Anatara Lifesciences Limited
Annual Report 2024

Plain-text annual report

ABN 41 145 239 872 ANATARA LIFESCIENCES LTD Annual Report 2023 - 2024 Our Vision TO PROVIDE EVIDENCE-BASED HEALTH SOLUTIONS TO ADDRESS UNMET CLINICAL NEEDS. Anatara Lifesciences (ASX: ANR) specialises in creating evidence-based, innovative solutions to address unmet health needs, with a particular focus on conditions of and relating to the complex gastrointestinal tract. Our focus is on building a pipeline of health products through in-house development and partnerships for licensing. Our core commitment is to deliver tangible benefits to patients and create significant value for our shareholders. GET TO KNOW US 03 David Brookes Executive Chair John Michailidis Executive Director Chief Operator Officer Nicholas Haslam Non-Executive Director Simon Erskine Chief Development Director Michael West Chief Scientific Officer Stephen Denaro Company Secretary Get to know us Backed by a well credentialed board and management team, and world-leading scientific collaborators, Anatara is uniquely positioned to potentially fulfill significant unmet needs in gastrointestinal tract health and to identify other beneficial opportunities. Executive Chair’s Letter to Shareholders Thank you for your continued support and investment in Anatara Lifesciences. On behalf of the Board of Directors, I am pleased to present Anatara’s 2024 Annual Report, which is again dominated by the progress of the GaRP-IBS Phase II trial. The trial has advanced into Stage 2 following the encouraging Interim Analysis results from Stage 1 of the trial announced on the 28th of September 2023. The Phase II trial of GaRP for IBS (Irritable Bowel Syndrome) selects sufferers of this complex disorder in the moderate to moderately severe categories of the IBS subtypes D (Diarrhoeal predominate) and M (mixed pattern). We continue to provide regular updates on the progress of Stage 2 of the trial, with the expectation that the promising results from Stage 1 will be consolidated. Following on from the confidence generated by the Stage 1 results, shareholders strongly supported a 2:5 Rights issue in November 2023 to raise $1.055M. This was followed by a $1M placement only to existing shareholders on 29th April that included participation by directors requiring shareholder approval. A General Meeting was convened on 5th July 2024 to ratify the placement including the directors’ participation. The focus on assessing other opportunities and assets to broaden Anatara’s human health portfolio has continued. I look forward to updating shareholders on both the GaRP-IBS trial progress and these other opportunities at the AGM scheduled for the 14th of November 2024 in Adelaide. There will be the opportunity for shareholders and stakeholders to attend in person or virtually, consistent with previous years. Anatara’s small team are very dedicated to building the Company’s projects and shareholder value. I take this opportunity to thank the management team, our consultants and fellow Board members for their expertise, with every confidence that we have in place the skills and resources to create an exciting company.   On behalf of the Anatara Board and management team, our sincere thanks again to our shareholders for their suuport. The GaRP product with broad gastrointestinal health indications has confirmed promise and we remain inspired to commercialise evidence-based solutions for gastrointestinal health and look forward to updating you on our progress. Dr. David Brookes Executive Chair Yours sincerely 04 04 Content Review of the Anatara’s main activity in FY2024 06 Headline Data Overview – Stage 1 07 Trial Design – Stages 1 & 2 09 Secondary Endpoint Data – Stage 1 12 Large Unmet Need for an effective IBS Treatment 15 Consolidated Financial Statement 16 Corporate Directory 17 Directors’ report 18 Corporate Governance Statement 43 Auditor's Independence Declaration under Section 307C of the Corporations Act 2001 43 Consolidated Statement of Profit or Loss and Other Comprehensive Income 44 Consolidated Statement of Financial Position 45 Consolidated Statement of Changes in Equity 46 Consolidated Statement of Cash Flows 47 Notes to the Financial Statements 48 Consolidated Entity Disclosure Statement 68 Director’s Declaration 69 Independent Audit Report 70 Top Shareholders as of 9/25/2024 72 Range of Shareholdings 74 FOR THE YEAR ENDED 30 JUNE 2024 Consolidated Financial Statements 05 THE GARP – IRRITABLE BOWEL SYNDROME (IBS) PHASE II TRIAL 06 Review of the Anatara’s main activity in FY2024 Anatara’s GaRP (Gastrointestinal ReProgramming) product is a multi- component, coated complementary medicine designed to address underlying factors associated with chronic gastrointestinal conditions such as IBS and IBD. The product consists of GRAS (Generally Regarded As Safe) components and is designed to assist restoration and maintenance of the gastrointestinal tract (GIT) lining and the homeostasis of the microbiome. 7 Headline Data Overview – Stage 1 REPORTED TO ASX 28/09/2023 The interim futility statistical analysis of Stage 1 of the GaRP-IBS trial was reviewed by the DSMB (Data Safety Monitoring Board) on 27 September 2023 and concluded that Stage 1 had successfully met the study objectives of confirming safety and the optimum dose for the single dose expanded Stage 2 of the trial, with a preliminary indication of meaningful efficacy.  The data from 61 participants over 3 arms (placebo, low and high dose) strongly supported continuing the trial using the Low Dose. There were no concerning safety signals and the DSMB were satisfied that continuation of the current trial protocol was supported.  Anatara’s Executive Chair, Dr David Brookes commented at that time: “This is a very pleasing and not unexpected outcome from the Stage 1 interim analysis given the trial design. To confirm safety and the optimum dose with a meaningful indication of efficacy was the intention of Stage 1 of the trial.  The Company is buoyed by this milestone and looks forward to advancing the GaRP project. Encouragingly the reduction in symptoms using the IBS-SSS suggests a meaningful adjunctive treatment for those patients meeting the criteria for moderate IBS. More broadly our expectation is that this complementary medicine’s rejuvenating gastrointestinal tract (GIT) effects will provide relief for sufferers of non-specific GIT symptoms and be an adjunctive therapy in other medical indications, such as IBD (Inflammatory Bowel Disease). As previously highlighted, the trial was more challenging than anticipated and highlighted the difficulties that sufferers of IBS deal with from day to day. The Company has learnt from these tribulations and I feel is now well placed to efficiently conduct Stage 2. We are also looking forward to sharing the data and discussing the results with other corporates and already interested potential partners following the analysis of Stage 1 of the IBS trial.”  The below chart highlights that GaRP is having a clinically meaningful reduction in trial participants' IBS-SSS Scores. It is highly encouraging to see such a strong divergence between Placebo and the active Low and High Dose arms, as this provides solid evidence that the drug is having an effect (working) whereas placebo is not.As is the case with statistical analysis, increasing the population/ patients in the trial (as is proposed for Stage 2 of the study) is expected to provide statistically significant P values. The statistical analysis suggests that Stage 2 may require as few as a total of 50 participants on the optimum Low Dose of product versus the placebo group to achieve the desired primary endpoint of at least a 20%I mprovement (reduction) in IBS-SSS Scores, noting that this 20% reduction has been achieved in Stage 1. 8 Headline Data Overview – Stage 1 (continued) REPORTED TO ASX 28/09/2023 The below table details the median IBS-SSS Scores for Stage 1 and highlights the large positive change in patients’ IBS scores on the two drug arms (high and low dose). To achieve a 50%+ reduction in one’s IBS Score translates to a significant positive change in day-to-day life, a benefit that cannot be understated. An IBS-SSS score of 240 is toward the high end of moderate IBS whilst 140 is mild IBS. The IBS Symptom Severity Scale (IBS-SSS) is a global measure of IBS symptoms that aggregates patient ratings of different, well-defined domains of IBS into a single overall score. The measure is utilised in clinical trials to monitor the progress of the disease and treatment effect. A score below 75 is seen in healthy people or those in remission, whilst 75–175 indicates mild disease, 175–300 moderate disease and over 300 indicates severe disease. The Anatara GaRP-IBS trial recruits patients with scores in the 175-350 range. The Company notes the difficulties for patients on placebo in the trial for the full duration with patients suffering from difficult to manage symptoms tending to drop out. The dropping out of 3 placebo patients from week 6 to week 8 highlights this, whilst the low or high dose arm from week 6 to week 8 participation remained stable. This point is reinforced by the week 6 Placebo response showing a strong return to baseline, something that would be expected for placebo, giving the Company optimism that larger patient numbers in Stage 2 would be likely to show a placebo trend of returning to baseline in week 8 as it did for week 6. The Company was not surprised or concerned about the high placebo response as the medical literature shows that IBS clinical trials typically have a high placebo response on average of about 40%, very much in line with today’s results [1]. The outperformance of the low-dose over the high-dose enhances the potential clinical utility of GaRP in a commercial setting. In terms of safety and ultimate commercial attractiveness of the product, achieving the desired clinical utility with a lower dose is preferred for the following reasons: -        Lower dose means less drug which means less chance of safety concerns or unwanted side effects, -        Less drug needs to be manufactured per patient dose and this has obvious cost savings and improved margins, and -        Less chance of other drug to drug interactions. [1]https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6414074/ #:~:text=Estimates%20of%20the%20placebo%20response,approximately%2040%259%E2%80%9311. 9 Trial Design – Stages 1 & 2 Recruitment for Stage 1 was finalised in June 2023 with approximately 70 patients from the more than 2,700 applicants screened for enrolment. The GaRP-IBS trial is powered to deliver results that will validate and support efficacy claims. There were 61 Intent to Treat patients in the final Stage 1 interim analysis with some of the other participants not included after withdrawing/not complying following the randomisation stage. Stage 1 had three arms with a placebo compared to 2 doses of GaRP which were ascribed the terms “High Dose” and “Low Dose”. The “Low Dose” was the predicted dose from pre-clinical  studies and the “High Dose” was double this predicted dose referred to as “Low Dose”. Stage 1 was to determine safety and an efficacy signal with  a satisfactory outcome from those endpoints to then guide a recommendation of which of the “Low Dose” or “High Dose” was the optimum dose for Stage 2. Both these doses satisfied the statistical markers for continuation and the Company chose the “Low Dose” on basis of performance and commercial considerations. The trial enrols males and females 18-65 years of age with irritable bowel syndrome (IBS) from the subtypes of IBS-D (“Diarrhoea” predominant) and IBS-M (“Mixed” being a subtype that alternates between diarrhoea and constipation )  and with IBS-SSS scores in the range of 175-350. The dosing regime is twice daily for 8 weeks. The trial has been designed to return, if successful, a clinically meaningful and statistically significant result, with primary endpoints of a reduction in the IBS-SSS (Irritable Bowel Severity Scoring System) and safety. Secondary endpoints include quality of life, anxiety and depression and pain improvements 10 Trial Design – Stages 1 & 2 Participants will be randomised into one of two arms in the trial in a 1:1 ratio and receive either the optimum dose of the GaRP product selected from Stage 1 or placebo for 8 weeks plus 2-week follow-up. Stage 2 in the trial design is to confirm the highly encouraging and clinically meaningful interim results from Stage 1 of the GaRP-IBS clinical trial. The data from Stage 1 and the 60-100 Stage 2 patients in the randomised, placebo controlled, double blind trial will form the basis of the analysis. This will result in 100-140 patients in total. The trial is sufficiently powered to deliver statistically significant results versus placebo. The Company announced on 13th of June 2024 that there had been high levels of interest shown at all 5 sites situated in Melbourne, Sydney and Brisbane with a total of over 500 Expressions of Interest (EoI) to date.  Following the trial protocol screening processes, consistent with Stage 1 of the trial, enrolments have already begun with 13 participants currently randomised. This was in line with Company expectations following a slight administrative delay at some of the new trial sites.  The target participant number is 60-100 for Stage 2 of the Trial. GaRP-IBS Clinical Trial Design As a footnote , post- end FY2024 the Company announced  to the ASX on 30 August 2024 an update on the recruitment for the Stage 2 of Anatara’s pivotal GaRP-IBS (Irritable Bowel Syndrome) trial with more than 30 participants enrolled. The Company maintained regular updates on recruitment and overall trial progress. 11 Trial Design – Stages 1 & 2 (continued) Further encouraging data from the Interim Analysis of Stage 1 of its Gastrointestinal ReProgramming (GaRP) trial for IBS followed in relation to the secondary endpoints of quality of life and anxiety/depression scores in the 17th   October 2023 ASX announcement. Quality of Life and anxiety/depression are considerations often associated with the overall impact of IBS and to report positive data from these secondary endpoints reinforced the Company’s previously reported positive headline data from Stage 1, announced on 28th September 2023. Dr David Brookes commented at that time “This is further very encouraging data suggesting GaRP is a product with the potential to improve mood and quality of life for patients with gastrointestinal tract (GIT) disorders by influencing the complexities of the gut-brain axis through restoration and maintenance of the integrity of the GIT lining and assisting the homeostasis of the microbiome. While we anticipated that the quality-of-life scores would and should mirror the previously announced improvement in the primary endpoint of the IBS-SSS, the highly significant improvement in anxiety  scores on Low Dose is eye-catching while noting and cautioning the small numbers. The P value of <0.05 is very pleasing for the overall treatment analysis of improvement in HADS and the Stage 2 design of the trial is to confirm/establish statistically significant P values for primary and secondary endpoints through greater numbers. This analysis of these GaRP-IBS trial Stage 1 secondary endpoints furthers a belief that this complementary medicine’s rejuvenating gastrointestinal tract (GIT) effects will provide relief for sufferers of non-specific GIT symptoms and be an important adjunctive therapy in mainstream medical indications, such as IBS and IBD (Inflammatory Bowel Disease)”. Anatara announced supportive Positive Results from analysis of secondary endpoints from Stage 1 of the Irritable Bowel Syndrome (IBS) clinical trial on 17th October 2023 12 Secondary Endpoint Data – Stage 1 The HADS reduction was highly significant for the Low Dose cohort across anxiety and depression (P- value <0.001) versus placebo with a reduction of 6 points.  This result is also clinically meaningful. Hospital Anxiety and Depression Scale (HADS) is a 14-item self-reported measure that was specifically developed to assess anxiety and depression in people with medical illnesses. It has two subscales, which evaluate anxiety and depression. Scoring: (for Depression and anxiety): 0-7        = Normal 8-10      = Borderline abnormal (borderline case) 11-21    = Abnormal (case) The analysis of the secondary endpoints of the change from baseline in the Hospital Anxiety and Depression Score (HADS) and the change in the quality of life for irritable bowel syndrome sufferers (IBS QoL) showed marked improvement for patients on the Stage 1 Low Dose. Secondary Endpoint – Hospital Anxiety & Depression Score (HADS) Secondary Endpoint – Hospital Anxiety & Depression Score (HADS) *Statistical analysis of Mean scores accounted for missing data so that the non-missing value did not contribute to the mean difference change from baseline or the difference between means of treatment versus placebo. Statistical analysis conducted by an independent third party. 13 Secondary Endpoint Data – Stage 1 (Continued) Total Hospital Anxiety & Depression Score (HADS) BASELINE TO WEEK 10/11 Depression and Anxiety Scores Baseline to week 10/11 14 Secondary Endpoint Data – Stage 1 (Continued) Secondary Endpoint – IBS Quality of Life Score IBS QUALITY OF LIFE (IBS-QOL): *Statistical analysis of Mean scores accounted for missing data so that the non-missing value did not contribute to the mean difference change from baseline or the difference between means of treatment versus placebo. Statistical analysis conducted by an independent third party. The IBS-QoL is a 34-item questionnaire that assesses the degree to which IBS interfered with quality of life for a subject over the past 30 days. Each item is rated on a 1 to 5 Likert scale, with higher values indicating a lower quality of life. Scores are summed to comprise eight subscales including a total score with a range of 34 to 170. A decrease of 10 points or more is considered a clinically meaningful improvement. · The Secondary Endpoint data for the IBS QoL showed a strong trend of improvement between the Low Dose and Placebo group from Baseline to: o week 8/9 of 11.4 (p=0.10) o week 10/11 of 8.3 · The higher placebo score at week 10/11 can be partly explained by difficulties for patients on placebo remaining in the trial for the full duration.  Patients suffering from difficult to manage symptoms tend to drop out. The dropping out of 3 placebo patients from week 6 to week 8 highlights this, whilst the low or high dose arm from week 6 to week 8 participation remained stable. 15 Large Unmet Need for an effective IBS Treatment Depending on the diagnostic criteria employed, IBS affects around 11% of the population globally. Around 30% of people who experience the symptoms of IBS will consult physicians for their IBS symptoms. These people do not have significantly different abdominal symptoms to those who do not consult, but they do have greater levels of anxiety and lower quality of life. Internationally, there is a female predominance in the prevalence of IBS. There is 25% less IBS diagnosed in those over 50 years and there is no association with socioeconomic status[2]. The Anatara GaRP-IBS trial recruited patients with scores in the 175-350 range on the IBS-SSS which highlights that this trial only included patients with moderate to severe IBS symptoms who often present with higher-than-normal levels of anxiety and depression. The Company notes it is very impressive, albeit in small numbers, to not only reduce patients’ IBS symptoms but also to improve comorbidities, such as anxiety.  IBS sufferers are largely dissatisfied with the treatments used, regardless if prescribed by a medical practitioner or non-prescription/OTC. Less than 20% are satisfied with suggested treatments that are available on prescription or otherwise. This is hardly surprising as most treatments are directed at symptom relief and not control of the underlying processes affecting the complexities of the gastrointestinal tract. The GaRP preliminary results offer the hope of a treatment that relieves and also controls the ongoing process by restoring the gastrointestinal tract (GIT) lining and homeostasis. This is a major point of differentiation from all other products on the market for sufferers of GIT disorders and complaint. [2]https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3921083/ #:~:text=Depending%20on%20the%20diagnostic%20criteria,physicians%20for%20their%20IBS%20symptoms. The other point of differentiation is that Anatara is conducting a mainstream, quality IBS trial ( randomised, double blind, placebo controlled) to allow appropriate, responsible evidence- based claims around GaRP should the trial conclude successfully. This cannot be said for many of the products sold for gut health and more specifically for IBS control. GaRP presents itself as a potential disease-modifying treatment that aims to positively impact a substantial proportion of the population that suffer from the debilitating symptoms of digestive disorders, including irritable bowel syndrome (IBS). Furthermore, GaRP is restorative of the gastrointestinal tract lining in function and as a barrier while benefiting the homeostasis of the microbiome. This enables potential beneficial effects for the complex gut-brain axis and overall health.[3] The lack of efficacious digestive treatments amplifies the clear unmet need and the significant market opportunity for Anatara. The global Digestives & Intestinal treatment market amounts to US$18.64bn in 2023.[4] [3] https://www.grandviewresearch.com/press-release/global-brain-health-supplements-market  [4] https://www.statista.com/outlook/cmo/otc-pharmaceuticals/digestives-intestinal-remedies/worldwide FOR THE YEAR ENDED 30 JUNE 2024 016 Consolidated Financial Statements Anatara Lifesciences Ltd ABN: 41 145 239 872 30 JUNE 2024 Corporate Directory Directors Mr David Brookes Executive Chair Mr Nicholas Haslam Non-Executive Director Mr John Michailidis Non-Executive Director Secretary Mr Stephen Denaro Secretary Registered office and principal place of business c/- Perks, Level 8, 81 Flinders Street, Adelaide SA 5000 Telephone: +61 (0)4 3802 7172 Share register Computershare Investor Services Pty Ltd Level 1, 200 Mary Street, Brisbane QLD 4000 Telephone: +61 (0)7 3237 2100 Auditor Grant Thorton Audit Pty Ltd Level 3, 170 Frome Street, Adelaide SA 5000 Telephone: +61 (0)8 8372 6666 Solicitors Thomson Geer Level 16, Waterfront Place, 1 Eagle Street, Brisbane QLD 4000 Telephone: +61 (0)8 8236 1300 Website www.anataralifesciences.com Bankers Commonwealth Bank of Australia Melbourne VIC 3000 Telephone: +61 (0)2 9378 20001300 Stock Exchange listing Anatara Lifesciences Ltd shares are listed on the Australian Securities Exchange (ASX code: ANR) 017 30 JUNE 2024 018 The directors present their report, together with the consolidated financial statements of the Group, being Anatara Lifesciences Ltd ("the Company") and its controlled entities ("the Group"), for the financial year ended 30 June 2024. General information Directors The following persons held office as directors of the Company during the whole of the financial year and up to the date of this report, except where otherwise stated: Names Position Appointed/Resigned Dr David Brookes Executive Chair Mr Nicholas Haslam Non-Executive Director Mr John Michailidis Executive Director Appointed 2 October 2023 Dr Jane Ryan Non-Executive Director Resigned 2 October 2023 Company secretary The following person held office as company secretary of the Company during the whole of the financial year and up to the date of this report, unless otherwise stated: Mr Stephen Denaro Principal activities and significant changes in nature of activities The Group is an Australian listed entity that is developing and commercialising innovative, evidence-based products for gastrointestinal health where there is significant unmet need. There were no significant changes in the nature of the Group's principal activities during the financial year. Directors' Report Directors' Report Review of operations and financial review Review of operations i. Human and animal health projects 19 30 June 2024 Anatara Lifesciences (ASX: ANR or “the Company”), a developer of evidence-based solutions for gastrointestinal diseases in humans and animals, continued to progress the Gastrointestinal ReProgramming (GaRP) trial for Irritable Bowel Syndrome (IBS) as a principle activity in human health towards commercialising the GaRP product. Stage 1 of the Phase II study was completed successfully meeting endpoints and the results announced to the market are detailed below (within this report). The Company considers the results extremely encouraging and consistent with the understanding of the project and product. Anatara’s GaRP product is a multi-component, coated complementary medicine designed to address underlying factors associated with chronic gastrointestinal conditions such as IBS and IBD. The product is made of GRAS (Generally Regarded As Safe) components and is designed to assist restoration and maintenance of the GIT lining and the homeostasis of the microbiome. The Company announced on 28th September 2023 that the interim futility statistical analysis of Stage 1 of Phase II GaRP- IBS trial had been reviewed by the DSMB (Data Safety Monitoring Board) on 27 September 2023.The conclusion given was that Stage 1 had successfully met the study objectives of confirming safety and the optimum dose for the single dose expanded Stage 2 of the trial, with a preliminary indication of meaningful efficacy. The data from 61 participants over 3 arms (placebo, low and high dose) strongly supported continuing the trial using the Low Dose. There were no concerning safety signals and the DSMB were satisfied that continuation of the current trial protocol was supported. As well there was a clinically meaningful reduction in trial participants' IBS-SSS Scores which is the targeted primary endpoint. The Company announced in October 2023 a positive analysis of the secondary endpoints of Quality of Life (QoL) and the Hospital Anxiety and depression Score (HADS). The improvement of the QoL scores was anticipated to reflect the trend of improvement in the primary endpoint of IBS-SSS. Analysis of improvement in HADS revealed highly significant improvement in anxiety and depression scores on Low Dose (p <0.05) for the overall treatment. The Company considered this a remarkable result while cautioning on the low numbers involved at this stage of the full trial. Stage 2 of the trial design is to confirm/establish statistical significance for primary and secondary endpoints through greater numbers. Anatara is currently conducting Stage 2 of the Phase II GaRP-IBS trial which commenced recruiting in late in Q3FY24 and had 5 sites established across 3 capital cities in Q4FY24.The company announced on the 13th of June 2024 that the high number of expressions of interest had seen significant enrolment in the trial (13 randomised participants ) with further potential participants in screening. The Company continued to monitor and manage the momentum of trial participation and interest through the remaining period. Following the GaRP interim trial results, Anatara continues to engage with global pharma companies interested in expanding their portfolio of complementary medicines. The ongoing trial has garnered interest from global leaders in the gastroenterology field due to the strong evidence-based design of the GaRP trial. The Company continues to actively assess other opportunities in the human healthcare space and is appraising projects suitable to add to the Company’s portfolio. There are also ongoing discussions for potential uses of Anatara’s established products and know-how for animal health indications. Directors' Report 20 30 June 2024 The product continues to remain stable after extensive and regular testing, offering long shelf life.Testing of the GaRP product continues to demonstrate excellent long -term stability supporting a commercially reasonable shelf-life with product stability in excess of 24 months under the tested conditions. Samples were tested to ensure potency was maintained over the shelf-life and release of active ingredients in the targeted segments of the ileum and colon was maintained. The Company continued to work towards solidifying the regulatory framework in key jurisdictions (EU, USA, AU) in order to progress the development of the product towards commercialisation. In addition, manufacturing scale-up and packaging work has been initiated in order to be best placed to commercialise as quickly as regulatory authorities will allow. The Company is securing a supply chain of materials for commercial readiness of the GaRP product as well as alternative manufacturing partners for commercial scale-up. The Company continues to progress the work necessary to apply for the GaRP product to be Listed on the Australian Register of Therapeutic Goods with the TGA. The Company has continued to expand and support ongoing patent applications under a broad family of patents in key jurisdictions including the EU and APAC countries, including Japan, korea,Hong Kong and Australia. In addition, the Company’s website was upgraded along with the commencement of new company and product branding, in line with Anatara’s commercialisation plans. Review of operations and financial review (continued) Review of operations (continued) ii. Manufacturing & Regulatory considerations Directors' Report 21 30 June 2024 The Company announced on 2nd October that Dr Jane Ryan has retired as Non-Executive Director effective immediately. Mr John Michailidis was simultaneously appointed as an Executive Director while remaining in the role of COO (Chief Operating Officer). Dr. Micheal West was appointed CSO (Chief Scientific Officer) in March 2024 having previously been both CSO and COO at Anatara and having maintained a consultancy to the Company. Review of operations and financial review (continued) Review of operations (continued) iii. Board & Management changes The Company’s cash at the end of the year was $0.982 million (30 June 2023: $0.351 million). Net cash outflow from operating activities during the year was $1.247 million, compared to a $2.258 million cash outflow from operating activities in the year ended 30 June 2023. As announced on the 3rd of November 2023, the Company launched a 2 for 5 pro-rata non- renounceable Entitlement Offer to raise $1.055 million and subsequently announced on the 7th & 18th December 2023 the finalisation of the offer raising the full $1.055 million before capital raising costs. A further announcement on the 1st May accompanied a placement of 25 million shares to raise $1.0 million before capital raising costs. In Q1FY24, the application for the 2023 Research & Development Tax Rebate resulted in a refund of $0.923 million in August. All expenditure was as anticipated as Stage 1 of the GaRP trial was finalised and the Interim Analysis conducted. iv. Summary of FY2024 cashflows Directors' Report 22 30 June 2024 Financial Position The Group’s cash balance as at 30 June 2024 was $982,107 (up from $351,184 as at 30 June 2023). The Group's decreased expenditure contributed to a reduction in the loss for the year to $1,451,242 (down from $2,023,188 in 2023). During the year, a total of 47,969,742 shares were issued pursuant to the entitlement offer announced on 8 December 2023 and a further 23,250,000 shares were issued in May 2024 pursuant to a share placement offer announced on 1 May 2024, raising a further $930,000 before costs. There were no other significant changes in the Group's state of affairs during the year. Other items Significant changes in state of affairs No dividends were declared or paid to members for the year ended 30 June 2024. The directors do not recommend that a dividend be paid in respect of the financial year. Dividends paid or recommended Other than the information disclosed in the review of operations and activities, there are no likely developments or details on the expected results of operations that the Group has not disclosed. Likely future developments and results The Group's operations are not regulated by any significant environmental regulations under a law of the Commonwealth or of a state or territory of Australia. Environment Regulation A General Meeting was held on the 5th July 2024 in Adelaide to ratify the May placement and approve Director participation and Options to Directors and Advisors. Except for the above, no matters or circumstances have arisen since the end of the financial year which significantly affected or could significantly affect the operations of the Group, the results of those operations or the state of affairs of the Group in future financial years. Events after the reporting date Directors' Report Information on directors 23 30 June 2024 Director Information Dr David Brookes Executive Chair Experience: Dr. Brookes has extensive experience in the health and biotechnology industries, first becoming involved in the biotechnology sector in the late 1990’s as an analyst. Dr. Brookes has since held Board positions in a number of ASX listed biotechnology companies, including as Chairman of genomics solutions company, RHS Ltd, which was acquired by Perkin Elmer Inc (NYSE:PKI) in June 2018. He has also Chaired the risk and audit committees in ASX listed companies. He is currently a Non-Executive Chairman of Dominion Minerals Limited (ASX:DLM), and a Non-Executive Director of Island Pharmaceuticals (ASX:ILA) and TALI Digital (ASX:TD1). He was Non-Executive Chairman of the Better Medical Group (unlisted) until the sale of that company to private equity firm Livingbridge in January 2021. Dr. Brookes maintains roles as a clinician and as a biotechnology industry consultant. Dr Brookes, MBBS (Adelaide), is a Fellow of the Australian College of Rural and Remote Medicine and a Fellow of the Australian Institute of Company Directors. Other current public directorships Dominion Minerals Limited (ASX:DLM), previously known as Factor. Therapeutics Limited (ASX:FTT), since 10 April 2019. Tali Digital Ltd (ASX:TD1), since 29 June 2020. Island Pharmaceuticals Limited (ASX:ILA) since October 2020. Special Responsibilities Chair of Board Member of the audit and risk management committee Member of the remuneration and nominations committee Directorships held in other listed entities during the three years prior to the current year: None Directors' Report Information on directors (continued) 24 30 June 2024 Director Information (continued) Mr Nicholas Haslam Non-Executive Director Experience: Nick is a chartered accountant with ten years of experience in professional services with M&A and restructuring at PwC, before undertaking leadership roles in professional sports and medical device companies. With respect to medical experience, Nick is formerly the Chief Executive Officer of Plasma Shield Limited, an Australian air decontamination company, as well as commercial manager of KangaTech Pty Ltd, an injury prevention business, with customers spread across Australia, the US, and Europe. Other current public directorships None Special Responsibilities Chair of the audit and risk management committee Directorships held in other listed entities during the three years prior to the current year: None Directors' Report 25 30 June 2024 Dr Jane Ryan Non-Executive Director, resigned 2 October 2023 Experience: Jane has over 30 years of international experience in the pharmaceutical and biotechnology industries where she has held executive roles in management of research and development programs as well as business development and alliance management. Jane has worked in Australia, the United States and the United Kingdom with companies including Peptech, Roche, Cambridge Antibody Technology and Biota Holdings. Throughout her career, she has led many successful fundraising campaigns and licensing initiatives including the winning of a $230 million US Government contract. Jane was Chair of the Advisory Board at the ithree Institute at the University of Technology Sydney (UTS) which studies how microbes grow, live, adapt and survive Jane has been a Board Member of the government and not for profit organisations and is currently Non-Executive Director of Bionomics Limited (NASDAQ:BNOX). Other current public directorships Bionomics Ltd (NASDAQ:BNOX), since 1 October 2020 IDT Australia Limited (ASX:IDT), since 28 January 2022 Special Responsibilities Member of the audit and risk management committee Chair of the remuneration and nominations committee Directorships held in other listed entities during the three years prior to the current year: None Information on directors (continued) Director Information (continued) Directors' Report 26 30 June 2024 Mr John Michailidis Executive Director, appointed 2 October 2023 Experience: John is an accomplished CEO with over 30 years’ experience in the healthcare, pharmaceutical and biotechnology industries both in Australia and internationally. He has a proven track record in business transformation, entrepreneurship, translation and commercialisation of science organisations; government engagement and influence; effectiveness in research translation; business development and organisational responsibility. Other current public directorships None Special Responsibilities Chief Operating Officer Directorships held in other listed entities during the three years prior to the current year: None Information on directors (continued) Director Information (continued) Directors' Report 27 30 June 2024 Directors’ Meeting Audit Committee Remuneration Committee Number eligible to attend Number attended Number eligible to attend Number attended Number eligible to attend Number attended Dr David Brookes 12 12 2 2 1 1 Dr Jane Ryan 4 4 1 1 1 1 Mr Nicholas Haslam 12 12 2 2 1 1 Mr John Michailidis 8 8 1 1 - - Director Information (continued) Company secretary The Company Secretary is Mr Stephen Denaro, appointed to the position on 24 February 2014. Stephen has extensive experience in mergers and acquisitions, business valuations, accountancy services, and income tax compliance gained from positions as Company Secretary and Chief Financial Officer of various public companies and with major chartered accountancy firms in Australia and the United Kingdom. He provides company secretarial services for a number of start-up technology and ASX listed and unlisted public companies. Stephen has a Bachelor of Business in accountancy, Graduate Diploma in Applied Corporate Governance and is a member of Chartered Accountants Australia & New Zealand and the Australian Institute of Company Directors. Meetings of directors During the financial year, 15 meetings of directors (including committees of directors) were held. Attendances by each director during the year were as follows: Directors' Report 28 30 June 2024 (a) Insurance of officers During the financial year, the Group paid a premium of $30,250 to insure the directors and secretaries of the company and its Australian-based controlled entities, and the general managers of each of the divisions of the Group. The liabilities insured are legal costs that may be incurred in defending civil or criminal proceedings that may be brought against the officers in their capacity as officers of entities in the Group, and any other payments arising from liabilities incurred by the officers in connection with such proceedings. This does not include such liabilities that arise from conduct involving a wilful breach of duty by the officers or the improper use by the officers of their position or of information to gain advantage for themselves or someone else or to cause detriment to the Company. It is not possible to apportion the premium between amounts relating to the insurance against legal costs and those relating to other liabilities. Director Information (continued) Indemnification and insurance of officers and auditors (b) Indemnity of auditors Anatara Lifesciences Ltd has agreed to indemnify their auditors, Grant Thornton Audit Pty Ltd, to the extent permitted by law, against any claim by a third party arising from Anatara Lifesciences Ltd’s breach of their agreement. The indemnity stipulates that Anatara Lifesciences Ltd will meet the full amount of any such liabilities including a reasonable amount of legal costs. No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of the company, or to intervene in any proceedings to which the company is a party, for the purpose of taking responsibility on behalf of the company for all or part of those proceedings. No proceedings have been brought or intervened in on behalf of the company with leave of the Court under section 237 of the Corporations Act 2001. Proceedings on behalf of company Directors' Report 29 30 June 2024 Options Unissued ordinary shares Unissued ordinary shares of Anatara Lifesciences Ltd under option and performance rights at the date of this report are as follows: Date options granted Expiry date Issue price of shares ($) Number under options 23-08-2021 18-08-2025 0.2256 20,000 16-11-2021 14-11-2025 0.2226 1,350,000 29-11-2021 25-11-2025 0.2030 300,000 28-11-2022 11-12-2025 0.0700 7,495,595 19-12-2022 11-12-2025 0.0700 15,857,163 21-02-2023 11-12-2025 0.0700 4,397,026 07-05-2024 06-05-2027 0.1000 2,000,000 Total 31,419,784 Date performance rights granted Expiry date Number under performance rights 31-08-2022 31-08-2025 206,612 01-08-2023 01-08-2026 1,611,176 Total 1,817,788 No option holder or performance rights holder has any right under the options or performance rights to participate in any other share issue of the company or any other entity. Options exercised during the year No ordinary shares of the Company were issued during the year ended 30 June 2024 from the exercise of issued options. No ordinary shares of the Company were issued during the year ended 30 June 2024 from the exercise of performance rights. Directors' Report Non-audit Services 30 30 June 2024 The board of directors, in accordance with advice from the audit committee, is satisfied that the provision of non-audit services during the year is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. The company may decide to employ the auditor on assignments additional to their statutory audit duties where the auditor’s expertise and experience with the company and/or the Group are important. Details of the amounts paid or payable to the auditor (Grant Thornton Audit Pty Ltd) for audit and non-audit services provided during the year are set out below. The directors are satisfied that the provision of non-audit services by the auditor, as set out below, did not compromise the auditor independence requirements of the Corporations Act 2001 for the following reasons: • all non-audit services are reviewed and approved by the audit committee prior to commencement to ensure they do not adversely affect the integrity and objectivity of the auditor; and • the nature of the services provided do not compromise the general principles relating to auditor independence in accordance with APES 110: Code of Ethics for Professional Accountants (including Independence Standards) set by the Accounting Professional and Ethical Standards Board. The following fees were paid or payable to the Grant Thornton Audit Pty Ltd and its related entities and other Grant Thornton network firms for non-audit services provided during the year ended 30 June 2024: Ongoing corporate initiatives 2024
 $ 2023
 $ Tax compliance services - 38,000 Total remuneration for taxation services - 38,000 Total remuneration for non-audit services - 38,000 The auditor's independence declaration in accordance with section 307C of the Corporations Act 2001 for the year ended 30 June 2024 has been received and can be found on page 21 of the consolidated financial report. Auditor's Independence Declaration The Company is an entity to which ASIC Corporations (Rounding in Financial/Directors' Report) Instrument 2016/191 applies and, accordingly, amounts in the consolidated financial statements and directors' report have been rounded to the nearest dollar. Rounding of Amounts Remuneration report (audited) 31 The directors present the Company's 2024 remuneration report, outlining key aspects of our remuneration policy and framework, and remuneration awarded this year. The report is structured as follows: a) Key management personnel (KMP) covered in this report b) Remuneration policy and link to performance c) Elements of remuneration d) Link between remuneration and performance e) Remuneration expenses f) Contractual arrangements with executive KMPs g) Non-executive director arrangements h) Additional statutory information (a) Key management personnel covered in this report Dr David Brookes, Executive Chair Dr Jane Ryan, Non-Executive Director - Resigned 2 October 2023 Mr Nicholas Haslam, Non-Executive Director Mr Simon Erskine, Chief Development Officer Mr John Michailidis, Executive Director / Chief Operating Officer Directors' Report 30 June 2024 (b) Remuneration policy and link to performance The remuneration and nominations committee of the Company is mainly comprised of independent non-executive directors. The committee reviews and determines the Company's remuneration policy and structure annually to ensure it remains aligned to business needs, and meets Company remuneration principles. In particular, the Board aims to ensure that remuneration practices are: • Competitive and reasonable, enabling the Company to attract and retain key talent; • Aligned to the Company's strategic and business objectives and the creation of shareholder value; • Transparent and easily understood; and • Acceptable to shareholders. 32 Remuneration report (audited) (continued) Element Purpose Performance Metrics Potential Value Fixed remuneration (FR) Provide competitive market remuneration Nil Positioned at the market rate Short-term incentives (STI) Reward for in-year performance and retention KPI achievement, determined by remuneration and nominations committee CDO: 30% of FR Long-term incentives (LTI) Alignment to long-term shareholder value KPI achievement, determined by remuneration and nominations committee CDO: 300,000 unlisted 4 year options at $0.2030 exercise price, vesting over a 3-year period from the grant date Assessing performance The remuneration and nominations committee is responsible for assessing performance against KPIs and determining the STI and LTI to be paid. To assist in this assessment, the committee receives data from independently run surveys. Performance is monitored on an informal basis throughout the year and a formal evaluation is performed annually. Securities trading policy The Company's securities trading policy applies to all directors and executives, see https://anataralifesciences.com/investors/corporate-governance. It only permits the purchase or sale of company securities during certain periods: • Product development and commercialisation. Directors' Report 30 June 2024 (c) Elements of remuneration (i) Fixed annual remuneration (FR) Key management personnel may receive their fixed remuneration as cash, or cash with non- monetary benefits such as health insurance and car allowances. Fixed remuneration is reviewed annually, or on promotion. It is benchmarked against market data for comparable roles in companies in a similar industry and with similar market capitalisation. The committee aims to position executives at or near the median, with flexibility to take into account capability, experience, value to the organisation and performance of the individual. (ii) Short-term incentives (STI) All executives are entitled to participate in a short-term incentive scheme which provides for executive employees to receive a combination of short-term incentives (STI) as part of their total remuneration if they achieve certain performance indicators as set by the board. The short-term incentives can be paid either by cash, or a combination of cash and the issue of equity in the company, at the determination of the remuneration and nominations committee and board. 33 The Group’s CDO is entitled to short-term incentives in the form of cash bonus up to 30% of fixed remuneration against agreed various key performance indicators (KPIs), including target EBITDA, appreciation in share price value, retention of key talent, and achievement of major project milestones. On an annual basis, KPIs are reviewed and agreed in advance of each financial year and include financial and non-financial company and individual performance goals that relate to: • Operational management. • Investor relations and shareholder value creation. • R&D activities. (iii) Long-term incentives (LTI) Executives may also be provided with longer-term incentives through the Company’s ‘executive option plan’ (EOP), that was approved by shareholders at the annual general meeting held on 26 November 2020. The aim of the EOP is to allow executives to participate in, and benefit from, the growth of the Company as a result of their efforts and to assist in motivating and retaining those key employees over the long term. Continued service is the condition attached to the vesting of the options. The board at its discretion determines the total number of options granted to each executive. Remuneration report (audited) (continued) Directors' Report 30 June 2024 (d) Link between remuneration and Statutory performance indicators The directors aim to align executive remuneration to strategic and business objectives and the creation of shareholder wealth. The table below shows measures of the Group’s financial performance over the last five years as required by the Corporations Act 2001. However, these are not necessarily consistent with the measures used in determining the variable amounts of remuneration to be awarded to KMPs. As a consequence, there may not always be a direct correlation between the statutory key performance measures and the variable remuneration awarded. 34 Remuneration report (audited) (continued) Directors' Report 30 June 2024 2024 $ 2023 2022 2021 2020 $ Loss for the year attributable to owners ($) 1,451,242 2,023,188 2,532,293 1,995,874 3,364,644 Basic loss per share (cents) 0.97 2.07 3.56 3.18 6.77 Share price at year-end ($) 0.04 0.03 0.06 0.16 0.13 The Group’s earnings have remained negative since inception due to the nature of the business. Shareholder wealth reflects this speculative and volatile market sector. No dividends have ever been declared by the Company. The Company continues to focus on revenue growth with the objective of achieving key commercial milestones in order to add further shareholder value. (e) Remuneration expenses for the year ended 30 June 2024 The following tables show details of the remuneration expense recognised for the Group's key management personnel for the current and previous financial year measured in accordance with the requirements of the accounting standards. 35 Remuneration report (audited) (continued) Directors' Report 30 June 2024 Notes: (1) Dr Jane Ryan resigned on 2 October 2023. (2) Mr John Michailidis was appointed as Executive Director on 2 October 2023. (3) The options expense has been recognised in respect of options issued in previous years. Short Term Post Employment Long Term Share Based Payments Superannuation Long service leave Options Performance rights Total 2024 $ $ $ $ $ Non-executive directors Dr Jane Ryan (1) 15,000 1,650 - - - 16,650 Mr Nicolas Haslam 60,000 6,600 - - - 66,600 Executive directors Dr David Brookes 150,000 16,500 - 6,411 - 172,911 Mr John Michailidis (2) 154,113 16,505 167 - - 170,785 Other KMP Mr Simon Erskine 207,311 22,000 1,491 3,818 54,780 289,400 Total KMP compensation 586,424 63,255 1,658 10,229 54,780 716,346 (e) Remuneration expenses for the year ended 30 June 2024 (continued) 36 Remuneration report (audited) (continued) Directors' Report 30 June 2024 Notes: (1) Ms Sue MacLeman resigned on 7 December 2022. (2) Mr Nicholas Haslam was appointed on 7 December 2022. (3) Subsequent to year end, 1,611,176 performance rights were issued to Mr Simon Erskine, as part of his final performance bonus of $54,780. These performance rights have nil exercise price and expire on 1 August 2026. Short Term Benefits Post Employment Benefits Long Term Benefits Share Based Payments Superannuation Long service leave Options Performance rights Total 2023 $ $ $ $ $ Non-executive directors Ms Sue MacLeman (1) 27,000 2,835 6,412 - 36,247 Dr Jane Ryan 61,154 6,421 - 14,830 - 82,405 Mr Nicolas Haslam (2) 34,154 3,586 - - - 37,740 Executive directors Dr David Brookes 152,223 15,983 - 29,661 - 197,867 Other KMP Mr Simon Erskine (3) 213,222 21,404 584 8,832 69,780 313,822 Mr John Michailidis 107,500 11,288 - - - 118,788 Total KMP compensation 595,253 61,517 584 59,735 69,780 786,869 (f) Contractual arrangements with executive KMPs 37 Remuneration report (audited) (continued) Directors' Report 30 June 2024 Name: Dr David Brookes Position: Executive Chair Contract duration: Unspecified Notice period: Unspecified Fixed remuneration: $150,000 per annum, plus 11% Name: Mr Simon Erskine Position: Chief Development Officer Contract duration: Unspecified Notice period: 3 months by either party Fixed remuneration: $220,000 per annum, including 11% Name: Mr John Michailidis Position: Executive Director / Chief Operating Contract duration: Unspecified Notice period: Unspecified Fixed remuneration: $8,000 per month, adjusted based on time commitment, plus 11% superannuation (g) Non-executive director arrangements Non-executive directors receive a board fee and fees for chairing but not participating on board committees, see table below. They do not receive performance-based pay or retirement allowances. The fees are exclusive of superannuation. The chair receives higher base fee than other non-executive directors, reflective of the additional demands and responsibilities of this role. Fees are reviewed annually by the board taking into account comparable roles and market data provided by the board’s independent remuneration adviser. The maximum annual aggregate directors’ fee pool limit is $500,000, adopted on initial public offering of the Company on 14 October 2014. Base fees Chair $150,000 Other non-executive directors $60,000 38 Remuneration report (audited) (continued) Directors' Report 30 June 2024 Notes: (1) Ms Sue MacLeman resigned on 7 December 2022. (2) Dr Jane Ryan resigned on 2 October 2023. (3) Mr Nicholas Haslam was appointed on 7 December 2022. (4) Mr John Michailidis was previously the Chief Operating Officer and was appointed as Executive Director on 2 October 2023. Fixed remuneration At risk - STI At risk - LTI 2024 2023 2024 2023 2024 2023 2023 % % % % % % Non-executive directors Ms Sue MacLeman (1) - 82 - - - 18 Dr Jane Ryan (2) 84 82 - - 16 18 Mr Nicolas Haslam (3) 100 - - - - - Executive directors Dr David Brookes 96 85 - - 4 15 Mr John Michailidis (4) 100 100 - - - - Other KMP Mr Simon Erskine (3) 80 75 - - 20 25 (h) Additional statutory information (i) Relative proportions of fixed vs variable remuneration expense The following table shows the relative proportions of remuneration that are linked to performance and those that are fixed, based on the amounts disclosed as statutory remuneration expense in (e) above. 39 Remuneration report (audited) (continued) Directors' Report 30 June 2024 (h) Additional statutory information (continued) (ii) Terms and conditions of the share-based payment arrangements Options The terms and conditions of each grant of options affecting remuneration in the current or a future reporting year are as follows: Grant Date Vesting and exercised date d Expiry date Exercise price ($) Value per option at grant date ($) Vested (%) 16-11-2021 16-11-2022 14-11-2025 0.2226 0.0748 100% 16-11-2021 16-11-2023 14-11-2025 0.2226 0.0748 100% 29-11-2021 25-11-2022 25-11-2025 0.2030 0.0708 100% 29-11-2021 25-11-2023 25-11-2025 0.2030 0.0708 100% 29-11-2021 25-11-2024 25-11-2025 0.2030 0.0708 86% The vesting criteria for the options to become exercisable is that the option holder remains an employee of the company during the vesting period. Performance rights The terms and conditions of each grant of performance rights affecting remuneration in the current or a future reporting year are as follows: Grant Date Vesting and exercised date Expiry date Exercise price ($) Value per performance right at grant date ($) Vested (%) 01-08-2023 01-08-2023 01-08-2026 - 0.0340 100% 40 Remuneration report (audited) (continued) Directors' Report 30 June 2024 Notes: (1) Balance may include shares held prior to individuals becoming a KMP. For individuals who became a KMP during the year, the balance is at the date they became a KMP. (2) Other changes incorporates changes from the acquisition of shares. (3) For a former KMP, the balance is at the date they cease to be a KMP. (4) Dr Jane Ryan resigned on 2 October 2023. (5) Mr John Michailidis was previously the Chief Operating Officer and was appointed as Executive Director on 2 October 2023. (h) Additional statutory information (iii) Reconciliation of ordinary shares, performance rights and options held by KMP Share holdings Share Holdings Balance at beginning of year (1) Granted as remuneration Exercised Other changes (2) Balance at the end of year (3) 30 June 2024 No. No. No. No. No. Shares Dr David Brookes 2,164,286 - - 2,365,716 4,530,002 Dr Jane Ryan (4) 325,936 - - - 325,936 Mr Nicholas Haslam - - - - - Mr Simon Erskine - - - - - Mr John Michailidis (5) 499,999 - - 450,000 949,999 2,990,221 - - 2,815,716 5,805,937 41 Remuneration report (audited) (continued) Directors' Report 30 June 2024 Notes: (1) Balance may include options held prior to individuals becoming a KMP. For individuals who became a KMP during the year, the balance is at the date they became a KMP. (2) Other changes incorporates changes from the acquisition of shares or options. (3) For a former KMP, the balance is at the date they cease to be a KMP. (4) Dr Jane Ryan resigned on 2 October 2023. (5) Mr John Michailidis was previously the Chief Operating Officer and was appointed as Executive Director on 2 October 2023. (h) Additional statutory information (continued) (iii) Reconciliation of ordinary shares, performance rights and options held by KMP Share holdings (continued) Option Holdings Balance at beginning of year (1) Granted as remuneration Exercised Other changes (2) Balance at the end of year (3) Vested exercisable 30 June 2024 No. No. No. No. No. No. Shares Dr David Brookes 1,832,143 - - - 1,832,143 1,832,143 Dr Jane Ryan (4) 521,432 - - - 521,432 296,432 Mr Simon Erskine 300,000 - - - 300,000 200,000 Mr John Michailidis (5) 250,000 - - - 250,000 250,000 2,903,575 - - - 2,903,575 2,578,575 42 Remuneration report (audited) (continued) Directors' Report 30 June 2024 (h) Additional statutory information (continued) Performance Rights Balance at beginning of year Granted as remuneration Exercised Other changes Balance at the end of year 30 June 2024 No. No. No. No. No. Performance Rights Mr Simon Erskine (1) 206,612 1,611,176 - - 1,817,788 206,612 1,611,176 - - 1,817,788 Notes: (1) On 1 August 2023, 1,611,176 performance rights with nil exercise price and an expiration date of 1 August 2026 were issued to Mr Simon Erskine as part of his performance bonus for the year ended 30 June 2023. The value of these performance rights was recognised in the statement of profit or loss in the previous financial year. (i) Other transactions with key management personnel There are no other transactions with key management personnel of the Company. (j) Voting of shareholders at last year's annual general meeting The Company received more than 97 percent of favourable votes on its remuneration report for the 2023 financial year. The Company did not receive any specific feedback at the 2023 annual general meeting or throughout the year on its remuneration practices. End of Audited Remuneration Report This director's report, incorporating the remuneration report, is signed in accordance with a resolution of the Board of Directors. Director: Dr David Brookes, Executive Chair Adelaide Dated this 22 day of August 2024 The Company and the board are committed to achieving and demonstrating the highest standards of corporate governance. The Company has reviewed its corporate governance practices against the Corporate Governance Principles and Recommendations (4th edition) published by the ASX Corporate Governance Council. The 2024 corporate governance statement is dated as at 30 June 2022 and reflects the corporate governance practices in place throughout the 2024 financial year. A description of the Group’s current corporate governance practices is set out in the Group’s corporate governance statement which can be viewed at: https://anataralifesciences.com/investors/corporate-governance/. 43 Corporate Governance Statement 30 June 2024 Grant Thornton Audit Pty Ltd Grant Thornton House Level 3 170 Frome Street Adelaide SA 5000 GPO Box 1270 Adelaide SA 5001 T +61 8 8372 6666 www.grantthornton.com.au ACN-130 913 594 Grant Thornton Audit Pty Ltd ACN 130 913 594 a subsidiary or related entity of Grant Thornton Australia Limited ABN 41 127 556 389 ACN 127 556 389. ‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Limited is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 ACN 127 556 389 and its Australian subsidiaries and related entities. Liability limited by a scheme approved under Professional Standards Legislation. Auditor’s Independence Declaration To the Directors of Anatara Lifesciences Ltd In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the audit of Anatara Lifesciences Ltd for the year ended 30 June 2024, I declare that, to the best of my knowledge and belief, there have been: a no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and b no contraventions of any applicable code of professional conduct in relation to the audit. GRANT THORNTON AUDIT PTY LTD Chartered Accountants J L Humphrey Partner – Audit & Assurance Adelaide, 22 August 2024 44 Consolidated Statement of Profit or Loss and Other Comprehensive Income 2024 $ 2023 $ Note Other income 6(a) 644,026 1,245,846 General and administrative expenses 6(b) (1,354,243) (1,682,693) Research expenses 6(b) (748,910) (1,602,231) Operating loss (1,459,127) (2,039,078) Finance income 7,885 18,260 Finance expenses - (2,370) Finance income - net 7,885 15,890 Loss before income tax (1,451,242) (2,023,188) Income tax expense 7 - - Loss for the year (1,451,242) (2,023,188) Other comprehensive income Other comprehensive income for the year, net of tax - - Total comprehensive loss for the year (1,451,242) (2,023,188) Total comprehensive loss attributable to: Owners of Anatara Lifesciences Ltd (1,451,242) (2,023,188) Basic earnings per share (cents) 22 (0.97) (2.07) Diluted earnings per share (cents) 22 (0.97) (2.07) For the Year Ended 30 June 2024 The accompanying notes form part of these financial statements. 45 Consolidated Statement of Financial Position 2024 2023 Note $ $ ASSETS CURRENT ASSETS Cash and cash equivalents 8 982,107 351,184 Trade and other receivables 9 671,092 1,004,078 Other financial assets - 50,000 Other assets 17,429 10,853 TOTAL CURRENT ASSETS 1,670,628 1,416,115 NON-CURRENT ASSETS Property, plant and equipment 794 3,258 TOTAL NON-CURRENT ASSETS 794 3,258 TOTAL ASSETS 1,671,422 1,419,373 LIABILITIES CURRENT LIABILITIES Trade and other payables 10 269,691 474,462 Employee benefits 11 34,472 19,705 TOTAL CURRENT LIABILITIES 304,163 494,167 NON-CURRENT LIABILITIES Employee benefits 11 2,686 665 TOTAL NON-CURRENT LIABILITIES 2,686 665 TOTAL LIABILITIES 306,849 494,832 NET ASSETS 1,364,573 924,541 EQUITY Issued capital 12 23,176,613 21,368,718 Reserves 13 278,030 347,698 Accumulated losses (22,090,070) (20,791,875) TOTAL EQUITY 1,364,573 924,541 For the Year Ended 30 June 2024 The accompanying notes form part of these financial statements. 46 Consolidated Statement of Changes in Equity For the Year Ended 30 June 2024 Issued Capital Reserves Accumulated losses Total Note $ $ $ $ Balance at 1 July 2023 21,368,718 347,698 (20,791,875) 924,541 Loss for the year - - (1,451,242) (1,451,242) Total comprehensive loss for the year - - (1,451,242) (1,451,242) Transactions with owners in their capacity as owners Issue of shares 12 1,985,334 - - 1,985,334 Less: capital raising costs 12 177,439) 32,000 - (145,439) Share based payment expense - options 20(b) - (3,401) - (3,401) Options lapsed 13 - (153,047) 153,047 - Performance rights issued 20 - 54,780 - 54,780 Total transactions with owners in their capacity as owners 1,807,895 (69,668) 153,047 1,891,274 Balance at 30 June 2024 23,176,613 278,030 (22,090,070) 1,364,573 2024 Issued Capital Reserves Accumulated losses Total Note $ $ $ $ Balance at 1 July 2022 19,908,471 439,488 (18,983,656) 1,364,303 Loss for the year - - (2,023,188) (2,023,188) Total comprehensive loss for the year - - (2,023,188) (2,023,188) Transactions with owners in their capacity as owners Issue of shares 12 1,697,482 - - 1,697,482 Less: capital raising costs 12 (242,235) 53,550 - (188,685) Share based payment expense - options 20(b) - 54,629 - 54,629 Options lapsed 13 - (214,969) 214,969 - Performance rights issued 20 - 20,000 - 20,000 Performance rights exercised 20 5,000 (5000) - - Total transactions with owners in their capacity as owners 1,460,247 (91,790) 214,969 1,583,426 Balance at 30 June 2023 21,368,718 347,698 (20,791,875) 924,541 The accompanying notes form part of these financial statements. 47 Consolidated Statement of Cash Flows 2024 2023 Note $ $ CASH FLOWS FROM OPERATING ACTIVITIES: CASH FLOWS FROM OPERATING ACTIVITIES: Payments to suppliers and employees (inclusive of GST) (2,195,763) (3,071,976) Interest received 7,208 17,582 Government grants and research & development tax incentives 923,236 771,898 Other income 17,923 24,600 Net cash (used in) operating activities 14 (1,247,396) (2,257,896) CASH FLOWS FROM INVESTING ACTIVITIES: Payments for property, plant and equipment - (1,726) Proceeds from term deposits 50,000 - Net cash provided by/(used in) investing activities 50,000 (1,726) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from issue of shares 1,985,334 1,697,482 Share issue transaction costs (157,015) (188,685) Lease payments - (18,195) Net cash provided by financing activities 1,828,319 1,490,602 Net increase / (decrease) in cash and cash equivalents held 630,923 (769,020) Cash and cash equivalents at beginning of year 351,184 1,120,204 Cash and cash equivalents at end of financial year 8 982,107 351,184 For the Year Ended 30 June 2024 The accompanying notes form part of these financial statements. (c) Going concern The financial statements have been prepared on the going concern basis, which contemplates continuity of normal business activities and the realisation of assets and settlement of liabilities in the normal course of business. As disclosed in the financial statements, the Group incurred a loss of $1,451,242 (2023: $2,023,188) and had operating cash outflows of $1,247,396 (2023: $2,257,896) for the year ended 30 June 2024. As at 30 June 2024, the Group held cash and cash equivalents of $982,107 (2023: $351,184). In the process of approving the Group’s internal forecast and business plan for upcoming financial years, the board has considered the cash position of the Group within the next 12 months from the date of this report. The Group’s internal forecast and business plan for the upcoming financial year includes capital raising. The directors have assessed that the Group could raise additional capital to meet the Group’s contractual commitments and working capital requirements. Notwithstanding the uncertainty over either of these events occurring, based on the above considerations the board has assessed the resources and opportunities available to the Group, and consequently believe that the Group will be able to repay its debts as and when they fall due and are of the opinion that the financial statements have been appropriately prepared on a going concern basis. In the event that these measures are unsuccessful, there would be a material uncertainty which may cast significant doubt as to whether the Group will continue as a going concern and therefore whether it will realise its assets and extinguish its liabilities in the normal course of business and at the amounts stated in the financial report. The financial report does not include any adjustments related to the amounts or classification of recorded assets or liabilities that might be necessary if the Group does not continue as a going concern. 48 Notes to the Consolidated Financial Statements For the Year Ended 30 June 2024 The consolidated financial report covers Anatara Lifesciences Ltd ("the Company") and its controlled entities ("the Group"). Anatara Lifesciences Ltd is a for-profit Company limited by shares, incorporated and domiciled in Australia. The separate financial statements of the parent entity, Anatara Lifesciences Ltd, have not been presented within this financial report as permitted by the Corporations Act 2001 and Australian Accounting Standards requirements. The financial report was authorised for issue by the Directors on August 2024. Comparatives are consistent with prior years, unless otherwise stated. 2. Basis of Preparation The financial statements are general purpose financial statements that have been prepared in accordance with the Australian Accounting Standards and Interpretations issued by the Australian Accounting Standards Board and the Corporations Act 2001. The Group is a for-profit entity for financial reporting purposes under Australian Accounting Standards. (a) Compliance with IFRS The financial statements of the Group also comply with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB"). (b) Summary of Material Accounting Policy Information The financial statements, except for the cash flow information, have been prepared on an accruals basis and are based on historical costs modified, where applicable, by the measurement at fair value of selected non-current assets, financial assets and financial liabilities. 49 Notes to the Consolidated Financial Statements For the Year Ended 30 June 2024 2. Basis of Preparation (continued) (d) New and amended standards adopted by the Group The Group has adopted all of the new or amended Accounting Standards and Interpretations issued by the Australian Accounting Standards Board ("AASB") that are mandatory for the current reporting period. Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted. 3. Summary of Material Accounting Policy Information Material accounting policy information adopted in the preparation of these financial statements is presented below and has been consistently applied unless stated otherwise. (a) Basis for consolidation A list of controlled entities is contained in Note 17 to the financial statements. Subsidiaries Subsidiaries are all entities over which the parent has control. Control is established when the parent is exposed to, or has rights to variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the relevant activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases. The acquisition method of accounting is used to account for business combinations by the Group. Intercompany transactions, balances and unrealised gains on transactions between Group companies are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the transferred asset. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group. b) Foreign currency transactions and balances Functional and presentation currency Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (‘the functional currency’). The consolidated financial statements are presented in Australian dollars ($), which is the Group's functional and presentation currency. Transaction and balances Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rates are generally recognised in profit or loss. Foreign exchange gains and losses that relate to borrowings are presented in the consolidated income statement, within finance costs. All other foreign exchange gains and losses are presented in the consolidated statement of profit or loss on a net basis within other gains/(losses). 50 Notes to the Consolidated Financial Statements For the Year Ended 30 June 2024 3. Summary of Material Accounting Policy Information (continued) (c) Revenue and other income Grant revenue Transactions involving government grants received are accounted for by applying AASB 120 Accounting for Government Grants and Disclosure of Government Assistance. Grants from the government are recognised at their fair value where there is a reasonable assurance that the grant will be received and the Group will comply with all attached conditions. In relation to Research and Development tax incentive, as the estimate is able to be reliably measured, the research and development tax incentive is measured on an accruals basis. Material accounting policy information adopted in the preparation of these financial statements is presented below and has been consistently applied unless stated otherwise. Research and Development Tax Incentive In relation to Research and Development tax incentive, as the estimate is able to be reliably measured, the research and development tax incentive is measured on an accruals basis. (d) Income tax The income tax expense or credit for the year is the tax payable or receivable on the current year’s taxable income based on the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses. The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the reporting year in the countries where the Company and its subsidiaries and associates operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities. Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, deferred tax liabilities are not recognised if they arise from the initial recognition of goodwill. Deferred income tax is also not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the end of the reporting year and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled. Deferred tax assets are recognised only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses. Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively. (e) Impairment of non-financial assets Intangible assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs of disposal and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or groups of assets (cash-generating units). Non-financial assets other than goodwill that suffered an impairment are reviewed for possible reversal of the impairment at the end of each reporting year. (f) Cash and cash equivalents For the purpose of presentation in the consolidated statement of cash flows, cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities in the consolidated statement of financial position. (g) Trade receivables Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less loss allowance. See note 9 for further information about the Group’s accounting for trade receivables and note 15(b) for a description of the Group’s impairment policies. (h) Financial instruments Financial instruments are recognised initially on the date that the Group becomes party to the contractual provisions of the instrument. On initial recognition, all financial instruments are measured at fair value plus transaction costs (except for instruments measured at fair value through profit or loss where transaction costs are expensed as incurred). 51 Notes to the Consolidated Financial Statements For the Year Ended 30 June 2024 3. Summary of Material Accounting Policy Information (continued) (h) Financial instruments (continued) Financial assets All recognised financial assets are subsequently measured in their entirety at either amortised cost or fair value, depending on the classification of the financial assets. Classification On initial recognition, the Group classifies its financial assets into the following categories, those measured at: • amortised cost • fair value through profit or loss - FVTPL • fair value through other comprehensive income - equity instrument (FVOCI - equity) • fair value through other comprehensive income - debt investments (FVOCI - debt) Financial assets are not reclassified subsequent to their initial recognition unless the Group changes its business model for managing financial assets. The classification depends on the entity’s business model for managing the financial assets and the contractual terms of the cash flows. For assets measured at fair value, gains and losses will either be recorded in profit or loss or OCI. For investments in equity instruments that are not held for trading, this will depend on whether the Group has made an irrevocable election at the time of initial recognition to account for the equity investment at fair value through other comprehensive income (FVOCI). Recognition and derecognition Regular way purchases and sales of financial assets are recognised on trade-date, the date on which the Group commits to purchase or sell the asset. Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the Group has transferred substantially all the risks and rewards of ownership. Measurement At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss (FVTPL), transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at FVTPL are expensed in profit or loss. Debt instruments Subsequent measurement of debt instruments depends on the Group’s business model for managing the asset and the cash flow characteristics of the asset. There are three measurement categories into which the Group classifies its debt instruments: • Amortised cost: Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortised cost. Interest income from these financial assets is included in finance income using the effective interest rate method. Any gain or loss arising on derecognition is recognised directly in profit or loss and presented in other gains/(losses) together with foreign exchange gains and losses. Impairment losses are presented as separate line item in the consolidated statement of profit or loss. • FVOCI: Assets that are held for collection of contractual cash flows and for selling the financial assets, where the assets’ cash flows represent solely payments of principal and interest, are measured at FVOCI. Movements in the carrying amount are taken through OCI, except for the recognition of impairment gains or losses, interest income and foreign exchange gains and losses which are recognised in profit or loss. When the financial asset is derecognised, the cumulative gain or loss previously recognised in OCI is reclassified from equity to profit or loss and recognised in other gains/(losses). Interest income from these financial assets is included in finance income using the effective interest rate method. Foreign exchange gains and losses are presented in other gains/(losses) and impairment expenses are presented as separate line item in the consolidated statement of profit or loss. • FVTPL: Assets that do not meet the criteria for amortised cost or FVOCI are measured at FVTPL. A gain or loss on a debt investment that is subsequently measured at FVTPL is recognised in profit or loss and presented net within other gains/(losses) in the year in which it arises. Impairment The Group assesses on a forward looking basis the expected credit losses associated with its debt instruments carried at amortised cost and FVOCI. The impairment methodology applied depends on whether there has been a significant increase in credit risk. 52 Notes to the Consolidated Financial Statements For the Year Ended 30 June 2024 3. Summary of Material Accounting Policy Information (continued) (i) Trade and other payables These amounts represent liabilities for goods and services provided to the Group prior to the end of financial year which are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition. Trade and other payables are presented as current liabilities unless payment is not due within 12 months after the reporting year. They are recognised initially at their fair value and subsequently measured at amortised cost using the effective interest method. (j) Employee benefits Share-based payments Share-based compensation benefits are provided to employees via the "Employee Option Plan" (“EOP"). Information relating to these schemes is set out in note 20. Employee options The fair value of options granted under the EOP is recognised as a share-based payment expense with a corresponding increase in equity. The total amount to be expensed is determined by reference to the fair value of the options granted: • including any market performance conditions (e.g. the Company’s share price); • excluding the impact of any service and non-market performance vesting conditions (e.g. profitability, sales growth targets and remaining an employee of the Company over a specified time year); and • including the impact of any non-vesting conditions (e.g. the requirement for employees to save or holdings shares for a specific year of time). The total expense is recognised over the vesting year, which is the year over which all of the specified vesting conditions are to be satisfied. At the end of each year, the Group revises its estimates of the number of options that are expected to vest based on the non-market vesting and service conditions. It recognises the impact of the revision to original estimates, if any, in profit or loss, with a corresponding adjustment to equity. Performance rights Performance pay for selected employees of the Group may be paid in performance rights rather than cash, subject to board approval. Performance rights to be issued to employees are long-term incentives under the Executive Option Plan. (k) Contributed equity Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares and share options which vest immediately are recognised as a deduction from equity, net of any tax effects. (l) Loss per share Basic loss per share is calculated by dividing the loss attributable to owners of the Company, excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the year, adjusted for bonus elements in ordinary shares issues during the year. Diluted loss per share adjusts the basic earnings per share to take into account the after tax effect of interest and other financing costs associated with dilutive potential ordinary shares, and the weighted average number of additional ordinary shares that would have been outstanding assuming the conversion of all dilutive potential ordinary shares. (m) Goods and services tax (GST) Revenue, expenses and assets are recognised net of the amount of goods and services tax (GST), except where the amount of GST incurred is not recoverable from the Australian Taxation Office (ATO). In this case it is recognised as part of the cost of acquisition of the asset or as part of the expense. Receivables and payable are stated inclusive of GST. The net amount of GST recoverable from, or payable to, the ATO is included with other receivables or payables in the consolidated statement of financial position. Cash flows in the consolidated statement of cash flows are presented on a gross basis and the GST component of cash flows arising from investing and financing activities which is recoverable from, or payable to, the taxation authority is classified as operating cash flows. 53 Notes to the Consolidated Financial Statements For the Year Ended 30 June 2024 4 Critical Accounting Estimates and Judgments The preparation of financial statements requires the use of accounting estimates which, by definition, will seldom equal the actual results. Management also needs to exercise judgement in applying the Group’s accounting policies. This note provides an overview of the areas that involved a higher degree of judgement or complexity, and of items that are more likely to be materially adjusted due to estimates and assumptions turning out to be wrong. Detailed information about each of these estimates and judgements is included in other notes together with information about the basis of calculation for each affected line item in the financial statements. In addition, this note also explains where there have been actual adjustments this year as a result of an error and of changes to previous estimates. Key estimates - estimation of R&D tax incentive income accrual - note 6(a)(i) Management has used judgements to assess the Group’s eligible research and development (R&D) activities and eligible expenditure under the incentive scheme. The determination of the eligible R&D activities and eligible expenditure would affect the expected amounts recognised for R&D tax incentive. The R&D tax incentive refund provides an important source of funding and enables the Group to progress the development and commercialisation of our GaRP product. Key estimates - share based payments - note 20 Management has used judgements to assess the Group’s share-based payments by determining the choice of option pricing model. The choice of model would result in option valuation that requires various underlying assumptions to determine the fair value of options and performance rights at grant date. Management used the Black-Scholes option pricing model that takes into account the exercise price, term of the option or performance right, security price at grant date and expected price volatility of the underlying security, the expected dividend yield, the risk-free interest rate for the term of the security and certain probability assumptions as all these inputs would affect the share-based payments valuation. The share-based payments are long-term incentives which allow executives to participate in, and benefit from, the growth of the Group as a result of their efforts and to assist in motivating and retaining those key employees over the long-term. Estimates and judgements are continually evaluated. They are based on historical experience and other factors, including expectations of future events that may have a financial impact on the Group and that are believed to be reasonable under the circumstances. 5 Operating Segments Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Executive Chair of the Company. The Group has identified one reportable segment; that is, the research, development of oral solutions for gastrointestinal diseases and the commercialisation of the Detach® diarrhoea treatment for piglets. The segment details are therefore fully reflected in the body of the consolidated financial statements. 54 Notes to the Consolidated Financial Statements For the Year Ended 30 June 2024 6 Other Income and Expense Items (a) Other Income 2024 2023 Note $ $ Other Income - Research & (i) 626,103 1,215,150 Other grants 16,164 24,600 Other income 1,759 - Gain on lease i - 6,096 Total other income 644,026 1,245,846 (i) R&D tax incentive The Group’s Research & Development (R&D) activities are eligible under an Australian government tax incentive for eligible expenditure. Management has assessed these activities and expenditure to determine which are likely to be eligible under the incentive scheme. Amounts are recognised when it has been established that the conditions of the tax incentive have been met and that the expected amount can be reliably measured. For the year ended 30 June 2024, the Group has recognised a receivable of $626,103 (2023 $923,236). (b) Breakdown of expenses by nature 2024 2023 $ $ General and administrative Accounting and audit fees 184,891 206,989 Consulting fees 103,945 216,264 Depreciation 2,463 24,763 Employee benefits 695,628 687,639 Insurance 57,723 64,106 Investor relations 103,525 71,287 Legal expenses 9,899 25,950 Listing and share registry 53,633 69,253 Occupancy costs 23 5,012 Share-based payment expense 20(b) 28,599 4,629 Superannuation 65,882 74,907 Travel and entertainment 20,705 23,115 Other expenses 27,327 158,779 Total general and administrative 1,354,243 1,682,693 Research expenses Corporate and finance - 107,353 Project research and development 748,910 1,494,878 Total research expenses 748,910 1,602,231 55 Notes to the Consolidated Financial Statements For the Year Ended 30 June 2024 7 Income Tax Expense (a) Reconciliation of income tax to accounting profit: (b) Tax losses: Deferred tax assets have not been recognised in respect of the following: 2024 2023 $ $ Loss from continuing operations before income tax expense (1,451,242) (2,023,188) Tax at the Australian tax rate of 25.0% (2023: 25.0%) (362,811) (505,797) Add: Tax effect of: - Accounting expenditure subject to R&D tax incentive 359,830 530,595 - Share-based payments 7,150 13,658 - Other items 42,299 3,697 46,468 42,153 Less Tax effect of: - R&D tax incentive 156,526 303,788 Income tax attributable to parent entity (110,058) (261,635) Tax losses and other timing differences for which no deferred tax asset 110,058 261,635 Income tax expense - - 2024 2023 $ $ Unused tax losses for which no deferred tax asset has been recognised 12,625,530 11,609,599 Potential tax benefit @ 25.0% (2023: 25.0%) 3,156,383 2,902,400 Deferred tax assets have not been recognised in respect of these items because it is not probable that future taxable profit will be available against which the Group can utilise the benefits therein. Unused tax losses can be carried forward indefinitely subject to continuity of ownership and business continuity test. 56 Notes to the Consolidated Financial Statements For the Year Ended 30 June 2024 8 Cash and Cash Equivalents (b) Classification as cash equivalents Term deposits are presented as cash equivalents if they have a maturity of three months or less from the date of acquisition and are repayable with 24 hours notice with no loss of interest. See note 3(f) for the Group's other accounting policies on cash and cash equivalents. (c) Risk exposure The Group's exposure to interest rate risk is discussed in note 15. The maximum exposure to credit risk at the end of the reporting period is the carrying amount of each class of cash and cash equivalents mentioned above. 9 Trade and Other Receivables 2024 2023 $ $ Cash at bank and in hand 932,016 351,184 Term deposit 50,091 - Total cash and cash equivalents 982,107 351,184 (a) Reconciliation of cash Cash and Cash equivalents reported in the consolidated statement of cash flows are reconciled to the equivalent items in the consolidated statement of financial position as follows: 2024 2023 $ $ Cash and cash equivalents 932,016 351,184 Balance as per consolidated statement of cash flows 932,016 351,184 2024 2023 $ $ CURRENT 626,103 923,236 Research and Development Tax Incentive receivable 44,989 80,842 Other receivables Total current trade and other receivables 671,092 1,004,078 (a) Fair value of trade and other receivables The carrying value of trade receivables is considered a reasonable approximation of fair value due to the shortterm nature of the balances. The maximum exposure to credit risk at the reporting date is the fair value of each class of receivable in the financial statements. 2024 2023 $ $ 191,143,727 (2023: 119,923,985) Ordinary shares 24,520,876 22,535,542 Share issue costs (1,344,263) (1,166,824) Total issued capital 23,176,613 21,368,718 57 Notes to the Consolidated Financial Statements For the Year Ended 30 June 2024 10 Trade and Other Payables 2024 2023 $ $ CURRENT Trade and other payables 248,028 436,508 Other payables 21,663 37,954 Total trade and other payables 269,691 474,462 Trade and other payables are unsecured, non-interest bearing and are normally settled within 30 days. The carrying value of trade and other payables is considered a reasonable approximation of fair value due to the short-term nature of the balances. 2024 2023 $ $ CURRENT Provision for employee benefits - annual leave 34,472 19,705 Total current employee benefits 34,472 19,705 NON CURRENT Provision for employee benefits - long service leave 2,686 665 Total non-current employee benefits 2,686 665 (a) Leave obligations The leave obligations cover the Group’s liabilities for long service leave and annual leave which are classified as either other long-term benefits or short-term benefits. The current portion of this liability includes all of the accrued annual leave, the unconditional entitlements to long service leave where employees have completed the required year of service and also for those employees that are entitled to pro-rata payments in certain circumstances. The majority of leave provision is presented as current, being $34,472 (2023: $19,705), since the Group does not have an unconditional right to defer settlement for any of these obligations. However, based on past experience, the Group does not expect all employees to take the full amount of accrued leave or require payment within the next 12 months. 11 Employee Benefits 12 Issued Capital (b) Ordinary shares Ordinary shares entitle the holder to participate in dividends, and to share in the proceeds of winding up the Company in proportion to the number of and amounts paid on the shares held. On a show of hands every holder of ordinary shares present at a meeting in person or by proxy, is entitled to one vote, and upon a poll each share is entitled to one vote. Ordinary shares have no par value and the company does not have a limited amount of authorised capital. (c) Options and performance rights Information relating to options and performance rights, including details of those issued, exercised, and lapsed during the financial year, and the outstanding balance as at the end of the reporting year is set out in note 13. 13 Reserves (a) Share-based payments reserve The consolidated statement of financial position line item "other reserves" comprises the "share- based payments reserve". The share-based payment reserve records items recognised as expenses on valuation of share options and performance rights issued to key management personnel, other employees and eligible contractors. 58 Notes to the Consolidated Financial Statements For the Year Ended 30 June 2024 12 Issued Capital (continued) Number of shares Total $ Balance at 1 July 2022 71,355,621 19,908,471 Issue at $0.035 pursuant to Placement - Tranche 1 (28-10-2022) 10,703,343 374,617 Issue at $0.035 pursuant to Entitlement Offer (28-11-2022) 14,991,156 524,691 Issue at $0.035 pursuant to Placement - Tranche 2 (16-12-2022) 14,010,943 490,383 Exercise of performance rights with nil cash consideration (27-01-2022) 68,871 - Transfer from reserves on exercise of performance rights (27-01-2023) - 5,000 Issue at $0.035 pursuant to Shortfall Offer (21-02-2023) 8,794,051 307,791 Less: Transaction costs arising on share issues - (242,235) Balance at 30 June 2023 119,923,985 21,368,718 Issue at $0.022 pursuant to Entitlement Offer (08-12-2023) 43,437,967 955,635 Issue at $0.022 pursuant to Entitlement Offer (18-12-2023) 4,531,775 99,699 Issue at $0.04 pursuant to share placement (07-05-2024) 23,250,000 930,000 Less: Transaction costs arising on share issues - (177,439) Balance at 30 June 2024 191,143,727 23,176,613 (a) Movements in ordinary shares (i) The issue of 3,500,000 options to external consultants was approved by shareholders at the general meeting held in December 2022. (ii) On 31 August 2022, 275,483 performance rights were issued to employees, as part of their performance bonus of $20,000 recognised as expenses in the prior year. (iii) The issue of 2,000,000 options to external consultants was approved by shareholders at the general meeting held in July 2024. (iv) On 1 August 2023, 1,611,176 performance rights were issued to an employee as part of their performance bonus of $54,780 recognised as an expense in the prior year. (v) This number of options balance does not include options issued during the year that are not in relation to share based payments. Unlisted options: For every 2 shares subscribed for in the placement on 28 November 2022, 15 December 2022 and 21 February 2023, one listed option was issued with an exercise price of 7c per option, expiring on 11 December 2025. The total number of unlisted options at 30 June 2024 is 24,249,784. 59 Notes to the Consolidated Financial Statements For the Year Ended 30 June 2024 13 Reserves (continued) Note Number of options Number of performance Total $ Balance at 1 July 2022 4,877,704 - 439,488 Options expired/lapsed during the year (1,217,704) - (214,970) Options forfeited (265,000) - (5,903) Issue of options to external consultants (i) 3,500,000 - 53,550 Share-based payment expenses of options issued in prior years - - - 60,533 Issue of performance rights (ii) - 275,483 20,000 Performance rights exercised during the year - (68,871) (5,000) Balance at 30 June 2023 6,895,000 206,612 347,698 Options expired/lapsed during the year (1,500,000) (153,047) Options forfeited during the year (225,000) - (13,631) Issue of options to external consultants (iii) 2,000,000 - 32,000 Share-based payment expenses of options issued in prior years - - 10,230 Issue of performance rights (iv) - 1,611,176 54,780 Balance at 30 June 2024 (v) 7,170,000 1,817,788 278,030 (b) Movement in options and performance rights 60 Notes to the Consolidated Financial Statements For the Year Ended 30 June 2024 13 Reserves (continued) (b) Movement in options and performance rights Fair value of options granted: See note 20(a)(ii) for details of fair value measurement of options issued during the year. The model inputs for options granted to external consultants during the year ended 30 June 2024 included: 2024 Grant Date Expiry Date Exercise price $ No. of options Share price at grant date $ Expected volatility Dividend yield Riskfree interest rate Fair value at grant date per option $ 07 May 2024 06 May 2027 0.1000 2,000,000 0.046 79.60% - % 3.91% 0.0160 2,000,000 14 Cash Flow Information (a) Reconciliation of (loss) for the year to cashflows from operating activities Reconciliation of net (loss) to net cash provided by operating activities: 2024 $ 2023 $ Loss for the year (1,451,242) (2,023,188) Non-cash flows in loss: depreciation and amortisation 6(b) 2,463 24,763 finance costs - 2,370 issue of performance rights 20,000 (gain) on lease modification - (6,096) share-based payments 20 28,599 54,629 Changes in assets and liabilities: decrease/(increase) in trade and other receivables 332,986 (495,553) (increase)/decrease in other assets (6,574) 7,316 (decrease)/increase in trade and other payables (225,196) 173,108 decrease/(increase) in other liabilities 16,788 (15,245) Net cash (outflow) from operations (1,247,396) (2,257,896) 61 Notes to the Consolidated Financial Statements For the Year Ended 30 June 2024 14 Cash Flow Information (continued) (b) Non-cash investing and financing activities Reconciliation of net (loss) to net cash provided by operating activities: 2024 $ 2023 $ Financial instruments with cash flow risk Cash and cash equivalents 8 932,016 351,184 Term deposits 50,091 50,000 Total financial instruments with cash flow risk 982,107 401,184 Non-cash investing and financing activities disclosed in other notes are: • Options/performance rights issued for no cash consideration - note 20. 15 Financial Risk Management This note explains the Group’s exposure to financial risks and how these risks could affect the Group’s future financial performance. The Group’s risk management is predominantly controlled by the board. The board monitors the Group’s financial risk management policies and exposures and approves substantial financial transactions. It also reviews the effectiveness of internal controls relating to market risk, credit risk and liquidity risk. (a) Market risk (i) Foreign exchange risk The majority of the Group’s operations are denominated in Australian dollars, with the few exceptions on services acquired from overseas suppliers but at a marginally insignificant amount and frequency. Therefore, management has concluded that market risk from foreign exchange fluctuation is not material. (ii) Cash flow and fair value interest rate risk The Group's main interest rate risk arises from cash and cash equivalents and other financial assets at amortised cost (deposits at call) held, which expose the Group to cash flow interest rate risk. During 2024 and 2023, the Group’s cash and cash equivalents and deposits at call at variable rates were denominated in Australian dollars. The Group's exposure to interest rate risk at the end of the reporting year, expressed in Australian dollars, was as follows: Sensitivity analysis The following table illustrates the sensitivity of the net result for the year and equity to a reasonably possible change in interest rates of +/-4.93% (2023: +/-3.38%), with effect from the beginning of the year. The use of 4.93% was determined based on analysis of the Reserve Bank of Australia cash rate change, on an absolute value basis, at 30 June 2024 and the previous four balance dates. The average cash rate at these balance dates was 1.93% (2023: 1.31%) The average change to the cash rate between balance dates was 255.69% (2023: 257.80%). By multiplying these two values, the interest rate risk was derived. Loss sensitivity to movements in interest rates is reasonably consistent between 2024 and 2023 as increases in interest rates have been offset by a reduction in cash and cash equivalents. The Group's exposure to other classes of financial instruments with cash flow risk is not material. The calculations are based on the financial instruments held at each reporting date. All other variables are held constant. 2024 2023 +/-4.93% +/-3.38% $ $ Impact on loss for the period 48, 465 12,945 Impact on other components of equity - - 62 Notes to the Consolidated Financial Statements For the Year Ended 30 June 2024 15 Financial Risk Management (continued) (b) Credit risk Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in a financial loss to the Group. (i) Risk management The Group manages credit risk and the losses which could arise from default by ensuring that financial assets such as cash at bank and deposits at call are held with reputable organisations. (ii) Impairment of financial assets While cash and cash equivalents and term deposits are subject to the impairment requirements of AASB 9, the identified impairment loss was immaterial. (b) Liquidity risk Liquidity risk arises from the possibility that the Group might encounter difficulty in settling its debts or otherwise meeting its obligations related to financial liabilities. The Group manages this risk through the following mechanisms: • preparing forward looking cash flow analyses in relation to its operating, investing and financing activities; • obtaining funding from a variety of sources; • maintaining a reputable credit profile; • managing credit risk related to financial assets; investing cash and cash equivalents and deposits at call with major financial institutions; and comparing the maturity profile of financial liabilities with the realisation profile of financial assets. Less than 6 months $ 6-12 months $ Between 1 and 2 years $ Between 2 and 5 years $ Over 5 years $ Total contractual cash flows $ Carrying amount (assets)/ liabilities $ At 30 June 2024 Payables 269,691 - - - - 269,691 269,691 Total 269,691 - - - - 269,691 269,691 At 30 June 2023 Payables 474,462 - - - - 474,462 474,462 Total 474,462 - - - - 474,462 474,462 (i) Maturities of financial liabilities 63 Notes to the Consolidated Financial Statements For the Year Ended 30 June 2024 16 Capital management (a) Risk management The Group's objectives when managing capital are to: • safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders; and • maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Group may issue new shares or reduce its capital, subject to the provisions of the Group’s constitution. The capital structure of the Group consists of equity attributed to equity holders of the Group, comprising contributed equity, reserves and accumulated losses. By monitoring undiscounted cash flow forecasts and actual cash flows provided to the board by the Group’s management, the board monitors the need to raise additional equity from the equity markets. As at 30 June 2024, the Group held cash and equivalents of $982,107 (2023: $351,184). The Group has put in place measures to reduce all non-critical expenditure. (b) Dividends No dividends were declared or paid to members for the year ended 30 June 2024 (2023: nil). The Group’s ranking account balance was nil at 30 June 2024 (2023: nil). 17 Interests in Subsidiaries The Group's principal subsidiaries at 30 June 2024 are set out below. Unless otherwise stated, they have share capital consisting solely of ordinary shares that are held directly by the Group, and the proportion of ownership interests held equals the voting rights held by the Group. The country of incorporation or registration is also their principal place of business. Principal place of business / Country of Incorporation Percentage Owned (%)* 2024 Percentage Owned (%)* 2023 Subsidiaries: Sarantis Pty Ltd Australia 100 100 Except for the above, no other matters or circumstances have arisen since the end of the financial year which significantly affected or could significantly affect the operations of the Group, the results of those operations, or the state of affairs of the Group in future financial years. 19 Related Parties (a) The Group's main related parties are as follows: Interests in subsidiaries are set out in note 17. Key management personnel - refer to note 19(b). Other related parties include close family members of key management personnel and entities that are controlled or significantly influenced by those key management personnel or their close family members. (b) Key management personnel compensation Key management personnel remuneration included within employee expenses for the year is shown below: 2024 $ 2023 $ Short-term employee benefits 586,425 595,253 Post-employment benefits 63,255 61,517 Long-term benefits 1,658 584 Share-based payments 65,010 129,515 Total key management personnel compensation 716,348 786,869 (c) Transactions with other related parties No transactions with related parties occurred in 2023 or 2024. 18 Events Occurring After the Reporting Date The consolidated financial report was authorised for issue on August 2024 by the board of directors. On 9 July 2024, 1,750,000 shares and 4,500,000 options were issued to Directors pursuant to the share placement offer announced on 1 May 2024 as approved by shareholders at a general meeting held on 5 July 2024. *The percentage of ownership interest held is equivalent to the percentage voting rights for all subsidiaries. 64 Notes to the Consolidated Financial Statements For the Year Ended 30 June 2024 20 Share-Based Payments (a) Executive option plan The establishment of the ‘executive option plan’ (EOP) was approved by shareholders at the 2020 annual general meeting. The plan is designed to provide long-term incentives for executives (including directors) to deliver long-term shareholder returns. Participation in the plan is at the board’s discretion and no individual has a contractual right to participate in the plan or to receive any guaranteed benefits. Set out below are summaries of options granted under the plan: Share options outstanding at the end of the year have the following expiry date and exercise prices: 2024 Average exercise price per share option $ Number of options No. 2023 Average exercise price per share option $ Number of options No. As at 1 July 0.23 3,395,000 0.48 4,877,704 Forfeited/lapsed during the year 0.25 (1,725,000) 0.44 (1,482,704) As at 30 June 0.23 1,670,000 0.23 3,395,000 Vested and exercisable at 30 June 0.22 1,570,000 0.24 2,520,000 The forfeited/lapsed options were fully vested before they forfeited/lapsed. Number Grant Date Vesting Date Expiry Date Exercise Options 20,000 23 August 2021 23 August 2022 18 August 2025 0.2256 Options 900,000 16 November 2021 16 November 2022 14 November 2025 0.2256 Options 450,000 16 November 2022 16 November 2023 14 November 2026 0.2256 Options 100,000 29 November 2021 25 November 2022 25 November 2023 0.2030 Options 100,000 29 November 2022 25 November 2023 25 November 2024 0.2030 Options 100,000 29 November 2023 25 November 2024 25 November 2025 0.2030 1,670,000 2024 2023 Weighted average remaining contractual life of options outstanding at end of period 1.38 1.52 (i) Vesting conditions Vesting condition apply to options granted under the executive option plan (EOP). Shares are not be issued unless the vesting condition is met. The vesting condition generally depends on service periods of the employees or directors. If the vesting condition is not met on the relevant vesting date, the options lapse and the option holders are not issued any shares. The vesting condition that apply to the options offered are set out in the options offer letter and the EOP. 65 Notes to the Consolidated Financial Statements For the Year Ended 30 June 2024 20 Share-Based Payments (continued) (a) Executive option plan (continued) (i) Vesting conditions Vesting condition apply to options granted under the executive option plan (EOP). Shares are not be issued unless the vesting condition is met. The vesting condition generally depends on service periods of the employees or directors. If the vesting condition is not met on the relevant vesting date, the options lapse and the option holders are not issued any shares. The vesting condition that apply to the options offered are set out in the options offer letter and the EOP. (ii) Fair value of options granted The value attributed to options issued is an estimate calculated using an appropriate mathematical formula based on an option pricing model. The choice of models and the resultant option value require assumptions to be made in relation to the likelihood and timing of the conversion of the options to shares and the value and volatility of the price of the underlying shares. Management has assessed the fair value of options determined at grant date, using the Black-Scholes option pricing model that takes into account the exercise price, term of the option, security price at grant date and expected price volatility of the underlying security, the expected dividend yield, the risk-free interest rate for the term of the security and certain probability assumptions. There were no options granted under EOP during the year ended 30 June 2024. (b) Executive option plan Total expenses arising from share-based payment transactions recognised during the year are as follows: 2024 $ 2023 $ Options issued under EOP 10,230 60,533 Options issued to external brokers 13(b) 32,000 Adjustment for previous share-based payments not vested (13,631) (5,904) Total 28,599 54,629 (i) Performance pay It was agreed that performance pay for selected employees for the year ended 30 June 2023 and 30 June 2022 would be paid in performance rights rather than cash. Performance rights to be issued to employees are longterm incentives under the Executive Option Plan (EOP). The performance rights for the 2023 financial year were granted on 1 August 2023. (ii) Options issued to external consultants The issue of 2,000,000 options to external consultants was approved by shareholders at the general meeting held in July 2024. See 13(b) for the fair value measurement of these options. 21 Auditors' Remuneration During the year the following fees were paid or payable for services provided by the auditor of the parent entity, its related practices and non-related audit firms: (a) Grant Thornton Audit Pty Ltd 2024 $ 2023 $ Audit and other assurance services - auditing or reviewing the financial statements 64,000 65,500 Taxation services - tax compliance services - 38,000 Total auditor's remuneration 64,000 103,500 66 Notes to the Consolidated Financial Statements For the Year Ended 30 June 2024 22 Loss Per Share (a) Basic (loss) per share 2024 Cents 2023 Cents Basic (loss) per share (0.97) (2.07) (b) Diluted (loss) per share 2024 Cents 2023 Cents Diluted (loss) per share (0.97) (2.07) (c) Reconciliation of (loss) used in calculating basic and diluted loss per share 2024 $ 2023 $ (Loss) attributable to the ordinary equity holders of the company used in calculating: (loss) per share: (Loss) for the year (1,451,242) (2,023,188) (d) Weighted average number of ordinary shares outstanding during the year used in calculating basic EPS 2024 No. 2023 No. Weighted average number of ordinary shares outstanding during the year used in calculating basic EPS 150,016,572 97,917,397 On the basis of the Group's losses, the outstanding options as at 30 June 2024 are considered to be anti- dilutive and therefore were excluded from the diluted weighted average number of ordinary shares calculation. 23 Parent Entity The following information has been extracted from the books and records of the parent, Anatara Lifesciences Ltd (“the Company") and has been prepared in accordance with Australian Accounting Standards. The individual financial statements for the parent resemble the consolidated financial statements as the Company’s subsidiary, Sarantis Pty Ltd, is a dormant entity. (a) Guarantees The parent entity has not entered into any guarantees in relation to debts of its subsidiaries in the year ended 30 June 2024 (2023: nil). (b) Contingent liabilities The parent entity did not have any contingent liabilities as at 30 June 2024 or 30 June 2023. (c) Contractual commitments for the acquisition of property, plant and equipment The parent entity did not have any commitments for the acquisition of property, plant or equipment in the year ended 30 June 2024 or 30 June 2023. 67 Notes to the Consolidated Financial Statements For the Year Ended 30 June 2024 23 Parent Entity (continued) (d) Determining parent entity financial information (i) Tax consolidation legislation Anatara Lifesciences Ltd and its wholly-owned Australian controlled entities have implemented the tax consolidation legislation. The head entity, Anatara Lifesciences Ltd, and the controlled entities in the tax consolidated group account for their own current and deferred tax amounts. These tax amounts are measured as if each entity in the tax consolidated group continues to be a stand-alone taxpayer in its own right. In addition to its own current and deferred tax amounts, Anatara Lifesciences Ltd also recognises the current tax liabilities (or assets) and the deferred tax assets arising from unused tax losses and unused tax credits assumed from controlled entities in the tax consolidated group. The entities have also entered into a tax funding agreement under which the wholly-owned entities fully compensate Anatara Lifesciences Ltd for any current tax payable assumed and are compensated by Anatara Lifesciences Ltd for any current tax receivable and deferred tax assets relating to unused tax losses or unused tax credits that are transferred to Anatara Lifesciences Ltd under the tax consolidation legislation. The funding amounts are determined by reference to the amounts recognised in the wholly-owned entities’ financial statements. The amounts receivable/payable under the tax funding agreement are due upon receipt of the funding advice from the head entity, which is issued as soon as practicable after the end of each financial year. The head entity may also require payment of interim funding amounts to assist with its obligations to pay tax installments. Assets or liabilities arising under tax funding agreements with the tax consolidated entities are recognised as current amounts receivable from or payable to other entities in the group. Any difference between the amounts assumed and amounts receivable or payable under the tax funding agreement are recognised as a contribution to (or distribution from) wholly-owned tax consolidated entities. 24 Contingencies In the opinion of the Directors, the Company did not have any contingencies at 30 June 2024 (30 June 2023: Nil). 25 Statutory Information The registered office and principal place of business of the company is: Anatara Lifesciences Ltd c/- Perks, Level 8, 81 Flinders Street Adelaide SA 5000 Australia 68 Consolidated Entity Disclosure Statement as at 30 June 2024 Basis of Preparation This Consolidated Entity Disclosure Statement (CEDS) has been prepared in accordance with the Corporations Act 2001 and includes required information for each entity that was part of the consolidated entity as at the end of the financial year. Consolidated entity This CEDS includes only those entities consolidated as at the end of the financial year in accordance with AASB 10 Consolidated Financial Statements (AASB 10). Determination of Tax Residency Section 295 (3A) of the Corporations Act 2001 defines tax residency as having the meaning in the Income Tax Assessment Act 1997. The determination of tax residency involves judgment as there are currently several different interpretations that could be adopted, and which could give rise to a different conclusion on residency. In determining tax residency, the consolidated entity has applied the following interpretations: Australian tax residency The consolidated entity has applied current legislation and judicial precedent, including having regard to the Tax Commissioner's public guidance in Tax Ruling TR 2018/5 Income tax: central management and control test of residency. Partnerships and Trusts Australian tax law does not contain specific residency tests for partnerships and trusts. Generally, these entities are taxed on a flow-through basis so there is no need for a general residence test. There are some provisions which treat trusts as residents for certain purposes but this does not mean the trust itself is an entity that is subject to tax. Additional disclosures on the tax status of partnerships and trusts have been provided where relevant. Body corporates Tax residency Entity name Entity type Place formed or incorporated % of share capital held Australian or foreign Foreign jurisdiction Anatara Lifesciences Ltd Body corporate Australia N/A Australian N/A Sarantis Pty Ltd Body corporate Australia 100 Australian N/A 69 Director’s Declaration as at 30 June 2024 The directors of the Company declare that: 1. the consolidated financial statements and notes set out on pages 22 - 50 are in accordance with the Corporations Act 2001, including: a. comply with Australian Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements; and b. giving a true and fair view of the consolidated group's financial position as at 30 June 2024 and of its performance for the financial year ended on that date; and 2. in the directors' opinion, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable. 3. in the directors' opinion, the attached consolidated entity disclosure statement is true and correct as at 30 June 2024. Note 2(a) confirms that the financial statements also comply with International Financial Reporting Standards as issued by the International Accounting Standards Board. The directors have been given the declarations by the chief executive officer and chief financial officer required by section 295A of the Corporations Act 2001. This declaration is made in accordance with a resolution of the Board of Directors Director Dr David Brookes, Executive Chair Dated this 22 day of August 2024 70 Grant Thornton Audit Pty Ltd Grant Thornton House Level 3 170 Frome Street Adelaide SA 5000 GPO Box 1270 Adelaide SA 5001 T +61 8 8372 6666 w #12308257v3 www.grantthornton.com.au ACN-130 913 594 Grant Thornton Audit Pty Ltd ACN 130 913 594 a subsidiary or related entity of Grant Thornton Australia Limited ABN 41 127 556 389 ACN 127 556 389. ‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Limited is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 ACN 127 556 389 and its Australian subsidiaries and related entities. Liability limited by a scheme approved under Professional Standards Legislation. Independent Auditor’s Report To the Members of Anatara Lifesciences Ltd Report on the audit of the financial report Opinion We have audited the financial report of Anatara Lifesciences Ltd (the Company) and its subsidiaries (the Group), which comprises the consolidated statement of financial position as at 30 June 2024, the consolidated statement of profit or loss and other comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, and notes to the consolidated financial statements, including material accounting policy information, the consolidated entity disclosure statement and the directors’ declaration. In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including: a giving a true and fair view of the Group’s financial position as at 30 June 2024 and of its performance for the year ended on that date; and b complying with Australian Accounting Standards and the Corporations Regulations 2001. Basis for opinion We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report. We are independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Grant Thornton Audit Pty Ltd 2 Material uncertainty related to going concern We draw attention to Note 2(c) in the financial statements, which indicates that the Group incurred a net loss of $1,451,242 during the year ended 30 June 2024, and the Group’s operating cash outflows were $1,247,396. As at 30 June 2024 the Group had total cash and cash equivalents of $982,107. These events or conditions, along with other matters as set forth in Note 2(c), indicate that a material uncertainty exists that may cast doubt on the Group’s ability to continue as a going concern. Our opinion is not modified in respect of this matter. Key audit matters Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial report of the current period. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. In addition to the matter described in the Material uncertainty related to going concern section, we have determined the matters described below to be the key audit matters to be communicated in our report. Key audit matter How our audit addressed the key audit matter Recognition of research and development tax incentive – Notes 6(a) and 9(a) The Group receives a refundable tax offset of eligible expenditure under the research and development (R&D) tax incentive scheme. An R&D plan is filed with AusIndustry in the following financial year, and, based on this filing, the Group receives the incentive in cash. Management reviews the Group’s total research and development expenditure to determine the potential claim under the R&D tax incentive legislation. The Group recognises the R&D tax incentive on an accrual basis, meaning that a receivable is recorded at the balance date based on the estimated amount that is yet to be received from the Australian Taxation Office for the year 1 July 2023 to 30 June 2024. This area is a key audit matter due to the judgement and interpretation of the R&D tax legislation required by management to assess the eligibility of the R&D expenditure under the scheme. Our procedures included, amongst others: • Obtaining management’s R&D incentive calculations that have been reviewed by management’s expert and engaging an internal R&D Tax Expert to assist in assessing the reasonableness of the estimate; • Performing a review to -verify that any relevant legislation changes have been appropriately applied; • Comparing the nature of the R&D expenditure included in the current year estimate to the prior- year approved claim; • Comparing the estimates made in previous years to the amount of cash received after lodgement of the R&D tax claim; • Considering the nature of the expenses against the eligibility criteria of the R&D tax incentive scheme to assess whether the expenses included in the estimate are likely to meet the eligibility criteria; • Assessing the eligible expenditure used to calculate the estimate is in accordance with expenditure recorded in the general ledger; • Vouching a sample of expenditure items included in the estimate to supporting documentation to verify that they are appropriately recognised in the accounting records and are eligible expenditures; • Inspecting copies of relevant correspondence with AusIndustry and the ATO related to the claims; and • Reviewing the appropriateness of the relevant disclosures in the financial statements. 71 Grant Thornton Audit Pty Ltd 3 Information other than the financial report and auditor’s report thereon The Directors are responsible for the other information. The other information comprises the information included in the Group’s annual report for the year ended 30 June 2024, but does not include the financial report and our auditor’s report thereon. Our opinion on the financial report does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Responsibilities of the Directors for the financial report The directors of the Company are responsible for the preparation of: a the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 (other than the consolidated entity disclosure statement); and b the consolidated entity disclosure statement that is true and correct in accordance with the Corporations Act 2001, and for such internal control as the directors determine is necessary to enable the preparation of: i i) the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error; and ii ii) the consolidated entity disclosure statement that is true and correct and is free of misstatement, whether due to fraud or error. In preparing the financial report, the Directors are responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so. Auditor’s responsibilities for the audit of the financial report Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report. A further description of our responsibilities for the audit of the financial report is located at the Auditing and Assurance Standards Board website at: http://www.auasb.gov.au/auditors_responsibilities/ar1_2020.pdf.This description forms part of our auditor’s report. Report on the remuneration report Opinion on the remuneration report We have audited the Remuneration Report included in the Directors’ report for the year ended 30 June 2024. In our opinion, the Remuneration Report of Anatara Lifesciences Ltd, for the year ended 30 June 2024 complies with section 300A of the Corporations Act 2001. Grant Thornton Audit Pty Ltd 4 Responsibilities The Directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards. GRANT THORNTON AUDIT PTY LTD Chartered Accountants J L Humphrey Partner – Audit & Assurance Adelaide, 22 August 2024 72 Top Shareholders as of 9/25/2024 ANATARA LIFESCIENCES LIMITED FULLY PAID ORDINARY SHARES (Total) Top Holders (Ungrouped) As Of 9/25/2024 Composition : FPO Rank Name Units % Units 1 RTL GROUP INVESTMENTS PTY LTD 22,000,000 11.41 2 UBS NOMINEES PTY LTD 16,642,732 8.63 3 SCINTILLA STRATEGIC INVESTMENTS LIMITED 8,000,000 4.15 4 HIMSTEDT & CO PTY LTD 6,900,000 3.58 5 PARMA CORPORATION PTY LTD 5,576,771 2.89 6 RTL GROUP INVESTMENTS PTY LTD 5,000,000 2.59 7 MR SAMUEL FRANCIS HUNTER 4,862,662 2.52 8 JOHN DAHLSEN SUPERANNUATION FUND PTY LTD 4,200,000 2.18 9 MOUSETRAP NOMINEES PTY LTD 3,953,053 2.05 73 Top Shareholders as of 9/25/2024 (continued) 10 MR MICHAEL ANDREW WHITING + MRS TRACEY ANNE WHITING 3,625,000 1.88 11 MYENG PTY LTD 3,580,211 1.86 12 CALAMA HOLDINGS PTY LTD 3,371,940 1.75 13 SYMINGTON PTY LTD 3,340,000 1.73 14 TOUCAN TRADING PTY LTD 3,097,955 1.61 15 LONGRIDGE PARTNERS PTY LTD 2,839,248 1.47 16 MR BRENDAN PHYLAND 2,651,659 1.37 17 MR ANDRE NICHOLAS MARSCHKE + MRS SHALEAH ANN MARSCHKE 2,600,000 1.35 18 OCTIFIL PTY LTD 2,595,416 1.35 19 TARANDI 1996 PTY LTD 2,490,002 1.29 20 MR DAVID LIONEL BROOKES + MRS ELISABETH MARY BROOKES 2,300,000 1.19 Totals: Top 20 holders of FULLY PAID ORDINARY SHARES (Total) 109,626,649 56.83 Total Remaining Holders Balance 83,267,078 43.17 Selection Criteria: Address: Hidden Holder ID: Hidden Control Account: Included 74 Range of Shareholdings ANATARA LIFESCIENCES LIMITED FULLY PAID ORDINARY SHARES (Total) Range of Units As Of 9/25/2024 Composition : FPO Range Total holders Units % Units 1 - 1,000 37 12,483 0.01 1,001 - 5,000 123 460,068 0.24 5,001 - 10,000 113 889,620 0.46 10,001 - 100,000 287 10,281,126 5.33 100,001 Over 163 181,250,430 93.96 Rounding 0.00 Total 723 192,893,727 100.00 Unmarketable Parcels Minimum Parcel Size Holders Units Minimum $ 500.00 parcel at $ 0.0720 per unit 6,945 198 699,243 Selection Criteria: Hide Unmarketable Parcels: Shown Control Account: Included ABN 41 145 239 872

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