterial cells. The
surfactant facilitates the destruction of the
cell membrane by pulling out the proteins
holding the structure together, allowing the high
osmolarity solution to enter the cell and lysing
the bacterial cell.
Defend
The solvent and buffer system defend against
recolonisation by dissolving the polymers
holding the structure together and preventing
the metal ions from reattaching.
#NEXTSCIENCEHEALS
8
Annual Report 2023 In 2023, Dr. Matthew Regulski, DPM, developed the ‘Prepare to
Repair™ paradigm.’ This initiative emphasises the critical importance
of adequately preparing wounds to repair, or heal, before considering
advanced therapies. The Prepare to Repair™ paradigm outlined
essential steps for clinicians to follow, including adding an effective
antimicrobial such as BLASTX® when addressing patients with
wounds, ensuring comprehensive care and optimised outcomes. The
first step being biofilm management.
Dr. Matthew Regulsky
Podiatric Surgeon
The ‘Prepare to Repair’ paradigm showcased BLASTX’s
pivotal role in wound management. Dr. Regulski’s feature
on ‘The Balancing Act’ shared powerful patient stories,
cementing BLASTX’s reputation as a game-changer in
chronic wound care. Scan the QR code to witness
BLASTX’s healing power firsthand.
Watch the interview with
Dr. Matthew Regulski
#NEXTSCIENCEHEALS
9
Annual Report 2023 COLLAGEN AND DME
(DURABLE MEDICAL EQUIPMENT) DISTRIBUTION
In the year following its launch in October 2022,
Next Science’s Durable Medical Equipment
(DME) program has continued to make
significant strides in advancing wound care
solutions. The DME program allows physicians
to select Wound Care Packs that include a
variety of wound care products tailored to their
patients needs. These packs include collagen,
wound cleanser, various dressings and gauze,
and the option of BLASTX. The packs are then
prescribed to patients by their physicians and
billed through insurance.
Why are Payors Important?
The business model for Durable Medical Equipment (DME)
differs significantly from the surgical model. In DME, our
collaboration extends to patients, physicians, and insurance
payors. When a patient receives a prescription from their
physician, it’s simultaneously forwarded to Next Science. We
then engage with their insurance provider to confirm coverage
and facilitate payment. Our reimbursement is directly impacted
by the number of payors we partner with, ensuring optimal
financial support for prescribed treatments.
10
Annual Report 2023 RESEARCH AND
DEVELOPMENT
Research and development (R&D) remains a cornerstone of Next Science’s commitment to
innovation and advancement in healthcare solutions, aligned with our mission to significantly
improve patient outcomes, elevate physician efficacy, and create value within the overall healthcare
system. In FY23, the Company continued to allocate significant resources towards R&D endeavors,
reflecting its dedication to driving future growth and enhancing patient care. In FY23, the Company
expensed $6.5m in R&D, up 5.5% compared with FY22 directly related to continued spend on R&D
projects and clinical studies including increased expenditure relating to the Canada study being
conducted by the Ottawa Hospital Research Institute
Furthermore, the scientific community’s interest in evaluating Next Science’s proprietary XBIOTM
technology has continued to grow. Notably, recent studies have highlighted the unique advantage of
XBIOTM Technology with anti-inflammatory properties, leading to a wider discussion of treatment in
the wound and surgical spaces.
Looking ahead, Next Science is poised to continue its pursuit of excellence in R&D, driving forward
transformative advancements in healthcare solutions.
11
Annual Report 2023
RECENT STUDIES/PUBLICATIONS
DATE:
AREA
AUTHORS
HYPERLINK
January 2023
Discovery: Spine
Fresquez, Chung, Pereira,
https://pubmed.ncbi.nlm.nih.
Disease
et al. (USC)
gov/36358169/
March 2023
BLASTX®
Regulski, Myntti, Garth et
https://mdpi.com/2079-6382/12/3/536
Effectiveness
al. (Wound Care Institute,
Next Science, Montana
State University)
March 2023
Irrigation, Biofilms,
Cheng, Owen , Swink,
https://lnkd.in/eN3CnXv2
Infection
Myntti (Allegheny
Health Network poster
presentation at
Orthopaedic Research
Society meeting.
April 2023
Acne treatment
Marshall-Hudson, Tuley,
https://pub-press.mydigitalpublication.com/
Damstra, Dosik, Myntti,
publication/?m=54680&i=787927&p=42&ver=html5
Porral, Palomo (TXL
Research Inc., Next
Science)
July 2023
Biofilm, Wound Care
Patricia Stevenson,
Melissa Marguet and
Matthew Regulski
https://www.sciencedirect.com/science/article/abs/
pii/S0899588523000515?dgcid=author
November
XPERIENCETM Case
Daniel Hawk, Dr. Jon
https://worldjournalofcasereports.org/science-world/
2023
Study on Acute
Minter, MD
articlepdf/wjcrci-22-221.pdf
Septic Knee Arthritis
December
XPERIENCETM and
Louis Battista, Andrew
https://journaloei.scholasticahq.com/article/89994
2023
inflammation
Wickline, MD
January 2024
Biofilms
Claudia A Cox, Elias K
https://pubmed.ncbi.nlm.nih.gov/38214428/
Manavathu, Sushama
Wakade, Matthew Myntti,
Jose A Vazquez
February 2024 BLASTX Case study
Patricia Stevenson, Kristie
https://worldjournalofcasereports.org/science-world/
on Sweets Syndrome
Warwick, Kerry Wirz,
articlepdf/wjcrci-24-31-224.pdf
February 2024
Irrigation, PJI
Sean B Sequeira, Matthew
https://pubmed.ncbi.nlm.nih.gov/38372561/
Chelsea Birtwell
F Myntti, Michael A Mont
12
Annual Report 2023 CHAIR MESSAGE
DEAR FELLOW SHAREHOLDERS,
I am pleased to present the Annual Report of Next Science Limited for the year ended 31 December 2023, my first
as your Chair.
A YEAR OF RENEWAL
2023 has been a year of renewal for the Company with significant changes made to our Board and leadership team
as well as across the business. The DME structure which was in its infancy at the start of FY23 has continued to
show growth as we implemented key learnings and refined our strategy. We also made good progress in driving
direct sales of BLASTX® and XPERIENCETM.
We finished FY23 with a new-look Board following the departure of our Chair, Mark Compton for personal reasons and
Bruce Hancox, who had served on the Board for over a decade following the investments by our major shareholder
Lang Walker AO. We are extremely grateful to them both for their important contribution and longstanding support
of the Company. We appointed two Australian-based Non-Executive Directors, Grant Hummel and Katherine Ostin,
who bring fresh perspectives, valuable skills and deep experience in the healthcare sector.
We also made significant changes to our leadership team. Our former CEO and Managing Director Judith Mitchell
retired in July 2023, and we thank Judith for her pioneering work in establishing Next Science’s position as a listed
medical device company and building its business especially in the United States. Judith led the Company through
its ASX-listing and built a team focused on commercial success.
I would also like to acknowledge the contribution of our former Chief Financial Officer (CFO) Jacqueline Butler who
was pivotal in the ASX-listing, establishing robust financial systems and the successful formation of the DME.
As part of the process of appointing a US-based CEO and Managing Director, we made the strategic decision to
move the CFO role to our Florida office in the US. The relocation of the CFO role is designed to support and provide
even greater focus on the ongoing growth of the commercial business. Marc Zimmerman was appointed CFO in
May 2023. Marc has held different CEO and CFO roles as well as various finance positions during his 15-year tenure
at Verizon.
In July 2023, we were delighted to welcome I.V. Hall to Next Science as CEO and Managing Director. I.V. is a
respected leader in the US healthcare industry with a rare combination of scientific, clinical and commercial skill and
experience. He has a proven track record in building successful businesses and a positive organisational culture.
I.V. was most recently a member of the Global Leadership Team and R&D Leadership Team for De Puy Synthes, a
subsidiary of Johnson & Johnson (NYSE: JNJ).
Since joining, I.V. has already made a huge difference to the Company creating a more inclusive and supportive
culture based on accountability from the Board down. He has also conducted detailed reviews of our operating
processes, sales strategy and the DME segment.
CAPITAL RAISE AND USE OF FUNDS
In August 2023, we successfully completed a Placement to new and existing institutional and sophisticated investors
to raise gross proceeds of A$12m. This was followed by a Share Purchase Plan (SPP) and US Offer which were
completed in September to raise a further A$9.5m.
13
Annual Report 2023 CHAIR MESSAGE
CAPITAL RAISE AND USE OF FUNDS (CONT.)
In conjunction with the Placement, Next Science reached agreement with Walker Group Holdings Pty Ltd to retire
the A$10m in convertible notes held by the Walker Group with the redemption amount of A$10m (plus accrued
interest) offset against a share subscription commitment by Walker Group at the Placement Price. The settlement
and issue of shares to Walker Group was approved by shareholders at a General Meeting in October 2023.
The funds raised strengthened Next Science’s balance sheet ensuring we are well placed to fund the promotion of
XPERIENCETM research, resourcing to service the Health Trust opportunity, expansion of the DME sales force and
expansion of a second fulfilment site for the DME.
LANG WALKER AO
In January 2024, we were saddened to learn of the passing of Lang Walker AO, who has been a longstanding
supporter of Next Science and its unique XBIOTM technology. Related party interests associated with Mr Walker hold
around 37% of Next Science via Walker Group Holdings Pty Ltd and the Auckland Trust Company.
OUR OUTSTANDING TEAM
After a long career witnessing problematic infections, I joined the Next Science Board in 2018 because I was
excited by the possibilities inherent in the XBIOTM technology platform. I have seen the debilitating impacts these
infections have on people’s lives and the enormous burden they place on our healthcare systems. As we make the
transition from a start up to a small company with successful commercialisation, I look forward to working closely
with the Board, and I.V. and his team as we seek to eradicate these biofilms.
On behalf of the Board, I would like to thank all our team for their continued dedication and commitment to our
business. Our people are critical to Next Science’s success.
I would also like to thank our board of directors who have provided counsel and guidance during an extraordinary
year.
Finally, I would like to acknowledge the ongoing support provided by our Shareholders and thank them for their
belief in our mission to heal people and save lives.
Aileen Stockburger
Chair and Independent Non-Executive Director
14
Annual Report 2023 CEO MESSAGE
DEAR FELLOW SHAREHOLDERS,
I am pleased to deliver the annual report for FY23, my first as your CEO.
I would like to begin with what drew me to the CEO role. I have spent my 30-year career in medical devices, 28
years of which were in orthopaedics. For the first half of my career, I worked as an engineer in R&D, developing
and launching hundreds of products. The second half has been focused on sales, commercialisation, and strategy.
What I learned through my time in orthopaedic trauma was that the healthcare marketplace has developed excellent
solutions for repairing biomechanics. We have optimised implant and instrument design for restoration of structure,
developed robotics for perfection of surgical techniques and biologics for regeneration and remodelling of tissues.
However, the one clinical challenge that remains and does not have a gold standard of care is the prevention or
treatment of infection, whether it is orthopaedic or soft tissue-based surgery. Moreover, for wounds in general,
we do not have effective and efficient gold standard of care treatment solutions for the prevention or treatment of
infection.
The XBIOTM technology is a very simple solution that does not change the way the procedures are done. It does not
change the way a clinician has to work and forms part of the standard workflow of the surgery or patient treatment.
The mode of action is so unique and the XBIOTM technology so straightforward in its approach and simplicity that
it provides an elegant solution to a very difficult problem.
When I first met with Next Science and gained a better understanding of the challenges facing the Company, I
realised the needs primarily related to commercialisation rather than the technical side. This meant there was a
real opportunity to get a solution into the healthcare space to solve entrenched problems and deliver better patient
outcomes to an underserved population.
IMMEDIATE PRIORITIES
Since joining the Company in July 2023, I have focused on a several immediate priorities. This began with a
refinement of our strategy and the establishment of key goals and objectives.
We revised our mission statement to include innovation and education. As we focused on education, we looked
closely at how we serve our customers. We decided it was time for the company to commit to building a sales
force centred around product expertise and clinical acumen that is a true valued benefit.
We consolidated our sales leadership team and launched a new sales training program, Next Science University,
as first steps in this transformation. We have since taken on the process of training all of our direct field sales
consultants in the clinical and technical realm of wound care. These changes and new focus on training are
expected to deliver significant improvements in the future productivity and efficiency of the sales team.
At the same time, it became clear that we needed to improve and expand our customer engagement and sales
strategies specific to the DME business. We refocused our sales teams to target larger volume and more profitable
segments of the wound care market. This involved targeting the larger Wound Care Centres and expanding our
payor matrix beyond Medicare to include the private payor sector to enable access to more patients that are being
treated in those Wound Care Centres.
We have also refined the culture of the organisation building on the incredible passion displayed by our team with
a renewed focus on consistency, quality, and rigour.
15
Annual Report 2023 CEO MESSAGE
FY23 FINANCIAL RESULT
In FY23, Next Science delivered record revenue of US$22.2m which was 89.4% higher on the prior corresponding
period (pcp). 2H FY23 revenue of US$12.1m was in line with the 2H FY23 guidance of US$12-14m provided in
October 2023.
As we moved through the year, we saw an improved performance across the business. Wound Care sales recorded
solid growth as the DME structure benefited from an increased focus on wound care centres and shift in our payor
mix. Higher direct sales of BLASTX® reflected a new distributor arrangement for Veterans Affairs clinics and orders
from Long Term Care Centres. Within the Surgical segment, direct sales of XPERIENCETM recorded good growth
due to an increase in the clinical evidence available and broader access to healthcare sites provided by our contract
with a leading GPO.1
The key highlights of the FY23 result are as follows:
•
•
•
•
Revenue: US$22.2 million (FY22: US$11.7 million)
Gross Profit: US$16.2 million (FY22: US$9.2 million)
Operating Loss: US$16.0 million (FY22: US$12.7 million)
Closing Cash: US$9.2 million (FY22: US$5.1 million)
CLINICAL STUDIES
In 2023, we commenced a 7,600 participant Canadian randomised control study that will be one of the largest
orthopaedic clinical studies conducted. The scale of the study has been designed to support our objective of
XPERIENCETM being adopted as the standard of care in surgery. At the end of FY23, 261 patients had been enrolled
in the first site. A second site has started recruiting with another five sites pending completion of contracts.
Other important clinical studies released during FY23 added to the increasing body of clinical evidence available
on the efficacy of XPERIENCETM. This included a study by Dr Andrew Wickline MD which showed a potential
anti-inflammatory benefit for XPERIENCETM. Following a peer review process, it was published in the Journal of
Orthopaedic Experience & Innovation in December 2023.
In November 2023, a study by Dr Robert Harris MD, published on VuMedi, found XPERIENCETM to be efficacious
with zero infection rate in the 423-patient cohort up to 90 days post-surgery.
OUTLOOK
Our priorities for FY24 are to deliver significant topline growth across three key areas of the business. Firstly, by
increasing the penetration and productivity of the DME structure to achieve further improvement in revenue quality.
Secondly, by driving higher direct sales of BLASTX® to Long Term Care Centres and Veterans Affairs clinics.
¹On 1 August 2023, Next Science entered into an agreement with leading Group Purchasing Organisation (GPO) HealthTrust to provide its members with access
to XPERIENCETM. The US-based organisation serves 1,600 hospitals and 43,000 alternate sites of care including ambulatory surgery centres, physician practices
and long-term care centres.
16
Annual Report 2023 CEO MESSAGE
OUTLOOK (CONT.)
Finally, direct sales of XPERIENCETM are expected to benefit from the expansion of our GPO footprint and extension
of the use case from high risk to prophylactic use. The publication of additional clinical research for both BLASTX®
and XPERIENCE® in the next 12 months will also be important and lead to broader recognition in the medical
community.
Next Science expects to achieve a cash flow positive position on a monthly basis by the end of FY24. This is
underpinned by continued revenue growth, working capital and cost management which includes an increase in
the variability of our cost base.
I would like to thank our Board, team, and shareholders for their invaluable contribution to the continued growth
of our Company.
Harry Thomas Hall, IV (I.V.)
Managing Director and Chief Executive Officer
17
Annual Report 2023 Next Science Limited
ACN 622 382 549
Annual Report - 31 December 2023
18
Annual Report 2023
DIRECTORS’ REPORT
The Directors present their report together with the consolidated financial statements of the Group comprising
Next Science Limited (Next Science/Company), and the entities it controlled at the end of, or during, the year
ended 31 December 2023 (Group). All amounts are presented in US dollars (USD) unless otherwise stated.
DIRECTORS
The Directors of the Company in office during or since the end of the financial year were as follows:
CURRENT
Aileen Stockburger
Harry Thomas Hall, IV (I.V.)
Appointed 10 July 2023
Grant Hummel
Katherine Ostin
Daniel Spira
FORMER
Bruce Hancox
Mark Compton
Judith Mitchell
Appointed 23 August 2023
Appointed 24 October 2023
Retired 30 June 2023
Retired 23 August 2023
Retired 31 July 2023
DIVIDENDS
No dividends were paid or declared since the commencement of the year and the Directors do not recommend
the declaration of a dividend.
OPERATING AND FINANCIAL REVIEW
Principal activities
The principal activities of the Group during the course of the year were the research, development and com-
mercialisation of technologies to resolve the issues caused by biofilms and their incumbent bacteria, fungus
and viruses and the infections they cause with a focus on human health. The Company is headquartered in
Sydney, Australia and has a research and development centre and sales and marketing functions located in
Florida, USA.
19
Annual Report 2023 DIRECTORS’ REPORT
OPERATING AND FINANCIAL REVIEW (CONT.)
Significant changes in the state of affairs
On 2 February 2023, the Company, issued 10,000,000 Secured Convertible Notes with a Face Value of
A$10,000,000 (Notes) to a major shareholder, Walker Group Holdings Pty Limited (Walker Group) to support
the establishment and growth of the Company’s new Durable Medical Equipment (DME) business and to fund
investment in a Canadian study at the Ottawa Hospital Research Institute (see further details on the study
below). The terms of the Notes included a 21-month term maturing on 11 November 2024 at a conversion
price of A$0.72 per security and accrual of interest at a rate of 10% per annum, (payable in one instalment on
redemption, or if Walker Group issued a notice of conversion, at a rate of 5% per annum and capitalised into
additional shares on conversion.
In March 2023, recruitment commenced for a 7,600-patient study into periprosthetic joint infection (PJI) through
the Ottawa Hospital Research Institute in Canada. The randomised controlled study is being conducted over
at least five sites and will be one of the largest orthopaedic studies ever conducted. The study will assess the
rate of PJI (less than 90 days post-surgery) in patients undergoing primary total knee arthroplasty, total hip
arthroplasty or hip resurfacing with XPERIENCE™ Advanced Surgical Irrigation versus dilute Betadine.
In May 2023, the Company announced that, as part of the process of appointing a new US based Managing
Director and Chief Executive Officer (CEO), it had made a strategic decision to also move the Chief Financial
Officer (CFO) role to the Company’s US office. The CFO role relocation was designed to support and provide
even greater focus on the ongoing growth of the Company’s commercial business.
Marc Zimmerman was appointed as CFO on 26 May 2023. Marc has over 29 years’ experience holding both
CFO and CEO positions.
On 10 July 2023, Harry Thomas Hall, IV (I.V.) commenced as the Company’s CEO, based in the Company’s
Florida office. I.V. has over 28 years’ experience in the global medical device industry. Prior to joining Next
Science, I.V. was a member of the Global Leadership Team and R&D Leadership Team for DePuy Synthes, a
subsidiary of Johnson and Johnson (NYSE: JNJ). I.V. joined DePuy Synthes in 1997 where he held senior roles
including: Global Vice President – MedTech R&D and Worldwide President – Trauma, Extremities, Craniomaxil-
lofacial & Animal Health. As Worldwide President of Trauma, Extremities, Craniomaxillofacial and Animal Health
at DePuy Synthes, I.V. was responsible for a global portfolio and execution strategy for a US$3.2bn platform
including upstream marketing and commercial planning in the Global Orthopaedic Unit of DePuy Synthes.
The terms of I.V.’s executive services agreement include a sign-on grant of performance rights equivalent in
value to US$500,000 (based on the 20-trading day volume weighted average price of the Company’s shares
prior to the date of announcement of I.V.’s appointment), vesting in equal tranches annually over a three-year
period subject to continuous employment through to each vesting date. The Company will seek shareholder
approval for the sign-on grant at the 2024 annual general meeting and the rights will be granted following the
meeting. If shareholder approval is not obtained, vested rights will be satisfied with Company shares pur-
chased on market.
On 30 June 2023, Non-Executive Director, Bruce Hancox, retired as a Director, having served on the Board for
more than 10 years and as Chair of the Board’s Audit and Risk Committee, since the Company’s admission to
20
Annual Report 2023 DIRECTORS’ REPORT
OPERATING AND FINANCIAL REVIEW (CONT.)
Significant changes in the state of affairs (continued)
the official list of ASX in 2019. Aileen Stockburger was appointed by the Board to assume the role of Chair of
the Audit and Risk Committee upon Bruce’s retirement.
On 27 July 2023, the Company announced that it had signed its first Group Purchasing Organisation (GPO)
contract. The Company’s GPO contract with HealthTrust has provided access to XPERIENCE™ for Health-
Trusts’ members since 1 August 2023. HealthTrust is a leading GPO in the US serving 1,600 hospitals and
43,000 alternate sites of care including ambulatory surgery centres, physician practices and long-term care
centres.
On 9 August 2023, Next Science announced the release of the findings of a 60-patient double-arm pilot study
which demonstrates a potential anti-inflammatory benefit for XPERIENCE™, Next Science’s advanced sur-
gical irrigation product, following a total knee arthroplasty (TKA). Next Science considers the study findings
to be important as they suggest an expanded application for XPERIENCE™ beyond reducing biofilm-based
infection rates. The study findings subsequently underwent a peer review process and were published in the
Journal of Orthopaedic Experience & Innovation in December 2023.
On 23 August 2023, the Company announced the appointment of Aileen Stockburger as Chair of the Board of
Directors and the appointment of a longstanding advisor to the Company, Grant Hummel, as an independent
Non-Executive Director. The timing of the Board changes was brought about by the retirement of Mark Comp-
ton AM as a Non-Executive Director and Chair of the Company. Mark’s retirement from the Board followed
recent family bereavements.
On 31 August 2023, the Company announced the completion of a placement to institutional and sophisticated
investors (Placement) raising A$12,000,000 at a price of A$0.42 per share as well as the launch of a Share
Purchase Plan to raise up to A$5,000,000 and an offer to US accredited investors to raise up to A$1,500,000,
each at the same price as the Placement.
The Company also announced on 31 August 2023 that in conjunction with the Placement, the Company had
entered into a Subscription and Redemption Deed agreement with Walker Group to retire all of the Notes on
the basis that the redemption amount of A$10,000,000 plus accrued interest would be offset against a share
subscription commitment by Walker Group at the same price as the Placement, conditional upon shareholder
approval.
On 24 October 2023, the Board appointed Katherine Ostin (Kathy) as an independent Non-Executive Director
and Chair of the Board’s Audit and Risk Committee. Kathy was an Audit, Assurance and Risk Consulting Part-
ner at KPMG from 2005 to 2017 and has extensive experience in the aged care and healthcare sectors, having
established and led KPMG’s New South Wales Health, Ageing and Human Services audit practice from 2006
to 2017. During her 24 years with KPMG, Kathy worked in Australia, the US, Asia, and the UK.
On 25 October 2023, in accordance with the Subscription and Redemption Deed between Walker Group and
Next Science and following receipt of shareholder approval to do so, Walker Group gave notice of the exercise
of their right to elect to redeem the A$10,000,000 Notes in return for the issue to Walker Group of 24,673,842
shares in the Company at a price of $0.42 being the same price as the Placement price. The early conversion
21
Annual Report 2023 DIRECTORS’ REPORT
OPERATING AND FINANCIAL REVIEW (CONT.)
Significant changes in the state of affairs (continued)
and modification of the Notes resulted in an overall gain on fair value of US$402,324. Following the issue of
the shares to Walker Group, the interests of Walker Group, and its associates, in the Company increased to
37.17%.
In the opinion of the Directors, other than the events previously stated, there were no further significant chang-
es in the state of affairs of the Group that occurred during the year.
Shareholder returns
Revenue
Loss attributable to owners of the company
Basic earnings per share (EPS) (cents)
Share price as at 31 Dec (A$)
Return on capital employed
Review of operations
2023
$22,179,327
($16,270,814)
($6.95)
AUD$0.340
(113.4%)
2022
$11,712,722
($12,683,312)
($6.03)
AUD$0.685
(128.0%)
The loss for the Group for the financial year to 31 December 2023 after providing for income tax amounted to
$16,270,814 (2022: $12,683,312).
Revenue increased by 89% for the period increasing from $11,712,722 in the prior corresponding period to
$22,179,327. Major contributors to increases in product sales included significant growth in both the Wound
Care and Surgical businesses. Growth in the Wound Care business is through the Durable Medical Equip-
ment (DME) structure of offering reimbursed Collagen with BlastX. Contributing to the growth in the Surgical
business is the Company’s GPO contract with HealthTrust giving Next Science the framework to sell XPERI-
ENCE™ to a larger number of hospitals and alternate sites as well as further clinical studies conducted which
provides support for the product, preventing surgical site infection.
Gross profit for FY23 was $16,234,576 compared to $9,149,698 in the prior corresponding period. Gross mar-
gin as a percent of sales was 73% compared with 78% in the prior corresponding period.
Selling and distribution expenses were $20,165,335, an increase of $9,855,130 compared with $10,310,205 in
the prior corresponding period. The increase in spend in 2023 mainly relates to an increase in the Wound Care
sales team which more than doubled associated with growing the DME business in 2023 and the associated
increases in US domestic travel.
Administration expenses were $5,610,459, an increase of $225,453 compared with $5,385,006 in the prior
corresponding period. The increase mainly relates to further costs to support the DME launch and the overall
higher product sales.
Research and development expenses were $6,485,524 an increase of $335,718 compared with $6,149,806
in the prior corresponding period with expenditure in the current period related to continued spend on R&D
projects and clinical studies including increased expenditure relating to the Canada study being conducted by
the Ottawa Hospital Research Institute.
22
Annual Report 2023 DIRECTORS’ REPORT
OPERATING AND FINANCIAL REVIEW (CONT.)
Review of operations (Continued)
Cash and cash equivalents at 31 December 2023 amounted to $9,238,697 compared to $5,073,625 at 31
December 2022. Term deposits at 31 December 2023 amounted to $37,823 compared to $37,789 at 31 De-
cember 2022.
The Directors have considered the effects of the Israeli-Palestinian Conflict, the rising interest and inflation
outlook and climate-related risks and do not expect any significant impact on the Group arising from these
matters.
Inherent risks of Investments in Health Care Companies
There are many inherent risks associated with the development of medical devices to a marketable stage. The
distribution of some of Next Science’s products is subject to obtaining and maintaining FDA and other clear-
ances issued by appropriate governmental authorities and regulatory bodies. Following regulatory approval of
some products such as XPERIENCE™, further clinical studies are being undertaken to demonstrate effective-
ness and to expand the list of claims per product. Although Next Science believes such clinical studies will be
a success, there are no guarantees that the studies will effectively meet their end points.
Other risks include patent protection and proprietary rights, whether patent applications and issued patents
will offer adequate protection to enable product development, the obtaining of necessary regulatory authority
approvals and difficulties caused by rapid advancements in technology.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS
Further information about likely developments in the operations of the Group and the expected results of those
operations in future financial years has not been included in this report because disclosure of the information
would be likely to result in unreasonable prejudice to the Group.
MATTERS SUBSEQUENT TO THE END OF THE FINANCIAL YEAR
There has not arisen in the interval between the end of the financial year and the date of this report any item,
transaction or event, other than those matters detailed above, of a material and unusual nature likely, in the
opinion of the directors of the Company, to affect significantly the operations of the Group, the results of those
operations, or the state of affairs of the Group, in future financial years.
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
environmental requirements.
GOVERNMENT REGULATION
The Group is subject to varying degrees of governmental regulation in the countries in which its operations are
conducted, and the general trend is towards increasingly stringent regulation. In the U.S., the drug,
23
Annual Report 2023 DIRECTORS’ REPORT
GOVERNMENT REGULATION (CONT.)
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 available to the U.S. Food and Drug Administration (the “FDA”) can
result in increases in the amounts of testing and documentation required for FDA clearance of new drugs and
devices and a corresponding increase in the expense of product introduction. Similar trends are also evident
in major markets outside of the U.S.
The Jacksonville based subsidiary, Next Science LLC, is licensed and accredited by US Medicare, as a Dura-
ble Medical Equipment (DME) provider based in the State of Florida, USA. Such licensing and accreditation,
brings with it additional regulatory and compliance obligations. Being accredited as a DME business, Next
Science must comply with the U.S Health Insurance Portability and Accountability Act (HIPPA) which requires
companies that deal with protected health information to have physical, network, and process security mea-
sures in place and follow them. Next Science will need to ensure that it maintains its HIPPA compliance in
order to continue to be accredited as a DME entity.
The Group relies on global supply chains, and production and distribution processes that are complex and
are subject to lengthy regulatory approval processes and ongoing regulatory requirements which can affect
sourcing, supply and pricing of materials used in the Group’s products.
24
Annual Report 2023 DIRECTORS’ REPORT
INFORMATION ON DIRECTORS
NAME: AILEEN STOCKBURGER
Title:
Chair and Independent Non-Executive Director
Special responsibilities:
Member, Audit and Risk Committee
Member, People, Culture and Remuneration Committee
Qualifications:
Bachelor of Science and MBA, The Wharton School, University of Penn-
sylvania, Graduate of the Australian Institute of Company Directors, Certi-
fied Public Accountant (CPA – USA).
Experience and expertise:
Prior to joining Next Science, Aileen was the Worldwide Vice President of
Business Development for the DePuy Synthes Group of Johnson & John-
son, where she oversaw the group’s merger and acquisition activities, in-
cluding deal structuring, negotiations, contract design and review, and
deal terms. Aileen 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 drive 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 listed company director-
Non-Executive Director, Microbot Medical Inc. (NASDAQ: MBOT).
ships in last three years:
25
Annual Report 2023 DIRECTORS’ REPORT
NAME: HARRY THOMAS HALL, IV (I.V.) (APPOINTED 10 JULY 2023)
Title:
Managing Director and Chief Executive Officer
Special responsibilities:
None
Qualifications:
Bachelor of Science: Ceramic Engineering and Master of Science: Bio-
engineering, Clemson University
MBA, Pennsylvania State University
Advanced Management Program, Harvard Business School
Experience and expertise:
I.V. has more than 28 years’ experience in the global medical device in-
dustry and has held diverse general management roles including prod-
uct development, global strategic marketing, commercial operations,
and sales leadership. Prior to joining Next Science, I.V. was a member
of the Global Leadership Team and R&D Leadership Team for DePuy
Synthes, a subsidiary of Johnson and Johnson (NYSE: JNJ), and com-
pleted the launch of the first surgical robot developed by JNJ / DePuy
Synthes. I.V. joined DePuy Synthes in 1997 where he held senior roles
including: Global Vice President – MedTech R&D and Worldwide Pres-
ident – Trauma, Extremities, Craniomaxillofacial & Animal Health. As
Worldwide President of Trauma, Extremities, Craniomaxillofacial and
Animal Health, I.V. was responsible for a global portfolio and execution
strategy for a US$3.2bn platform including upstream marketing and
commercial planning in the Global Orthopaedic Unit of DePuy Synthes.
In addition to managing over 1,100 staff across sales, marketing and
R&D, I.V. created and sustained personal relationships with well over
one hundred key opinion leaders worldwide.
Other listed company director-
None
ships in last three years:
26
Annual Report 2023 DIRECTORS’ REPORT
INFORMATION ON DIRECTORS (CONTINUED)
NAME:
Title:
GRANT HUMMEL (APPOINTED 23 AUGUST 2023)
Independent Non-Executive Director
Special responsibilities:
None
Qualifications:
Bachelor of Science with an honours degree in molecular genetics and
Bachelor of Laws (Honours), University of Tasmania
Graduate Diploma of Applied Finance and Investment, FINSIA (now Ka-
plan)
Experience and expertise:
Grant was part of Next Science’s ASX listing deal team in 2019. He has
been a partner of a major Australian law firm, for over fifteen years. Grant
has experience with corporate and commercial transactions, with partic-
ular expertise in advising primary care, allied health, medical device and
life science clients.
Other listed company director-
Non-Executive Director of GLG Corp Ltd (ASX:GLE)
ships in last three years:
NAME:
Title:
KATHERINE OSTIN (APPOINTED 24 OCTOBER 2023)
Independent Non-Executive Director
Special responsibilities:
Chair, Audit and Risk Committee
Qualifications:
Bachelor of Commerce (Accounting and Finance), University of New
South Wales
Fellow of the Financial Services Institute of Australasia
Graduate, Australian Institute of Company Directors
Experience and expertise:
Kathy is an experienced non-executive director and audit and risk com-
mittee chair. Kathy was an Audit, Assurance and Risk Consulting Partner
at KPMG from 2005 to 2017 and has extensive experience in aged care
and healthcare sectors, having established and led KPMG’s New South
Wales Health, Ageing and Human Services audit practice from 2006 to
2017. During her 24 years with KPMG, Kathy worked in Australia, the US,
Asia, and the UK.
Other listed company director-
Non-Executive Director of 3P Learning Limited (ASX:3PL) since August
ships in last three years:
2021
Non-Executive Director of Dusk Group Limited (ASX:DSK) since Septem-
ber 2020
Non-Executive Director of Capral Limited (ASX:CAA) since June 2020
Non-Executive Director of Alex Corporation Limited since February 2021
Non-Executive Director of Elanor Investors Group Limited (ASX: ENN)
and Elanor Commercial Property Fund (ASX: ECF) since January 2024
Non-Executive Director of Swift Media Ltd (ASX:SW1) (1 October 2019 -
18 November 2021)
27
Annual Report 2023 DIRECTORS’ REPORT
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:
Dan is the CEO of iNova Pharmaceuticals (since 2017), 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 Amer-
ica (with responsibility for a portfolio of businesses spanning Vision
Care, Dermatology and Aesthetic Devices) and was also Managing
Director, Pacific region.
Prior to that, Dan spent over 15 years at Johnson & Johnson Inc in
various roles including Vice President, Country Manager, Chief Mar-
keting Officer and other sales and marketing roles across the Asia
Pacific, Europe/Middle East and North American regions.
Other listed company director-
None
ships in last three years:
NAME:
Title:
MARK COMPTON AM (RETIRED 23 AUGUST 2023)
Chair and Independent Non-Executive Director
Special responsibilities:
Member, Audit and Risk Committee
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 Austral-
asian College of Health Services Management, the Australian Insti-
tute of Management and the Royal Society (New South Wales).
Experience and expertise
Mark is Lord Prior of the International Order of St John and Chair of
the Board of Trustees of St John International.
Mark is Chair of Sonic Healthcare Limited, a global medical diagnos-
tics and healthcare organisation which is a Top 50 ASX listed entity.
He is also Chair of St Luke’s Care Limited, a not-for-profit health and
aged care organisation. 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, Sci-
Gen Limited and Alpha Healthcare Limited. He is an Adjunct Profes-
sor at Macquarie University in healthcare leadership and manage-
ment (since 2012).
Other listed company director-
Chair and Non-Executive Director of Sonic Healthcare Limited (ASX:
ships in last three years:
SHL).
28
Annual Report 2023 DIRECTORS’ REPORT
INFORMATION ON DIRECTORS (CONTINUED)
NAME:
Title:
BRUCE HANCOX (RETIRED 30 JUNE 2023)
Non-Executive Director
Special responsibilities:
Chair, Audit and Risk Committee
Qualifications:
Bachelor of Commerce, Canterbury University New Zealand
Experience and expertise:
Bruce has many years of corporate 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 gen-
eral 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 Lang Walker AO since
2008. He serves as a director at Walker Corporation.
Other listed company director-
None
ships in last three years:
NAME:
Title:
JUDITH MITCHELL (RETIRED 31 JULY 2023)
Managing Director and Chief Executive Officer
Special responsibilities:
None
Qualifications:
MBA, University of Hull
Experience and expertise:
Judith has been the Managing Director of Next Science since 2017. Prior
Graduate of the Australian Institute of Company Directors
to joining Next Science, 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 Sys-
tems, 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 listed company directorships
None
in last three years:
29
Annual Report 2023 DIRECTORS’ REPORT
COMPANY SECRETARY
Gillian Nairn, BA/LLB, LLM, FGIA, was appointed Company Secretary on 21 June 2018. Gillian is an experi-
enced corporate governance professional with more than 20 years legal and governance experience gained
in private practice and in various in-house and consulting company secretarial roles, predominantly with listed
entities.
MEETINGS OF DIRECTORS
The number of meetings held and attended by each of the Directors of the Company during the year ended 31
December 2023 were as follows:
NAME OF DIRECTOR
BOARD
MEETINGS
PEOPLE,
CULTURE &
REMUNERATION
COMMITTEE
AUDIT AND RISK
COMMITTEE
AD HOC COMMITTEE1
Aileen Stockburger
Harry Thomas Hall, IV4
Mark Compton5
Bruce Hancox6
Grant Hummel7
Judith Mitchell8
Katherine Ostin9
Daniel Spira
A2
23
16
10
6
13
8
4
23
B3
23
15
8
6
13
8
4
22
A
3
-
2
-
1
-
-
3
B
3
-
2
-
1
-
-
3
A
6
-
3
2
3
-
1
-
B
6
-
3
2
3
-
1
-
A
5
5
-
-
-
5
-
-
B
5
4
-
-
-
5
-
-
1This was a temporary subcommittee established by the Board to deal with ad-hoc matters during
the year
2A - Number of meetings held
3B - Number of meetings attended by the Director during the time the Director was a member of the
Board or Committee
4Appointed Managing Director and CEO on 10 July 2023
5Approved leave of absence from 17 August 2023 to 22 August 2023 inclusive. Retired on 23 August
2023.
6Retired on 30 June 2023
7Appointed a Director on 23 August 2023
8Retired on 31 July 2023
9Appointed a Director on 24 October 2023
30
Annual Report 2023
DIRECTORS’ REPORT
DIRECTORS’ INTERESTS
The relevant interest of each Director in shares, options and rights 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:
DIRECTOR
FULLY PAID ORDINARY SHARES
SHARE OPTIONS OR RIGHTS
Aileen Stockburger
Harry Thomas Hall, IV (I.V.)*
Grant Hummel
Katherine Ostin
Daniel Spira
Total
Number
569,638
200,000
387,694
-
752,172
1,909,504
Number
-
-
-
-
-
-
*Note: I.V. Hall has a contractual right to a sign-on grant of rights. Refer to page 38 for further details.
SHARES UNDER OPTION AND RIGHTS
At the date of this report, there are 6,349,967 options over ordinary shares on issue (2022: 2,812,000 options)
and 2,017,151 performance rights, representing 2.87% (2022: 1.31%) of the Company’s undiluted total share
capital, granted to employees and directors under an equity incentive plan.
INDEMNITY AND INSURANCE OF OFFICERS
The Group has indemnified the Directors and executives of the Group for costs incurred, in their capacity as a
director or executive, for which they may be held personally liable, except where there is a lack of good faith.
During the financial year, the Group has paid a premium in respect of a contract to insure the Directors and ex-
ecutives of the Company against a liability to the extent permitted by the Corporations Act 2001. The contract
of insurance prohibits disclosure of the nature of the liability and the amount of the premium.
INDEMNITY AND INSURANCE OF AUDITOR
The Company and the Group have not, during or since the end of the financial year, indemnified or agreed to
indemnify the auditor of the Company or any 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 proceed-
ings 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.
31
Annual Report 2023 DIRECTORS’ REPORT
NON-AUDIT SERVICES
Details of the amounts paid or payable to the auditor for non-audit services provided during the financial year
by the auditor are outlined in note 36 to the financial statements.
The Directors are satisfied that the provision of non-audit services by the auditor during the financial year is
compatible with the general standard of independence for auditors imposed by the Corporations Act 2001.
The Directors are of the opinion that the services as disclosed in note 36 to the financial statements do not
compromise the external auditor’s independence requirements under the Corporations Act 2001 for the fol-
lowing reasons:
• All non-audit services have been reviewed and approved to ensure that they do not impact the integrity
and objectivity of the auditor; and
• The external auditor has declared to the Directors that to the best of the individual auditor’s knowledge
and belief, there have been no contraventions of the auditor independence requirements of the Corpo-
rations Act 2001 and no contraventions of any applicable code of professional conduct in relation to the
audit for the year ended 31 December 2023.
The non-audit services provided do not undermine the general principles relating to auditor independence
as set out in APES 110 Code of Ethics for Professional Accountants (including Independence Standards), as
they did not involve reviewing or auditing the auditor’s own work, acting in a management or decision making
capacity for the Company, acting as an advocate for the Company or jointly sharing 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 48 and forms part of the Directors’ Report for the
financial year ended 31 December 2023.
AUDITOR
KPMG continues in office in accordance with section 327 of the Corporations Act 2001.
REMUNERATION REPORT (AUDITED)
This Remuneration Report forms part of the Directors’ Report for the year ended 31 December 2023. 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 Corpo-
rations Act 2001 and its Regulations.
32
Annual Report 2023 DIRECTORS’ REPORT
REMUNERATION REPORT (AUDITED) (CONT.)
For the purposes of this Report, key management personnel (KMP) are defined as those persons having au-
thority and responsibility for planning, directing and controlling the activities of the Group, directly or indirectly,
including any director of the Company (non-executive or executive).
The information in this Remuneration Report is set out under the 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 plans and performance rights over equity instruments
• KMP Remuneration
• KMP Equity Holdings
KEY MANAGEMENT PERSONNEL (KMP)
The KMP of the Group during the financial year and the positions held are summarised below:
Non-Executive Directors
Aileen Stockburger, Board Chair
Mark Compton
Bruce Hancox
Grant Hummel
Katherine Ostin
Daniel Spira
Managing Director and CEO
Harry Thomas Hall, IV (I.V.)
Judith Mitchell
Other KMP
Marc Zimmerman
Jacqueline Butler
Matthew Myntti
Jon Swanson
(retired 23 August 2023)
(retired 30 June 2023)
(appointed 23 August 2023)
(appointed 24 October 2023)
(appointed 10 July 2023)
(resigned as Managing Director and CEO on 9 July
2023 and retired as a Director on 31 July 2023)
(Chief Financial Officer) (appointed 26 May 2023)
(Chief Financial Officer) (resigned 31 May 2023)
(Chief Technology Officer)
(Chief Operating Officer)
33
Annual Report 2023 DIRECTORS’ REPORT
REMUNERATION GOVERNANCE
The People, Culture and Remuneration Committee comprises the following members:
• Daniel Spira (Chair)
• Aileen Stockburger
• Grant Hummel
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 Committee Charter provides that the Committee should comprise at
least three members, all of whom are Non-Executive Directors and a majority of whom are independent Di-
rectors.
The Chair of the Committee should be an independent Director who is not Chair of the Board.
The Charter requires the Committee to meet at least twice each year.
All of the current members of the People, Culture and Remuneration Committee have been assessed by the
Board as being independent Non-Executive Directors and the Chair of the Committee is not Chair of the Board.
SERVICE AGREEMENTS AND REMUNERATION POLICY
Executives are employed under executive employment agreements with the Group.
In determining remuneration, the Group considers:
•
industry based remuneration benchmarking (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.
34
Annual Report 2023 DIRECTORS’ REPORT
SERVICE AGREEMENTS AND REMUNERATION POLICY (CONT.)
Employment agreements
Name:
Title:
HARRY THOMAS HALL, IV (I.V.) (APPOINTED 10 JULY 2023)
Managing Director and Chief Executive Officer (CEO)
Ongoing service agreement.
If the Company terminates the CEO’s employment without Cause or the CEO resigns
other than for Good Reason, 90 days’ notice must be provided.
If the CEO resigns for Good Reason, the Company must continue to pay the CEO for 6
months from the termination date; up to 6 months of COBRA1 reimbursement; pro rata
STI for current year payable in a single cash lump sum on the date the STI otherwise
Details:
would have been paid; earned and unpaid STI for the previous year; and accelerated
vesting of outstanding service-based equity grants and continued eligibility for vesting of
performance-based equity grants (in each case on a pro rata basis).
The Company can terminate immediately for Cause.
I.V. is entitled to participate in the Company’s short and long-term incentive plans.
The CEO’s services agreement contains standard provisions regarding duties, leave en-
titlements, confidentiality, intellectual property, non-competition and non-solicitation re-
strictions.
1 COBRA is a US law that allows former employees to elect to remain as participants in their former employer’s group health insurance
plan for a limited period of time after termination of employment
Name:
Title:
MARC ZIMMERMAN (APPOINTED 26 MAY 2023)
Chief Financial Officer (CFO)
Details:
Ongoing service agreement.
The CFO’s employment may be terminated by either party at any time and for any
reason on 60 days’ notice. If the CFO resigns, the Company may unilaterally accel-
erate the date of termination.
The CFO is entitled to participate in the Company’s short and long-term incentive
plans. The CFO’s services agreement contains standard provisions regarding du-ties,
leave entitlements, confidentiality, intellectual property, and non-competition and
non-solicitation restrictions.
35
Annual Report 2023 DIRECTORS’ REPORT
SERVICE AGREEMENTS AND REMUNERATION POLICY (CONT.)
Employment agreements
Name:
Title:
Details:
Name:
Title:
Details:
DR MATTHEW MYNTTI
Chief Technology Officer (CTO)
Ongoing employment agreement to be reviewed annually by the Company.
The Company or employee may terminate the service agreement by giving 90 days
written notice.
The Company may terminate immediately for Cause as defined in the agreement.
Matthew is entitled to participate in the Company’s short term and long-term incen-
tive plans.
JON SWANSON
Chief Operating Officer (COO)
Ongoing employment agreement to be reviewed annually by the Company.
The Company or employee may terminate the service agreement by giving 90 days
written notice.
The Company may terminate immediately for Cause as defined in the agreement.
Jon is entitled to participate in the Company’s short term and long-term incentive
plans.
36
Annual Report 2023 DIRECTORS’ REPORT
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, the Constitution and the ASX Listing Rules stipulate that the total
amount of fees paid to Non-Executive Directors (excluding any special exertion fees) must not exceed the
amount approved by the Company’s shareholders. This amount has been fixed initially in the Company’s Con-
stitution 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 respon-
sibilities of the role. An additional fee of AUD$10,000 per annum is paid for performing the role of Chair of the
Audit and Risk Committee or the People, Culture and Remuneration Committee. The Company paid special
exertion fees to Aileen Stockburger during 2022 and 2023. These exertions were in consideration for assisting
the Board in ensuring the Company’s activities in the US received appropriate Board oversight and support.
EMPLOYEE INCENTIVE ARRANGEMENTS AND LINK BETWEEN PERFORMANCE AND
REWARD
Short Term Incentive (STI) Plan for Executives
The CEO, CFO, Chief Technical Officer (CTO), Chief Operating Officer (COO) and Chief Commercial Officer
(CCO) are eligible to participate in the Company’s short-term incentive plan (STI Plan).
The STI Plan year is defined as 1 January until 31 December in a given year.
Participants in the STI Plan, must be employed with the Company, or a wholly owned subsidiary of the Com-
pany, for at least six months during the Plan year. Participants who resign or are terminated before the end of
a Plan year are not eligible for any payments under the Plan unless the Board determines otherwise, in its sole
discretion.
The objectives of the STI Plan are to:
•
reward executives for their contribution to ensuring that Next Science achieves its annual goals and ob-
jectives;
• enhance Next Science’s opportunity to attract, motivate and retain high calibre and high performing ex-
ecutives; and
•
link part of executive remuneration directly to the achievement of Company and individual key perfor-
mance objectives.
The making of any payment under the STI Plan is subject to the achievement of three gateway hurdles:
achievement of at least 90% of the Company’s revenue target; 100% of the Company’s EBITDA target; and an
individual performance rating of at least ‘meets expectations’.
37
Annual Report 2023 DIRECTORS’ REPORT
EMPLOYEE INCENTIVE ARRANGEMENTS AND LINK BETWEEN PERFORMANCE AND
REWARD (CONT.)
The maximum STI opportunity is 100% of Total Fixed Remuneration (TFR) for the CEO and 80% of TFR for
the other executive participants. To receive the maximum STI opportunity, the Company must achieve at least
110% of its revenue and EBITDA targets and individual performance must be assessed as being at the top
level of ‘extraordinary’.
As a number of the members of the executive team already have significant security holdings in Next Science,
any payments under the STI Plan are paid in cash to ensure that the STI opportunities operate as true incen-
tives.
No STI payments were made in respect of the financial year ended 31 December 2023 (2022: Nil) as the gate-
way revenue and EBITDA targets were not met.
Long-Term Incentive (LTI) Plan for Executives
At the time of the Company’s initial public offering (IPO) in April 2019, the Board of the Company established
an equity incentive plan to facilitate the grant of equity to eligible persons to align their interests with share-
holders through the sharing of a personal interest in the future growth and development of the Company (NXS
Employee Equity Plan). In May 2023, Next Science issued 700,000 options with an exercise price of A$0.68
and expiry date of 1 May 2028 to employees under the NXS Employee Equity Plan.
At the time of the Company’s IPO, the Company also established a long term incentive plan under which the
Company can issue incentives in the form of performance rights (LTI Plan) to eligible executives of the Com-
pany. The grant of performance rights under the LTI Plan is governed by the NXS Employee Equity Plan Rules.
The CEO, CFO, CTO, COO and Senior Vice-President, Sales are eligible to participate in the LTI Plan.
During the financial year ended 31 December 2023, the Board undertook a review of the Company’s approach
to long term incentives, assisted by external remuneration consultants, with the key objectives of the review
including ensuring that the LTI Plan was appropriate for the size of the Company and its stage of development,
the LTI Plan was aligned to the Company’s strategy and commercialisation goals and the LTI Plan was simple
to understand and valuable to all participants.
This review led to the Board revising the Company’s LTI Plan with a key change being amending the form of
equity offered under the plan from performance rights only to an equal split of performance rights and options
i.e. 50% performance rights and 50% options.
The CEO is entitled to an initial sign-on grant of performance rights equivalent in value to US$500,000, vesting
in equal tranches annually over a three-year period subject to continuous employment. The Company intends
to seek shareholder approval for the sign-on grant at the Company’s 2024 Annual General Meeting (AGM). The
rights will be granted following the AGM. If shareholder approval of the grant of rights is not obtained, vested
rights will be satisfied with Company shares purchased on-market.
38
Annual Report 2023 DIRECTORS’ REPORT
EMPLOYEE INCENTIVE ARRANGEMENTS AND LINK BETWEEN PERFORMANCE AND
REWARD (CONT.)
The number of Performance Rights granted under the LTI Plan, as amended, is based on the volume weighted
average price (VWAP) of shares in the Company during the 30 days to 30 June in the relevant plan year.
The vesting of Performance Rights issued under the LTI Plan is dependent on satisfaction of vesting condi-
tions relating to relative total shareholder return (Relative TSR) and continued employment during a three-year
performance period.
If Relative TSR performance is less than the 50th percentile, no performance right will vest. At or above the
50th percentile, vesting occurs on a pro rata basis.
Subject to vesting conditions being satisfied, performance rights automatically convert to shares, on a one-for
one basis, three years after the date on which they are granted. If vesting conditions have not been satisfied,
the performance rights will automatically lapse. Participants must be employed by the Company or a wholly
owned subsidiary at the date of vesting.
During the financial year ending 31 December 2023, 2,629,928 Performance Rights were issued under the
Company’s LTI Plan (2022: Nil). Of these, 612,777 rights lapsed on 31 December 2023 due to an executive’s
employment ending.
The vesting of options issued under the LTI Plan is dependent on satisfaction of vesting conditions comprising
share price hurdles and continued employment on the relevant vesting date.
The Options are only exercisable during a two-year period commencing on the third anniversary of the grant
date of the options and ending on the fifth anniversary of the grant date. Any Options that have not been ex-
ercised by the end of this exercise period lapse.
If a participant resigns or is terminated for cause (including due to a material breach of their obligations to
Next Science), all vested but unexercised Options immediately lapse on cessation. If a participant ceases em-
ployment for any other reason, any vested but unexercised Options that they hold may be exercised within a
period of 60 calendar days (or such other period determined by the Board) from the start of the exercise period
applicable to the options, after which time they will lapse.
During the year ended 31 December 2023, 7,366,333 incentive stock options were issued under the Compa-
ny’s LTI Plan). (2022: Nil). Of these, 1,716,366 options lapsed on 31 December 2023 due to an executive’s
employment ending.
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 33).
With the exception of the former Managing Director, Judith Mitchell, as described below, the only vesting con-
dition applicable to the options granted under these earlier plans was that the individual be employed by the
Company, or a wholly owned subsidiary of the Company at the vesting date. As at 31 December 2023, there
were no outstanding options over ordinary shares issued under the ECP or ESOP.
39
Annual Report 2023 DIRECTORS’ REPORT
OPTIONS AND RIGHTS OVER EQUITY INSTRUMENTS
Details of the options over ordinary shares issued under the LTI Plan which were held by KMP as at 31 Decem-
ber 2023 are set out below:
KMP
GRANT DATE
EXPIRY
DATE
VESTING
DATE
FAIR VALUE AT
GRANT DATE (USD)
EXERCISE
PRICE (USD)
Executive Director
Harry Thomas Hall, IV
(I.V.)
Non-Executive
Directors
Aileen Stockburger
Grant Hummel
Katherine Ostin
Daniel Spira
Other KMP
Jon Swanson
Marc Zimmerman
Matthew Myntti
-
-
-
-
-
-
-
-
-
-
24 Jul 2023
24 July
2028
-
-
24 Jul 2023
24 July
2028
-
-
-
-
-
(i)
-
(i)
-
-
-
-
-
202,584
-
275,625
-
-
-
-
-
0.49
-
0.49
i. The Vesting date of the options can be any date between the grant date of 24 July 2023, and 3 years from
the grant date. However, the options are only exercisable during the two year period starting on the third
anniversary of the grant date being 24 July 2026 to 24 July 2028.
Details of the 1,302,292 rights issued under the LTI Plan which were held by KMP as at 31 December 2023
are set out below:
Other KMP
Jon Swanson
Matthew Myntti
NUMBER OF
RIGHTS
GRANTED
GRANT DATE
EXPIRY
DATE*
VESTING
CONDITION
FAIR VALUE AT
GRANT DATE
551,691
24 Jul 2023
750,601
24 Jul 2023
N/A
N/A
(i)
(i)
157,178
213,848
* No expiry date applies to the Rights other than that any Rights for which the Vesting Conditions have not
been met shall be forfeited.
i. Vesting conditions include continued employment and Relative Total Shareholder Return over the Perfor-
mance Period from grant date, 24 July 2023, to 24 July 2026.
40
Annual Report 2023 DIRECTORS’ REPORT
OPTIONS AND RIGHTS OVER EQUITY INSTRUMENTS (CONTINUED)
The movement for the year ended 31 December 2023, in the number of rights and options over ordinary shares
in Next Science Limited held, directly, indirectly or beneficially, by each KMP, including their related parties was
as follows:
KMP
Options
Executive Director
INSTRUMENT
BALANCE
AS AT
1 JAN 2023
NO.
GRANTED
NO.
EXERCISED
NO.
LAPSED
NO.
BALANCE
AS AT
31 DEC 2023
NO.
VESTED
DURING
THE YEAR
VESTED AND
EXERCISABLE
NO.
UN-VESTED
NO.
Harry Thomas Hall,
-
-
IV (I.V.)
Non-Executive Directors
Aileen Stockburger
Options
520,000
Grant Hummel
Katherine Ostin
Daniel Spira
Other KMP
-
-
-
-
Options
260,000
-
-
-
-
-
-
-
- (520,000)
-
-
-
-
- (260,000)
-
-
-
-
-
Jon Swanson
Options
650,000 1,545,267
- (650,000)
1,545,267
Marc Zimmerman
Matthew Myntti
Rights
-
Options
Rights
-
-
551,691
-
- 2,102,408
-
750,601
-
-
-
-
-
-
-
-
551,691
-
2,102,408
750,601
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
- 1,545,267(i)
-
-
-
-
- 2,102,408(i)
-
-
i. Vesting conditions include continued employment and Relative Total Shareholder Return over the Perfor-
mance Period from grant date, 24 July 2023, to 24 July 2026.
41
Annual Report 2023 DIRECTORS’ REPORT
OPTIONS AND RIGHTS OVER EQUITY INSTRUMENTS (CONTINUED)
The movement for the year ended 31 December 2022, in the number of rights and options over ordinary shares
in Next Science Limited held, directly, indirectly or beneficially, by each KMP, including their related parties was
as follows:
KMP
Options
Executive Director
BALANCE
AS AT 1 JAN
2022 NO.
GRANTED
NO.
EXERCISED
NO.
LAPSED
NO.
BALANCE AS
AT 31 DEC
2022 NO.
VESTED
DURING
THE YEAR
VESTED AND
EXERCISABLE
NO.
UN-VESTED
NO.
Judith Mitchell
-
Non-Executive Directors
Bruce Hancox
Daniel Spira
Mark Compton
520,000
260,000
520,000
Aileen Stockburger
520,000
Other KMP
Matthew Myntti
-
Jon Swanson
650,000
Jacqueline Butler
Dustin Haines
Rights
-
-
Dustin Haines*
340,602
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(113,534)
(227,068)
-
520,000
260,000
520,000
520,000
-
650,000
-
-
-
*Dustin Haines employment agreement with Next Science ceased on 20 April 2022
-
-
-
-
-
-
-
-
-
-
-
520,000
260,000
520,000
520,000
-
650,000
-
-
-
-
-
-
-
-
-
-
-
N/A
N/A
EXERCISE OF OPTIONS GRANTED AS COMPENSATION
During the reporting period, there were no shares issued upon the exercise of options previously granted as
compensation, to KMP.
42
Annual Report 2023 DIRECTORS’ REPORT
DETAILS OF EQUITY INCENTIVES AFFECTING CURRENT AND FUTURE
REMUNERATION
KMP
INSTRUMENT
NUMBER
GRANT
DATE
EXPIRY
DATE
%
VESTED
Executive Director
Harry Thomas Hall, IV
(I.V.)
Non-Executive Directors
Aileen Stockburger
Grant Hummel
Katherine Ostin
Daniel Spira
Other KMP
Jon Swanson
Marc Zimmerman
Matthew Myntti
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Options
1,545,267 24 Jul 2023 24 Jul 2028
Rights
551,691 24 Jul 2023
-
-
-
-
-
Options
2,102,408 24 Jul 2023 24 Jul 2028
Rights
750.601
24 Jul 2023
-
-
-
-
-
-
-
-
-
-
-
FINANCIAL
YEARS IN
WHICH
GRANT
VESTS
-
-
-
-
-
(i)
(ii)
-
(i)
(ii)
i.
Vesting conditions include continued employment and Relative Total Shareholder Return over the Perfor-
mance Period from grant date, 24 July 2023, to 24 July 2026.
ii. Vesting conditions include continued employment and Relative Total Shareholder Return over the Perfor-
mance Period from grant date, 24 July 2023, to 24 July 2026.
43
Annual Report 2023 DIRECTORS’ REPORT
KMP REMUNERATION
The table below details the remuneration of the KMP based on the remuneration policies discussed in this
report for the year ended 31 December 2023.
Year ended 31 December 2023
CASH
SALARY AND
FEES
OTHER
CASH
SERVICE (II)
LONG
SERVICE
LEAVE
SUPER-
ANNUATION
SHARE-BASED
PAYMENTS
(OPTIONS AND
RIGHTS) (VI)
$
$
$
PERFOR-
MANCE
RELATED
(VII)
%
TOTAL
$
KMP
(USD)
Executive
Directors
Harry Thomas Hall,
199,038
IV (I.V.)
Judith Mitchell (i)
204,547
Non-Executive
Directors
Aileen Stockburger
111,846
Grant Hummel
Katherine Ostin
Daniel Spira
Mark Compton (iii)
Bruce Hancox (iv)
Other KMP
Marc Zimmerman
Matthew Myntti
Jon Swanson
Jacqueline Butler (v)
19,323
11,401
66,439
107,989
30,063
193,846
360,433
264,917
233,430
-
-
-
-
-
-
-
-
20,000
8,065
449
-
-
-
-
-
-
-
-
-
-
-
-
19,535
1,803,272
28,514
19,535
$
-
11,205
-
2,126
1,254
-
2,743
3,157
-
-
-
$
-
-
-
-
-
-
-
-
-
45,210
33,229
199,038
215,752
111,846
21,449
12,655
66,439
110,732
33,220
213,846
413,708
298,595
11,737
32,222
-
264,702
78,439 1,961,982
-
-
-
-
-
-
-
-
-
10.9
11.1
-
-
i.
Judith Mitchell’s employment with Next Science ceased on 31 July 2023.
ii. Other cash services for Marc Zimmerman, Matthew Myntti and Jon Swanson includes motor vehicle al-
lowance and/or other minor benefits.
iii. Mark Compton ceased as a Director with Next Science on 23 August 2023.
iv. Bruce Hancox ceased as a Director with Next Science on 30 June 2023.
v.
Jacqueline Butler’s employment with Next Science ceased on 31 May 2023.
vi. Share based payments were issued under the Company’s Long-Term Incentive Plan in the form of perfor-
mance rights and share options. Refer to pages 38 and 39 above for further information on the Long-Term
Incentive Plan.
vii. Disclosed above are the relative proportions of each individual’s remuneration that are related to perfor-
mance; the remaining proportion being fixed remuneration.
44
Annual Report 2023 DIRECTORS’ REPORT
KMP REMUNERATION (CONTINUED)
The table below details the remuneration of KMP for the year ended 31 December 2022.
Year ended 31 December 2022
KMP
(USD)
CASH SAL-
ARY AND
FEES
OTHER
CASH SER-
VICE (I)
LONG
SERVICE
LEAVE
SUPER-
ANNUATION
SHARE-BASED
PAYMENTS
RIGHTS (II)
Executive Director
Judith Mitchell
264,444
$
Non-Executive
Directors
Mark Compton
Bruce Hancox
Daniel Spira
Aileen Stockburger
Other KMP
Matthew Myntti
Jon Swanson
Jacqueline Butler
Dustin Haines (iv)
173,466
62,941
67,768
79,868
359,962
264,571
207,427
103,474
$
-
-
-
-
-
6,650
609
$
$
6,717
16,922
-
-
-
-
-
-
-
6,446
1,619
-
-
-
38,925
4,630
16,926
46
-
-
1,583,921
46,230
11,347
41,913
$
-
-
-
-
-
-
-
-
8,750
8,750
TOTAL
PERFOR-
MANCE
RELATED
(III)
$
%
288,083
173,466
69,387
69,387
79,868
366,612
265,180
267,908
112,270
1,692,161
-
-
-
-
-
-
-
-
-
-
i.
Included in Jacqueline Butler’s Other cash services is an amount of $38,925 for cashed out annual leave.
ii. Other cash services for Matthew Myntti, Jon Swanson and Dustin Haines includes motor vehicle allow-
ance and/or other minor benefits. For the year ended 31 December 2023, threshold Group performance
targets were not met and hence no amounts were awarded to KMP under the STI Plan.
iii. The fair value of the right is calculated at the date of grant using the 60 day volume weighted average price
of Next Science shares in the period immediately prior to the offer date. The rights disclosed is the portion
of the fair value of the rights recognised as an expense in the reporting period.
iv. Disclosed above are the relative proportions of each individual’s remuneration that are related to perfor-
mance; the remaining proportion being fixed remuneration.
v. Dustin Haines employment agreement with Next Science ceased on 20 April 2022.
45
Annual Report 2023 DIRECTORS’ REPORT
KMP EQUITY HOLDINGS
The movement during the reporting period in the number of shares in Next Science Limited held directly, indi-
rectly or beneficially, by each KMP, including their related parties, is as follows:
Year ended 31 December 2023
BALANCE AS AT
1 JAN 2023
NO.
RECEIVED
ON EXERCISE
OF OPTIONS/
RIGHTS
NO.
OTHER CHANG-
ES DURING THE
YEAR NO.*
BALANCE ON
TERMINATION
BALANCE AS
AT 31 DEC 2023
NO.
-
6,420,000
44,837
-
752,172
564,482
171,920
-
410,196
11,943,969
50,000
-
-
-
-
-
-
-
-
-
-
-
-
200,000
-
200,000
-
6,420,000
-
524,801
387,694
-
-
-
-
-
-
-
-
564,482
171,920
569,638
387,694
-
752,172
-
-
150,000
-
150,000
-
410,196
(7,772,145)
-
-
-
-
4,171,824
50,000
KMP
Executive Directors
Harry Thomas Hall,
IV (I.V.)
Judith Mitchell (i)
Non-Executive
Directors
Aileen Stockburger
Grant Hummel (ii)
Katherine Ostin
Daniel Spira
Bruce Hancox (iii)
Mark Compton (iv)
Other KMP
Marc Zimmerman
Jacqueline Butler (v)
Matthew Myntti
Jon Swanson
* Other changes represent shares that were purchased, sold or transferred to another party during the year.
i. Judith Mitchell’s employment with Next Science ceased on 31 July 2023.
ii. Grant Hummel appointed a Director with Next Science 23 August 2023. 78,170 shares were held prior to
being appointed a Director and 309,524 shares were acquired during the year.
iii. Bruce Hancox ceased as a Director with Next Science on 30 June 2023.
iv. Mark Compton ceased as a Director with Next Science on 23 August 2023.
v. Jacqueline Butler’s employment with Next Science ceased on 31 May 2023.
46
Annual Report 2023 DIRECTORS’ REPORT
KMP EQUITY HOLDINGS (CONTINUED)
Year ended 31 December 2022
KMP
Executive Director
Judith Mitchell
Non-Executive Di-
rectors
Mark Compton
Bruce Hancox
Daniel Spira
Aileen Stockburger
Other KMP
Matthew Myntti
Jon Swanson
Jacqueline Butler
Dustin Haines
BALANCE AS AT
1 JAN 2022 NO.
RECEIVED ON
EXERCISE OF OP-
TIONS/RIGHTS
NO.
OTHER CHANGES
DURING THE YEAR NO.*
BALANCE ON
TERMINATION
BALANCE AS
AT 31 DEC 2022
NO.
6,560,000
137,438
530,000
723,437
44,837
13,354,989
50,000
410,196
-
-
-
-
-
-
-
-
(140,000)
34,482
34,482
28,735
-
(1,411,020)
-
-
-
-
-
-
-
-
-
-
-
113,534**
(40,000)
73,534
6,420,000
171,920
564,482
752,172
44,837
11,943,969
50,000
410,196
N/A
* Other changes represent shares that were purchased, sold or transferred to another party during the year.
** Dustin Haines employment agreement with Next Science ceased on 20 April 2022.
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 Corpora-
tions Act 2001.
On behalf of the directors:
Aileen Stockburger
Chair and Independent Non-Executive Director
47
Annual Report 2023 LEAD AUDITOR'S INDEPENDENCE DECLARATION
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 2023 there have been:
no contraventions of the auditor independence requirements as set out in the
Corporations Act 2001 in relation to the audit; and
no contraventions of any applicable code of professional conduct in relation to the audit.
i.
ii.
KPM_INI_01
PAR_SIG_01
PAR_NAM_01
PAR_POS_01
PAR_DAT_01
PAR_CIT_01
KPMG
Kevin Leighton
Partner
Sydney
28 February 2024
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.
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.
48
25
Annual Report 2023
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
AND OTHER COMPREHENSIVE INCOME
For The Year Ended 31 December 2023
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 (costs) / income
Loss before income tax expense
Income tax expense
Loss after income tax expense for the year
Other comprehensive loss
Items that may be reclassified subsequently to profit or loss
Foreign currency translation differences
Other comprehensive profit/(loss) for the year, net of tax
Total comprehensive loss for the year
Basic earnings per share
Diluted earnings per share
CONSOLITDATED
Note
2023
$
2022
$
6
22,179,327
11,712,722
(5,944,751)
(2,563,024)
16,234,576
9,149,698
7
99,484
37,870
(20,165,335)
(10,310,205)
(6,485,524)
(5,610,459)
9
(26,827)
(6,149,806)
(5,385,006)
(45,558)
(15,954,085)
(12,703,007)
11
12
467,722
(784,451)
(316,729)
48,298
(28,603)
19,695
(16,270,814)
(12,683,312)
13
-
-
(16,270,814)
(12,683,312)
566,333
566,333
(556,734)
(556,734)
(15,704,481)
(13,240,046)
Cents
(6.95)
(6.95)
37
37
Cents
(6.03)
(6.03)
The above consolidated statement of profit or loss and other comprehensive income should be read in con-
junction with the accompanying notes.
49
Annual Report 2023 CONSOLIDATED STATEMENT FINANCIAL POSITION
As at 31 December 2023
CONSOLIDATED
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
Right-of-use assets
Intangible 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
Reserves
Accumulated losses
Total equity
Notes
2023
$
2022
$
14
15
16
17
18
15
19
21
20
22
23
25
26
23
25
26
27
28
9,238,697
5,073,625
3,588,649
1,738,923
721,310
871,266
37,823
37,789
373,954
541,506
13,960,433
8,263,109
36,656
36,656
713,511
696,848
802,701
1,053,113
2,387,050
2,409,930
3,939,918
4,196,547
17,900,351
12,459,656
3,207,184
1,979,346
274,902
274,801
79,660
274,902
257,912
94,811
3,836,547
2,606,971
549,804
687,164
5,780
824,706
962,060
30,194
1,242,748
1,816,960
5,079,295
4,423,931
12,821,056
8,035,725
133,823,509 113,526,533
(42,491,223)
(42,362,294)
(78,511,230)
(63,128,514)
12,821,056
8,035,725
The above consolidated statement of financial position should be read in conjunction with the accompanying
notes.
50
Annual Report 2023 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
31 December 2023
SHARE
CAPITAL $
COMMON
CONTROL
RESERVE $
FOREIGN
CURRENCY
TRANSLATION
RESERVE $
SHARE
OPTION
RESERVE $
PERFOR-
MANCE
RIGHTS
RESERVE
$
113,526,533
(42,596,715)
(1,905,877)
2,140,298
-
-
-
-
-
-
-
-
-
Transactions with owners in
their capacity as owners
Balance at 1
January 2023
Loss for the year
Other comprehensive
income
Foreign currency
translation differences
Total other
comprehensive profit
Total comprehensive
profit/(loss) for the year
Performance rights
issued
Share-based pay-
ments
Transfers to retained
earnings
Foreign currency
translation differences
Convertible note
Issue of ordinary
shares
Capital raising costs
Total transactions with
owners
Balance at 31
December 2023
20,933,533
(636,557)
20,296,976
ACCUMULATED
LOSSES $
TOTAL EQUITY
$
(63,128,514)
8,035,725
(16,270,814)
(16,270,814)
-
-
566,333
566,333
(16,270,814)
(15,704,481)
-
-
-
-
-
-
-
-
-
-
95,782
38,651
(888,098)
20,119
-
-
-
-
-
-
-
-
-
-
-
95,782
38,651
888,098
-
-
-
-
-
20,119
38,284
20,933,533
(636,557)
-
566,333
566,333
566,333
-
-
-
-
38,284
-
-
-
-
-
-
-
-
-
-
-
-
-
-
38,284
(829,328)
95,782
888,098
20,489,812
133,823,509
(42,596,715)
(1,301,260)
1,310,970
95,782
(78,511,230)
12,821,056
The above consolidated statement of changed in equity should be read in conjuction with the accompany notes.
51
Annual Report 2023 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
31 December 2023
COMMON
CONTROL
RESERVE
$
FOREIGN
CURRENCY
TRANSLATION
RESERVE
$
SHARE
OPTION
RESERVE
$
PERFOR-
MANCE
RIGHTS
RESERVE
$
SHARE
CAPITAL $
ACCUMULAT-
ED LOSSES
$
TOTAL
EQUITY
$
(42,596,715)
(1,349,143)
2,140,298
96,250
(50,445,202)
10,766,495
Balance at 1
January 2022
Loss for the year
Other comprehen-
sive income
Foreign currency
translation differ-
ences
Total other
comprehensive loss
Total comprehensive
loss for the year
Transactions with owners in
their capacity as owners
Sharebased
payments
Performance rights
converted to shares
on vesting
Issue of ordinary
105,000
shares
10,886,160
Capital raising costs
(385,634)
Total transactions
with owners
Balance at 31
December 2022
10,605,526
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(556,734)
(556,734)
(556,734)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(12,683,312)
(12,683,312)
-
-
-
-
-
(556,734)
(556,734)
(12,683,312)
(13,240,046)
8,750
(105,000)
-
-
(96,250)
-
-
-
-
-
8,750
-
10,886,160
(385,634)
10,509,276
(42,596,715)
(1,905,877)
2,140,298
-
(63,128,514)
8,035,725
The above consolidated statement of changed in equity should be read in conjuction with the accompany notes.
52
Annual Report 2023 CONSOLIDATED STATEMENT OF CASH FLOWS
For The Year Ended 31 December 2023
CONSOLIDATED
Notes
2023
$
2022
$
Operating activities
Receipts from customers
Payments to suppliers and employees
Payments for research and development
Interest received
Other income
Net cash used in operating activities
Investing activities
Payments for property, plant and equipment
Payments for intangible assets
(Payments for)/proceeds from investments (term deposit)
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 from financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Effects of exchange rate changes on cash and cash equivalents
Cash and cash equivalents at the end of the financial year
11
14
19
20
27
24
27
27
21
20,109,562
10,657,495
(33,396,827)
(20,464,045)
(1,902,656)
(2,033,830)
65,398
65,527
12,720
37,890
(15,058,996)
(11,789,770)
(295,417)
(589,052)
(88,972)
(386,744)
(34)
329,340
(884,503)
(146,376)
14,035,576
10,853,400
6,983,199
-
-
32,760
(637,862)
(273,277)
(385,634)
(253,229)
20,107,636
10,247,297
4,164,137
(1,688,849)
5,073,625
7,000,869
935
(238,395)
9,238,697
5,073,625
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
53
Annual Report 2023 NOTES TO THE CONSILDATED FINANCIAL STATEMENTS
31 December 2023
NOTE 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 2023 and comparative information for the year ended 31 December 2022.
NOTE 2. BASIS OF PREPARATION
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 Financial Reporting Standards (“IFRS”) adopted
by the International Accounting Standards Board (“IASB”).
The financial statements were approved by the Board of Directors and authorised for issue on 28 February 2024.
Basis of measurement
The financial statements have been prepared on a historical cost basis unless otherwise stated.
Functional and presentation currency
The financial statements are presented in United States Dollars, which is the Group’s presentation currency. Entities with-
in the Group hold functional currencies of AUD or USD as appropriate to the individual entity.
NOTE 3. MATERIAL ACCOUNTING POLICY INFORMATION
The accounting policies that are material to the Group are set out below. The accounting policies adopted are consistent
with those of the previous financial year, unless otherwise stated.
Parent entity information
In accordance with the Corporations Act 2001, these financial statements present the results of the Group only. Supple-
mentary information about the parent entity is disclosed in note 30.
54
Annual Report 2023
NOTES TO THE CONSILDATED FINANCIAL STATEMENTS
31 December 2023
NOTE 3. MATERIAL ACCOUNTING POLICY INFORMATION (CONT.)
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 the identifiable net assets acquired. Any goodwill that arises is test-
ed annually for impairment. Any gain on a bargain purchase is recognised in profit or loss immediately. Transaction costs
are expensed as incurred, except if related to the issue of debt or equity securities.
Common control transactions record assets and liabilities acquired at their book value at the date of acquisition, rather
than their fair value. The difference between the fair value of the consideration given and the carrying value of the assets
and liabilities acquired is recognised as a common control reserve.
The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such
amounts are generally recognised in profit or loss.
(ii) 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 affect those returns through its power over the
entity. The financial statements of subsidiaries are included in the consolidated financial statements from the date on
which control commences 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 relat-
ed 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.
(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.
Operating segments
Operating segments are presented using the ‘management approach’, where the information presented is on the same
basis as the internal reports provided to the Chief Operating Decision Makers (‘CODM’). The CODM is responsible for the
allocation of resources to operating segments and assessing their performance.
55
Annual Report 2023
NOTES TO THE CONSILDATED FINANCIAL STATEMENTS
31 December 2023
NOTE 3. MATERIAL ACCOUNTING POLICY INFORMATION (CONT.)
Foreign currency
(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 ex-
change 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, 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 equity and accumulated in the translation reserve.
Revenue from contracts with customers
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 some of Next Science’s customers at the point when the Group fulfils its obligation to deliver,
and goods are available at the customer’s premises. For these customers, the performance obligation (including the
license) transfers at the point in time when each good is delivered. Therefore, revenue is recognised at the point in time
when the product is delivered. For other customers (including DME patients), title and control pass when the product is
delivered to the courier, with revenue being recognised at this point in time.
56
Annual Report 2023
NOTES TO THE CONSILDATED FINANCIAL STATEMENTS
31 December 2023
NOTE 3. MATERIAL ACCOUNTING POLICY INFORMATION (CONT.)
Revenue from contracts with customers (continued)
(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 con-
sideration 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.
For the DME business, revenue is recognised when the cash reimbursement amount is received and an estimate is made
of amounts to be recognised in relation to debtor balances owing from Medicare.
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.
The ‘effective interest rate’ is the rate that exactly discounts estimated future cash payments or receipts through the
expected life of the financial instruments to the gross carrying amount of the financial asset or the amortised cost of the
financial asset.
In calculating income and expense, the effective interest rate is applied to the gross carrying amount of the asset (when
the asset is not credit-impaired) or to the amortised cost of the liability. However, for financial assets that have become
credit-impaired subsequent to initial recognition interest income is calculated by 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 and
liabilities that are not eliminated upon consolidation are recognised in OCI. Borrowing costs that are not directly attribut-
able to the acquisition, construction or production of a qualifying asset are recognised in profit or loss using the effective
interest method.
57
Annual Report 2023
NOTES TO THE CONSILDATED FINANCIAL STATEMENTS
31 December 2023
NOTE 3. MATERIAL ACCOUNTING POLICY INFORMATION (CONT.)
Finance income and finance costs (continued)
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 3.5% to 4.6% on current leases held.
Foreign currency gains and losses are reported on a net basis as either finance income or finance cost depending on
whether foreign currency movements are in a net gain or net loss position.
Income tax
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.
(i) Current tax
Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjust-
ment 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.
(ii) Deferred tax
Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for temporary
differences on the initial recognition of assets or liabilities in a transaction that is not a business combination and that af-
fects neither accounting nor taxable profit or loss, or on taxable temporary differences arising on the initial recognition of
goodwill.
Deferred tax assets are recognised for unused tax losses, tax credits and deductible temporary differences, to the extent
that it is probable that future taxable profits will be available against which they can be utilised. Deferred tax assets are
reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will
be realised; such reductions are reversed when the probability of future taxable profits improves.
Unrecognised deferred tax assets are reassessed at each reporting date and recognised to the extent that it has become
probable that future taxable profits will be available against which they can be used.
58
Annual Report 2023
NOTES TO THE CONSILDATED FINANCIAL STATEMENTS
31 December 2023
NOTE 3. MATERIAL ACCOUNTING POLICY INFORMATION (CONT.)
Income tax (continued)
(ii) Deferred tax (continued)
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.
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 after the
reporting period; or the asset is cash or cash equivalent unless restricted from being exchanged or used to settle a liability
for at least 12 months after the reporting period. All other assets are classified as non-current.
A liability is classified as current when: it is 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 uncon-
ditional right to defer the settlement of the liability for at least 12 months after the reporting period. All other liabilities are
classified as non-current.
Deferred tax assets and liabilities are always classified as non-current.
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.
Trade and other receivables
Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective
interest method, less any allowance for expected credit losses. Trade receivables are generally due for settlement within 30 days.
59
Annual Report 2023
NOTES TO THE CONSILDATED FINANCIAL STATEMENTS
31 December 2023
NOTE 3. MATERIAL ACCOUNTING POLICY INFORMATION (CONT.)
Trade and other receivables (continued)
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.
Inventories
Inventories are measured at the lower of cost and net realisable value. The cost of inventories is based on the first in, first
out principle. Inventory provision is measured by taking into consideration inventory quantities held, timing of expiration of
products and confirmed sale contracts. The amount of any inventory write-down to net realisable value or inventory losses
is recognised as an expense in the period the write-down or loss occurred.
Property, plant and equipment
(i) Recognition and measurement
Items of property, plant and equipment are measured at cost less accumulated depreciation and accumulated impair-
ment losses. Cost includes expenditure that is directly attributable to the acquisition of the asset. If significant parts of an
item of property, plant and equipment have different useful lives, they are accounted for as separate items (major com-
ponents) 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.
(ii) Subsequent expenditure
Subsequent expenditure is capitalised only when it is probable that the future economic benefits associated with the
expenditure will flow to the Group.
(iii) Depreciation
Depreciation is 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
obtain ownership by the end of the lease term. Land is not depreciated.
60
Annual Report 2023
NOTES TO THE CONSILDATED FINANCIAL STATEMENTS
31 December 2023
NOTE 3. MATERIAL ACCOUNTING POLICY INFORMATION (CONT.)
Property, plant and equipment (continued)
(iii) Depreciation (continued)
The estimated useful lives of property, plant and equipment are as follows:
FIXED ASSET CLASS
Leasehold improvements
Plant and equipment
Furniture and fittings
USEFUL LIFE
5-15 years
5 years
5 years
Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.
Right-of-use assets
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, any initial direct costs incurred, and, except where included in
the cost 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 asset at the end of
the lease term, the 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.
Intangible assets
(i) Recognition and measurement
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 process is technically and commercially feasible,
future economic benefits are probable, and the Group intends to and has sufficient resources to complete development
and to use or sell the asset. Otherwise, it is recognised in profit or loss as incurred. Subsequent to initial recognition,
development expenditure is measured at cost less accumulated amortisation and any accumulated impairment losses.
61
Annual Report 2023
NOTES TO THE CONSILDATED FINANCIAL STATEMENTS
31 December 2023
NOTE 3. MATERIAL ACCOUNTING POLICY INFORMATION (CONT.)
Intangible assets (continued)
(i) Recognition and measurement (continued)
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.
Computer software
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
Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific
asset to which it relates. All other expenditure, including expenditure on internally generated goodwill and brands, is
recognised in profit or loss as incurred.
(iii) Amortisation
Amortisation is 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.
The estimated useful lives of intangible assets are as follows:
• Development expenditure: 5 years
• Computer software: 2-3 years
• 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 trademarks and goodwill, have finite useful lives.
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.
62
Annual Report 2023
NOTES TO THE CONSILDATED FINANCIAL STATEMENTS
31 December 2023
NOTE 3. MATERIAL ACCOUNTING POLICY INFORMATION (CONT.)
Contract liabilities
Contract liabilities represent the Group’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.
Convertible notes
Convertible notes that can be converted into ordinary shares at the option of the holder, where the number of shares to be
issued is fixed by a rate determined by the management upon particular events specified occurs.
Convertible notes are separated into a liability and equity based on the terms of the agreement. On issuance of the con-
vertible notes, the liability component is initially recognised at the fair value of a similar liability that does not have an equity
conversion option. The residual amount is treated as equity or liability depending on whether it meets the “fixed for fixed”
test. Where the “fixed for fixed” test is met, the conversion option is classified as an equity instrument. And where the
“fixed for fixed” test is not met the conversion option is classified as a financial liability.
The debt is carried at amortised cost using the effective interest method until it is extinguished on conversion or redemp-
tion.
The Group de-recognises financial liabilities when, and only when, the Company’s obligations are discharged, cancelled or
they expire. The difference between the carrying amount of the financial liability derecognised and the consideration paid
and payable is recognised in profit or loss.
Leases
(i) Definition of a new lease
The determination of whether a contract contains a lease is on the basis of whether the customer has the right to control
the use of an 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 consoli-
dated 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.
63
Annual Report 2023
NOTES TO THE CONSILDATED FINANCIAL STATEMENTS
31 December 2023
NOTE 3. MATERIAL ACCOUNTING POLICY INFORMATION (CONT.)
Leases (continued)
(ii) Lessee accounting (continued)
Right-of-use assets are tested for impairment in accordance with AASB 136 Impairment of assets. Lease incentives, if rel-
evant, 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 (present-
ed within financial activities) and interest on lease liabilities, both recognised in the consolidated statement of profit or loss.
For short-term leases (lease term of 12 months or less) and leases of low-value assets, the Group has opted to recognise
a lease expense on a straight-line basis. This expense is presented within other expenses in the consolidated statement
of profit or loss.
Finance costs
Finance costs attributable to qualifying assets are capitalised as part of the asset. All other finance costs are expensed in
the period in which they are incurred.
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.
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 in-
clude 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.
64
Annual Report 2023
NOTES TO THE CONSILDATED FINANCIAL STATEMENTS
31 December 2023
NOTE 3. MATERIAL ACCOUNTING POLICY INFORMATION (CONT.)
Employee benefits (continued)
(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 financial year in which employees render the related service. Other long-term
employee benefits are measured at the present value of the expected future payments to be made to employees. Expected
future payments incorporate anticipated future wage and salary levels, duration of service and employee departures and
are discounted at rates determined by reference to market 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 sepa-
rate entity and will have no legal or constructive obligation to pay further amounts. Obligations for contributions to employ-
ees’ 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 fair value of performance rights and options granted is recognised as an employee expense with a corresponding
increase in equity, on a straight-line monthly basis over the vesting period in which the performance and/or service condi-
tions are fulfilled after which the employee becomes unconditionally entitled to them. The cumulative expense recognised
for share-based payments at each reporting date until the vesting date reflects the extent to which the vesting period has
ended and the Group’s best estimate of the number of equity instruments that will ultimately vest. The expense or credit
for a period represents the movement in cumulative expense recognised as at the beginning and end of the period. No
expense is recognised for awards that do not ultimately vest, except for equity-settled transactions for which vesting are
conditional upon a market or non-vesting condition. These are treated as vesting irrespective of whether or not the market
or non-vesting condition is satisfied, provided that all other performance and/or service conditions are satisfied.
Financial instruments
(i) Recognition and initial measurement
The Group initially recognises trade receivables issued on the date that they are originated. All other financial assets and
financial liabilities are recognised initially on the trade date.
(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”).
65
Annual Report 2023
NOTES TO THE CONSILDATED FINANCIAL STATEMENTS
31 December 2023
NOTE 3. MATERIAL ACCOUNTING POLICY INFORMATION (CONT.)
Financial instruments (continued)
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 loss. Any gain or loss on derecognition is 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 effective interest method. Interest
expense and foreign exchange gains and losses are recognised in profit or loss. Any gain or loss on derecognition is also
recognised in profit or loss.
(iii) Derecognition
Financial assets
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.
Financial liabilities
The Group derecognises a financial liability when its contractual obligations are discharged, 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.
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.
66
Annual Report 2023
NOTES TO THE CONSILDATED FINANCIAL STATEMENTS
31 December 2023
NOTE 3. MATERIAL ACCOUNTING POLICY INFORMATION (CONT.)
Impairment (continued)
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 un-
due 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 dis-
counted 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.
Share capital
Ordinary shares
Incremental costs directly attributable to the issue of ordinary shares, net of any tax effects, are recognised as a deduc-
tion from equity.
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 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.
67
Annual Report 2023
NOTES TO THE CONSILDATED FINANCIAL STATEMENTS
31 December 2023
NOTE 3. MATERIAL ACCOUNTING POLICY INFORMATION (CONT.)
Fair value measurement (continued)
If there is no quoted price in an active 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 consider in pricing a trans-
action.
Earnings per share
(i) Basic earnings per share
Basic earnings per share is calculated 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 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.
Goods and Services Tax (‘GST’) and other similar taxes
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not re-
coverable 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 recov-
erable from, or payable to, the tax authority is included in other receivables or other payables in the statement of financial
position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities
which are recoverable from, or payable to the tax authority, are presented as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the tax authority.
NOTE 4. CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS
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
68
Annual Report 2023
NOTES TO THE CONSILDATED FINANCIAL STATEMENTS
31 December 2023
NOTE 4. CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS (CONT.)
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. This involves value-in-use 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.
Value in use for the cash-generating units (‘CGU’) was determined by discounting the future cashflows to be generated
from the CGUs and is based on the following key assumptions:
• Cashflows were projected based on forecast operating results over a 5 year period plus a terminal value.
• Average annual revenue growth rates and approved budgets were used for revenue projections.
• The pre-tax discount rates of 12% - 175% based on the weighted average cost of capital.
• Changes in key assumptions would impact recoverable amount calculations.
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 the useful lives
are less than previously estimated lives, or technically obsolete or non-strategic assets that have been abandoned or
sold will be written off or written down and the incremental borrowing rate is estimated.
Recovery of deferred tax assets
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 those tax losses against.
Going concern
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.
69
Annual Report 2023
NOTES TO THE CONSILDATED FINANCIAL STATEMENTS
31 December 2023
NOTE 4. CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS (CONT.)
Going concern (continued)
For the financial year ended 31 December 2023 the Group incurred a loss of $16,270,814 and had net cash outflows
from operations of $15,058,996 As at 31 December 2023, the Group had net current asset and net asset positions of
$10,123,886 and $12,821,056 respectively.
The Group has modelled a range of scenarios for going concern purposes including the continued revenue growth in
the DME business, providing cash inflows via reimbursements from insurance providers and improvement in the Group’s
direct sales and distribution model with the recent agreement with a leading Group Purchasing Organisation which
provides direct access to a larger number of hospitals. The Group considers that its cash and term deposits totalling
$9,238,697 at 31 December 2023, together with potential cost management initiatives are sufficient to enable the Group
to continue as a going concern for the foreseeable future, being at least twelve months from the date of signing this
financial report.
Convertible notes
The Group de-recognised the convertible note financial liability at 1 November 2023 as the Company had entered into an
agreement with Walker Group to redeem all of the Notes and for Walker Group to apply all of the redemption proceeds to
subscribing for new shares in the Company. The fair value of the liability component of the convertible notes were remea-
sured at redemption date and the difference between the carrying amount of the financial liability derecognised and the
consideration paid and payable recognised in profit or loss. The early conversion and modification of the convertible note
resulted in an overall gain on fair value of USD$402,324.
NOTE 5. STANDARDS ISSUED BUT NOT YET EFFECTIVE
A number of new standards are effective for annual periods beginning after 1 January 2024 and earlier application is per-
mitted; 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:
(1)
Non-current Liabilities with Covenants (AASB 2022-6 Amendments to Australian Accounting Standards)
(2)
Disclosure of Non-current Liabilities with Covenants: Tier 2 (AASB 2023-3 Amendments to Australian
Accounting Standards)
(3)
Lease Liability in a Sale and Leaseback (AASB 2022-5 Amendments to Australian Accounting Standards)
70
Annual Report 2023
NOTES TO THE CONSILDATED FINANCIAL STATEMENTS
31 December 2023
NOTE 6. REVENUE
Revenue from contracts with customers
22,179,327
11,712,722
CONSOLIDATED
2023
$
2022
$
Identification of reporting operating segments
The Group operates in one operational 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 determin-
ing the allocation of resources. The one operational segment operates over two geographical segments, North America
and Australia and New Zealand.
Year ended 31 December 2023
Revenue from contracts with customers
Segment assets
Segment liabilities
Segment loss
Year ended 31 December 2022
Revenue from contracts with customers
Segment assets
Segment liabilities
Segment loss
Major customers
NORTH AMERICA
AUSTRALIA AND
NEW ZEALAND
$
$
21,836,183
5,893,600
3,764,477
9,969,090
343,144
12,016,395
1,324,462
6,301,724
NORTH AMERICA
AUSTRALIA AND
NEW ZEALAND
$
$
TOTAL
$
22,179,327
17,909,995
5,088,939
16,270,814
TOTAL
$
11,712,722
12,592,400
4,556,677
11,009,151
8,237,427
2,949,117
(6,765,412)
703,571
4,354,973
1,607,560
(5,917,901)
(12,683,313)
Revenues from two major customers of the Group represented 23% (2022: 43%) of the Group’s total revenue.
71
Annual Report 2023
NOTES TO THE CONSILDATED FINANCIAL STATEMENTS
31 December 2023
NOTE 7. OTHER INCOME
Other income
CONSOLIDATED
2023
$
2022
$
99,484
37,870
Income received in relation to grants will only be recognised when there is reasonable assurance when all conditions at-
taching to the grant have been complied with.
NOTE 8. DEPRECIATION AND AMORTISATION
The loss from ordinary activities before income tax includes the following expenses:
CONSOLIDATED
2023
$
2022
$
64,853
30,609
796,252
653,349
251,918
213,143
CONSOLIDATED
2023
$
81
26,746
26,827
2022
$
1,475
44,083
45,558
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
NOTE 9. OTHER EXPENSES
Loss on sale of fixed asset
Impairment loss on intangibles
72
Annual Report 2023
NOTES TO THE CONSILDATED FINANCIAL STATEMENTS
31 December 2023
NOTE 10. EMPLOYEE EXPENSES
Salaries and wages
Contributions to defined contribution funds
Share-based payments
CONSOLIDATED
2023
$
2022
$
17,569,111
10,075,827
49,357
134,433
43,499
8,750
17,752,901
10,128,076
As part of employee compensation, the Group offers medical insurance to certain employees in certain geographies
(2023:$1,870,405, 2022:$1,040,228). These insurance amounts are not included in the above figures.
NOTE 11. FINANCE INCOME
Interest income
Net foreign exchange gain
Gain on modification and early conversion of convertible note
NOTE 12. FINANCE COSTS
Interest expense on lease liabilities
Interest expense on convertible note
Other interest expense
Net foreign exchange loss
CONSOLIDATED
2023
$
65,398
-
402,324
467,722
2022
$
12,720
35,578
-
48,298
CONSOLIDATED
2023
$
48,536
712,694
876
22,345
784,451
2022
$
28,603
-
-
-
28,603
73
Annual Report 2023
NOTES TO THE CONSILDATED FINANCIAL STATEMENTS
31 December 2023
NOTE 13. 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 com-
ponents of tax expense comprise:
Income tax expense
Current tax
Deferred tax
Aggregate income tax expense
Numerical reconciliation of income tax expense and tax at the statutory rate.
Reconciliation of income tax to accounting profit:
Loss before income tax expense
Tax at the statutory tax rate of 25%
Tax effect amounts which are not deductible/(taxable) in calculating taxable income:
Permanent differences
Effect of tax rate in foreign jurisdictions
Tax losses not brought to account
Income tax expense
The unused tax losses as at 31 December were as follows:
Australia gross unused tax losses (in AUD)
USD gross unused tax losses (in USD)
CONSOLIDATED
2023
$
2022
$
-
-
-
-
-
-
(16,270,814)
(12,683,312)
(4,067,704)
(3,170,828)
33,608
24,231
(412,563)
(264,232)
4,446,658
3,410,829
-
-
CONSOLIDATED
2023
$
2022
$
63,277,349
52,469,578
44,809,849
34,495,776
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.
74
Annual Report 2023
NOTES TO THE CONSILDATED FINANCIAL STATEMENTS
31 December 2023
Australian entities
Movement in deferred tax assets and liabilities using the Company’s domestic Australian tax rate of 25%
2023 cost
Intangibles
Employee benefits
Accrued expenses
Deferred revenue
Unused tax losses carried forward
Other items
Deferred tax assets not recognised
Deferred tax assets/(liabilities)
2022 cost
Intangibles
Employee benefits
Accrued expenses
Deferred revenue
Unused tax losses carried forward
Other items
Deferred tax assets not recognised
Deferred tax assets/(liabilities)
OPENING BALANCE
RECOGNISED IN
PROFIT OR LOSS CLOSING BALANCE
$
$
$
(514,447)
25,193
32,644
274,902
8,508,385
(52,272)
(8,274,405)
-
(555,043)
30,295
45,011
357,373
7,161,233
(47,486)
(6,991,383)
-
(5,513)
(17,166)
21,971
(68,726)
1,795,181
5,529
(1,731,276)
-
40,596
(5,102)
(12,367)
(82,471)
1,347,152
(4,786)
(1,283,022)
-
(519,960)
8,027
54,615
206,176
10,303,566
(46,743)
(10,005,681)
-
(514,447)
25,193
32,644
274,902
8,508,385
(52,272)
(8,274,405)
-
75
Annual Report 2023
NOTES TO THE CONSILDATED FINANCIAL STATEMENTS
31 December 2023
U.S. entities
Movement in deferred tax assets and liabilities using the US tax rate of 21%
2023 cost
Intangibles
Employee benefits
Accrued expenses
Unused tax losses carried forward
Other items
Deferred tax asset not recognised
Deferred tax assets/(liabilities)
2022 cost
Intangibles
Employee benefits
Accrued expenses
Unused tax losses carried forward
Other items
Deferred tax asset not recognised
Deferred tax assets/(liabilities)
OPENING BALANCE
RECOGNISED IN
PROFIT OR LOSS CLOSING BALANCE
$
(73,950)
5,089
156,307
7,244,113
(28,418)
(7,303,141)
-
(83,520)
2,181
83,282
5,856,894
(39,415)
(5,819,422)
-
$
9,436
6,111
146,082
2,165,955
(59,368)
(2,268,216)
-
9,570
2,908
73,025
1,387,219
10,997
(1,483,719)
-
$
(64,514)
11,200
302,389
9,410,068
(87,786)
(9,571,357)
-
(73,950)
5,089
156,307
7,244,113
(28,418)
(7,303,141)
-
76
Annual Report 2023
NOTES TO THE CONSILDATED FINANCIAL STATEMENTS
31 December 2023
NOTE 14. CASH AND CASH EQUIVALENTS
Current assets
Cash at bank
Reconciliation of cash flows from operating activities
Loss for the year
Adjustments for:
Depreciation and amortisation
Share based payments (note 10)
Unrealised foreign currency translation gain
Interest expense on right-of-use assets (note 21)
Interest expense on convertible notes (note 24)
Gain on remeasurement on the early conversion of convertible note (note 24)
Sub-lease income
Loss on sale of fixed asset (note 9)
Impairment of intangible assets (note 20)
CONSOLIDATED
2023
$
2022
$
9,238,697
5,073,625
CONSOLIDATED
2023
$
2022
$
(16,270,814)
(12,683,312)
1,113,023
897,101
134,433
24,251
48,536
712,694
(402,324)
(33,510)
81
26,746
8,750
25,806
20,827
-
-
-
1,475
44,083
Operating loss before changes in working capital and provisions
(14,646,884)
(11,685,270)
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 provisions
Change in contract liabilities
(1,909,282)
(807,827)
273,056
312,778
1,348,902
(162,664)
(274,902)
(412,112)
556,918
(455,474)
806,350
70,436
(274,903)
(104,500)
Net cash used in operating activities
(15,058,996)
(11,789,770)
77
Annual Report 2023
NOTES TO THE CONSILDATED FINANCIAL STATEMENTS
31 December 2023
NOTE 15. TRADE AND OTHER RECEIVABLES
Current assets
Trade receivables
Other receivables
Non-current assets
Security deposit
CONSOLIDATED
2023
$
2022
$
3,460,703
1,596,417
127,946
142,506
3,588,649
1,738,923
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 expected
credit loss to be insignificant.
Information about the Group’s exposure to credit and market risks, and impairment losses for trade receivables is included
in Note 38 (c).
NOTE 16. INVENTORIES
Current assets
Finished goods - at cost
Raw materials – at cost
Less: Provision for obsolete stock
NOTE 17. OTHER CURRENT ASSETS - TERM DEPOSITS
Current assets
Term deposits
78
CONSOLIDATED
2023
$
2022
$
385,565
345,391
(9,646)
721,310
617,540
386,470
(132,744)
871,266
CONSOLIDATED
2023
$
2022
$
37,823
37,789
Annual Report 2023
NOTES TO THE CONSILDATED FINANCIAL STATEMENTS
31 December 2023
NOTE 18. OTHER CURRENT ASSETS - OTHER
Current assets
Prepayments and other assets
NOTE 19. PROPERTY, PLANT AND EQUIPMENT
Non-current assets
Leasehold improvements - at cost
Less: Accumulated depreciation
Plant and equipment - at cost
Less: Accumulated depreciation and impairment
Furniture, fixtures and fittings - at cost
Less: Accumulated depreciation and impairment
CONSOLIDATED
2023
$
2022
$
373,954
541,506
CONSOLIDATED
2023
$
2022
$
406,284
361,222
(134,766)
(85,011)
271,518
276,211
1,329,939
1,188,504
(1,020,670)
(848,804)
309,269
339,700
388,971
286,892
(256,247)
(205,955)
132,724
713,511
80,937
696,848
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out
below:
LEASEHOLD
IMPROVEMENTS
PLANT AND
EQUIPMENT
FURNITURE
AND FITTINGS
Consolidated
Balance at 1 January 2022
Additions
Disposals
$
125,143
162,885
-
$
477,959
51,010
(1,475)
$
80,460
35,987
TOTAL
$
683,562
249,882
-
(1,475)
Depreciation expense
(11,817)
(187,794)
(35,510)
(235,121)
Balance at 1 January 2023
Additions
Depreciation expense
Balance at 31 December 2023
276,211
45,042
(49,735)
271,518
339,700
148,215
(178,646)
309,269
80,937
102,079
696,848
295,336
(50,292)
(278,673)
132,724
713,511
79
Annual Report 2023
NOTES TO THE CONSILDATED FINANCIAL STATEMENTS
31 December 2023
NOTE 20. INTANGIBLE ASSETS
Non-current assets
Capitalised development - at cost
Less: Accumulated amortisation and impairment
Patents and trademarks - at cost
Less: Accumulated amortisation and impairment
Computer software - at cost
Less: Accumulated amortisation
CONSOLIDATED
2023
$
2022
$
2,569,723
2,139,440
(1,145,925)
(770,862)
1,423,798
1,368,578
1,807,655
1,675,632
(844,403)
(634,280)
963,252
1,041,352
56,772
(56,772)
-
117,613
(117,613)
-
2,387,050
2,409,930
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out
below:
Consolidated
CAPITALISED
DEVELOPMENT
PATENTS AND
TRADE MARKS
COMPUTER
SOFTWARE
$
$
$
TOTAL
$
Balance at 1 January 2022
1,485,258
1,046,596
637
2,532,491
Additions
Impairment of assets
Amortisation expense
218,927
(44,083)
(291,524)
167,817
-
-
-
(173,061)
(637)
Balance at 1 January 2023
1,368,578
1,041,352
Additions
Impairment of assets
Amortisation expense
457,029
(26,746)
(375,063)
132,023
-
(210,123)
Balance at 31 December 2023
1,423,798
963,252
-
-
-
-
-
386,744
(44,083)
(465,222)
2,409,930
589,052
(26,746)
(585,186)
2,387,050
80
Annual Report 2023
NOTES TO THE CONSILDATED FINANCIAL STATEMENTS
31 December 2023
NOTE 21. RIGHT-OF-USE ASSETS
The Group holds leases for properties with lease terms ranging from 3 to 5 years.
Non-current assets
Property - right-of-use
Less: Accumulated depreciation
Amounts recognised in profit or loss
Depreciation expense
Interest expense
Expense relating to variable lease payments not included in the measurement of the lease
liability
The total cash outflow in relation to lease payments amounted to $273,277 (2022: $253,229).
Balance at 1 January 2023
Depreciation expense
Foreign exchange movements
Closing value at 31 December 2023
Balance at 1 January 2022
Additions
Depreciation expense
Foreign exchange movements
Closing value at 31 December 2022
81
CONSOLIDATED
2023
$
2022
$
1,682,369
1,682,210
(879,668)
(629,097)
802,701
1,053,113
CONSOLIDATED
2023
$
2022
$
249,164
48,536
109,763
407,463
196,757
28,603
89,511
314,871
PROPERTY
$
1,053,113
(249,164)
(1,248)
802,701
232,456
1,025,617
(196,757)
(8,203)
1,053,113
Annual Report 2023 NOTES TO THE CONSILDATED FINANCIAL STATEMENTS
31 December 2023
NOTE 22. TRADE AND OTHER PAYABLES
Current liabilities
Trade payables
Other payables and accrued expenses
CONSOLIDATED
2023
$
2022
$
1,411,037
973,665
1,796,147
1,005,681
3,207,184
1,979,346
All amounts are short term and the carrying values are considered to be a reasonable approximation of fair value.
NOTE 23. CONTRACT LIABILITIES
Current liabilities
Contract liabilities
Non-current liabilities
Contract liabilities
CONSOLIDATED
2023
$
2022
$
274,902
274,902
549,804
824,706
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.
82
Annual Report 2023
NOTES TO THE CONSILDATED FINANCIAL STATEMENTS
31 December 2023
NOTE 24. LOANS AND BORROWINGS
Non-current liabilities
Convertible notes - debt host liability
Movements:
Balance at 1 January 2023
Convertible note issued during the year (i)
Less: transaction costs
Net proceeds
Less: foreign exchange movements
Add: accrued effective interest
Gain on modification at 31 August 2023 (ii)
Early conversion and modification of convertible note at 1 November 2023 (ii)
Balance at 31 December 2023
CONSOLIDATED
2023
$
2022
$
-
-
6,983,200
(62,637)
6,920,563
(514,713)
712,694
(402,324)
(6,716,220)
(6,920,563)
-
-
-
-
-
-
-
-
-
-
-
-
(i) On 2 February 2023, the Company, issued 10,000,000 Secured Convertible Notes with a face value of A$10,000,000 to
major shareholder, Walker Group Holdings Pty Limited (Notes). The Notes have a 21 month term maturing on 11 November
2024 at a conversion price of A$0.72 per security. Each Note accrues interest at a rate of 10% per annum if the Notes are
redeemed (and payable in one instalment only on redemption) or at a rate of 5% per annum if the Notes are converted (and
capitalised into additional shares on conversion). Interest accrues on any overdue sum at a rate of 12% per annum from
the due date. If converted, the shares rank pari passu with existing ordinary shares.
(ii) On 31 August 2023, the Company announced that it had completed a placement to institutional and sophisticat-
ed investors (Placement) raising A$12,000,000 at a price of A$0.42 per share and that the Company had entered into an
agreement with Walker Group to redeem all of the Notes and for Walker Group to apply all of the redemption proceeds to
subscribing for new shares at the same price as the Placement, subject to shareholder approval. On 1 November 2023, in
accordance with the Subscription and Redemption Deed between Walker Group Holdings Pty Limited and Next Science,
Walker Group agreed to retire the A$10m convertible notes in return for equity at the same price as the Placement Price,
being $0.42. The early conversion and modification of the convertible note resulted in an overall gain on modification of
USD$402,324 (refer note 11).
83
Annual Report 2023
NOTES TO THE CONSILDATED FINANCIAL STATEMENTS
31 December 2023
NOTE 25. LEASE LIABILITIES
Current liabilities
Lease liability
Non-current liabilities
Lease liability
CONSOLIDATED
2023
$
2022
$
274,801
257,912
687,164
962,060
The following table sets out a maturity analysis of lease payments, showing the undiscounted lease payments to be paid
after the reporting date:
CONSOLIDATED
2023
$
2022
$
259,979
755,311
306,736
1,043,232
1,015,290
1,349,968
CONSOLIDATED III
2023
$
2022
$
79,660
94,811
5,780
30,194
Maturity analysis
Not later than 1 year
Later than 1 year but not later than 5 years
NOTE 26. EMPLOYEE BENEFITS
Current liabilities
Liability for annual leave
Non-current liabilities
Liability for long service leave
84
Annual Report 2023
NOTES TO THE CONSILDATED FINANCIAL STATEMENTS
31 December 2023
NOTE 27. SHARE CAPITAL
In number of shares
Balance as at 1 January 2022
Shares issued in February 2022 on conversion of employee performance shares (i)
Shares issued in February 2022 on conversion of employee share options (ii)
Placement in March 2022 (iii)
Shares purchase plan in March 2022 (iv)
Placement in May 2022 (v)
Balance as at 31 December 2022
Balance as at 1 January 2023
Institutional placement in September 2023 (viii), (ix)
Share Purchase Plan in September 2023 (ix)
US Placement in September 2023 (ix)
Shares issued for corporate advisory services in November 2023 (x)
Director Placement in November 2023 (xi)
FULLY PAID
197,973,909
113,534
78,000
6,666,667
5,513,579
4,444,445
214,790,134
214,790,134
28,571,429
20,238,012
2,244,504
142,857
1,034,325
Shares issued to Walker Group in November 2023 on redemption of A$10 million convertible notes (xi)
24,673,842
Balance as at 31 December 2023
Balance at 1 January 2022
Shares issued in February 2022 on conversion of employee performance shares (i)
Shares issued in February 2022 on conversion of employee share options (ii)
Placement in March 2022 (iii)
Shares purchase plan in March 2022 (iv)
Placement in May 2022 (v)
Capital raising costs
Balance at 31 December 2022
Balance at 1 January 2023
Institutional placement in September 2023 (viii), (ix)
Share Purchase Plan in September 2023 (ix)
US Placement in September 2023 (ix)
Shares issued for corporate advisory services in November 2023 (x)
Directors Placement in November 2023 (xi)
Shares issued to Walker Group in November 2023 on redemption of A$10 million convertible notes (xi)
Capital raising costs
Balance at 31 December 2023
291,695,103
$
102,921,007
105,000
32,760
4,382,730
3,597,370
2,873,300
(385,634)
113,526,533
113,526,533
7,777,143
5,508,787
610,954
38,886
281,543
6,716,220
(636,557)
133,823,509
85
Annual Report 2023 NOTES TO THE CONSILDATED FINANCIAL STATEMENTS
31 December 2023
NOTE 27. SHARE CAPITAL (CONT.)
(i) In February 2022, 113,534 performance rights converted into 113,534 ordinary shares at a fair value of USD$0.92
per share.
(ii) In February 2022, 78,000 round 3 Equity Incentive Plan (ECP) employee share options converted to 78,000 ordi-
nary shares at a price of A$0.58.
(iii) In March 2022, Next Science raised A$6,000,000 via a Placement at A$0.90 per share.
(iv) In March 2022, Next Science raised A$4,796,814 via a Share Purchase Plan at A$0.87 per share.
(v) In May 2022, Next Science raised A$4,000,000 via a Placement to Walker Group Holdings Pty Limited at A$0.90,
approved by shareholders at the annual general meeting held on 27 May 2022.
(vi) In May 2023, Next Science issued 700,000 options with an exercise price of A$0.68 and expiry date of 1 May
2028 to employees under the Company’s Employee Equity Plan.
(vii) In July 2023, Next Science issued 7,366,333 options and 2,629,928 rights to executives under the Company’s
Long Term Incentive Plan. Of these, 1,716,366 options and 612,777 rights lapsed on 31 December 2023 following
the cessation of employment of one of the executives.
(viii) In August 2023, Next Science completed a placement to institutional and sophisticated investors (Placement)
at a price of A$0.42 (Placement Price).
(ix) In September 2023, Next Science issued:
a. 28,571,429 ordinary fully paid shares to the participants in the Placement, raising A$12 million (before costs);
b. 20,238,012 ordinary fully paid shares raising A$8,499,965 via a Share Purchase Plan (SPP) at the Placement
Price;
c. 2,244,504 ordinary fully paid shares raising A$610,954 via an offer to eligible US investors at the Placement
Price (US Offer).
(x) In November 2023, Next Science issued 142,857 ordinary fully paid shares at the Placement Price to a consul-
tant, who provided corporate advisory services to the Company, in lieu of fees.
(xi) In November 2023, following receipt of shareholder approval at a General Meeting held on 25 October 2023:
a. Next Science issued 1,034,325 ordinary fully paid shares to three Directors (Chair Aileen Stockburger, Man-
aging Director and CEO I.V. Hall, and Non-Executive Director, Grant Hummel) who participated in the Placement
and US Offer; an
b. Next Science issued 24,673,842 ordinary fully paid shares to Walker Group Holdings Pty Limited at the Place-
ment Price in accordance with the Subscription and Redemption Deed between Walker Group Holdings Pty
Limited and Next Science on the basis that the redemption amount of A$10m plus accrued interest was offset
against the share
subscription commitment and the A$10m convertible notes held by Walker Group were to be retired; and
c. the A$10m convertible notes held by Walker Group were retired in accordance with the Subscription and Re-
demption Deed.
86
Annual Report 2023
NOTES TO THE CONSILDATED FINANCIAL STATEMENTS
31 December 2023
NOTE 27. SHARE CAPITAL (CONT.)
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.
Capital management
The Group’s objectives when managing capital is to safeguard its ability to continue as a going concern, so that it can
provide returns for shareholders and benefits for other stakeholders and to maintain an optimum capital structure to
reduce the cost of capital.
NOTE 28. RESERVES
Share option reserve
Foreign currency translation reserve
Common control reserve
Performance rights reserve
CONSOLIDATEDI
2023
$
2022
$
1,310,970
2,140,298
(1,301,260)
(1,905,877)
(42,596,715)
(42,596,715)
95,782
-
(42,491,223)
(42,362,294)
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) was 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.
87
Annual Report 2023
NOTES TO THE CONSILDATED FINANCIAL STATEMENTS
31 December 2023
NOTE 28. RESERVES (CONT.)
Movements in reserves
Movements in each class of reserve during the current and previous financial year are set out below:
Consolidated
Balance at 1 January 2022
Foreign currency translation
Share-based payments
Foreign exchange impact
SHARE
OPTION
RESERVE
$
FOREIGN
CURRENCY
TRANSLATION
RESERVE
COMMON
CONTROL
RESERVE
PERFORMANCE
RIGHTS RESERVE
$
$
$
TOTAL
$
2,140,298
(1,349,143)
(42,596,715)
96,250
(41,709,310)
-
-
-
(556,734)
-
-
-
-
-
-
(556,734)
8,750
8,750
(105,000)
(105,000)
Balance at 31 December 2022
2,140,298
(1,905,877)
(42,596,715)
Foreign currency translation
Performance rights issued
Share-based payments
Transfers to retained earnings
Foreign currency translation differences
-
-
38,651
(888,098)
20,119
566,333
-
-
-
-
Convertible note
-
38,284
-
-
-
-
-
-
-
-
95,782
-
-
-
-
(42,362,294)
566,333
95,782
38,651
(888,098)
20,119
38,284
Balance at 31 December 2023
1,310,970
(1,301,260)
(42,596,715)
95,782
(42,491,223)
NOTE 29. DIVIDENDS
Dividends
No dividends were paid or declared by the Company during the financial year.
NOTE 30. PARENT ENTITY INFORMATION
As at, and throughout, the financial year to 31 December 2023 the parent entity of the Group was Next Science Limited.
Statement of profit or loss and other comprehensive income
Profit/(loss) after income tax
Other comprehensive income
Total comprehensive income / (loss)
PARENT 2023
PARENT 2022
$
1,474,963
901,312
2,376,275
$
(13,713,271)
(685,101)
(14,398,372)
88
Annual Report 2023
NOTES TO THE CONSILDATED FINANCIAL STATEMENTS
31 December 2023
NOTE 30. PARENT ENTITY INFORMATION (CONT.)
Statement of financial position
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
Reserves
Accumulated losses
Total equity
PARENT 2023
PARENT 2022
$
$
3,299,432
33,204,079
36,503,511
3,877,713
9,938,727
13,816,440
(1,517,647)
(815,428)
-
(1,517,647)
34,985,864
-
(815,428)
13,001,012
133,823,509
(26,586,646)
(72,250,999)
34,985,864
113,526,533
(26,799,559)
(73,725,962)
13,001,012
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 2023 and 31 December 2022.
Contingent liabilities
The parent entity had no contingent liabilities as at 31 December 2023 and 31 December 2022.
Capital commitments - Property, plant and equipment
The parent entity had no capital commitments for property, plant and equipment as at 31 December 2023 and 31 Decem-
ber 2022.
Material accounting policy information
The accounting policies of the parent entity are consistent with those of the Group, as disclosed in note 3, except for the
following:
●
Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity.
89
Annual Report 2023
NOTES TO THE CONSILDATED FINANCIAL STATEMENTS
31 December 2023
NOTE 31. GROUP ENTITIES
Set out below is the Group structure listing all subsidiaries as at 31 December 2023.
90
Annual Report 2023
NOTES TO THE CONSILDATED FINANCIAL STATEMENTS
31 December 2023
NOTE 32. RELATED PARTY TRANSACTIONS
(a) Key management personnel compensation
Key management personnel (“KMP”) are defined as those persons having authority and responsibility for planning, direct-
ing and controlling the activities of the Group, directly and indirectly, and include the Directors, executive and non-exec-
utive, as well as certain other senior executives. The totals of remuneration of the KMP of the Company included within
employee expenses are as follows:
Short term employee benefits
Other long term employee benefits
Post employment benefits
Share based payment benefits
Total
CONSOLIDATED
2023
$
2022
$
1,831,786
1,630,151
19,535
32,222
78,439
11,347
41,913
8,750
1,961,982
1,692,161
Short term employee benefits
Short term employee benefits includes salary, fringe benefits and cash bonuses paid to the executive directors and other
KMP as well as fees and benefits 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
KMPs of the Company hold 0.59% (2022: 9.48%) of the issued capital of the Company as at 31 December 2023.
NOTE 33. 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 con-
tribute 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 2023, there are 8,066,333 options and rights over ordinary shares on issue (2022: 2,812,000 options), represent-
ing 2.77% (2022: 1.31%) of the Company’s total share capital, granted to the employees and Directors of the Company.
91
Annual Report 2023
NOTES TO THE CONSILDATED FINANCIAL STATEMENTS
31 December 2023
NOTE 33. SHARE BASED EMPLOYEE INCENTIVE ARRANGEMENTS (CONT.)
Equity Incentive Plan (equity-settled) (continued)
The grant dates, vesting dates and exercise prices of options issued vary and are as follows:
GRANT DATE
AND VESTING
CONDITIONS
EXPIRY DATE
INSTRUMENT
NO AS AT
31 DEC
2022
GRANTED
EXERCISED (II)
LAPSED
NO AS AT 31
DEC 2023
VESTED AS
AT 31 DEC
2023
24-Jul-23 (i)
N/A
Rights
1-May-23 (ii)
30-Apr-28
Options
24-Jul-23 (iii)
24-Jul-28
Options
-
-
-
2,629,928
700,000
7,366,333
17-Dec-18
17-Dec-23
Options
17-Dec-18
17-Dec-23
Options
1,820,000
992,000
-
-
Totals
2,812,000
10,696,261
-
-
-
-
-
-
(612,777)
2,017,151
-
700,000
(1,716,366)
5,649,967
(1,820,000)
(992,000)
-
-
(5,141,143)
8,367,118
-
-
-
-
-
-
(i) No expiry date applies to the Rights other than that any Rights for which the Vesting Conditions have not been met shall
be forfeited.
(ii) The Vesting date of the options vary between 1 May 2024 and 1 May 2026.
(iii) The Vesting date of the options can be any date between the grant date of 24 July 2023, and 3 years from the grant
date. However, the options are only exercisable during the two year period starting on the third anniversary of the grant
date being 24 July 2026 to 24 July 2028.
As at 31 December 2023, nil options have vested (2022: 2,812,000).
The fair value of options has been measured using the Black-Scholes formula for options granted 1 May 2023 and the
Monte Carlo simulation for options granted 24 July 2023.
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
92
GRANT DATE
GRANT DATE
1 MAY 23
0.06-0.24
0.44
0.45
60%
5 years
0%
3.08%
24 JUL 23
0.11-0.16
0.39
0.49
60%
5 years (i)
0%
3.86%
Annual Report 2023
NOTES TO THE CONSILDATED FINANCIAL STATEMENTS
31 December 2023
NOTE 33. SHARE BASED EMPLOYEE INCENTIVE ARRANGEMENTS (CONT.)
Equity Incentive Plan (equity-settled) (continued)
Expected volatility is measured based on peer companies and expected life is the number of days until expiry.
(i) The expected life of the options granted on 24 July 2023 is 5 years. However, the vested options are only exercisable
during the exercise period form the last vesting date to the expiry date.
The fair value of the performance rights granted during the year is calculated at the date of grant using the Monte-Carlo
simulation model taking into account the simulated share price and total shareholder returns of Next Science Limited and
peer companies during the vesting period. These values were calculated applying the following inputs to performance
rights issued:
Grant date
Fair value per performance right
Number of performance rights issued
Remaining life of the performance rights
PERFORMANCE RIGHTS
24 Jul 2023
USD $0.2849
2,017,151
N/A
(i) During the financial year ending 31 December 2023, 2,629,928 Performance Rights were issued under the Company’s
LTI Plan (2022: Nil). Of these, 612,777 rights lapsed on 31 December 2023 due to an executive’s employment ending.
NOTE 34. CONTINGENT LIABILITIES AND CAPITAL COMMITMENTS
The Group has no contingent liabilities as at 31 December 2023.
The Group has no capital commitments as at 31 December 2023 (2022: nil).
NOTE 35. EVENTS OCCURRING AFTER THE REPORTING DATE
No matter or circumstance has arisen since 31 December 2023 that has significantly affected, or may significantly affect
the Group’s operations, the results of those operations, or the Group’s state of affairs in future financial years.
93
Annual Report 2023
NOTES TO THE CONSILDATED FINANCIAL STATEMENTS
31 December 2023
NOTE 36. REMUNERATION OF AUDITORS
Audit and assurance related services
KPMG Australia
Audit of financial statements
Other services
KPMG Australia
Taxation services
Other services
Total other services
Total auditor’s remuneration
NOTE 37. EARNINGS PER SHARE
Loss after income tax
Weighted average number of shares
(Number)
Basic earnings per share
(Cents)
Diluted earnings per share
(Cents)
CONSOLIDATED
2023
$
2022
$
121,704
97,485
25,086
24,875
49,961
10,171
7,142
17,313
171,665
114,798
CONSOLIDATED
2023
$
2022
$
(16,270,814)
(12,683,312)
234,094,658
210,468,045
(6.95)
(6.95)
(6.03)
(6.03)
NOTE 38. 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.
94
Annual Report 2023
NOTES TO THE CONSILDATED FINANCIAL STATEMENTS
31 December 2023
NOTE 38. 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 man-
agement framework with assistance from the Audit and Risk Committee (as detailed below). The Group’s risk management
framework has been established to identify and analyse the material risks faced by the Group, to set appropriate risk lim-
its and controls and to monitor risks and adherence to the risk appetite set by the Board. The Group’s risk management
framework is reviewed at least annually by the Audit and Risk Committee and the consideration of changes in the Group’s
risk profile and mitigating actions and controls is a standing item at Audit and Risk Committee meetings.
Audit and Risk Committee
The Audit and Risk Committee responsibilities in relation to risk management are to:
(a)
(b)
(c)
Oversee the establishment, and maintenance by management, of processes to ensure that there is an adequate
and effective system to identify and manage material business risks;
Monitor the Group’s Risk Register to confirm that key risks have been identified and adequate controls are in
place to mitigate risks so far as reasonably practicable;
Receive reports from management on new and emerging sources of risk and the proposed risk controls to miti-
gate those risks;
(d)
Receive reports from management and the external auditor on any material incident involving fraud or a break-
(e)
(f)
(g)
(h)
(i)
(j)
down of the Group’s risk controls and the lessons learned;
Review, at least annually, the Group’s risk management framework to confirm that it continues to be sound and
that the Group is operating with due regard to the risk appetite set by the Board;
Monitor the need for, and if considered necessary, require, an internal or external audit of critical areas of risk;
Oversee the establishment of procedures for the receipt, handling and investigation of whistleblower disclosures;
Oversee the establishment of, and monitor, assurance mechanisms for monitoring:
• the Group’s culture and compliance with the Group’s Values; and
• compliance with the Group’s corporate governance policies and procedures, contractual obligations and the
laws applicable to the Group and its operations;
Oversee the Group’s annual insurance program, having regard to the Group’s business and the insurable risks
within its business;
Assess the adequacy of controls, including disaster recovery and business continuity plans, for preserving and
re-establishing financial and operational information in the event of a disaster; and
(k)
Review and make recommendations to the Board in relation to public disclosures made by the Group regarding
material business risks.
The Board considers the Group’s risk management framework to be appropriate for the size and level of operations of the
Group.
95
Annual Report 2023
NOTES TO THE CONSILDATED FINANCIAL STATEMENTS
31 December 2023
NOTE 38. FINANCIAL RISK MANAGEMENT (CONT.)
(c) Credit risk
Cash and cash equivalents
The Group held cash and cash equivalents of USD $9,238,697 and USD $37,823 in term deposits at 31 December
2023 (2022: USD $5,073,625 in cash and USD $37,789 in term deposits). The cash and cash equivalents are held with
credit worthy bank and financial counterparties. The expected credit loss of each of these banks and counterparties are
considered to be extremely low; accordingly any expected credit losses are deemed to be insignificant.
Trade receivables and contract assets
Credit risk on trade receivables is the risk of financial loss if a customer fails to meet its contractual obligations.
The carrying amounts of financial assets represents the maximum credit exposure.
Maximum exposure to credit risk for trade receivables by type of counterparty was as follows:
Distribution & Licensing Partners
Hospitals & Surgery Centres
Prescribing Physicians
CONSOLIDATED
2023
$
918,484
787,772
1,754,447
2022
$
867,065
526,897
202,455
3,460,703
1,596,417
As at 31 December 2023, Zimmer Surgical Inc (worldwide) accounted for over 23% of the trade receivables (2022: Zimmer
Surgical Inc accounted for over 47% of the trade receivables).
(i) Risk management
The Group’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. However, man-
agement also considers the factors that may influence the credit risk of its customer base, including the default risk asso-
ciated with the industry and country in which customers operate. Details of concentration of revenue are included in note 6.
96
Annual Report 2023
NOTES TO THE CONSILDATED FINANCIAL STATEMENTS
31 December 2023
NOTE 38. FINANCIAL RISK MANAGEMENT (CONT.)
(c) Credit risk (continued)
(i) Risk management (continued)
The Audit and Risk Committee has established a credit policy under which each new customer is analysed individually
for creditworthiness before the Group’s standard payment and delivery terms and conditions are offered. The Group’s re-
view of new customers includes customer due diligence and credit agency information (Dun & Bradstreet Corporation), if
available. Sale limits are established for each customer and reviewed periodically. Any sales exceeding those limits require
approval according to an approval matrix.
The maximum exposure to credit risk at the reporting date to recognised financial assets is the carrying amount, net of
any provisions for impairment of those assets, as disclosed in the statement of financial position and notes to the financial
statements.
In monitoring customer credit risk, customers are grouped according to their credit characteristics, including whether they
are an individual hospital or surgery centre or whether they are a distribution partner with which Next Science has a licens-
ing or distribution agreement. Further consideration is given to their geographic location and trading history with the Group
and existence of any previous financial difficulties.
(ii) Impaired trade receivables
Generally, trade receivables are written off when there is no reasonable expectation of recovery. Indications of this include
significant financial difficulties of the debtor, the failure of a debtor to engage in a repayment plan, no active enforcement
activity and a failure to make contractual payments for an extensive period of time.
Impairment losses are recognised in the profit or loss statement within selling and distribution expenses. Subsequent re-
coveries of amounts previously written off are credited against selling and general expenses.
As at 31 December 2023, trade receivables with a nominal value of $Nil (2022: Nil) were considered impaired and fully
provided for.
(iii) Past due not impaired
As at 31 December 2023, trade receivables of $51,577 (2022: $56,315) were past due but not impaired. These relate to
customers for whom there is no recent history of default.
97
Annual Report 2023
NOTES TO THE CONSILDATED FINANCIAL STATEMENTS
31 December 2023
NOTE 38. FINANCIAL RISK MANAGEMENT (CONT.)
(c) Credit risk (continued)
(iii) Past due not impaired (continued)
The aging analysis of trade receivables is as follows
0 - 30 days
31 - 60 days
61 - 90 days
91 - 120 days
More than 120 days
Total
CONSOLIDATED
2023
$
2022
$
2,175,204
1,269,546
327,215
962,119
3,835
-
281,858
35,791
9,222
-
3,468,373
1,596,417
(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.
As 31 December 2023
Trade and other payables
Lease liabilities
Total
As 31 December 2022
Trade and other payables
Lease liabilities
Total
6-12 MONTHS
BETWEEN 1
AND 5 YEARS
$
-
$
-
131,270
131,270
755,311
755,311
TOTAL
CONTRACTED
AMOUNTS
$
3,207,182
1,015,290
4,222,472
-
155,185
155,185
-
1,043,232
1,043,232
1,979,346
1,349,967
3,329,313
LESS THAN
6 MONTHS
$
3,207,182
128,709
3,335,891
1,979,346
151,550
2,130,896
98
Annual Report 2023
NOTES TO THE CONSILDATED FINANCIAL STATEMENTS
31 December 2023
NOTE 38. FINANCIAL RISK MANAGEMENT (CONT.)
(d) Liquidity risk (continued)
Exposure to liquidity risk (continued)
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 chang-
es 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 $87,854 (2022: $13,032). This analysis assumes that all other variables, in par-
ticular 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 report-
ing 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.
The carrying amounts of the Group’s foreign currency denominated financial assets (trade and other receivables includ-
ing accrued income) and financial liabilities (trade and other payables) at the reporting date were as follows:
AUD financial assets converted to USD
AUD financial liabilities converted to USD
Net exposure in statement of financial position
CONSOLIDATED III
2023
$
9,140,418
(389,619)
8,750,799
2022
$
1,402,132
(346,097)
1,056,035
A reasonably possible strengthening (weakening) of the Unites States Dollar against all other currencies at 31 Decem-
ber 2023 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.
99
Annual Report 2023 NOTES TO THE CONSILDATED FINANCIAL STATEMENTS
31 December 2023
NOTE 38. FINANCIAL RISK MANAGEMENT (CONT.)
(e) Market risk (continued)
Currency risk (continued)
2023
Australian Dollars
2022
Australian Dollars
%
CHANGE
PROFIT
BEFORE TAX
STRENGTHEN
PROFIT
BEFORE TAX
WEAKEN
EQUITY
STRENGTHEN
EQUITY
WEAKEN
$
$
$
$
$
10%
875,080
(875,080)
875,080
(875,080)
10%
105,604
(105,604)
105,604
(105,604)
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.
100
Annual Report 2023
DIRECTORS DECLARATION
31 December 2023
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 49 to 100 and the Remuneration
Report on pages 32 to 47 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 Company as at 31 December 2023 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 be
come 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 2023.
3. The Directors draw attention to Note 2 to the consolidated financial statements, which includes a statement of compli-
ance with International Financial Reporting Standards.
Signed in accordance with a resolution of Directors:
_________________________________________
Aileen Stockburger
Chair and Independent Non-Executive Director
28 February 2024
101
Annual Report 2023
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 2023 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 2023
• 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 material 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 these requirements.
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
Liability limited by a scheme approved under Professional Standards Legislation.
66
name and logo are trademarks used under license by the independent member firms of the KPMG global organisation.
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.
102
Annual Report 2023
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 22,179,327
Refer to Note 6 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;
• High degree of estimation required to
calculate the period end revenue
recognition adjustment for Durable
Medical Equipment (DME) product
sales;
• Group has manual processes and
controls which may increase the risk
of error in recognition of revenue at
the end of the reporting period due to
differing terms of trade and differing
delivery periods of customer
contracts.
Our procedures included:
• Reviewed new and modified contracts and
considered management’s assessment of revenue
recognition in accordance with AASB 15 Revenue
from contracts with customers.
• Evaluated the appropriateness of the Group’s
revenue recognition policies against the
requirements of AASB 15 Revenue from Contracts
with Customers.
• Obtained an understanding of and assessed
management’s recognition and estimation of
revenue from the new collagen products (DME)
through examination of the underlying
arrangements and substantive sampling.
•
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, underlying sales
invoices and bank statement cash receipts.
•
For the calculation of deferred revenue, we
reviewed the calculation based on the remaining
life of the contract with reference to the underlying
customer contract.
• Selected a sample of revenue transactions across
67
103
Annual Report 2023
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.
Other Information
Other Information is financial and non-financial information in Next Science Limited’s annual report
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, Remuneration Report and Corporate Directory. The Our Purpose Page, Chairman’s Letter,
Managing Director’s Report and Investor Information 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
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.
104
68
Annual Report 2023
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 2023, 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 12 to 24 of the Directors’ report for the year
ended 31 December 2023.
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
KPMG
Kevin Leighton
Partner
Sydney
28 February 2024
105
69
Annual Report 2023
INVESTOR INFORMATION AS AT 4 MARCH 2024
NUMBER OF SECURITYHOLDERS
At the specified date, there were 4,421 holders of ordinary shares (quoted), 11 holders of options over ordinary shares
(unquoted) and three holders of performance rights (unquoted). These were the only classes of equity securities on issue.
SHAREHOLDING DISTRIBUTION
SIZE OF SHAREHOLDING
NUMBER OF HOLDERS
NUMBER OF SHARES
% OF ISSUED CAPITAL
1-1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and above
Total
1,070
1,323
590
1,191
247
4,421
559,159
3,716,402
4,621,735
39,793,031
243,004,776
291,695,103
0.19
1.27
1.58
13.64
83.31
100
TWENTY LARGEST HOLDERS OF ORDINARY SHARES
NAME
SHARES HELD
% OF ISSUED CAPITAL
1
2
3
4
5
6
7
8
9
10
11
12
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
AUCKLAND TRUST COMPANY LTD
UBS NOMINEES PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED – A/C 2
MR CHARLES ROBERT DIRCK WITTENOOM
JUDITH LEE MITCHELL
DR MATTHEW FRANCO MYNTTI
CITICORP NOMINEES PTY LIMITED
MR JAMES FONG SEETO
BNPP NOMS PTY LTD HUB24 CUSTODIAL SERV LTD
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
S G ANDREW PTY LTD
13 MR DEAN ANTHONY MACKENZIE
14
15
16
17
18
19
BOND STREET CUSTODIANS LIMITED
MR EVAN PHILIP CLUCAS & MS LEANNE JANE WESTON
BELGRAVIA STRATEGIC EQUITIES PTY LTD
TWENTY FIFTH ELPORTO PTY LTD
BROOK ST SMSF PTY LTD
RETZOS EXECUTIVE PTY LTD
20 MR TIMOTHY IAN DOUGLAS
Total
106
59,990,423
56,019,938
16,528,388
11,839,023
5,118,880
4,706,975
4,171,824
3,815,931
3,000,000
2,925,007
2,921,688
2,745,000
2,514,258
2,460,427
2,251,187
1,965,000
1,800,000
1,255,702
1,057,146
1,032,075
20.57
19.20
5.67
4.06
1.75
1.61
1.43
1.31
1.03
1.00
1.00
0.94
0.86
0.84
0.77
0.67
0.62
0.43
0.36
0.35
188,118,872
64.49
Annual Report 2023 INVESTOR INFORMATION AS AT 4 MARCH 2024
SUBSTANTIAL HOLDERS
Substantial holders as disclosed in substantial holding notices given to the Company were as follows:
NAME OF SUBSTANTIAL HOLDER
DATE OF NOTICE
NUMBER OF SHARES
% OF ISSUED
OVER WHICH RELEVANT
CAPITAL
INTEREST IS HELD
Walker Group Holdings Pty Limited, Auckland Trust
2.11.2023
108,296,030
37.17
Company Limited as trustee of the Second Pacific
Master Superannuation Fund and Lang Alexander
Walker
Thorney Technologies Ltd, TIGA Trading Pty Ltd, Thor-
20.9.2023
13,964,280
5.74
ney Investment Group entities and Jasforce Pty Ltd
SECURITIES SUBJECT TO ESCROW
There were no securities subject to a restriction period or voluntary escrow period.
UNQUOTED OPTIONS OVER ORDINARY SHARES
There were 6,149,967 unquoted options over ordinary shares held as follows:
SIZE OF OPTION HOLDING
NUMBER OF HOLDERS
NUMBER OF OPTIONS
% OF ISSUED OPTIONS
1-1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,000 and above
Total
0
0
0
4
7
11
0
0
0
100,000
6,049,967
6,149,967
0
0
0
1.63
98.37
100
Three executives of the Company - Dr Matthew Myntti, Jon Swanson and Robert Bell - hold 20% or more of the unquoted
options on issue. The options were issued under the Company’s executive long-term incentive plan.
UNQUOTED PERFORMANCE RIGHTS
There were 2,017,151 unquoted performance rights held as follows:
SIZE OF RIGHTS HOLDING
NUMBER OF HOLDERS
NUMBER OF RIGHTS
% OF ISSUED RIGHTS
1-1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,000 and above
Total
0
0
0
0
3
3
0
0
0
0
2,017,151
2,017,151
0
0
0
0
100
100
Three executives of the Company - Dr Matthew Myntti, Jon Swanson and Robert Bell - hold 20% or more of the unquoted
rights on issue. The rights were issued under the Company’s executive long-term incentive plan.
107
Annual Report 2023 INVESTOR INFORMATION AS AT 4 MARCH 2024
VOTING RIGHTS
Ordinary shares (including partly paid shares) carry voting rights on a one for one basis and unlisted options and rights do
not carry voting rights.
UNMARKETABLE PARCELS
There are 1,228 holders of an unmarketable parcel of shares based on the closing market price of $0.36 at 4 March 2024.
108
Annual Report 2023 CORPORATE DIRECTORY
DIRECTORS
Independent Non-Executive Chair
Aileen Stockburger
Managing Director
Harry Thomas Hall, IV
Non-Executive Directors
Company Secretary
Registered office
Share register
Auditor
Solicitors
Grant Hummel
Katherine Ostin
Daniel Spira
Gillian Nairn
HWL Ebsworth
Level 14, Australia Square
264-278 George Street
Sydney NSW 2000
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 code: NXS)
Website
www.nextscience.com
Corporate governance statement
https://www.nextscience.com/corp-governance/
109
Annual Report 2023