Kazia Therapeutics Annual Report 2021

42 Kazia Therapeutics Limited 42 Annual Report 2021 NOTE 1. GENERAL INFORMATION The financial statements cover Kazia Therapeutics Limited as a consolidated entity consisting of Kazia Therapeutics Limited and its subsidiaries. The financial statements are presented in Australian dollars, which is Kazia Therapeutics Limited’s functional and presentation currency. Kazia Therapeutics Limited is a listed public company limited by shares, incorporated and domiciled in Australia. Its registered office and principal place of business is: Three International Towers Level 24, 300 Barangaroo Avenue Sydney NSW 2000 The financial statements were authorised for issue, in accordance with a resolution of Directors, on 26 August 2021. The Directors have the power to amend and reissue the financial statements. NOTE 2. SIGNIFICANT ACCOUNTING POLICIES The principal accounting policies adopted in the preparation of the financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated. New or amended Accounting Standards and Interpretations adopted The consolidated entity has adopted all of the new, revised or amending Accounting Standards and Interpretations issued by the Australian Accounting Standards Board (‘AASB’) that are mandatory for the current reporting period. The adoption of these Accounting Standards and Interpretations did not have any significant impact on the financial performance or position of the consolidated entity. Any new, revised or amending Accounting Standards or Interpretations that are not yet mandatory have not been early adopted. New Accounting Standards and Interpretations not yet mandatory or early adopted Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet mandatory, have not been early adopted by the consolidated entity for the annual reporting period ended 30 June 2021. The consolidated entity’s assessment of the impact of these new or amended Accounting Standards and Interpretations is that none are deemed to have a material impact on the entity. Going concern The consolidated entity incurred a loss after income tax of $8,421,960 (2020: $12,467,466), was in a net current asset position of $21,064,264 (2020: net current asset position of $5,586,128) and had net cash outflows from operating activities of $9,110,516 (2020: $8,809,519) for the year ended 30 June 2021. As at 30 June 2021 the consolidated entity had cash in hand and at bank, including cash on deposit, of $27,586,760. The financial statements have been prepared on a going concern basis, which contemplates continuity of normal activities and realisation of assets and settlement of liabilities in the normal course of business. As is often the case with drug development companies, the ability of the consolidated entity to continue its development activities as a going concern is dependent upon it deriving sufficient cash from investors, from licensing and partnering activities, and from other sources of revenue such as grant funding. The directors have considered the cash flow forecasts and the funding requirements of the business and continue to explore grant funding, licensing opportunities and equity investment opportunities in the Company. In particular, the directors have considered the impact of COVID-19 on the operations of the Company, and make the following observations: • Kazia’s key clinical trials have not been impacted by COVID-19 to date. The GBM Agile study, the pivotal study for paxalisib in glioblastoma, is on track with recruitment running to plan, and no disruption to this schedule is foreseen. The Phase II study of paxalisib in glioblastoma was fully recruited prior to the onset of restrictions and is in wrap up stage at the date of this report. Plans are on track for the commencement of a Phase I trial for EVT801 before the end of 2021; • In general, clinical research in advanced cancer is relatively protected from pandemic disruption due to the ongoing and time-critical need for patient care in specialised facilities which cannot easily be repurposed; • The Company is not reliant on ongoing revenue from customers, and so changes in customer behaviour over the next several years due to public health restrictions and reduced economic activity have little to no impact on its finances; • The Company was able to secure funding of approximately $9 million at the height of the initial wave of COVID-19 in April 2020, and additional funds of approximately $25 million during the 2021 financial year; • Based on budgets and forecasts, the Company has sufficient cash to fund the operations for a period of at least 12 months from the date of this report; and • As a consequence, the directors do not foresee any other impacts of COVID-19 on the Company’s ability to pursue its objectives, and in particular on its ability to raise additional funding if required. Accordingly the directors have prepared the financial statements on a going concern basis. Should the above assumptions not prove to be appropriate, there is material uncertainty whether the consolidated entity will continue as a going concern and therefore whether it will realise its assets and extinguish its liabilities in the normal course of business and at the amounts stated in these financial statements.