Kazia Annual Report 2022

60 FINANCIAL REPORT NOTES TO THE FINANCIAL STATEMENTS CONTINUED 30 June 2022 Note 16. Contingent consideration Consolidated 2022 2021 $ $ Current liabilities Contingent consideration – EVT801 758,840 3,164,557 Non-current liabilities Contingent consideration – paxalisib 1,167,536 1,015,249 Contingent consideration – EVT801 7,588,405 7,911,392 8,755,941 8,926,641 9,514,781 12,091,198 Reconciliations Reconciliation of the balance at the beginning and end of the reporting period is set out below: Consolidated 2022 2021 $ $ Contingent consideration at start of period 12,091,198 1,844,988 EVT801 acquisition - 11,075,949 Payment of paxalisib milestone - (3,400,000) Payment of EVT801 milestone (2,364,732) - Effect of exchange rates on contingent consideration (363,972) - Loss on revaluation of contingent consideration 152,287 2,570,261 9,514,781 12,091,198 Contingent consideration - paxalisib During the 2017 financial year, the consolidated entity acquired the rights to develop and commercialise paxalisib, as part of a business combination. The acquisition contained four contingent milestone payments, the first two milestone payment settlements being Kazia shares, and the third and fourth milestone payment settlements either cash or Kazia shares at the discretion of Kazia. Milestones 1 and 4 have now been paid out, and Milestone 3 has lapsed. Milestone 2 comprises shares to the value of $1,250,000. Each milestone payment is probability weighted for valuation purposes. The milestone payments are discounted to present value, using a discount rate of 15% per annum (15% - 2021). Kazia is also required to pay royalties to Genentech in relation to net sales. These payments are related to future financial performance, and are not considered as part of the consideration in relation to the Genentech agreement. In April 2022 the paxalisib Phase II clinical study was successfully completed and a final clinical study report received.

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