Interim report
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1 Interim Report For the Half Year Ended 30 June 2026 (Formerly Advanced Energy Minerals Limited) LIMITED
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Advanced Engineered Materials Limited Interim Report for the Half Year 2026 1 Appendix 4D Half Year Report for the Year Ended 30 June 2026 ASX Announcement 31 August 2026 Advanced Engineered Materials Ltd (ASX:AEM) 4D Half Year Report Highlights Advanced Engineered Materials Limited (ASX: AEM), The following is given to the ASX under listing rule 4.2A 1. Company details Name of entity: Advanced Engineered Materials Limited ABN: 20 095 907 565 Reporting period: For the half year ended 30 June 2026 Previous period: For the half year ended 30 June 2025 Results for announcement to the market 0BConsolidated Group 1BItem 2B 3B 4BAUD Revenue from ordinary activities 2.1 Up 84.9% to $459,518 Loss from ordinary activities after tax attributable to the owners of Advanced Energy Minerals Limited 2.2 Up 47.3% to $13,420,851 Loss for the half-year attributable to the owners of Advanced Energy Minerals Limited 2.3 Up 47.3% to $13,420,851 5BDividend 2.4 N/A Amount per Security Cents Franked Amount per Security Cents Final Dividend Nil Nil Interim Dividend Nil Nil Previous Corresponding Period Final Dividend Interim Dividend Nil Nil Nil Nil Record Date for Determining Entitlement to the Dividend Not Applicable 6BNTA Backing 7BCurrent Period 8BPrevious Corresponding Period Net Tangible Asset Backing per Ordinary security 22.7 Cents 25.1 Cents The attached Half Year Report which forms part of this Appendix 4D were subject to a review by the auditors and the review report is attached as part of the Interim Report.
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2 Advanced Engineered Materials Limited ABN 20 095 907 565 Interim Report For the Half-Year Ended 30 June 2026
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Advanced Engineered Materials Limited Interim Report for the Half Year 2026 3 Directors' Report 30 June 2026 The directors present their report, together with the financial statements, on the consolidated entity (referred to hereafter as the 'consolidated entity') consisting of Advanced Engineered Materials Limited (referred to hereafter as the 'company' or 'parent entity') and the entities it controlled at the end of, or during, the half-year ended 30 June 2026. On the 4th June 2026 the company changed its name from Advanced Energy Minerals Limited to Advanced Engineered Materials Limited. Directors The following persons were directors of Advanced Engineered Materials Limited during the whole of the financial half-year and up to the date of this report, unless otherwise stated: • Richard Seville, Executive Chairperson • Michael Adams, Managing Director and Chief Executive Officer • Timothy Fletcher, Non-Executive Director • Steve Petersohn, Non-Executive Director • Richard Evans Non-Executive Director • Nassif Obeid Non-Executive Director • Anthony Giammaria Non-Executive Director • Leanne Heywood Non-Executive Director (Appointed 22 August 2025) Principal Activities During the financial half-year, the principal continuing activities of the consolidated entity are: Advanced Energy Minerals Inc (100%) Advanced Energy Minerals Inc is the holding company for our high purity alumina (HPA) operating companies, it has two subsidiaries: 1) AEM Canada Inc (“ACG”), which owns and operates our chemical plant in Cap-Chat, Quebec, Canada, and produces HPA for use in semi-conductors, advanced ceramics, the synthetic sapphire/LED industry, battery applications, and other associated products, and 2) AEM Technologies Inc (“AET”), with research and development facilities in Montreal, Quebec, Canada. AEM Japan G.K (100%) AEM Japan G.K is a sales entity in Japan for the AEM group. This entity is solely a sales arm of the business. Dividends There were no interim cash dividends paid or recommended during the period ended 30 June 2026 (2025: No dividends were paid or recommended). Review of Operations The loss for the consolidated entity after providing for income tax amounted to $13,420,851 (30 June 2025: $9,111,052).
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Advanced Engineered Materials Limited Interim Report for the Half Year 2026 | Directors’ Report 4 Overview The half-year ended 30 June 2026 was the Company’s first half-year reporting period as an entity listed on the Australian Securities Exchange, following its listing on 24 December 2025. During the period, the Company continued to focus on customer development whilst operating its Cap-Chat Plant in Quebec, Canada, to satisfy customer requirements and build up stock levels or intermediate products from extended campaigns of key circuits. In addition, progress was made increasing capacity to complete Stage 1 and on the Stage 2 feasibility study as well as undertaking plant modifications to enable production of HPA that emits extremely low levels of alpha particle radiation (termed “ultra-low alpha HPA”) to meet an emerging and strongly growing demand for such products from the global semiconductor industry. Key highlights for the half-year, and to the date of this report, included: → Sales of 12.5 tonnes for A$459,518 revenue (vs PCP of $248,486 revenue). These sales arose from orders of 17.6 tonnes for A$687,000, with 5.1 tonnes for A$227,482 outstanding for delivery in July. → Production and Wages expenses are higher than the PCP due to higher production volumes and activity at the plant. Administration costs have risen slightly as expected as a listed company. Management is keenly focused on minimising costs and maximising efficiencies in the business. → The customer pipeline increased to 210 projects on 30 June 2026 (38% more than on 31 December 2025) representing an un-risked aggregate demand for 5,500 tpa of HPA (c.15% higher) at an average price of US$29/kg (c. 7% higher), which translates into un-risked annualised value of approximately US$160 million (c. 23% higher than on 31 December 2025); → completion of plant modifications at Cap-Chat to enable commercial-scale production of ultra-low-alpha HPA for the semiconductor sector; → continued progress on the dedicated 1,000 tpa 3N5+ circuit, which will lift the Plant’s nameplate capacity to 3,000 tpa; → a collaboration with NeoCtech Corp to scale up and pilot rare-earth-doped nano high-purity alumina, supported by a CAD$800,000 grant from Next Generation Manufacturing Canada (NGen); → continued progress on the Definitive Feasibility Study for the Stage 2 Expansion to 6,000 tpa; → the change of the Company’s name to Advanced Engineered Materials Limited, following shareholder approval at the 2026 Annual General Meeting (ASX code unchanged: AEM); and → subsequent to the end of the period, a cooperation agreement with Zürcher Frères SA (ZFS) under which AEM will be the exclusive supplier of nano-particle HPA for ZFS’s high-performance zirconia- alumina ceramics (announced 15 July 2026).
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Advanced Engineered Materials Limited Interim Report for the Half Year 2026 | Directors’ Report 5 Sales and Marketing The Company’s sales and marketing activities in the period benefited from strong market tailwinds arising from: → Rapidly growing demand for 4N+ HPA from the global semiconductor industry to meet the increasing performance requirements of AI and robotic applications. This growth in demand was, and is continuing to be, fuelled not only by the need for ultra-low alpha HPA for thermal management, but also by a move by the leading semiconductor producers to adopt 4N+ HPA for use in the tools (etching chambers, electrostatic chucks, nozzles, capillaries and carriers) used to fabricate and package leading edge semiconductors. → Ongoing realignment of industrial supply chains in response to new geopolitical conditions that has raised customer interest in the Company’s products both in Western-aligned markets and in China. → Greater realisation amongst customers that the looming global supply shortage of HPA is now becoming a reality. Helped by these tailwinds, the Company’s commercial momentum continued to build through the period as it continued to identify new opportunities and convert existing opportunities from qualification stages into commercial relationships. As at 30 June 2026, the Company’s sales pipeline stood at 210 projects (c.f. 152 projects on 31 December 2025:), comprising 166 projects in laboratory trials, 28 in industrial trials and 16 in commercial relationships. On an un-risked basis, these projects represented a volume of approximately 5,500 tpa of HPA at an average price of US$29/kg, equivalent to an annual value of US$160 million. Compared with 31 December 2025, these represent approximate increases in volume, price and value of 15%, 7% and 23% respectively. Notably, the higher average price reflects a shift in product mix towards premium products, including ultra-low-alpha HPA. Pipeline projects span customers across North America, Europe, Japan, Korea, Taiwan and China. The Company continued to invest in its global sales capability through its in-house sales team and its network of distributors and agents.
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Advanced Engineered Materials Limited Interim Report for the Half Year 2026 | Directors’ Report 6 Operations at the Cap-Chat Plant During the half-year the Cap-Chat Plant operated to satisfy commercial customer requirements and customer qualifications whilst also building up modest stocks of intermediate products following extended campaigns to develop operating competencies and test out circuits such as decomposition (fluidised bed furnace and acid recovery) and calcination (tunnel kiln and robotic handling). The Company is very pleased with the performance of both these major parts of the plant’s pyrometallurgical circuits. They are now well prepared for the expected increase in demand in the second half. Modifications were completed during the period to enable commercial-scale production of ultra-low alpha HPA. Work also advanced on the dedicated 1,000 tpa 3N5+ circuit, scheduled to enter production in 2026, which will raise the Plant’s nameplate capacity to 3,000 tpa, together with additional milling, drying and product-tailoring equipment matched to the evolving product mix.
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Advanced Engineered Materials Limited Interim Report for the Half Year 2026 | Directors’ Report 7 Research and Development The Company’s Technical Development Centre in Montreal continued its programme of product and process innovation in close collaboration with customers. In May 2026 the Company announced a collaboration with NeoCtech Corp to scale up and pilot the production of nano high-purity alumina (nHPA) doped with rare earth elements recovered from end-of-life products, supported by a CAD$800,000 grant from NGen. Rare-earth-doped nHPA has potential applications across semiconductors, artificial intelligence and robotics, power electronics, defence and aerospace ceramics, advanced optics and catalysis; piloting will be undertaken at Cap-Chat at a scale of 10 kg/day for subsequent laboratory validation. The Company also continued to develop its nano-particle HPA and ultra-low-alpha product routes and to invest in additional analytical capability at its laboratories. The commercial potential of this work in advanced ceramics was further underlined after the end of the period, when the Company entered a cooperation agreement with Zürcher Frères SA (ZFS) for the exclusive supply of nano-particle HPA to ZFS’s high-performance zirconia-alumina ceramics (announced 15 July 2026). Stage 2 Expansion The Company progressed the Definitive Feasibility Study (DFS) for its Stage 2 Expansion, which would add a further 3,000 tpa of capacity to take total nameplate capacity to 6,000 tpa from 2029. The DFS, which incorporates a revised scope integrating the expansion with the existing plant and product mix, is targeted for completion in the third quarter of 2026. The Stage 2 pre-feasibility study, independently reviewed by WSP with financial modelling verified by BDO, indicated robust project economics. Corporate Following approval by shareholders by special resolution at the Company’s 2026 Annual General Meeting held on 29 May 2026, the Company changed its name from Advanced Energy Minerals Limited to Advanced Engineered Materials Limited. The change of name took effect on 4 June 2026 following approval by the Australian Securities and Investments Commission and was announced to the market on 13 July 2026. The new name better reflects the Company’s business of producing value- added, high-purity engineered materials rather than commoditised minerals. The Company’s ASX code remains unchanged (AEM).
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Advanced Engineered Materials Limited Interim Report for the Half Year 2026 | Directors’ Report 8 Outlook The Company remains focused on ramping production at the Cap-Chat Plant, completing the Stage 1 Expansion to 3,000 tpa, advancing the Stage 2 DFS, and converting its growing customer pipeline into commercial supply. These statements are forward-looking and subject to the risks, assumptions and disclaimers set out elsewhere in this report. Significant Changes in the State of Affairs There were no significant changes in the state of affairs of the consolidated entity during the financial half-year. 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. This report is made in accordance with a resolution of directors, pursuant to section 306(3)(a) of the Corporations Act 2001. On behalf of the directors ___________________________ Richard Seville Director 31 August 2026 Sydney
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9 AUDITOR’S INDEPENDENCE DECLARATION As lead auditor for the review of the consolidated financial report of Advanced Engineered Materials Limited for the half-year ended 30 June 2026, I declare that to the best of my knowledge and belief, there have been no contraventions of: a) the auditor independence requirements of the Corporations Act 2001 in relation to the review; and b) any applicable code of professional conduct in relation to the review. Perth, Western Australia 31 August 2026 D I Buckley Partner
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Advanced Engineered Materials Limited Interim Report for the Half Year 2026 10 Contents General information 11 Consolidated Statement of Profit or Loss and Other Comprehensive Income 12 Consolidated Statement of Financial Position 13 Consolidated Statement of Changes in Equity 14 Consolidated Statement of Cash Flow 15 Notes to the Consolidated Financial Statements 16 Directors' Declaration 25 Independent Auditors Report 26
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Advanced Engineered Materials Limited Interim Report for the Half Year 2026 | Consolidated Financial Statements 11 General Information The interim financial statements cover Advanced Engineered Materials Limited as a consolidated entity consisting of Advanced Engineered Materials Limited and the entities it controlled at the end of, or during, the half-year. The interim financial statements are presented in Australian dollars, which is Advanced Engineered Materials Limited's functional and presentation currency. Advanced Engineered Materials Limited is a listed public company on the Australian Securities Exchange (ASX) limited by shares, incorporated and domiciled in Australia. Its registered office and principal place of business are: Registered Office Principal Place of Business 3 Amy Close 7220 Rue Fredrick-Banting Wyong NSW 2259 Saint-Laurent, QC H4S 2A1 Australia A description of the nature of the consolidated entity's operations and its principal activities are included in the directors' report, which is not part of the interim financial statements. The interim financial statements were authorised for issue, in accordance with a resolution of directors, on 31 August 2026.
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Advanced Engineered Materials Limited Interim Report for the Half Year 2026 | Consolidated Financial Statements 12 Consolidated Statement of Profit or Loss and Other Comprehensive Income For the half-year ended 30 June 2026 The above statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying note s Consolidated 6 months to 6 months to Note 30 June 2026 30 June 2025 Revenue 3 459,518 248,486 Other income 4 260,662 156,945 720,180 405,431 Expenses Raw materials and consumables used (633,920) (316,136) Employment expenses (7,266,235) (6,078,050) Share Base Payments Expense 6 (1,492,704) – Depreciation and amortisation (1,504,350) (634,756) Patent maintenance (69,110) (63,920) Production expenses 5 (1,576,764) (1,234,911) Professional & Consulting Expenses 5 (1,719,633) (1,467,568) Corporate & Administration Expenses 5 (1,533,491) (733,629) Net finance income/(cost) 5 655,613 (501,804) Total expenses (15,140,594) (11,030,774) Loss before Tax (14,420,414) (10,625,343) Income tax benefit 7 999,563 1,514,291 Net Loss for the Period (13,420,851) (9,111,052) Other Comprehensive (Loss)/Profit Items that may be subsequently reclassified to profit or loss: Exchange difference on translation of foreign operations (1,316,888) 11,430 Total Comprehensive Loss for the Period (14,737,739) (9,099,622) Earnings per share: Basic and Diluted loss per share (cents per share) (2.28) (2.99)
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Advanced Engineered Materials Limited Interim Report for the Half Year 2026 | Consolidated Financial Statements 13 Consolidated Statement of Financial Position As at 30 June 2026 The above statement of financial position should be read in conjunction with the accompanying notes Consolidated Note 30 June 2026 31 December 2025 Current Assets Cash and cash equivalents 8 23,667,483 39,823,506 Trade and other receivables 9 543,280 1,889,981 Inventories 10 908,165 712,387 Other assets 11 1,284,110 704,406 Total Current Assets 26,403,038 43,130,280 Non-Current Assets Property, plant, and equipment 12 120,481,416 121,099,058 Intangibles 13 597,600 677,813 Goodwill 14 52,197,712 52,197,712 Other Receivables 15 1,479,066 – Total Non-Current Assets 174,755,794 173,974,583 Total Assets 201,158,832 217,104,863 Current Liabilities Trade and other payables 16 1,835,953 3,070,041 Borrowings 17 1,738,451 1,673,864 Employee benefits 18 488,041 400,222 Total Current Liabilities 4,062,445 5,144,127 Non-Current Liabilities Borrowings 19 10,564,926 11,184,676 Deferred tax liability 20 10,861,143 11,860,707 Total Non-Current Liabilities 21,426,069 23,045,383 Total Liabilities 25,488,514 28,189,510 Net Assets 175,670,318 188,915,353 Equity Issued capital 21 186,422,293 186,422,293 Reserves 22 5,915,239 5,739,423 Accumulated losses 23 (16,667,214) (3,246,363) Total Equity 175,670,318 188,915,353
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Advanced Engineered Materials Limited Interim Report for the Half Year 2026 | Consolidated Financial Statements 14 Consolidated Statement of Changes in Equity For the half-year ended 30 June 2026 The above statement of changes in equity should be read in conjunction with the accompanying notes Consolidated Issued Capital Retained Earnings/ (Accumulated Losses) Share Based Payment Reserve Foreign Exchange Translation Reserve Total $ $ $ $ $ Balance at 1 January 2025 76,064,244 25,416,357 934,895 1,168,135 103,583,631 Loss for the period – (9,111,052) – – (9,111,052) Other comprehensive income for the period – – – 11,430 11,430 Total comprehensive loss for the period – (9,111,052) – 11,430 (9,099,622) Shares issued during the year (net of costs) 3,288,779 – – – 3,288,779 Convertible Note Issued to Vivent – Conversion (3,288,779) – – – (3,288,779) Balance at 30 June 2025 76,064,244 16,305,305 934,895 1,179,565 94,484,009 Balance at 1 January 2026 186,422,293 (3,246,363) 3,889,704 1,849,719 188,915,353 Loss for the period – (13,420,851) – – (13,420,851) Other comprehensive loss for the period – – – (1,316,888) (1,316,888) Total comprehensive loss for the period – (13,420,851) – (1,316,888) (14,737,739) Shares Based Payments – – 1,492,704 – 1,492,704 Balance at 30 June 2026 186,422,293 (16,667,214) 5,382,408 532,831 175,670,318
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Advanced Engineered Materials Limited Interim Report for the Half Year 2026 | Consolidated Financial Statements 15 Consolidated Statement of Cash Flow For the half-year ended 30 June 2026 Consolidated 6 months to 30 June 2026 6 months to 30 June 2025 Note $ $ Cash flows from operating activities Cash flows used in operating activities: Loss from continuing operations (14,420,414) (10,625,343) Adjustments for: Depreciation 1,504,350 634,756 Non-cash net financial expenses 382,942 (1,176,741) Share Based Payments 1,492,704 – Sales taxes and other receivables (132,366) 524,452 Inventory (195,779) (78,377) Prepaid expenses and others (579,705) (2,625,731) Accounts payable and accrued liabilities (1,321,912) (223,074) Net cash (used in) operating activities (13,270,180) (13,570,058) Cash flows from financing activities Proceeds from C3I Tax Credit – 1,662,940 Proceeds from long-term debt – 3,911,926 Repayment of long-term debt – 2,706 Proceeds from the Issue of Debentures – 15,255,923 Net cash from financing activities – 20,833,495 Additions to Long Lead Items – 7,471,070 Additions to property, plant and equipment (2,898,554) (12,909,518) Additions to intangible assets 12,711 41,484 Net cash (used in) investing activities (2,885,843) (5,396,964) Net (decrease)/increase in cash (16,156,023) 1,866,473 Cash, beginning of period 8 39,823,506 2,927,098 Cash, end of period 23,667,483 4,793,571 The above statement of cash flows should be read in conjunction with the accompanying notes
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Advanced Engineered Materials Limited Interim Report for the Half Year 2026 16 Notes to the Consolidated Financial Statements For the half-year ended 30 June 2026 Note 1. Corporate Information and Material Accounting Policy Information Corporate Information Advanced Engineered Materials Limited. (the 'company' or 'parent entity') is a company listed on the Australian Securities Exchange (ASX) incorporated in New South Wales, Australia with its Registered office at 3 Amy Close, Wyong NSW 2259, Australia and Principal Place of Business at 7220 Rue Fredrick-Banting, Saint-Laurent, QC H4S 2A1 Canada. On the 4th June 2026 the company changed its name from Advanced Energy Minerals Limited to Advanced Engineered Materials Limited. Basis of Preparation These general purpose financial statements for the interim half-year reporting period ended 30 June 2026 have been prepared in accordance with Australian Accounting Standard AASB 134 'Interim Financial Reporting' and the Corporations Act 2001, as appropriate for for-profit oriented entities. Compliance with AASB 134 ensures compliance with International Financial Reporting Standard IAS 34 'Interim Financial Reporting'. These general purpose financial statements do not include all the notes of the type normally included in annual financial statements. Accordingly, these financial statements are to be read in conjunction with the annual report for the year ended 31 December 2025 and any public announcements made by the company during the interim reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001. The accounting policies adopted are consistent with those of the previous financial year and corresponding interim reporting period, unless otherwise stated. Going Concern For the half-year ended 30 June 2026, the consolidated entity's or (Group's) has incurred a net (loss) after tax of ($13,420,851) (2025: net (loss) after tax ($9,111,052)), a net cash outflow of $16,156,023 (2025: net cash inflow $1,866,473), was in a net asset position of $175,670,318 (Dec 2025: $188,915,353) and a cash and cash equivalents position of $23,667,483 (Dec 2025: $39,823,506) as at 30 June 2026. The financial statements have been prepared on a going concern basis, meaning on the basis that the Company will be able to realize its assets and discharge its liabilities in the normal course of operations. New or Amended Accounting Standards and Interpretations Adopted In the half-year ended 30 June 2026, the Directors have reviewed all of the new and revised Standards and Interpretations issued by the AASB that are relevant to the Company and effective for the current reporting period. The Directors have determined that there are no material impacts of the new and revised Standards and Interpretations on the group. Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted. Significant Accounting Judgements and Key Estimates The preparation of the half-year financial report requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expense. Actual results may differ from these estimates. In preparing this half-year financial report, the significant judgements made by management in applying the Group’s accounting policies and the key sources of estimation uncertainty were the same as those that applied to the financial report for the year ended 31 December 2025.
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Advanced Engineered Materials Limited Interim Report for the Half Year 2026 | Notes to the Consolidated Financial Statements 17 Note 2. Operating Segments Identification of Reportable Operating Segments The consolidated entity is organised into one operating segment based on the products and services provided, sale of High Purity Alumina. Note 3. Revenue Consolidated 6 months to 30-June 2026 6 months to 30-June 2025 $ $ Revenue Revenue - Sale of HPA Products, point in time 459,518 248,486 459,518 248,486 Note 4. Other Income Consolidated 6 months to 30-June 2026 6 months to 30-June 2025 $ $ Other income Grant income (1) 205,834 143,372 Other 54,828 13,573 260,662 156,945 1. Grant income relates to the receipt of a grant from Ngen and Employment training related grants from the Quebec Ministry of Employment. Note 5. Expenses Consolidated 6 months to 30-June 2026 6 months to 30-June 2025 $ $ Production expenses (1) 1,576,764 1,234,911 Net finance (income)/costs (2) (655,613) 501,804 Professional & Consulting fees (3) 1,719,633 1,467,568 Corporate & Administrative Expenses a) Audit fees 78,750 94,858 b) Other Corporate & Administrative Expenses (4) 1,454,741 638,771 Total Corporate & Administrative Expenses 1,533,491 733,629 1) The production expenses include repair and maintenance of the HPA production plant, energy, chemicals & waste, and transportation costs related to the cost of Plant management and inefficiency due to the low production volumes. 2) Finance Income includes interest on funds on deposit and costs include Interest on Convertible Debentures capitalised into the Debenture, Fair Value losses on the Embedded Derivative and other financing transaction costs. 3) Professional & Consulting fees include Accounting & Tax Consulting fees for Canadian subsidiaries, C3I and R&D Tax advice fees, Legal fees, Technical Engineering and IT consulting fees . 4) Other Corporate & Administrative Expenses include Directors’ fees, D&O Insurance, Travel, Rent, and General Administration costs.
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Advanced Engineered Materials Limited Interim Report for the Half Year 2026 | Notes to the Consolidated Financial Statements 18 Note 6. Share Based Payments Expense 1. Retention rights, 2024 and 2025 Rights issued to AEM Ltd employees which vest on different terms to employees of AEM Ltd, these have been independently valued by Barrington Pty Ltd and expensed over the vesting period. 2. Loyalty Rights issued to AEM Ltd employees which vest to AEM Ltd employees have been valued as per Black Scholes model and expensed over the vesting period. 3. Deferred Share Units issued to Directors of AEM Ltd have been valued at $0.53 per share. These vest on issue and have been expensed upfront. Further details on the various Rights are provided below: The vesting of Performance Rights is based on the following performance conditions: Note 7. Income Tax Consolidated 6 months to 30-June 2026 6 months to 30-June 2025 Number $ $ Retention Performance Rights (1) 6,950,000 485,510 – 2024 Performance Rights (1) 4,270,715 298,342 – 2025 Performance Rights (1) 3,221,319 134,026 – Loyalty Rights (2) 3,050,000 574,826 – Deferred Share Units (3) 2,272,175 – – Total 1,492,704 – Right Number Valuation Issue Date Vesting Date Basis Vesting Vesting Days Retention Performance Rights 6,950,000 1,445,801 07-Nov-25 31-Mar-27 Performance Based TSR vest after 30 April 2027 539 2024 Performance Rights 4,270,715 888,432 07-Nov-25 30-Apr-27 Performance Based TSR vest after 30 April 2027 539 2025 Performance Rights 3,221,319 670,128 07-Nov-25 30-Apr-28 Performance Based TSR vest after 30 April 2028 905 Loyalty Rights 3,050,000 1,616,500 07-Nov-25 31-Mar-27 Service Based 31-Mar-27 509 Relative TSR Over the Vesting and Measurement Period Proportion of Performance Rights Vested Below the 50th percentile 0% At the 50th percentile 50% Between the 50th and 75th percentile Between 50% and 100% calculated on a pro rata linear basis At and above the 75th percentile 100% Consolidated 6 months to 30-June 2026 6 months to 30-June 2025 $ $ Numerical reconciliation of income tax expense and tax at the statutory rate Loss before income tax expense (14,420,414) (9,099,622) Tax at the statutory tax rate of 30% 4,326,124 2,729,887 Deferred tax asset not brought to account (4,326,124) (2,729,887) Tax Benefit from Prior Year 999,563 1,514,291 Income tax benefit 999,563 1,514,291
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Advanced Engineered Materials Limited Interim Report for the Half Year 2026 | Notes to the Consolidated Financial Statements 19 Note 8. Current Assets — Cash and Cash Equivalents Consolidated 30 June, 2026 31 December, 2025 $ $ Cash at bank and in hand 23,667,483 39,823,506 23,667,483 39,823,506 Note 9. Trade and Other Receivables Consolidated 30 June, 2026 31 December, 2025 Current $ $ Trade Debtors 123,805 196,671 GST/Sales Tax Receivable 419,475 256,234 CYK Loan Receivable – 1,437,076 543,280 1,889,981 Note 10. Inventories Consolidated 30 June, 2026 31 December, 2025 At Cost $ $ Finished products 233,206 300,475 Intermediate product 494,899 273,632 Raw materials 180,060 138,280 908,165 712,387 Note 11. Current Assets — Other Consolidated 30 June, 2026 31 December, 2025 Current $ $ Prepaid Expenses (1) 1,284,110 536,975 Deposits – 167,431 1,284,110 704,406 1. Prepaid expenses consist of items purchased on long lead awaiting final installation and commissioning in relation to the capital works programme/plant upgrade at the Capchat plant in Quebec, Canada.
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Advanced Engineered Materials Limited Interim Report for the Half Year 2026 | Notes to the Consolidated Financial Statements 20 Note 12. Non-Current Assets — Property, Plant and Equipment Consolidated 30 June, 2026 31 December, 2025 $ $ Land and buildings 8,272,492 7,556,796 Less: accumulated depreciation (1,047,679) (729,047) 7,224,813 6,827,749 Assets under construction, at cost 4,123,398 2,965,811 Less: accumulated depreciation (4,750) – 4,118,648 2,965,811 Furnitures and IT – at cost 504,210 147,301 Less: accumulated depreciation (189,283) (146,374) 314,927 927 Plant and equipment – at cost 114,206,999 117,650,113 Less: accumulated depreciation (5,418,630) (4,774,166) C3I Tax Credit Offset – (1,622,854) 108,788,369 111,253,092 Vehicles – at cost 137,208 90,763 Less: accumulated depreciation (102,549) (39,285) 34,659 51,478 120,481,416 121,099,058 Note 13. Intangibles Note 14. Goodwill Consolidated 30 June, 2026 31 December, 2025 $ $ Opening Balance 52,197,712 52,197,712 Closing Balance - Goodwill on Acquisition 52,197,712 52,197,712 Consolidated 30 June, 2026 31 December, 2025 Intangibles assets $ $ Trade Name, Domain Name & Trademarks 61,613 65,712 Patents, at cost 957,737 1,021,461 Less: accumulated amortisation (421,750) (409,360) 597,600 677,813
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Advanced Engineered Materials Limited Interim Report for the Half Year 2026 | Notes to the Consolidated Financial Statements 21 Note 15. Other Receivables Consolidated 30 June, 2026 31 December, 2025 Current $ $ CYK Loan Receivable (1) 1,479,066 – 1,479,066 – 1. The loan note receivable from Cape York Kaolin (CYK) Limited is convertible into shares in CYK on the earlier of the listing of CYK on the ASX or the 5th November 2028. Based on this the loan has been moved from a current asset to non -current asset as the loan is expected to be repaid beyond a 12mth period. Note 16. Trade and Other Payables Consolidated 30 June, 2026 31 December, 2025 Current $ $ Trade Payables and accruals 1,835,953 3,070,041 1,835,953 3,070,041 Note 17. Other Current Liabilities — Borrowings Consolidated 30 June, 2026 31 December, 2025 Current $ $ Other Loans (a) 57,131 26,832 3CI Loan (b) 1,392,305 1,409,389 Lease Liability - Right of Use Asset - Current Portion (c) 289,015 237,643 1,738,451 1,673,864 a) Other Loans -this represents the Short Term portion of the Ford Loan. b) 3CI Loan- In December 2025, AEM Canada Group Inc., a subsidiary, secured loans amounting to CAD $1,250,000 for working capital and general corporate purposes. The loans were repaid in July 2026. c) Lease Liability re Right of Use Asset — relates to the current portion of the Rental Lease agreement with Montreal Head Office. Note 18. Employee Benefits Consolidated 30 June, 2026 31 December, 2025 $ $ Employee Entitlements 436,915 378,156 Superannuation/Pension Payable 51,126 22,066 488,041 400,222
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Advanced Engineered Materials Limited Interim Report for the Half Year 2026 | Notes to the Consolidated Financial Statements 22 Note 19. Non-Current Liabilities — Borrowings Consolidated 30 June, 2026 31 December, 2025 $ $ IQ & DEC Loan 9,998,090 10,404,982 Lease Liability 531,907 728,463 Ford Loan 34,929 51,231 10,564,926 11,184,676 Assets pledged as security The IQ and DEC loans are secured by first mortgages over the Canadian subsidiaries land, buildings and equipment. Note 20. Deferred Tax Consolidated 30 June, 2026 31 December, 2025 Potential deferred tax asset comprises temporary differences attributable to: $ $ Unused tax losses for which no deferred tax asset has been recognized 21,176,196 19,761,756 Provisions & Other Items 191,595 191,595 Unused tax credits for which no deferred tax asset has been recognized 1,098,742 1,098,742 22,466,533 21,052,093 Potential tax benefit not recognised at 30% (2025: 30%) (Australian Federal Tax Rate) 6,739,960 6,315,628 The benefit of theses tax losses will only be realised if the Group derives further assessable income of a nature an amount. Consolidated 30 June, 2026 31 December, 2025 Net Deferred tax liabilities Recognised $ $ Unused tax losses for which a deferred tax asset has been recognized (prior years) (48,251,026) (35,892,315) Unused tax losses for which a deferred tax asset has been recognized (Current Period) (7,872,833) (16,459,605) Fair Value Property Plant & Equipment 97,109,305 97,109,305 40,985,446 44,757,385 Deferred tax liabilities at 26.5% (Canadian Federal and Provincial Tax Rate) 10,861,143 11,860,707
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Advanced Engineered Materials Limited Interim Report for the Half Year 2026 | Notes to the Consolidated Financial Statements 23 Note 21. Equity — Issued Capital Consolidated 2026 2025 2026 2025 Shares Shares $ $ Ordinary shares - fully paid 589,503,245 589,503,245 186,422,293 186,422,293 Note 22. Reserves Consolidated 30 June, 2026 31 December, 2025 Reserves $ $ Foreign currency translation reserve 532,831 1,849,719 Share based payment reserve 5,382,408 3,889,704 5,915,239 5,739,423 Note 23. Retained Earnings / (Accumulated Losses) Consolidated 30 June, 2026 31 December, 2025 $ $ Retained earnings/(Accumulated losses) at the beginning of the period (3,246,363) 25,416,357 (Losses) for the period (13,420,851) (28,662,719) (Accumulated losses) at the end of the period (16,667,214) (3,246,363) Note 24. Fair Value Measurement The Companies assets and liabilities are not measured at fair value as the carrying amount is a reasonable approximation of fair value. Note 25. Contingent Liabilities and Commitments The consolidated entity had no contingent liabilities or commitments as at 30 June 2026 and 31 December 2025. The consolidated entity had capital commitments for property, plant and equipment related to the plant upgrade in Canada of $3.7m CAD of commitments as at 30 June 2026 and nil at 31 December 2025. Note 26. Related Party Payments Payments were made to an entity AG Avocats Conseil Inc totalling $141,236 CAD for legal services provided in relation to the Convertible debentures conversion and 3CI loan. AG Avocats Conseil Inc is a related party to Mr Anthony Giammaria a Director of the company. These transactions are all conducted on an arm’s length basis for rendering of professional services.
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Advanced Engineered Materials Limited Interim Report for the Half Year 2026 | Notes to the Consolidated Financial Statements 24 Note 27. Events After the Reporting Period The following matters or circumstances have 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 financial years. 3CI Loan On 16th July 2026 AEM received a 3CI tax credit from Revenue Quebec for $1,389,314 CAD and has repaid the outstanding loan of $1,378,739 CAD in relation to this credit on 31 July 2026. Change of Company name Following approval by shareholders at the 2026 Annual General Meeting and subsequent approval by the Australian Securities and Investments Commission, the Company changed its name to Advanced Engineered Materials Limited. The change of name was announced to the market on 13 July 2026. The Company’s ASX code remains unchanged (AEM). Cooperation agreement – Zürcher Frères SA On 15 July 2026 the Company announced a cooperation agreement with Zürcher Frères SA (ZFS) of Switzerland, under which the Company will be the exclusive supplier of nano-particle HPA for ZFS’s zirconia-alumina ceramics. Other than the above, there are currently no matters or circumstances that have arisen since the end of the financial period that have significantly affected or may significantly affect the operations of the consolidated entity, the results of those operations, or the state of affairs of the consolidated entity in future financial years.
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Advanced Engineered Materials Limited Interim Report for the Half Year 2026 25 Directors' Declaration In the directors' opinion: • the attached financial statements and notes comply with the Corporations Act 2001, Australian Accounting Standard AASB 134 'Interim Financial Reporting', the Corporations Regulations 2001 and other mandatory professional reporting requirements; • the attached financial statements and notes give a true and fair view of the consolidated entity's financial position as at 30 June 2026 and of its performance for the financial half- year ended on that date; and • there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable. Signed in accordance with a resolution of directors made pursuant to section 303(5)(a) of the Corporations Act 2001. On behalf of the directors ___________________________ Richard Seville Director 31 August 2026 Sydney
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26 INDEPENDENT AUDITOR’S REVIEW REPORT To the Members of Advanced Engineered Materials Limited Report on the Interim Financial Report Conclusion We have reviewed the interim financial report of Advanced Engineered Materials Limited (the “Company”) and its controlled entities (the “consolidated entity”), which comprises the statement of financial position as at 30 June 2026, the statement of profit or loss and other comprehensive income, the statement of changes in equity and the statement of cash flows for the half -year ended on that date, selected explanatory notes , and the directors’ declaration, for the consolidated entity comprising the Company and the entities it controlled at the half-year end or from time to time during the half-year. Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the accompanying interim financial report of Advanced Engineered Materials Limited does not comply with the Corporations Act 2001 including: (a) giving a true and fair view of the consolidated entity’s financial position as at 30 June 2026 and of its performance for the half-year ended on that date; and (b) complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001. Basis for Conclusion We conducted our review in accordance with ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity . Our responsibilit y is further described in the Auditor’s Responsibility for the Review of the Financial Report section of our report. We are independent of the company 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 Ac countants (including Independence Standards) (the “Code”) that are relevant to audits of the financial report of public interest entities in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. Responsibility of the Directors for the Financial Report The directors of the Company are responsible for the preparation of the interim financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the interim financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error. Auditor’s Responsibility for the Review of the Financial Report Our responsibility is to express a conclusion on the interim financial report based on our review. ASRE 2410 requires us to conclude whether we have become aware of any matter that makes us believe that the interim financial report is not in accordance with the Corporations Act 2001 including giving a true and fair view of the consolidated entity’s financial position as at 30 June 2026 and its performance for the half -year ended on that date, and complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001.
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27 A review of an interim financial report consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. Independence In conducting our review, we have complied with the independence requirements of the Corporations Act 2001. HLB Mann Judd D I Buckley Chartered Accountants Partner Perth, Western Australia 31 August 2026
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28 aemhpa.com info@aemhpa.com Investor and Media Enquiries Emmanuel Duvnjak +61 412 734 200 eduvnjak@aemhpa.com OFFICES AEM Technologies Inc. 200-7220 Frédérick-Banting St., Saint-Laurent, Québec, H4S 2A1, Canada +1 877-359-1893 Advanced Engineered Materials Ltd. 3 Amy Close, Wyong NSW 2259, Australia Advanced Energy Minerals Japan GK Level 32, Shinjuku Nomura Building 1-26-2 Nishi-Shinjuku, Shinjuku-ku, Tokyo 163-0532 Japan +81 03-5322-1310 PLANT AEM Canada Group Inc. 80, Louis-Landry St., Cap-Chat, Quebec G0J 1E0 +1 418-786-5492