20 DIRECTORS’ REPORT Risks Related to Our Financial Condition and Capital Requirement We have incurred significant net losses. We anticipate that we will continue to incur significant net losses for the foreseeable future and we may never achieve or maintain profitability. We are a biotechnology company and have not yet generated significant revenue. We have incurred losses of A$8,419,484, A$25,014,055 and A$20,465,180 for the fiscal years ended June 30, 2021, 2022 and 2023, respectively. We have not generated any revenues from sales of any of our product candidates in prior financial years, however in the fiscal year ended June 30, 2021 we did generate revenues of A$15.2 million from the licensing of our development stage drug candidates. As of 30 June 2023, we had accumulated losses of A$89.1 million. We have devoted most of our financial resources to research and development, including our clinical development activities. To date, we have financed our operations primarily through the issuance of equity securities, research and development grants from the Australian government and payments from our collaboration partners. While we have generated revenue in recent fiscal years from license transactions, the nature of such revenue is irregular and unpredictable, and is based upon achievement of milestones over which we have limited or no control. As a consequence, we expect to continue to incur significant operating losses for the foreseeable future due to the cost of research and development including clinical trials and the regulatory approval process for product candidates. The amount of our future net losses is uncertain and will depend, in part, on the rate of our future expenditures. Our ability to continue operations will depend on, among other things, our ability to obtain funding through equity or debt financing, strategic collaborations or grants. We expect to continue to incur significant expenses and similar or increasing operating losses for the foreseeable future. We anticipate that our expenses will increase substantially if and as we: • continue our research and clinical development of our product candidates; • expand the scope of our current clinical studies for our product candidates or initiate additional clinical or other studies for product candidates; • seek regulatory and marketing approvals for any of our product candidates that successfully complete clinical trials; • further develop the manufacturing process for our product candidates; • change or add additional manufacturers or suppliers; • seek to identify and validate additional product candidates; • acquire or in-license other product candidates and technologies; • maintain, protect and expand our intellectual property portfolio; • create additional infrastructure to support our operations as a public company in the United States and our product development and future commercialization efforts; and • experience any delays or encounter issues with any of the above. The net losses we incur may fluctuate significantly from year to year, such that a period-to-period comparison of our results of operations may not be a good indication of our future performance. We have never generated any revenue from product sales and may never be profitable. Our ability to generate significant revenue and achieve profitability depends on our ability, alone or with strategic collaboration partners, to successfully complete the development of and obtain the regulatory approvals for our product candidates, to manufacture sufficient supply of our product candidates, to establish a sales and marketing organization or suitable third-party alternative for the marketing of any approved products and to successfully commercialise any approved products on commercially reasonable terms. All of these activities will require us to raise sufficient funds to finance business activities. In addition, we do not anticipate generating revenue from commercializing product candidates for the foreseeable future, if ever. Our ability to generate future revenues from commercializing product candidates depends heavily on: • successfully initiating and completing clinical trials of our product candidates; • the timing of the initiation and completion of preclinical studies and clinical trials • the timing of patient enrolment and dosing in any future clinical trials; • the timing of the availability of data from clinical trials • expectations about the successful completion of clinical trials • obtaining regulatory and marketing approvals for product candidates for which we complete clinical trials; • the timing of expected regulatory filings; • expectations about approval by regulatory authorities of our drug candidates; • the clinical utility and potential attributes and benefits of our product candidates, including the potential duration of treatment effects; • potential licenses of intellectual property and collaborations; • the commercialization of our product candidates, if approved; • expectations regarding expenses, ongoing losses, future revenue and capital needs; • our financial performance;
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