Announcement PDF Patrys Limited ABN 97 123 055 363 Annual Report - 30 June 2025 Patrys Limited Contents 30 June 2025 Corporate directory 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 Patrys Limited Shareholder information 1 2 3 18 19 20 21 22 23 44 45 46 50 Patrys Limited Corporate directory 30 June 2025 Directors Mr. Peter Christie (Chair) Dr. James Campbell (Non-Executive Director) Dr. Anton Uvarov (Non-Executive Director) Company secretary Mr Stefan Ross Registered office Suite 2, Level 11 385 Bourke Street Melbourne VIC 3000 Ph: +61 3 9670 3273 Principal place of business Suite 2, Level 11 385 Bourke Street Melbourne VIC 3000 Ph: +61 3 9670 3273 Share register Computershare Investor Services Pty Limited 452 Johnston Street Abbotsford VIC 3067 Phone: 1300 850 505 (within Australia) Phone: +61 3 9415 4000 (outside Australia) Auditor BDO Audit Pty Ltd Tower 4, Level 18, 727 Collins Street Melbourne VIC 3008 Australia Stock exchange listing Patrys Limited shares are listed on the Australian Securities Exchange (ASX code: PAB) Website www.patrys.com 2 Patrys Limited Directors' report 30 June 2025 The Directors present their report, together with the financial statements, on the consolidated entity (referred to hereafter as the 'Group') consisting of Patrys Limited (referred to hereafter as the 'Company' or 'parent entity') and the entities it controlled at the end of, or during, the year ended 30 June 2025. Directors The following persons were Directors of Patrys Limited during the whole of the financial year and up to the date of this report, unless otherwise stated: Mr. Peter Christie (Chair - appointed on 17 June 2025) Dr. James Campbell (Managing Director & CEO role made redundant, effective 1 July 2025, appointed as a Non-Executive Director on 1 July 2025) Dr. Anton Uvarov (Non-Executive Director - appointed on 17 June 2025) Dr. Charmaine Gittleson (Non-Executive Chair - resigned on 17 June 2025) Dr. Pamela M. Klein (Non-Executive Director - resigned on 17 June 2025) Mr. Michael Stork (Non-Executive Director and Deputy Chair - retired on 31 March 2025) Principal activities Patrys is using its proprietary deoxymab antibody technology platform to develop new therapies for the treatment of cancer and other diseases. Unlike most other antibodies, Patrys’ deoxymabs are able to cross the blood-brain barrier, enter cells and the cell nucleus, and stop or significantly slow the growth of tumours with impaired DNA damage repair systems. Recently Patrys has shown that, by way of their DNA-binding properties, deoxymabs are able to inhibit a process called NETosis that is implicated in a number of inflammatory and autoimmune diseases including vasculitis. Patrys has an exclusive, worldwide licence to the deoxymab technology for cancer applications from Yale University and is using this to develop and commercialise a portfolio of anti-cancer and diagnostic agents that include anti-DNA antibodies, antibody fragments, variants and conjugates. Patrys and Yale University also have filed intellectual property pertaining to the use of deoxymabs in a range of non-cancer indications, and Patrys holds the exclusive commercial rights for these opportunities. At the start of the financial year Patrys was focused on advancing its lead agent PAT-DX1 towards a first in human clinical study. In the last quarter of FY2024, a large-scale production run of PAT-DX1 was completed in preparation for the clinical trial. In October 2024 the Company announced that specification testing of the drug material from this production run met the pre-determined thresholds, however for some parameters it only met those thresholds by a narrow margin. As a consequence, there was a significant risk that the drug material would not continue to meet specification for the time required to initiate and conduct a phase-1 clinical trial. In view of this, the Board of Patrys decided it was not appropriate to continue with plans to initiate a clinical trial of PAT-DX1 using this material. Given the challenges Patrys had previously experienced with manufacturing PAT-DX1 over several production runs, Patrys’ Board made the decision to prioritise its future investment in development activities on progressing PAT-DX3. For several years and in parallel, Patrys has been advancing the development of PAT-DX3 as an additional deoxymab asset. PAT-DX3 has shown very similar biological activity to PAT-DX1 including the ability to target tumours throughout the body and to cross the blood-brain barrier. As a full-sized IgG antibody, PAT-DX3 can also be used as the basis for Antibody Drug Conjugates. Patrys has completed the early stages of development for PAT-DX3 including clone selection, generation of Master Cell Bank (MCB) and development of upstream and downstream processes and formulation. Following the decision to pivot to the development of PAT-DX3, Patrys worked with its research partners to evaluate and develop an R&D program to advance PAT-DX3 towards the clinic as a therapy for inflammatory diseases based on its ability to inhibit NETosis. At this stage it is believed that such a program may be feasible and that the associated clinical trials have the potential to require less drug material than for cancer indications due to the anticipated dosing regime and shorter time to achieve clinical endpoints. The Company has also initiated discussions with several third parties who are working on therapeutics based on the NETosis pathway. As well as working on a funded development plan for PAT-DX3, the Company continues active programs to seek a partner for PAT-DX1, and continues to evaluate other assets that may enhance the Company’s pipeline. Dividends There were no dividends paid, recommended or declared during the current or previous financial year. Review of operations The loss for the Group after providing for income tax amounted to $3,013,303 (30 June 2024: $3,539,150). 3 Patrys Limited Directors' report 30 June 2025 R&D progress Please refer the “Principal activities” section for the information and updates on R&D progress. Corporate developments In addition to exploring out-licensing opportunities of deoxymabs, the Company has been evaluating several additional assets that could diversify risk for shareholders. Several technologies and opportunities are currently being evaluated. However, as there is still a high degree of uncertainty regarding the outcome of this initiative, the Company will only be in a position to update shareholders of outcome of this process when it is further progressed. As part of ongoing cost rationalisation, the Company is reviewing its license obligations to, and agreements with, Yale University across the deoxymab technology platform with a view to rationalising ongoing licenses such that they better align with any potential future development programs being pursued. In June 2025 the Company undertook a restructure of its Board and management. Dr Gittleson (Non-Executive Chair) and Dr Klein (Non-Executive Director) stepped down from the Board on 17 June 2025, and were replaced by Mr Peter Christie (NonExecutive Chair) and Dr Anton Uvarov (Non-Executive Director). Dr Campbell accepted redundancy as CEO and Managing Director, and remains on the Board as a Non-Executive Director. During June 2025 Patrys announced the successful completion of a $308,362 capital raise by way of a placement of new shares and attaching options to sophisticated and professional investors. Funds raised will allow the Company to maintain its business development activities for the deoxymab program, providing financial leeway until the expected receipt of the Federal government’s R&D rebate in the second half of 2025. As a subsequent event, on 23 July 2025 the Company announced a fully underwritten non-renounceable Entitlement Offer to raise approximately $1.774 million. The funds raised will provide working capital to fund ongoing evaluation of the potential of advancing PAT-DX3 to the clinic as well as business development costs (including the evaluation of new opportunities) as well as general operating and compliance costs and working capital. Looking ahead Patrys’ operational efforts are threefold: ● Continue to build a robust package of non-clinical studies for deoxymabs, particularly in inflammation; ● Progress the ongoing partnering opportunities for both deoxymabs; ● Evaluate complementary assets that may enhance the Company’s pipeline. Statement of Financial Position At 30 June 2025, the Group held cash of $742,441 (30 June 2024: $2,240,661). Excluding prepaid expenses, the working capital position at 30 June 2025 was $561,514 (30 June 2024: $2,893,697). Operating results The loss for the Group after providing for income tax amounted to $3,013,303 (30 June 2024: $3,539,150). Total other income during the year was $828,540 (2024: $1,394,163). This includes R&D tax incentive income of $807,271 (2024: $1,285,038). Patrys’ strategy is to outsource product development expenses, including manufacturing, regulatory and clinical trial expenses, to specialist, best of breed partner organisations. As a consequence, Patrys has not incurred any major capital expenditure for the year and does not intend to incur substantial commitments for capital expenditure in the immediate future. Total consolidated operating expenses for the year were $3,841,843 (2024: $4,933,313). Operating expenses include research and development costs of $1,754,163 (2024: $3,071,793) which have been expensed in the year they were incurred. Level of R&D costs incurred in FY2025 is consistent with the pre-clinical and manufacturing works undertaken during the financial year. Administration and management costs contributed a further $1,783,930 (2024: $1,861,520) from continuing operations. 4 Patrys Limited Directors' report 30 June 2025 Risks and uncertainties Patrys is subject to risks that are specific to the Group and its business activities, as well as general risks. Following are the significant risks and uncertainties relevant for current reporting year. Future funding risks The Group had a cash and cash equivalents balance of $742,441, a receivable of $807,271 in relation to the R&D tax incentives and net assets of $732,874 at 30 June 2025. The Company may require substantial further financing to finance the continue research, development and commercialisation of its technology / products and its other longer-term objectives. Any additional equity financing will dilute shareholdings, and debt financing, if available, may involve restrictions on financing and operating activities. If the Company is unable to obtain additional financing as needed, it may be required to reduce the scope of its operations and scale back its research and development activities as the case may be. There is however no guarantee that the Company will be able to secure any additional funding or be able to secure funding on terms favourable to the Company. Patrys' ability to raise additional funds will be subject to, among other things, factors beyond the control of the Company and its Directors, including cyclical factors affecting the economy and share markets generally. If for any reason Patrys was unable to raise future funds, its ability to achieve its milestones or continue future development / commercialisation of its assets would be significantly affected. The Directors regularly review the spending pattern and ability to raise additional funding to ensure Patrys' ability to generate sufficient cash inflows to settle its creditors and other liabilities. In addition, Patrys is eligible for certain government grants and R&D tax incentive payments. Regulatory and licensing risks Changes in relevant taxation, interest rates, other legal, legislative and administrative regimes and Government policies in Australia and in other markets in which the businesses of the Company do and will operate, may have an adverse effect on the assets, operations and ultimately the financial performance of the Company and the market price of its Securities. The research, development, manufacture and sale of products based on Patrys' technology is subject to a number of regulations prescribed by government authorities in Australia and overseas. Generally, there is a high rate of failure for drug candidates proceeding through pre-clinical and clinical trials. Further, even if the Group views the results of a trial to be positive, the FDA or other regulatory authorities may disagree with the Group’s interpretation of the data. Thus, any product based on Patrys’ technology may be shown to be unsafe, non-efficacious, difficult or impossible to manufacture on a large scale, uneconomical to market, compete with superior products marketed by third parties, fail to secure meaningful reimbursement approval, or not be as attractive as alternative treatments. Patrys' monitors legislative and regulatory developments and engages proactively with key stakeholders to manage this risk. Innovating technological development Patrys' product range includes candidates that are in pre-clinical development and need to be further tested before they can progress to human clinical trials. Pre-clinical and clinical development of Patrys' product candidates could take several years to complete and might fail for a number of reasons including but not limited to lack of efficacy, failure to obtain regulatory approval, difficulty or failure to manufacture Patrys' products on a large scale, or toxicity. There is no guarantee that Patrys will be commercially successful. Dependence on service providers and third-party collaborators There is no guarantee that Patrys will be able to find suitable third-party providers and third-party collaborators including academic institutions to complete the development and commercialisation of its products. Patrys is therefore exposed to the risk that any of these parties can experience problems related to operations, financial strength or other issues, and collaborative agreements may be terminable by Patrys' partners. Non-performance, suspension or termination of relevant agreements could negatively impact the progress or success of Patrys’ product development efforts, financial condition and results of operations. Patrys monitors commercial developments and engages proactively with key stakeholders to manage this risk. 5 Patrys Limited Directors' report 30 June 2025 Reliance on key personnel Patrys' success depends to a significant extent upon its key management personnel, as well as other management and technical personnel including those employed on a contractual basis. The loss of the services of such personnel or the reduced ability to recruit additional personnel could have an adverse effect on the performance of Patrys. Patrys maintains a mixture of permanent staff and expert consultants to advance its programs and ensure access to multiple skill sets. Patrys, through the Remuneration and Nomination Committee reviews remunerations to human resources regularly. Inability to protect intellectual property Patrys' ability to leverage its innovation and expertise is dependent on its ability to protect its intellectual property including maintaining patent protection for its product candidates and their respective targets and any improvements to it. A failure or inability to protect Patrys' intellectual property rights could have an adverse impact on operating and financial performance. Patrys owns or has in-licensed issued and pending patent applications covering a range of antibodies, cell lines, molecular targets, potential drug candidates and platform technologies. The prospect of attaining patent protection for products such as those Patrys proposes to develop is highly uncertain and involves complex and continually evolving factual and legal questions. Patrys may incur significant costs in prosecuting or defending its intellectual property rights. Patrys proactively monitors applications and renewals of patents and licences; and requires relevant stakeholders to comply with the requirements set out in the confidentiality policy. IT system failure and cyber security risks Any information technology system is potentially vulnerable to interruption and/or damage from a number of sources, including but not limited to computer viruses, cyber security attacks and other security breaches, power, systems, internet and data network failures, and natural disasters. Patrys is committed to preventing and reducing cyber security risks through outsourcing the IT management to a reputable services provider. In addition, Patrys has an insurance policy covering IT and cyber security matters. Significant changes in the state of affairs On 31 March 2025 the Company announced the retirement of Mr. Michael Stork as a Non-Executive Director. On 10 June 2025, the Company announced the receipt of commitments for a capital raising of up to approximately $308,362 before costs, by way of a placement of new shares at an issue price of $0.01 per new share. On 10 June 2025, the Company announced the appointment of Dr Anton Uvarov as a non-executive director and Mr Peter Christie as Chair, effective from 17 June 2025. On the same day, Dr Charmaine Gittleson and Dr Pamela M Klein have resigned as directors of the Company. On 10 June 2025, the Company announced that the CEO and Managing Director, Dr James Campbell would accept redundancy as part of the rationalisation of the Company’s cost base, with effect on 1 July 2025, and transition to a nonexecutive director from 1 July 2025. There were no other significant changes in the state of affairs of the Group during the financial year. Matters subsequent to the end of the financial year As announced on 8 July 2025, 27,360,500 Options expired during the June 2025 quarter and on 1 July 2025, because the conditions have not been, or have become incapable of being, satisfied. On 23 July 2025, the Company announced a fully underwritten non-renounceable Entitlement Offer to raise approximately $1,774,357. On 27 August 2025 the Company advised that it has received applications under the Offer from eligible shareholders amounting to 423,479,439 Shares raising gross proceeds of $423,479. On 28 August 2025, the Company issued a total of 529,349,257 shares, being the 423,479,439 shares applied for and accepted by eligible shareholders under the Offer, plus 105,869,818 free attaching shares. On 4 September 2025, the Company issued a total of 1,688,597,451 fully paid ordinary shares comprising of 1,350,877,963 shortfall Shares and 337,719,488 shortfall free attaching Shares raising $1,350,878 from the Underwriter (and sub-underwriters). No other matter or circumstance has arisen since 30 June 2025 that has significantly affected, or may significantly affect the Group's operations, the results of those operations, or the Group's state of affairs in future financial years. 6 Patrys Limited Directors' report 30 June 2025 Likely developments and expected results of operations The Group will continue to pursue its objective of developing antibodies as therapies for a range of different cancers and inflammatory diseases. Patrys has a pipeline of antibodies for both internal development and as partnering opportunities. The Group’s focus for the coming period will be to build further value into the Deoxymab platform through pre-clinical activities, and the planned progression of the PAT-DX1 and DX3 asset towards the clinic. Environmental regulation The Group is not subject to any significant environmental regulation under Australian Commonwealth or State law. Information on Directors Name: Title: Experience and expertise: Peter Christie Non-Executive Chair (appointed on 17 June 2025) Mr. Peter Christie is a qualified accountant and tax agent with over 25 years of experience in public accounting. He has served on the boards of several public companies in the resource sector since 2006 and has developed extensive interests in hospitality and property development. Mr. Christie is the Director of Hawkins Christie Management Services, a firm based in Nedlands, Western Australia, providing accounting and management services. He is also the current President of the South Fremantle Football Club, a role he has held since 2018, following over a decade of service on the club's board. His leadership has been instrumental in the club's strategic growth and community engagement initiatives. Other current directorships: Former directorships (last 3 years): Special responsibilities: Interests in shares: Interests in options: Name: Title: Qualifications: Experience and expertise: Other current directorships: Former directorships (last 3 years): Special responsibilities: Interests in shares: Interests in options: In addition to his roles in the resource sector and community sports, Mr. Christie has experience in the medical industry, having previously served as Chairman of Safety Medical Products Limited. His diverse background in finance, corporate governance, and community leadership positions him as a valuable asset to the board. None. None. Chair of the Nomination and Remuneration Committee (effective 26 August 2025) Member of the Audit and Risk Committee (effective 26 August 2025) 31,250,000 fully paid ordinary shares None James Campbell Non-Executive Director (effective from 1 July 2025) formerly Managing Director and Chief Executive Officer, with that role being made redundant, effective 1 July 2025 Ph.D, MBA, GAICD Dr. Campbell has over 30 years of international biotechnology research, management and leadership experience and has been involved in the creation and/or transformation of multiple successful Australian and international biotechnology companies. Dr. Campbell was previously the CFO and COO of ChemGenex Pharmaceuticals Limited (ASX: CXS), where, as a member of the executive team he helped transform a researchbased company with a market capitalization of $10M to a company with completed clinical trials and regulatory dossiers submitted to the FDA and EMA. In 2011 ChemGenex was sold to Cephalon for $230M. Dr. Campbell was a foundation executive of Evolve Biosystems, and has assisted private biotechnology companies in Australia, New Zealand and the USA with successful capital raising and partnering negotiations. Dr Campbell chairs the board of AusBiotech Australia’s peak industry body for biotechnology. Non-Executive Chair of Prescient Therapeutics Limited (ASX: PTX) None. Member of the Nomination and Remuneration Committee (effective 26 August 2025) Member of the Audit and Risk Committee (effective 26 August 2025) 36,589,928 fully paid ordinary shares 23,389,950 unlisted options, exercisable at $0.059, expiring on 30 September 2025. 7 Patrys Limited Directors' report 30 June 2025 Name: Title: Experience and expertise: Other current directorships: Former directorships (last 3 years): Special responsibilities: Interests in shares: Interests in options: Name: Title: Qualifications: Experience and expertise: Other current directorships: Former directorships (last 3 years): Special responsibilities: Interests in shares: Interests in options: Name: Title: Experience and expertise: Other current directorships: Former directorships (last 3 years): Special responsibilities: Interests in shares: Interests in options: Dr. Anton Uvarov Non-Executive Director (appointed on 17 June 2025) Dr. Anton Uvarov brings extensive experience in the healthcare sector, with a particular focus on neuroscience. He began his career in biotechnology investment as an equities analyst at Citigroup and has since co-founded and served as a director of several ASXlisted companies, including clinical-stage ventures such as Dimerix (ASX:DXB) and Actinogen Medical (ASX:ACW). Dr. Uvarov is currently a Non-Executive Director of Neuroscientific Biopharmaceuticals (ASX:NSB), and previously served on the board of Imugene (ASX:IMU), a late-stage clinical oncology company. Dr Uvarov is also the Executive Director and co-founder of BlinkLab (ASX:BB1), a digital diagnostics company focused on autism. Non-Executive Director of Neuroscientific Biopharmaceuticals (ASX:NSB), Executive Director of BlinkLab Limited (ASX:BB1). None. Chair of the Audit and Risk Committee (effective 26 August 2025) Member of the Nomination and Remuneration Committee (effective 26 August 2025) 250,000,000 fully paid ordinary shares None Charmaine Gittleson (resigned on 17 June 2025) Non-Executive Chair MD, BSci, AICD Dr Gittleson was the former Chief Medical Officer of CSL Limited with more than 20 years of experience in pharmaceutical development in Australia and the USA. Dr Gittleson’s expertise spans many aspects of the pharmaceutical industry, from drug development and clinical research through to strategic planning and executive management. Dr Gittleson has been involved in drug development programs across a wide range of different therapeutic areas, and has successfully worked with regulators in key markets such as the US, EU, Asia Pacific, Japan and South America. Dr Gittleson is currently the Chair of Percheron Therapeutics Limited (ASX: PER) where she has been actively involved in strategy development, capital raising and Board renewal. Percheron Therapeutics (ASX:PER) None. Chair of Nomination and Remuneration Committee (ceased on 17 June 2025) Member of Audit and Risk Committee (ceased on 17 June 2025) Nil 2,000,000 unlisted options, exercisable at $0.045 (4.5 cents), expiring 14 November 2026 Dr. Pamela M. Klein (resigned on 17 June 2025) Non-Executive Director Dr. Klein has a proven track record as an executive over more than 20 years in the oncology and biopharmaceutical industry. She is currently on the Board of Directors for Argenx, a dual-listed (Euronext Brussels and NASDAQ), clinical-stage therapeutic antibody company developing novel drugs in severe autoimmune disease. She is also on the Board of Frontier Medicines; Shasqi and ONA Therapeutics She was previously on the Board of Directors of F-Star Therapeutics, Jiya Acquisition Corp, a special purpose acquisition company (SPAC) affiliated with Samsara BioCapital, Sardona and I-MAB. Dr. Klein is the Principal and Founder of PMK BioResearch, which offers strategic consulting in oncology drug development. Argenx (arGEN-X ADS (NASD)), Argenx (arGENX (EURONEXT), Frontier Medicines, ONA Therapeutics, Shasqi. F-star Therapeutics (NASDAQ: FSTX), I-MAB, Sardona, Jiya Acquisition Corp. Member of Nomination and Remuneration Committee (ceased on 17 June 2025) Member of Audit and Risk Committee (ceased on 17 June 2025) 250,000 fully paid ordinary shares. None. 8 Patrys Limited Directors' report 30 June 2025 Name: Title: Qualifications: Experience and expertise: Other current directorships: Former directorships (last 3 years): Special responsibilities: Interests in shares: Interests in options: Michael Stork (retired on 31 March 2025) Non-Executive Director and Deputy Chair BBA Mr. Stork was the Managing Director of Stork Holdings Ltd, an Investment Holding company active in the Canadian technology start-up sector. Mr. Stork was on the Board of Governors of the University of Waterloo. None. None. Member of Nomination and Remuneration Committee (ceased on 31 March 2025) Chair of Audit and Risk Committee (ceased on 31 March 2025) 98,773,814 fully paid ordinary shares (These shares are held by Stork Holdings Ltd. The director has the ability to influence the voting and disposal of the shares of this company). None. 'Other current directorships' quoted above are current directorships for listed entities only and excludes directorships of all other types of entities, unless otherwise stated. 'Former directorships (last 3 years)' quoted above are directorships held in the last 3 years for listed entities only and excludes directorships of all other types of entities, unless otherwise stated. Company Secretary Mr Stefan Ross BBus (Acc) Mr Ross has over 12 years of experience in accounting and secretarial services for ASX listed companies. His extensive experience includes ASX compliance, corporate governance control and implementation, statutory financial reporting, shareholder meeting requirements, capital raising management, and board and secretarial support. Mr Ross has a Bachelor of Business majoring in accounting. Meetings of Directors The number of meetings of the Company'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: Nomination and Remuneration Committee Attended Held Full Board Attended Held Charmaine Gittleson James Campbell Michael Stork Pamela Klein 10 11 4 11 11 11 5 11 1 1 1 1 Audit and Risk Committee Attended Held 2 1 2 2 2 2 Held: represents the number of meetings held during the time the Director held office or was a member of the relevant committee. Remuneration report (audited) The remuneration report details the key management personnel remuneration arrangements for the Group, in accordance with the requirements of the Corporations Act 2001 and its Regulations. Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Group, directly or indirectly, including all directors. The remuneration report is set out under the following main headings: ● Principles used to determine the nature and amount of remuneration ● Details of remuneration ● Service agreements ● Share-based compensation ● Additional information ● Additional disclosures relating to key management personnel 9 Patrys Limited Directors' report 30 June 2025 P