Announcement PDF ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2025 ADALTA LTD ABN 92 120 332 925 AdAlta Limited Contents 30 June 2025 Corporate directory Chair and Managing Director's Letter Directors' report Auditor's independence declaration Statement of profit or loss and other comprehensive income Statement of financial position Statement of changes in equity Statement of cash flows Notes to the financial statements Consolidated entity disclosure statement Directors' declaration Independent auditor's report to the members of AdAlta Limited Shareholder information 1 2 3 4 26 27 28 29 30 31 46 47 48  AdAlta Limited Corporate directory 30 June 2025 Directors Dr Paul MacLeman Dr Timothy Oldham Dr David Fuller Ms Michelle Burke (Appointed 20 November 2024) Dr Robert Peach (Resigned 20 November 2024) Mr Iain Ross (Appointed 20 November 2024 and Resigned 30 June 2025) Company secretary Mr Cameron Jones Registered office Suite 201, 697 Burke Road Camberwell VIC 3124 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 1ADO Website www.adalta.com.au 2 AdAlta Limited Chair and Managing Director's Letter 30 June 2025 AdAlta is well into a transformation journey to create a regional leader in cellular immunotherapies at the forefront of two seismic shifts in our industry: the rise of China as an innovation powerhouse and new technologies to modify a patient’s own immune cells to find and fight solid cancers. Dear fellow shareholder, AdAlta is well into a transformation journey. In the first half of 2024, AdAlta completed its second Phase 1 clinical trial for AD-214 and launched our “East to West” cellular immunotherapy strategy. We stand poised to capitalise on the work done during the financial year ended 30 June 2025 (FY25) to give effect to this transformation. In early 2025 we fully committed to the “East to West” strategy to drive growth in clinical stage assets, while recognising that there remains significant value to be unlocked by monetising our existing assets including AD-214. Our “East to West” cellular immunotherapy strategy is supported by two key macro-drivers: the rise of China as a global powerhouse of biopharmaceutical innovation (but with real barriers to exporting that innovation that we can solve) and the growing evidence that T cell therapies can deliver transformational therapeutic outcomes impossible with other therapeutic modalities (and where applying this technology to solid cancers is the next frontier). We are now finalising exclusive negotiations to license two highly differentiated CAR-T cell therapies, developed in China for solid cancers, following successful technical due diligence and planning in the final quarter of FY25. The merits of sourcing assets from China continued to be validated both by the increasing volume of licensing transactions across our industry involving Chinese assets, and by positive investor feedback about our business model. We have multiple ongoing and highly productive discussions with potential investors that we anticipate will enable us to secure the capital to support licensing our first CAR-T asset in the very near future. Of our existing assets, we are particularly focused on AD-214 and WD-34. AD-214 offers a whole new approach to treating degenerative and fatal fibrotic diseases such as idiopathic pulmonary fibrosis. Eli Lilly in-licensed a Phase 1 antibody product candidate (the same stage of development as AD0214) in January 2025 for US$99 million up front and US$687 million in contingent milestones plus royalties, confirming the value of new assets in this field. We continue to advance partnering discussions in respect of this asset. WD-34 is, we believe, the world’s first antibody-like molecule conferring pan-species inhibition of malaria parasite invasion, offering the potential for a new, single dose prophylactic treatment for travelers, deployed personnel and children and pregnant women in endemic malarial areas. We are exploring ways to out-license this pre-clinical stage candidate for further development. We are excited by, and committed to, the potential for near term transactions to transform our business and unlock value for shareholders. The financing environment for biotechnology does remain challenging due to global financial market volatility and partnering discussions for our existing assets are progressing more slowly than we had hoped, and so we have implemented significant and appropriate cost reduction measures, including the cessation of our internal discovery R&D and resulting reduction in the size of our organization. The Board and CEO have suspended fees and salary pending completion of these transactions and while we review other strategic options for the business. On behalf of the entire AdAlta Board, we would like to acknowledge and thank our former staff for their commitment and contribution to our business. We also want to take this opportunity to thank our loyal and patient shareholders for their support, including through supporting our fully subscribed Renounceable Rights Issue in the last quarter of FY25. We are on the cusp of an opportunity to create a regional leader in cellular immunotherapies at the forefront of two seismic shifts in our industry. Paul MacLeman Tim Oldham Non-executive Chair CEO and Managing Director 3 AdAlta Limited Directors' report 30 June 2025 The Directors of AdAlta Limited (“AdAlta” or “the Group”) submit herewith the Annual Report of the Group for the financial year ended 30 June 2025. 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 Chairman, joined the board 16 April 2015. Paul has over 25 years experience across all MBA, BVSc, Grad Dip Tech, phases of the life sciences sector. With a career-spanning veterinary practice, Grad Cert Eng, FAICD, MATT pharmaceutical development and manufacturing, biotechnology, diagnostics and finance, Paul has expertise in capital management, business development, technology commercialisation and sales & marketing globally. Paul has launched products using both inhouse and outsourced sales staff in Australia and the US. He has founded life sciences startups in the biologics area and worked in investment banking focusing on the analysis and financing of technology companies. Paul has previously served as Chairman, Director or Managing Director/CEO of several VC funded, ASX, NASDAQ, CSE and TSX listed companies and has driven a number of IPOs. Paul Chaired the Industry Review Committee for the Pharmaceutical Manufacturing National Training Package for the AISC for approximately 10 years prior to the establishment of the new Jobs and Skills Councils and advises the new formed Manufacturing Industry Skills Alliance. He is also an expert advisor to PharmaVentures plc. (Oxford, UK) and serves on a number of other NFP and government advisory groups. He currently Chairs or is a Non-Executive Director of a number of ASX listed, public unlisted and private companies. Paul resigned as the Executive Chairman of Island Pharmaceuticals Limited (ASX:ILA) on 19 November 2024. Dr Timothy Oldham Managing Director and CEO, joined the Board on 8 October 2019. Tim has more than 20 BSc(Hons), LLB (Hons), PhD 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. Tim was appointed CEO and MD in October 2019. Immediately prior to this, he was Executive Leader of Tijan Ventures, an advisory business focused on growing life sciences companies through strategic advisory and interim CEO, executive and non-executive leadership services, with a particular focus on biologics, cell and gene therapies and immunotherapy. Previous roles include 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. Prior to this, Tim was an engagement manager with McKinsey & Company. He currently serves as a Non-executive Director at Acrux Ltd (ASX:ACR) and Non-executive Chair at Skin2Neuron Pty Ltd. Dr David Fuller MBBS, BPharm(Hons) Non-Executive Director, appointed 22 July 2020. David has over 30 years experience in preclinical, clinical development, medical and regulatory affairs with specialisations in early phase development and oncology. He has led five product approvals in the United States (US) and European Union (EU) for orphan and major market products, together with multiple Regulatory Agency (US/EU) interactions including Investigational New Drug (IND) applications. David has designed and executed multiple Phase I – III studies in US, EU and Asia across multiple therapeutic areas. David is currently Chief Medical Officer for Dimerix Ltd. Previously David was Chief Medical Officer for Aucentra Therapeutics, Chair of EpiAxis Therapeutics Pty Ltd, Chief Medical Officer at Race Oncology (ASX:RAC), Senior Vice President, Oncology, Syneos Health, a Non-Executive Director of Linear Clinical Research Ltd – a Perth based clinical trials facility – and a former Chair of Dimerix Ltd (ASX:DXB). David holds Bachelor of Medicine/Bachelor of Surgery and Bachelor of Pharmacy degrees from University of Sydney. 4 AdAlta Limited Directors' report 30 June 2025 Ms Michelle Burke (Appointed 20 November 2024) 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 her most recent 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, an incubator for early stage research commercialisation, and volunteers her expertise to other advisory boards. Mr Iain Ross (Appointed 20 November 2024 and Resigned 30 June 2025) Iain was appointed to the Board on 20 November 2024 and resigned on 30 June 2025. Dr Robert Peach (Resigned 20 November 2024) BSc, MSc, PhD Robert resigned as Non-Executive Director on 20 November 2024. 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 Dr Paul MacLeman Dr Timothy Oldham Dr David Fuller Ms Michelle Burke Fully paid ordinary shares (Number) Unlisted Options (Number) 544,042 13,368,416 491,560 - 5,855,000 12,486,255 2,950,000 - Listed Options (Number)1 Performance Rights (Number) 35,536 5,833,333 98,312 - 1,396,999 - 1Listed Options 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. 5 AdAlta Limited Directors' report 30 June 2025 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 3,450,342 1,478,718 6,655,000 350,000 1,400,000 50,000 11,025,000 662,500 757,195 226,951,398 $0.2479 $0.2482 $0.0845 $0.0757 $0.0397 $0.0200 $0.0200 $0.0200 $0.0183 $0.0100 26 November 2025 26 November 2025 29 November 2025 28 February 2026 27 February 2027 25 August 2027 22 November 2027 26 February 2028 20 November 2025 3 June 2028 Ordinary Ordinary Ordinary Ordinary Ordinary Ordinary Ordinary Ordinary Ordinary Ordinary The holders of these options do not have the right to participate in any share issue of the Group without first exercising the 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 Exercise price of option Expiry date of options 1,396,999 1,041,788 Ordinary Ordinary 0.0000 0.0000 4 December 2028 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 such 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 2025, and the number of meetings attended by each Director were: Remuneration and Nomination Committee1 Attended Held Full Board Attended Held Dr Timothy Oldham Dr Paul MacLeman Dr Robert Peach Dr David Fuller Ms Michelle Burke Mr Iain Ross 11 11 1 10 9 9 11 11 2 11 9 9 1 1 1 1 1 Audit and Risk Committee1 Attended Held 1 1 1 1 1 2 2 1 2 1 1 2 2 1 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. 6 AdAlta Limited Directors' report 30 June 2025 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. Operating and financial review 1. Summary of principal activities and purpose AdAlta Ltd (ASX:1AD) (AdAlta or the Company) is a clinical stage biotechnology company. The principal business is the discovery and 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. AdAlta creates value by in-licensing or acquiring clinical stage, highly differentiated T cell immunotherapies for solid cancers from the “East” (Asia) and advancing their development for global markets by establishing manufacturing facilities from which “Western” markets can be supplied and then conducting first clinical trials under “Western” regulatory oversight (typically USA FDA). This research and development is conducted in Australia. AdAlta’s management of these products makes them more valuable to larger biopharmaceutical companies by generating confirmatory clinical data in non-Asian patients, securing a scalable supply chain and eliminating transactional and technology transfer complexity. 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. The Company aims to convert this value to revenue by out-licensing its product candidates after Phase 1 clinical trials are complete to larger biopharmaceutical and biotechnology companies in return for upfront payments, further development and commercialisation milestone payments, royalties and in some cases equity in partner companies. In the case of its cell therapy programs, the revenue is shared with the Company’s in-licensing partners. The primary focus of the FY25 year was to secure a pipeline of highly differentiated T cell immunotherapies, transition the Company’s research and development focus away from i-body® discovery to support these new therapies, and to advance partnering opportunities for AD-214 and WD-34. 2. Key FY25 results Significantly advanced “East to West” cellular immunotherapy strategy: ● Secured exclusive access to three first in class, clinical stage, CAR-T cell therapy products from more than 10 assets reviewed under a rigorous product selection process ● Selected the two most differentiated products to advance to definitive agreements following due diligence and development planning, and commenced discussions to access additional platform technology and early stage assets with one of these ● Commenced discussions to select Australian clinical sites ● Expanded technical expertise with appointment of Kevin Lynch as Consultant Chief Medical Officer and engagement of a specialist cell and gene therapy regulatory and product development consultant i-body® enabled assets and R&D reset: ● Ceased i-body® discovery and closed in-house laboratories to focus resources on “East to West” cellular immunotherapy strategy ● Focussed on monetising i-body®-enabled assets AD-214 and WD-34 via partnering or sale Financing: ● Raised $2.2m million from second close of flexible institutional investment facilities from New Life Sciences Capital LLC (NLSC) and major shareholder the Meurs Group and a fully subscribed Entitlement Offer. ● Substantially reduced overhead and research operating costs as part of the transition from in-house i-body® discovery to in-licensed cellular immunotherapy development. 7 AdAlta Limited Directors' report 30 June 2025 3. Company strategy AdAlta is a clinical stage biotechnology business focused on the discovery and 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. 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. AdAltaaims 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 II 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 Cellular immunotherapies are a new class of highly innovative therapeutics that involve engineering a patient’s own immune cells in a laboratory to enable them to find and fight cancer and returning them to the patient. These highly specialised, precision medicine products are living drugs that offer potential cures for cancer in a single or limited number of doses. AdAlta’s ‘East to West’ cellular immunotherapy strategy seeks to bring the transformative outcomes that cellular immunotherapies have brought to blood cancers to patients with solid tumors which represent 90% of all cancers. This much larger solid cancer market was opened during 2024 with the US Food & Drug Administration (US FDA) approval of the first T cell immunotherapies for solid cancers. AdAlta aims to in-license clinical stage, highly differentiated T cell immunotherapies for solid cancers from the “East” (Asia) and provide a pathway for these groundbreaking products to access “Western” markets by establishing manufacturing and conducting first clinical trials under a USA FDA IND in Australia. AdAlta’s management of these products creates value for larger biopharmaceutical companies by “Westernising” and re-risking these innovative assets, generating confirmatory clinical data and eliminating transactional and execution complexity for Western partners. This value is shared with the Company’s in-licensing partners enabling them to realise higher value than they could achieve on their own. AdAlta acts as a force multiplier for Asian innovators. The business model is illustrated in Figure 1. This strategy leverages the rich innovation in Asia in biotechnology generally and cellular therapies in particular. A significant percentage of global cellular immunotherapy developers, as well as a majority of all cellular immunotherapy clinical trials are located in Asia. Making this innovation available to Western patients remains challenging: large biopharma companies resist the opportunity costs and complexity of transacting with Asia and want clinical data in more diverse populations, and many Asian companies lack the financial and operational skills to deliver this. AdAlta’s “East to West” strategy aims to provide a pathway across this gap, leveraging Australia's specific expertise in cell therapy manufacturing and clinical translation and utilising AdAlta’s clinical translation skills and a unique business model. The merits of sourcing assets and innovation from China continue to be externally validated. A report by Jefferies published in July 2025 stated that “China biotechs are reshaping the US biopharma landscape” and a Bloomberg report reported in the Australian Financial Review on 15 July 2025 described the leap in the quantity and quality of innovation in Chinese biotech as “tectonic”, citing cell therapies in particular, while noting that “Chinese biotechs with ambition to sell their drugs overseas must prove that the treatment benefits can be replicated in non-Chinese patients”. 8 AdAlta Limited Directors' report 30 June 2025 Figure 1: Valuation upside from becoming a force multiplier for Asian partners 3 3 On-licensing: Establish global manufacturing network and on-license to commercialisation partners. AdAlta and partner share increased value that partner could not achieve not achieve on on their their own own In-license market leading assets from Asia (“East”): Low acquisition cost. By financing to next inflection point AdAlta acquires a share of the asset at exit 1 2 Build valueBuild by transferring to “West” under AdAlta management: value by transferring to “West” under AdAlta management: Apply Western regulated obtain first obtain western regulated Apply Westernmanufacturing, regulated manufacturing, first western regulated clinical data in Australia create substantial inflection point for bigpoint pharma clinical data intoAustralia to create substantial inflection for big pharma Managed byManaged AdAlta; leveraged third party by AdAlta;with leveraged with investment third party investment Using a disciplined asset selection process, AdAlta is identifying highly differentiated T cell immunotherapies designed to overcome the challenges of accessing and treating solid cancers and with potential to be significantly better than current best in class treatments. The solid cancer market is larger and less competitive than the blood cancer market. The “East to West” strategy is highly scalable, with the deep opportunity pipeline available providing a runway for AdAlta to evolve into a powerhouse in cellular immunotherapy through replicating product licensing by becoming a force multiplier for Asian partners. Interest from international investors indicates that AdAlta can own and manage these assets while leveraging significant thirdparty capital to finance value creation. During the FY25 financial year, the AdAlta group signed three term sheets securing exclusive negotiation rights with two Chinese companies and one US company in respect of CAR-T cell therapy products developed in China for solid cancers. Following completion of due diligence and development planning, including successful on-site visits in China that reviewed clinical sites, manufacturing processes, raw materials and manufacturing sites, and an extensive investor engagement program AdAlta elected to prioritise the two most differentiated and highly engineered products for licensing. Extensions of time to negotiate definitive agreements have been secured and discussions in relation to the third asset have ceased. This progress demonstrates the rigor of AdAlta’s asset selection process. Definitive transaction documents are now in negotiation for both products, with finalisation of at least one, subject to financing, now targeted for the September quarter (previous forecasts were based on only one product progressing at this stage). The Company’s aspirational targets are to commence technology transfer of the first asset late in 2025 or early in 2026 and for one new asset to progress into clinical trials each year from calendar year 2026 onwards. The profile of the two prioritised products are summarised in Figure 2. Discussions in relation to the second asset have been expanded to include additional platform technologies and pipeline products. If definitive agreements are entered into on the terms currently proposed, AdAlta will most likely make upfront and milestone payments to partners of US$2.3-3.0 million, such payments to include supply of viral vectors and other raw materials and in some cases payment for further clinical studies in Asia. AdAlta will be responsible for completing technology transfer to a suitable contract manufacturing organisation, securing a US FDA IND approval and conducting a Phase 1 clinical trial, most likely in Australia, to prepare each asset for Phase 2 studies (which could support regulatory approval depending on the results and indication). AdAlta aims to receive between 45-60% of the economic proceeds of a licensing transaction at the end of any Phase 1 study and will also aim to have the option to progress development itself or in co-operation with its partners. Each term sheet may or may not result in a definitive license agreement and terms may vary materially as a result of due diligence findings. Full details about each asset, including licensing terms, will be communicated when definitive agreement