Annual Report for Fiscal Year Ending June 30, 2026 (Form 10-K)

Management's Discussion and Analysis of Financial Condition and Results of Operations.

You should read the following discussion and analysis of financial condition and operating results together with our consolidated financial statements and the related notes and other financial information included in Item 8 in this Annual Report. This discussion contains forward-looking statements that involve risks and uncertainties. As a result of many factors, such as those set forth in the section of the Annual Report captioned "Risk Factors" and elsewhere in this Annual Report, our actual results may differ materially from those anticipated in these forward- looking statements.

Overview

Benitec Biopharma Inc. ("Benitec" or the "Company" or in the first person, "we" or "our") is a clinical-stage biotechnology company focused on the advancement of novel genetic medicines with headquarters in Hayward, California. We are developing a silence and replace-based therapeutic (BB-301) for the treatment of Oculopharyngeal Muscular Dystrophy ("OPMD"), a chronic, life-threatening genetic disorder.

BB-301 is an AAV-based gene therapy designed to permanently silence the expression of the disease-causing gene (to slow, or halt, the biological mechanisms underlying disease progression in OPMD) and to simultaneously replace the mutant gene with a functional gene (to drive restoration of function in diseased cells). This fundamental therapeutic approach to disease management is called "silence and replace." The silence and replace mechanism offers the potential to restore the normative physiology of diseased cells and tissues and to improve treatment outcomes for patients suffering from the chronic, and potentially fatal, effects of OPMD. BB-301 has been granted Orphan Drug Designation in the European Union and Orphan Drug Designation and Fast Track Designation in the United States.

We believe that this novel mechanistic profile of the current and future investigational agents developed by Benitec could facilitate the achievement of robust and durable clinical activity while greatly reducing the frequency of drug administration traditionally expected for medicines employed for the management of chronic diseases. Additionally, the achievement of permanent gene silencing and gene replacement may significantly reduce the risk of patient non-compliance during the course of medical management of potentially fatal clinical disorders. We will require additional financing to progress our product candidates through future inflection points.

Financing and Financing-Related Transactions During the Year Ended June 30, 2026

November 2025 Capital Raise

On November 5, 2025, we entered into an Underwriting Agreement with Leerink Partners LLC and TD Securities (USA) LLC and Evercore Group L.L.C., as representatives of the several underwriters named therein, pursuant to which we agreed to issue and sell, in a firm commitment underwritten offering by us (the "November 2025 Underwritten Offering"), 5,930,000 shares of the Company's common stock, par value $0.0001 per share (the "Common Stock"). In addition, we granted the Underwriters a 30-day option to purchase up to an additional 889,500 shares of Common Stock. The public offering price for each share of Common Stock is $13.50. In connection with their services, the underwriters received an underwriting discount equal to 6.0% of the gross proceeds of the November 2025 Underwritten Offering.

Concurrently with the November 2025 Underwritten Offering, on November 5, 2025, we entered into a Securities Purchase Agreement (the "Purchase Agreement") with affiliates of Suvretta Capital (now Montanova Capital), Averill Master Fund, Ltd. and Averill Madison Master Fund, Ltd. (together, the "Purchasers" and the "Suvretta Funds"), pursuant to which the Company agreed to issue and sell to the Purchasers an aggregate of 1,481,481 shares of Common Stock at a purchase price of $13.50 per share in a registered direct offering (the "Direct Offering," and together with the November 2025 Underwritten Offering, the "Offerings"), the same price per share as the price to the public in the November 2025 Underwritten Offering. In connection with their services, we entered into a Placement Agency Agreement with Leerink Partners, TD Securities and Evercore ISI pursuant to which we agreed to pay such placement agents a fee in an amount equal to 6.0% of the gross proceeds received by the Company from the Direct Offering, subject to the placement agents reimbursing the Company for certain of its expenses. Pursuant to the Purchase Agreement, the Company and the Purchasers entered into a Registration Rights Agreement pursuant to which the Company agreed to register for resale the shares of Common Stock sold in the Direct Offering.

Total gross proceeds received by the Company during the year ended June 30, 2026 from the issuance of Common Stock totaled $104.5 million, less underwriter issuance costs of $5.7 million and other incidental costs of $0.6 million.

Results of Operations

Revenues

We did not generate or recognize any revenue during the years ended June 30, 2026 and 2025.

Operating Expenses

Research and Development Expenses

Research and development expenses relate primarily to the cost of conducting clinical and preclinical trials. Preclinical and clinical development costs are a significant component of research and development expenses. We record accrued liabilities for estimated costs of research and development activities conducted by third-party service providers, which include the conduct of preclinical studies and clinical trials, and contract manufacturing activities. We record the estimated costs of research and development activities based upon the estimated amount of services provided but not yet invoiced and includes these costs in trade and other payables on the consolidated balance sheets and within research and development expenses on the consolidated statements of operations and comprehensive loss.

General and Administrative Expenses

General and administrative expenses consist primarily of salaries, related benefits, travel, and share-based compensation expense. General and administrative expenses also include facility expenses, professional fees for legal, consulting, accounting and audit services and other related costs.

We anticipate that our research and development expenses may increase as we focus on the continued development of the clinical OPMD program. We also anticipate an increase in expenses relating to accounting, legal and regulatory-related services associated with maintaining compliance with exchange listing and SEC requirements, director and officer insurance premiums and other similar costs.

The following table sets forth a summary of our expenses for each of the periods:

During the year ended June 30, 2026, we incurred $23.4 million in research and development expenses, as compared to $18.3 million for the comparable year ended June 30, 2025. Research and development expenses relate primarily to ongoing clinical development of BB-301 for the treatment of OPMD. The year-over-year increase for the year ended June 30, 2026, primarily reflects an increase in share-based compensation expense of $6.3 million and an increase in payroll of $2.2 million, offset by a reduction in contract manufacturing activity of $3.8 million.

General and administrative expenses totaled $27.8 million for the year ended June 30, 2026, compared to $23.4 million for the comparable year ended June 30, 2025. The increase for the year ended June 30, 2026, relates primarily to increases in share-based compensation of $2.7 million and an increase in payroll of $0.8 million.

Other Income (Loss)

The following table sets forth a summary of our other income (loss) for each of the periods:

Other income (loss), net during the year ended June 30, 2026, which mainly consists of foreign currency transaction gain (loss), and interest income other expense, net, which totaled $5.6 million. Net interest income increased by $2.3 million for year ended June 30, 2026, in comparison the year ended June 30, 2025, reflecting an increase in our cash and cash equivalent balances. In the year ended June 30, 2025, there was a gain on extinguishment of liabilities due to a settlement of an outstanding trade payables balance and accrued clinical development project costs of $1.2 million with a vendor for $0.5 million due to a contractual dispute regarding contract performance and deliverables. This settlement resulted in a gain of $0.8 million in fiscal year 2025. No comparable settlements occurred during the year ended June 30, 2026.

Liquidity and Capital Resources

We have incurred cumulative losses and negative cash flows from operations since our predecessor's inception in 1995. We had accumulated losses of $273.7 million as of June 30, 2026. We expect that our research and development expenses will increase due to the continued development of the OPMD program. It is also likely that there will be an increase in the general and administrative expenses due to compliance requirements of a public company in the United States.

We had no borrowings as of June 30, 2026 and do not currently have a credit facility. As of June 30, 2026 and 2025, we had outstanding warrants to purchase 20,017,501 and 20,443,496 shares respectively, of Common Stock consisting of the following:

As of June 30, 2026, we had cash and cash equivalents of approximately $180.0 million. Cash in excess of immediate requirements is invested in accordance with our investment policy, primarily with a view to liquidity and capital preservation. Currently, our cash and cash equivalents are held in bank accounts. On March 25, 2025, we completed a financing which raised $30.5 million.

On November 5, 2025, we sold 5.9 million shares of common stock in an offering, and concurrently sold 1.5 million shares to affiliates of Suvretta Capital (now Montanova Capital) in a registered direct offering. Total gross proceeds from the common stock issuances during the year ended June 30, 2026 was $104.5 million, less underwriter issuance costs of $5.7 million and other incidental costs of $0.6 million.

The following table sets forth a summary of the net cash flow activity for each of the periods set forth below:

Operating activities

Net cash used in operating activities for the years ended June 30, 2026 and 2025 was $16.5 million and $23.6 million, respectively. Net cash used in operating activities was primarily the result of our net loss, partially offset by non-cash expenses. Other factors included changes in working capital - primarily an increase in payables offset by a decrease in prepaid assets and lease liabilities.

Investing activities

Net cash used in investing activities for the years ended June 30, 2026 and 2025 was not significant and related to the purchase of furniture and fixtures and lab equipment.

Financing activities

Net cash provided by financing activities was $99.0 million and $70.5 million for the years ended June 30, 2026 and 2025, respectively. Cash from financing activities in the year ended June 30, 2026 was mostly related to the issuance of common stock from the November 2025 offering, and the exercise of pre-funded warrants, Series 2 warrants, and common warrants, partially offset by share issuance costs. Cash from financing activities in the year ended June 30, 2025 was related to the March 2025 underwritten and direct offering with gross proceeds of $42.3 million, partially offset by share issuance costs of $2.3 million, resulting in net cash provided by financing activities of $70.5 million, and the issuance of common stock from the exercise of pre-funded warrants, Series 2 warrants, and common warrants.

Funding Requirements

The future of the Company as an operating business will depend on its ability to manage operating costs and budgeted amounts and obtain adequate financing.

We do not have any products approved for sale and have not generated any revenue from product sales. We do not know when, or if, we will generate any revenue from product sales. We do not expect to generate significant revenue from product sales unless and until we obtain regulatory approval of and commercialize one of our current or future product candidates.

Unless and until we establish significant revenues from licensing programs, strategic alliances or collaboration arrangements with pharmaceutical companies, or from product sales, we anticipate that we will continue to generate losses for the foreseeable future, and we expect the losses to increase as we continue the development of product candidates and begin to prepare to commercialize any product that receives regulatory approval. We are subject to the risks inherent in the development of new gene therapy products, and we may encounter unforeseen expenses, difficulties, complications, delays, and other unknown factors that may adversely affect our business. We estimate that our cash and cash equivalents will be sufficient to fund our operations for at least the next twelve months from the date of this report.

We have based our projections of operating capital requirements on assumptions that may prove to be incorrect, and we may use all of our available capital resources sooner than we expect. Because of the numerous risks and uncertainties associated with research, development, and commercialization of pharmaceutical products, we are unable to estimate the exact amount of our operating capital requirements. Our future funding requirements will depend on many factors, including, but not limited to:

Contractual Obligations and Commercial Commitments

On October 1, 2016, the Company entered into an operating lease for office space in Hayward, California with multiple amendments extending the lease through December 2027. The Company also entered into a lease in Los Angeles, California for office space with an initial expiration date in July 2026. The Company entered into a lease amendment for the Los Angeles office that extended the lease through January 2028. See Note 8 of the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K.

Off-Balance Sheet Arrangements

We did not have during the periods presented, and we do not currently have, any off-balance sheet arrangements, as defined under SEC rules.

We enter into contracts in the normal course of business with third-party contract research organizations, contract development and manufacturing organizations and other service providers and vendors. These contracts generally provide for termination on notice and, therefore, are cancellable contracts and not considered contractual obligations and commitments.

Critical Accounting Policies and Significant Accounting Estimates

The preparation of consolidated financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires us to make judgments, assumptions and estimates that affect the amounts reported. Note 2 of the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K describes the significant accounting policies used in the preparation of the consolidated financial statements. Certain of these significant accounting policies are considered to be critical accounting policies.

A critical accounting policy is defined as one that is both material to the presentation of our consolidated financial statements and requires us to make difficult, subjective, or complex judgments that could have a material effect on our financial condition or results of operations. Specifically, these policies have the following attributes: (1) we are required to make assumptions about matters that are highly uncertain at the time of the estimate; and (2) different estimates we could reasonably have used, or changes in the estimate that are reasonably likely to occur, would have a material effect on our financial condition or results of operations.

Estimates and assumptions about future events and their effects cannot be determined with certainty. We base our estimates on historical experience and on various other assumptions believed to be applicable and reasonable under the circumstances. These estimates may change as new events occur, as additional information is obtained and as our operating environment changes. These changes have historically been minor and have been included in the consolidated financial statements as soon as they became known. In addition, we are periodically faced with uncertainties, the outcomes of which are not within its control and will not be known for prolonged periods of time. These uncertainties are discussed in the section above entitled "Risk Factors." Based on a critical assessment of its accounting policies and the underlying judgments and uncertainties affecting the application of those policies, we believe that our consolidated financial statements are fairly stated in accordance with accounting principles generally accepted in the United States of America and provide a meaningful presentation of our financial condition and results of operations.

We believe that the following are critical accounting policies:

Research and Development Expense

Preclinical and clinical trial costs are a significant component of our research and development expenses. We accrue for preclinical and clinical development costs based on factors such as estimates of the work completed and in accordance with agreements established with our third-party service providers. We make significant judgments and estimates in determining the accrued liabilities balance at the end of each reporting period. As actual costs become known, we adjust our accrued liabilities accordingly on a prospective basis and will do so in the period in which the facts that give rise to the revision become reasonably certain.

Share-based Compensation Expense

We record share-based compensation in accordance with ASC 718, Stock Compensation. ASC 718 requires the fair value of all share-based compensation awarded to employees and non-employees to be recorded as an expense over the shorter of the service period or the vesting period. We determine employee and non-employee share-based compensation based on grant-date fair value using the Black-Scholes Option Pricing Model and allocate the resulting compensation expense over the corresponding requisite service period using the graded vesting attribution method. We account for forfeitures of share-based awards as they occur.

Recent Accounting Pronouncements

For a discussion of recent accounting pronouncements that we have adopted and have not yet adopted, see Note 2 to our consolidated financial statements.