Annual report
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ADALTA LIMITED AND CONTROLLED ENTITIES ABN 92 1 20 332 925 ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2026
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AdAlta Limited and controlled entities Contents 30 June 2026 1 Corporate directory 2 Directors' report 3 Auditor's independence declaration 29 Statement of profit or loss and other comprehensive income 30 Statement of financial position 31 Statement of changes in equity 32 Statement of cash flows 33 Notes to the financial statements 34 Consolidated entity disclosure statement 47 Directors' declaration 48 Independent auditor's report to the members of AdAlta Limited and controlled entities 49 Shareholder information 53
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AdAlta Limited and controlled entities Corporate directory 30 June 2026 2 Directors Dr Paul MacLeman Dr Timothy Oldham Ms Michelle Burke Mr Fadi Diab (Appointed 18 March 2026) Dr David Fuller (Resigned 17 April 2026) Company secretary Mr Cameron Jones Registered office Level 1, Suite 1, 117 Camberwell Road Hawthorn East, VIC 3123 Australia Auditor Dry Kirkness (Audit) Pty Ltd Ground Floor, 50 Colin Street West Perth, Western Australia 6005 Share Registry Automic Registry Services Level 5 126 Phillip Street Sydney, NSW 2000 Tel: 1300 288 664 Stock exchange listing AdAlta Limited shares are listed on the Australian Securities Exchange. ASX Code 1AD and listed options under ASX:1ADO Website www.adalta.com.au
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AdAlta Limited and controlled entities Directors' report 30 June 2026 3 The Directors of AdAlta Limited (“AdAlta” or “the Group”) submit herewith the Annual Report of the Group for the financial year ended 30 June 2026. In order to comply with the provisions of the Corporations Act 2001, the Directors report as follows: Information about the Directors The names and particulars of the Directors of the Group during or since the end of the financial year are: Dr Paul MacLeman MBA, BVSc, Grad Dip Tech, Grad Cert Eng, FAICD, MATT Chairman, joined the board 16 April 2015. Paul has over 35 years experience across all phases of the life sciences sector, with a career spanning veterinary practice, pharmaceutical development and manufacturing, biotechnology, diagnostics and capital markets, focused on the development, scale-up and commercialisation of complex therapeutic products.He has held CEO and senior executive roles in GMP manufacturing organisations including IDT Australia, where he led the operation of Australia’s only high - containment API and sterile manufacturing facility, supporting cytotoxic and highly potent pharmaceutical production, contract manufacturing and clinical trial supply. Across multiple roles, he has been directly involved in the design, commissioning and operation of GMP facilities spanning biologics, vaccines and complex protein-based therapeutics. Paul has served as Chairman, Managing Director or CEO of multiple publicly listed and venture - backed life sciences companies across the ASX, NASDAQ, TSX and CSE, leading numerous IPOs and secondary capital raisings. He has extensive experience in technology commercialisation, cross-border transactions and intellectual property strategy. He brings particular expertise in bridging scientific development with capital allocation under conditions of technical and regulatory uncertainty, including the acquisition and development of novel antiviral assets targeting Ebola and Marburg haemorrhagic fevers, delivering significant shareholder value through clinical and regulatory progression. Paul currently serves as Chair of AdAlta Limited (ASX:1AD) and has held board roles across pharmaceutical, biologics, diagnostics and medical technology companies. In addition to his commercial roles, Paul has contributed extensively to Australian pharmaceutical manufacturing policy and workforce development, including as Chair of the Pharmaceutical Manufacturing Industry Reference Committee and advisor to the Manufacturing Jobs & Skills Council, with a focus on building sovereign capability in advanced therapeutics manufacturing. He holds a Bachelor of Veterinary Science from the University of Sydney, an MBA from Macquarie Graduate School of Management, and is a Graduate of the Australian Institute of Company Directors. Dr Timothy Oldham BSc(Hons), LLB (Hons), PhD Managing Director and CEO, joined the Board on 8 October 2019. Tim has more than 20 years of life sciences business development, alliance management, portfolio and product development, and commercialisation experience in Europe, Asia and Australia, with a particular focus on biologics, cell and gene therapies and pharmaceutical products. Immediately prior to joining AdAlta, as Executive Leader of Tijan Ventures, Tim provided strategic and operational advice to growing life sciences companies developing biologics, cell and gene therapies and immunotherapies. He had previously served as CEO and Managing Director of Cell Therapies Pty Ltd, a leading contract manufacturer and distributor of cellular therapies in Asia Pacific, President of Asia Pacific for Hospira, Inc., and a variety of senior management roles with Mayne Pharma Ltd prior to its acquisition by Hospira. He currently serves as a Non-executive Director at Acrux Ltd (ASX:ACR, topical and transdermal drug delivery) and Non-executive Chair at Skin2Neuron Pty Ltd (regenerative cell therapies for Alzheimer’s Disease).
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AdAlta Limited and controlled entities Directors' report 30 June 2026 4 Ms Michelle Burke BSc(Hons), GAICD Michelle joined the Board on 20 November 2024. Michelle has more than 25 years experience in the life sciences sector, with a breadth of knowledge across pharma and biotech industries, from early stage development through to late stage commercialisation, across pre-IPO, private commercial, industry groups and multinational organisations. Her executive career as a commercial leader spanned more than two decades, including at Bristol-Myers Squibb and SmithKline Beecham. With focus on pre-launch, market access and payor negotiations, she has delivered market access, reimbursement and stakeholder leadership for products across multiple therapeutic areas, including oncology, haematology, immunology, virology, cardiovascular and metabolic conditions. She also led the New Zealand commercial business, launching key products in that market, and was business development lead for Australia and New Zealand. Michelle is currently the industry nominee to the Pharmaceutical Benefits Advisory Committee, an independent statutory body that makes medicines decisions for inclusion to the Pharmaceutical Benefits Scheme (PBS). She is also Chair and non-executive director at Cell Therapies Pty Ltd (a leading contract development and manufacturer (CDMO) in cell and gene therapies). Other roles include non-executive director at Olivia Newton-John Cancer Research Institute, Senseye Australia Pty Ltd, as well as being past Chair of AusBiotech Ltd, the peak industry association for the life sciences sector. Michelle also serves as an advisor for Proto Axiom Pty Ltd and provides expertise to other advisory boards. Mr Fadi Diab (Appointed 18 March 2026) Fadi joined the Board on 18 March 2026. Fadi is a seasoned corporate executive with over 10 years experience in large financial institutions. He has led a number of large -scale technology transformation programs that have received national industry recognition and awards, and has managed large operational teams responsible for processing billions of dollars in payments. In addition to his executive career, Fadi currently serves as a Non-Executive Director of Balkan Mining and Minerals Limited (ASX: BMM), AdAlta Limited (ASX: 1AD) and Simble Solutions Limited (ASX: SIS). He previously served as a Non-Executive Director of Lithium Universe Limited (ASX: LU7). His board experience spans corporate governance, strategy, capital markets, mergers and acquisitions, and the oversight of ASX-listed companies across the mining, biotechnology and technology sectors. Fadi holds a Bachelor of Business in Human Resource Management and Industrial Relations from the University of Western Sydney and a Master of Business Management from the University of Technology Sydney. Dr David Fuller MBBS, BPharm(Hons) Non-Executive Director, appointed 22 July 2020, resigned 17 April 2026. The above-named Directors held office during the whole of the financial year and since the end of the financial year, unless otherwise indicated.
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AdAlta Limited and controlled entities Directors' report 30 June 2026 5 The above-named Directors held office during the whole of the financial year and since the end of the financial year, unless otherwise indicated. Company Secretary The name and particulars of the Company Secretary of the Group during or since the end of the financial year are: Cameron Jones B.Bus, CA,GIA(Cert) Cameron is a finance executive and Chartered Accountant with experience as CFO and Company Secretary of ASX Listed and Venture Capital healthcare companies. Cameron has supported companies through IPOs, capital raising and M&A transactions. Cameron is the Managing Director of Bio101, a financial services firm providing transaction advisory, CFO, accounting, tax and company secretarial services specialising in the healthcare and life science sectors. Directors’ shareholdings as at the date of this report The following table sets out each Director’s relevant interest in shares, debentures and rights or options in shares or debentures of the Group as at the date of this report: Directors Fully paid ordinary shares Unlisted Options Listed Options (Number) (Number) (Number)1 Dr Paul MacLeman 544,042 2,800,000 35,536 Dr Timothy Oldham 17,265,415 6,357,195 5,833,333 Ms Michelle Burke - - - Mr Fadi Diab - - - 1Listed Options terms trade under ASX code 1ADO, have exercise price of 1.0 cent and expire 3 June 2028. Dividends There were no dividends paid, recommended or declared during the current or previous financial year.
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AdAlta Limited and controlled entities Directors' report 30 June 2026 6 Shares under option as at the date of this report Number of shares under option Class of shares Exercise price of option Expiry date of options 1,300,000 Ordinary $0.0397 27 February 2027 50,000 Ordinary $0.0200 25 August 2027 11,025,000 Ordinary $0.0200 22 November 2027 662,500 Ordinary $0.0200 26 February 2028 757,195 Ordinary $0.0183 20 November 2028 1,083,901,398 Ordinary $0.0100 3 June 2028 The holders of these options do not have the right to participate in any share issue of the Group without first exercising th e options in accordance with the terms of any such share issue. Performance Rights under option as at the date of this report Number of performance rights Class of shares Expiry date of options 1,041,788 Ordinary 6 December 2028 Indemnity and insurance of officers and auditors During the financial year, the Group paid a premium in respect of a contract that insures the Directors of the Group (as named above), the company secretary and all executive officers of the Group and of any related body corporate against a liability incurred as such a Director, secretary or executive officer 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. The Group has not otherwise, during or since the end of the financial year, except to the extent permitted by law, indemnified or agreed to indemnify an officer or auditor of the Group or of any related body corporate against a liability incurred as su ch an officer or auditor. Meetings of Directors The number of meetings of the Group's Board of Directors ('the Board') and of each Board committee held during the year ended 30 June 2026, and the number of meetings attended by each Director were: Full Board Remuneration and Nomination Committee1 Audit and Risk Committee1 Attended Held Attended Held Attended Held Dr Timothy Oldham 10 10 2 2 1 1 Dr Paul MacLeman 10 10 2 2 1 1 Ms Michelle Burke 10 10 2 2 1 1 Mr Fadi Diab 2 2 - - - - Dr David Fuller 8 8 2 2 1 1 Held: represents the number of meetings held during the time the Director held office or was a member of the relevant committee. 1All non-executive directors are invited to attend all committee meetings regardless of committee membership. Only committee members are entitled to vote on resolutions of the committees. Proceedings on behalf of the Group No person has applied for leave of Court to bring proceedings on behalf of the Group or intervene in any proceedings to which the Group is a party for the purpose of taking responsibility on behalf of the Group for all or any part of those proceedings . Auditor's independence declaration A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out immediately after this Directors' Report.
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AdAlta Limited and controlled entities Directors' report 30 June 2026 7 Operating and financial review 1. Summary of principal activities and purpose AdAlta Ltd (ASX:1AD) (AdAlta or the Company) is a clinical stage biotechnology business. Its principal activity is the development of next generation cellular immunotherapies for the treatment of solid cancers , together with the commercialisation of protein therapeutics previously discovered using the Company’s proprietary i -body® platform. Through its ‘East to West’ strategy, AdAlta integrates Asia’s prowess in T cell therapy development with the efficiency and quality of Australia’s clinical and manufacturing ecosystem, creating a pathway that connects ‘Eastern’ innovation in cellula r immunotherapies with ‘Western’ regulated markets and patients. AdAlta in -licenses clinically de -risked products from Asian originators and invests to establish US FDA regulated manufacturing and to conduct early clinical studies, with the aim of positioning each product for on -licensing to larger biopharmaceutical companies for registrational studies and commercialisation. AdAlta applies a disciplined approach to asset selection , focused on highly differentiated T cell therapy products already supported by human clinical data in solid cancers. The business model is deliberately capital efficient, is designed to deliv er a return on investment in each project within three to four years, and is replicable and scalable across multiple products. Solid tumours account for approximately 90% of all cancers yet remain underserved by current cellular immunotherapies. The global cellular immunotherapy market is projected to grow at a compound annual growth rate of 34% to reach US$20.3 billion by 2028. AdAlta has previously created value by discovering and developing novel protein based therapeutics using its i-body® platform to address drug targets that have been intractable to other methods. The most significant of these are AD-214, a Phase 2 ready, first in class i-body fusion protein taking a whole new approach to fibrotic diseases of the lung and kidney such as the degenerative and fatal Idiopathic Pulmonary Fibrosis (IPF); and WD-34, a discovery stage i-body® that AdAlta believes is the first antibody-like molecule showing both high potency against malaria parasite invasion and activity against multiple strains of malaria. Both assets are available for partnering. AdAlta aims to convert the value it creates into revenue by out -licensing its product candidates to larger biopharmaceutical and biotechnology companies in return for upfront payments, development and commercialisation milestone payments, royalties and, in some cases, equity. In the case of its cellular immunotherapy programs, this value is shared with the Company’s in-licensing partners, enabling those partners to realise more than they could achieve alone. The primary focus of the FY2026 year was to convert AdAlta’s ‘East to West’ strategy from concept into execution – securing the Company’s first cellular immunotherapy asset, establishing Australian manufacturing and US regulatory pathways for it, building the pipeline behind it, and continuing to pursue partnering outcomes for AD -214 and WD-34. 2. Key FY2026 results “East to West” cellular immunotherapy strategy launched and first asset secured: ● Entered a Development and Collaboration Agreement with Shanghai Cell Therapy Group Co Ltd (SHcell) in respect of EW-001 (formerly BZDS1901), a first in class, anti-PD1 armoured mesothelin (MSLN) CAR-T therapy for advanced mesothelioma with potential in more than ten other cancers (January 2026). ● Completed the initial financial commitment under that agreement through two milestone payments totalling US$2.0 million, securing AdAlta’s rights to develop EW-001 for all markets outside Greater China and unlocking additional clinical data and the proprietary materials required to manufacture EW-001 in Australia. ● Reported new clinical data from investigator-initiated studies in China showing up to a 50% overall response rate and a 20% complete response rate at the highest current generation EW-001 doses tested – complete tumour clearance is almost never achieved in advanced mesothelioma. ● Signed the first manufacturing work order with Cell Therapies Pty Ltd (CTPL) and commenced technology transfer of EW-001 to Australia, and entered a Memorandum of Understanding with CTPL and Oribiotech to access the IRO® automated manufacturing platform. ● Appointed an EW-001 Clinical Advisory Board drawn from Australia’s leading CAR-T centres and engaged DarkHorse Consulting to guide engagement with the US FDA.
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AdAlta Limited and controlled entities Directors' report 30 June 2026 8 i-body® enabled assets and R&D: ● Continued to progress partnering and financing discussions for AD-214, with enquiries increasingly focused on kidney fibrosis applications. ● Completed AD-214 patent coverage across all target markets with the grant of a Canadian composition of matter patent. ● Advanced grant applications and third-party funding options for WD-34, including the possible creation of a dedicated spin-out company. Financing and organisation: ● Raised approximately A$5.3 million (before costs) across three placements during the year. ● Strengthened decision making through artificial intelligence, including EMU, AdAlta’s in-house agent built on Anthropic’s Claude, which screens and scores in-licensing opportunities. 3. Company strategy AdAlta is a clinical stage biotechnology business focused on the development of next generation cell and protein based therapeutics. Current programs address the need for effective cellular immunotherapies for the treatment of solid cancers and the need for more effective therapies for fibrotic diseases such as Idiopathic Pulmonary Fibrosis and for malaria. Through its ‘East to West’ cellular immunotherapy strategy, the Company is integrating Asia’s prowess in T cell therapy development with the efficiency and quality of Australia’s clinical and manufacturing ecosystem to create a pathway connecting ‘Eastern’ innovation in cellular immunotherapies with ‘Western’ regulated markets and patients. AdAlta aims to in -license clinical stage T cell immunotherapies, establish manufacturing and complete initial US FDA compliant clinical trials in Australia, and then on -license to larger biopharmaceutical companies, sharing the value created with the Company’s in -licensing partners. This strategy is the key growth driver for the Company. AdAlta has previously developed other assets using its proprietary i-body® technology for which it is now seeking partnerships intended to crystallise the value that previous R&D investment in these unique assets has created. AD-214, a Phase 2 ready, first in class i -body fusion protein, takes a whole new approach to fibrotic diseases of the lung and kidney, such as the degenerative and fatal Idiopathic Pulmonary Fibrosis (IPF). WD -34 is a discovery stage i -body® showing potential in the treatment and prevention of malaria and related diseases. AdAlta believes this is the first antibody-like molecule showing both high potency against malaria parasite invasion and activity against multiple strains of malaria. 4. ‘East to West’ cellular immunotherapies - AdCella Cellular immunotherapies are a new class of highly innovative therapeutics that involve engineering a patient’s own immune cells in a laboratory so that they can find and fight cancer, and then returning them to the patient. These highly specialise d, precision medicine products are living drugs that offer the potential to cure cancer from a single or limited number of doses. AdAlta sources clinically validated cellular immunotherapies developed in Asia – approximately 40% of all cellular immunotherapy developers and 60% of all cellular immunotherapy clinical trials are located in Asia – and co-develops these assets through Western (US FDA) regulatory pathways using Australian clinical trial and manufacturing infrastructure. The model is designed to: ● reduce early stage discovery risk; ● shorten development timelines; ● materially lower development capital intensity; and ● improve the probability of successful commercialisation and strategic transaction outcomes. The opportunity AdAlta is addressing is straightforward: Asia, and China in particular, has produced a deep pool of clinical stage cell therapies, but few of these have a credible, compliant path to Western approval and reimbursement. Large biopharmaceutical companies want the innovation but resist the transaction cost, data acceptance and supply chain questions that come with it. This gap is illustrated in Figure 1.
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AdAlta Limited and controlled entities Directors' report 30 June 2026 9 Figure 1: An innovation surplus in the “East” that cannot easily reach patients in the “West” AdAlta acts as a force multiplier for Asian innovators, creating value for larger biopharmaceutical companies by ‘Westernising’ these innovative assets and generating confirmatory clinical data, with that value shared with its in -licensing partners. Capital is recycled from each exit into the next asset, and the platform structure enables AdAlta to scale a multi - asset pipeline using both public and private sources of capital, preserving capital efficiency and minimising balance sheet risk. The business model is illustrated in Figure 2. Figure 2: The ‘East to West’ business model – in-license, add value, exit, recycle
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AdAlta Limited and controlled entities Directors' report 30 June 2026 10 EW-001 (formerly BZDS1901) – the first asset The first product being developed under the ‘East to West’ strategy is EW-001, a clinical stage, first in class armoured CAR- T therapy targeting mesothelin (MSLN) , a protein found on mesothelioma and more than ten other cancers. In January 2026 AdAlta entered a Development and Collaboration Agreement with Shanghai Cell Therapy Group Co Ltd (SHcell) to bring the product, then known as BZDS1901, to markets outside Greater China. AdAlta has adopted the internal project code EW- 001 to describe the version of the product manufactured by the Company, ensuring clarity in communications with regulators. EW-001 is the first MSLN CAR -T product designed to secrete PD1 -blocking molecules, which overcome the tumour’s ability to suppress the activity of both the infused CAR -T cells and the patient’s own T cells. Its binding is deliberately tuned to activate only where MSLN is densely expressed, helping protect healthy tissue. Patients with advanced mesothelioma – a rapidly fatal cancer infamously associated with asbestos exposure – have very limited options today. Existing second line treatments (used after initial therapy has failed to control tumours) typically deliver tumour shrinkage in only 11–29% of patients, complete tumour clearance only rarely, and median survival of 8 –10 months. By contrast, across 36 patients treated in three investigator-initiated trials in China, EW-001 has reported up to a 50% overall response rate (tumour shrinkage) and up to a 20% complete response rate (complete tumour clearance) at the higher doses tested. Median overall survival has not yet been reached in the current cohort, and an earlier generation of the product achieved median overall survival of more than 25 months. Complete responses are the strongest early predictor of durable, potentially curative outcomes and are the results that most change the conversation with patients, regulators and prospective partners. These results are summarised in Figures 3 and 4. Figure 3: Best change in tumour size in advanced mesothelioma patients treated with current generation of EW-001 in China
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AdAlta Limited and controlled entities Directors' report 30 June 2026 11 Figure 4: Imaging of two patients achieving complete tumour clearance following EW -001 treatment (labelled BZDS1901, SHcell’s product code). Patient #03 shows gradual disappearance of tumours at three months after treatment (compare yellow boxes between baseline (pre-treatment) and month 3 M3) using CT imaging. PET-CT imaging shows continued absence of tumours at 12 and 18 months Patient #17 shows complete elimination of multiple tumour lesions in the lung cavity at one month (1) after treatment by PET-CT imaging These early results suggest EW -001 could represent a significant new treatment option in a large unmet market. The global market for mesothelioma -related drugs alone is forecast to reach US$12.2 billion by 2034, with the addressable market for EW-001 in advanced mesothelioma estimated at US$4.2 billion, before any expansion into other MSLN -positive cancers. AdAlta will receive 60% of the proceeds of any commercialisation event following completion of Phase 1. Manufacturing – a critical value driver Unlike conventional drugs, CAR -T therapies are manufactured individually from each patient’s own cells. Manufacturing quality, speed, cost and consistency are therefore central to clinical and commercial success and are heavily scrutinised in CAR-T transactions. For regulatory and logistical reasons, EW -001 cannot be manufactured in China for patients elsewhere in the world. EW-001 was selected in part because it already uses a short (under two day, compared with around nine days for many traditional CAR-T products) and low cost manufacturing process that does not require expensive viral vectors. During the year AdAlta executed its first Work Order with its manufacturing partner, Cell Therapies Pty Ltd (CTPL), and commenced transfer and optimisation of that process in Australia, following a completed technology feasibility assessment. CTPL is capable of becoming AdAlta’s global manufacturing reference site for EW-001.
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AdAlta Limited and controlled entities Directors' report 30 June 2026 12 Successfully transferring and optimising EW-001 manufacturing in Australia matters because it: ● supports planned Australian clinical trials; ● demonstrates the process can be replicated outside China; ● provides confidence in global scalability; ● reduces future supply chain and regulatory risk; and ● increases attractiveness to larger pharmaceutical partners evaluating licensing or acquisition opportunities. Looking further ahead, AdAlta has executed a Memorandum of Understanding with CTPL and Oribiotech providing access to the IRO® automated manufacturing platform , which targets 10 –50 times higher throughput in the same footprint, shorter manufacturing times and higher success rates, potential cost savings of 30 –50%, and digital tools that make technology transfer faster and easier. Together these initiatives support a pathway to a commercial cost of goods below US$50,000 per patient dose, which protects margin, broadens patient access and directly lifts the value of any future licensing transaction . Regulatory pathway AdAlta engaged DarkHorse Consulting, a specialist cell and gene therapy regulatory and product development adviser, and is preparing for a pre-IND meeting with the US FDA anticipated in the second half of calendar 2026. Early alignment with the FDA is a key step towards Australian and US clinical studies and an important driver of EW -001’s future value. An EW - 001 Clinical Advisory Board comprising senior clinicians from Australia’s leading CAR-T centres has been appointed to guide clinical development. Scaling the platform With EW-001 proving the model, the strategy is designed to be repeatable. AdAlta screens every candidate against a defined set of selection criteria – solid cancer indications only, engineered T cell products, first or best in class potential, existing human clinical proof of concept, and a closed, scalable, low cost manufacturing process or a clear pathway to one. Additional candidates are currently in due diligence, and the Company’s aspiration is to progress one new asset into the clinic each year. AdAlta is also progressing private asset/subsidiary level financing for the cellular immunotherapy portfolio, enabling access to a broader pool of international investors. Financing at the asset level is intended to fund development of EW -001 through to its Australian Phase 1 readout and to secure further assets, while limiting dilution at the listed parent level. AdAlta is applying artificial intelligence at both ends of this model . EMU, an in -house agent built on Anthropic’s Claude, produces fully referenced preliminary due diligence and scores candidate assets against the Company’s selection criteria, allowing AdAlta to screen many more opportunities than its size would ordinarily permit. Following year end, AdAlta entered a strategic collaboration with Oktopi, gaining access to an AI -enabled platform purpose -built to peer review development - plans and sharpen the many expert decisions involved in developing a new medicine. Where EMU helps AdAlta choose the right products, Oktopi helps it plan and pressure -test their development – with AdAlta’s experts retaining control of every decision. 5. i-body® enabled assets AD-214 – a whole new approach to fibrotic disease AD-214 is a first in class, next generation protein therapeutic for fibrotic diseases including lung fibrosis (specifically IPF and Interstitial Lung Disease) and kidney fibrosis. Using AdAlta’s proprietary i -body® technology to target the G -protein coupled receptor CXCR4, AD -214 has been shown to be well tolerated in Phase 1 clinical studies and effective in multiple animal and laboratory models of lung and kidney fibrosis, with patent protection beyond 2036. The Company is working to out-license AD-214 to regional and global biopharmaceutical companies for both lung and kidney indications, or to finance Phase 2 trials through a potential spin-out. The majority of recent enquiries have focused on kidney fibrosis applications, reflecting the growing industry focus on diabetes and metabolic disease. Interest in fibrosis assets remains significant, with several new enquiries received during the year and several active due diligence programs being supported. Of particular note, the US FDA approved Boehringer Ingelheim’s Jascayd for IPF in October 2025 – the first new therapeutic option for IPF patients in over a decade – and for Progressive Pulmonary Fibrosis in December 2025. Despite this new option there is still no cure for IPF , and the opportunity for additional products such as AD -214 that target new modes of action remains significant.
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AdAlta Limited and controlled entities Directors' report 30 June 2026 13 WD-34 – transforming malaria prophylaxis and treatment Current therapies for malaria are limited by the rapid development of resistance to small molecule drugs, by cost and strain - specific limitations for antibody drugs, and by the limited efficacy of vaccines. WD-34 is an i-body® discovered in collaboration with La Trobe University that targets a highly conserved region of a protein called AMA1 that is crucial for malaria parasites to invade human cells. WD -34 recognises AMA1 from multiple malaria (Plasmodium) species as well as Babesia and Toxoplasma. This pan-strain recognition combined with high potency inhibition of invasion suggests potential for a long acting, single dose prophylaxis for travellers and deployed personnel, seasonal prophylaxis for children in endemic regions, or a novel method of antigen generation for more effective vaccines. Several interested parties are working with AdAlta to finance additional candidate optimisation and pre-clinical proof of concept studies for WD-34. 6. Future milestones The Company is currently focused on advancing EW -001 towards clinical trials in Australia, evaluating additional ‘East to West’ assets to expand the pipeline, and monetising its existing i -body® enabled assets. Near term milestone objectives include: Expected timing Milestone Why it matters to shareholders Second half calendar 2026 First Australian manufacturing runs of EW-001 at CTPL Demonstrates EW-001 can be reliably manufactured outside China; reduces supply and regulatory risk and increases attractiveness to partners Second half calendar 2026 US FDA pre-IND meeting Confirms and de-risks the remaining manufacturing and pre- clinical work required before Phase 1 Calendar 2026 to 2027 One to two further assets secured under option or licence Evidences the repeatability of the sourcing engine and builds a multi-asset portfolio Calendar 2026 to 2027 Extended clinical data read-outs from investigator-initiated studies in China Refines durability, survival and dosing – the indicators prospective partners watch most closely Calendar 2027 Deployment of the IRO® automated platform at CTPL A reproducible, automated process for the whole pipeline that reduces cost of goods, technology transfer time and cost, and lifts partner appeal Second half calendar 2027 First patient dosed in an Australian Phase 1 study of EW-001 Begins generation of FDA-grade Western clinical data – the principal value inflection point Not able to be forecast Partnering, licensing or spin-out transactions for AD-214 and WD-34 Crystallises value from prior R&D investment. For competitive and practical reasons AdAlta is unable to forecast when, or whether, specific agreements may be concluded 7. Intellectual property Robust intellectual property protection is important for maximisation of the commercial potential of AdAlta’s assets. Under the Development and Collaboration Agreement with SHcell in respect of EW -001 (formerly BZDS1901), AdAlta holds exclusive or non -exclusive licences to seven patent families . These cover composition of matter for CAR and armouring moiety sequences and related platform technologies, and secure AdAlta’s rights to develop and commercialise EW-001 in all markets outside Greater China. AD-214 is protected by patents granted in Australia, the USA, Europe, China, Japan, India, Singapore and, following a grant during the year, Canada – completing protection across all of AdAlta’s target markets , including the eight largest pharmaceutical markets in the world and the largest biosimilar manufacturing locations. These patents expire on 8 January 2036. New patent applications have been filed in relation to methods of treatment that, if granted, would offer additional protection to 2043. Patent applications have also been lodged in relation to AdAlta’s AMA1 (malaria) binding i-bodies.
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AdAlta Limited and controlled entities Directors' report 30 June 2026 14 Financial results The loss for the consolidated entity after providing for income tax amounted to $4,683,849 (30 June 2025: $4,502,268). The year ended 30 June 2026 operating results included the following: Consolidated 2026 2025 $ $ R&D tax incentive 404,245 677,010 Research and development expenses (external) (3,212,006) (1,336,015) Research and development expenses (employee benefit expense) (124,443) (859,885) Corporate administration expenses (1,018,439) (2,118,916) Share based payment expenses (34,622) (75,010) Corporate administration expenses (employee benefit expense) (136,669) (444,425) In the year ended 30 June 2026, the company made payment of $2.858 million ($2.0 million USD) to SHCell Therapy Group Co Ltd in respect of license payment for EW -001 (BZDS1901), this is included in Research and development expenses (external). Financial liquidity and capital resources The Group began the year with $1.31 million cash at bank. During the year the Group received the Research and Development Tax Incentive (RDTI) cash refund of $0.93 million for the 2024/2025 financial year and repaid in full the outstanding $0.45 million balance of the Radium Capital R&D Tax Incentive Loan Advance Facility. During the year the group raised $5.3 million ($0.8 million issued post 30 June 2026) and repaid $0.41 million in relation to convertible debt securities. The Group ended the year with $1.28 million cash at bank on 30 June 2026. Corporate updates AdAlta had two permanent employees at the end of the reporting period. In addition, it has access to a range of subject matter experts on hourly rate consulting engagements, including a Consultant Chief Medical Officer and specialist cell and gene therapy regulatory, clinical and manufacturing advisers. This structure allows the Company to access deep expertise while keeping fixed overheads low. Board changes Mr Fadi Diab joined the Board as a Non -executive Director on 18 March 2026. Dr David Fuller retired as a Non -executive Director on 17 April 2026. At 30 June 2026 the Board comprised three Non-executive Directors and the Chief Executive Officer and Managing Director. Capital raises The Company completed three placements during the year, raising approximately A$5.3 million in total before costs: ● October 2025: A$1.6 million from placements to sophisticated and professional investors at A$0.003 per share, a 20% premium to the then market price, with one free attaching option (ASX:1ADO) for every two shares issued, exercisable at A$0.01 and expiring 3 June 2028. ● January 2026: A$1.2 million from a placement to sophisticated and professional investors at A$0.005 per share, with one free attaching option (ASX:1ADO) for every two shares issued, exercisable at A$0.01 and expiring 3 June 2028. ● May and June 2026: A$2.5 million from a placement to sophisticated and professional investors at A$0.004 per share, with one free attaching option (ASX:1ADO) for every three shares issued, exercisable at A$0.01 and expiring 3 June 2028. A$0.8 million of this placement was approved by shareholders at a general meeting held on 15 June 2026 and EGM approved shares were issued on 2 July 2026.
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AdAlta Limited and controlled entities Directors' report 30 June 2026 15 62 Capital Pty Ltd acted as lead manager for the January 2026 and May 2026 placements. Funds raised have been applied to the SHcell milestone payments, Australian manufacturing and US FDA engagement for EW -001, progressing additional transaction opportunities, strengthening intellectual property and working capital. Events after the reporting period The following matters have arisen since 30 June 2026: On 2 July 2026, the Group issued 236,250,012 ordinary shares at $0.04 per share and 235,000,001 options (ASX:1ADO) In July 2026 AdAlta entered a strategic collaboration with Oktopi, gaining access to an AI-enabled research and development platform that supports and peer reviews expert development decisions, complementing AdAlta’s in -house EMU screening agent. In August 2026, the Group announced further results of ongoing IIT studies of EW -001 in China, including that the two complete responders had passed their one year and two year assessments respectively with no evidence of cancer returning and that all five patients on study in March were still alive and in follow up . No other matter or circumstance has arisen since 30 June 2026 that has significantly affected, or may significantly affect the consolidated entity's operations, the results of those operations, or the consolidated entity's state of affairs in future fi nancial years. Likely developments and expected results of operations Information on likely developments in the operations of the consolidated entity and the expected results of operations have not been included in this report because the Directors believe it would be likely to result in unreasonable prejudice to the consolidated entity. The strategic goals and objectives of the Company and set out in the Operating and Financial Review above. Environment, social and governance statement AdAlta recognises that good ESG practices protect the social and environmental assets that underpin the Company’s success. While a formal ESG governance model is being developed, the Company’s CEO is responsible for ensuring the Board has oversight of arising ESG matters. Environmental The Company’s operations are not subject to significant environmental regulation under Australian Commonwealth or State law. Following the closure of its in -house laboratories, AdAlta now operates as a virtual company: it holds no laboratory or manufacturing facilities of its own and its direct environmental footprint is limited to a small office presence and business travel. Laboratory, manufacturing and clinical activities are conducted by contracted third parties, and AdAlta requires those parties to hold and comply with the permits, procedures and standards applicable to occupational health and safety and to the storage, handling and disposal of solid, liquid and hazardous materials and waste in their respective jurisdictions. Social Pre-clinical and clinical trials: The Company conducts in vivo pre-clinical and clinical studies in compliance with Australian and relevant international regulatory and ethical guidelines and requirements. AdAlta applies the same principles to pre-clinical and clinical studies conducted in China as it does in Australia, and satisfies itself through due diligence, contractual standards and on-site inspection that the studies it relies on meet those expectations. By strictly adhering to these guidelines, AdAlta seeks to protect clinical trial participant safety and minimise negative impacts on animal welfare. The Company also rigorously evaluates each pre -clinical and clinical trial to ensure that it is designed to provide actionable data that cannot be obtained any other way and which minimises the number of study subjects. Diversity, inclusion and employee engagement: AdAlta proactively supports Science, Technology, Engineering and Mathematics (STEM) education by regularly sponsoring internships or supporting internship units of study. These have led to the subsequent employment of interns in some instances. The Company employed two full time staff members at 30 June 2026, both of whom are male. Its non -executive Board comprises three Non -executive Directors, one of whom is female and one of whom is located internationally. Given the Company’s very small size, these proportions can move materially with a single appointment. AdAlta remains committed to achieving gender, ethnic and background diversity as succession opportunities arise, consistent with objective, merit -based performance assessment, and draws on a deliberately diverse network of consultants and advisers across Australia, Asia, Europe and the United States. Scientific and clinical community and patient engagement: During FY2026 AdAlta appointed a Clinical Advisory Board for EW-001, comprising senior clinicians and researchers from Australia’s leading CAR-T and solid cancer centres. This brings
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16 AdAlta Limited and controlled entities Directors' report 30 June 2026 the Company into close and ongoing engagement with the clinicians who treat the patients its products are intended to help, and supports the development of Australian clinical capability in cellular immunotherapy. Governance The Company’s Corporate Governance Statement and Policies can be found on its website at: adalta.com.au/investors/ corporate-governance AdAlta is committed to the highest standard of honesty and integrity in all its interactions, including interactions with health care professionals. The Company’s commitment to the highest ethical standards includes strict compliance with applicable anti-bribery and corruption laws in Australia and overseas. This commitment is reflected in the Company's Anti-Bribery, Corruption and Fraud Policy, which is published on the Company’s website. As the Company increases its reliance on in-licensed intellectual property and research results generated in international markets, it is developing new governance principles to manage both the ethical conduct and integrity of such studies and the complex and rapidly evolving international trade environment. The Board also actively manages the opportunities and risks associated with artificial intelligence. AdAlta uses AI tools to screen in-licensing opportunities and to support and peer review development decisions, which materially extends the reach of a small team. The Board has satisfied itself that these tools are used in a manner that keeps human experts accountable for every decision, protects the confidentiality of the Company’s and its partners’ information, manages the risk of inaccurate or unverifiable output, and is subject to appropriate oversight as the technology and its regulation continue to evolve. Business Risks General The Company’s activities are subject to a number of risks which may impact future financial performance and the price at which securities may be sold. Some of these risks can be mitigated by the use of safeguards and appropriate controls, however, others are outside the Company’s control and cannot be mitigated. Therefore, investors who acquire securities may be exposed to a number of risks. Broadly, these risks can be classified as risks that are general to investing in trading companies and risks specific to an investment in Shares and the Company’s underlying business. This section sets out the identified major risks associated with investing in securities of the Company. This list is not exhaustive. Investors should also have regard to their own investment objectives and financial circumstances, and should consider seeking appropriate independent investment advice before deciding whether to invest in securities of the Company. Risk factors specific to the Company (a) Business risks Prospective investors should consider the various risks and difficulties frequently encountered by companies early in their commercialisation, particularly companies that develop and sell biopharmaceuticals. These risks include AdAlta’s ability to: (1) implement and execute its business strategy; (2) develop its products; (3) identify and secure capable commercialisation partners on profitable terms; (4) obtain regulatory and reimbursement approval for its products (itself or through partners); (5) establish cost competitive and reliable supply chains for its products; (6) manage expanding operations; and (7) respond effectively to competitive pressures and developments. In particular, to generate a return on its investment in research and development of its products, the intention of the Company is to secure agreements with other biopharmaceutical companies to further develop and commercialise its products. There is no guarantee that AdAlta will be able to secure such agreements or the terms on which they may be secured in which case the Company may need to secure ongoing development financing from other sources and delay or halt development of certain product development programs.
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AdAlta Limited and controlled entities Directors' report 30 June 2026 17 (b) Business development risks To execute its growth strategy, the Company needs to be able to successfully in -license suitable assets. Each term sheet executed in respect of such assets may or may not result in a definitive license agreement and terms may vary materially from term sheets as a result of due diligence findings. Definitive licensing agreements may contain conditions relating to financing, development project milestones and timelines that the Company may not be able to meet. To realise the value of its existing assets, the Company needs to be able to successfully out -license its assets. There is no guarantee as to the timelines or financial terms of such transactions or even that any transaction will eventuate.. (c) Costs and financing of development programs The development programs required to further develop the Company’s assets and progress its strategy are not fully funded. The Company has limited financial resources and no continuous revenue generating products today. Therefore, it is dependent on being able to transact its assets and continue to raise capital to continue operations and develop its assets. Once financed, the development programs rely on numerous work items. The costs of these items cannot be confirmed until each item is requested from the supplier and the work scope and pricing agreed. There is a risk that the work items in the proposed development program may cost more than that budgeted for, or may require more drug substance than that budgeted for (and as a result the Company may need to manufacture additional drug substance at significant cost and delay), or may require additional studies to meet regulatory or other requirements and as a result the Company may need to obtain additional funds to complete the programs. No assurance can be given that future funding will be available, or that it will be available on terms acceptable to the Company. As a result, the Company’s ability to complete its development programs may be delayed or halted until such funds are raised (if at all), preventing the Company from commercialising its intellectual property and generating revenues. (d) Regulatory risks AdAlta’s products and intended products are subject to various laws and regulations including but not limited to regulatory approval and quality compliance. Data obtained from pre -clinical and clinical activities are susceptible to varying interpretations, which could delay, limit or prevent regulatory approval or clearance. Before the Company can conduct the clinical studies necessary to develop its assets it must obtain necessary approvals from Human Research Ethics Committees and regulatory authorities. Before the Company or its commercialisation partners can undertake further clinical trials or market and sell its products, the products must be demonstrated to be safe and effective and of suitable quality and must obtain necessary approvals from regulatory authorities (for example, the Australian Therapeutic Goods Administration and the United States Food and Drug Administration). Such approval may take longer than anticipated, require additional trials to be undertaken or may not be provided at all. As a result, the Company may require additional funding to secure the regulatory pathway. No assurance can be given that future funding will be available, or that it will be available on terms acceptable to the Company. Accordingly, the Company’s ability to complete its development programs may be delayed or halted until such funds are raised (if at all), preventing the Company from commercialising its intellectual property and generating revenues. There is no guarantee that compliance will be achieved to support the Company’s commercialisation plans. Regular reviews by regulatory bodies are also a feature of the industry in which AdAlta, and its partners, contract service providers and suppliers, operates. Changes in laws and regulations (including interpretation and enforcement) could also adversely affect the Company’s ability to meet compliance costs and to market, distribute and sell its biopharmaceutical products. It is not possible to predict the likelihood, nature or extent of changes in government regulation that may arise. (e) Australian Government R&D incentives may change The Company’s development program includes anticipated receipt of tax refunds based on the Company’s actual research and development spending. Certain loan facilities are or may be secured against these receipts. If the status of the Company or its connected entities should change, or the Australian Federal Government changes its R&D Tax Incentive (RDTI) program in a manner which adversely affects the amount of funds available or the timing of receipt of such funds, there is a risk tha t the Company may need to obtain additional funds to complete the program. The Company notes that the Commonwealth Government budget presented to parliament on 12 May 2026 proposed significant changes to the RDTI program. These are subject to additional consultation and enabling legislation however if enacted as presented the Company estimates that the quantum benefits received via the RDTI program may materially reduce and the timing of receipt of such benefits may be materially delayed.
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AdAlta Limited and controlled entities Directors' report 30 June 2026 18 No assurance can be given that future funding will be available, or that it will be available on terms acceptable to the Company. As a result, the Company’s ability to complete its development programs may be delayed or halted until such funds are raised (if at all), preventing the Company from commercialising its intellectual property and generating revenues. (f) Clinical trial risk Moving from discovery to development and subsequent commercialisation typically involves multiple and progressively larger clinical trials. Such trials can be expensive, time consuming, may be delayed or may fail. Clinical trial success can be impacted by a number of factors including obtaining ethics approval, incomplete or slower than expected recruitment of patients, failure to meet trial en d points, lack of product effectiveness durin g the trial , safety issues an d modifications to trial protocols or changes to regulatory requirements for trials. Clinical trial protocols routinely provide discretion to the principal investigator and safety management committee to modify dose escalation schedules, cohort sizes or other factors in response to observations during the trial. These factors can impact the size , cost and duration of a clinical trial. There is no guarantee that anycurrent or future trials will demonstrate that the Company’s products are successful. Failure or material delay a t any point of th e clinical trial process will reduc e the Company’s ability to commercialis e its intellectual property and generate revenues. (g) Risk of product development and manufacturing The Company’s products, including EW-001 and AD-214, have not yet been produced on a scale sufficient for large scale clinical trials, multiple simultaneous trials or commercial production. The development of formulations and packaging for the Company’s products, including EW-001 and AD-214, are not yet complete. The manufacture of patient specific cellular immunotherapies such as CAR-T therapies pose particular cost and complexity challenges at all stages of development and commercialisation. If the Company is unable to manufacture products in sufficient quantities or in suitable formulations and presentations or at an appropriate cost level, it may not be able to conduct appropriate clinical tests to prove its product. Further, it may be unable to produce the products at a price point which is profitable or in a format sufficiently convenient for patients and healthcare professionals to adopt in the context of commercial sales of the product. The Company’s ability to implement its business plan and partner its assets would be significantly hindered such this failure and the Company may be unable to generate a profit, even if its drug development activity is successful. ( h) Risk in drug development The Company has limited history in drug development. Accordingly, the Company cannot guarantee that the AD-214, WD-34, EW-001 or other cellular immunotherapy discovery, pre-clinical or clinical programs will result in the development of any products, or even if they do that the products will be approved or commercialised successfully. The Company’s ability to generate revenues or profits, may therefore be adversely affected by this lack of experience. The development and commercialisation of pharmaceutical products is subject to the inherent risk of failure, including the possibility that products may: ● be found to be unsafe or ineffective; ● fail to demonstrate any material benefit or advancement in safety and/or efficacy of an existing product; ● fail to receive necessary regulatory approvals; ● be difficult or impossible to manufacture on the necessary scale; ● be uneconomical to market or otherwise not commercially exploitable; ● fail to be developed prior to the successful marketing of a similar product by competitors; ● compete with products marketed by third parties that are superior; and ● fail to achieve the support or acceptance of physicians, patients or the medical community. (i) Intellectual property The Company’s success depends, in part, on its ability to obtain or license patents, maintain trade secret protection and operate without infringing the proprietary rights of third parties. The Company relies on its ability to develop and commercialise intellectual property. A failure to protect its intellectual property successfully may lead to a loss of opportunities and adversely impact on AdAlta’s operating results and financial position. Although the Company will seek to protect its intellectual property, there can be no assurance that these measures will be sufficient. The Company gives no guarantee that further development of its intellectual property will be successful, that development milestones will be achieved, or that the intellectual property will be developed into further products that are commercially exploitable.
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AdAlta Limited and controlled entities Directors' report 30 June 2026 19 The Company may be dependent on third parties to protect and defend intellectual property associated with in -licensed or out-licensed products and there can be no guarantee that such third parties will have sufficient resources or be successful in protecting and defending such intellectual property. There can be no assurance that any patents the Company may own or control or licence now and, in the future, will afford the Company a competitive advantage, commercially significant protection of the intellectual property, or that any of the projects that may arise from the intellectual property will have commercial application. Any challenge to the Company’s intellectual property position would divert the limited resources of the Company away from its primary development program and may result in the Company requiring additional funds to complete that program. It may also result in the Company being unable to fully utilise its intellectual property portfolio or being required to in -licence certain intellectual property in order to be able to conduct its development program in a manner which will allow commercialisation of its products, and which may reduce the profits available from such activities. There is always a risk of third parties claiming involvement in technological and medical discoveries. The granting of a patent does not guarantee that the rights of others are not infringed or that a competitor will not develop competing intellectual property that circumvents such patents. The patent position of pharmaceutical companies can be highly uncertain and frequently involve complex legal and scientific evaluation. The breadth of claims allowed in pharmaceutical patents and their enforceability cannot be predicted. (j) Reliance on key personnel Due to the specialised nature of the Company’s business and its size, its ability to commercialise its products and maintain its research program will depend in part on its ability to attract and retain suitably qualified management, scientists, research personnel and consultants. The Company also faces competition to employ and retain the services of such individuals. The Company has recently reduced its permanent, directly employed personnel and is therefore reliant on consultant and contracted expertise. There can be no assurance that the Company will b e able to attract or retain sufficiently qualified scientific and management personnel or maintain its relationship with key scientific organisations and contractors. The loss of key scientific and management personnel, and the associated corporate knowledge of those people could have a detrimental impact on the Company, and this may adversely affect the Company by impeding the achievement of its research, product development and commercialisation objectives. (k) Competitive risk There are a number of companies with drugs an d cell therapies at various stages of development for the treatment of IPF, other fibrotic diseases, malaria and for solid cancers. There are also a number of companies developing cellular immunotherapies similar to those the Company is developing and a number of companies competing to license technology and products originating in Asia and especially China. The Company’s potential competitors may include companies with substantially greater resources and access to more markets. Therefore, competitors may succeed in developing products that are safe, more effective or otherwise commercially superior than those being developed by AdAlta or which could render the Company’s products obsolete and/or otherwise uncompetitive. The Company’s ability to implement its business plan would be significantly hindered by this and the Company may be unable to generate revenues or profits, even if its drug development activity is successful. (l) Currency risk Expenditure in overseas jurisdictions is subject to the risk of fluctuations in foreign exchange. The Company’s payment obligations to many of its third-party service providers, including its manufacturer and certain pre-clinical testing are expected to be in foreign currency. The Company intends to forward purchase foreign currency against known near term contractual obligations to aid in financial planning. If there are adverse currency fluctuations against the Australian dollar, there is a risk that the work items in any proposed development program may cost more than that budgeted for and as a result the Company may need to obtain additional funds to complete the program. No assurance can be given that future funding will be available, or that it will be available on terms acceptable to the Company. As a result, the Company’s ability to complete its development programs may be delayed or halted until such funds are raised (if at all), preventing the Company from commercialising its intellectual property and generating revenues.
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AdAlta Limited and controlled entities Directors' report 30 June 2026 20 (m) Sufficiency of funding AdAlta is currently not profitable and does not expect to become profitable until after achieving successful commercialisation of its products to allow sufficient sales revenue to fund on -going company operations. The Company will not have sufficient capital to implement licensing agreements and fully commercialise any of its programs or strategies. Accordingly, the Company will either have to raise additional capital through further offers or rely on securing grants or commercial transactions to further its development programs. The Company's ability to raise further capital (equity or debt) or secure grants or a commercial (including licensing) transaction within an acceptable time, or a sufficient amount and on terms acceptable to it will vary according to a number of factors, including the success of current projects, the result of research and development and other cyclical factors affecting the Company and financial and share markets generally. No assurance can be given that future funding will be available, or that it will be available on terms acceptable to the Company. As a result, the Company’s ability to complete its development programs may be delayed or halted until such funds are raised (if at all), preventing the Company from commercialising its intellectual property and generating revenues. General Risks A number of factors which are outside of the Company’s control may significantly impact on the Company, its performance and the value of Options and the underlying Shares. These factors include: (a) Investment and Economic Risk Economic factors bot h in Australia and internationally beyon d the control of the Company , such as interest rates , inflation, exchange rates, taxation, changes in government policy and legislation, may negatively impact on the operational performance of the Company. The Company’s revenues, expenses and cash flows could be negatively affected by any of thes e factors, which in turn may affect the value of its securities. (n) Product liability risk The process of securing marketing approval of a new product is both costly and time consuming. The intention of the Company is to out-license product candidates prior to completion of clinical trials and obtaining of marketing authorisations from relevant regulatory authorities. The conduct of clinical trials will expose the Company to product liability risks and future sales of its products may, and if the Company decides to develop a product candidate and take it to market directly will, expose the Company to product liability risks which are inherent in the research and development, manufacturing, marketing and use of its products. The Company intends to obtain and maintain adequate levels of insurance to cover product liability risks. Despite this, ther e can be no guarantee that adequate insurance coverage will be available at an acceptable cost (or in adequate amounts), if at all, or that product liability or other claims will not materially and adversely affect the operations and condition of the Company. A product liability claim may give rise to significant liabilities as well as damage the Company’s reputation. The Group intends to obtain and maintain adequate levels of insurance to cover product liability risks. Despite this, there can be no guarantee that adequate insurance coverage will be available at an acceptable cost (or in adequate amounts), if at all, or that product liability or other claims will not materially and adversely affect the operations and condition of the Group . A product liability claim may give rise to significant liabilities as well as damage the Group's reputation. (o) Third party service provider risk The Company will conduct much of its development and manufacturing activities through a series of contractual relationships with third parties. All contracts, including those entered into by the Company, carry a risk that the respective parties will not adequately or fully comply with their respective contractual rights and obligations, or that these contractual relationships may be terminated. This may adversely affect the Company by impeding the achievement of its research, product development and commercialisation objectives. (p) Healthcare insurers and reimbursement In many markets, treatment volumes are likely to be influenced by the availability and amounts of reimbursement of patients’ medical expenses by third party payer organisations including government agencies, private health care insurers and other health care payers. There is no assurance that reimbursement of any products or services developed and commercialised by the Company will be available to patients at all or without substantial delay. Even if such reimbursement is provided, the approved reimbursement amounts may not be sufficient to enable the Company or its commercialisation partners to sell products on a profitable basis.
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AdAlta Limited and controlled entities Directors' report 30 June 2026 21 No assurances can be made that the Company’s performance will not be adversely affected by any such market fluctuations or factors. None of the Company or its Directors or any other person guarantees the performance of the Company or the market price at which its securities of the Company trade. The securities issued carry no guarantee in respect of profitability, dividends, or return of capital. The value of the securities of the Company will be subject to a range of factors beyond the control of the Company and its Directors including the demand for and availability of the securities. An investment in the Company’s securities should be considered speculative. (b) Government policy The Company’s capacity to conduct its operations, as well as industry profitability generally, can be affected by changes in government policy which may be beyond the control of the Company. These can also include introduction of trade protection mechanisms by governments without notice (such as tariffs). The Company intends to do business with entities based in China and the USA and notes the increased levels of tariff and non -tariff barriers and other trade and business restrictions presently being imposed on short notice by these and other countries. (c) Future capital needs and additional funding The future capital requirements of the Company will depend on many factors. There can be no guarantee that the Company will be able to raise additional capital to meet future funding requirements. Any inability to obtain additional finance, if required, would have a material adverse effect on the Company’s business and its financial condition and performance. (d) Taxation risk Variations in the taxation laws of Australia and other countries in which the Company operates could impact the Company’s financial performance. Interpretation of taxation law could also change, leading to a change in taxation treatment of investments or activities. (e) Changes in regulatory environment Changes to laws and regulations or accounting standards which apply to the Company from time to time could adversely impact the operating and financial performance and cash flows of the Company. Other Risk Factors Other risk factors includ e thos e normally found i n conducting business including litigation resulting from the breac h of agreements or in relation to employees (through personal injuries, industrial matters or otherwise) or any other cause, strikes, lockouts, loss of service of key managemen t or operational personnel , non-insurable risks, delay in resumption of activities after reinstatement following the occurrence of an insurable risk and other matters tha t may interfere with the Company’s business or trade. The above list of risk factors should not be taken as exhaustive of the risks faced by the Company or the Shareholders . The above factors, and others not specifically referred to above, may in the future materially affect the Company’s financial performance and the value of the Company’s securities. Remuneration report (audited) This remuneration rep ort, which forms par t of the Directors ' report, sets ou t information abo ut the remuneratio n of AdAlta Limited's key management personnel for the financial year ended 30 June 2026 i n accordance with the requirements of the Corporations Act 2001 and its Regulations. The term 'key management personnel' refers to those persons having authority and responsibility for planning, directing and controlling the activities of the Group, directly or indirectly, including any Director (whether executive or otherwise) of the Group. The prescribed details for each person covered by this report are detailed below under the following headings: ● key management personnel ● remuneration policy ● relationship between the remuneration policy and Group performance ● details of remuneration ● additional disclosures relating to key management personnel
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AdAlta Limited and controlled entities Directors' report 30 June 2026 22 Key management personnel The Directors and other key management personnel of the Group during the financial year were: Non-Executive Directors Position Dr Paul MacLeman Non-Executive Chairman Dr David Fuller1 Non-Executive Director Ms Michelle Burke Non-Executive Director Mr Fadi Diab2 Non-Executive Director Executive Directors Position Dr Timothy Oldham Chief Executive Officer and Managing Director 1 Resigned 17 April 2026 2 Appointed 18 March 2026 The named persons held their current position for the whole of the financial year and since the end of the financial year unless otherwise indicated. Remuneration policy The Remuneration and Nominations Committee is currently responsible for determining and reviewing compensation arrangements for key management personnel. All recommendations of the Remuneration and Nominations Committee require Board approval for adoption. The Group has a Remuneration Committee, which consists of Michelle Burke (Chair of Remuneration Committee), Paul MacLeman and Fadi Diab. David Fuller was a member until he resigned. The remuneration policy, which is set out below, is designed to promote superior performance and long -term commitment to the Group. Non-Executive Director remuneration Non-Executive Directors are remunerated by way of fees, in the form of cash, non-cash benefits, superannuation contributions or salary sacrifice into equity. Non-Executive Directors are also eligible to receive equity grants as a component of fees under share and option schemes generally made in accordance with thresholds and on terms set in plans approved by shareholders. Shareholders’ approval must be obtained in relation to the overall limit set for the Non-Executive Directors’ fees. The maximum aggregate remuneration approved by shareholders for Non-Executive Directors is $350,000 per annum. The Directors set the individual Non-Executive Director fees within the limit approved by shareholders. Non -executive Directors are not provided with retirement benefits. Executive Director and Executive remuneration Executive Directors and Executives receive a base remuneration, which is at market rates, and may be entitled to performance based remuneration, which is determined on an annual basis. Overall remuneration policies are subject to the discretion of the Board and can be changed to reflect competitive and business conditions where it is in the interests of the Group and shareholders to do so. Executive remuneration and other terms of employment are reviewed annually by the Board having regard to performance, relevant comparative information and expert advice. The Board’s remuneration policy reflects its obligation to align executive remuneration with shareholders' interests and to retain appropriately qualified executive talent for the benefit of the Group. The main principles are: (a) remuneration reflects the competitive market in which the Group operates; (b) individual remuneration should be linked to performance criteria if appropriate; and (c) executives should be rewarded for both financial and non-financial performance.
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AdAlta Limited and controlled entities Directors' report 30 June 2026 23 The total remuneration of executives consists of the following: (a) Salary – executives receive a fixed sum payable monthly in cash plus superannuation at 12% of salary in FY2026 on salary up to the statutory maximum superannuation contribution base; (b) Cash at risk component (short term incentive) – executives may receive a variable cash sum up to a maximum percentage of salary that is payable annually at the end of each financial year on the basis of performance against goals set at the beginning of each financial year (as assessed by the Board); (c) Equity component (long term incentive) – executives may participate, at the discretion of the board, in share and option schemes generally made in accordance with thresholds and on terms set in plans approved by shareholders and otherwise at the discretion of the Board. In exceptional circumstances the Board may, subject to any necessary shareholder approval, issue shares and options to executives outside of approved schemes. Long term incentive awards are typically time limited and are made on a case by case basis having regard to the overall number, value and remaining term of unexpired incentive securities held by the executive, benchmarking and performance; and (d) Other benefits – executives may, if deemed appropriate by the Board, be provided with a fully expensed mobile phone and other forms of remuneration. The Board has not formally engaged the services of a remuneration consultant to provide recommendations when setting the remuneration received by Directors or other key management personnel during the financial year. Relationship between the remuneration policy and Group performance The Board considers that at this time, evaluation of the Group's financial performance using generally accepted measures such as profitability, total shareholder return or per Group comparison are not relevant due to the early stage of development of the Group's assets as outlined in the Directors' report. Remuneration is structured to align short term incentives with th e achievement of operational objectives that meaningfully progress the development of the Group's assets each year and to align long term incentives with increasing shareholder value as a result of developing and increasing those assets over the mid-term. Details of remuneration Remuneration is reported as Earned Remuneration and Realised Remuneration. Earned Remuneration is the accounting value of remuneration awarded in a period as recorded in the financial statements of the Group. This includes cash payments during the period plus the value of long term incentives awarded and expensed during the period which have an accounting value that may not be immediately realisable by the recipient, for example because options have an exercise price that is equal to or below the current share price. Realised Remuneration value is the value of remuneration realised or becoming realisable by the recipient during the period. This includes cash payments during the period plus the value of long term incentive payments from the current or any prior period that have become immediately realisable by the recipient during the period. This will include, for example, the value of shares issued on the exercise of options less the exercise price (as measured at the time of exercise). Key terms of employment contracts Arrangements with Directors: Position Annual Salary Non-Executive Chair $75,000 Non-Executive Directors $50,000 The Group has entered into consulting agreements with all Directors. These agreements can be terminated by either party by giving one month's notice. Further, continuation of appointment is subject to re-election at a forthcoming AGM. No additional fees are payable to Directors for their involvement in Board committees. On appointment to the Board, all Non -Executive Directors are required to sign a letter of appointment with the Group. The letter of appointment summarises the Board policies and terms, including compensation relevant to the office or Director.
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AdAlta Limited and controlled entities Directors' report 30 June 2026 24 Non-Executive Directors Director fees for Michelle Burke and Paul Macleman were suspended from October 2025 to 30 April 2026. Fees accrued in respect of service periods from July to September 2025 and May to June 2026. Director fee arrangements recommenced on 1 May 2026. During FY26, Michelle Burke and Paul Macleman received remuneration equivalent to five months of director fees. Director fees for Fadi Diab were suspended from 18 March 2026 (date of appointment) to 30 April 2026. Fees accrued in respect of service periods from July to September 2025 and May to June 2026. During FY26, Fadi Diab received remuneration equivalent to two months of director fees. Director fees for David Fuller were suspended from October 2025 to 17 April 2026 (date of resignation). Fees accrued only in respect of service periods from July to September 2025. During FY26, David Fuller received remuneration equivalent to three months of director fees. CEO and Managing Director The CEO and Managing Director's remuneration was suspended from November 2025 to 30 April 2026. Remuneration recommenced on 1 May 2026. During FY26, the CEO and Managing Director received remuneration equivalent to six months of remuneration. Annual leave and long service leave continued to accrue throughout the suspension period in accordance with the terms of employment. Amounts of remuneration Details of the remuneration of key management personnel of the consolidated entity are set out in the following tables. Short-term benefits Post- employmen t benefits Total cash payments Share- based payments Total earned % remunerati on paid in % remunerati on paid in Cash Equity Cash salary Super- Equity- remunerati on and fees annuation settled $ $ $ $ $ % % 25,893 5,357 31,250 3,383 34,633 90 10 17,262 3,571 20,833 - 20,833 100 - 8,333 - - - 8,333 100 - 12,500 - 12,500 2,114 14,614 86 14 2026 Non-Executive Directors: Dr Paul MacLeman1 Ms Michelle Burke1 Mr Fadi Diab2 Dr David Fuller3 Executive Directors Dr Timothy Oldham4 177,825 13,679 191,504 10,468 201,972 95 5 241,813 22,607 256,087 15,965 280,385 1 Director fees for Michelle Burke and Paul Macleman were suspended from October 2025 to 30 April 2026. Fees accrued in respect of service periods from July to September 2025 and May to June 2026. Director fee arrangements recommenced on 1 May 2026. During FY26, Michelle Burke and Paul Macleman received remuneration equivalent to five months of director fees. 2 Director fees for Fadi Diab were suspended from 18 March 2026 (date of appointment) to 30 April 2026. During FY26, Fadi Diab received remuneration equivalent to two months of director fees. 3 Director fees for David Fuller were suspended from October 2025 to 17 April 2026 (date of resignation). Fees accrued only in respect of service periods from July to September 2025. During FY26, David Fuller received remuneration equivalent to three months of director fees. 4The CEO and Managing Director's remuneration was suspended from November 2025 to 30 April 2026. Remuneration recommenced on 1 May 2026. During FY26, the CEO and Managing Director received remuneration equivalent to six months of remuneration. Annual leave continued to accrue throughout the suspension period in accordance with the terms of employment. There were no options granted as compensation during the current financial year.
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AdAlta Limited and controlled entities Directors' report 30 June 2026 25
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AdAlta Limited and controlled entities Directors' report 30 June 2026 26 Additional disclosures relating to key management personnel Fully paid ordinary shares of AdAlta Limited Balance at Balance held Additions Balance held Balance at 1 July on appointment on resignation 30 June 2026 Number Number Number Number Number Dr. Timothy Oldham1 13,368,416 - 3,896,999 - 17,265,415 Dr Paul MacLeman 544,042 - - - 544,042 Ms Michelle Burke - - - - - Mr Fadi Diab2 - - - - - Dr David Fuller3 491,650 - - (491,650) - 1 1,396,999 shares acquired via exercise of performance rights and 2,500,000 as an on market purchase 2 Appointed 18 March 2026 3 Resigned 17 April 2026 Balance at Balance held Additions Balance held Balance at 1 July on appointment on resignation 30 June 2025 Number Number Number Number Number Dr. Timothy Oldham 1,601,750 - 11,766,666 - 13,368,416 Dr Paul MacLeman 472,970 - 71,072 - 544,042 Dr Robert Peach2 1,453,126 - - (1,453,126) - Dr David Fuller 294,936 - 196,714 - 491,650 Ms Michelle Burke1 - - - - - Mr Iain Ross1,3 - 2,880,000 1,920,000 (4,800,000) - 1 Appointed 20 November 2024. 2 Resigned 20 November 2024. 3 Resigned 30 June 2025. Share Options of AdAlta Limited Balance at 1 July Granted as compensa- tion Cancelled/ Expired Balance on Balance at 30 June Vested and exercisable Options vested during year 2026 Number Number Number Resignation Number Number Number Dr Timothy Oldham 18,319,588 - (6,129,060) - 12,190,528 11,811,940 3,178,598 Dr Paul MacLeman 5,890,536 - (3,055,000) - 2,835,536 2,835,536 1,400,000 Ms Michelle Burke - - - - - - - Mr Fadi Diab 1 - - - - - - - Dr David Fuller 2 3,048,312 - (1,200,000) (1,848,312) - - 875,000 1 Appointed 18 March 2026 2 Resigned 17 April 2026
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AdAlta Limited and controlled entities Directors' report 30 June 2026 27 Balance at 1 July Granted as compensa- tion Cancelled/ Expired Net other change4 Balance on Balance at 30 June Vested and exercisable Options vested during year 2025 Number Number Number Number Resignation Number Number Number Dr Timothy Oldham 11,729,060 757,195 - 5,833,333 - 18,319,588 12,462,393 8,633,333 Dr Paul MacLeman 5,855,000 - - 35,536 - 5,890,536 4,490,536 1,435,536 Dr Robert Peach2 2,950,000 - - - (2,950,000) - - 875,000 Dr David Fuller 2,950,000 - - 98,312 - 3,048,312 2,173,312 973,312 Ms Michelle Burke1 - - - - - - - - Mr Iain Ross 1,3 - - - 960,000 (960,000) - - - 1 Appointed 20 November 2024. 2 Resigned 20 November 2024. 3 Resigned 30 June 2025. 4Options issued as a result of participation in Renounceable Rights Issue undertaken during the period. There were no options granted as compensation during the current financial year. Performance Rights of AdAlta Limited Balance at Balance held Balance held Exercised Balance at 1 July on appointment on resignation 30 June 2026 Number Number Number Number Number Dr. Timothy Oldham 1,396,999 - - (1,396,999) - Dr Paul MacLeman - - - - - Ms Michelle Burke - - - - - Mr Fadi Diab1 - - - - - Dr David Fuller2 - - - - - 1 Appointed 18 March 2026 2 Resigned 17 April 2026 Balance at Balance held Balance held Additions Balance at 1 July on appointment on resignation 30 June 2025 Number Number Number Number4 Number Dr. Timothy Oldham4 - - - 1,396,999 1,396,999 Dr Paul MacLeman - - - - - Dr Robert Peach 2 - - - - - Dr David Fuller - - - - - Ms Michelle Burke 1 - - - - - Mr Iain Ross1,3 - - - - - 1 Appointed 20 November 2024. 2 Resigned 20 November 2024. 3 Resigned 30 June 2025. 4 Approved by Shareholders at 2024 AGM as STI Performance Rights.
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28 AdAlta Limited and controlled entities Directors' report 30 June 2026 Voting and comments made at the Group's 2025 Annual General Meeting (AGM). At the Group's 2025 Annual General Meeting (AGM), a resolution to adopt the 2025 Remuneration Report was put to the vote and greater than 98% of the votes cast were cast in favour of the resolution. No comments were made at the AGM by shareholders in relation to the Remuneration Report. This Directors' report, incorporating the remuneration report, is signed in accordance with a resolution made pursuant to s.298(2) of the Corporations Act 2001. This concludes the remuneration report, which has been audited. This report is made in accordance with a resolution of Directors, pursuant to section 298(2)(a) of the Corporations Act 2001. On behalf of the Directors Paul MacLeman Chairman 21 August 2026 Melbourne
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Dry Kirkness (Audit) Pty Ltd Ground Floor, 50 Colin St West Perth WA 6005 / PO Box 216, West Perth, 6872 admin@drykirknessaudit.com.au drykirknessaudit/audit-assurance/ / P: (08) 6326 2300 ABN: 61 112 942 373 RCA No: 289109 / Liability limited by a scheme approved under the Professional Standards Legislation AUDITOR’S INDEPENDENCE DECLARATION As lead auditor for the audit of AdAlta Limited for the year ended 30 June 2026, I declare that, to the best of my knowledge and belief, there have been: a) No contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and b) No contraventions of any applicable code of professional conduct in relation to the audit. This declaraƟon is in respect of AdAlta Limited and the enƟƟes it controlled during the year. DRY KIRKNESS (AUDIT) PTY LTD LUCY GARDNER Principal Perth Date: 21 August 2026
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AdAlta Limited and controlled entities Statement of profit or loss and other comprehensive income For the year ended 30 June 2026 Consolidated Note 2026 $ 2025 $ 30 Revenue and other income Interest received 73,987 18,644 Other revenue 3 404,245 677,010 Total revenue and other income 478,232 695,654 Expenses Research and development expenses (external) (3,212,006) (1,336,015) Research and development expenses (Employee benefit expense) (124,443) (859,885) Corporate and administration (external) (1,018,439) (2,118,916) Corporate and admin (Employee benefit expense) (136,669) (444,425) Patent and legal costs (274,668) (219,514) Finance costs (290,943) (62,348) Share based payment expenses 14 (34,622) (75,010) Depreciation and amortisation expense - (85,231) Net foreign exchange (loss) / gain (70,291) 3,422 Total expenses (5,162,081) (5,197,922) Loss before income tax expense (4,683,849) (4,502,268) Income tax expense 4 - - Loss after income tax expense for the year attributable to the owners of AdAlta Limited and controlled entities (4,683,849) (4,502,268) Other comprehensive income for the year, net of tax - - Total comprehensive income for the year attributable to the owners of AdAlta Limited and controlled entities (4,683,849) (4,502,268) Cents Cents Basic earnings per share 5 (0.23) (0.69) Diluted earnings per share 5 (0.23) (0.69) The above statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes
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AdAlta Limited and controlled entities Statement of financial position As at 30 June 2026 Consolidated Note 2026 2025 $ $ The above statement of financial position should be read in conjunction with the accompanying notes 31 Assets Current assets Cash and cash equivalents 6 1,284,300 1,305,594 Trade and other receivables 7 437,255 835,969 Total current assets 1,721,555 2,141,563 Total assets 1,721,555 2,141,563 Liabilities Current liabilities Trade and other payables 8 404,782 821,668 Borrowings 9 - 446,785 Provisions 10 126,600 68,276 Other current liabilities 11 820,000 - Total current liabilities 1,351,382 1,336,729 Non-current liabilities Provisions 10 - 27,184 Financial liabilities 12 - 1,375,894 Total non-current liabilities - 1,403,078 Total liabilities 1,351,382 2,739,807 Net assets/(liabilities) 370,173 (598,244) Equity Issued capital 13 54,629,067 49,197,823 Reserves 14 2,447,460 2,226,438 Accumulated losses (56,706,354) (52,022,505) Total equity/(deficiency) 370,173 (598,244)
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AdAlta Limited and controlled entities Statement of changes in equity For the year ended 30 June 2026 32 Issued Retained capital Reserves profits Total equity Consolidated $ $ $ $ Balance at 1 July 2025 49,197,823 2,226,438 (52,022,505) (598,244) Loss after income tax expense for the year - - (4,683,849) (4,683,849) Other comprehensive income for the year, net of tax - - - - Total comprehensive income for the year - - (4,683,849) (4,683,849) Transactions with owners in their capacity as owners: Share-based payments - 34,622 - 34,622 Issue of ordinary shares via conversion of financial liabilities 1,201,000 - - 1,201,000 Issue of ordinary shares 4,511,840 - - 4,511,840 Share issue costs (281,596) 186,400 - (95,196) Balance at 30 June 2026 54,629,067 2,447,460 (56,706,354) 370,173 The above statement of changes in equity should be read in conjunction with the accompanying notes Issued Retained Total deficiency in equity capital Reserves profits Consolidated $ $ $ $ Balance at 1 July 2024 47,399,255 2,151,428 (47,520,237) 2,030,446 Loss after income tax expense for the year - - (4,502,268) (4,502,268) Other comprehensive income for the year, net of tax - - - - Total comprehensive income for the year - - (4,502,268) (4,502,268) Transactions with owners in their capacity as owners: Share-based payments - 75,010 - 75,010 Issue of ordinary shares via conversion of financial liabilities 700,000 - - 700,000 Issue of ordinary shares 1,284,282 - - 1,284,282 Share issue costs (185,714) - - (185,714) Balance at 30 June 2025 49,197,823 2,226,438 (52,022,505) (598,244)
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AdAlta Limited and controlled entities Statement of cash flows For the year ended 30 June 2026 Consolidated Note 2026 2025 $ $ The above statement of cash flows should be read in conjunction with the accompanying notes 33 Cash flows from operating activities Payments to suppliers and employees (5,384,088) (4,729,707) R & D tax incentive 933,568 1,774,530 Interest received 10,441 18,644 Net cash used in operating activities 19 (4,440,079) (2,936,533) Cash flows from investing activities Proceeds from disposal of property, plant and equipment - 109,615 Net cash from investing activities - 109,615 Cash flows from financing activities Proceeds from issue of shares 4,511,840 1,284,282 Proceeds from shares requiring approval 820,000 - Payment of share issue costs (81,937) (185,714) Proceeds from issue of financial liabilities - 875,895 Repayment of borrowings (424,600) (1,400,000) Proceeds from borrowings - 424,600 Payments related to financial liabilities (406,518) - Net cash from financing activities 4,418,785 999,063 Net decrease in cash and cash equivalents (21,294) (1,827,855) Cash and cash equivalents at the beginning of the financial year 1,305,594 3,133,449 Cash and cash equivalents at the end of the financial year 6 1,284,300 1,305,594
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AdAlta Limited and controlled entities Notes to the financial statements 30 June 2026 1. General information The financial statements cover AdAlta Limited and controlled entities as a Consolidated Entity consisting of AdAlta Limited and the entities it controlled at the end of, or during, the financial year. The financial statements are presented in Austra lian dollars, which is AdAlta Limited and controlled entities' functional and presentation currency. AdAlta Limited and controlled entities is a listed public Group limited by shares, incorporated and domiciled in Australia. I ts registered office and principal place of business is: Level 1, Suite 1, 117 Camberwell Road Hawthorn East, VIC 3123 Australia A description of the nature of the group's operations and its principal activities are included in the Directors' report, whi ch is not part of the financial statements. The financial statements were authorised for issue, in accordance with a resolution of Directors, on 21 August 2026. The Directors have the power to amend and reissue the financial statements. 2. 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. Basis of preparation The financial report is a general purpose financial report that has been prepared in accordance with Australian Accounting Standards, Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting Standards Board (AASB) and the Corporations Act 2001. The Group is a for-profit entity for financial reporting purposes under Australian Accounting Standards. Australian Accounting Standards set out accounting policies that the AASB has concluded would result in a financial report containing relevant and reliable information about transactions, events and conditions to which they apply. Material accounting policy information relating to the preparation of the financial statements and presented below are consistent with prior reporting periods unless otherwise stated. Except for cash flow information, the financial report has been prepared on an accruals basis and is based on historical costs, modified, where applicable, by the measurement at fair value of selected non -current assets, financial assets and financial liabilities. Parent entity information In accordance with the Corporations Act 2001, these financial statements present the results of the consolidated entity only. Supplementary information about the parent entity is disclosed in note 23. Principles of consolidation The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of AdAlta Limited ('company' or 'parent entity') as at 30 June 2026 and the results of all subsidiaries for the year then ended. AdAlta Limited and its subsidiaries together are referred to in these financial statements as the 'consolidated entity' and / or “Group”. Going concern The financial statements have been prepared on a going concern basis which contemplates the realisation of assets and the settlement of liabilities in the normal course of business. As disclosed in the financial statements, the Group incurred losses of $4,683,849 (2025: $4,502,268) and the Group had net cash outflows from operating activities of $4,440,079 (2025: $2,936,533). As at balance date, the Group had net current assets of $370,173 (2025: $804,834). Although the above are indicative of a material uncertainty relevant to the going concern consideration, the directors consider that the Group can pay its debts as and when they fall due at the date of this report. In actively considering and managing the Group’s cashflow forecast, the directors consider that: 34
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AdAlta Limited and controlled entities Notes to the financial statements 30 June 2026 35 34 2. Material accounting policy information (continued) ● The Group can scale down its operations sufficiently (and narrow the scope of its planned project activities) as required; ● The Group has a track record of raising capital as an ASX listed Group; ● The Group is in active discussions to license/partner its technology (in the ordinary course of executing its business plan); and ● The Group does not have any long term leases ● The Group has historically been successful in receiving Research & Development tax incentive refunds from the ATO. In the unlikely event that the activities referred to above result in a negative outcome, then the going concern basis of accounting may not be appropriate with the result that the group may have to realise its assets and extinguish its liabilitie s other than in the normal course of business and in amounts different to that stated within the financial report. The financial report does not include any adjustments relating to the recoverability or classification of recorded asset amounts or classification of liabilities that might be necessary should the group not be able to continue as a going concern. Research and Development Tax Incentive The Research and Development Tax Incentive is accounted for in accordance with AASB 120 Government Grants on an accruals basis when the following recognition criteria have been met: (a) the entity reasonably expects it will comply with the conditions attaching to the grant; and (b) the grant will be received. Income tax The income tax expense or benefit for the period is the tax payable on that period's taxable income based on the applicable income tax rate for each jurisdiction, adjusted by the changes in deferred tax assets and liabilities attributable to tempora ry differences, unused tax losses and the adjustment recognised for prior periods, where applicable. Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses. Fair value measurement The fair value of liabilities and the entity's own equity instruments (excluding those related to share -based payment arrangements) may be valued, where there is no observable market price in relation to the transfer of such financial instruments, by reference to observable market information where such instruments are held as assets. Where this information is not available, other valuation techniques are adopted and, where significant, are detailed in the respective note to the financial statements. Borrowings Loans and borrowings are initially recognised at the fair value of the consideration received, net of transaction costs. They are subsequently measured at amortised cost using the effective interest method. Financial Liability - Investment Agreement The institutional investment (Investment Agreements) are treated as hybrid financial instruments and separated into the host liability and embedded derivative components based on the terms of the agreement. On issuance of the share subscription agreements, the host liability component is initially recognised at the residual value by deducting the fair value of the derivative liability from the amount of financial liabilities. The embedded derivative component is initially recognised at fair value. The host debt is carried at amortised cost using the effective interest method until extinguished on conversion or redemption. Where borrowings feature share conversion clauses that entitle the investor to a variable number of shares, be this through an entitlement to settle interest through the conversion clause or through the terms specified in the conversion clause itsel f, an embedded derivative is separated from the underlying borrowing host contract only when the conversion clause is activated upon a movement in a market price at initial recognition. Thereafter the embedded derivative is revalued at each subsequent reporting date with changes taken to the profit or loss. The underlying host contract following initial recognition is recognised at amortised cost applying the effective interest rate method.
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AdAlta Limited and controlled entities Notes to the financial statements 30 June 2026 2. Material accounting policy information (continued) Embedded Derivative An embedded derivative is a component of a hybrid instrument that also includes a non-derivative host contract with the effect that some of the cash flows of the combined instrument vary in a similar way to a standalone derivative. The embedded derivative is separate from the host contract and accounted for as a derivative if the economic characteristics and risks of the embedded derivative are not closely related to economic characteristics and risks of the host contract. The embedded derivative is measured at fair value with changes in value being recorded in profit and loss. Employee benefits Equity-settled transactions are awards of shares, or options over shares, that are provided to employees in exchange for the rendering of services. The cost of equity-settled transactions are measured at fair value on grant date. Fair value is independently determined using either the Binomial or Black -Scholes option pricing model that takes into account the exercise price, the term of the option, the impact of dilution, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the option, together with non-vesting conditions that do not determine whether the consolidated entity receives the services that entitle the employees to receive payment. No account is taken of any other vesting conditions. Comparative figures When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation for the current financial year. Critical accounting estimates and judgements The Directors evaluate estimates and judgements incorporated into the financial statements based on historical knowledge and best available current information. Estimates assume a reasonable expectation of future events and are based on current trends and economic data, obtained both externally and within the Group. Key estimates: (i) Environmental Issues Balances disclosed in the financial statements and notes thereto are not adjusted for any pending or enacted environmental legislation, and the Directors understanding thereof. At the current stage of the Group's development and its current environmental impact the Directors believe such treatment is reasonable and appropriate. (ii) Taxation Balances disclosed in the financial statements and the notes hereto, related to taxation are based on the best estimates of Directors. These estimates take into account both the financial performance and position of the Group as they pertain to current income tax legislation and the Directors understanding thereof. No adjustment has been made for pending or future tax legislation. The current income tax position represents that Directors' best estimate, pending an assessment by the Australian Taxation Office. New Accounting Standards and Interpretations not yet mandatory or early adopted The consolidated entity has adopted all of the new or amended Accounting Standards and Interpretations issued by the Australian Accounting Standards Board ('AASB') that are mandatory for the current reporting period. Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted. 36
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AdAlta Limited and controlled entities Notes to the financial statements 30 June 2026 3. Other revenue Consolidated 2026 2025 $ $ R&D tax incentive 404,245 677,010 The Group made an Overseas Finding application in FY26 and FY25. The estimated R&D tax refund at 30 June does not include any overseas expenditure in relation to the overseas finding made during the year. In the event that the overseas finding is successful, the R&D refund will increase accordingly. The FY2026 income includes $182k in relation to the FY2025 R&D tax incentive refund which was received in FY2026. 4. Income tax expense Consolidated 2026 2025 $ $ Income tax expense Current tax - - Deferred tax - - Aggregate income tax expense - - Numerical reconciliation of income tax expense and tax at the statutory rate Loss before income tax expense (4,683,849) (4,502,268) Tax at the statutory tax rate of 30% (25% for FY25) (1,405,155) (1,125,567) Tax effect amounts which are not deductible/(taxable) in calculating taxable income Non deductible expenses 162,719 433,617 Non assessable income (121,274) (169,253) Temporary differences 31,435 (68,290) Benefits of tax losses not brought into account 1,332,274 929,493 Income tax expense - - The Group has revenue losses of approximately $23,772,458 for which no deferred tax asset has been recognised. The Group has no franking credits currently available for future offset. 5. Loss per share Consolidated 2026 2025 $ $ Loss after income tax attributable to the owners of AdAlta Limited and controlled entities (4,683,849) (4,502,268) Number Number Weighted average number of ordinary shares used in calculating basic earnings per share 2,047,680,311 653,076,978 Weighted average number of ordinary shares used in calculating diluted earnings per share1 2,047,680,311 653,076,978 Cents Cents Basic earnings per share (0.23) (0.69) Diluted earnings per share (0.23) (0.69) 37
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AdAlta Limited and controlled entities Notes to the financial statements 30 June 2026 38 5. Loss per share (continued) 1The group had 13,794,695 unlisted options and 848,901,397 listed options on issue as at 30 June 2026 (2025:25,828,755 unlisted options and 226,951,398 listed options) and 1,041,788 performance rights on issue as at 30 June 2026 (2025: 2,438,787) that are not considered to be dilutive due to the exercise price exceeding the current market price of the underlying ordinary shares. 6. Cash and cash equivalents Consolidated 2026 2025 $ $ Cheque accounts 211,745 141,231 Cash reserve accounts 1,072,555 1,164,363 1,284,300 1,305,594 7. Trade and other receivables Consolidated 2026 2025 $ $ Goods and services tax 52,018 42,772 Prepaid expenses 163,659 116,187 R&D tax incentive 221,578 677,010 437,255 835,969 8. Trade and other payables Consolidated 2026 2025 $ $ Trade payables 312,091 641,765 Accrued expenses 54,998 134,603 PAYG payable 37,693 37,817 Superannuation payable - 7,483 404,782 821,668 9. Borrowings Consolidated 2026 2025 $ $ Current liabilities Loan – R&D Advance - 446,785
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AdAlta Limited and controlled entities Notes to the financial statements 30 June 2026 9. Borrowings (continued) 39 The balance as at 30 June 2025, is in relation to the loan facility entered into on 5 March 2025 was with Innovation Structured Finance Co., LLC serviced via Radium Capital and was an advance on 80% of the Company’s estimated R&D tax Incentive (RDTI) for the financial year ending 30 June 2025. The interest rate for the loan facility was 16% per annum. The facility was fully repaid in December 2025. 10. Provisions Current provisions Consolidated 2026 2025 $ $ Annual leave 88,159 68,276 Long-service leave 38,441 - 126,600 68,276 Non-current provisions Consolidated 2026 2025 $ $ Long service leave - 27,184 11. Other current liabilities Consolidated 2026 2025 $ $ Shares requiring approval 795,000 - Funds held to be refunded 25,000 - 820,000 - 12. Financial liabilities Consolidated 2026 2025 $ $ Institutional Investment Agreement - debt component - 1,320,831 Institutional Investment Agreement - embedded derivative component - 55,063 - 1,375,894 On 29 April 2024 the Group entered into an institutional investment via the Investment Agreements with New Life Sciences Capital, LLC ("NLSC") and the Meurs Group (Meurs Investment) for up to $3.7 million, a total of $1.2 million was received in May 2024, being the initial investment. During September 2024 $300k and in November 2024 $576k were received being the second tranche. Both tranches of the investment were recognised as a financial liability with a debt and embedded derivative component. Additionally, during the 2025 year $700k was converted to ordinary shares.
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AdAlta Limited and controlled entities Notes to the financial statements 30 June 2026 12. Financial liabilities (continued) 40 The Group had the right (but not an obligation) to opt to repay the subscription amount of each investment by making a payment to NLSC equal to the market value of the shares that would have otherwise been issued, instead of issuing shares to NLSC. If the Group did not exercise that right, the Group will issue Placement Shares when requested by NLSC, within 36 months of the date of the first tranche. The number of shares so issued by the Group will be determined by applying the Purchase Price (as set out below) to the subscription amount, but subject to the Floor Price (as set out below). The Purchase Price of the Placement Shares was equal to $0.06 initially, representing a premium of approximately 93.5% to the closing price of the Group's shares on 26 April 2024. Subject to the Floor Price described below, after the initial mont h, the Purchase Price was reset to the average of the five daily volume-weighted average prices selected by NLSC during the 20 consecutive trading days immediately prior to the date of NLSC’s notice to issue Placement Shares, less a 10% discount. The Purchase Price was, nevertheless, be the subject of the Floor Price of $0.02. If the Purchase Price formula resulted in a price that is less than the Floor Price, the Group may forego issuing shares and instead opt to repay the applicable subscription amount in cash (with a 12% premium), subject to NLSC’s right to receive Placement Shares at the Floor Price in lieu of such cash repayment. For the benefit of the Group, the Purchase Price will not be the subject of a cap. As at 30 June 2025, in accordance with Investment Agreements, a total of $1,562,725 was available to be converted ($1,199,725 NLSC and $363,000 Meurs Investment). During the period ending 30 June 2026 a total of $1,201,000 was converted to ordinary shares and $406,518 was repaid. 13. Issued capital Consolidated 2026 2025 2026 2025 Shares Shares $ $ Ordinary shares - fully paid 2,975,919,019 1,071,316,488 54,629,067 49,197,823 Ordinary shares Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the Group in proportion to the number of and amounts paid on the shares held. On a show of hands, every holder of ordinary shares present at a meeting in person or by proxy is entitled to one vote, and upon a poll each share is entitled to one vote. Incremental costs directly attributable to the issue of the new shares or options are shown in equity as a deduction, net of tax, from the proceeds. 2026 2025 2026 2025 Shares Shares $ $ Balance at beginning of the reporting period 1,071,316,488 595,623,520 49,197,823 47,399,255 Shares issued to brokers in lieu of fees 36,400,000 - - - Issued on conversion of financial liability 667,222,224 46,945,647 1,201,000 700,000 Issued on exercise of performance rights 1,396,998 653,592 - - Issue of ordinary shares 1,199,583,309 428,093,729 4,511,840 1,284,282 Capital raising costs - - (281,596) (185,714) 2,975,919,019 1,071,316,488 54,629,067 49,197,823 14. Reserves Consolidated 2026 2025 $ $ Share-based payments reserve 2,447,460 2,226,438
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AdAlta Limited and controlled entities Notes to the financial statements 30 June 2026 14. Reserves (continued) 41 Share-based payments reserve The reserve is used to recognise the value of equity benefits provided to employees and Directors as part of their remuneration, and other parties as part of their compensation for services. No options and performance rights were issued during the period as a part of remuneration. 2026 2025 $ $ At beginning of reporting period 2,226,438 2,151,428 Options and Performance Rights issued to Directors and Employees 34,622 75,010 Securities issued to other parties as part of compensation 186,400 - At end of reporting period 2,447,460 2,226,438 Expiry Exercise Balance at start Granted in Exercised Expired / Balance at of year year cancelled end of year Date Price Number Number Number Number Number 26/11/2025 $0.2479 492,906 - - (492,906) - 26/11/2025 $0.2479 1,478,718 - - (1,478,718) - 26/11/2025 $0.2479 1,478,718 - - (1,478,718) - 26/11/2025 $0.2482 1,478,718 - - (1,478,718) - 29/11/2025 $0.0845 6,655,000 - - (6,655,000) - 28/02/2026 $0.0757 350,000 - - (350,000) - 27/02/2027 $0.0397 1,400,000 - - (100,000) 1,300,000 25/08/2027 $0.0200 50,000 - - - 50,000 22/11/2027 $0.0200 11,025,000 - - - 11,025,000 26/02/2028 $0.0200 662,500 - - - 662,500 20/11/2028 $0.0183 757,195 - - - 757,195 03/06/2028 $0.0100 226,951,398 621,949,999 - - 848,901,397 252,780,153 621,949,999 - (12,034,060) 862,696,092 1The options expiring 3 June 2028 includes 82,200,000 listed options provided to 62Capital Pty Ltd in connection with it acting as the Lead Manager to the placement announced to ASX on 13 January 2026. Weighted average exercise price at 30 June 2026 $0.0102 (30 June 2025: $0.0172). For the options granted as compensation to employees during the current financial year, as these are listed options the listed price per the ASX has been used to determine the fair value at the grant date. 15. Related party transactions Related parties The Group's main related parties are as follows: Non-Executive Directors Position Dr Paul MacLeman Non-Executive Chair Ms Michelle Burke Non-Executive Director Mr Fadi Diab Non-Executive Director Executive Directors Dr Timothy Oldham Chief Executive Officer and Managing Director
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AdAlta Limited and controlled entities Notes to the financial statements 30 June 2026 15. Related party transactions (continued) 42 Transactions with related parties Aside from the amounts previously disclosed in the Remuneration Report, there were no other transactions with related parties during the current and previous financial year. The aggregate compensation made to Directors and other Key Management Personnel of the Group is set out below: Consolidated 2026 2025 $ $ Short-term benefits (Including performance bonuses) 241,813 540,404 Post-employment benefits 22,607 37,609 Share based payments 15,965 68,696 280,385 646,709 16. Contingent liabilities and contingent assets The Directors are not aware of any matters or circumstances which may give rise to a contingent liability or asset. 17. Commitments Capital commitments The Group has no capital commitments. Other commitments The Group has no other commitments. 18. Financial risk management The Board has overall responsibility for the determination of the Group’s risk management objectives and policies and, whilst retaining ultimate responsibility for them, it has delegated the authority for designing and operating processes that ensure the effective implementation of the objectives and policies to the Group’s finance function. The Group’s risk management policies and objectives are therefore designed to minimise the potential impacts of these risks on the Group where such impacts may be material. The board receives monthly financial reports through which it reviews the effectiveness of the processes put in place and the appropriateness of the objectives and policies it sets. The overall objective of the board is to set policies that seek to reduce risk as far as possible without unduly affecting the Group’s competitiveness and flexibility. Term, conditions and accounting policies The Group's accounting policies, including the terms and conditions of each class of financial asset, financial liability and equity instrument, both recognised and unrecognised at the reporting date, are as follows:
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AdAlta Limited and controlled entities Notes to the financial statements 30 June 2026 18. Financial risk management (continued) 43 Recognised Financial Statement of Accounting Policies Terms and Conditions Instruments Financial Position Notes i) Financial assets Cheque account 6 Carried at face value. The cheque account is at call with an interest rate of 0.00% (2025: 0.00%). Cash reserve 6 Carried at face value. The cash reserve account is at call with an interest rate of 1.15% (2025: 1.21%). R & D tax incentive 7 Recognised on an accrual basis. The incentive is claimed annually under an Australia Taxation Office mechanism which designed to promote research and development. Trade receivables 7 Recognised on an accrual basis. Normal invoice terms are 14-60 days. Goods & services tax paid 7 Recognised on an accrual basis. Business activity statements are lodged on a quarterly basis. ii) Financial liabilities Trade and other creditors 8 Liabilities are recognised for amounts to be paid in the future for goods and services received, whether or not billed to the group. The majority of costs are invoiced on a quarterly basis and hence liabilities accrue for up to 90 days. Trade liabilities are normally settled on 14- 30 day terms. Borrowings 9 Carried at face value. 2026: No borrowings held as at 30 June 2026 2025: The Loan is a Secured Loan, with a variable interest rate. The Security is the R&D Tax Incentive refund for the financial year ending 30 June 2025 (Rate as at 30 June 2025 of 15%) Financial liabilities 12 Carried at face value. The institutional investment is recognised based on an external valuation. iii) Equity Ordinary shares 13 Ordinary share capital is recognised at the fair value of the consideration received by the group. Details of the shares issued and the terms and conditions of the options outstanding over ordinary shares at balance date are set out in note 13. Carrying value The carrying value of financial assets and liabilities approximates their fair value. Financial risk management The Group's activities expose it to a variety of financial risks; market risk (fair value interest rate risk and price risk), credit risk, liquidity risk and cash flow interest rate risk. The Group's overall risk management program focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance of the Group. i) Market risk The Group is not exposed to either equity securities price risk or commodity price risk. The Group has an exposure to foreign currency risk because several contracts relating to cost of services are denominated in foreign currencies. When the service agreement is signed the Group seeks to lock -in a foreign exchange rate to minimise the risks associated with fluctuating currency markets. ii) Credit risk The maximum credit risk is total current assets of which the vast majority is either in the form of cash or amounts receivabl e from the Australian Taxation Office in the form of the Research and Development tax incentive and GST refundable.
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AdAlta Limited and controlled entities Notes to the financial statements 30 June 2026 18. Financial risk management (continued) iii) Liquidity risk Prudent liquidity risk management implies maintaining sufficient cash and short -term assets to enable the Group to settle its liabilities. The contractual undiscounted cash flows of the Group's borrowing commitments is set out in the table below. Balances due within 12 months equal their carrying amounts as the impact of discounting is not significant. Contractual maturities less than 1 year >1 year >5 years Total Carrying 5 years amount Loan - R&D advance - 2026 - - - - - Loan - R&D advance - 2025 446,785 - - 446,785 446,785 iv) Interest Rate Risk As at the reporting date the Group had the following variable rate bank accounts and borrowings: Weighted Balance Fixed interest Variable interest average rate exposure rate exposure % $ $ $ Cash and cash Equivalents - 2026 1.04% 1,284,300 1,072,555 211,745 Cash and cash Equivalents - 2025 1.21% 1,305,594 1,164,363 141,231 Borrowings - 2025 2.82% 446,785 - 446,785 v) Cash flow and fair value interest rate risk The Group maintains a current cheque account balance sufficient to meet day to day expenses with the balance of cash held in accounts designed to maximise interest income. vi) Foreign exchange risk The Group has contracts denominated in foreign currencies, predominantly in US dollars , Euros and Great Britain Pounds and may enter into forward exchange contracts where appropriate in light of anticipated future purchases and sales, conditions in foreign markets, commitments with suppliers and customers and past experience and in accordance with Board-approved limits. 44
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AdAlta Limited and controlled entities Notes to the financial statements 30 June 2026 19. Reconciliation of loss after income tax to net cash used in operating activities (continued) Reconciliation of cash flow from operations with profit after income tax Consolidated 2026 2025 $ $ Loss after income tax expense for the year (4,683,849) (4,502,268) Adjustments for: Depreciation and amortisation - 85,231 Net loss on disposal of plant and equipment and termination of lease - 53,354 Share-based payments 34,622 72,757 Interest expense and borrowing costs 195,346 32,927 Change in operating assets and liabilities: (Increase) / decrease in receivables 398,714 1,115,216 (Increase) / decrease in current assets - 16,388 Increase / (decrease) in payables (416,909) 270,676 Increase / (decrease) in provisions 31,997 (80,814) Net cash used in operating activities (4,440,079) (2,936,533) 20. Dividends There were no dividends paid, recommended or declared during the current or previous financial year. 21. Remuneration of auditors During the financial year the following fees were paid or payable for services provided by Dry Kirkness (Audit) Pty Ltd, the auditor of the group: Consolidated 2026 2025 $ $ Audit services - Dry Kirkness (Audit) Pty Ltd Audit and review of the financial statements 32,675 30,000 22. Events after the reporting period The following matters have arisen since 30 June 2026: On 2 July 2026, the Group issued 236,250,012 ordinary shares at $0.04 per share and 235,000,001 options (ASX:1ADO) In July 2026 AdAlta entered a strategic collaboration with Oktopi, gaining access to an AI-enabled research and development platform that supports and peer reviews expert development decisions, complementing AdAlta’s in -house EMU screening agent. In August 2026, the Group announced further results of ongoing IIT studies of EW -001 in China, including that the two complete responders had passed their one year and two year assessments respectively with no evidence of cancer returning and that all five patients on study in March were still alive and in follow up . No other matter or circumstance has arisen since 30 June 2026 that has significantly affected, or may significantly affect the consolidated entity's operations, the results of those operations, or the consolidated entity's state of affairs in future fi nancial years. 45
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AdAlta Limited and controlled entities Consolidated entity disclosure statement As at 30 June 2026 23. Parent entity information Set out below is the supplementary information about the parent entity. Statement of profit or loss and other comprehensive income Parent 2026 2025 $ $ Loss after income tax (1,402,742) (4,502,268) Total comprehensive income (1,402,742) (4,502,268) Statement of financial position Parent 2026 2025 $ $ Total current assets 3,434,653 2,141,563 Total assets 4,900,954 2,141,563 Total current liabilities 1,249,690 1,336,729 Total liabilities 1,249,690 2,739,807 Equity Issued capital 54,629,067 49,197,823 Share-based payments reserve 2,447,460 2,226,438 Accumulated losses (53,425,263) (52,022,505) Total equity/(deficiency) 3,651,264 (598,244) There are no joint venture arrangements in place and no contingent liabilities or commitments at year end. 46
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AdAlta Limited and controlled entities Consolidated entity disclosure statement As at 30 June 2026 47 Place formed / Ownership interest Entity name Entity type Country of incorporation % Tax residency AdAlta Limited Body Corporate Australia - Australia AdSolis Pty Ltd Body Corporate Australia 100.00% Australia AdCella Pty Ltd Body Corporate Australia 100.00% Australia Basis of preparation This Consolidated entity disclosure statement (CEDS) has been prepared in accordance with the Corporations Act 2001 and includes information for each entity that was part of the Group as at the end of the financial year in accordance with AASB 10 Consolidated Financial Statements. Determination of tax residency Section 295 (3A)(vi) of the Corporation Act 2001 defines tax residency as having the meaning in the Income Tax Assessment Act 1997. The determination of tax residency involves judgement as there are different interpretations that could be adopted, and which could give rise to a different conclusion on residency. In determining tax residency, the Group has applied the following interpretations: Australian tax residency The Group has applied current legislation and judicial precedent, including having regard to the Tax Commissioner’s public guidance in Tax Ruling TR 2018/5. Foreign tax residency Where necessary, the Group has used independent tax advisers in foreign jurisdictions to assist in its determination of tax residency to ensure applicable foreign tax legislation has been complied with (see section 295(3A)(vii) of the Corporations Act 2001). Partnerships and Trusts None of the entities noted above were trustees of trusts within the year.
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AdAlta Limited and controlled entities Directors' declaration 30 June 2026 48 In the Directors' opinion: ● the attached financial statements and notes comply with the Corporations Act 2001, the Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements; ● the attached financial statements and notes comply with IFRS Accounting Standards as issued by the International Accounting Standards Board as described in note 2 to the financial statements; ● the attached financial statements and notes give a true and fair view of the group's financial position as at 30 June 2026 and of its performance for the financial year ended on that date; and ● there are reasonable grounds to believe that the group will be able to pay its debts as and when they become due and payable. ● the information disclosed in the attached consolidated entity disclosure statement is true and correct. The Directors have been given the declarations required by section 295A of the Corporations Act 2001. Signed in accordance with a resolution of Directors made pursuant to section 295(5)(a) of the Corporations Act 2001. On behalf of the Directors Paul MacLeman Chairman 21 August 2026 Melbourne
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Dry Kirkness (Audit) Pty Ltd Ground Floor, 50 Colin St West Perth WA 6005 / PO Box 216, West Perth, 6872 admin@drykirknessaudit.com.au drykirknessaudit/audit-assurance/ / P: (08) 6326 2300 ABN: 61 112 942 373 RCA No: 289109 / Liability limited by a scheme approved under the Professional Standards Legislation INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF ADALTA LIMITED Report on the audit of the annual financial report Opinion We have audited the financial report of AdAlta Limited (“the Company”) and its controlled entities (“the Group”), which comprises the consolidated statement of financial position as at 30 June 2026, the consolidated statement of profit and loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, and notes to the financial statements, including material accounting policy information, the consolidated entity disclosure statement and the directors’ declaration. In our opinion, the accompanying financial report of AdAlta Lim ited, is in accordance with the Corporations Act 2001, including: i) giving a true and fair view of the Group’s financial position as at 30 June 2026 and of its financial performance for the year then ended; ii) complying with Australian Accounting Standards and the Corp orations Regulations 2001. Basis for Opinion We have conducted our audit in accordance with Australian Auditing Standards. 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 auditor independence requirements of 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 h a v e a l s o f u l f i l l e d o u r e t h i c a l r e q u i r e m e n t s i n accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Material Uncertainty Related to Going Concern We draw attention to Note 2 in the financial report which indicates that the Group incurred a loss after tax of $4,683,849 (2025: $4,502,268) and had net cash outflows from op erating activities of $4,440,079 (2025: $2,936,533) for the year ended 30 June 2026. As at 30 June 2026, the Group had net current assets of $370,173 (2025: $804,834). The Group’s cash flow forecast for the perio d ending September 2027, indicates a cash surplus of $545,522. Notwithstanding this forecast positive cash position, the Group has incurred recurring losses and operating cash outflows and remains dependent on for ecast capital raisings and R&D income to fund its planned activities. As stated in Note 2, these conditions, along with other matters as set forth in Note 2, indicate that a material uncertainty exists that may cast significant doubt on the Group’s ability to continue as a going concern. Our opinion is not modified in respect of this matter.
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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. These matters were 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 these matters. Key Audit Matte r How our audit addressed the key audit matte r Equity and Capital Structure Refer notes 13 and 14 During the year, the Group successfully issued fully paid ordinary shares as well as various share based payments. Research and Development Tax Incentive Refer notes 3 and 7 Management make key assumptions, judgements and estimates in determining the R&D Tax Incentive receivable for the year as disclosed in notes 3 and 7 . Management have used the services of an expert to prepare the calculation of the Group's eligible R&D expenditure for inclusion in its submission to the ATO. Our audit procedures included : - an examination of each issue of fully paid ordinary shares during the year; - an examination of the movements in the share based payment reserve; - assessing the recognition of share-based payments made during the year; - reconciling the various components of issued capital to share registry reports; and - assessing the adequacy of the related disclosures within the financial report. Our audit procedures included: - an evaluation of the assumptions, methodologies and conclusions used by management’s expert in preparing the R&D Tax Incentive Rebate application; and - assessing the adequacy of the related disclosures within the financial report. Other information The directors are responsible for the other information. The other information comprises the information in the Group’s annual report for the year ended 30 June 2026 but does not include the financial report and the auditor’s report thereon. Our opinion on the financial report does not cover the other information and accordingly we do not express any form of assurance conclusion thereon. In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, 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. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Directors’ responsibilities for the financial report The directors of the Group are responsible for the preparation of:
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a) the financial report (other than the consolidated entity disclosure statement) that gives a true and fair view in accordance with the Australian Accounting Standards and the Corporations Act 2001; and b) the consolidated entity disclosure statement that is true and correct in accordance with the Corporations Act 2001; and c) for such internal control as the directors determine is necessary to enable the preparation of: i) the financial report (other than the consolidated entity disclosure statement) that gives a true and fair view and is free from material misstatement, whether due to fraud or error; and ii) the consolidated entity disclosure statement that is true and c orrect and is free from misstatement, whether due to fraud or error. In preparing the financial report, the directors are responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so. Auditor’s Responsibilities for the Audit of the Financial Report Our objectives are 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 the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, i ndividually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial report. As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement and maintain professional scepticism throughout the audit. We also: Identify and assess risks of material misstatement of the financial report, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk o f not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors. Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern. Evaluate the overall presentation, structure and content of the financial report, including the disclosures, and whether the financial report represents the underlying tran sactions and events in a manner that achieves fair presentation.
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Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the financ i a l r e p o r t . W e a r e r e s p o n s i b l e f o r t h e direction, supervision and performance of the Group audit. We r emain solely responsible for our audit opinion. We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide the directors with a statement that we have com plied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied. From the matters communicated with the directors, we determine those matters that were of most significance in the audit of the financial report of the current period and are therefore key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh public interest benefits of such communication. Report on the Remuneration Report Opinion We have audited the Remuneration Report included on pages 21 to 28 of the directors’ report for the year ended 30 June 2026. In our opinion, the Remuneration Report of AdAlta Limited, for the year ended 30 June 2026, complies with section 300A of the Corporations Act 2001. Responsibilities The directors of the Group are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards. DRY KIRKNESS (AUDIT) PTY LTD LUCY GARDNER Principal Perth Date: 21 August 2026
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AdAlta Limited and controlled entities Shareholder information 30 June 2026 53 The shareholder information set out below was applicable as at 23 July 2026. (a) Distribution of equitable securities (i) Quoted Options, exercisable at $0.01 expiring on 3 June 2028 1 to 1,000 2 599 - 1,001 to 5,000 26 78,822 0.03% 5,001 to 10,000 17 130,373 0.06% 10,001 to 100,000 88 4,050,013 1.89% 100,001 and over 186 1,079,641,591 98.02% 319 1,083,901,398 100% The number of option holding less than a marketable parcel of options are 98. (ii) Ordinary Shares 1 to 1,000 51 6,326 0.00% 1,001 to 5,000 99 334,559 0.01% 5,001 to 10,000 164 1,269,563 0.04% 10,001 to 100,000 511 23,107,630 0.72% 100,001 and over 82 3,187,450,953 99.23% 1,65 3,212,169,031 100.00% The number of shareholders holding less than a marketable parcel of shares are 860. Options
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AdAlta Limited and controlled entities Shareholder information 30 June 2026 54 (b) Voting rights (i) Quoted Options, exercisable at $0.01 expiring on 3 June 2028 No voting rights. The names of the twenty largest holders of quoted options are: 1 SUFIAN AHMAD 302,783,329 27.93% 2 MS CHUNYAN NIU 73,750,001 6.80% 3 KOBALA INVESTMENTS PTY LTD <FERNANDO EDWARD FAMILY A/C> 56,666,667 5.23% 4 MR BILAL AHMAD 41,500,000 3.83% 5 MR BIN LIU 39,166,666 3.61% 6 SACAVIC PTY LTD <MORRIS SUPER FUND A/C> 33,333,333 3.08% 7 DR MICHEL ELKHOURY 31,166,666 2.88% 8 MR DAVID DOMINIC PEVCIC 20,833,334 1.92% 9 MRS IFRAH NISHAT 20,833,333 1.92% 10 KG VENTURE HOLDINGS PTY LTD <KG VENTURE HOLDINGS A/C> 19,583,333 1.81% 11 AGHA FAMILY INVESTMENTS PTY LTD <AGHA FAMILY A/C> 16,666,667 1.54% 12 MR DEAN BRETT BLANKFIELD 14,166,667 1.31% 13 MRS SHAISTA ZAFFAR 13,950,000 1.29% 14 Kevin Cairns 12,000,000 1.11% 14 MRS GWEN MURRAY PFLEGER <PFLEGER FAMILY A/C> 12,000,000 1.11% 15 SCINTILLA STRATEGIC INVESTMENTS LIMITED 10,600,000 0.98% 16 VAGABOND VENTURES PTY LTD <VAGABOND INVESTMENTS A/C> 10,000,000 0.92% 17 LIBERT PTY LTD <N & L MULLER S/F A/C> 9,166,667 0.85% 18 DAVE DEVLIN SUPER FUND PTY LTD <DAVID DEVLIN SUPER FUND A/C> 8,500,000 0.78% 19 SACAVIC PTY LTD <SACAVIC A/C> 8,333,334 0.77% 20 MR JOSHUA GORDON 8,333,333 0.77% 20 RIMOYNE PTY LTD 8,333,333 0.77% Total 771,666,663 71.19% Total issued capital - selected security class(es) 1,083,901,398 100.00%
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AdAlta Limited and controlled entities Shareholder information 30 June 2026 55 (ii) Ordinary shares On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each share shall have one vote. The names of the twenty largest holders of quoted ordinary shares are: 1 MEURS GROUP 293,480,026 9.14% 2 SUFIAN AHMAD 287,133,321 8.94% 3 MR DAVID DOMINIC PEVCIC 230,595,264 7.18% 4 SACAVIC PTY LTD <SACAVIC A/C> 191,108,388 5.95% 5 MS CHUNYAN NIU 181,969,001 5.67% 6 KOBALA INVESTMENTS PTY LTD <FERNANDO EDWARD FAMILY A/C> 124,000,000 3.86% 7 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED - A/C 2 79,574,880 2.48% 8 SCINTILLA STRATEGIC INVESTMENTS LIMITED 75,000,000 2.33% 9 MR BIN LIU 65,000,000 2.02% 10 MRS IFRAH NISHAT 62,500,000 1.95% 11 DR MICHEL ELKHOURY 62,161,295 1.94% 12 MR BILAL AHMAD 52,333,333 1.63% 13 MR DEAN BRETT BLANKFIELD 49,166,667 1.53% 14 BNP PARIBAS NOMINEES PTY LTD <IB AU NOMS RETAILCLIENT> 39,453,727 1.23% 15 LIBERT PTY LTD <N & L MULLER S/F A/C> 39,166,667 1.22% 16 MRS SHAISTA ZAFFAR 37,516,667 1.17% 17 MR JOSHUA GORDON 31,894,921 0.99% 18 CTH GOVT - DEPT SCI IND 27,029,924 0.84% 19 PONCE PTY LTD <WEXFORD ARMS A/C> 25,000,000 0.78% 19 MRS GWEN MURRAY PFLEGER <PFLEGER FAMILY A/C> 25,000,000 0.78% 19 MR MUHAMMAD SALMAN & MRS SAJIDA AKRAM & MISS FATIMA SALMAN <KULOWALL FAMILY S/F A/C> 25,000,000 0.78% 20 AGHA FAMILY INVESTMENTS PTY LTD <AGHA FAMILY A/C> 23,333,333 0.73% Total 2,027,417,414 63.12% Total issued capital - selected security class(es) 3,212,169,031 100.00%
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AdAlta Limited and controlled entities Shareholder information 30 June 2026 56 (c) Substantial shareholders (i) Ordinary Shares The names of substantial shareholders in accordance with section 671B of the Corporations Act 2001 are: 1 MEURS GROUP 293,480,026 9.14% 2 SUFIAN AHMAD 287,133,321 8.94% 3 MR DAVID DOMINIC PEVCIC 230,595,264 7.18% 4 SACAVIC PTY LTD <SACAVIC A/C> 191,108,388 5.95% 5 MS CHUNYAN NIU 181,969,001 5.67% 1Number of shares held per last reported substantial interest notice holding notice. (d) Unquoted securities Details of substantial holders: 14,836,483 37 Options expiring various dates and various prices Tim Oldham 42.85% (6,357,195) Mr Paul Macleman 18.87% (2,800,000) Mr David Fuller 11.80% (1,750,000) Mr Angus Tester 7.08% (1,051,140) Robert Peach 5.90% (875,000) Holders of more than 5%