Celyad SA
Annual Report 2023

Plain-text annual report

1   2023 Annual Report 2023 ANNUAL REPORT 0 2023 Annual Report Table of Contents SHAREHOLDERS NEWSLETTER 1. ACTIVITY REPORT ................................................................................................................. 1.1 Who we are - Business Overview ........................................................................................ 1.2 Our Strategy......................................................................................................................... 1.3 What differentiates Celyad Oncology?................................................................................. 1.4 Our Activities and R&D ........................................................................................................ 1.5 Clinical Programs................................................................................................................. 1.6 Licensing and Collaboration Agreements ............................................................................ 1.7 Our shareholding structure .................................................................................................. 1.8 Post balance sheet events................................................................................................... 1.9 Our capital expenditures ...................................................................................................... 1.10 Financial review of the year ending December 31, 2023................................................... 1.10.1. Analysis of the consolidated income statement...................................................... 1.10.2. Analysis of the consolidated statements of financial position ................................. 1.10.3. Analysis of the consolidated net cash burn rate ..................................................... 1.11 Personnel........................................................................................................................... 1.12 Environment....................................................................................................................... 1.13 Going concern.................................................................................................................... 1.14 Risks and uncertainties...................................................................................................... 1.15 Events and circumstances that could have a significant impact on the future................... 2. CORPORATE GOVERNANCE ................................................................................................ 2.1 General ................................................................................................................................ 2.2 Board of Directors ................................................................................................................ 2.2.1. Composition of the Board of Directors...................................................................... 2.2.2. Board resolutions...................................................................................................... 2.2.3. Director Independence ............................................................................................. 2.2.4. Role of the Board in Risk Oversight.......................................................................... 2.2.5. Committees within the Board of Directors ................................................................ 2.2.6. Meetings of the Board and the committees .............................................................. 2.3 Executive Committee ........................................................................................................... 2.4 Conflict of Interest of Directors and members of the Executive Committee and transactions with affiliated companies.................................................................................. 2.4.1. General ..................................................................................................................... 2.4.2. Conflicts of interest of Directors................................................................................ 2.4.3. Existing conflicts of interest of members of the Board of Directors .......................... 2.4.4. Related Party Transactions ...................................................................................... 2.4.5. Transactions with affiliates........................................................................................ 2.4.6. Code of Business Conduct and Ethics ..................................................................... 2.4.7. Market abuse regulations ......................................................................................... 2.5 Corporate Governance Code............................................................................................... 2.6 Remuneration Policy ............................................................................................................ 2.6.1. Introduction ............................................................................................................... 2.6.2. Remuneration of the Board of Directors ................................................................... 2.6.3. Remuneration of the Executive Committee .............................................................. 2.6.4. Deviations from this Policy........................................................................................ 2.7 Remuneration report ............................................................................................................ 2.7.1. Introduction ............................................................................................................... 2.7.2. Total Remuneration .................................................................................................. 2.7.3. Share-based Remuneration...................................................................................... 2.7.4. Termination Indemnities ........................................................................................... 2.7.5. Use of the possibility to reclaim the variable remuneration ...................................... 2.7.6. Deviations from the Remuneration Policy................................................................. 2.7.7. Evolution of the remuneration and the performance of the company and ratio ........ 2.7.8. Taking into consideration of the vote of the shareholders ........................................ 2.7.9. Statutory Auditor ....................................................................................................... 2.8 Description of the principal risks associated to the activities of the Group .......................... 2.8.1. Risk Management..................................................................................................... 2.8.2. Organization and values ........................................................................................... 2.8.3. Risks analysis ........................................................................................................... 7 7 8 10 12 14 15 20 20 20 21 21 21 25 26 26 26 26 27 28 28 28 28 32 33 33 34 35 37 39 39 39 40 45 45 46 46 46 48 48 48 50 54 54 54 55 59 70 71 71 71 71 72 72 72 72 73 1 2023 Annual Report 2.8.4. Risks related to the Company’s financial position, capital requirements and governance ......................................................................................................................... 2.8.5. Risks related to Company’s business activities and industry ................................... 2.8.6. Risks related to intellectual property......................................................................... 2.8.7. Risks linked to the Company’s reliance on third parties ........................................... 2.8.8. Risks related to the shares ....................................................................................... 2.8.9. Audit activities........................................................................................................... 2.8.10. Controls, supervision and correctives actions ........................................................ 3. GROUP STRUCTURE, SHAREHOLDING AND SHARE CAPITAL ....................................... 3.1 Group structure .................................................................................................................... 3.2 Capital increase and issuance of shares ............................................................................. 3.3 Warrants plans..................................................................................................................... 3.4 Changes to the share capital ............................................................................................... 3.5 Major Shareholders.............................................................................................................. 3.6 Anti-takeover provisions under Belgian laws ....................................................................... 3.7 Financial services ................................................................................................................ 4. CONSOLIDATED FINANCIAL STATEMENTS ....................................................................... 4.1 Responsibility statement ...................................................................................................... 4.2 Statutory auditor’s report to the general meeting of shareholders of Celyad Oncology SA for the year ended December 31, 2023 (consolidated financial statements) ....................... 4.3 Consolidated financial statements as at December 31, 2023.............................................. 4.3.1. Consolidated statements of financial position........................................................... 4.3.2. Consolidated statements of comprehensive loss ..................................................... 4.3.3. Consolidated statements of changes in equity ......................................................... 4.3.4. Consolidated statements of Cash flows.................................................................... 5. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS............................................ 5.1 General information ............................................................................................................. 5.2 Basis of preparation and significant accounting policies...................................................... 5.2.1. Basis of preparation.................................................................................................. 5.2.2. Consolidation ............................................................................................................ 5.2.3. Foreign currency translation ..................................................................................... 5.2.4. Revenue ................................................................................................................... 5.2.5. Other income ............................................................................................................ 5.2.6. Intangible assets....................................................................................................... 5.2.7. Property, plant and equipment.................................................................................. 5.2.8. Leases ...................................................................................................................... 5.2.9. Impairment of non-financial assets ........................................................................... 5.2.10. Cash and cash equivalents..................................................................................... 5.2.11. Financial assets ...................................................................................................... 5.2.12. Financial liabilities................................................................................................... 5.2.13. Share based payment............................................................................................. 5.2.14. Income Taxes ......................................................................................................... 5.2.15. Earnings (loss) per share........................................................................................ 5.2.16. Equity...................................................................................................................... 5.2.17. Assets held for sale ................................................................................................ 5.3 Risk Management ................................................................................................................ 5.4 Critical accounting estimates and judgments....................................................................... 5.5 Operating segment information............................................................................................ 5.6 Intangible assets .................................................................................................................. 5.6.1. Intangible assets details and balance roll forward .................................................... 5.6.2. Impairment testing .................................................................................................... 5.7 Property, plant and equipment............................................................................................. 5.8 Non-current trade receivables and other non-current assets............................................... 5.9 Trade receivables and other current assets......................................................................... 5.10 Section left blank................................................................................................................ 5.11 Cash and cash equivalents................................................................................................ 5.12 Subsidiaries fully consolidated........................................................................................... 5.13 Share Capital ..................................................................................................................... 5.14 Share-based payments...................................................................................................... 5.15 Section left blank................................................................................................................ 5.16 Recoverable Cash Advances............................................................................................. 73 76 77 81 82 83 84 85 85 86 86 87 88 88 92 93 93 94 100 100 100 101 102 103 103 103 103 105 105 106 106 108 110 110 110 111 111 111 111 112 113 113 114 114 115 117 118 118 119 120 121 121 122 122 122 123 125 127 127 2 2023 Annual Report 5.17 Other non-current liabilities ................................................................................................ 5.18 Trade payables and other current liabilities ....................................................................... 5.19 Financial liabilities .............................................................................................................. 5.19.1. Maturity analysis ..................................................................................................... 5.19.2. Changes in liabilities arising from financing activities ............................................. 5.20 Financial instruments ......................................................................................................... 5.20.1. Financial instruments not reported at fair value on statement of financial position 5.20.2. Financial instruments reported at fair value on statement of financial position ...... 5.21 Income taxes...................................................................................................................... 5.22 Other reserves ................................................................................................................... 5.23 Revenue............................................................................................................................. 5.24 Research and Development expenses .............................................................................. 5.25 General and Administrative expenses ............................................................................... 5.26 Depreciation and amortization ........................................................................................... 5.27 Employee benefit expenses............................................................................................... 5.28 Other income and other expenses..................................................................................... 5.29 Section left blank................................................................................................................ 5.30 Leases ............................................................................................................................... 5.31 Finance income and expenses .......................................................................................... 5.32 Loss per share ................................................................................................................... 5.33 Contingent assets and liabilities......................................................................................... 5.34 Commitments..................................................................................................................... 5.34.1. Celdara ................................................................................................................... 5.34.2. Horizon Discovery / PerkinElmer ............................................................................ 5.35 Related-party transactions ................................................................................................. 5.35.1. Remuneration of key management......................................................................... 5.35.2. Transactions with non-executive directors.............................................................. 5.35.3. Transactions with shareholders .............................................................................. 5.36 Events after the close of the fiscal year ............................................................................. 5.37 Statutory accounts as of December 31, 2023 and 2022 according to Belgian GAAP ....... 5.37.1. Balance Sheet ........................................................................................................ 5.37.2. Income statement ................................................................................................... 5.37.3. Notes ...................................................................................................................... 5.37.4. Summary of valuation rules .................................................................................... 129 130 130 130 131 132 132 133 133 135 135 136 137 137 138 138 139 140 143 143 143 143 143 145 146 146 146 147 147 147 148 149 149 154 3 ANNUAL REPORT 2023 2023 Annual Report This Annual Report (the “Report”) is dated April 4, 2024, and contains all required information as per the Belgian Code of the Companies and Associations (the “BCCA”). The affiliates included in this Report are Celyad Oncology SA, Celyad Inc. and CorQuest Medical Inc. Celyad Oncology SA and its affiliates will be collectively referred to as “the Company”, “the Group”, “Celyad”, “we” or “us”. LANGUAGE OF THE REPORT The Company publishes this Report in French, in accordance with Belgian laws. The Company also provides an English translation. In case of a difference of interpretation, the French version will prevail. AVAILABILITY OF THE REPORT A printed copy of the Report is available free of charge upon request to: Celyad Oncology SA Investor Relations Rue André Dumont 9, B-1435 Mont-Saint-Guibert, Belgium Tel: +32 10 394100 E-mail: investors@celyad.com electronic An http://www.celyad.com/investors/regulated-information this Report version of is available on the Company website: FORWARD LOOKING STATEMENTS This Report may contain forward-looking statements, within the meaning of applicable securities laws, including the Private Securities Litigation Reform Act of 1995, as amended, including, without limitation, statements regarding beliefs about and expectations for the Company’s updated strategic business model, including associated potential benefits, transactions and partnerships, statements regarding the potential value of the Company’s IP, statements regarding the Company’s financial statements, and statements regarding the continuation of the Company’s existence. The words “will,” “believe,” “potential,” “continue,” “target,” “project,” “should” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Any forward-looking statements in this Report are based on management’s current expectations and beliefs and are subject to a number of known and unknown risks, uncertainties and important factors which might cause actual events, results, financial condition, performance or achievements of Celyad Oncology to differ materially from those expressed or implied by such forward-looking statements. Such risks and uncertainties include, without limitation, risks related to the Company’s ability to realize the expected benefits of its updated strategic business model; the Company’s ability to develop its IP assets and enter into partnerships with outside parties; the Company’s ability to enforce its patents and other IP rights; the possibility that the Company may infringe on the patents or IP rights of others and be required to defend against patent or other IP rights suits; the possibility that the Company may not successfully defend itself against claims of patent infringement or other IP rights suits, which could result in substantial claims for damages against the Company; the possibility that the Company may become involved in lawsuits to protect or enforce its patents, which could be expensive, time-consuming, and unsuccessful; the Company’s ability to protect its IP rights throughout the world; and the potential for patents held by the Company to be found invalid or unenforceable. These forward-looking statements speak only as of the date of publication of this document and Celyad Oncology’s actual results may differ materially from those expressed or implied by these forward-looking statements. Celyad Oncology expressly disclaims any obligation to update any such forward-looking statements in this document to reflect any change in its expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based, unless required by law or regulation. 4 Shareholder Letter Dear Shareholder, 2023 Annual Report Over the last 2 years, Celyad Oncology (the “Company”) has completed a significant strategic shift with the ambition to stay at the forefront of innovation in immunotherapy, and more precisely, chimeric antigen receptor (CAR) T cell therapy. Its primary focus is to pioneer and advance the field of cell therapy by addressing the limitations of these groundbreaking therapies. Celyad Oncology has initiated its strategic shift in 2022 from a fully integrated cell therapy company which included manufacturing and clinical development, to a company focusing on its preclinical research and the monetization of its intellectual property portfolio (IP). While most of the reorganization took place over 2022, it extended until the third quarter of 2023, with the move of the company to a new location in the Axis Parc, across the street from its previous headquarters. The new offices and research facility are better suited to the current needs of the Company. Throughout the past year, the hard work and dedication of the entire Celyad Oncology team has generated remarkable achievements and positive changes throughout the Company, confirming the value creation potential of our strategic choices. First, the R&D team exceeded our expectations in 2023 with innovative and actionable outcomes which are truly relevant for the immunotherapy field. o o o We have made huge progress in the development of our exclusive short hairpin RNA (shRNA)-based multiplexing platform and reported compelling data underscoring the remarkable versatility and adaptability of this technology. This achievement has raised significant interest from the entire scientific community. Our shRNA multiplex platform is a promising technology that could revolutionize the life sciences industry and become an important addition to the tool library for CAR-T cell engineering. We will continue to further this development and pursue new opportunities as they arise. We have generated and presented, at several international meetings along the year, new data validating a multi-target (multi-specific) CAR approach based on NKG2D, which, we believe, will allow to overcome resistance and immune escape often observed with traditional single targeting approaches. First data with CD19/NKG2DL CAR constructs have delivered proof-of-concept of this approach. In addition, we have published results from the Phase I THINK clinical trial early 2023, providing clinical proof-of-concept of targeting NKG2D ligands by CAR T-cells. This has created a solid foundation for our current strategy to develop approaches that could broaden the range of indications targeted by CAR T-cells. These research activities complement our IP monetization efforts. Finally, on the financial side, we have secured an EUR 9.8 million private placement from historical shareholders intended to cover our operating expenses well into 2025. In summary, these achievements mark our commitment to move the frontiers of cellular immunotherapy and overcome current limitations by leveraging our long-standing expertise and know-how. Looking ahead, we are committed to further explore the dynamic potential and differentiated nature of our multi-specific and shRNA platforms . 5 The value and opportunity provided by our technology platforms are key points of focus for our investors and Celyad is committed to create significant shareholder value in the next few years. 2023 Annual Report Michel Lussier Co-Founder, Interim CEO Hilde Windels Chair 6 2023 Annual Report 1. Activity Report 1.1 Who we are - Business Overview We are a cutting-edge biotechnology company dedicated to pioneering the discovery and advancement of revolutionary technologies for chimeric antigen receptor (CAR) T-cells. Our primary objective is to unlock the potential of proprietary technology platforms and intellectual property, enabling us to be at the forefront of developing next-generation CAR T-cell therapies. By fully leveraging our innovative technology platforms, we aim to maximize the transformative impact of our candidate CAR T-cell therapies and redefine the future of CAR T-cell treatments. Our differentiated strategy includes the development of technology platforms and CAR T-cell candidates to broaden the range of cancer indications and tackle the main limitations of current CAR T-cell therapies. Overview of the CAR T-cell landscape and current main limitations Over the past decades, immunotherapy has become the main approach for novel cancer treatment options with several approved blockbuster products that saved the lives of thousands of patients with cancer indications. Within the field of immuno-oncology, chimeric antigen receptor (CAR) T-cell therapy is now a realistic treatment paradigm for patients with advanced disease. In this strategy, T-cells are genetically reprogrammed in the lab to express a gene coding for a receptor (called CAR), aiming to help the T-cells to specifically recognize, attack, and destroy tumor cells via binding to proteins that are mainly expressed by tumor cells (called antigens). As of the date of this Report, a total of eight autologous CAR T-cell therapies for the treatment of hematological malignancies have been approved by different regulatory authorities. These include six CAR T-cell products directed against the cluster of differentiation 19 (CD19) or the B-cell maturation antigen (BCMA) which are approved in the United States and in many other countries, and two CD19-specific CAR T-cell products which are only approved in China. In addition, one CD19-specific CAR T-cell product has received approval in Spain under the “hospital exemption” approval pathway. All these approvals were based on impressive overall response rates and durable remissions observed with CD19 and BCMA-specific CAR T-cell therapies in patients with non-Hodgkin lymphoma, B-cell acute lymphoblastic leukemia (B-ALL), or multiple myeloma who had failed under standard therapies. These CAR T-cell therapies have profoundly altered the treatment landscape in those indications. Despite this success and continued progress in the CAR T-cell field, many challenges remain including: i) antigen modulation and heterogeneity, ii) tumor microenvironment (TME), and iii) cell source of CAR T-cells. i) Antigen modulation and heterogeneity are major causes of CAR T-cell resistance in B-cell malignancies. In pediatric B-ALL, 50% of relapses are associated with CD19 antigen loss, and, in large B- cell lymphoma, 30% of relapses are CD19-negative and an additional 30% has CD19 expression levels that are too low to allow for CAR T-cell activation. To overcome tumor antigen escape, reduction in antigen expression levels, or mutational changes within the single antigen, platforms with CAR T-cells targeting multiple antigens rather than a single antigen need to be created. It is likely that antigen modulation poses an even greater challenge in solid tumors, where antigens show significant heterogeneity due to the heterogenous nature of the components that make up the TME, than in hematological malignancies. ii) The TME contains a variety of cells (such as: cancer cells, cancer-associated fibroblasts, and immune cells including but not limited to tumor-associated macrophages, myeloid progenitor cells, and myeloid- derived suppressor cells), matrix proteins, secreted proteins as well as an extracellular matrix comprised of stromal cells, fibrous proteins, glycoproteins, proteoglycans, and polysaccharides. The presence of each of 7 2023 Annual Report these cells and proteins varies depending on the tumor location and cancer type, but all contribute to the very complex and immunosuppressive TME. In order for CAR T-cells to exert their function against the tumor cells, the first challenges are to navigate through the ecosystem of the TME and to reach the tumor. Once there, they need to bypass the strong immunosuppressive and complex TME that downregulates their activity, expansion, and persistence at the tumor site. To face those challenges, additional engineering of CAR T-cells to endow them with novel attributes and functionalities necessary to overcome the TME is required. iii) Another limitation is related to the source of CAR T-cells. The majority of CAR T-cell therapies in clinical testing worldwide, including the marketed products, are autologous in nature which means that the CAR T- cells are produced from patient-derived T-cells. Specifically, T- cells are harvested from the patient's blood using a procedure known as leukapheresis, after which the cells are genetically modified and then administered back to the patient via intravenous infusion in the bloodstream. This custom-made cell production is very expensive, requires complex patient-specific manufacturing with a failure rate between 2- 10% in the commercial setting, has limited scalability, and shows a large variability in quality between patients due to the patient’s prior treatment and disease history which makes it difficult to predict the potency of the T-cells. Additionally, the delay in treatment initiation due to the time needed for the manufacturing process (weeks to months) can be particularly problematic in patients with rapidly progressing disease. Moreover, there is a logistical challenge in shipping cells back and forth between the treatment site and cell production facilities, which usually follows a centralized manufacturing model, meaning that patients with advanced diseases have a significant possibility of disease progression before they receive the CAR T-cells. The development of allogeneic, ‘off-the-shelf’ CAR T- cells allows to overcome many of these limitations, contributing to scalability and direct access to CAR T-cell therapies. Allogeneic CAR T-cells are manufactured from blood collected from healthy donors after which the cells can be stored frozen until a patient requires treatment. Hence, allogeneic CAR T-cells are available on demand and lack the variability inherent in autologous CAR T-cells. Whilst attractive, the main downside of the allogeneic approach is the risk of potential life-threatening toxicity called “graft-versus-host disease” (GvHD) that is mediated by recognition of the patient’s healthy tissues by the T-cell receptor (TCR) present on the surface of allogeneic CAR T-cells. To minimize this risk, the manufacturing process of allogeneic CAR T-cell therapies include an engineering step that aims to eliminate or blunt the signaling or the expression of the TCR using specific technology. As a result, the engineered allogeneic CAR T-cells fail to recognize the patient’s healthy tissue as foreign, preventing GvHD. Of late, current research efforts to prevent GvHD have been focused on gene editing technologies to enable the genome-level ablation of components of the TCR. Several gene-edited allogeneic CAR T-cell candidates are currently being evaluated in human clinical trials in B-cell malignancies, with some preliminary success. However, off-target editing remains a concern for developers and regulators because the safety risks associated with genetic disruptions that may lead to unintended, irreversible off-target genetic alterations (i.e. off-target DNA cleavages, mutations, or chromosomal rearrangements) are significant. Moreover, practical hurdles (i.e. lengthy and difficult technical process to engineer multiple gene editing, an inefficient production characterized with lower yield as the number of edits increase, etc.) to delivering a gene-edited T-cell product remain. 1.2 Our Strategy Our activities are based on three main pillars: • The development of CAR T-cells based on targets expressed in a vast majority of tumor indications aims to provide a treatment option to a broad patient population. Celyad Oncology has developed several CAR T-cell product candidates based on the natural killer group 2D (NKG2D), a receptor that is expressed on natural killer (NK) and T-cells and binds to eight stress-induced ligands broadly expressed on tumor cells in most solid tumors and hematological malignancies. Two autologous product candidates, CYAD-01 and CYAD-02, and the allogeneic counterpart of 8 2023 Annual Report • CYAD-01, CYAD-101, have been evaluated in clinical trials between 2016 and 2022 to provide proof-of-concept of the NKG2D-based approach. All data collected to date have shown an acceptable safety profile and some clinical activity was observed in acute myeloid leukemia, myelodysplastic syndrome, and colorectal cancer patients. Based on what we learned from the clinical data, we are now focusing on the development of the next-generation NKG2D-based CAR T-cells with the goal to overcome the immune escape often seen with classical single-target approaches. In parallel, we are developing CAR T-cell candidates targeting B7-H6, which is a ligand of another receptor expressed on NK cells, namely NKp30. The development of a proprietary non-gene editing technology platform based on multiplexing of short hairpin ribonucleic acid (shRNAs)-derived sequences into a chimeric microRNA (miRNA) scaffold to design next-generation CAR T-cells. shRNAs are small pieces of non-coding RNAs that downregulate gene expression post-transcriptionally. This downregulation allows for effective silencing of specific targets, without gene manipulation. Proof-of-concept of this proprietary technology has been provided via clinical evaluation of two of our CAR T-cell candidates including: i) an allogeneic BCMA-targeting CAR T-cell candidate (CYAD-211), where the propriety technology was used to target CD3ζ to knock-down the TCR complex, and ii) an autologous NKG2D-based CAR T-cell candidate (CYAD-02), where the propriety technology was used to target the NKG2D ligands (NKG2DL) MICA/B to prevent cell fratricide and improve cell persistence. While the knock-down of a single target has its benefits, the real potential of our technology relies in the multiplexing and the simultaneous knock-down of multiple targets in the same cell. For instance, multiple modifications are required to overcome the immunosuppressive TME and enhance cell persistence, and the immune checkpoints PD-1, LAG3, TIM3, and TIGIT are all obvious targets to overcome cellular exhaustion. Furthermore, to increase cell persistence of allogeneic CAR T-cells, rejection of the cells by the patient’s immune system must be avoided which requires downregulation of the genes encoding the human leukocyte antigen (HLA)-I and II. Therefore, we are focused on the engineering of a novel miRNA-based scaffold where multiple shRNAs can be inserted into a single construct, allowing simultaneous downregulation of multiple target genes. • In addition, the Company has compiled a fundamental and broad Intellectual Property (IP) portfolio that controls key aspects of the development of allogeneic and NK receptor-based therapies. 9 2023 Annual Report 1.3 What differentiates Celyad Oncology? The level of activity in the CAR T-cell landscape across the globe has expended rapidly over the last few years. The challenges in immuno-oncology are significant. Most tumors develop undetected over years, fine tuning their capacity to resist treatment, before exploding with clinically relevant disease that rapidly overcomes standard treatment paradigms. Immune-based therapies, including CAR T-cell therapies, are now delivering clinically relevant responses in certain, limited malignancies. The hope is that this initial clinical sucecess with CAR T-cell therapy can be further developed to be effective against a much broader range of cancer. Scientific progress within the field of cancer immunotherapy has led to seven CAR T-cell therapy approvals, including Kymriah (tisagenlecleucel) developed by Novartis Pharmaceuticals, Yescarta (axicabtagene ciloleucel) developed by Kite Pharma/Gilead, Tecartus (brexucabtagene autoleucel) developed by Kite Pharma/Gilead, Breyanzi (lisocabtagene maraleucel) developed by Juno Therapeutics/Celgene/Bristol Myers Squibb, Abecma (idecabtagene vicleucel) developed by Bluebird/Celgene/Bristol Myers Squibb, Carvykti (Ciltacabtagene autoleucel) developed by Legend Biotech/Janssen Biotech,Carteyva (Relmacabtagene autoleucel) developed by JW Therapeutics, Fucaso (Equecabtagene Autoleucel) developed by Innovent Biologics/Nanjing IASO Biotherapeutics, Yuanruida (Inaticabtagene autoleucel) developed by CASI Pharmaceuticals et Juventas Cell Therapy and Actalycabtagene autoleucel developed by ImmunoACT. While Carteyva, Fucaso and Yuanruida have been approved only in China, and Actalycabtagene autoleucel was approved only in India, all the other six therapies have been approved in the U.S. by the FDA and in Europe by the EMA and in other countries. In addition, ARI-0001 (CART19-BE- 01), developed at Hospital Clínic de Barcelona (Spain), received authorization from the Spanish Agency of Medicines and Medical Devices under the “hospital exemption” approval pathway. These historic approvals have driven CAR T-cell funding to new heights and CAR T-cell market is expected to potentially generate substantial market value within the next five years. Figure 1: CAR T-cell market increase As of the date of this Annual Report, our competitors with the adoptive cell therapy landscape, include but is not limited to 2seventy bio, Inc., Adicet Bio, Inc, Adaptimmune Therapeutics plc, Antion Biosciences, Arsenal Biosciences, Allogene Therapeutics Inc., Arcellx, Inc., Atara Biotherapeutics, Inc., Autolus Therapeutics plc, Beam Therapeutics Inc., Bellicum Pharmaceuticals, Inc., Caribou Biosciences, Inc., CARsgen Therapeutics Co. Ltd., Cellectis S.A., Cellular Biomedicine Group, Celularity, Inc., Century Therapeutics, Inc., CRISPR Therapeutics, Inc., Editas Medicines, Inc, Fate Therapeutics, Inc., Gracell Biotechnologies Inc.(acquired by Astra Zenecca), Legend Biotech USA, Inc., Leucid Bio, Lyell Immunopharma, Inc., Mustang Bio, Inc., Nkarta Therapeutics, Inc., Poseida Therapeutics, Inc., Precision Biosciences, Inc., Sana Biotechnology, Inc., and Tmunity Therapeutics, Inc. (acquired by Kite/Gilead). The multibillion-dollar CAR T-cell therapy market would not have been possible without the remarkable efficacy of the early CAR T therapies in treating several types of blood cancers. Ranging from small start- ups to very large companies, CAR T-cell companies are proliferating in all healthcare markets worldwide. 1 0 2023 Annual Report As stated above (see Section 1.1), all approved CAR T-cell products are directed against antigens specific to a very limited number of B-cell malignancies (i.e. CD19 and BCMA) in which those approaches have shown durable clinical benefit. However, CAR T-cell therapy has yet to show similar clinical efficacy for other malignancies, including solid cancer indications. Moreover, all approved products are of autologous origin, which comes with a number of limitations including manufacturing and timing constraints, which are not appropriate for broad indications. Our expertise in oncology, our proprietary technologies, and our differentiated approach to developing innovative technologies for CAR T-cell therapies is providing the tools with which to tackle some of the challenges, including the difficulty of targeting a broad array of hematological and solid tumors. Our solutions include: • The development of CAR T-cells based on targets expressed in a vast majority of tumor indications to provide a treatment option to a broad patient population. As mentioned in Section 1.2, we are currently developing several technologies and future CAR T- cell candidates by exploring underestimated targets including NKG2D ligands and B7-H6. This would allow to target a broad range of cancers including solid cancer indications and other hematological indications for which no validated target exists as of today. In addition, we are also exploring multi-targeting approaches, which could be used to decrease risk of relapse or resistance often observed with traditional single-targeting CAR T approaches (See Section 1.4). • The development of a proprietary non-gene editing technology platform based on multiplexing of shRNA-derived sequences into a chimeric miRNA scaffold to design next- generation CAR T-cells. As mentioned in Section 1.2, we previously validated the use of our proprietary shRNA technology as a novel allogeneic platform through two clinical candidates, CYAD-211 and CYAD-02. The initial clinical validation of the shRNA technology has provided an important milestone event for the Company. The power and versatility of the shRNA platform, including the ability to multiplex and modulate the levels of gene expression, which allows to optimize CAR T-cell features, persistence, efficacy or ability to evade complex or immunosuppressive tumor microenvironments, for both allogeneic or autologous products, continues to support its strength, value, and potential differentiation within the cell therapy landscape (see Section 1.4). Importantly, the shRNA platform can be used with an all-in-one vector approachmeaning that a single vector is used to generate CAR T-cells which allows simplifying the design and development of our CAR T-cell therapy candidates. The all-in-one vector encodes multiple components of the CAR construct simultaneously, including the CAR, one or several shRNAs targeting genes involved in alloreactivity, cell persistence, anti-tumor activity or the ability to evade the complex and immunosuppressive TME as well as a cell selection marker used to enrich the manufactured cells and potential therapeutic “add-ons” such as cytokines. This single transduction, plug-and-play approach has the potential to streamline process development and manufacturing while broadening the potential applicability of our CAR T-cell therapy candidates. Through these approaches, we are proposing different solutions, tackling the major current limitations of CAR T-cell therapies as detailed in Section 1.1. More recently, a number of studies have built on the success of CAR T-cell therapy in cancer to branch out to other disease areas such as cardiometabolic disorders, autoimmune disease, fibrosis, cellular senescence and infectious pathologies. It is important to mention that the shRNA platform currently developed at Celyad Oncology, as well as the targets explored, could be eventually extended beyond cancer indications. We therefore strongly believe our differentiated strategy could pave the way to a new era of cell therapies. 1 1 2023 Annual Report 1.4 Our Activities and R&D shRNA non-gene-edited technology shRNA is a dynamic, innovative technology that allows, among others, for the development of allogeneic CAR T-cells through the modulation of genes encoding the TCR without the need for gene editing. Beyond its use to generate allogeneic cell therapies, shRNA can be used to modulate other genes, including essential functional genes and genes whose partial expression is required to provide broad therapeutic functionalities. We are currently engineering T-cells for specific desired features, including increased persistence, enhanced anti-tumor activity, ability to evade complex or immunosuppressive TME, or potentially improved tolerability of the CAR T-cell candidate. We believe that shRNA offers us the ability to design and develop next-generation, non-gene-edited allogeneic CAR T-cell therapies with any CAR across a broad array of targets. Next to the ability to downregulate the target (or targets) of interest, the dynamic range achievable with the shRNA multiplexed platform allows that the expression of each candidate protein can be modulated independently. This is of importance in instances where a reduction in the protein expression is of benefit rather than a complete removal of the protein expression. There are multiple proteins within T-cells that play crucial roles in the skewing of T-cell functionality, efficacy, persistence, and survival that need to be down- tuned rather than simply removed. This is, for example, the case for the HLA class I protein. Specifically, removal of this protein leads to recognition of the cells by the patient’s NK cells, which in turn will lead to low cell persistence. Modulating the protein expression to an extent that it is no longer targeted by NK cells can help the engineered cells to evade the patient’s immune system. We are currently focusing on multiplexing the shRNA technology to enable targeting of multiple targets simultaneously using our all-in-one vector system. This is of great importance, as targeting a single gene is of limited use in most cases. For example and especially in the context of solid tumors, immune checkpoint inhibitors, encompassing a group of multiple receptors that include PD-1, LAG-3 and many others, are important targets for downregulation – since it has been shown that multiple tumors express the ligands of these receptors. As immune checkpoint inhibitors can suppress T-cell cytotoxicity, they could be involved in the inhibition of CAR T-cell responses or other T-cell mediated responses. The large number of target genes that can be downregulated simultaneously makes these perfect candidate targets for our shRNA technology. During 2023, we have collected and presented data validating our shRNA multiplexing approach: • • • • • • We developed a miRNA-based multiplex shRNA platform designed for easy, efficient, and tunable downregulation of up to four target genes simultaneously; Furthermore, we showed that the downregulation of each target gene could be fine-tuned, from a moderate downregulation up to a functional knock-out, without the need of gene editing thereby avoiding associated potential safety issues; The plug-and-play design of our platform is designed to allow swapping of each target sequence without affecting the performance of the technology and streamlining of the generation of engineered adoptive T-cell therapies; The results detailing the technical aspects of the development of this platform and showcasing the easiness, efficiency, and tunability of this technology to knock-down up to four target genes simultaneously have been published in Molecular Therapy – Nucleic Acids (2023) 34:102038; To demonstrate the effectiveness of our approach, we have been able to simultaneous knock-down in CAR T-cells several genes involved in different cellular processes such as alloreactivity (CD3ζ), cell persistence (β2M, CIITA), T-cell exhaustion (PD-1, LAG-3), or ligand-induced apoptosis (CD95); With our approach we proved the feasibility of the simultaneous knock-down of 4 co-inhibitory receptors (PD-1, LAG-3, TIM-3 and CD95) to decrease the expression of exhaustion markers at the surface of CAR T-cells and the feasibility of this approach to improve allogeneic CAR T-cell 1 2 viability by allowing evasion from graft-versus-host disease (GvHD), host-versus-graft (HvG) reaction and CD95L-induced autophagy; • Data were presented at the World Oncology Cell Therapy Congress in Boston, US (April 25-26, 2023), at the 4th International Conference on Lymphocyte Engineering (ICLE) in Munich (September 12-14) and at the 38th Annual Meeting of the Society for Immunotherapy of Cancer (SITC) in San Diego (November 1-5). 2023 Annual Report NKG2D-based CAR T-cells NKG2D is an activating receptor on NK cells and some T-cell subsets (CD8+ T-cells, natural killer T-cells, γδ T-cells). In anormal situation, NK cells use NKG2D to scan the whole body for the presence of stress signals on cells and tissues which could be indicative of a virus or bacterial infection, or malignant transformation. NKG2D binds to eight different stress induced ligands (MICA, MICB, ULBPs 1-6) which are over expressed by a large variety of tumor cells, but are absent or expressed at low levels in normal tissues. By arming T-cells with the NKG2D-specificity, we enable them to target the stress ligands present on tumor cells while activating the killer function of T-cells within the tumor. Furthermore, targeting stress ligands enables NKG2D-based CARs to potentially treat a broad range of cancers. We have validated the NKG2D ligands targeting approach in the clinic with two autologous CAR T-cell candidates: CYAD-01 and CYAD-02, and one allogeneic CAR T-cell candidate: CYAD-101. Overall, NKG2D-based CAR T-cells were well tolerated with no treatment-related deaths and less than 30% of the patients had adverse events of grade 3 or above. Some signs of clinical activity were reported in difficult-to- treat patient populations including metastatic acute myeloid leukemia and colorectal cancer. During 2023, we have published data validating our NKG2D-based CAR T-cell approach: • • • Results from the hematological arm of the Phase I THINK trial have been published in The Lancet Haematology Journal (Lancet Haematol. 2023 Mar;10(3):e191-e202). Data from the 16 patients treated in the dose-escalation segment provided proof-of-concept for targeting NKG2D ligands with CAR T-cell therapy. Further development of NKG2D-based CAR T-cell therapies is warranted, potentially in combination with other treatments or through further optimization of the CAR to improve anti-tumor efficacy. Multi-specific CAR T-cell platform As mentioned above, targeting a single antigen by CAR T-cells can be problematic in certain hematological malignancies, and efficacy has not yet been demonstrated in solid tumors. The reasons behind the possible failure of single targeting CAR T-cells are multi-factorial including but not limited to the immunosuppressive TME, and antigen escape or loss. With a multi-specific CAR, several antigens can be targeted simultaneously by the same CAR so that if one antigen is lost, there are still other antigens that can be recognized by the CAR resulting in lysis of the cancer cells. We therefore developed a multi-targeting CAR platform that focuses on the NKG2D receptor. The NKG2D receptor specifically targets NKG2D ligands (NKG2DL) of which the expression is induced by different stress situations. This strategy is different from multi-specific CAR T-cells where similar antigens (or lineage antigens) are targeted such as CD19 and CD20, and it is not limited to only one specific tumor indication. The targeted antigens are associated with both the immunosuppressive TME and the tumor tissue itself. Hence, the application of NKG2D based multi-specific CAR T-cells is suitable not only in situations where antigen escape and/or loss may occur, but also in situations where multiple organs are affected, which is for instance the case in metastatic and advanced solid cancers. These malignancies are very difficult to target with conventional means, and use of a NKG2D-based multi-targeting CAR platform may offer a key alternative. 1 3 2023 Annual Report During 2023, we have collected and presented data from our multi-specific CAR T-cell platform: • • • • • We have developed different CD19/NKG2DL, BCMA/NKG2DL and PSMA/NKG2DL multi-specific CAR T-cells, utilizing both tandem – that encompass the extracellular domain of the natural NKG2D receptor fused to a scFv targeting CD19, BCMA or PSMA, or dual constructs (bicistronic) – that co- express the NKG2D-based CAR with an anti-CD19, anti-BCMA or anti-PSMA CAR, respectively; Most of our CD19/NKG2DL multi-specific CAR T-cell candidates were able to secrete cytokines, proliferate, and eliminate acute lymphoblastic leukemia tumor cells lacking the CD19 antigen in vitro. Interestingly, some of these multi-specific CAR T-cells displayed a better in vitro functionality against wild-type leukemia tumor cells expressing the CD19 antigen as compared to CD19-specific single targeting CAR T-cells, highlighting the potential of our approach against both CD19 positive and CD19 negative cancer cells; In vivo, CD19/NKG2DL tandem CAR T-cells outperformed bicistronic CAR T-cells in controlling tumor growth in an aggressive B-ALL relapse model; In vitro data generated with BCMA/NKG2DL and PSMA/NKG2DL multi-specific CAR T-cells further validate this approach and its application in other hematological and solid indications; Data were presented at the Immuno-Oncology Summit Europe 2023 held in London, UK (June 20- 22, 2023), at the 4th ICLE conference in Munich (September 12-14) and at the 38th Annual SITC in San Diego (November 1-5). B7-H6 targeting CAR T-cells As part of our efforts to identify new targets expressed by a broad range of tumors, we are currently developing B7-H6-targeting CAR T-cell therapies. B7-H6 is a stress ligand involved in NK activation and immunosurveillance through its recognition by the receptor NKp30. In cancers, B7-H6 expression is associated with tumor progression, poor prognosis, and lymph node metastasis. B7-H6 may be used to recognize and kill tumor cells, and we believe it is an underappreciated target that could change the paradigm of cell therapy due to its broad expression in a large variety of cancers and absence in normal cells. In 2023, we continued to progress on the development of B7-H6-targeting CAR T-cells, with the aim of broadening the landscape of CAR T-cell therapies. 1.5 Clinical Programs From 2017, Celyad Oncology investigated a diversified pipeline of allogeneic and autologous CAR T candidates in several studies. Several patients evaluated in those studies are still in their long-term safety follow-up period and monitored annually. • CYAD-101 alloSHRINK Phase 1 Trial Overview In December 2018, we initiated the Phase 1 alloSHRINK trial, an open-label trial assessing the safety and clinical activity of CYAD-101, an investigational, non-gene edited allogeneic CAR T candidate engineered to co-express the chimeric antigen receptor based on NKG2D, the novel inhibitory peptide TIM and a truncated CD19 selection marker. CYAD-101 was administered every following preconditioning chemotherapy in patients with refractory unresectable mCRC. The dose-escalation segment of the trial evaluated the administrations of CYAD-101 concurrently with FOLFOX (combination of 5- fluorouracil, leucovorin and oxaliplatin) chemotherapy regimen at three dose levels (1×108, 3×108, 1×109 cells per infusion). Expansion cohort of the alloSHRINK trial evaluated three infusions of CYAD-101 at the recommended dose of 1×109 cells per infusion of CYAD-101 concurrently with FOLFIRI (combination of 5- fluorouracil, leucovorin and irinotecan) preconditioning chemotherapy for the treatment of advanced mCRC. two weeks administered 1 4 2023 Annual Report A total of 15 patients with relapsed/refractory mCRC who progressed after previous treatment with oxaliplatin-based or irinotecan-based chemotherapies were enrolled in the dose-escalation segment. Data from the trial showed that CYAD-101 was well-tolerated with no GvHD observed and no dose-limiting toxicities reported. Results also showed some preliminary clinical activity with two patients with partial response (PR) and nine patients with stable disease (SD). A total of 10 patients were recruited in the dose expansion cohort with FOLFIRI. CYAD-101 was again well-tolerated with no dose limiting toxicities or evidence of GvHD. Nine out of ten patients showed stable disease at first tumor assessment. Data also showed demonstrated an overall short persistence of CYAD-101 post infusion, limiting its efficacy. As of December 31, 2023, no patient was still in follow up period and the study was officially closed. Phase 1b CYAD-101-002 Trial Overview In December 2021, we initiated the CYAD-101-002 trial designed to evaluate CYAD-101 following FOLFOX preconditioning chemotherapy, followed with anti-PD1 therapy, in refractory mCRC patients with MSS / pMMR disease. 8 patients were evaluated in the study in total. A voluntary pause of the study to investigate reports of two fatalities caused interruption of all treatments to patients. Based on a strategic, financial and medical review, the Company finally decided to discontinue the development of CYAD-101 in September 2022. As of December 31, 2023, no patient was still in follow up period and the study will be closed in 2024. • CYAD-211 Phase 1 IMMUNICY-1 Trial Overview In November 2020, we initiated the dose-escalation Phase 1 IMMUNICY-1 trial evaluating CYAD-211, an investigational non-gene edited allogeneic CAR T-cell candidate engineered to co-express a BCMA chimeric antigen receptor and a single shRNA hairpin which interferes with the expression of the CD3ζ component of the TCR complex. IMMUNICY-1 evaluated the safety and clinical activity of a single infusion of CYAD-211 following preconditioning with CyFlu chemotherapy -cyclophosphamide and fludarabine in patients with relapsed or refractory (r/r) multiple myeloma (MM). The trial was initially designed to evaluate multiple dose levels of CYAD-211: 3x107, 1x108, 3x108 and 6x108 cells per infusion following preconditioning chemotherapy cyclophosphamide (300, 500 or 750 mg/m² for 3 days) and fludarabine (30 mg/m² for 3 or 4 days). In total, 19 r/r MM patients had been treated with CYAD-211 in the IMMUNICY-1 trial across all cohorts. The observed safety profile, including the lack of observed GvHD, provided proof-of-concept for the use of shRNA technology for allogeneic CAR T-cells. In total, out of 17 evaluable patients across all dosing cohorts, a partial response was achieved in five patients. Cell kinetics data showed all patients had detectable CYAD-211 cells in the peripheral blood, although engraftment was short lasting which called for further improvement of lymphodepletion depth and duration. However, data obtained with enhanced lymphodepletion with higher doses of preconditioning chemotherapy, continued to show short persistence of engraftment. As of December 31, 2023, 7 patients remained in follow-up. Similar to what other stakeholders in the field showed, both data with CYAD-101 and CYAD-211suggest that further engineering of allogeneic CAR T-cells is needed to increase their persistence (limit the host-versus- graft reaction among others) and enhance their activity, including in the tumor microenvironment. 1.6 Licensing and Collaboration Agreements • Celdara Background In January 2015, we entered into an agreement with Celdara Medical, LLC, or Celdara in which we purchased all outstanding membership interests of OnCyte, LLC, or OnCyte. In connection with this transaction, we entered into an asset purchase agreement to which Celdara sold to OnCyte certain data, protocols, regulatory documents and intellectual property, including the rights and obligations under two 1 5 license agreements between OnCyte and The Trustees of Dartmouth College, or Dartmouth, related to our CAR T development programs. In March 2018, we dissolved the affairs of our wholly owned subsidiary OnCyte. As a result of the dissolution of OnCyte, all the assets and liabilities of OnCyte were fully distributed to us including our license agreement with Dartmouth. 2023 Annual Report Amended Asset Purchase Agreement In August 2017, we entered into an amendment to the asset purchase agreement described above. In connection with the amendment, the following payments were made to Celdara: (i) an amount in cash equal to $10.5 million, (ii) newly issued shares of Celyad valued at $12.5 million, (iii) an amount in cash equal to $6.0 million in full satisfaction of any payments owed to Celdara in connection with a clinical milestone related to our CAR T NKR-2 product candidate, (iv) an amount in cash equal to $0.6 million in full satisfaction of any payments owed to Celdara in connection with our license agreement with Novartis International Pharmaceutical Ltd., and (v) an amount in cash equal to $0.9 million in full satisfaction of any payments owed to Celdara in connection with our former license agreement with Ono Pharmaceutical Co., Ltd. Under the amended asset purchase agreement, we are obligated to make certain development-based milestone payments to Celdara up to $40.0 million, certain development-based milestone payments up to $36.5 million and certain sales-based milestone payments up to $156.0 million. We are required to make tiered single-digit royalty payments to Celdara in connection with the sales of CAR T products, subject to reduction in countries in which there is no patent coverage for the applicable product or in the event Celyad is required to secure licenses from third parties to commercialize the applicable product. We are also required to pay Celdara a percentage of sublicense income, including royalty payments, for each sublicense ranging from the mid-single digits to the mid-twenties, depending on which of a specified list of clinical and regulatory milestones the applicable product has achieved at the time the sublicense is executed. We are required to pay Celdara a single-digit percentage of any research and development funding received by us, not to exceed $7.5 million for each product group. We can opt out of the development of any product if the data does not meet the scientific criteria of success. We may also opt out of development of any product for any other reason upon payment of a termination fee of $2.0 million to Celdara. The Trustees of Dartmouth College (“Dartmouth”) As described above, as a result of our acquisition of all of the outstanding membership interests of OnCyte and the asset purchase agreement among us, Celdara and OnCyte, OnCyte became our wholly-owned subsidiary and acquired certain data, protocols, regulatory documents and intellectual property, including the rights and obligations under two license agreements between OnCyte and Dartmouth. The first of these two license agreements concerned patent rights related, in part, to methods for treating cancer involving chimeric NK and NKP30 receptor targeted therapeutics and T cell receptor-deficient T cell compositions in treating tumor, infection, GVHD, transplant and radiation sickness, or the CAR T License, and the second of these two license agreements concerned patent rights related, in part, to anti-B7-H6 antibody, fusion proteins and methods of using the same, or the B7H6 License. In August 2017, we and Dartmouth entered into an amendment agreement in order to combine our rights under B7H6 Agreement with our rights under the CAR T License, resulting in the termination of the B7H6 License, and in order to make certain other changes to the agreement. In connection with the amendment, we paid Dartmouth a non-refundable, non-creditable amendment fee in the amount of $2.0 million in 2017. Under the amended license agreement, Dartmouth granted us an exclusive, worldwide, royalty-bearing license to certain know-how and patent rights to make, have made, use, offer for sale, sell, import and commercialize any product or process for human therapeutics, the manufacture, use or sale of which, is covered by such patent rights or any platform product. Dartmouth reserves the right to use the licensed patent rights and licensed know-how, in the same field, for education and research purposes only. The patent rights included in the amended license agreement also include the patents previously covered by the B7H6 License. In consideration for the rights granted to us under the amended license agreement, we are required 1 6 2023 Annual Report to pay to Dartmouth an annual license fee as well as a low single-digit royalty based on annual net sales of the licensed products by us, with certain minimum net sales obligations beginning April 30, 2024, and continuing for each year of sales thereafter. Under the amended license agreement, in lieu of royalties previously payable on sales by sublicensees, Celyad is required to pay Dartmouth a percentage of sublicense income, including royalty payments, (i) for each product sublicense ranging from the mid-single digits to low-single digits, depending on which of a specified list of clinical and regulatory milestones the applicable product has achieved at the time the sublicense is executed and (ii) for each platform sublicense in the mid-single digits. Additionally, the agreement requires that we exploit the licensed products, and we have agreed to meet certain developmental and regulatory milestones. Upon successful completion of such milestones, Celyad is obligated to pay to Dartmouth certain clinical and regulatory milestone payments up to an aggregate amount of $1.5 million and a commercial milestone payment in the amount of $4.0 million. We are responsible for all expenses in connection with the preparation, filing, prosecution and maintenance of the patents covered under the agreement. As further amended in December 2021, this agreement allows Dartmouth to terminate the amended license after April 30, 2026, extended from the prior date of April 30, 2024, in the event that Celyad fails to meet the specified minimum net sales obligations for any year (USD 10 million during first year of sales, USD 40 million during the second year of sales and USD 100 million during the third year of sales and every year of sales thereafter), unless Celyad pays to Dartmouth the royalty Celyad would otherwise be obligated to pay had Celyad met such minimum net sales obligation. Dartmouth may also terminate the license if Celyad fails to meet a milestone within the specified time period, unless Celyad pays the corresponding milestone payment. In connection with the December 2021 amendment, we agreed to certain protective provisions of any sublicenses and paid Dartmouth a non-refundable, non-creditable amendment fee and an additional non-refundable, non-creditable sublicense fee to be paid on an annual basis. • Novartis On May 1st, 2017, we entered into a non-exclusive license agreement with Novartis International AG, or Novartis, regarding U.S. patents related to allogeneic CAR T-cells. The agreement includes our intellectual property rights under U.S. Patent No. 9,181,527. This agreement is related to two undisclosed targets currently under development by Novartis. Under the terms of the agreement, we received an upfront payment of $4.0 million and are eligible to receive additional milestone payments in aggregate amounts of up to $92.0 million. In addition, we are eligible to receive royalties based on net sales of the licensed target associated products at percentages in the single digits. We retain all rights to grant further licenses to third parties for the use of allogeneic CAR T-cells. • Horizon Discovery / PerkinElmer In April and June 2018, we signed two research and development collaboration and license agreements with Horizon Discovery Group plc, or Horizon, to evaluate the utility of Horizon’s SMART vector shRNA reagents to reduce expression of one or more defined targets in connection with the development of our product candidates. The first agreement was focused on targets related to our autologous CAR T candidate, CYAD- 02. The second agreement was focused on targets related to our allogenic CAR T product candidate CYAD- 211 and one pre-clinical allogenic product candidate not yet publicly announced, called CYAD-203. In December 2018, we exercised our option to convert the second agreement into an exclusive license agreement, in connection with which we paid Horizon an up-front payment of $1 million. In September 2019, we exercised our option to convert the first agreement into an exclusive license agreement, in connection with which we have paid Horizon an up-front payment of $0.1 million and an additional milestone of $0.1 million for the first IND filed by us for CYAD-02. In September 2020, we paid an additional milestone of $0.2 million for the first IND filed by us for CYAD-211. Under these exclusive license agreements combined, Horizon is eligible to receive additional milestone payments in development, regulatory and commercial milestone payments, in addition to low single digit royalties on net sales, subject to customary reductions. 1 7 2023 Annual Report In December 2020, Horizon Discovery was acquired by PerkinElmer, Inc. (Horizon/PKI). In 2021, Horizon/PKI informed us they believe we are in material breach of these agreements as a result of certain disclosures we have made in connection with our obligations as a publicly traded company in the United States and Belgium, although they have not formally delivered to us a notice of material breach or termination. We believe any such assertion of material breach would be without merit and we would expect to vigorously defend any such notice of material breach. Any dispute under these agreements would be subject to arbitration in The Hague under the International Chamber of Commerce Rules. We are currently in discussions with Horizon about possible amendments to these agreements in connection with which we would retain freedom to operate under the in-licensed patents. Of note, we have filed patent applications which, if issued, would cover other aspects of the product candidates described above as well as products developed by third parties that deploy similar technology and targets. These patent applications encompass the downregulation of one or more of the targets covered under the Horizon/PKI agreements, the use of shRNA to downregulate such targets in immune cells and the combination of shRNAs with a chimeric antigen receptor in immune cells. We are also developing a second generation shRNA platform that does not incorporate any of the Horizon Discovery/Perkin Elmer, Inc. technology described above. Our discontinued allogeneic CAR T product candidate, CYAD-101, does not incorporate any of the Horizon Discovery/Perkin Elmer, Inc. technology described above. • Mesoblast On May 8, 2018, we entered into an exclusive license agreement with Mesoblast, an Australian biotechnology company, to develop and commercialize our intellectual property rights relating to C-Cathez, an intra-myocardial injection catheter, related to our former cardiovascular business, for which Mesoblast has paid to Celyad an upfront fee of $1,000,000. In addition to the upfront fee, Celyad may be eligible for up to $20,000,000 in clinical, regulatory, and commercial milestone payments payable in cash or, for certain milestones, in Mesoblast shares. On January 17, 2022, we entered into an amendment with Mesoblast to convert the license into non- exclusive, to remove the termination fee of $2,500,000 from Mesoblast and to extend certain payments milestones. In consideration for this amendment, Mesoblast agreed to pay to Celyad $1,500,000 in Mesoblast ordinary shares. • Fortress Group On December 2, 2021, the Company entered into a Subscription Agreement (the “Subscription Agreement”) with CFIP CLYD LLC (“Fortress”), an affiliate of Fortress Investment Group, pursuant to which the Company agreed to sell to Fortress, in an unregistered offering, an aggregate of 6,500,000 ordinary shares at a purchase price of $5.00 per share (the “Private Placement”). The Private Placement closed on December 8, 2021, and resulted in the receipt of gross proceeds of approximately $32,500,000. In connection with the Subscription Agreement, the Company also entered into a Shareholders’ Rights Agreement (the “Shareholders’ Rights Agreement”) with Fortress, pursuant to which Fortress (i) has the right to select two individuals to be, at Fortress’s option, either members of Celyad’s Board of Directors or non-voting observers of the Board, so long as Fortress continues to hold at least 10% of Celyad’s outstanding ordinary shares; and (ii) received a right of first offer on any new indebtedness to be incurred by Celyad and a pro rata right of first refusal on any new equity securities to be issued by Celyad, as well as customary registration rights. The Company also granted Fortress certain protective provisions related to Celyad’s intellectual property portfolio. On August 24, 2023 Fortress, through its subsidiary CFIP CLYD (UK) Limited, committed to subscribe for an additional aggregate amount of €8,506,500.08 in capital increase of the Company. This amount was subscribed in two steps: (a) 1,454,808 new shares were subscribed by Fortress on September 4, 2023, for 1 8 2023 Annual Report a subscription amount of €756,500.16, in the framework of the authorised capital and (b) 14,903,846 new shares were subscribed by Fortress on November 14, 2023, for a subscription amount of €7,749,999.92, in the framework of a capital increase approved by the shareholders’ meeting. In the framework of this investment, Fortress, through its subsidiary CFIP CLYD (UK) Limited, and the Company have entered into an amended and restated shareholders’ rights agreement on September 4, 2023 (“Amended and Restated Shareholders’ Rights Agreement”), which amends and restates the existing Shareholders’ Rights Agreement dated 2 December 2021 (referred to above). Pursuant to this Amended and Restated Shareholders’ Rights Agreement, (i) Fortress has been subject to a customary lock-up obligation of 45 days starting on September 4, 2023, (ii) Fortress received a right of first offer on any new indebtedness to be incurred by Celyad and a pro rata right of first refusal on any new equity securities to be issued by Celyad, as well as customary registration rights, (iii) for so long as Fortress holds a majority of the Company’s shares, it will have the right to nominate a number of individuals to be appointed as directors and representing a majority of Celyad’s board of directors, for so long as Fortress holds at least 30% of the Company’s shares, it will have the right to nominate a number of candidates to Celyad’s board of directors equal to the greater of (a) four and (b) a percentage of the board members equal to its ownership percentage rounded up to the nearest whole number (but not a majority), and for so long as Fortress holds at least 10% of the Company’s shares, it will have the right to nominate three individuals to be appointed as directors; in each event, Fortress Credit Advisors LLC or its designee shall have the further right to select one individual to be a non-voting observer of the board of directors of the Company, (iv) Fortress was provided with certain protective provisions related to Celyad’s intellectual property portfolio and (v) as long as Fortress holds in the aggregate at least 10% oof the then outstanding Company’s shares, certain amendments to the Company’s articles of association or other transactions affecting Fortress’ rights will be subject to its prior approval. Pursuant to the Amended and Restated Shareholders’ Right Agreement, until Fortress own in the aggregate less than 10% of the outstanding shares of the Company for more than thirty (30) consecutive days, the Company and its subsidiaries shall not, directly or indirectly, without the consent of Fortress, (i) incur or issue any indebtedness that would encumber any intellectual property of the Company or any of its subsidiaries, (ii) issue (x) any share, (y) any other security, financial instrument, certificate or other right (including options, futures, swaps and other derivatives) representing, being exercisable, convertible or exchangeable into or for, or otherwise providing a right to acquire, directly or indirectly, any of the foregoing or (z) any other security or financial instrument the value of which is based on any of the foregoing (each of (x), (y) and (z), an Equity Security) of the Company that are senior to the ordinary shares with respect to the right to receive (x) dividends or other distributions to shareholders or (y) proceeds in the event of the liquidation, dissolution or winding-up of the Company (including for such purposes in connection with any change of control transaction), (iii) alter, amend or change the rights, preference or privileges of the ordinary shares, including in connection with any reclassification, recapitalization, reorganization or restructuring, (iv) recommend, directly or indirectly, or take any other action to (A) increase or decrease the size of the board of directors of the Company or (B) co-opt or appoint to the Board of Directors in place of a Fortress Designee any person other than a Fortress Designee[1] ,(v) make any proposal to amend, repeal or otherwise modify any provision of the articles of association that would be reasonably expected to adversely affect the interests of Fortress or (vi) make any proposal to modify the rights of any Equity Securities of the Company in a manner adverse to Fortress. The requirement described above shall expire once the Fortress Shareholders (which shall have the meaning ascribed to it in the Amended and Restated Shareholders’ Rights Agreement) own in aggregate less than 10% of the outstanding shares for more than thirty (30) consecutive days. [1] “Fortress Designee” means any person identified by Fortress Credit Advisors LLC or its designee from time to time in accordance with the provisions of this Agreement and reasonably acceptable to Celyad. • Tolefi On September 4, 2023, 1,913,462 new shares were subscribed by Tolefi for a total amount of EUR 995,000 within the framework of the authorized capital. 1 9 2023 Annual Report As part of Tolefi’s investment, Tolefi and the Company have entered on September 4, 2023, into a subscription agreement and into a shareholders’ rights agreement. Pursuant to the shareholders’ rights agreement, Tolefi (i) has been subject to a customary lock-up obligation of 45 days starting on September 4, 2023, (ii) for so long as Tolefi holds in the aggregate at least 5% of the then outstanding Company’s shares, it will benefit from a right to participate with respect to its pro rata portion of any new indebtedness to be incurred by Celyad from Fortress and a right to purchase its pro rata portion of any new equity securities to be issued by Celyad, (iii) as long as Tolefi holds in the aggregate at least 5% of the then outstanding shares of the Company, it will have the right to nominate one individual to be appointed as member of Celyad’s board of directors, and (iv) for a period of up to seven years and as long as Tolefi holds in the aggregate 5% or more of the then outstanding Company’s shares, Tolefi may request that certain board decisions (such as the use of authorized capital, certain intellectual property transactions, certain indebtedness or off balance sheet transactions and certain acquisitions) be subject to a 72.5% board majority for approval. 1.7 Our shareholding structure 1.8 Post balance sheet events There were no other subsequent events that have occurred between year-end and the date when the financial statements were authorized by the Board for issue. 1.9 Our capital expenditures The Company’s actual capital expenditures excluding impact of recognition of right-of-use assets for the years ended December 31, 2022, and 2023 amounted to €0.1 million and €0.9 million, respectively. These capital expenditures primarily consisted of the acquisition of laboratory equipment and the refurbishment of its new research and development laboratories and its corporate offices located in Belgium after their relocation in 2023. The Company expects its capital expenditures to decrease in absolute terms in 2024 as the Company has relocated in new laboratories before to increase in 2025 and beyond as the Company continues to advance its research and development programs. 2 0 1.10. Financial review of the year ending December 31, 2023 1.10.1. Analysis of the consolidated income statement The table below sets forth the Group’s consolidated income statement, ending up with a €8.4 million loss for the year ended December 31, 2023, and comparative information for the year 2022. 2023 Annual Report (€'000) Revenue Cost of sales Gross profit Research and Development expenses General & Administrative expenses Change in fair value of contingent consideration Impairment of Oncology intangible assets Other income Other expenses Operating Loss1 Financial income Financial expenses Loss before taxes Income taxes Loss for the period Basic and diluted loss per share (in €) For the year ended December 31, 2023 2022 102 (69) 33 (4,602) (6,028) — — 2,334 (194) (8,457) 30 (84) (8,511) 63 (8,448) (0.33) — — — (18,928) (10,546) 14,679 (35,084) 9,360 (338) (40,857) 185 (198) (40,870) (65) (40,935) (1.81) 1 The operating loss arises from the Company’s loss for the period before deduction of financial income, financial expenses and income taxes. The purpose of this measure by Management is to identify the Company’s results in connection with its operating activities. The Company’s license and collaboration agreements have generated no revenue in 2023 and 2022. The Company recognized other revenue in 2023 as part of contracts with customers to sell C-Cathez medical devices. The Research and Development expenses include pre-clinical, intellectual property, clinical, and regulatory expenses and other research and development expenses, which are aggregated and presented as a single line in the Company’s consolidated financial statements. Bottom-line, the R&D expenses show a year-over-year decrease of €14.3 million. The changes in the R&D expenses are mainly driven by (see note 5.24): • • • • The decrease of employee expenses mainly related to headcount reduction through the year ended December 31, 2022 to support the Group’s reorganization around preclinical and clinical programs; The decrease on clinical study costs mainly due to the Group’s decision to discontinue the development of its remaining clinical programs CYAD-02, CYAD-101 and CYAD-211 taken in December 2022 for which a provision had been recorded to cover for contractual obligations through 2023 for an amount of €2.1 million (whose €2.1 million were used during the year 2023). In relation to the closing activities of the clinical studies through the year 2023, additional savings have been recognized mainly associated to the closing of sites, central labs and clinical research organization (“CRO”); The decrease of preclinical activities after the Group’s decision to adopt and implement over the last few months of the year 2022 the new business strategy to focus on early stage discovery research in areas of expertise where it can leverage the differentiated nature of its platforms; The decrease of the expenses associated with the share-based payments (non-cash expenses) related to the warrants plan offered to the employees, managers and directors, mainly related to the decrease in the fair market value of stock options issued over the previous years and the headcount reduction through the year ended December 31, 2022, partly compensated by the accelerated vesting costs recognized in 2023 on warrant plans 2023, 2022 and 2021; 2 1 2023 Annual Report • • The decrease in depreciation and rent and utilities due to sale of the assets associated to the Manufacturing Business Unit included facilities and equipment, office furniture, leasehold improvements, and laboratory equipment in September 2022 and to the sale of certain fixed assets of the Group to Cellistic as of January 1, 2023, mainly associated to the Belin 2 building for which the Group executes short term lease (less than 12 months) of a part of Belin 2 building from Cellistic before moving to the new Group’s headquarter during the second semester of 2023 (see note 5.1); and The decrease of process development costs, consulting fees and other costs associated with the manufacturing activities after the Group’s decision to adopt and implement over the last few months of the year 2022 the new business strategy to focus on early stage discovery research and discontinue the development of clinical programs and associated manufacturing activities. General and Administrative expenses were €6.0 million in 2023 as compared to €10.5 million in 2022, an decrease of €4.5 million (see note 5.25). This decrease primarily relates to: • • • • The decrease of employee expenses mainly related to headcount reduction and management changes through the year ended December 31, 2022 to support the Group’s reorganization; The decrease in insurances costs (D&O insurance principally) due to additional expenses recognized during the first semester of the year 2022, associated to previous capital raise which occurred at year-end 2021 and a decrease of the insurance following the Group's delisting from the Nasdaq market; The decrease on consulting fees mainly associated with the reversal of transaction costs which occurred at year-end 2022, for an amount of €0.6 million, mainly linked to the LPC equity facility not subject to further capitalization and not available to be offset against a future capital raise as the equity facility expired early January 2023. In addition, the Nasdaq delisting and the reorganization of the Group has also led to a reduction of the consulting fees (legal fees associated to HR matters, audit fees, IT consultancy...); and The decrease of the expenses associated with the share-based payments (non-cash expenses) related to the warrants plan offered to the employees, managers and directors, mainly related to the decrease in the fair market value of stock options issued over the previous years and the headcount reduction through the year ended December 31, 2022, partly compensated by the accelerated vesting costs recognized in 2023 on warrant plans 2023, 2022 and 2021. As of December 31, 2023, there is no change in fair value of the contingent consideration and other financial liabilities as Management has determined that there has been no event (such as a firm sublicense or collaboration contract) that increases the probability of the projected future revenue or cash outflow due to Celdara Medical, LLC and Dartmouth College, indicating that the probability is remote, similar to December 31, 2022 (see notes 5.6.2 and 5.20.2) The Company’s other income (see note 5.28) is mainly related to: • Grant income (RCAs): additional grant income has been recognized in 2023 on grants in the form of recoverable cash advances (RCAs) for contracts numbered 8212 and 8436. In accordance with IFRS standards, the Company has earned grants for the period amounting to €0.8 million, out of which €0.2 million is accounted for as a financial liability and the remaining €0.6 million as a grant income. The decrease compared to December 31, 2022, is mainly associated with the decrease on additional grant income recognized on the conventions due to advancement of the subsidized programs and closing of conventions in 2023; • Grant income (Others): additional grant income has been recognized in 2023 on grants received from the regional government (contract numbered 8516), not referring to RCAs and not subject to reimbursement. The convention has been closed in 2023 which explains the decrease of additional grant income recognized on this convention compared to December 31, 2022; 2 2 2023 Annual Report • • R&D tax credit: the current year income decreased compared to December 31, 2022, due to lower eligible expenses on clinical activities and prioritization of discovery research in areas of expertise where it can leverage the differentiated nature of the Group’s platforms; The decrease on the remeasurement income on the recoverable cash advances (RCAs) is mainly related to the Group decision to discontinue its remaining clinical programs in 2022 (see note 5.19.2); • Gain on sale of Property, plant & equipment results from the terms of the asset purchase agreement between Celyad Oncology and Cellistic under which Cellistic agreed to acquire certain fixed assets of the Group for a total consideration of €1.3 million, effective as of January 1, 2023 (see note 5.1). The book value of the assets sold to Cellistic was €0.2 million. As of December 31, 2022, in accordance with IFRS 5, Non-current Assets Held for Sale and Discontinued Operations, these fixed assets had been classified as non-current assets held for sale and presented in the consolidated statement of financial position as a line item entitled “Assets held for sale”; and • Other income associated to cross-charge of expenses to Cellistic associated to the management of the transition phase before moving of the Group’s to its new headquarter for €0.2 million (see note 5.1). The other expenses are mainly due to the recognition of a bad debt accrual on trade and other receivable in 2023, similar to 2022 (see note 5.28). 1.10.2. Analysis of the consolidated statements of financial position The table below sets forth the Group’s consolidated statements of financial position for the year ended December 31, 2023, and comparative information as at December 31, 2022. (€’000) NON-CURRENT ASSETS Goodwill and Intangible assets Property, Plant and Equipment Non-current Grant receivables Other non-current assets CURRENT ASSETS Trade and Other Receivables Current Grant receivables Other current assets Short-term investments Cash and cash equivalents Assets held for sale TOTAL ASSETS EQUITY Share Capital Share premium Other reserves Capital reduction reserve Accumulated deficit NON-CURRENT LIABILITIES Lease liabilities Recoverable Cash advances (RCAs) Contingent consideration payable and other financial liabilities Post-employment benefits Other non-current liabilities CURRENT LIABILITIES Lease liabilities Recoverable Cash advances (RCAs) Trade payables Other current liabilities TOTAL EQUITY AND LIABILITIES For the year ended December 31, 2023 2022 5,161 390 1,830 2,804 137 11,121 457 2,258 1,402 — 7,004 0 16,282 6,304 32,949 — 35,734 295,993 (358,372) 7,046 902 4,505 — 1 1,638 2,932 156 366 1,243 1,167 16,282 4,891 864 309 3,454 264 14,825 1,118 — 1,017 — 12,445 245 19 716 4,317 78,585 6,317 34,800 234,562 (349,947) 4,973 118 4,584 — 13 258 10,426 137 437 4,752 5,100 19,716 The changes on intangible assets mainly relate to the amortization of the intangible asset capitalized in January 2022 for $1.0 million (€0.9 million), reflecting the Group’s opportunity to explore new partnership for the C-Cathez, which is amortized over a period of 2 years (see note 5.6). Increase in the Property, Plant and Equipment is mainly due to a new lease agreement for its new facility located at Rue Dumont 9, 1435 Mont-Saint-Guibert, Belgium, and the acquisitions of equipment, furniture 2 3 2023 Annual Report and leasehold improvements associated to the refurbishment for this new facility (see notes 5.1, 5.7 and 5.30). Non-current grant receivables relate to a receivable on the amounts to collect from the Federal Government. For the year ended December 31, 2023, the Group recorded additional R&D tax credit of €0.1 million partly compensated by the reclassification under current grant receivables of €0.8 million related to the fiscal year 2018 R&D tax credit (see note 5.8). The decrease of trade and other receivables is mainly due to credit notes received following the closing of clinical studies and termination of the lease associated to the previous corporate offices (Belin 2) for €0.2 million, payment received for an amount of €0.1 million related to the sales of the C-Cathez, recognition of a bad debt accrual on trade and other receivable for €0.1 million and payment of the cross-charge of expenses to Cellistic associated to the management of the transition phase before moving of the Group’s to its new headquarter for €0.2 million (see note 5.9). As of December 31, 2023, the increase in current grant receivables for €2.3 million is driven by the fiscal year 2018 R&D tax credit expected to be proceeded within one year as of December 31, 2023, out of which €1.5 million related to potential repayment due by the Group taking into account the relevant probabilities of the related income The increase in other current assets is mainly driven by the increase on prepaid expenses on insurances (mainly D&O run-off insurance) for €0.6 million due to timing difference on the period covered by the insurance after the Nasdaq delisting and a decrease on VAT receivable as a result of decreased clinical activities compared to year-end 2022 (see note 5.9). The Company’s Treasury position2 amounts to €7.0 million at December 31, 2023, which accounts for an decrease of €5.4 million as compared to year-end 2022, mainly as a result of the Group’s operations expenses compensated by net cash proceeds mainly coming from capital raises which occurred in 2023 (see note 5.10 & 5.11). 2 ‘Treasury position’ is an alternative performance measure determined by adding Short-term investments and Cash and cash equivalents from the statement of financial position prepared in accordance with IFRS. The purpose of this measure by Management is to identify the level of cash available internally (excluding external sources of financing) within 12 months. On September 4, 2023, 3,930,770 new shares were issued by decision of the board of directors and subscribed for by TOLEFI SA, CFIP CLYD LLC (“Fortress”), an affiliate of Fortress Investment Group, as well as other historical shareholders, in the framework of a private placement for a global cash proceed of €2.0 million into share capital. On November 14, 2023, 14,903,846 new shares were issued by decision of the board of directors and subscribed for by CFIP CLYD LLC (“Fortress”), an affiliate of Fortress Investment Group, in the framework of a private placement for a global cash proceed of €7.8 million into share capital (see note 5.13). During the extraordinary shareholders meeting of December 22, 2023, the shareholders, in accordance with Belgian Companies and Associations Code, approved the absorption of approximately €6.0 million of accounting losses into share premium and approximately €55.4 million of accounting losses into share capital. As a result, share premium and share capital has been reduced by a cumulative amount of €61.4 million in the 12 months period ended December 31, 2023 (€296.0 million of loss absorption has been approved and recorded from inception to December 31, 2023) against capital reduction reserve. This transaction has no impact on the total equity, comprehensive income (loss), assets (including cash) nor liabilities (see note 5.13). Lease liabilities reach a total amount of €1.1 million as of December 31, 2023, increasing by €0.8 million compared to the year-end 2022. Increase in lease liability (current and non-current) is due to a new lease agreement for the Group's relocated corporate offices in 2023 (see notes 5.1 and 5.19.2). 2 4 2023 Annual Report The recoverable cash advances (RCAs) decreased to €4.9 million as of December 31, 2023, the decrease of €0.1 million compared to year-end 2022 mainly related to the repayments of contractual turnover independent to the Walloon Region partly compensated by new liability components recognized in 2023 and the repayments of contractual turnover independent lump sums to the Walloon Region (see note 5.16 & 5.19.2). As of December 31, 2023, Management has determined that there has been no event that increase the probability of cash outflow due to Celdara Medical, LLC and Dartmouth College, indicating that the probability is more than remote, such as there is no change in the fair value of the contingent consideration (see note 5.20.2). Trade payables amount to €1.2 million at year-end, which represents a decrease of €3.5 million compared to year-end 2022. Their decrease is mainly attributable to the timing of the expenses and the related payments combined with a decrease of activities after the sale of the Group's Cell Therapy Manufacturing Unit (CTMU) activities and the strategic shift from an organization focused on clinical development to one prioritizing R&D discovery and the monetization of its IP portfolio through partnerships, collaborations and license agreements (see note 5.18). The other current liabilities amount to €1.2 million at year-end which represents a decrease of €3.9 million compared to prior year-end. This decrease is mainly explained by: • • • • The decrease on social security and payroll accruals of €0.9 million compared to December 31, 2022, is mainly related to headcount reduction in 2022 and 2023; A provision for onerous contracts in order to cover the contractual obligations, mainly on clinical activities follow-up and studies closing costs, after the Group’s decision to discontinue the development of its remaining clinical programs taken in the fourth quarter of 2022. The provision recorded to cover for contractual obligations through 2023 was €2.1 million as of December 31, 2022, while the remaining current portion of the provision is €0.1 million as of December 31, 2023 ; The decrease of the other current liabilities related to RCAs and other grants by €0.8 million. The decrease compared to year-end 2022 is mainly related to the conventions 8212 and 8436 due to eligible expenses subsidized by the convention recognized in 2023. The total amount of €0.1 million as of December 31, 2023, is explained by the excess of cash proceeds compared to the eligible expenses; and The decrease on other current liabilities for €0.3 million is mainly explained by a decrease on withholding taxes due to timing of the related payments and headcount reduction in 2022 and 2023. For more details on other current liabilities, refer to note 5.18. 1.10.3. Analysis of the consolidated net cash burn rate4F 3 The table below summarizes the net cash burn rate of the Company for the years 2023 and 2022. (€’000) Net cash used in operations Net cash (used in)/from investing activities Net cash (used in)/from financing activities Effects of exchange rate changes Change in Cash and cash equivalents Change in Short-term investments Net cash burned over the period For the year ended December 31, 2023 2022 (15,202) 407 9,355 (1) (5,441) — (5,441) (28,010) 7,202 3,241 (6) (17,573) — (17,573) 3 ‘Net cash burn rate’ is an alternative performance measure determined by the year-on-year net variance in the Group’s treasury position as above defined. The purpose of this measure for the Management is to determine the change of the treasury position. 2 5 2023 Annual Report The cash outflow resulting from operating activities amounted to €15.2 million for the year ended December 31, 2023, as compared to €28.0 million for the prior year’s period. The decrease of €12.8 million is primarily driven by the selling of the manufacturing activities in 2022 combined with global decrease on preclinical and clinical activities, insurance costs, headcount, management changes costs and associated impact on the change in working capital. The decrease of these costs is in line with the Group’s decision to adopt and implement over the last few months of the year 2022 the new business strategy to focus on early stage discovery research in areas of expertise where it can leverage the differentiated nature of its platforms. The cash flow from investing activities represented a net cash inflow of €0.4 million for the year 2023, mainly due to the the sale of certain fixed assets of the Group for a total consideration of €1.3 million to Cellistic partly compensated by the acquisitions of assets for the Group’s new headquarters. In 2022, the cash inflow from investing activities was primarily due to the sale of the Mesoblast shares received following the signed amendment with Mesoblast in January 2022 for €1.1 million and the proceeds from the sale of Manufacturing Business Unit to Cellistic for a gross amount of €6.0 million; and The increase in cash inflow from financing activities is primarily due to the net proceeds from capital raises which occurred in 2023 for €9.5 million while no proceeds from capital raise occurred in 2022, partly compensated by decrease in proceeds from RCAs and other grants due to advancement of the subsidized programs and closing of conventions in 2023. 1.11. Personnel As of December 31, 2023, we employed 12 full-time employees, 2 part-time employees, 5 members of the Executive Committee (among them 2 are under management services agreement). 1.12. Environment All entities of the Group continue to hold the permits required by their activities and are in compliance with all applicable environmental rules. In the second half of 2023, the Company moved to new offices in the same area that are more energy- efficient (e.g. more recent, more in adequation with the Company needs in terms of spaces, solar panel equipment…). 1.13 Going concern Management made an assessment of the Company’s ability to continue as a going concern4 through preparation of detailed budgets and cash flow forecasts for the years 2024 and 2025. These forecasts reflect the strategy of the Group and include significant expenses and cash outflows estimations in relation to the development of its proprietary technology platforms and intellectual property, partly compensated by grants funding and tax incentives. In performing this assessment, Management considered factors that could indicate the presence of material uncertainties that may cast significant doubt upon the company’s ability to continue as a going concern. Factors, among others, considered operating losses..... 4 The uncertainly raised by the war in Ukraine are not impacting going concern. Although there are lot of uncertainties, it does not impact the Company’s ability to continue operations into the second quarter of 2025 considering its treasury position as of December 31, 2023. For additional information on war in Ukraine updates, refer to note 5.2.1. As of December 31, 2023, the Company had cash and cash equivalents of €7.0 million. The Company projects that its existing treasury position should be sufficient to fund operating expenses and capital expenditure requirements into the second quarter of 2025 (until at least General Assembly of May 2025). After due consideration of detailed budgets and estimated cash flow forecasts for the years 2024 and 2025 (which are leaner following the restructuring actions already implemented in 2022 and 2023), the Company projects that its existing treasury position will be sufficient to fund its estimated operating and capital expenditures over at least the next 12 months from the date that the financial statements are issued. This 2 6 statement is prepared on a conservative approach with respect to future revenues which are only considered if committed at closing date. After due consideration of the above, the Board of Directors determined that Management has an appropriate basis to conclude on the business continuity over the next 12 months from the date the financial statements are issued, and hence it is appropriate to prepare the financial statements on a going concern basis. 2023 Annual Report 1.14 Risks and uncertainties Reference is made to section 2.8 “Description of the principal risks associated to the activities of the Group“. War in Ukraine In February 2022, Russia launched a military invasion of Ukraine. The ongoing military operations in Ukraine and the related sanctions targeted against Russia and Belarus may have an impact on the European and global economies. The Company has no operations or suppliers based in Ukraine, Belarus, or Russia, and consequently there has not been a negative impact on our operations to date. However, the general economic impacts of the conflict are unpredictable and could lead to market disruptions, including significant volatility in commodity prices, credit and capital markets. Given the continuing conflict, the operations of the Company could be disrupted due to the demise of commercial activity in impacted regions and due to the severity of sanctions on the businesses upon which the Company and its suppliers rely. Further, state-sponsored cyberattacks could expand as part of the conflict, which could adversely affect the Company’s ability to maintain or enhance key cyber security and data protection measures. To date, the Company has not experienced any material adverse impacts, but the Company is not able to reliably predict the potential impact of the conflict on its future business or operations. 1.15 Events and circumstances that could have a significant impact on the future The Company has not identified significant events and circumstances that could have a significant impact on the future in addition to the potential impact of risks described in section 8 of chapter 2: “Description of the principal risks associated to the activities of the Group”. 2 7 2023 Annual Report 2. CORPORATE GOVERNANCE 2.1 General This section summarizes the rules and principles on the basis of which the corporate governance of the Company has been organized pursuant to the BCCA and the Company’s corporate governance charter (the “Charter”) adopted in accordance with the Belgian Corporate Governance Code 2020 (the “CGC”) and updated regularly by the Board of Directors. The Company does not incorporate the information contained on, or accessible through, its corporate website into this Report, and you should not consider it a part of this Report. The Charter governance/). is available on the Company’s website (https://celyad.com/investors/corporate- The text of the CGC is available on the website of the Commission of Corporate Governance at https://www.corporategovernancecommittee.be/fr/over-de-code-2020/code-belge-de-gouvernance- dentreprise-2020. The Charter includes the following main chapters: • • • • • • • • Structure and organization; Shareholder structure; The Board : terms of reference; Chairman of the Board; Company Secretary; Board committees; Executive Committee; Rules preventing market abuse; • Miscellaneous and annexes. 2.2. Board of Directors 2.2.1. Composition of the Board of Directors As provided by the articles 7:85 et sq. of the BCCA, the Company is managed by a Board of Directors acting as a collegiate body. The Board of Directors’ role is to pursue the long-term success of the Company by providing entrepreneurial leadership and enabling risks to be assessed and managed. The Board of Directors determines the Company’s values and strategy, its risk preference and key policies. The Board of Directors ensures that the necessary leadership, financial and human resources are in place for the Company to meet its objectives. The Company has opted for a one-tier governance structure. As provided by Article 7:93 of the BCCA, the Board of Directors is the ultimate decision-making body in the Company, except with respect to those areas that are reserved by the law or by the Company’s articles of association to the Shareholders Meeting. The Company’s articles of association state that the number of directors of the Company, who may be natural persons or legal entities and who need not be shareholders, must be at least three. At least half of the 2 8 2023 Annual Report members of the Board of Directors must be non-executive directors and at least three of them must be independent directors. A meeting of the Board of Directors is validly constituted if at least half of its members are present in person or represented at the meeting. If that quorum is not met, a new board meeting may be convened by any director to deliberate and decide on the matters on the agenda of the board meeting for which a quorum was not met, provided that at least two members are present. Meetings of the Board of Directors are convened by the Chairperson of the Board or by at least two directors, whenever the interest of the Company so requires. In principle, the Board of Directors will meet at least four times per year. The Chairperson of the Board of Directors shall have a casting vote on matters submitted to the Board of Directors in the event of a tied vote. As long as the Fortress Shareholders (which shall have the meaning ascribed to it in the Amended and Restated Shareholders’ Rights Agreement, in the form filed with the United States Securities and Exchange Commission on August 25, 2023) own in the aggregate: (i) (ii) (iii) the majority of the Company’s shares, it will have the right to nominate a number of individuals (i.e. the Fortress Designees) to be appointed as directors and representing a majority of Celyad’s board of directors; at least 30% of the Company’s shares, it will have the right to nominate a number of individual (i.e. the Fortress Designees) to be appointed as directors of the Company equal to the greater of (a) four and (b) a percentage of the board members equal to its ownership percentage rounded up to the nearest whole number (but not a majority); and at least 10% of the Company’s shares, it will have the right to nominate three individuals (i.e. the Fortress Designees) to be appointed as directors. Until such time as Tolefi owns in the aggregate less than 5% of the Shares for a certain period, Tolefi shall have the right to nominate one individual to be appointed as director (i.e. the Tolefi Designee[1] [1]“Tolefi Designee” shall mean the individual identified by Tolefi from time to time in accordance with the provisions of the Shareholders’ Rights Agreement between Tolefi and Celyad, and reasonably acceptable to Celyad.). At the date of this Report, the Board of Directors consists of 10 members, all being non-executive directors, including three independent directors. The Board of Directors is composed of 5 men and 5 women. Name Position CFIP CLYD LLC (1) Non-executive Director Serge Goblet Non-executive Director Christopher LiPuma Non-executive Director Hilde Windels BV (2) Independent Director Ami Patel Shah Non-Executive Director Dominic Piscitelli Independent Director Marina Udier Independent Director Jonathan James Non-executive Director Sage Mandel Non-executive Director Andrea Gothing Non-executive Director (1) Represented by Michel Lussier (2) Represented by Hilde Windels Term 2025 2024 2024 2026 2024 2024 2025 2026 2026 2026 Board Committee Membership Member of the Nomination and Remuneration Committee Chair of the Board Member of the Audit Committee and Chair of the Nomination and Remuneration Committee Chair of the Audit Committee and member of the Nomination and Remuneration Committee Member of the Audit Committee 2 9 The following paragraphs contain brief biographies of each of the directors, or in case of legal entities being director, their permanent representatives, with an indication of other relevant mandates as member of administrative, management or supervisory bodies in other companies during the previous five years. 2023 Annual Report Hilde Windels serves as Chair of the Board of Directors since June 2022. Hilde Windels is an advisor in the life sciences industry. She brings over 20 years of experience in biotech with a track record of business and corporate strategy, building and structuring organizations, private fundraising, mergers and acquisitions and public capital markets. Ms. Windels has worked as Chief Financial Officer for several biotech companies, amongst those Belgium based molecular Dx company Biocartis where she started as Chief Financial Officer CFO in 2011. She transitioned to the co-Chief Executive Officer role in 2015 and became interim Chief Executive Officer in 2017. She took up the CEO role of MyCartis in early 2018 and of its spin-out Antelope Dx mid-2019. Ms. Windels is a member of the board of directors of Erytech, GIMV and MdxHealth. She holds a Master’s Degree in Economics (Commercial Engineer) from the University of Leuven (Belgium). Michel Lussier is ad interim Chief Executive Officer of the Company. Mr. Lussier co-founded Cardio3 Biosciences SA the company which became Celyad SA. Mr. Lussier currently serves also on several Boards of Directors: iSTAR Medical SA and Gabi Smart Care SA as Chairman, Occlutech AG as board member. Previously, Mr. Lussier founded MedPole SA and its North American affiliate Medpole LTD, a Medtech and cell therapy incubator for start-up companies, serving as CEO until July 2020. From May 2014 and until September 2020, Mr. Lussier also served as the CEO of Metronom Health Inc, an early stage medical device company founded by Fjord Ventures, where he also acted as a management consultant. Mr. Lussier served as a member of the Board of Directors of Biological Manufacturing Services SA until 2017. Prior to that, from 2002 to 2013, he worked for Volcano Corporation, where he served in global leadership positions. Mr. Lussier started his career with Medtronic where he held a number of technical, marketing, sales then general management roles. Mr. Lussier obtained a Bachelor of Sciences degree in Electrical Engineering and Master’s Degree in Biomedical Engineering at the University of Montreal. He also holds an MBA from INSEAD, France. Serge Goblet holds a Master Degree in Business and Consular Sciences from ICHEC, Belgium and has many years of international experience as director in Belgian and foreign companies. Mr. Goblet is the managing director of TOLEFI SA, a Belgian holding company and holds director mandates in subsidiaries of TOLEFI. Dominic Piscitelli brings more than 20 years of industry experience, including debt and equity financings, in-licensing transactions, acquisitions, marketing partnerships and commercial product launches (XTANDI® and Tarceva®). Since September 2019 Dominic has served as the Chief Financial Officer of ORIC Pharmaceuticals, Nasdaq-listed biotechnology company, that completed its initial public offering in April 2020. Prior to joining ORIC, Mr. Piscitelli was CFO of AnaptysBio, a Nasdaq-listed biotechnology company, where he helped raise over $500 million in an IPO and follow-on financings. From 2012 until 2017, Mr. Piscitelli was Vice President of Finance, Strategy and Investor Relations at Medivation and played a key role in its acquisition by Pfizer. Previously, he served as Senior Director of Collaborations and Operations Finance at Astellas Pharma. Prior to that, Mr. Piscitelli served in various roles of increasing responsibility culminating as the Vice President, Treasury & Management Finance at OSI Pharmaceuticals, and played a significant role in their acquisition by Astellas. Mr. Piscitelli began his career with KPMG and is a certified public accountant. He earned a bachelor’s degree in accounting and an MBA from Hofstra University (New York). 3 0 Marina Udier, Ph.D., serves as CEO of Nouscom after joining as Chief Operating Officer in 2016 from Versant Ventures, where she was Operating Principal. Prior to Versant, she held senior development and commercial roles at Novartis in Basel including work as a Global Commercial Head. Previously, Dr. Udier worked for McKinsey & Company in the US, working with Healthcare Fortune 500 companies in areas of marketing, strategy and pricing. She has a Ph.D. in Organic Chemistry from Yale University. 2023 Annual Report Ami Patel Shah is a Managing Director in Fortress Investment Group LLC’s Intellectual Property Group based in San Francisco, where she focuses on a wide variety of investment opportunities in connection with intellectual property and technology. Prior to joining Fortress in 2013, Ms. Shah worked for Intel, most recently heading Intel’s Global Wireless Patents group, overseeing the Intel’s patent procurement, licensing, transaction and monetization activities for Intel and their development partners. At Intel, Ms. Shah also held wide-ranging and deep technical responsibilities, as well as led Intel’s standards bodies interactions. Before joining Intel, she was with the law firms of Dorsey & Whitney, and Fish & Richardson where she worked on patent prosecution, licensing and ITC litigation matters. Ms. Shah is recognized as one of the World’s Leading IP Strategists by Intellectual Asset Magazine in the IAM 300, awarded to individuals with an established track record in developing and rolling out world-class IP value creation programs. Ms. Shah began her legal career as an examiner in the United States Patent Office and was an engineer in the auto industry. Ms. Shah holds a J.D. from Cleveland State University along with a B.S. in Electrical and Computer Engineering from Wayne State University. Christopher LiPuma is a Director in Fortress Investment Group LLC’s Intellectual Property Group based in San Francisco, where he focuses on a wide variety of investment opportunities in connection with intellectual property, life sciences, and academic institutions. Prior to joining Fortress in 2018, Mr. LiPuma headed business development for Kastle Therapeutics, a private equity backed biotechnology company acquiring ultra-orphan drugs. Before joining Kastle, Mr. LiPuma was with OrbiMed Advisors, a life sciences focused asset management firm. At OrbiMed, Mr. LiPuma worked on royalty monetizations, direct lending to late development stage and early commercial stage life sciences companies, and several private equity transactions focused on acquiring legacy assets from big pharma. Mr. LiPuma started his career as an investment banker at Leerink Partners. Mr. LiPuma holds a B.A. from Hamilton College. Jonathan James is a Managing Director based in Menlo Park for the Fortress Credit Funds Business. Mr. James is part of the Intellectual Property Group where he serves as the Director of Litigation and Portfolio Management. Mr. James has nearly 30 years of experience representing leading technology companies in patent, trade secret and other IP litigation throughout the United States, before the International Trade Commission, and in Europe and Asia. Mr. James also has extensive experience advising clients on patent portfolio strategy, patent licensing, patent sales and acquisition and patent monetization. Prior to joining Fortress in 2017, Mr. James was a partner and Co-Chair of the Intellectual Property Practice at Perkins Coie, an international law firm of over 1,000 lawyers with one of the largest intellectual property practices in the world. Mr. James served in numerous other leadership roles at Perkins Coie, including as a member of the firm’s Executive Committee. Prior to Perkins Coie, Mr. James was a partner with Brown & Bain, a leading technology and intellectual property litigation firm. Before attending law school, Mr. James worked in marketing positions at IBM. He also served as a law clerk for the United States Senate Judiciary Committee Sub-Committee on Patents, Copyrights and Trademarks. Mr. James is recognized by Intellectual Asset Magazine as one of the World’s Leading IP Strategists and is one of the IAM 300, awarded to individuals with an established track record in developing and rolling out world-class IP value creation programs. Mr. James received a B.S. in Business Administration from the University of Arizona and a J.D. from Arizona State University. Sage Mandel is a Vice President in Fortress Investment Group LLC’s Intellectual Property Group based in New York, where she focuses on new investment underwriting and ongoing asset management for 3 1 2023 Annual Report opportunities in connection with intellectual property and life sciences. Before joining Fortress, Ms. Mandel was an investment professional at EW Healthcare Partners, a growth focused private equity firm with $4.0 billion AUM dedicated exclusively to healthcare investments in the pharmaceutical, medical device, diagnostics, and technology-enabled services sectors in the United States and in Europe. Prior to EW Healthcare Partners, Ms. Mandel was in the healthcare investment banking group at J.P. Morgan, where she focused on pharmaceutical, medical device, biotechnology and services deals spanning M&A, structured transactions and debt and equity financings. Ms. Mandel has also worked in science research labs at the Mount Sinai School of Medicine Department of Pharmacology, the University of Pennsylvania Department of Biology, and the Stony Brook University Department of Biochemistry. Ms. Mandel graduated magna cum laude from the Vagelos Life Sciences and Management Dual Degree Program at the University of Pennsylvania, where she earned a Bachelor of Science degree in Economics with a concentration in Finance at the Wharton School and a Bachelor of Arts degree in Biology at the College of Arts and Sciences. Andrea Gothing serves as a Director at Fortress Investment Group in Menlo Park, California for the Fortress Credit Funds Business. Ms. Gothing is part of the Intellectual Property group where she oversees investment monetization strategies, including licensing and litigation. Ms. Gothing has over 20 years of experience representing clients in patent litigation and trade secret matters on both sides of the courtroom. Before joining Fortress, Ms. Gothing was a litigation partner at the litigation boutique of Robins Kaplan LLP, where she served on the hiring committee and as an instructor in the firm’s trial practice program. Prior to law school, Ms. Gothing was a semiconductor device engineer at Motorola. Ms. Gothing earned her law degree magna cum laude from the University of Minnesota. In addition, she has a Bachelor of Science in Electrical Engineering from Worcester Polytechnic Institute where she graduated with high distinction. Ms. Gothing has a Master of Science in Electrical Engineering from the University of Minnesota. Her Master’s thesis was entitled Image Processing for Positron Emission Technology. In addition, Ms. Gothing was a Biomedical Engineering doctoral candidate at the University of Minne sota where she did all but her dissertation. Her area of research was micro coils for nuclear magnetic resonance imaging. Ms. Gothing is a member of Eta Kappa Nu, the international honor society of the Institute of Electrical and Electronics Engineers, and Tau Beta Pi, the oldest engineering honor society in the United States. 2.2.2. Board resolutions The Board meets as frequently as the interest of the Company dictate, but in any case, sufficiently regularly to enable it to discharge its duties effectively, and certainly not less than four times per year. Resolutions are taken by a simple majority of the votes cast. However, until Fortress own in aggregate less than 10% of the outstanding shares of the Company for more than thirty (30) consecutive days, any transaction whereby the Company or its subsidiaries would terminate their intellectual property or licence, sub-licence or contribute their intellectual property to a third party other than Fortress, which transaction presents any of the following characteristics: (i) a transfer of litigation or prosecution rights to licensees and sublicensees associated with any Dartmouth IP, (ii) the granting of an exclusive or non-exclusive license to any Dartmouth IP, or (iii) the termination of the rights of the company or any of its subsidiaries to any Dartmouth IP (each of (i), (ii) and (iii), a Dartmouth IP[1] Transaction), [1] “IP” means intellectual property. shall be subject to approval by the board of directors, including the vote of at least one Fortress Designee. In addition, the Company shall not, without approval of a reinforced board majority (positive vote of 72.5% of the members of the Board of Directors) if the Tolefi Designee so requests, decide on the following matters (i) incur or issue any indebtedness in an aggregate principal amount in excess of USD 1,000,000, (ii) amend, modify, supplement or waive any material terms of any existing indebtedness, (iii) repay, redeem, purchase, defease or otherwise satisfy any indebtedness prior to the scheduled maturity thereof, (iv) incur off-balanced-sheet commitments with a value in excess of EUR 20,000,000 in the aggregate, (v) consummate a business acquisition or combination or asset acquisition transaction for consideration in excess of EUR 20,000,000, (vi) disposal of non-IP assets with a value in excess of EUR 1,000,000 or (vii) use the authorized capital of the Company. 3 2 2023 Annual Report Furthermore, until such time as the Fortress Shareholders own in the aggregate less than 10% of the then outstanding shares for a period of more than thirty (30) consecutive days, the Company shall not, directly or indirectly, without the consent of Fortress, (i) incur or issue any indebtedness that would encumber any intellectual property of the Company, (ii) issue any Equity Securities (defined as any share and any other security, financial instrument, certificate or other right (including options, futures, swaps and other derivatives) representing, being exercisable, convertible or exchangeable into or for, or otherwise providing a right to acquire, directly or indirectly, any of the securities mentioned above or any other security or financial instrument the value of which is based on any of the foregoing) of the Company that are senior to the ordinary shares with respect to the right to receive (x) dividends or other distributions to shareholders or (y) proceeds in the event of the liquidation, dissolution or winding-up of the Company (including for such purposes in connection with any change of control transaction), (iii) alter, amend or change the rights, preference or privileges of the shares, including in connection with any reclassification, recapitalization, reorganization or restructuring, (iv) recommend, directly or indirectly, or take any other action to (A) increase or decrease the size of the Board of Directors or (B) co-opt or appoint to the Board of Directors in place of a Fortress Designee any person other than a Fortress Designee, (v) make any proposal to amend, repeal or otherwise modify any provision of the Company’s articles of association that would be reasonably expected to adversely affect the interests of Fortress or any Fortress Shareholder or (vi) make any proposal to modify the rights of any Equity Securities of the Company in a manner adverse to Fortress. 2.2.3. Director Independence Pursuant to the article 7:87 of the BCCA, a director of a listed company is considered as independent if he does not entertain with the Company or an important shareholder of the Company any relation the nature of which could put his independence at risk. If the director is a legal entity, the independence must be assessed both in the case of the legal entity and its permanent representative. In order to verify if a candidate director fulfils those conditions, the independence criteria of the article 3.5 of the CGC are applied and can be summarized as follows: • • • • • • • • The director has not been an executive member of the Board of Directors, or daily manager of the Company (or an affiliate of the Company, if any), during a term of three years prior to his or her election and does not possess any stock option of the Company related to that function; The director has not been a non-executive director for a cumulative period of more than 12 years; The director has not been a member of the managerial staff of the Company (or an affiliate of the Company, if any) during a term of three years prior to his or her election and does not possess any stock option of the Company related to that function; The director does not receive and has not received any remuneration or other significant financial advantage from the Company (or an affiliate of the Company, if any), other than the profit share (“tantièmes”) and remuneration received in his or her capacity as a non-executive director or as a member of the supervisory body; The director does not own any corporate rights that represent 10% or more of the share capital or voting rights of the Company, Further, the director cannot be appointed by a shareholder who falls under the conditions set forth in this criterion; The director does not and, during the year preceding his appointment, did not, have a significant business relationship with the Company (or an affiliate of the Company, if any), either directly or as a partner, shareholder, member of the Board of Directors or member of the managerial staff of a company or of a person that maintains such a relationship; The director is not and has not been at any time during the past three years, a partner or an employee of its current or former statutory auditor or of a company or person affiliated therewith; The director is not an executive director of another company in which an executive director of the Company is a non-executive director or a member of the supervisory body, and has no other significant ties with executive directors of the Company through his or her involvement in other companies or bodies; 3 3 2023 Annual Report • The director’s spouse, unmarried legal partner and relatives (via birth or marriage) up to the second degree do not act as a member of the Board of Directors, member of the management board (“directiecomité / comité de direction”) (should such corporate body be created) or daily manager or member of the managerial staff in the Company (or an affiliate of the Company, if any), and do not meet one of the criteria set out above. The Board of Directors, assisted by the Head of Legal and upon recommendation of the Remuneration and Nomination Committee, determines annually if the conditions of independence are fulfilled by its members. 2.2.4. Role of the Board in Risk Oversight The Board of Directors is primarily responsible for the oversight of its risk management activities and has delegated to the Audit Committee the responsibility to assist the Board of Directors in this task. While the Board of Directors oversees the overall risk management, the Company’s Management is responsible for the day-to-day risk management processes. The Board of Directors expects the management to consider risk and risk management in each business decision, to proactively develop and monitor risk management strategies and processes for day-to-day activities and to effectively implement risk management strategies adopted by the Board of Directors. The Company believes this division of responsibilities is the most effective approach for addressing the risks the Company faces. 2.2.5. Committees within the Board of Directors 2.2.5.1. General Without prejudice to the role, responsibilities and functioning of the Executive Committee as set out below under section “Executive Committee”, the Board of Directors may set up specialized committees to analyze specific issues and advise the Board of Directors on those issues. Such committees are advisory bodies only and the decision-making remains the collegiate responsibility of the Board of Directors. The Board of Directors determines the terms of reference of each committee with respect to the organization, procedures, policies and activities of the committee. 2.2.5.2. Audit Committee At the date of this Report, the Audit Committee consists of three members: Dominic Piscitelli (Chairperson), Marina Udier and Hilde Windels. The role of the Audit Committee is to ensure the effectiveness of the internal control and risk management systems, the internal audit (if any) and its effectiveness and the statutory audit of the annual and consolidated accounts, and to review and monitor the independence of the external auditor, in particular regarding the provision of additional services to the Company. The Audit Committee reports regularly to the Board of Directors on the exercise of its functions. The Audit Committee informs the Board of Directors about all areas in which action or improvement is necessary in its opinion and produces recommendations concerning the necessary steps that need to be taken. The audit review and the reporting on that review cover the Company and its subsidiaries as a whole. The members of the Audit Committee are entitled to receive all information which they need to perform their function from the Board of Directors, Executive Committee and employees. Each member of the Audit Committee shall exercise this right in consultation with the Chairperson of the Audit Committee. The Audit Committee’s duties and responsibilities include, among other things: the financial reporting, the review of internal controls and risk management, and managing the internal and external audit process. Those tasks are further described in the Audit Committee charter as set out in the Charter and in the Article 7:99 §4 of the BCCA. Dominic Piscitelli and Hilde Windels have been identified by the Company’s Board of Directors as having the necessary expertise in accounting and audit matters to serve as experts on the Audit Committee. The Audit Committee holds a minimum of four meetings per year. 3 4 2.2.5.3. Nomination and Remuneration Committee 2023 Annual Report As of the date of this Report, the Nomination and Remuneration Committee is composed of three members: Hilde Windels (Chairperson), Christopher LiPuma and Dominic Piscitelli. The Nomination and Remuneration Committee consists of not less than three directors, or such greater number as determined by the Board of Directors at any time. All members must be non-executive directors and at least a majority of its members must be independent in accordance with Article 7:87 of the BCCA. The Company’s Board of Directors has determined that a majority of the members of the Nomination and Remuneration Committee are independent in accordance with Article 7:87 of the BCCA. The Nomination and Remuneration Committee must have the necessary expertise as regards the remuneration policy, and this condition is fulfilled if at least one member has had a higher education and has had at least three years of experience in personnel management or in the field of remunerating directors and managers. As of the date of this Annual Report, Hilde Windels, Christopher LiPuma and Dominic Piscitelli satisfy this requirement. The CEO has the right to attend the meetings of the Nomination and Remuneration Committee in an advisory and non-voting capacity on matters other than those concerning himself. The Nomination and Remuneration Committee will elect a chairman from amongst its members. The Chairperson of the Nomination and Remuneration Committee is actually Hilde Windels. The role of the Nomination and Remuneration Committee is to assist the Board of Directors in all matters: • • • • • • Relating to the selection and recommendation of qualified candidates for membership of the Board of Directors; Relating to the nomination of the CEO; Relating to the nomination of the members of the Executive Committee, other than the CEO, upon proposal by the CEO; Relating to the remuneration of independent directors; Relating to the remuneration of the CEO; Relating to the remuneration of the members of the Executive Committee, other than the CEO, upon proposal by the CEO; • On which the Board of Directors or the Chairman of the Board of Directors requests the Nomination and Remuneration Committee's advice. Additionally, with regard to matters relating to remuneration, except for those areas that are reserved by law to the Board of Directors, the Nomination and Remuneration Committee will at least have the following tasks: • • Preparing the remuneration report (which is to be included in the Board of Director’s corporate governance statement); and Explaining its remuneration report at the Annual General Shareholders Meeting. It will report to the Board of Directors on the performance of these tasks on a regular basis. These tasks are further described in the terms of reference of the Nomination and Remuneration Committee as set out in the Charter. The Nomination and Remuneration Committee will meet at least twice per year, and whenever it deems it necessary to carry out its duties. 2.2.6. Meetings of the Board and the committees In 2023, the Board of Directors held 12 meetings by telephone or videoconference: 3 5 2023 Annual Report Board Members Syga Bio SARL S. Goblet A. Patel J. James S. Mandel A. Gothing D. Piscitelli M. Udier H. Windels C. LiPuma CFIP CLYD LLC Hilde Windels BV Mel Management SRL 26 Jan N.A. Present Present N.A. N.A. N.A. Present Present Present Present N.A. 22 Feb N.A. Present Absent N.A. N.A. N.A. Present Present Present Present N.A. 2 Mar N.A. Present Absent N.A. N.A. N.A. Present Present Present Present N.A. 14 Mar N.A. Present Present N.A. N.A. N.A. Present Present Absent Present N.A. 23 Mar N.A. Present Present N.A. N.A. N.A. Present Present Present Present N.A. #REF! 22 Jun 4 May 25 Apr Present Present Present Present Represented Absent Present Present Present N.A. N.A. N.A. N.A. N.A. N.A. N.A. N.A. N.A. Present Present Present Present Present Present Present Present Present Present Present Present N.A. N.A. N.A. 17 Jul Present Absent Present N.A. N.A. N.A. Present Present Present Present N.A. 24 Aug Present Present Present N.A. N.A. N.A. Present Present Present Present N.A. 5 Oct Present Present Present N.A. N.A. N.A. Present Present Present Present N.A. 5 Dec N.A. Present Present Present Present Present Present Present N.A. Present Present N.A. N.A. N.A. N.A. N.A. N.A. N.A. N.A. N.A. N.A. N.A. Present Present Present Present Present Present Present Present Present Present Present Present N.A. In addition, one notarized meeting of the Board of Directors took place in 2023 in relation to the capital increase and the issuance and amendment of warrants: Board Members Syga Bio SARL S. Goblet A. Patel Jonathan James Sage Mandel Andrea Gothing D. Piscitelli M. Udier H. Windels C. LiPuma CFIP CLYD LLC Hilde Windels BV 2023 4 Sep Present Represented Represented N.A. N.A. N.A. Represented Represented Present Represented N.A. N.A. Mel Management SRL Represented The Nomination and Remuneration Committee held 5 meetings by telephone or videoconference: Remuneration and Nomination Committee H. Windels D. Piscitelli Mel Management SRL Chris LiPuma 24 Jan Present Present Present Present 13 Jul Present Present Absent Present 2023 19 Oct Present Present Absent Present The Audit Committee held 6 meetings by telephone or videoconference: Audit Committee #REF! D. Piscitelli H. Windels M. Udier 10 Mar Present Present Present 20 Mar Present Present Present 28 Mar Present Present Present 31 May Present Present Present 22 Nov Present Present Present Present 1 Aug Present Present Present 24 Nov Present Present Present Present 1 Dec Present Present Absent 3 6 2023 Annual Report 2.3. Executive Committee The Board of Directors has established an Executive Committee. The terms of service of the Executive Committee have been determined by the Board of Directors and are set out in the Company’s Charter. The Executive Committee consists of the Chief Executive Officer, or CEO (who is the chairman of the Executive Committee), the Vice President of Finance and Administration (VP Finance), the Director of R&D, the Head of IP and the Head of Legal. The Executive Committee discusses and consults with the Board of Directors and advises the Board of Directors on the day-to-day management of the Company in accordance with the Company's values, strategy, general policy and budget, as determined by the Board of Directors. Each member of the Executive Committee has been made individually responsible for certain aspects of the day-to-day management of the Company and its business (in the case of the CEO, by way of delegation by the Board of Directors; in the case of the other member of the Executive Committee, by way of delegation by the CEO). The further tasks for which the Executive Committee is responsible are described in greater detail in the sections referencing the Executive Committee, as set out in the Company’s Charter. The members of the Executive Committee are appointed and may be dismissed by the Board of Directors at any time. The Board of Directors appoints them following the recommendation of the Nomination and Remuneration Committee, which shall also assist the Board of Directors on the remuneration policy of the members of the Executive Committee, and their individual remunerations. The remuneration, duration and conditions of dismissal of Executive Committee members is governed by the contract entered into between the Company and each member of the Executive Committee with respect to their function within the Company. In principle, the Executive Committee meets every month. Additional meetings may be convened at any time by the Chairman of the Executive Committee or at the request of two of its members. The Executive Committee will constitute a quorum when all members have been invited and the majority of the members are present or represented at the meeting. Absent members may grant a power of attorney to another member of the Executive Committee. Members may attend the meeting physically or by telephone or video conference. The absent members must be notified of the discussions in their absence by the Chairman (or the Company Secretary, if the Executive Committee has appointed a Company Secretary from among its members). The members of the Executive Committee must provide the Board of Directors with information in a timely manner, if possible, in writing, on all facts and developments concerning the Company that the Board of Directors may need in order to function as required and to properly carry out its duties. The CEO (or, in the event that the CEO is not able to attend the Board of Directors' meeting, the VP Finance & Administration, in the event that the VP Finance & Administration is not able to attend the Board of Directors' meeting, another representative of the Executive Committee) must report at every ordinary meeting of the Board of Directors on the material deliberations of the previous meeting(s) of the Executive Committee. The following table sets forth the members of the Executive Committee who have performed during 2023. 3 7 Name Charles Morris (1) Function Chief Medical Officer MC Consult SRL, represented by Philippe Nobels (2) Chief Human Resources Officer SYGA BIO SARL, represented by Georges Rawadi (3) Chief Executive Officer Mel Management SRL, represented by Michel Lussier Ad interim Chief Executive Officer F&C Consulting SRL, represented by David Georges Vice President Finance and Administration Eytan Breman Hannes Iserentant An Phan Director Research and Development Head of IP Heal of Legal (1) The collaboration between the Company and Charles Morris was terminated on January 27, 2023. (2) The collaboration between the Company and MC Consult SRL was terminated on February 28, 2023. (3) The collaboration between the Company and SYGA BIO SARL was terminated on December 1, 2023. 2023 Annual Report Year of birth 1965 1966 1967 1956 1976 1980 1978 1975 The following paragraphs contain brief biographies of each of the members of the Executive Committee or in case of legal entities being a member of the Executive Committee active on the date of this Annual Report, or key manager, their permanent representatives. Michel Lussier (representative of Mel Management SRL), CEO ad interim – reference is made to section “2.2.1. Composition of the Board of Directors”. David Georges (representative of F&C Consulting SRL), brings more than 20 years of experience in the life sciences industry holding various financial and administration roles. David first joined Celyad Oncology in January 2019 as Finance Director and was appointed VP of Finance and Administration in June 2022. He started his career in the bank and insurance sector working for Axa Royale Belge and the Citibank’s EMEA headquarters, where he had the opportunity to evolve in different financial roles including accounting, tax and financial consolidation. From there, he worked as a financial manager for the pharmaceutical Merck KGaA where he held responsibilities for financial controlling, procurement and supply chain as well as holding an active role on the finance integration of acquired company Serono. Before joining Celyad Oncology, David served as Finance and Administration Director and then CFO of DIAsource ImmunoAssays, a privately held Belgian infectious disease company where he played a key role in M&A activities with AnteoTech and Biovendor. David holds a bachelor’s degree in Economy and a postgraduate degree in Finance from the University of Louvain. Eytan Breman first joined Celyad Oncology as a R&D Project Leader in 2015 and has also held positions as a senior scientist and R&D Manager of the discovery group at the Company. As of June 2022, Eytan became Head of R&D, heading the implementation of our research and development strategy for both the current and future CAR T therapies we are developing. Prior to working at Celyad Oncology, he started his career as an engineer in the laboratory of immunology at the academic hospital of Maastricht in 2007. He then obtained a Masters in Biopharmaceutical Sciences from the University of Leiden and a PhD in transplant immunology from the University of Antwerp. He was awarded The Anthony P. Monaco Award for his work in the transplant field in 2014. Hannes Iserentant, serves as Head of Intellectual Property (IP) of the Company. He first joined Celyad Oncology as IP Director in 2016 and has held positions including Senior Director of IP and Senior Director of R&D at the Company. He started his IP career in private practice at Bird Goën & Co as a member of the life sciences team before moving to VIB, a research institute active in all areas of life sciences. He was a founding member of VIB’s technology watch team involved in identifying and securing access to early stage, emerging technologies. From 2013 to 2016, he was appointed as a member of the “Expert Group on the development and implications of patent law in the field of biotechnology and genetic engineering” for the 3 8 European Commission. Mr. Iserentant holds a PhD in Biomedical Sciences from Ghent University and is a qualified European Patent Attorney. 2023 Annual Report An Phan, joined Celyad Oncology in September 2021 as Senior Legal Director and was appointed as Head of Legal in July 2022. An brings more than 20 years of legal experience with a strong focus on Life Sciences and Compliance, as well as a proven record of providing strategically sound counsel in highly regulated businesses. An began her law career in international law firms. In 2004, she joined Johnson & Johnson as Senior Legal Counsel providing legal support to all J&J businesses mainly in the Middle East and Africa. Seven years later, An served as Legal Director EMEA for St. Jude Medical for eight years, where she was supporting the whole region of Europe, Middle East and Africa. Following the acquisition of St. Jude Medical by Abbott, An moved to Hill-Rom as Compliance Director Europe & MEATI located in Amsterdam. Prior to Celyad, An worked as General Counsel for De Smet SA Engineering & Contractors in Belgium supporting their operations worldwide. An holds a Master in Laws from the UCLouvain (Belgium) and a postgraduate certification in International and European Tax Law from the “Ecole Supérieure des Sciences Fiscales” (Brussels, Belgium). 2.4. Conflict of Interest of Directors and members of the Executive Committee and transactions with affiliated companies 2.4.1. General Each Director and member of the Executive Committee is encouraged to arrange his or her personal and business affairs so as to avoid direct and indirect conflicts of interest with the Company. The Company's Charter contains specific procedures to deal with potential conflicts. To the best knowledge of the Company, no member of the Board or the executive Committee, at any time within at least the past five years, has: • • • • been convicted in relation to fraudulent offences; held an executive function as a senior manager or a member of the administrative, management or supervisory bodies of any company at the time of or preceding any bankruptcy, receivership or liquidation or at the time at which such company has been put into administration; been subject to any official public incrimination and/or sanction by any statutory or regulatory authority (including any designated professional body); or been disqualified by a court from acting as a director member of the administrative, management or supervisory bodies and/or senior manager of a company or from acting in the management or conduct of the affairs of any company. 2.4.2. Conflicts of interest of Directors Article 7:96 of the BCCA provides for a special procedure within the Board of Directors in the event of a possible personal financial conflict of interest of one or more directors with one or more decisions or transactions to be adopted by the Board of Directors. In the event of a conflict of interest, the director concerned must inform his or her fellow directors of his or her conflict of interest before the Board of Directors deliberates and takes a decision in the matter concerned. Furthermore, the conflicted director may not participate in the deliberation and voting by the Board of Directors on the matter that gives rise to the potential conflict of interest. The minutes of the meeting of the Board of Directors must contain the relevant statements made by the conflicted director, as well as a description by the Board of Directors of the conflicting interests and the nature of the relevant decision or transaction to be adopted. The minutes must also contain a justification by the Board of Directors for the decision or transaction adopted, and a description of the financial consequences thereof for the Company. The relevant minutes must be included in the (statutory) Annual Report of the Board of Directors. 3 9 2023 Annual Report The Company must notify the Statutory Auditor of the conflict. The Statutory Auditor must describe in its statutory annual audit report the financial consequences of the decision or transaction that gave rise to the potential conflict. This procedure does not apply to decisions or transactions in the ordinary course of business at customary market conditions. 2.4.3. Existing conflicts of interest of members of the Board of Directors Except as reported hereinafter, as far as the Company is aware, none of the Directors have a conflict of interest within the meaning of Article 7:96 of the BCCA which has not been disclosed to the Board of Directors. Other than potential conflicts arising in respect of compensation-related matters, the Company does not foresee any other potential conflicts of interest in the near future. In 2023, certain members of the Board declared a conflict of interest. The following declaration were made in that respect: Excerpt from the minutes of the Board meeting of January 26, 2023: "The Board discussed the allocation of warrants to Board members: - Hilde Windels (10,000 warrants); - Serge Goblet (10,000 warrants); - Dominic Piscitelli (10,000 warrants); - Marina Udier Blagovic (10,000 warrants). The warrants are granted under the Warrants Plan 2022. Each warrant will give the right to its owner to acquire one new share of the Company. The exercise price will be equal to the fair market value of the Company’s shares at the time of the offer, this value corresponding to the closing price of the shares on the day before the date of the offer. The article 7:96 of the BCAC provides that “if a director has, directly or indirectly, a conflicting financial interest in a decision or operation to be decided by the board of directors, he must inform the other directors before the deliberation of the board of directors. His declaration, including the reasons for his conflicting financial interest, must be recorded in the minutes of the board meeting that will take the decision. The auditor must also be informed. The concerned directors cannot deliberate nor vote on the concerned decisions”. Serge Goblet informed the other directors that he has a conflicting financial interest in the decision proposed. This declaration will be communicated to the statutory auditor of the Company and inserted in the Annual Report 2022 in accordance with article 7:96 of the BCAC. Serge Goblet left the meeting, and the Board unanimously approved the allocation of 10,000 warrants to Serge Goblet. Serge Goblet then came back to the meeting. Hilde Windels informed the other directors that she has a conflicting financial interest in the decision proposed. This declaration will be communicated to the statutory auditor of the Company and inserted in the Annual Report 2022 in accordance with article 7:96 of the BCAC. Hilde Windels left the meeting, and the Board unanimously approved the allocation of 10,000 warrants to Hilde Windels. Hilde Windels then came back to the meeting. Dominic Piscitelli informed the other directors that he has a conflicting financial interest in the decision proposed. This declaration will be communicated to the statutory auditor of the Company and inserted in 4 0 2023 Annual Report the Annual Report 2022 in accordance with article 7:96 of the BCAC. Dominic Piscitelli left the videoconference, and the Board unanimously approved the allocation of 10,000 warrants to Dominic Piscitelli. Dominic Piscitelli then came back to the videoconference. Marina Udier Blagovic informed the other directors that she has a conflicting financial interest in the decision proposed. This declaration will be communicated to the statutory auditor of the Company and inserted in the Annual Report 2022 in accordance with article 7:96 of the BCAC. Marina Udier Blagovic left the videoconference, and the Board unanimously approved the allocation of 10,000 warrants to Marina Udier Blagovic. Marina Udier Blagovic then came back to the videoconference." Excerpt from the minutes of the Board meeting of August 24, 2023: "Before the deliberations on the agenda started, all directors, except Serge Goblet, declared that they had no direct or indirect interest of patrimonial nature which could be contrary to the resolutions to be passed at this meeting or the Transaction contemplated thereby, within the meaning of article 7:96 of the BCCA. Serge Goblet declared that he controls Tolefi within the meaning of article 1:14 of the BCCA and will hence indirectly benefits from the Capital Increase subscribed by Tolefi. Tolefi would subscribe to the Capital Increase in aggregate amount of EUR 995,000, with cancellation of preferential subscription rights of the Company’s existing shareholders in accordance with art. 7:198 juncto 7:179, 7:191 and 7:193 of the BCCA. In the framework thereof, the Company and Tolefi will enter into the Tolefi Subscription Agreement and into the Tolefi Shareholders’ Rights Agreement. The subscribed amount will be contributed to the capital of the Company and will thus strengthen its balance sheet. The envisaged Capital Increase is considered to be in the interest of the Company. In accordance with article 7:96 of the BCCA, Serge Goblet did not participate to the deliberation nor to the voting concerning the Transaction related items on the agenda. In addition thereto, the procedure set out under article 7:97 of the BCCA has been duly complied with. Before the deliberations on the agenda started, Christophe LiPuma and Ami Patel Shah, as directors representing Fortress at the board of directors of the Company, declared that they could be considered as “involved in” the capital increase subscribed by Fortress, the Fortress Shareholders Rights Agreement and the Fortress Subscription Agreement and the Transaction, within the meaning of article 7:97, §4 of the BCCA. They declared that, as reflected in the Advice, Fortress as one of the main shareholders of the Company is able to exercise a significant influence over the Company and is, in this respect, considered as a related party of the Company, within the meaning of IAS 24.9. Moreover, Serge Goblet, as controlling shareholder of Tolefi, declared that he could be considered by the Company as “involved in” the First Capital Increase subscribed by Tolefi, within the meaning of article 7:97, §4 of the BCCA. He declared that, as reflected in the Advice, he is the controlling shareholder of Tolefi and is, in this respect, considered as a related party of the Company within the meaning of IAS 24.9. Accordingly, Serge Goblet did not participate to the deliberation nor to the vote concerning the First Board Report, the Tolefi Shareholders Rights Agreement and the Tolefi Subscription Agreement (in respect of Serge Goblet). Christophe LiPuma and Ami Patel Shah did not participate to the deliberation nor to the vote concerning the First Capital Increase, the Second Capital Increase (the related convening of the Extraordinary General Meeting), the Fortress Shareholders Rights Agreement and Fortress Subscription Agreement." Excerpt from the minutes of the Board meeting of September 4, 2023: «Conflict of interest procedures 4 1 1. Application of the procedure relating to related parties in accordance with article 7:97 of the Companies and Associations Code and the procedure relating to conflicts of interest in accordance with article 7:96 Companies and Associations Code. 2023 Annual Report 2. Conflict of interest procedure for related parties: a. Acknowledgement of the prior opinion of the Committee of Independent Directors concerning the conflict of interest procedure relating to related parties that applies in connection with the capital increase by cash contribution, drawn up in accordance with Article 7:97 of the Companies and Associations Code (the "Independent Opinion"); b. Deliberation and decision on the Independent Opinion; c. Acknowledgement of the statutory auditor's report assessing whether the financial and accounting data contained in the minutes of the Board of Directors and in the Independent Opinion contain any material inconsistencies with the information available to him in the context of his assignment, drawn up in accordance with article 7:97 of the Companies and Associations Code. 3. Conflict of interest procedure for directors: a. Acknowledgement of the declaration made by Mr. Serge Goblet, director, in accordance with article 7:96 of the Companies and Associations Code, and the declarations made by Mr. Serge Goblet, Mr. Christophe LiPuma and Mrs. Ami Patel Shah, directors, in accordance with article 7:97 of the Companies and Associations Code; b. Deliberation and decision on the declarations. II. Attendance quorum The Board of Directors currently comprises eight (8) directors. For the reasons set out under agenda items 1 to 3, Mr. Serge Goblet, director, does not take part in the deliberations of the present Board of Directors and does not take part in the vote, in accordance with articles 7:96, §1, fourth paragraph and 7:97, §4, second paragraph of the Companies and Associations Code with regard to agenda items 4 to 11. For the reasons set out under agenda items 1 and 3, Mr. Christophe LiPuma and Mrs. Amy Patel Shah, directors, do not take part in the deliberations of the present Board of Directors and do not take part in the vote, in accordance with article 7:97 §4, second paragraph of the Companies and Associations Code in respect of items 4 to 10. In accordance with article 16 of the Articles of Association, any director may give a proxy to one of his or her colleagues by letter, fax, e-mail or any other written means, to represent him or her at a meeting of the Board of Directors. A director may represent as many of his colleagues as he wishes. The attendance list shows that all directors are present or represented, so that compliance with the formalities for convening the meeting need not be demonstrated, and the Board of Directors is validly constituted and able to deliberate on the agenda. Conflict of interest procedures FIRST RESOLUTION: Application of conflict of interest procedures in accordance with articles 7:97 and 7:96 of the Companies and Associations Code. 4 2 2023 Annual Report The Chairman states that Mr. Serge Goblet, director, has informed the Board of Directors that he has a conflict of interest within the meaning of Article 7:96 of the Companies and Associations Code because he has undertaken (either directly or indirectly through entities he controls/manages or otherwise) to participate in the capital increase referred to in the above agenda, so that the procedure relating to conflicts of interest must be applied in accordance with Article 7:96 of the Companies and Associations Code. The other members of the Board of Directors declare that they have no direct or indirect interest of a proprietary nature which is opposed to the interests of the Company and to the decisions to be taken by the Board of Directors at the present meeting, within the meaning of article 7:96 of the Companies and Associations Code. The Chairman also states that the following persons are qualified as "related parties" to the Company within the meaning of article 7:97 of the Companies and Associations Code and have expressed their commitment to subscribe (either directly or indirectly through entities controlled/managed by them or otherwise) to the capital increase referred to in the above agenda up to the following amounts: - Mr. Serge Goblet, director and controlling the shareholder Tolefi: 995,000 EUR; - Fortress Investment Group, a US company indirectly controlling 28.77% of the Company's outstanding voting shares: EUR 756,500. Consequently, in order to be able to validly decide on the capital increase referred to in the above agenda, the Board of Directors must follow the procedure relating to related parties in accordance with article 7:97 of the Companies and Associations Code. In accordance with the procedure relating to related parties, the Board of Directors appointed, at its meeting on June 8, 2023, a committee of independent directors to draw up the Independent Opinion. SECOND RESOLUTION: Conflict of interest procedure for related parties. a. Acknowledgement of the Independent Opinion. The Board of Directors acknowledges and exempts the Chairman from reading the Independent Opinion of the Committee of Independent Directors, prepared in accordance with Section 7:97 of the Companies and Associations Code, a copy of which will be kept on file with the undersigned notary. The Independent Opinion literally concludes as follows: « The Committee has assessed the proposed Transaction in light of the criteria included in Article 7:97 of the Companies and Associations Code and has concluded, in light of the Company's financial position and cash requirements, after considering and reviewing alternative financing options and taking into account the interest of all stakeholders, that the expected benefits of the Transaction outweigh the expected disadvantages, leading to the conclusion that the Transaction is to the advantage and in the interest of the Company. The Transaction is consistent with the Company's strategic policy and is not manifestly unreasonable, and the Committee confirms its favorable opinion with regard to the Transaction.” b. Deliberation and decision on the Independent Opinion. The Board of Directors confirms that the procedure relating to related parties in accordance with Article 7:97 of the Companies and Associations Code has been followed and declares that it does not deviate from the Independent Opinion. 4 3 2023 Annual Report The Board of Directors deliberates on the proposed capital increase and considers that this capital increase is in the interests of the Company and its shareholders and that the participation of related parties (either directly or indirectly through entities they control/manage or otherwise), as described above, is justified. Acknowledgement of the statutory auditor's report, drawn up in accordance with article 7:97 of the c. Companies and Associations Code. The Board of Directors acknowledges and exempts the Chairman from reading the statutory auditor's report assessing whether the financial and accounting data contained in the minutes of the Board of Directors and in the Independent Opinion contain any material inconsistencies with the information available to him in connection with his assignment, drawn up in accordance with article 7:97 of the Companies and Associations Code. A copy of the auditor's report will be kept in the file of the undersigned notary. THIRD RESOLUTION: Conflict of interest procedure for directors. a. Acknowledgement of the director's declaration. The Board of Directors acknowledges and exempts the Chairman from reading the declaration of Mr. Serge Goblet, director, in accordance with Article 7:96 of the Companies and Associations Code, concerning his conflict of interest in participating in the capital increase referred to in the above agenda, as recorded in the minutes of the Board of Directors meeting held on August 24, 2023, a copy of which will be kept on file with the undersigned notary. Since Mr. Serge Goblet is a director of the Company and has a direct or indirect interest of a proprietary nature in relation to items 4 to 10 on the agenda and was appointed on the proposal of Tolefi, he is not authorized to take part in the deliberations and votes in accordance with articles 7:96, article 7:97, §4, second paragraph and 7:200 of the Companies and Associations Code in relation to these items 4 to 10. Mr. Christophe LiPuma and Mrs. Amy Patel Shah are directors of the Company and have been appointed on the proposal of Fortress Investment Group and do not take part in the deliberations of the present Board of Directors and do not take part in the voting, in accordance with articles 7:97, §4, second paragraph and 7:200 of the Companies and Associations Code with regard to points 4 to 10. b. Deliberation and decision on the declaration. The Board of Directors considers that the capital increase referred to in the above agenda is in the interest of the Company, as more fully justified in the minutes of the Board of Directors meeting held on August 24, 2023. » Excerpt from the minutes of the Board meeting of December 5, 2023: “Taken into account the conflicts of interest declared by certain directors, the Board also approved the following allocations of Warrants to the following Board members in November 2023: - 10,000 Warrants to Mrs. Hilde Windels; - 10,000 Warrants to Mrs. Marina Udier Blagovic; - 10,000 Warrants to M. Michel Lussier; - 10,000 Warrants to M. Dominic Piscitelli; and - 10,000 Warrants to M. Serge Goblet 4 4 2023 Annual Report Hilde Windels, Marina Udier Blagovic, Michel Lussier, Dominic Piscitelli and Serge Goblet informed the other directors that they each had a conflicting financial interest in this decision in accordance with article 7:96 of the Belgian Code of Companies and Associations (“BCAC”). This declaration will be communicated to the statutory auditor of the Company and inserted in the Company’s annual report in accordance with article 7:96 of the BCAC. Therefore, Hilde Windels, Marina Udier Blagovic, Michel Lussier, Dominic Piscitelli and Serge Goblet abstained from taking part and voting on this topic and the Board members who are not conflicted approved the aforementioned allocations. The Board granted a specific mandate to the VP Finance & Admin in order to formalize the offers of Warrants approved above. Taken into account the conflicts of interest declared by certain directors, the Board decided to grant forward vesting and exercise of outstanding warrants received under the Warrants Plans 2021, 2022 and 2023, in case of change of control on November 14th following the approval of the capital increase by the second EGM leading to Fortress owning then 55% of the shares of the Company. In the framework of this resolution, Michel Lussier, Serge Goblet, Hilde Windels, Dominic Piscitelli, Marina Udier Blagovic and Georges Rawadi informed the Board that they each are in a situation of conflict of interest in accordance with article 7:96 of the BCAC, as they each have a conflicting interest of a pecuniary nature in the aforementioned decision. This decision concerned the forwarding of the vesting and exercise of warrants allocated by the Company to certain beneficiaries under the Warrants Plans 2021, 2022 and/or 2023, including Michel Lussier, Serge Goblet, Hilde Windels, Dominic Piscitelli, Marina Udier Blagovic and Georges Rawadi. In accordance with the above legal provision, the abovementioned directors did not take part in this decision and abstained from voting on this item. This declaration will be communicated to the statutory auditor of the Company and inserted in the Company’s annual report in accordance with article 7:96 of the BCAC. Michel Lussier informed the other directors that he has a conflicting financial interest in the decision regarding this agenda item as per article 7:96 of the BCAC. This declaration will be communicated to the statutory auditor of the Company and inserted in the Company’s annual report in accordance with article 7:96 of the BCAC. Michel Lussier left the meeting. The Board approved the appointment of Mel Management SRL, represented by Michel Lussier, as CEO ad interim of the Company, with effective date as of December 1st, 2023. Michel Lussier rejoined the meeting.” 2.4.4. Related Party Transactions To date, no related party transaction involving the Company’s Directors, or the members of the Executive Committee, except section 2.4.3, has been disclosed to the Company. 2.4.5. Transactions with affiliates Article 7:97 of the BCCA provides for a special procedure that applies to intra-group or related party transactions with affiliates. The procedure will apply to decisions or transactions between the Company and affiliates of the Company that are not a subsidiary of the Company. It will also apply to decisions or transactions between any of the Company’s subsidiaries and such subsidiaries’ affiliates that are not a subsidiary of the Company. This procedure was applied once by the Company during the financial year 2023, at the occasion of the meeting of the board of directors dated September 4, 2023. Prior to any such decision or transaction, the Board of Directors must appoint a special committee consisting of three independent directors, assisted by one or more independent experts. This committee provides the Board of Directors with a written report giving the motives for the decision of the envisaged operation, addressing at least the following elements: the nature of the decision or the operation, a description and an estimation of the equity consequences, a description of the eventual other consequences, the advantages and inconvenient resulting therefrom for the Company, as the case maybe. The committee puts the proposed decision or operation in the context of the strategy of the Company and determines if it causes any prejudice to the Company, if it is compensated by other elements of that strategy, or if it is manifestly abusive. The remarks of the expert are integrated in the opinion of the committee. 4 5 2023 Annual Report The Board of Directors must then take a decision, taking into account the opinion of the committee. Any deviation from the committee’s advice must be explained. Directors who have a conflict of interest are not entitled to participate in the deliberation and vote. The committee’s advice and the decision of the Board of Directors must be communicated to the Company’s Statutory Auditor, who must render a separate opinion. The conclusion of the committee, an excerpt from the minutes of the Board of Directors and the opinion by the Statutory Auditor must be included in the (statutory) annual report of the Board of Directors. The procedure does not apply to decisions or transactions in the ordinary course of business at customary market conditions, and transactions or decisions with a value of less than 1% of the consolidated net assets of the Company. In 2023, the procedure provided under Article 7:97 BCCA was applied once on September 4, 2023 when Serge Goblet (as controlling shareholder of Tolefi) and Fortress Investment Group were qualified of related parties with respect to proposed subscriptions of shares by Tolefi (for EUR 995,000) and Fortress Investment Group, through an affiliate, (for EUR 756,000). 2.4.6. Code of Business Conduct and Ethics In 2015, the Company adopted a Code of Business Conduct and Ethics, or the Code of Conduct, applicable to all of its employees, members of its Executive Committee and directors. It has been updated on June 25, 2020. at https://www.celyad.com/en/investors/corporate-governance. The Audit Committee is responsible for overseeing the Code of Conduct and is required to approve any waivers of the Code of Conduct for employees, members of its Executive Committee and directors. Company’s available Conduct website Code The the on of is 2.4.7. Market abuse regulations On June 17, 2013, the Board of the Company defined specific rules to prevent the illegal use of inside information by board members, shareholders, managers and employees or the appearance of such use (the "Market Abuse Policy”). The Market Abuse Policy is regularly reviewed and updated by the Board of Directors and is available on the Company’s website. These provisions and their compliance are primarily intended to protect the market. To ensure that the law is respected and to uphold the reputation of the Company, it is therefore necessary to take a number of preventive measures in the form of a code of conduct. The Policy applies to all holders of inside information (the "Insiders"). An insider can be given access to inside information within the scope of the normal performance of his or her duties. The insider has the strict obligation to treat this information confidentially and is not allowed to trade financial instruments of the Company to which this inside information relates. In accordance with art 25bis §1 of the law of August 2, 2002, and the EU Regulation 596/2014 of April 16, 2014, on market abuse (the “MAR”), the Company has established a list of persons in the Company who, based on an employment or service agreement, have contracted with the Company and have during the course of their duties access to inside information directly or indirectly. This list is updated regularly and remains at the disposal of the FSMA for a period of 5 years. 2.5. Corporate Governance Code The Company's Board of Directors complies with the principles of the CGC. However, the Company deviates from the following principles: 4 6 2023 Annual Report • • • • Remuneration in company’s shares (principle 7.6): as per applicable laws, the Company does not meet the legal requirements to proceed with a shares buy-back and, consequently does not own treasury shares, and therefore, is not able to grant a portion of non-executive directors’ remuneration in company’s shares; No grant of stock options to independent directors (principle 7.6): since the Company is not able to offer treasury shares, the Company decided that independent directors may be allocated a fixed number of subscription rights (warrants). This allocation of warrants is not related to any performance criteria. As further detailed in the Company’s Remuneration Policy, this allocation is aimed at attracting highly skilled non-executive directors in a highly dynamic and competitive market; Absence of minimum detention of shares (principle 7.9): at the date of this Report, the Company has not fixed any minimum threshold for the detention of shares by the members of the Executive Committee. This decision is led by the fact that, since the Company does not have distributable incomes it cannot proceed to shares buy-backs (pursuant to article 7:215 of the BCCA, shares buy- back may only be paid with distributable incomes) and consequently does not own treasury Shares, which limits the possibility to offer shares for free to members of the Executive Committee. However, the members of the Executive Committee hold subscription rights (warrants) on the Company’s shares as described in the Remuneration Report; No clawback (principle 7.12): at the date of this Report, the Company has not adopted any clawback provision to claim variable remuneration from the Executive Committee members, given the practice of the industry in which the Company operates and the difficulties to recruit in this competitive environment. The Company has not adopted a diversity policy. The talents market is particularly tense and dynamic in the biopharmaceutical industry and developing a diversity policy adjusted to this fast-changing environment was not deemed to be the best instrument to meet the Company’s challenges in human resources. Over the past years, the Company has successfully achieved a broad degree of diversity from a gender, citizenship, expertise and educational background perspective at the Company’s Board of Directors, Executive Committee, Management and staff levels. The Company has attracted talents from various countries which reflects the Company’s international footprint to support the Company’s strategy. At the Board of Directors, the Company complies with Belgian laws on gender with at least one third of the members who are from a different gender. One Board member is Belgian-Canadian, six members are Americans, one is Croatian, and two are Belgians. At the Executive Committee, one member is Belgian-Canadian, three are Belgians and one is Israeli-Dutch. One member is a woman. The Company will pursue its efforts to increase the female presence at the Executive Committee. Regarding the employees not included above the Company records 50% female employees and 50% male employees. In accordance with the CGC, the Board of Directors of the Company will review its Charter from time to time and make such changes as it deems necessary and appropriate. The Charter, together with the Company’s (https://celyad.com/wp- articles of association, content/uploads/20220324_Celyad-Oncology_Corporate_governance_charter.pdf) and can be obtained free of charge at the registered office of the Company. the Company's website is available on 4 7 2023 Annual Report 2.6. Remuneration Policy 2.6.1. Introduction The remuneration policy of the Company (the “Policy”) applied during the financial year 2023 has been approved at the shareholders meeting of May 5, 2021. The Board of Directors proposes to amend the remuneration policy for the period starting January 1st, 2024 as described below. The Policy is established to be competitive in the (employment) markets in which the Company operates, mainly Europe and United States. The Company believes this adds to the long-term value creation for all our stakeholders. As a biotechnology company, the Company aims at achieving a strategy involving discovering, developing and testing (potential) product candidates. Successful implementation of this strategy requires an intense long-term effort of highly qualified persons. As such, this Policy is aimed at attracting and retaining highly qualified persons for executive and non-executive positions on our Board of Directors as well as executive management and to motivate them to contribute to our long-term goals and strategy. 2.6.2. Remuneration of the Board of Directors 2.6.2.1. Principles The Policy is aimed at attracting directors with the most relevant skills, knowledge and expertise in a highly competitive and quickly evolving industry. The Policy will help the Company attract and retain a diverse and international team of directors, striking a balance between scientific, financial, operational and strategic contributions, promoting an open, fair, sustainable and equitable company culture, driven by success. The remuneration of directors is determined by the Shareholders’ Meeting upon proposal of the Board of Directors based on a recommendation from the Nomination and Remuneration Committee. The Nomination and Remuneration Committee benchmarks non-executive Directors' compensation against peer companies to ensure that it remains fair and competitive. The Directors’ remunerations are therefore market driven. 2.6.2.2. Components The Policy, to be applied since January 1st, 2024, is based on the following fixed components: (a) A fixed fee; and (b) Warrants. The fixed fee shall be paid only to independent and non-executive directors and the warrants may be offered by the Board of Directors to any non-executive directors.1 1 Being however noted that some directors are not allowed to accept any offer of warrants, for instance the individuals who are on staff of investment funds and banks. The remuneration of these Directors does not contain any variable part and is not based on any performance conditions. Executive directors shall not receive any remuneration nor warrant in consideration for their membership of the Board. As the Company has no distributable reserves, it does not meet the legal requirements to proceed to a shares buy-back, therefore does not own treasury shares and is then currently unable to grant shares to the non-executive directors as part of their remuneration. This is a deviation from principle 7.6 of the CGC. Fixed fee 4 8 The fixed fee to be paid to independent and non-executive directors consists of a fixed annual fee (retainer) of EUR 40,000. The Board fees are paid in quarterly installments at the end of each subsequent calendar quarter. The Company will also reimburse out-of-pocket expenses (such as, without limitation, travel, meals and lodging expenses) incurred by directors in direct relation with their Board duties. 2023 Annual Report Warrants In deviation from the principle 7.6 of the CGC, the Board has determined that the grant of warrants to certain directors is in the best interest of the Company to attract and retain highly skilled directors in a very dynamic and competitive environment. The grant of warrants is a commonly used remuneration instrument in the sector in which the Company operates, in particular in the United States where the Company is active. In addition, the Company is not entitled to own treasury shares (see above) and is currently unable to offer any remuneration in shares. Finally, the grant of warrants provides an attractive additional remuneration without impacting the Company’s cash. Without this possibility, the Company would be subject to a considerable disadvantage compared to competitors offering warrants to their directors. The grant of warrants is not linked or subject to any performance conditions and consequently, does not qualify as variable remuneration. The warrants are usually issued by decision of the Board of Directors within the framework of the authorized capital (but can also be issued by decision of the Shareholders’ Meeting). The warrants are then offered to certain directors by decision of the Board of Directors upon recommendation of the Nomination and Remuneration Committee. Conflict of interest procedure applies to such decision of the Board. Each warrant gives its holder the right (but not the obligation) to subscribe, under the exercise conditions, during the exercise periods and against payment of the exercise price, to one Company’s share. Company’s warrants are granted for a limited term. This term is determined by the Board of Directors, in compliance with the BCCA, with a maximum of ten years. As an express derogation to article 7:91 of the BCCA, the warrants have a vesting period of minimum one (1) year and may be exercised to the extent vested. Shares obtained through the exercise of warrants are freely transferrable. The exercise price is equal to the fair market value of the Company's shares at the time of the offer. This value is determined by the Board of Directors and corresponds to either the closing price of the Company's share on the day before the date of the offer or the average of the thirty (30) calendar days preceding the date of the offer of the closing price of the Company's Share. The vesting scheme and/or exercise of the warrants can be accelerated, upon decision of the Board of Directors, in the following situations: (a) Share capital increase in cash without suspension of the preferential rights of the existing shareholders; (b) Takeover bid on the shares of the Company as of the announcement of the public offer by the FSMA; (c) Change of control on the Company; (d) Conclusion of a “strategic partnership” with an important industrial actor, active in the life-science sector, and if the “strategic partnership” is qualified as such by the board of directors. For further details on the terms and conditions of our warrants plans, we refer to the plans available on our website and as may be amended from time to time. 4 9 2.6.2.3. Contract terms and conditions 2023 Annual Report The directors' mandate may be terminated "ad nutum" (at any time) without any form of compensation. There is no specific agreement between the Company and non-executive directors which waives or restrains the right of the Company to terminate “ad nutum” (at any time) the mandates of the directors. The Company has signed with its directors an engagement letter consistent with the terms of this Policy. 2.6.3. Remuneration of the Executive Committee 2.6.3.1. Principles The Company’s remuneration Policy for the members of its Executive Committee is aimed at attracting, motivating, and retaining top talents in a very competitive and international environment to deliver our strategic and operational objectives. The Company’s aim is therefore to be competitive against peer companies in its markets, to incentivize performance and not to discriminate on any manner. The remuneration Policy is driven by the employees’ and the Company’s performance. The remunerations are based on market benchmarks. The remuneration of the members of the Executive Committee is determined by the Board of Directors based on recommendations made by the Nomination and Remuneration Committee, further to a recommendation made by the CEO to the Nomination and Remuneration Committee (except where his own remuneration is concerned). The Nomination and Remuneration Committee takes into consideration the employment conditions of employees and ensures that the remuneration of the Executive Committee remains proportionate to the remuneration of the employees, taking into consideration the degree of responsibility of the Executive Committee. Both the members of Executive Committee and employees’ remunerations are market driven. For employees, the Company’s remuneration is based on an independent benchmark done by a reputed international firm. The benchmark includes data points from biotech, medium and large pharmaceutical companies and is performed on an annual basis. 2.6.3.2. Components The remuneration of the Executive Committee is based on the following fixed and variable components: (a) Base fixed remuneration; (b) Variable annual cash remuneration; (c) Pension; (d) Fringe benefits; and (e) Warrants. The structure of the remuneration of Executive Committee members consists in an appropriate balance between fixed and variable remuneration. The nature and magnitude of the variable remuneration is structured to align the interests of the Executive Committee members with the sustainable value-creation objectives of the Company. Pension and other fringe benefits complete the remuneration package in line with market practice. The actual relative weights of the components of the remuneration package depends on the achievement of the performance criteria, the role and the location of each Executive Committee member as specified below, and aims at ensuring remuneration packages that are competitive and in line with market practice. Base Fixed Remuneration 5 0 Each member of the Executive Committee is entitled to a base fixed remuneration designed to fit responsibilities, relevant experience, and competences, in line with market rates for equivalent positions. 2023 Annual Report Variable Annual Cash Remuneration The base amount of the variable remuneration is based on the Company’s performance and the individual performance of the Executive Committee members measured against the individual and Company’s objectives. For the CEO, the variable remuneration is based on 75% of the Company performance and 25% of individual performance. For the other members of the Executive Committee, the variable remuneration is based on 50% of Company performance and 50% of individual performance. The variable compensation represents 30% of the fixed compensation at target for non-US members, 35% to 40% of the fixed compensation at target for US-based members and 45% of the fixed compensation at target for the CEO. Those target percentages may be multiplied by a factor from 0% to 200%, depending on the individual performance. The Variable Annual Cash Remuneration is therefore subject to an absolute cap of 200% of the fixed compensation, in line with principle 7.10 of the CGC. The Company objectives are determined annually by the Board of Directors, ultimately at the start of the period in which the incentive may be earned. The individual performance of each member of the Executive Committee is determined by an annual assessment between the individual and the CEO (or, for the CEO, between the CEO and the Chairman of the Board). It consists of SMART (Specific, Measurable, Actionable, Realistic, Time driven) and challenging objectives. Those individual objectives are aligned and consistent with the Company’s strategic objectives. The performance assessment leads to a score that will define the overall individual performance and is determined by the Board of Directors upon recommendation of the Nomination and Remuneration Committee. The Company’s objectives are aligned with the Mission and the Vison of the Company and contribute to the Company’s strategy, the enhancing of patients’ well-being and life and shareholders value creation, while maintaining a solid cash position. The Company’s objectives are typically based on a combination of various elements: • R&D Engine - - - Pre-clinical Product and Platform Development Target identification and validation Intellectual property creation • External Visibility - - - Peer reviewed and corporate publications Invited presentations Investors relations/media • • Company funding, cash runway and the efficient use of financial and non-financial resources against budget External partnership development and collaboration 5 1 The Company’s and the individual’s performances are assessed in the first quarter of each calendar year by the Board of Directors. The variable compensation is paid to the members of the Executive Committee in the first quarter of the following year upon decision of the Board of Directors. In deviation from principle 7.12 of the CGC, there is no possibility for the Company to reclaim the variable remuneration. 2023 Annual Report Pension Each member of the Executive Committee who is an employee of the Company is entitled to the participation to pension plans with defined contributions. For Belgium-based members of the Executive Committee, defined contributions pensions are paid in a Group Insurance plan which also includes a health insurance and a life insurance. US-based members of the Executive Committee participate to an employer-sponsored defined-contribution pension account defined in subsection 401(k) of the Internal Revenue Code disability insurance and life insurance. The members of the Executive Committee who are engaged through services or consulting agreements are not entitled to a group insurance plan, or to an employer-sponsored defined-contribution pension account defined in subsection 401(k) of the US Internal Revenue Code, or to a health insurance plan. Fringe benefits Each member of the Executive Committee is entitled to several fringe benefits which may include: (a) A company car; (b) A lump-sum expense allowance; (c) If required by their specific social or tax status, a housing allowance, tax advisory services, relocation allowances, schooling allowances; (d) The reimbursement of other expenses related to their responsibilities in the company. On an exceptional basis and depending on the employment market conditions, a sign on bonus may be granted when a member of the Executive Committee is hired. The sign on bonus is approved by the Board of Directors based on recommendations made by the Nomination and Remuneration Committee. Warrants The Company may from time to time offer to the members of the Executive Committee to participate to a warrants plan at the discretion of the Board of Directors. The warrants are usually issued by decision of the Board of Directors within the framework of the authorized capital (but could also be issued by decision of the Shareholders’ Meeting). The warrants are then offered to each member of the Executive Committee by decision of the Board of Directors upon recommendation of the Nomination and Remuneration Committee. Each warrant gives its holder the right (but not the obligation) to subscribe, under the exercise conditions, during the exercise periods and against payment of the exercise price, to one Company’s share. The number of warrants offered to each of the beneficiaries is freely determined by the Board of Directors, acting upon the recommendation of the Nomination and Remuneration Committee. The number of warrants is based on a benchmarking exercise regularly performed to ensure that the grants are competitive and in line with market practice. When the offer of warrants is based on the individual performance of the member of the Executive Committee, the performance scores range from 1 (underperforming) to 5 (exceeding performance): 5 2 2023 Annual Report (a) If the performance score is 1, the number of warrants is zero; (b) If the performance score is 2, the number of warrants is multiplied by a factor between 50% to 90%; (c) If the performance score is 3, the number of warrants is multiplied by a factor of 100%; (d) (e) If the performance score is 4, the number of warrants is multiplied by a factor between 100% and 125%; If the performance score is 5, the number of warrants is multiplied by a factor between 125% and 150%. In principle, the performance score is based on an assessment of the individual performance over one year. Yet, the vesting period of minimum one (1) and maximum four (4) years applied on the warrants, whose value is notably impacted by the performance of the Executive Committee, implies that the Company complies with a long term view for a major portion of the variable remuneration of the members of the Executive Committee. Under our incentive plans, warrants are granted for a limited term. This term is determined by the Board of Directors, in compliance with the provisions of the BCCA with a maximum of ten years. The warrants have a vesting period of minimum one (1) and maximum four (4) years and may be exercised to the extent vested. Shares obtained through the exercise of warrants are freely transferrable. The exercise price is equal to the fair market value of the Company's shares at the time of the offer. This value is determined by the Board of Directors and corresponds to either the closing price of the Company's share on the day before the date of the offer or the average of the thirty (30) calendar days preceding the date of the offer of the closing price of the Company's Share. The vesting scheme and/or exercise of the warrants can be accelerated in the following situations: (a) Share capital increase in cash without suspension of the preferential rights of the existing shareholders; (b) Takeover bid on the shares of the company as of the announcement of the public offer by the FSMA; (c) Change of control on the company; (d) Conclusion of a “strategic partnership” with an important industrial actor, active in the life-science sector, and provided that the “strategic partnership” is qualified as such by the board of directors. For further details on the terms and conditions of our warrants plans, we refer to the plans available on our website and as may be amended from time to time. In deviation from the principle 7.9 of the CGC, the Company has not fixed any minimum threshold for the detention of shares by the members of the Executive Committee. However, the members of the Executive Committee hold subscription rights (warrants) on the Company’s shares as described in above in this Remuneration Policy, enabling them to hold shares in the Company. 2.6.3.3. Contract terms and conditions The members of the Executive Committee are engaged based on a services agreement or an employment contract. Labour law applies to the contractual arrangements with the members of the Executive Management engaged on an employment contract. When the member of the Executive Committee is engaged on a services agreement, it generally provides for a notice period of six months and for the possibility to terminate the agreement with cause and without indemnity. 5 3 No specific severance clauses are agreed as a rule, except when duly justified after recommendation of the Nomination and Remuneration Committee. There is no specific additional individual plan regarding supplementary pension or early retirement schemes put in place for the members of the Executive Committee. 2023 Annual Report 2.6.4. Deviations from this Policy The Board has the authority to temporarily deviate from this Policy in case of exceptional circumstances, primarily those in which deviation is necessary to serve the long-term interests and sustainability of the company or to guarantee the viability of the company. Should there be a need to deviate from this remuneration Policy, the CEO will bring substantiated arguments to the Nomination and Remuneration Committee for recommendations and approval by the Board of Directors. Any deviations from this policy will be described in the Remuneration report. 2.7. Remuneration report 2.7.1. Introduction In 2023, the remuneration of the Board of Directors was based on a fixed remuneration and a fixed grant of warrants, whereas the remuneration of the Executive Committee members was based on a base fixed remuneration, a variable annual cash remuneration, fringe benefits and long-term share-based incentives (warrants). The variable remuneration of the Executive Committee members was calculated based on the Company and the individual’s performance. The Company’s performance was measured against the Company’s objectives, and the Executive Committee members’ performance, against their individual objectives. The Company’s 2023 objectives have been determined by the Board of Directors at the beginning of the year. For 2023, the Board of Directors has decided to establish the Company’s performance at 90%, reflecting the level of achievement of the Company’s objectives based on the execution of the development of our R&D programs, our licensing and business development, the financing of the Company, and the finalization of the reorganization of the Company. The individual performance of each member of the Executive Committee has been determined by an individual assessment between the Executive Committee member and the CEO (or, for the CEO, between the CEO and the Chairman of the Board). The assessment of the Executive Committee member and the CEO was reviewed by the Nomination and Remuneration Committee which made a recommendation to the Board of Directors for final decision. The CEO did not participate to any decision regarding his own individual performance. For the CEO, the variable remuneration is based on 75% of the Company performance and 25% of individual performance. For the other members of the Executive Committee, the variable remuneration is based on 50% of Company performance and 50% of individual performance. The variable compensation represents 30% of the fixed compensation at target for non-US members, 35% or 40% of the fixed compensation at target for US-based members and 45% of the fixed compensation at target for the CEO. Those target percentages may be multiplied by a factor from 0% to 200%, depending on the individual performance. Therefore, the following formula has been used to calculate the amount of the variable remuneration: (Annual salary/fee x % contractual bonus x % Company performance x ratio Company performance%) + (Annual compensation/fee x % contractual bonus x % linked with the individual performance x ratio Individual performance). 5 4 2023 Annual Report In 2023, the Board of Directors, upon recommendation of the Nomination and Remuneration Committee, has also decided to offer to the members of the Executive Committee the opportunity to participate to a warrants plan. Reference is made to the section 2.5 of this Annual Report regarding the deviations from certain principles of the CGC relative to the remuneration of the Board of Directors and the Executive Committee. In the wave of the shareholders’ rights reform, the company complied with the new standardized remuneration report as presented by the EU Commission currently as a draft (Draft Guidelines on the standardized presentation of the remuneration report under Directive 2007/36/EC, as amended by Directive (E1U) 2017/828, as regards the encouragement of long-term shareholder engagement). The Company seeks to improve permanently the quality and transparency of its remuneration to the Board and to the Executive Committee and to take into account the observations of its shareholders or proxies. The remuneration Policy and this remuneration report provide for a greater degree of disclosure and transparency on all the components of the remuneration of the Board and the Executive Committee, and the link between the remuneration and the performance of the Company. The total remuneration of the Board of Directors, the CEO and the Executive Committee members is detailed hereinafter. 2.7.2. Total Remuneration In this Section, the Total Remuneration Tables are structured as follows: Table 1 – Total Remuneration (1) 1. Fixed Remuneration Name, Position (2) Fixed Fees Board Fees Other Benefits (3) 2. Variable remuneration Multi-year variable on warrants granted during 2023(5) a) Benefit in kind b) Number of warrants c) Target value at the offer date One Year Variable (4) 3. Extraordinary Items (6) 4. Pension expenses (7) 5. Total Remuneration 6. Proportion of Fixed & Variable Remuneration (8) (1) All components of remuneration are reported in gross amounts (2) If the officer has not been in service for the entire year of the report, the start date and/or the date of the end of his contract must be informed (3) This component includes death and disability benefits, medical expenses and other additional benefits (4) The amount reported is equal to the monetary value of the variable remuneration acquired during the year reported (2023) (5) Benefit in kind on granted warrants – according to the Belgian Act of 26 March 1999. (6) Extraordinary items paid in 2023: the grants of warrants are reported under this section, considered as extraordinary, fixed items of the remuneration. (7) The reported amount contains all contributions that were actually paid by the employer during the year to pension plans. (8) Relative share of fixed remuneration = [Fixed remuneration + cost of pension] / [Total remuneration] Relative share of variable remuneration = [Variable remuneration] / [Total remuneration] 5 5 2.7.2.1. Total remuneration of the Board of Directors Total remuneration (1) 2023 Annual Report 1. Fixed remuneration Name, Position (2) Base salary Board fees 2. Variable remuneration One year variable (4) Multi-year variable (5) Other benefits (3) Mel Management (permanent representative Lussier Michel) BVBA Hilde Windels ( permanent representative Windels Hilde Windels Hilde Goblet Serge (1) Piscitelli Dominic Udier Marina Patel Ami LiPuma Chris James Jonathan Mandel Sage Gothing Andrea Grand Total € € € € € € € € € € € € 18,750 10,125 88,375 13,500 69,500 49,500 - - - - - 249,750 3. Extraordinary items awarded in 2023 (6)1 a) BIK on fixed grants warrants b) Warrants awarded 4. Pension expense (7) 5.Total Remuneration 6. Proportion of fixed and variable remuneration (8) a)€ b) a)€ b) a) b) a) b) a)€ b) a)€ b) a) b) a) b) a) b) a) b) a) b) € 2,001 30,000 - — 2,599 40,000 2,001 30,000 - 40,000 - 40,000 (2) (3) (4) (5) (6) € € € € € € 20,751 Fixe Variable 100% 0% 10,125 90,974 15,501 69,500 49,500 Fixe Variable Fixe Variable Fixe Variable Fixe Variable Fixe Variable Fixe Variable Fixe Variable Fixe Variable Fixe Variable Fixe Variable 100% 0% 100% 0% 100% 0% 100% 0% 100% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 6,601 € 256,351 (1) 10,000 warrants were awarded during 2023 but declined by the board member in 2023 (2)(3)(4)(5)(6) not applicable – non eligible In 2023, each Director, including non-executive Directors, have been offered fixed grants of 10,000 warrants. The grants were not related to any performance condition. The reasons for the variation in the number of warrants awarded (disclosed under b) are specified under footnotes (1) and (2). No taxable benefit in kind is disclosed under (a) for Directors with tax residence outside of Belgium (who are not in scope for the tax valuation under Belgian law). The details on the warrants (including the number of warrants granted, vested, and exercised, and the exercise price, can be found in the Share-Based Remuneration section below: 2.7.2.2. Total remuneration of the CEO 5 6 1. Fixed remuneration 2. Variable remuneration Table1 - Total remuneration (1) 2023 Annual Report Multi-year variable on warrants granted during 2023(5) a) Benefit in kind b) Number of warrants c) Target value at the offer date a)€ - Base salary Board fees Other benefits (3) '(1) One year variable (4) 3. Extraordinary items (6) 4. Pension expense (7) 5. Total Remuneration 6. Proportion of fixed and variable remuneration (8) Name, Position (2) Lussier Michel - CEO (till April 17, 2023 and as from Dec 1, 2023 ) € 28,750 € — € - € — € 28,750 b) 0.00 c)€ - Fixe 100% Variable 0% (1) Others benefits such as health insurance… 1. Fixed remuneration Table1 - Total remuneration (1) 2. Variable remuneration Name, Position (2) Base salary Board fees Other benefits (3) '(1) One year variable (4) 192,500 € 8,800 € — Rawadi Georges € - former CEO (exit : Dec 1, 2023 Multi-year variable on warrants granted during 2023(5) a) Benefit in kind b) Number of warrants c) Target value at the offer date a)€ b) c)€ - 194,250 104,010 3. Extraordinary items (6) 4. Pension expense (7) 5. Total Remuneration 6. Proportion of fixed and variable remuneration (8) € 201,300 Fixe Variable 100% 0% The multi-year variable consists in the grant of warrants. The target value at the offer date may vary, depending on the share price. For the proportion between the fixed and the variable remuneration, the amount of the benefit in kind according to the Belgian Act of 26 March 1999 is taken into consideration. 5 7 2.7.2.3. Total Remuneration of the Executive Committee (excl.-CEO) 2023 Annual Report 1. Fixed remuneration 2. Variable remuneration Table1 - Total remuneration (1) Name, Position (2) Base salary Board fees Other benefits (3) (2)(2) One year variable (4) Variable sur plusieurs années sur les warrants octroyés en 2023(5) a) Avantage en nature b) Nombre de warrants c) Valeur cible à la date de l’ offre 3. Extraordinary items (6) 4. Pension expense (7) 5. Total Remuneration 6. Proportion of fixed and variable remuneration (8) Executive Committee (1) 710,561€ —€ 343,472€ a) 123,232€ b) c) 17,418€ 265,000 181,000€ 18,711€ 1,213,394€ Fixe Variable 88% 12% (1) This table contains aggregate amounts for active and former EC Members. For the actual EC Members; one Executive Committee member is legal entity engaged through services agreements with the Company and three Executive Committee Members are natural person. For the former EC Members, one is legal entity engaged through services agreements with the Company and one is natural person. (2) Other fringe benefits are attributed to natural persons only, such as pension plan, health insurance, company car, representation allowances. The table above contains aggregate amounts for the 6 members of the Executive Committee. The multi-year variable consists in the grant of warrants. The target value at the offer date may vary depending on the share price. For the proportion between the fixed and the variable remuneration, the amount of the benefit in kind according to the Belgian Act of 26 March 1999 is taken into consideration. 2.7.2.4. Performance of Executives in the reported financial year The performance criteria, their relative weighting and the actual outcome in 2023 can be summarized as follows. The amount of the variable remuneration is based on the Company’s performance and the individual performance of the executive committee members measured against the individual and Company’s objectives. For the CEO, the variable remuneration is based on 75% of the Company performance and 25% of individual performance. For the other members of the Executive Committee, the variable remuneration is based on 50% of Company performance and 50% of individual performance. The Company’s 2023 objectives have been determined by the Board of Directors at the beginning of the year. For 2023, the Board of Directors has decided to establish the Company’s performance at 90%, reflecting the level of achievement of the Company’s objectives based on the execution of the development of our R&D programs, our licensing and business development, the financing of the Company, and the finalization of the reorganization of the Company. 5 8 Upon recommendation of the Nomination and Remuneration Committee, the Board of Directors has decided to grant the following variable remuneration and warrants to the CEO and the members of the Executive Committee: 2023 Annual Report 1. Performance criteria 2. Relative weighting of the performance criteria 3. a) Measured performance Company Business Development R&D (3 pilars Dual Car/SHRNA/B7H6 CEO Financing Corporate / Other Company performance Individual Performance 4 Members of the executive committee Company Performance Individual performance 2.7.3. Share-based Remuneration Table 2 - Remuneration in warrants b) Actual award outcome (cash and warrants) a)110 % b)N/A a)100% b)N/A a)40% b)N/A a)100% b)N/A a)90 % b) N/A a) N/A b) N/A a)90% b) 66 412 EUR 103% in average a) b) 74 239 EUR 50% 20% 25% 5% 75% 25% 50% 50% The main conditions of warrant plans Name of Director, position 1. Specification of plan 2. Award date 3. Vesting date 4. End of retention period 5. Exercice period 6. Exercice Price Opening Balance 7. warrants held at the beginning of the year During the year (*) Information regarding the reported financial year Closing Balance 10. Warrants awarded and unexercised 8. a) waeeants awarded b) Price of the underlying shares @ date of the offer date 9. a) Warrants exercised b) Price of the underlying shares @date of acquisition c) Price @ Exercice price d) Added value @date of equisition The Share-Based Remuneration Tables are structured as follows: 2.7.3.1. Board of Directors In deviation from the principle 7.6 of the CGC, the Board has determined that the grant of warrants to non- executive or independent directors is in the best interest of the Company to attract and retain highly skilled directors in a very dynamic and competitive environment. The grant of warrants is a commonly used remuneration instrument in the sector in which the Company operates, in particular in the United States where the Company is active. In addition, the Company is not entitled to own treasury shares and is currently unable to offer any remuneration in shares. Finally, the grant of warrants provides an attractive additional remuneration without impacting the Company’s cash. Without this possibility, the Company would be subject to a considerable disadvantage compared to competitors offering warrants to their non-executive directors. 5 9 The grant of warrants is not linked or subject to any performance conditions and consequently, does not qualify as variable remuneration. 2023 Annual Report Table 2 - Remuneration in warrants Information regarding the reported financial year Opening 7. During the year (*) 8. 9. Name of Director, position The main conditions of warrant plans 1. 2. 3. 4. 5. 6. WP 2023 10/11/23 12/11/23 N/A 01/01/27- € 0.56 31/12/36 WP 2022 27/03/23 12/11/23 N/A 01/01/27 31/12/36 € 0.87 WP 2021 21/03/22 12/11/23 N/A 01/01/26- € 2.14 31/12/29 WP 2021 26/10/21 12/11/23 N/A 01/01/25- € 3.75 31/12/28 WP 2020 26/02/21 26/02/24 N/A 01/01/24- € 6.49 31/12/28 WP 2020 11/12/20 11/12/23 N/A 01/01/24- € 6.73 31/12/27 WP 2019 28/07/20 28/07/23 N/A 01/01/24- € 8.80 31/12/25 WP 2019 24/10/19 24/10/22 N/A 01/01/23- € 8.16 WP 2018 22/01/19 22/01/22 N/A 01/01/23- €22.04 31/12/24 WP 2017 02/08/17 02/08/20 N/A 01/01/21- €32.26 31/07/22 31/12/24 Michel Lussier, Board member 10,000 5,600 20,000 17,400 30,000 a) 23,000 b) c) d) 8. 10,000 5,600 20,000 17,400 10,000 10,000 10,000 10,000 10,000 10,000 10,000 0 0 a) b) a) b) a) b) a) b) a) b) a) b) a) b) a) b) a) b) — a) b) a) b) 10,000 10,000 10,000 10,000 10,000 — a) b) — a) b) a) b) a) b) a) b) a) b) a) b) — a) b) a) b) Closing 10. 10,000 20,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 — 100,000 20,000 10,000 10,000 10,000 10,000 10,000 — 80,000 Total: 70,000 (*) During the year, no warrants were exercised and no warrants expired in accordance with the warrant plan Table 2 - Remuneration in warrants Information regarding the reported financial year During the year (*) 9. Opening 7. Closing 10. 10,000 Name of Director, position The main conditions of warrant plans 1. 2. 3. 4. 5. 6. WP 2023 10/11/23 12/11/23 N/A 01/01/27- € 0.56 WP 2022 27/03/23 12/11/23 N/A 01/01/27- € 0.87 31/12/36 31/12/36 WP 2021 26/10/21 12/11/23 N/A 01/01/21- € 3.75 31/12/28 WP 2020 11/12/20 11/12/23 N/A 01/01/24- € 6.73 31/12/27 WP 2019 24/03/20 24/03/23 N/A 01/01/24- € 5.97 31/12/25 WP 2019 24/10/19 24/10/22 N/A 01/01/23- € 8.16 WP 2018 22/01/19 22/01/22 N/A 01/01/23- €22.04 31/12/24 WP 2017 02/08/17 02/08/20 N/A 01/01/21- €32.26 31/07/22 31/12/24 Serge Goblet, Board Member Total: 50,000 30,000 a) 23,000 b) c) d) (*) During the year, no warrants were exercised and no warrants expired in accordance with the warrant plan 6 0 Name of Director, position The main conditions of warrant plans 1. 2. 3. 4. 5. 6. WP 2023 10/11/23 12/11/23 N/A 01/01/27- € 0.56 WP 2022 27/03/23 12/11/23 N/A 01/01/27- € 0.87 31/12/36 31/12/36 WP 2022 28/12/22 12/11/23 N/A 01/01/26- € 0.52 31/12/35 WP 2019 24/10/19 24/10/22 N/A 01/01/23- € 8.16 WP 2018 26/10/18 26/10/21 N/A 01/01/22- €22.04 31/12/24 2023 Annual Report Table 2 - Remuneration in warrants Information regarding the reported financial year During the year (*) 9. Opening 7. 8. Closing 10. 10,000 10,000 5,600 20,000 17,400 10,000 5,200 — a) b) — a) b) — a) b) a) b) a) b) a) b) 10,000 10,000 20,000 10,000 10,000 — Hilde Windels, Chair (as from Jun-22) (*) During the year, no warrants were exercised but 10,000 warrants were forfeited in accordance with the warrant plan 2018 40,000 a) 28,200 b) c) d) 31/12/23 20,000 Total: 50,000 Information regarding the reported financial year Name of Director, position The main conditions of warrant plans Table 2 - Remuneration in warrants 1. 2. 3. 4. 5. 6. WP 2023 10/11/23 12/11/23 N/A 01/01/27- € 0.56 WP 2022 27/03/23 12/11/23 N/A 01/01/27- € 0.87 31/12/36 31/12/36 WP 2022 28/12/22 12/11/23 N/A 01/01/26- € 0.52 31/12/35 WP 2021 21/03/22 12/11/23 N/A 01/01/26- € 2.14 31/12/29 WP 2020 26/10/21 26/10/24 N/A 01/01/25- € 3.75 31/12/28 WP 2020 26/02/21 26/02/24 N/A 01/01/25- € 6.49 WP 2020 11/12/20 11/12/23 N/A 01/01/24- € 6.73 31/12/28 WP 2017 20/05/20 20/05/23 N/A 01/01/24- € 7.93 31/07/25 31/12/27 Dominic Piscitelli, Board Member In: May-20 Opening 7. — a) b) — a) b) — a) b) a) b) a) b) a) b) a) b) a) b) a) b) 10,000 10,000 10,000 10,000 10,000 Total: 50,000 During the year (*) 9. 8. 10,000 5,600 20,000 17,400 10,000 5,200 40,000 a) 28,200 b) c) d) Closing 10. 10,000 20,000 10,000 10,000 10,000 10,000 10,000 10,000 90,000 (*) During the year, no warrants were exercised, and no warrants expired in accordance with the warrant plan Table 2 - Remuneration in warrants Information regarding the reported financial year During the year (*) 9. Opening 7. Closing 10. 10,000 Name of Director, position The main conditions of warrant plans 1. 2. 3. 4. 5. 6. WP 2023 10/11/23 12/11/23 N/A 01/01/27- € 0.56 WP 2022 27/11/23 12/11/23 N/A 01/01/27- € 0.87 31/12/36 31/12/36 WP 2022 28/12/22 12/11/23 N/A 01/01/26- € 0.52 31/12/35 WP 2021 21/03/22 21/03/25 N/A 01/01/26- € 2.14 10,000 31/12/29 WP 2021 26/10/21 26/01/24 N/A 01/01/25- € 3.75 10,000 31/12/28 WP 2020 26/02/21 26/02/24 N/A 01/01/25- € 6.49 10,000 WP 2020 17/12/20 17/12/23 N/A 01/01/24- € 6.81 10,000 31/12/28 31/07/27 Marina Udier, Board Member In: May-20 Total: 40,000 0 0 0 a) b) a) b) a) b) a) b) a) b) a) b) a) b) a) b) 8. 10,000 5,600 20,000 17,400 10,000 5,200 40,000 a) 28,200 b) c) d) 20,000 10,000 10,000 10,000 10,000 10,000 80,000 (*) During the year, no warrants were exercised, and no warrants expired in accordance with the warrant plan Table 2 - Remuneration in warrants 6 1 Name of Director, position Ami Patel (In 08-Dec-21) * (*) Not applicable Name of Director, position Christopher LiPuma (In 08-Dec-21) * (*) Not applicable The main conditions of warrant plans 1. 2. 3. 4. 5. 6. Total: Table 2 - Remuneration in warrants The main conditions of warrant plans 1. 2. 3. 4. 5. 6. Total: Table 2 - Remuneration in warrants 2023 Annual Report Information regarding the reported financial year During the year (*) 9. Opening 7. Closing 10. 8. a) b) a) b) a) b) c) d) — — Information regarding the reported financial year During the year (*) 9. Opening 7. Closing 10. 8. a) b) a) b) a) b) c) d) — — Information regarding the reported financial year During the year (*) Closing 10. Opening 7. The main conditions of warrant plans 1. 2. 3. 4. 5. 6. Name of Director, position Jonathan James (In 14-Dec- 23) (*) Not applicable Total: Table 2 - Remuneration in warrants The main conditions of warrant plans 1. 2. 3. 4. 5. 6. Name of Director, position Sage Mandel (In 14-Dec- 23) (*) Not applicable Total: Table 2 - Remuneration in warrants The main conditions of warrant plans 1. 2. 3. 4. 5. 6. Name of Director, position Andrea Gothing (In 14-Dec- 23) (*) Not applicable Total: a) b) a) b) 8. 9. a) b) c) d) a) b) a) b) 8. 9. a) b) c) d) a) b) a) b) 8. 9. a) b) c) d) Information regarding the reported financial year During the year (*) Closing 10. Opening 7. Information regarding the reported financial year During the year (*) Opening 7. — — — — Closing 10. — — 6 2 2.7.3.2. Board of Directors – former members 2023 Annual Report Name of Director, position Table 2 - Remuneration in warrants The main conditions of warrant plans 1. 2. 3. 4. 5. 6. Information regarding the reported financial year Opening 7. During the year (*) 9. 8. Closing 10. Chris Buyse, Board Member (23/12/08-13/12/22) WP 2021 21/03/22 12/11/23 N/A WP 2021 26/10/21 12/11/23 WP 2020 26/02/21 26/02/24 N/A N/A WP 2020 11/12/20 11/12/23 N/A WP 2019 24/03/20 24/03/23 N/A WP 2019 24/10/19 24/10/22 N/A WP 2018 22/01/19 22/01/22 N/A WP 2017 02/08/17 02/08/20 N/A Total: 01/01/26- 31/12/29 01/01/25- 31/12/28 01/01/24- 31/12/28 01/01/24- 31/12/27 01/01/24- 31/12/25 01/01/23- 31/12/24 01/01/23- 31/12/24 01/01/21- 31/07/22 € 2.14 10,000 € € 3.75 6.49 10,000 10,000 € 6.73 10,000 € 5.97 10,000 € 8.16 10,000 € 22.04 10,000 a) b) a) b) a) b) a) b) a) b) a) b) € 32.26 — a) b) a) b) 70,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 — 70,000 — a) — b) c) d) (*) During the year, no warrants were exercised and no warrants expired in accordance with the warrant plan Name of Director, position Margo Roberts, Board Member (01/08/18-06/05/19 Table 2 - Remuneration in warrants The main conditions of warrant plans Information regarding the reported financial year Opening 1. 2. 3. 4. 5. 6. 7. WP 2019 10/02/20 10/02/23 N/A WP 2018 22/01/19 22/01/22 N/A WP 2018 26/10/18 26/10/21 N/A 01/01/24- 31/12/25 01/01/23- 31/12/24 01/01/22- 31/12/23 € 9.84 10,000 € 22.04 10,000 € 22.04 10,000 Total: 30,000 During the year (*) 8. 9. Closing 10. 10,000 10,000 — 20,000 — — a) b) c) d) a) b) a) b) a) b) a) b) (*) During the year, no warrants were exercised but 10,000 warrants were forfeited in accordance with the warrant plan 2018 Name of Director, position Roychowdhury Debasish, Board Member (21/08/15- 06/05/19) Table 2 - Remuneration in warrants The main conditions of warrant plans Information regarding the reported financial year Opening During the year (*) Closing 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. WP 2018 22/01/2019 22/01/2022 N/A WP 2017 20/07/2017 20/07/2020 N/A 01/01/23- 31/12/24 01/01/21- 31/07/22 € 22.04 10,000 a) b) € 32.26 — a) Total: b) a) b) — — 10,000 a) b) c) d) 10,000 — 10,000 (*) During the year, no warrants were exercised and no warrants expired due to the expiration of the warrant plan 6 3 2023 Annual Report Name of Director, position Hanspeter Spek, Board Member (05/05/14- 07/05/18) Table 2 - Remuneration in warrants The main conditions of warrant plans Information regarding the reported financial year Opening During the year (*) 1. 2. 3. 4. 5. 6. 7. WP 2017 20/07/2017 20/07/2020 N/A 01/01/21- 31/07/22 € 32.26 Total: 8. a) — b) a) — b) — — 9. a) b) c) d) Closing 10. — — (*) During the year, no warrants were exercised and no warrants expired due to the expiration of the warrant plan Name of Director, position Table 2 - Remuneration in warrants The main conditions of warrant plans 1. 2. 3. 4. 5. 6. Information regarding the reported financial year Opening 7. During the year (*) 9. 8. Closing 10. Rudy De Keyser, Board Member (23/12/08- 14/01/22) WP 2020 11/12/20 11/12/23 N/A WP 2019 24/03/20 24/03/23 N/A WP 2019 24/10/19 24/10/22 N/A WP 2018 22/01/19 22/01/22 N/A WP 2017 02/08/17 02/08/20 N/A Total: 01/01/24- 31/12/27 01/01/24- 31/12/25 01/01/23- 31/12/24 01/01/23- 31/12/24 01/01/21- 31/07/22 € 6.73 10,000 € 5.97 10,000 € 8.16 10,000 € 22.04 10,000 a) b) a) b) a) b) a) b) € 32.26 — a) b) a) b) 40,000 10,000 10,000 10,000 10,000 — 40,000 — a) — b) c) d) (*) During the year, no warrants were exercised and no warrants expired due to the expiration of the warrant plan Name of Director, position Maria Koehler, Board Member In : Mar-20 Out: Aug-21 Table 2 - Remuneration in warrants The main conditions of warrant plans Information regarding the reported financial year Opening During the year (*) Closing 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. WP 2020 26/02/21 26/02/24 N/A WP 2020 11/12/20 11/12/23 N/A WP 2019 24/03/20 24/03/23 N/A 01/01/25- 31/12/28 01/01/24- 31/12/27 01/01/24- 31/12/25 € 6.49 10,000 € 6.73 10,000 € 5.97 10,000 Total: 30,000 a) b) a) b) a) b) a) b) — — a) b) c) d) 10,000 10,000 10,000 30,000 (*) During the year, no warrants were exercised, and no warrants expired in accordance with the warrant plan 6 4 2.7.3.3. Executive Committee 2023 Annual Report In deviation from the principle 7.9 of the CGC, the Company has not fixed any minimum threshold for the detention of shares by the members of the Executive Committee. However, the members of the Executive Committee hold subscription rights (warrants) on the Company’s shares as further described hereinafter. Table 2 – Remuneration in warrants Name of Director, position The main conditions of warrant plans 1. 2. 3. 4. 5. 6. WP 2021 05/07/22 12/11/23 N/A 01/01/26- € 1.64 31/12/29 Michel Lussier CEO Total: Information regarding the reported financial year Opening 7. During the year (*) 8. 9 Closing 10. a) b) a) b) 300,000 — 300,000 — — — a) — b) c) d) 300,000 300,000 Table 2 – Remuneration in warrants Name of Director, position The main conditions of warrant plans 1. 2. 3. 4. 5. 6. WP 2023 10/11/23 12/11/23 N/A 01/01/27- € 0.56 WP 2022 27/03/23 12/11/23 N/A 01/01/27- € 0.87 31/12/36 31/12/36 WP 2022 28/12/22 12/11/23 N/A 01/01/26- € 0.52 31/12/29 WP 2021 21/03/25 12/11/23 N/A 01/01/26- € 2.14 31/12/29 WP 2021 26/10/21 12/11/23 N/A 01/01/25- € 3.75 31/12/28 WP 2020 26/02/21 26/02/24 N/A 01/01/25- € 6.49 WP 2020 11/12/20 11/12/23 N/A 01/01/24- € 6.73 31/12/28 31/12/25 WP 2019 24/03/20 24/03/23 N/A 01/01/23- € 5.97 31/12/24 WP 2019 24/10/19 24/10/22 N/A 01/01/23- € 8.10 WP 2018 01/03/19 01/03/22 N/A 01/01/21- €18.10 31/12/24 31/07/22 David Georges, VP Finance as from Jul-22 Information regarding the reported financial year During the year (*) 9. Opening 7. Closing 10 30,000 — a) b) — a) b) — a) b) a) b) a) b) a) b) a) b) a) b) a) b) a) b) a) b) 9,700 7,000 7,000 5,000 7,000 5,750 3,000 8. 30,000 16,800 50,000 43,500 25,000 13,000 105,000 a) 73,300 b) c) d) 50,000 25,000 9,700 7,000 7,000 5,000 7,000 5,750 3,000 149,450 (*) During the year, no warrants were exercised and no warrants expired in accordance with the warrant plan Total: 44,450 The main conditions of warrant plans Information regarding the reported financial year Table 2 – Remuneration in warrants Name of Director, position An Phan, Head of Legal (as from Jul-22) 1. WP 2022 2. 4. 28/12/22 12/11/23 N/A 3. WP2021 26/10/21 12/11/23 N/A 6. 0.52$ Opening 7. 0 3.75$ 5000 5. 01/01/26 31/12/35 01/01/25 31/12/28 (*) During the year, no warrants were exercised, and no warrants expired in accordance with the warrant plan Total: 5,000 a) b) a) b) a) b) During the year (*) 8. 9. 25,000 13,000 25,000 a) 13,000 b) c) d) Closing 10. 25,000 5,000 30,000 6 5 Table 2 – Remuneration in warrants 2023 Annual Report Name of Director, position The main conditions of warrant plans 1. 4. WP 2022 27/03/23 12/11/23 N/A 2. 3. WP 2022 28/12/22 12/11/23 N/A WP 2019 24/03/20 24/03/23 N/A WP 2019 24/10/19 24/10/22 N/A WP 2018 01/03/19 01/03/22 N/A Breman Eytan, Head of R&D as from Jul-22 WP 2017 20/07/17 20/07/20 N/A WP 2015 06/11/15 06/11/18 N/A WP 2014 09/04/15 09/04/15 N/A Total: 5. 6. 01/01/27- € 0.87 31/12/36 01/01/26- € 0.52 31/12/35 01/01/24- € 5.97 31/12/25 01/01/23- € 8.16 31/12/24 01/01/23- €18.10 31/12/24 01/01/21- €36.11 31/12/22 01/01/19- €34.65 31/12/25 01/01/19- €45.05 31/07/24 Information regarding the reported financial year During the year (*) Opening 7. Closing 10. 20,000 2,000 1,750 2,000 — a) b) — a) b) a) b) a) b) a) b) — a) b) a) b) a) b) a) 7,950 b) 1,500 700 9. 8. 20,000 17,400 15,000 7,800 35,000 a) 25,200 b) c) d) 15,000 1,750 2,000 2,000 — 1,500 700 42,950 (*) During the year, no warrants were exercised and no warrants expired in accordance with the warrant plan Table 2 – Remuneration in warrants Closing 10. 50,000 25,000 7,000 7,000 5,000 5,000 15,000 7,000 — 5,000 126,000 Information regarding the reported financial year Opening 7. During the year (*) 9. 8 50,000 43,500 25,000 13,000 Name of Director, position The main conditions of warrant plans 1. 3. WP 2022 27/03/23 12/11/23 N/A 01/01/27- € 5. 4. 2. 6. 0.87 WP 2022 28/12/22 12/11/23 N/A 01/01/26 € 0.52 31/12/36 31/12/35 WP 2021 26/10/21 12/11/23 N/A 01/01/25- € 3.75 31/12/28 WP 2020 26/02/21 26/02/21 N/A 01/01/25- € 6.49 31/12/28 WP 2020 11/12/20 11/12/23 N/A 01/01/24- € 6.73 31/12/27 WP 2019 24/03/20 24/03/23 N/A 01/01/24- € 5.97 31/12/25 WP 2019 26/10/19 24/10/22 N/A 01/01/23- € 8.16 31/12/24 WP 2018 01/03/13 01/03/22 N/A 01/01/23- € 18.10 31/12/24 WP 2018 26/10/18 26/10/21 N/A 01/01/22- € 21.16 31/12/23 WP 2015 29/02/16 29/02/17 N/A 01/01/19- € 32.60 31/07/25 Hannes Iseretant, Head of IP (as from Jul-22) — a) b) — a) b) a) b) a) b) a) b) a) b) a) b) a) b) a) b) a) b) a) b) 7,000 7,000 5,000 5,000 15,000 7,000 3,000 5,000 Total: 54,000 75,000 a) 56,500 b) c) d) (*) During the year, no warrants were exercised but 3,000 warrants were forfeited in accordance with the warrant plan 2018 6 6 Name of Director, position Filippo Petti, Chief Executive Officer Apr-19 - >Jun-22 2.7.3.4. Executive Committee – former members 2023 Annual Report Table 2 - Remuneration in warrants The main conditions of warrant plans 1. WP 2021 2. 21/03/22 3. 12/11/23 4. N/A WP 2021 26/10/21 12/11/23 N/A WP 2020 26/02/21 26/02/24 N/A WP 2020 11/12/20 11/12/23 N/A WP 2019 24/03/20 24/03/23 N/A WP 2019 24/10/19 24/10/22 WP 2018 19/09/19 19/09/22 WP 2018 22/01/19 22/01/22 WP 2018 26/10/18 26/10/21 N/A N/A N/A N/A 5. 01/01/26- 31/12/29 01/01/25- 31/12/28 01/01/25- 31/12/28 01/01/24- 31/12/27 01/01/24- 31/12/25 01/01/23- 31/12/24 01/01/23- 31/12/24 01/01/23- 31/12/24 01/01/22- 31/12/23 6. 2.14 3.75 € € 30,000 € 6.49 30,000 € 6.73 30,000 € € € € € 5.97 30,000 8.16 9.36 30,000 20,000 18.82 25,000 21.16 20,000 Total: 285,000 Information regarding the reported financial year During the year (*) 9. 8. Opening 7. 70,000 Closing 10. 70,000 a) b) a) b) a) b) a) b) a) b) a) b) a) b) a) b) a) b) a) b) — — a) b) c) d) 30,000 30,000 30,000 30,000 30,000 20,000 25,000 — 265,000 (*) During the year, no warrants were exercised but 20,000 warrants were forfeited in accordance with the warrant plan 2018 The main conditions of warrant plans Table 2 - Remuneration in warrants 1. WP 2021 2. 26/10/21 3. 12/11/23 4. N/A 5. 01/01/25- 31/12/28 6. € 3.75 Information regarding the reported financial year During the year (*) 8. 9. Opening 7. 20,000 Closing 10. 20,000 Name of Director, position Stephen Rubino, Chief Business Officer In : Feb-20 WP 2020 26/02/21 26/02/24 N/A WP 2020 11/12/20 11/12/23 N/A WP 2019 24/03/20 24/03/23 N/A 01/01/25- 31/12/28 01/01/24- 31/12/27 01/01/24- 31/12/25 € 6.49 15,000 € 6.73 20,000 € 5.97 50,000 (*) During the year, no warrants were exercised, and no warrants expired in accordance with the warrant plan Total: 105,000 a) b) a) b) a) b) a) b) a) b) 15,000 20,000 50,000 105,000 a) b) c) d) 6 7 2023 Annual Report Information regarding the reported financial year During the year (*) 9. 8. Opening 7. 20,000 Closing 10. 20,000 Name of Director, position Table 2 - Remuneration in warrants The main conditions of warrant plans 1. WP 2021 2. 26/10/21 3. 12/11/23 WP 2020 11/12/20 24/03/23 WP 2019 24/03/20 24/03/23 WP 2019 24/10/19 24/10/22 David Gilham, Chief Scientific Officer: Sep 2016-June 2022 WP 2017 WP 2018 22/01/19 22/01/22 20/07/17 20/07/20 WP 2015 02/11/16 02/11/19 4. N/A N/A N/A N/A N/A N/A N/A 5. 01/01/24- 31/12/28 01/01/24- 31/12/27 01/01/24- 31/12/25 01/01/23- 31/12/24 01/01/23- 31/12/24 01/01/21- 31/12/22 01/01/20- 31/12/25 6. 3.75 6.73 5.97 8.16 18.82 31.34 15.90 € € € € € € € Total: a) b) a) b) a) b) a) b) a) b) a) b) a) b) a) b) 20,000 25,000 20,000 25,000 — 10,000 120,000 (*) During the year, no warrants were exercised and no warrants expired in accordance with the warrant plan 20,000 25,000 20,000 25,000 — 10,000 120,000 a) b) c) d) Table 2 - Remuneration in warrants The main conditions of warrant plans Information regarding the reported financial year During the year (*) 9. Closing 10. Opening 7. 8. 1. 2. 3. 4. WP 2021 26/10/21 12/11/23 WP 2020 11/12/20 11/12/23 WP 2019 24/03/20 24/03/23 WP 2019 24/10/19 24/10/22 WP 2018 26/10/18 26/10/21 WP 2017 20/07/17 20/07/20 N/A N/A N/A N/A N/A N/A 5. 01/01/25- 31/12/28 01/01/24- 31/12/27 01/01/24- 31/12/25 01/01/23- 31/12/24 01/01/22- 31/12/23 01/01/21- 31/07/22 € € € € € € 6. 3.75 6.73 5.97 8.16 — 6,667 13,333 13,333 22.04 10,000 36.11 — a) b) a) b) a) b) a) b) a) b) a) b) a) b) — 6,667 13,333 13,333 — — 33,333 0 0 a) b) c) d) (*) During the year, no warrants were exercised but 10,000 warrants were forfeited in accordance with the warrant plan 2018 Total: 43,333 Table 2 - Remuneration in warrants The main conditions of warrant plans Information regarding the reported financial year During the year (*) 1. 2. WP 2021 05/07/22 3. 12/11/23 WP 2021 26/10/21 12/11/23 WP 2020 26/02/21 26/02/24 WP 2019 24/03/20 24/03/23 4. N/A N/A N/A N/A 5. 01/01/26- 01/01/25- 31/12/28 01/01/25- 01/01/24- 31/12/25 WP 2019 24/10/19 01/01/23 N/A 01/01/23- WP 2018 22/01/19 22/01/22 N/A 01/01/23- WP 2017 20/07/17 20/07/20 N/A 31/07/24 01/01/21- Total: € € € € € € € 6. 1.64 3.75 6.49 5.97 Opening 7. 50,000 20,000 25,000 25,000 8.16 20,000 22.04 10,000 8. 9. a) b) a) b) a) b) a) b) a) b) a) 36.11 b) — a) b) a) b) 150,000 — — a) b) c) d) (*) During the year, no warrants were exercised and no warrants expired in accordance with the warrant plan Name of Director, position Frederic Lehman, VP Clin Dev & Medical Affairs Name of Director, position Philippe Dechamps, Chief Legal Officer: Sep 2016-Oct 2022 Closing 10. 50,000 20,000 25,000 25,000 20,000 10,000 — 150,000 6 8 Table 2 – Remuneration in warrants 2023 Annual Report Information regarding the reported financial year Name of Director, position The main conditions of warrant plans 1. 2. 3. 4. 5. 6. WP 2022 28/12/22 12/11/23 N/A 01/01/26- € 0.52 WP 2021 05/07/22 12/11/23 N/A 01/01/26- € 1.64 31/12/35 31/12/29 WP 2021 26/10/21 12/11/23 N/A 01/01/25- € 3.75 31/12/25 WP 2020 26/02/21 26/02/24 N/A 01/01/25- € 6.49 31/12/25 WP 2019 24/03/20 24/03/23 N/A 01/01/24- € 5.97 31/12/25 WP 2019 24/10/19 24/10/22 N/A 01/01/23- € 8.16 WP 2018 22/01/19 22/01/22 N/A 01/01/23- €22.04 31/12/24 WP 2017 20/07/17 20/07/20 N/A 01/01/21- €36.11 31/07/22 31/12/24 Philippe Nobels, VP Human Resources Opening 7. 30,000 20,000 10,000 20,000 20,000 10,000 — a) b) a) b) a) b) a) b) a) b) a) b) a) b) — a) b) a) b) During the year (*) Closing 9. 8. 25,000 13,000 — a) 25,000 13,000 b) c) d) 10. 25,000 30,000 20,000 10,000 20,000 20,000 10,000 — 135,000 Total: 110,000 (*) During the year, no warrants were exercised and no warrants expired in accordance with the warrant plan Table 2 – Remuneration in warrants Name of Director, position The main conditions of warrant plans 1. 2. 3. 4. 5. 6. Information regarding the reported financial year Opening 7. During the year (*) Closing 8 10. 9. Charles Morris, Chief Medical Officer WP 2021 21/03/22 12/11/23 N/A 01/01/26- € 2.14 30,000 WP 2021 26/10/21 12/11/23 N/A 01/01/25- € 3.75 20,000 31/12/29 31/12/28 WP 2010 16/04/21 16/04/24 N/A 01/01/25- € 5.42 125,000 31/12/28 Total: 175,000 a) b) a) b) a) b) a) b) 30,000 20,000 125,000 175,000 — — a) b) c) d) (*) During the year, no warrants were exercised, and no warrants expired in accordance with the warrant plan Name of Director, position Christian Homsy, CEO Jul 2007-– Apr 2019 Table 2 - Remuneration in warrants The main conditions of warrant plans 1. 2. WP 2018 22/01/19 3. 22/01/22 WP 2016 20/07/17 20/07/20 4. 5. N/A 01/01/23- 31/12/24 N/A 01/01/21- 31/12/22 6. 22.04 36.11 € € Total: Information regarding the reported financial year During the year (*) Closing Opening 7. 40,000 — 40,000 a) b) a) b) a) b) 8. 9. a) b) c) d) 10. 40,000 — 40,000 (*) During the year, no warrants were exercised and no warrants expired in accordance with the warrant plan Name of Director, position Patrick Jeanmart, CFO Sep-07>Aug-18 Table 2 - Remuneration in warrants The main conditions of warrant plans Information regarding the reported financial year During the year (*) Closing Opening 1. WP 2017 2. 20/07/17 3. 20/07/20 4. N/A 5. 01/01/21- 31/07/22 6. 36.11 € 7. — 8. 9. 10. Total: a) — b) a) b) c) d) — — (*) During the year, no warrants were exercised and no warrants expired in accordance with the warrant plan 6 9 2023 Annual Report Name of Director, position Jean-Pierre Latere, COO Jan-16>May-20 Table 2 - Remuneration in warrants The main conditions of warrant plans 1. WP 2018 2. 22/01/19 3. 22/01/22 4. N/A WP 2017 20/07/17 20/07/20 N/A 5. 01/01/23- 31/12/24 01/01/21- 31/07/22 € € 6. 22.04 Opening 7. 3,333 36.11 — Total: 3,333 Information regarding the reported financial year During the year (*) 9. Closing 10. 8. a) b) a) b) a) b) 3,333 — 3,333 a) b) c) d) (*) During the year, no warrants were exercised and no warrants expired in accordance with the warrant plan Name of Director, position Georges Rawadi, VP Business Development Table 2 - Remuneration in warrants The main conditions of warrant plans 1. 2. WP 2023 10/11/23 3. 12/11/23 WP2022 07/06/23 12/11/23 WP 2017 20/07/17 20/07/20 WP 2015 06/11/15 06/11/18 WP 2014 16/09/14 16/09/17 4. N/A N/A N/A N/A N/A 5. 01/01/27- 31/12/36 01/01/27- 31/12/36 01/01/21- 31/07/22 01/01/19- 05/11/25 01/01/18- 16/09/24 6. 0.56 0.52 31.34 34.65 39.22 € € € € € Total: Information regarding the reported financial year During the year (*) Closing Opening 7. — a) b) — a) b) — a) b) a) b) a) b) a) b) 10,000 7,500 17,500 9. 8. 75,000 42,000 119,250 62,010 194,250 104,010 a) b) c) d) 10. 75,000 119,250 — 10,000 7,500 211,750 (*) During the year, no warrants were exercised and no warrants expired in accordance with the warrant plan Name of Director, position Anne Moore, VP Corporate Strategy Mar-19>Oct-19 Table 2 - Remuneration in warrants The main conditions of warrant plans Information regarding the reported financial year During the year (*) Closing Opening 1. WP 2018 2. 3. 01/03/19 01/03/2022 4. N/A 5. 01/01/23- 31/12/24 6. 18.10 € 7. 6,667 (*) During the year, no warrants were exercised, and no warrants expired in accordance with the warrant plan Total: 6,667 a) b) a) b) 8. 9. — a) — b) c) d) 10. 6 667 6,667 Name of Director, position Dieter Hauwaerts, VP Operations Jan-15>May-17 Table 2 - Remuneration in warrants The main conditions of warrant plans 1. 2. 3. 4. WP 2015 06/11/2015 06/11/2018 N/A WP 2014 08/01/2015 08/01/2018 N/A 5. 01/01/19- 05/11/25 01/01/19- 15/05/24 6. 34.65 33.49 € € Total: Information regarding the reported financial year During the year (*) 9. Closing 10. Opening 7. 8. 3,333 3,333 6,666 a) b) — — a) b) c) d) 3,333 3,333 6,666 (*) During the year, no warrants were exercised, and no warrants expired in accordance with the warrant plan 2.7.4. Termination Indemnities Syga Bio sarl, represented by Georges Rawadi, entered into a management agreement effective as of March 23, 2023, in order to formalize its mandate of CEO of the Company. This management agreement was terminated on December 1st, 2023, and a departure payment of 4 months’ fees was made to Syga Bio sarl. Charlie Morris was engaged through an employment agreement with effective March 15, 2021. The Company terminated the contract on January 27,2023 with the payment of a severance of 6-month salary. MC Consult, represented by Philippe Nobels, entered into a management agreement effective as of January 3, 2017. This management agreement was terminated on February, 28 2023, and a departure payment of 6 months' fees was made to MC Consult. 7 0 2023 Annual Report 2.7.5. Use of the possibility to reclaim the variable remuneration The Company has not provided for the possibility to reclaim the variable remuneration and did not reclaim any variable remuneration during the reported year. 2.7.6. Deviations from the Remuneration Policy This Remuneration Report does deviate from the 2023 remuneration Policy for the three items described in 2.7.2.4. The Remuneration Policy can be found on the Company’s website. 2.7.7. Evolution of the remuneration and the performance of the company and ratio 2.7.7.1. Comparative information Annual change Director's average remuneration Board Members (in€'000) Executive Committee (in€'000) Company’s performance Loss for the period (in€'000) Treasury position at year end (in€'000) Performance KPI's determining the company performance Clinical Programs Research & Development Business Development Financing Corporate / others Average remuneration on a full-time equivalent basis of employees Employees of the company - Celyad Oncology (in €'000) Employees of the company - Celyad Inc (in €'000) 2019 2020 2021 2022 2023 76 409 55 412 55 463 49 490 (28,632) 39,338 (17,204) 17,234 (26,502) 30,018 (40,935) 12,445 95% 38% 33% 25% 90% 40% 8% 8% 25% 10% 64 150 65 170 64 173 N/A 100% N/A N/A N/A N/A N/A 68 181 35 275 (8,448) 7,004 90% 55% 20% 10% 5% 79 19 This table includes the 2019, 2020, 2021, 2022 data for comparison with 2023. In addition to the losses and the treasury position at year end, the table includes the performance criteria which determined the variable remuneration. These might differ from one year to another, in accordance with the Remuneration Policy. For 2023, the Board of Directors recognized that it was the second year of transformation of the Company. In that context, the Board of Directors has acknowledged that executives, employees and consultants have demonstrated a sense of duty, understanding and professionalism throughout the transformation process of the Company. The Board of Directors has decided to rate the Company’s performance at 90%, reflecting the level of achievement of the Company based on the completion of the additional objectives set up during 2023 as described on the table here above. For the calculation of the average remuneration for the employees, the Company has taken into consideration the fixed and the variable parts of the remuneration as well as the other benefits paid to employees (such as group insurance, representation allowance, company car, or health insurance). 2.7.7.2. Ratio The ratio between the lowest salary for the employees and the highest salary of the Executive Committee is 3. For the calculation of the remuneration, the Company has taken into consideration the fixed gross salary. 2.7.8. Taking into consideration of the vote of the shareholders On May 5, 2023, the shareholders approved the 2022 remuneration report at 46.80%. Regarding the vesting period of the warrants, the Company’s warrants vest gradually during a period of minimum one (1) year and maximum four (4) year period. The approved warrants plan provide for an accelerated vesting, upon decision of the Board of Directors, in case for instance of a change of control or a 7 1 2023 Annual Report public offering on the shares of the Company. The Company believes that this accelerated vesting in a limited number of circumstances is market practice and does not prejudice the shareholders’ interests. 2.7.9. Statutory Auditor BDO Réviseurs d’Entreprises SRL, having its registered office at The Corporate Village, Da Vincilaan 9, box E6, 1930 Zaventem, Belgium, duly represented by Christophe Pelzer, has been appointed as Statutory Auditor of the Company on May 5, 2023, for a term of three years. Christophe Pelzer is member of the Belgian Institute of Certified Auditors ("Institut des Réviseurs d'Entreprises "). The annual remuneration of the auditor for the performance of its three-year mandate for the audit of its financial statements (including the statutory financial statements) amounts to €129,000 for the year 2023 (excluding VAT). The audit-related fees and the other fees respectively amount to €11,000 and €3,800 (excluding VAT) and there has been no tax fees for the year 2023. 2.8. Description of the principal risks associated to the activities of the Group 2.8.1. Risk Management Risk management is embedded in the strategy of the Company and is of crucial importance for achieving the objectives set by the Board of Directors. The Board is responsible for assessing the risks associated with the activities of the Company and for evaluating the internal audit systems. The Board relies partially on the Executive Committee to perform this assessment. The internal audit systems play a central role in managing the risks and the activities of the Company. To safeguard the proper implementation and execution of the strategies defined by the Board, the Company has set up internal risk management and control systems. The internal audit system is based on the following pillars: • • • The compliance with and the training on the internal policies of the Company, including but not limited to the Code of Business Conduct, Standard Operating Procedures, or policies related to areas such as data protection, information systems, contract lifecycle, conflict of interest, gifts and gratuities, crisis management; The values of the Company; The monitoring of the legal environment with the support of external attorneys; • Ongoing risk analysis; • • Audit activities performed by Quality Assurance and Finance departments; Controls, supervision and corrective actions and measures. The purpose of these systems is to manage in an effective and efficient manner the significant risks to which the Company is exposed. They are designed to ensure: • • The careful monitoring of the effectiveness of the Company’s short term and long-term strategy; The Company’s sustainability by a constant evaluation of its performance (operations and cash). 2.8.2. Organization and values The Company’s organization and values as well as the legal environment surrounding the activities of the Company constitute the basis of all the internal audit components. It is determined by a composition of formal and informal rules on which the functioning of the Company relies. The organization encompasses the following elements: • Company’s Mission: “Developing innovative cell therapies against cancer”; 7 2 2023 Annual Report • • • • • • • • The Company’s values: Passion. Respect. Innovation. Determination. Excellence; The Company’s vision: “Eliminate cancer. Improve life”; Employees and consultants: the Company has been able to attract and retain motivated and dedicated qualified employees. Passion, pro-activity, open-mindness, commitment, trust and integrity are the essential traits of character of the Company’s team. All the Company’s employees and consultants are required to manage the Company’s resources with due diligence, integrity and to act with the necessary common sense; A Board of Directors, including the Remuneration and Nomination Committee and the Audit Committee. See sections 2.2.2 and 2.2.5 for further information on the functioning of the Board and its Committees; Independent non-executive directors: the Company is supported by several independent directors. Their expertise and experience contribute to the Company’s effective management; A Chief Executive Officer, in charge of the day-to-day management, supported by the other member of the Executive Committee; An internal set of procedures: the Company set up a Code of Business Conduct and Ethics and adopted internal rules and procedures which regulate the activities within the Company; The external environment: the Company operates in a highly regulated environment. Compliance with all these external rules and guidelines is of critical importance to the Company. The evaluation of the Company’s organization, values and compliance with legal environment is made regularly for the supervising bodies. 2.8.3. Risks analysis The Board of Directors determines the Company’s strategy, the risk appetite and the main Company’s policies. It is the task of the Board of Directors to strive for long-term success by procuring proper risk assessment. The Executive Committee is responsible for the development of systems that identify, evaluate and monitor risks. Risk identification consists in examining the factors that could influence the Company’s strategy and objectives: • • Internal factors: those are closely related to the internal organization and could have several causes (e.g., change in the group structure, staff, ERP system); External factors: those can be the result of changes in the economic climate, regulations or competition. Besides the common risks associated to all industrial companies, the Executive Committee has identified the following specific risk factors which are described hereafter. 2.8.4. Risks related to the Company’s financial position, capital requirements and governance The Company has not yet commercialized any of its products and has discontinued the development of its clinical trials. As it is now focusing on monetizing its IP portfolio, revenues are dependent on agreements with external partners, mainly out-licencing agreements The Company had decided in 2022 to implement a strategic shift from an organization focused on clinical development to one prioritizing R&D discovery and the monetization of its intellectual property (IP) portfolio through partnerships, collaborations and license agreements. 7 3 2023 Annual Report In that respect, the Company had decided to discontinue the development of its clinical trials and does not envisage, in the near future, the launch new clinical trials. Despite the discontinuation of clinical trials development, the Company remains obliged to respect long-term safety follow up of the patients (“LTSFU”). Consequently and since the Company is now focusing on monetizing its IP portfolio, its revenues are directly dependent on agreements with external partners, mainly out-licensing agreements. The Company aims at delivering new technologies for best-in-class cell therapies for patients with unmet medical needs, through the following strategies: • • • Strengthening its research focus in areas of expertise where it can leverage the differentiated nature of its platforms: The Company is implementing a differentiated and innovative strategy, tackling the major current limitations of CAR T-cell therapies. This strategy includes a multiplexing approach of the short hairpin RNA (shRNA) platform, a dual CAR development of a next-generation NKG2D-based CAR, and the development of B7-H6-targeting immunotherapies (see Section 1.4). Focus on maximizing its IP portfolio: The Company has compiled a foundational and broad IP portfolio that controls key aspects of developing therapies in the allogeneic cell therapy space. The patents around allogeneic CAR T-cell therapies and NKG2D-based therapies provide an avenue to develop intellectual property programs and to partner with outside parties around the licensing of these patents. With its attractive portfolio, the Company is able to strategically develop both novel cell therapy candidates and potential partnerships within the allogeneic landscape. Drive innovation through strategic collaborations: In addition, the Company plans to continue to expand this portfolio to help advance the field more broadly. The Company is continually exploring opportunities to build strong partnerships with strategic organizations and key international academic institutions to maximize the potential of its current product candidates and innovative technologies. The Company will continue to explore additional opportunities to create value and develop its platform technologies in pursuit of its mission. In that respect, the Company intends to continue developing pre-clinical products with the aim of concluding partnerships or licenses for their clinical development or use (see Section 4.4 of this Annual Report for more information on the Company’s current R&D activities). The size of the Company’s future net losses will depend on the rate of future growth of its expenses and its ability to generate revenue, mainly through out-licensing. On the date of this Annual Report, the Company has never commercialised any of its products and there is no certainty that it will be able to find partners in the future in order to out-licence or sell its assets, know-how and products. The Company needs substantial additional funding, which may not be available on acceptable terms when needed, if at all. As of December 31, 2023, the Company had cash and cash equivalents of €7.0 million. Based on its current scope of activities, the Company estimates that its cash and cash equivalents as of December 31, 2023, should be sufficient to fund operating expenses and capital expenditure requirements into the second quarter of 2025. However, changing circumstances may cause it to increase its spending significantly faster than it currently anticipates, and the Company may need to spend more money than currently expected because of circumstances beyond its control. 7 4 2023 Annual Report The achievement of milestones (R&D, scientific, business) will trigger payment obligations towards Celdara, Dartmouth and Horizon, which will negatively impact the Company’s profitability and may require material additional funding. These commitments are detailed in the Note 5.34 of this Annual Report. Furthermore, the Company contracted over the past year numerous funding agreements with the Walloon Region to partially finance its research and development programs. Under the terms of the agreements, the Company would need to obtain the consent of the Walloon Region for any out-licensing agreement or sale to a third party of any or all of its products, prototypes or installations which may reduce the Company’s ability to partner or sell part or all of its products. The Company may not be able to reimburse such funding under the terms of the agreements or such reimbursement may jeopardize the funding of its activities – see Note 5.16 of this Annual Report. The Company’s ability to raise additional funds will depend on financial, economic and market conditions and other factors, over which it may have no or limited control, including the current geopolitical tension and military conflict between Russia and Ukraine, and the Company cannot guarantee that additional funds will be available to it when necessary, on commercially acceptable terms, if at all. If the necessary funds are not available, the Company may need to enter into collaborations and licensing arrangements, which may require it to reduce or relinquish significant rights to its research programs and product candidates, to grant licenses on its technologies to partners or third parties or enter into new collaboration agreements on less favorable terms than those it might have obtained in a different context. If adequate funds are not available on commercially acceptable terms when needed, the Company may be forced to delay, reduce or terminate the development of its activities. The Company has incurred net losses in each period since its inception and anticipate that the Company will continue to incur net losses in the future. The Company is not profitable and has incurred losses in each period since its inception. For the years ended December 31, 2023, 2022 and 2021, the Company incurred a loss for the year of €8.4 million, €40.9 million and €26.5 million, respectively. As of December 31, 2023, the Company had an accumulated deficit of €358.4 million. The Company expects this accumulated deficit to increase as it continues to incur significant research and development and other expenses related to its ongoing operations. Consequently, the Company’s net assets decreased and the Board of Directors was required to comply with the Article 7:228 of the Belgian Code on Companies and Associations from the date of the Company’s financial statements for the year ended December 31, 2023. Per Article 7:228, if a company’s net assets have dropped below half of its share capital, then a shareholders’ meeting must be convened within two months after the date on which such loss was (or should have been) determined, which will determine whether the company will continue to exist or be wound up. In April 2024, the Board of Directors acknowledged that the Company’s net assets have fallen below half of its share capital. The Company is therefore complying with the Article 7:228, and a shareholders’ meeting shall be convened within two months from the date of this annual report in order to decide on the Company’s continuity or winding up. The Company can provide no assurance that shareholders will approve its proposal to continue operations that the Company plans to put forth at this meeting. The Company may encounter unforeseen expenses, difficulties, complications, delays and other unknown factors that may adversely affect its business. The size of its future net losses will depend, in part, on the rate of future growth of its expenses and its ability to generate revenue. Its prior losses and expected future losses have had and will continue to have an adverse effect on its shareholders’ equity and working capital. Further, the net losses the Company incurs may fluctuate significantly from quarter to quarter and year to year, such that a period to period comparison of its results of operations may not be a good indication of its future performance. Certain significant shareholders of the Company, including CFIP CLYD (UK) Limited who controls Celyad, may have different interests from the Company and may be able to control the Company, including the outcome of shareholder votes. 7 5 2023 Annual Report On the basis of the transparency notifications received by the Company and taking into account the number of shares and voting rights of the Company (published by the Company on 15 December 2023 in a press release established pursuant see https://celyad.com/2023/12/15/information-on-the-total-number-of-voting-rights-and-shares-article-15-of- the-law-of-2-may-2007-12/) as of the date of this Annual Report, the Company has two significant shareholders who are: the Law of 2 May 2007 – to article 15 of - CFIP CLYD (UK) Limited, which holds 55.18% of the Shares and 58.37 % of the voting rights; and - TOLEFI SA, which holds 10.16 % of the Shares and 12.93 % of the voting rights. The aforementioned Shares held by these shareholders represent together 65.34 % of the Shares and 71.3 % of the voting rights. CFIP CLYD (UK) Limited controls the Company since it holds more than 50% of the voting rights and has the right to nominate the majority of the members of the Board of Directors (see Section 2.2.1 of this Annual Report) and to influence the management of the activities of the Company. In addition and based on a shareholders’ agreement dated September 4, 2023, CFIP CLYD (UK) Limited benefits from a right-of-first offer to provide indebtedness to the Company (see Section 1.6 of this Annual Report). Also, CFIP CLYD (UK) Limited benefits from an anti-dilution protection pursuant to which, if the Company proposes to issue or sell any new or existing equity securities, then it shall first offer such equity securities to CFIP CLYD (UK) Limited (see Section 1.6 of this Annual Report). This anti-dilution protection will allow CFIP CLYD (UK) Limited reinforce its shareholding in the Company and will limit the possibility for other shareholders and investors to acquire new shares to be issued. It is underlined that, the shareholders’ meeting of the Company decided to activate the possibility offered by Article 7:53 of BCCA and approved on May 23, 2019, to grant double voting right to registered shares held by a shareholder in a registered form for more than two years. Since May 3, 2021, Tolefi SA has been entitled to a double voting right for 2,295,701 shares and since December 8, 2023, CFIP CLYD (UK) Limited has been entitled to a double voting right for 6,500,000 shares. All shares held by both Tolefi and CFIP CLYD (UK) Limited are in registered form and may benefit from double voting rights after two years’ holding. The Company is not aware of shareholders of the Company that have entered into a voting agreement or have otherwise agreed to act in concert. Nevertheless and in addition to the ability to elect or dismiss directors, CFIP CLYD (UK) Limited and TOLEFI SA do have a nomination right granted by the Company (see Section 2.2.1 “Composition of the Board of Directors” of this Annual Report) and CFIP CLYD (UK) Limited benefits from a veto right at the level of the Board of Directors (see section 5.2.1 below). Depending on how widely the Shares are held and represented at shareholders’ meeting, controlling shareholder(s) could take certain shareholders’ decisions that require at least 50%, two thirds, 75% or 80% of the votes of the shareholders that are present or represented at general shareholders’ meetings where such items are submitted to voting by the shareholders. Alternatively, to the extent that these shareholders have insufficient votes to impose certain shareholders’ decisions, they could still have the ability to block proposed shareholders’ resolutions that require at least 50%, two thirds, 75% or 80% of the votes of the shareholders that are present or represented at general shareholders’ meetings where such decisions are submitted to voting by the shareholders. Any such voting by the shareholders may not be in accordance with the interests of the Company or the other shareholders of the Company. 2.8.5. Risks related to Company’s business activities and industry The Company’s product candidates and technological platforms are designed as new approaches to treat cancer and overcome cancer related hurdles that pose significant challenges. The Company has concentrated its research and development efforts on cell-based immunotherapy technology, and its future success is highly dependent on the successful development of cell-based immunotherapies in general and in particular its approach using the NKG2D receptor, an activating receptor of NK cells, to target stress ligands. The Company cannot be sure that its T-cell immunotherapy technologies will yield satisfactory products that are safe and effective, scalable or profitable. 7 6 2023 Annual Report The Company is still developing product candidates and even through the Company does not intend to lead the products up to commercialisation itself, their development is still associated with challenges and the Company cannot guarantee – like for any other product – that a product which is efficient and safe in preclinical assays will lead to clinical and commercial success. Its approach to cancer immunotherapy and cancer treatment generally poses a number of challenges, including: • • • As the Company is developing CAR T-cells targeting non-conventional targets, several challenges that have not been reported for the more classical CAR T-cells may appear during the product development path, like unexpected fratricide or persistence of the cells, unexpected safety issue on-target/off-tumor toxicity; Preclinical assays using murine models have their limit, and like for any other product candidate, a candidate which is efficient and safe in preclinical assays will not automatically lead to clinical and commercial success; Developing and deploying consistent and reliable processes for engineering a patient’s T cells ex vivo and infusing the engineered T-cells back into the patient. Additionally, because its technology involves the genetic modification of patient cells ex vivo using a virus, the Company is subject to many of the challenges and risks that gene therapies face, including: • • Regulatory requirements governing gene and cell therapy products have changed frequently and may continue to change in the future, and may have an influence on the CAR T-cell design; Although its viral vectors are not able to replicate, there is a risk with the use of retroviral or lentiviral vectors that they could lead to new or reactivated pathogenic strains of virus or other infectious diseases. For this reason, the FDA recommends a 15-year follow-up observation period for all patients who receive treatment using certain gene therapies. As several patients treated previously with the Company’s products are still in follow-up period, there is still a risk of development of a long-term safety event and/or specific request from the competent authorities. Furthermore, any safety issue reported in other CAR T-cell trials (from competitors) may have an impact on the requirements for a preclinical package for a new product candidate. The Company may face significant competition and technological change which could limit or eliminate the market opportunity for its product candidates and technologies. The market for pharmaceutical products is highly competitive. The Company’s competitors include many established pharmaceutical, biotechnology, universities and other research or commercial institutions, many of which have substantially greater financial, research and development resources than the Company. The fields in which the Company operates are characterized by rapid technological change and innovation. There can be no assurance that competitors of the Company are not currently developing or will not in the future develop technologies and products that are equally or more effective and/or are more economical as any current or future technology or product of the Company. This may therefore affect the ability of the Company to find potential partners or to conclude sublicence contracts. 2.8.6. Risks related to intellectual property The Company could be unsuccessful in obtaining or maintaining adequate patent protection for one or more of its product candidates. Patents, patent applications and other intellectual property rights are important in the sector in which the Company operates. The Company considers on a case-by-case basis the filing of patent applications with a view to protecting certain innovative products, processes, and methods of treatment. Celyad may also license or acquire rights to patents, patent applications or other intellectual property rights owned by third parties, academic partners or commercial companies which are of interest to Celyad. 7 7 2023 Annual Report The Company’s patent portfolio includes pending patent applications and issued patents both in the United States and Europe, as well as select other countries. Part of the Company’s portfolio is exclusively inlicensed to it, part of the Company’s portfolio is proprietary and based on its internal research. Prosecution of all patents is done by the Company. As of the date of this Annual Report, Celyad’s CAR T-cell portfolio includes four patent families exclusively licensed to Celyad by Dartmouth College. This portfolio includes twenty-three issued U.S. patents, ten pending U.S. patent applications and twenty-six foreign granted patents and applications pending in jurisdictions including Australia, Brazil, Canada, China, Europe, Hong Kong, India, Japan, Mexico and Russia. These patents and patent applications relate to specific chimeric antigen receptors and to T-cell receptor deficient T-cells. In addition to the inlicensed patents mentioned above, the Company files patent applications on its in-house developed technologies. Exemplary applications are those related to its proprietary shRNA platform. There are currently three patent families pending in this portfolio. No patents have been granted yet, but applications are pending in Australia, Canada, China, Europe, Japan, South-Korea and the US. Further applications are filed on improved processes and next-generation versions of Company’s CAR-T platform. The following risks are, among others, directly linked to the patent or patent applications of the Company: • The patent application process is expensive and time-consuming, and the Company and its current or future licensors and licensees may not be able to apply for or prosecute patents on certain aspects of its product candidates or deliver technologies at a reasonable cost, in a timely fashion, or at all. It is also possible that the Company or its current licensors, or any future licensors or licensees, will fail to identify patentable aspects of inventions made in the course of development and commercialization activities before it is too late to obtain patent protection on them. Therefore, its patents and applications may not be prosecuted and enforced in a manner consistent with the best interests of its business. • The Company currently has issued patents and patent applications directed to its product candidates and medical devices in several jurisdictions, including several European Union countries and the United States, as appropriate. The Company cannot be certain, however, that the claims in its pending patent applications will be considered patentable by patent offices in various countries, or that the claims in any of its issued patents will be considered valid and enforceable by local courts. • The strength of patents in the biotechnology and pharmaceutical field can be uncertain and evaluating the scope of such patents involves complex legal and scientific analyses. The patent applications that the Company owns, or in-licenses may fail to result in issued patents with claims that cover its product candidates, technology or uses thereof in the European Union, in the United States or in other jurisdictions. Even if the patents do successfully issue, third parties may challenge the validity, enforceability, or scope thereof, which may result in such patents being narrowed, invalidated, or held unenforceable. If the breadth or strength of protection provided by the patent applications the Company holds with respect to its product candidates or its technology is threatened, this could dissuade companies from collaborating with the Company to develop, and could threaten its ability to commercialize (e.g. via licensing), its product candidates. Further, because patent applications in most countries are confidential for a period of time after filing, the Company cannot be certain that the Company was the first to file any patent application related to its product candidates or technology. • Patents have a limited lifespan. Various extensions may be available; however, the life of a patent, and the protection it affords, is limited. Further, the extensive period of time between patent filing and regulatory approval for a product candidate limits the time during which the Company can market a product candidate under patent protection, which may particularly affect the profitability of 7 8 2023 Annual Report its early-stage product candidates. Without patent protection for its product candidates, the Company may be open to competition from biosimilar versions of its product candidates. • Filing, prosecuting and defending patents on product candidates in all countries throughout the world would be prohibitively expensive. Under its existing license agreements with the Trustees of Dartmouth College, the Company has the right, but not the obligation, to enforce its licensed patents. If its current licensors, or any future licensors or licensees, are not fully cooperative or disagree with the Company as to the prosecution, maintenance or enforcement of any patent rights, such patent rights could be compromised and the Company might not be able to prevent third parties from making, using, and selling competing products. If there are material defects in the form or preparation of its patents or patent applications, such patents or applications may be invalid and unenforceable. In addition, the laws of some foreign countries do not protect intellectual property rights to the same extent as laws in the European Union or the United States. Consequently, the Company may not be able to prevent third parties from practicing its inventions in all countries, or from selling or importing products made using its inventions in and into other jurisdictions. On the date hereof there is no ongoing litigation relating to the validity of the Company’s patents and other IP rights. For one European patent in Celyad’s portfolio an opposition procedure was initiated at the European patent office. The result of the opposition was that the concerned patent was maintained in amended form. The opponent filed an appeal against that decision, which has been pending since April 2022 before the European patent office. The Company’s patents and other intellectual property rights portfolio is relatively young and may not adequately protect its research programs and product candidates. The Company’s success will depend in part on the ability of the Company to obtain, maintain and enforce its patents and other intellectual property rights. The Company’s research programs, and product candidates are covered by several patent application families, which are either licensed to the Company or owned by the Company. Out of the numerous patent applications controlled by the Company, fifteen national patents have been granted in the US relating to the field of immuno-oncology. The Company cannot guarantee that it will be in a position in the future to develop new patentable inventions or that the Company or its licensors will be able to obtain or maintain these patent rights against challenges to their validity, scope and/or enforceability. Moreover, the Company may have little or no control over its licensors’ abilities to prevent the infringement of their patents or the misappropriation of their intellectual property. There can be no assurance that the technologies used in the Company’s research programs and product candidates are patentable. If the Company or its licensors do not obtain meaningful patents on their technologies or if the patents of the Company or its licensors are invalidated, third parties may use the technologies without payment to the Company. A third party’s ability to use unpatented technologies is enhanced by the fact that the published patent application contains a detailed description of the relevant technology. The Company cannot guarantee that third parties, contract parties or employees will not claim ownership rights over the patents or other intellectual property rights owned or held by the Company. The Company also relies on proprietary know-how to protect its research programs and product candidates. Know-how is difficult to maintain and protect. The Company uses reasonable efforts to maintain its know- how, but it cannot assure that its partners, employees, consultants, advisors or other third parties will not willfully or unintentionally disclose proprietary information to competitors. As far as the Company is aware, its intellectual property has not been challenged otherwise than by patent offices in the normal course of examination of its patent applications or misappropriated. The Company depends on intellectual property licensed from third parties and termination of any of these licenses could result in the loss of significant rights, which would harm its business. The Company is dependent on patents, know-how, and proprietary technology, both its own and licensed from others. The Company’s licenses technology from the Trustees of Dartmouth College, or Dartmouth 7 9 2023 Annual Report College. Dartmouth College may terminate the Company’s license, if the Company fails to meet a milestone within the specified time period, unless the Company pays the corresponding milestone payment. Dartmouth College may terminate either the license in the event the Company defaults or breach any of the provisions of the applicable license, subject to 30 days’ prior notice and opportunity to cure. In addition, the license automatically terminates in the event the Company becomes insolvent, make an assignment for the benefit of creditors or file, or have filed against us, a petition in bankruptcy. Furthermore, Dartmouth College may terminate the Company’s license, after April 30, 2026, if the Company fails to meet the specified minimum net sales obligations for any year (USD 10 million during first year of sales, USD 40 million during the second year of sales and USD 100 million during the third year of sales and every year of sales thereafter), unless the Company pays to Dartmouth College the royalty the Company would otherwise be obligated to pay had the Company met such minimum net sales obligation. Since 2018, the Company also licenses technology from Horizon Discovery Limited (acquired in 2021 by Perkin Elmer) (“Horizon/PKI”) through research and development collaboration and license agreements. Horizon/PKI may terminate the Company’s license in case of insolvency, material breach or force majeure. On February 18, 2021, Horizon Discovery Group plc / PerkinElmer, Inc. (Horizon/PKI) informed Celyad they believe Celyad is in material breach of those agreements as a result of certain disclosures Celyad has made in connection with its obligations as a publicly traded company in the United States and Belgium. Horizon/PKI recently informed Celyad that unless Celyad is able to reach agreement regarding the purported material breach, they may elect to serve Celyad a notice of termination. We believe any such assertion of material breach would be without merit and we would expect to vigorously defend any such notice of material breach. On the date of this Registration Document, Celyad and Horizon/PKI are still discussing a framework of solution to settle this matter and the last exchange with Horizon/PKI occurred in January 2023. Any dispute under these agreements would be subject to arbitration in The Hague under the International Chamber of Commerce Rules. No accounting provision is currently made as no reliable estimate can be made of the amount to be provisioned. Of note, we have filed patent applications which, if issued, would cover other aspects of the product candidates described above as well as products developed by third parties that deploy similar technology and targets. These patent applications encompass the downregulation of one or more of the targets covered under the Horizon /PKI agreements, the use of shRNA to downregulate such targets in immune cells and the combination of shRNAs with a chimeric antigen receptor in immune cells. We have also developed a second generation shRNA platform that does not incorporate any of the Horizon/PKI technology described above. Disputes may also arise between the Company and its licensors regarding intellectual property subject to a license agreement, including those relating to: • The scope of rights granted under the license agreement and other interpretation-related issues; • Whether and the extent to which its technology and processes infringe on intellectual property of the licensor that is not subject to the license agreement; • • Its right to sublicense patent and other rights to third parties under collaborative development relationships; The amount and timing of milestone and royalty payments; • Whether the company is complying with its diligence obligations with respect to the use of the licensed technology in relation to its development and commercialization of its product candidates; • The allocation of ownership of inventions and know-how resulting from the joint creation or use of intellectual property by the company and its partners and by its licensors. If disputes over intellectual property that the Company has licensed prevent or impair its ability to maintain its current licensing arrangements on acceptable terms, the Company may be unable to successfully develop and commercialize (through partners and out-licensing agreements) the affected product candidates. The Company is generally also subject to all of the same risks with respect to protection of intellectual property that the Company licenses as it is for intellectual property that the Company owns, which are described below. If the Company or its licensors fail to adequately protect this intellectual property, the Company’s ability to commercialize its products could suffer. 8 0 2023 Annual Report The licenses of the Company may be terminated if it is unable to meet the payment obligations under the agreements (notably if the Company is unable to obtain additional financing). Any termination of these licenses or any of the Company’s other licenses could result in the loss of significant rights and could harm its ability to commercialize its Product Candidates. The Company may infringe on the patents or intellectual property rights of others and may face patent litigation, which may be costly and time consuming. The Company’s success will depend in part on its ability to operate without infringing on or misappropriating the intellectual property rights of others. The Company cannot guarantee that its activities will not infringe on the patents or other intellectual property rights owned by others. The Company may expend significant time and effort and may incur substantial costs in litigation if it is required to defend against patent or other intellectual property right suits brought against the Company regardless of whether the claims have any merit. Additionally, the Company cannot predict whether it or its licensors will be successful in any litigation. If the Company or its licensors are found to infringe on the patents or other intellectual property rights of others, it may be subject to substantial claims for damages, which could materially impact the Company’s cash flow and financial position. The Company may also be required to cease development, use or sale of the relevant research program, product candidate or process or it may be required to obtain a license on the disputed rights, which may not be available on commercially reasonable terms, if at all. There can be no assurance that the Company is even aware of third-party rights that may be alleged to be relevant to any particular product candidate, method, process or technology. The Company may spend significant time and effort and may incur substantial costs if required to defend against any infringement claims or to assert its intellectual property rights against third parties. The risk of such a claim by a third party may be increased by the Company’s public announcement regarding its research programs and product candidates. The Company may not be successful in defending its rights against such procedures or claims and may incur as a consequence thereof significant losses, costs or delays in its intended commercialization plans as a result thereof. 2.8.7. Risks linked to the Company’s reliance on third parties Cell-based therapies rely on the availability of specialty raw materials, which may not be available to the Company on acceptable terms or at all. Engineered-cell therapies require many specialty raw materials, some of which are manufactured by small companies with limited resources and experience to support a commercial product. The suppliers may be ill-equipped to support the Company’s needs, especially in non-routine circumstances like an FDA inspection or medical crisis, such as widespread contamination. Even if the Company decided to discontinue the development of its clinical trials, not all clinical trials are closed on the date of this Report and several patients are still in long term safety follow-up. The long term safety follow-up period as written in the clinical protocols is up to 15 years (terminating earlier if no more patients are under follow-up), meaning that up until that moment the risks mentioned in this paragraph are still accurate. The Company also does not have contracts with many of these suppliers and may not be able to contract with them on acceptable terms or at all. Accordingly, the Company may experience delays in receiving key raw materials to support clinical or commercial manufacturing. In addition, some raw materials are currently available from a single supplier, or a small number of suppliers. The Company cannot be sure that these suppliers will remain in business, or that they will not be purchased by one of its competitors or another Company that is not interested in continuing to produce these materials for its intended purpose. The Company relies and will continue to rely on collaborative partners regarding the development of its research programs and product candidates. The Company is and expects to continue to be dependent on collaborations with partners relating to the development and commercialization of its existing and future research programs and product candidates. 8 1 2023 Annual Report The Company had, has and will continue to have discussions on potential partnering opportunities with various pharmaceutical and medical device companies. If the Company fails to enter into or maintain collaborative agreements on reasonable terms or at all, the Company's ability to develop its existing or future research programs and product candidates could be delayed, the commercial potential of its products could change, and its costs of development and commercialization could increase. The Company's dependence on collaborative partners subjects it to a number of risks, including, but not limited to, the following: • • • The Company may be required to relinquish significant rights, including intellectual property, marketing and distribution rights; The Company relies on the information and data received from third parties (essentially CROs subcontracting preclinical research) regarding its research programs and product candidates and will not have control of the process conducted by the third party in gathering and composing such data and information. The Company may not have formal or appropriate guarantees from its contract parties with respect to the quality and the completeness of such data; A collaborative partner may develop a competing product either by itself or in collaboration with others, including one or more of the Company's competitors. 2.8.8. Risks related to the shares The market price of the shares may fluctuate widely in response to various factors, especially in the biotech sector A number of factors may significantly affect the market price of the Company's shares (the "Shares"). The main factors are changes in the operating results of the Company and its competitors, announcements of technological innovations or results concerning the product candidates, changes in earnings estimates by analysts. Other factors which could cause the price of the shares to fluctuate or could influence the reputation of the Company include, amongst other things: • • • • • • • Developments concerning intellectual property rights, including patents; Public information regarding actual or potential results relating to technologies, products and product candidates under development by the Company’s competitors; Actual or potential results relating to technologies and product candidates under development by the Company itself; Regulatory and medicine pricing and reimbursement developments in Europe, the United States and other jurisdictions; Any publicity derived from any business affairs, contingencies, litigation or other proceedings, the Company’s assets (including the imposition of any lien), its management, or its significant shareholders or collaborative partners; Divergences in financial results from stock market expectations; and Changes in the general conditions in the pharmaceutical industry and general economic, financial market and business conditions in the countries in which the Company operates. In addition, as the biotech sector is perceived to be riskier than certain other sectors, stock prices of biotech companies have from time to time experienced extreme price and volume volatility which, in addition to general economic, financial and political conditions, could affect the market price for the Shares regardless of the operating results or financial condition of the Company. Future sales of substantial amounts of shares, or the perception that such sales could occur, could adversely affect the market value of the shares 8 2 2023 Annual Report Sales of a substantial number of shares in the public markets, notably by its major shareholders (CFIP CLYD (UK) Limited holding 55.18% and TOLEFI SA holding 10.16% of the Shares), or the perception that such sales might occur, might cause the market price of the Shares to decline. The Company cannot make any prediction as to the effect of any such sales or perception of potential sales on the market price of the Shares. Sustainability of a liquid public market The Company cannot guarantee the extent to which a liquid market for the Shares will be sustained. In the absence of such liquid market for the Shares, the price of the Shares could be impacted negatively. The average daily trading volume of the Company’s share is 38,776. The liquidity of the market for the Shares could be affected by various causes, including the factors identified in the next risk factor (below) or by a reduced interest of investors in biotechnology sector. If securities or industry analysts do not publish research or publish inaccurate research or unfavourable research about the Company’s business, the price of the Shares and trading volume could decline The trading market for the Shares depends in part on the research and reports that securities or industry analysts publish about the Company or its business. If no more or few securities or industry analysts cover the Company, the trading price would be negatively impacted. If one or more of the analysts who covers the Company downgrades the Shares or publishes incorrect or unfavourable research about its business, the price of the Shares would likely decline. If one or more of these analysts ceases coverage of the Company or fails to publish reports on the Company regularly, or downgrades the Shares, demand for the Shares could decrease, which could cause the price of the Shares or trading volume to decline. Analysts William Blair and Wells Fargo have ceased to follow the Company since its delisting from the Nasdaq market. The Company was historically followed by Bryan Garnier, Kempen, Kepler Cheuvreux, H.C. Wainwright, Jones Trading and Portzamparc, however the last report issued regarding the Company is dated November 2022 and there is no certainty that new reports will be issued in the near future nor that these analysts will continue to follow the Company. The Company will likely not be in a capacity to pay dividends in the foreseeable future and intends to retain all earnings The Company has not declared or paid any dividends on its Shares in the past and will likely not be in a capacity to pay dividends in the foreseeable future. Any recommendation by its board of directors to pay dividends will depend on many factors, including its financial condition (including losses carried-forward), results of operations, legal requirements and other factors. Furthermore, pursuant to Belgian law, the calculation of amounts available for distribution to shareholders, as dividends or otherwise, must be determined on the basis of its non-consolidated statutory accounts prepared in accordance with Belgian accounting rules. In addition, in accordance with Belgian law and its Articles of Association, the Company must allocate each year an amount of at least 5% of its annual net profit under its non-consolidated statutory accounts to a legal reserve until the reserve equals 10% of its share capital. On the date of this Annual Report, the legal reserve of the Company amounts to zero. Therefore, the Company is unlikely to pay dividends or other distributions in the foreseeable future. If the price of the Shares declines before the Company pays dividends, investors will incur a loss on their investment, without the likelihood that this loss will be offset in part or at all by potential future cash dividends. 2.8.9. Audit activities Internal audit activities are performed by the departments of Finance for all matters related to accounting and financial information. As of the date of this report, there is not yet a dedicated internal audit function. In order to properly manage identified risks, the Company has set up the following audit measures: • Access and security systems at the premises and offices; 8 3 2023 Annual Report • Establishment, under the supervision of the quality assurance department, of a set of procedures covering all activities of the company; • Weekly modifications and updates of the existing procedures; • • • • Development of electronic approval system in the existing ERP system; Implementation of extra controls in the existing ERP system; Development of a monthly financial reporting tool which allow a close monitoring of the financial information and KPI’s; Updated risks and controls matrix are in place for the internal controls processes (entity level, information technology, financial operations). 2.8.10. Controls, supervision and correctives actions Controls are performed by all persons in charge of departments and services. When deviations are identified, there are reported to, depending of their relative importance, the head of department or the Executive Committee. The Executive Committee supervises the implementation of internal audit and risk management, taking into consideration the recommendations on the Audit Committee. The Executive Committee is also in charge of proposing the Audit Committee corrective actions when identified. External audit On May 5, 2023, the shareholders meeting approved the appointment of BDO Réviseurs d’Entreprises SRL, having its registered office at The Coporate Village, Da Vincilaan 9, box E6, 1930 Zaventem, Belgium, duly represented by Christophe Pelzer, as Statutory Auditor, for a term of three years, i.e. until the ordinary general meeting approving the accounts closed on December 31, 2025. BDO’s mission includes the auditing of the statutory annual accounts, the consolidated annual accounts of the Company and its subsidiaries. The Company is also subject to ad hoc audit performed by the competent authorities to ensure compliance. 8 4 3. GROUP STRUCTURE, SHAREHOLDING AND SHARE CAPITAL 2023 Annual Report 3.1. Group structure The Company conducts its main business through Celyad Oncology SA. In 2011, the Company incorporated Cardio3 Inc, a fully owned subsidiary, in the U.S. for the purposes of supporting its clinical and regulatory activities of the Group in the US. Cardio3 Inc became Celyad Inc on May 12, 2015. The activities of Celyad Inc. is associated to the development of the US clinical and regulatory activities of the Company in the US. On November 5, 2014, the Company acquired CorQuest Medical, Inc., a private U.S. company, for a single cash payment of €1.5 million and on-going earn-out royalty payments based on sales milestones. CorQuest Medical, Inc. is developing Heart-XS, a new access route to the left atrium. The development of Heart-XS and the activities of CorQuest Medical, Inc. have been on hold following the decision of the Company to abandon the development of its cardio business program (C-Cure). On November 22, 2019, CorQuest Medical Inc. has sold to Corquest MedTech SRL, a company established under Belgian laws, its portfolio of patents and related rights for a consideration of €1 and the reimbursement of certain maintenance costs of these patents. CorQuest Medical Inc. has also the right to receive royalties on the future sales and a percentage on the capital gains in case of re-sale or change of control of Corquest MedTech SRL. On January 21, 2015, the Company purchased OnCyte, LLC, or OnCyte, a wholly-owned subsidiary of Celdara Medical, LLC, a privately-held U.S. biotechnology company for an upfront payment of $10.0 million, of which, $6.0 million was paid in cash and $4.0 million was paid in the form of 93,087 of its ordinary shares. As a result of this transaction the Company acquired its CAR T-cell Product Candidates and related technology, including technology licensed from the Trustees of Dartmouth College. OnCyte, LLC was the company holding the CAR T-cell portfolio of clinical-stage immuno-oncology assets. In March 2018, the Company has dissolved OnCyte, and all the assets and liabilities of OnCyte, have been fully distributed to and assumed by the Company. On May 1, 2016, the Company acquired Biological Manufacturing Services SA ("BMS"). BMS owns GMP laboratories. BMS rent its laboratories to the Company since 2009 and until April 30, 2016. Until the acquisition, BMS was considered as a related party to the Company. In September 2022, the Company and BMS entered into a €6.0 million asset purchase agreement with Ncardia Belgium BV, whereby this latter acquired the Company’s Good Manufacturing Practice (GMP) grade Cell Therapy Manufacturing Unit. In December 2023, the Company has dissolved BMS, and all the assets and liabilities of BMS, have been fully distributed to and assumed by the Company. The Company’s ordinary shares are listed on Euronext Brussels and Euronext Paris regulated markets, all under the ticker symbol CYAD. The Company does not exercise any activities through a branch office. The consolidation perimeter of the Company is as follows: Name Celyad Oncology SA Celyad Inc CorQuest Medical Inc Country of Incorporation and Place of Business Nature of Business Proportion of ordinary shares directly held by parent (%) Proportion of ordinary shares held by the Company (%) Proportion of ordinary shares held by non- controlling interests (%) BE US US Biopharma Biopharma Medical Device Parent company 100% 100% 100% 100% 0% 0% 5 8 2023 Annual Report 3.2. Capital increase and issuance of shares On January 1, 2023, the share capital of the Company amounted to €78,584,224.33 and was represented by 22,593,956 shares. On September 4, 2023, the Company issued 3,930,770 new shares of Celyad Oncology SA to Tolefi and an affiliate of Fortress Investment Group as well as other historical shareholders for an amount of €2,044,000.00. As a result, the Company’s share capital had been increased to 80,628,224.49 EUR and was represented by 26,524,726 shares. On November 14, 2023, the Company issued 14,903,846 new shares of Celyad Oncology SA to an affiliate of Fortress Investment Group for an amount of €7,750,000.00. As a result, the Company’s share capital had been increased to 88,378,224.25 EUR and was represented by 41,428,572 shares. On December 22, 2023, the shareholders' assembly of the Company approved a formal reduction of the accounting item "share capital" by way of absorption of the losses for an amount of € 55,429,423.55, to reduce it from €88,378,224.25 to €32,948,800.70. As of December 31, 2023, the share capital of the Company amounted to €32,948,800.70 and was represented by 41,428,572 shares. All shares are issued and fully paid up and are of the same class. Each share (i) entitles its holder to one vote at the Shareholders’ Meetings (except for what is said below regarding shares with double voting rights); (ii) represents an identical fraction of the capital and has the same rights and obligations and participates equally in the profit of Celyad; and (iii) gives its holder a preferential subscription right to subscribe to new shares, convertible bonds or warrants in proportion to the part of the share capital represented by the shares already held. The preferential subscription right can be restricted or cancelled by a resolution approved by the Shareholders’ Meeting, or by the Board of Directors subject to an authorization of the Shareholders’ Meeting, in accordance with the provisions of the BCCA and the Company’s articles of association. Further to the Initial Public Offering (IPO) made on the Nasdaq on June 19, 2015, some shares of the Company are represented in the form of American Depositary Shares (ADS). As of December 31, 2022, there were 1,041,156 ADS outstanding. On September 25, 2023, the Company announced that Citibank, N.A., as depositary (“Citibank”), shall issue the notice of terminating its American Depository Receipt program (“ADR Program”) of American Depositary Shares representing ordinary shares (“ADSs”) to the holders of ADSs according to the requirements under the deposit agreement. The ADR Program and the deposit agreement have been terminated on October 26, 2023 (the “Termination Date”). 3.3. Warrants plans The Company has created various incentive plans under which warrants were granted to its employees, consultants or directors (all warrants are together referred to as “Warrants”). This section provides an overview of the outstanding warrants as of December 31, 2023. Upon proposal of the Board of Directors, the extraordinary shareholders’ meeting approved the issuance of, in the aggregate, warrants giving right to subscribe to shares as follows: • On May 6, 2013, warrants giving right to 266,241 ordinary shares. Out of the 266,241 warrants offered, 253,150 Warrants were accepted by the beneficiaries. None are outstanding as of December 31, 2023; 8 6 2023 Annual Report • On May 5, 2014, warrants giving right to 100,000 shares; a plan of 100,000 warrants was approved. Warrants were offered to Company’s newcomers (employees, non-employees and directors) in several tranches. Out of the warrants offered, 94,400 warrants were accepted by the beneficiaries and 35,698 warrants are outstanding as of December 31, 2023; • On November 5, 2015, warrants giving right to 466,000 shares; a plan of 466,000 warrants was approved. Warrants were offered to Company’s newcomers (employees, non-employees and directors) in several tranches. Out of the warrants offered, 353,550 warrants were accepted by the beneficiaries and 79,315 warrants are outstanding as of December 31, 2023; • On December 8, 2016, warrants giving right to 100,000 shares; a plan of 100,000 warrants was approved. Warrants were offered to Company’s newcomers (employees, non-employees and directors) in two tranches. Out of the warrants offered, 45,000 warrants were accepted by the beneficiaries and 7,500 warrants are outstanding as of December 31, 2023; • On October 26, 2018, warrants giving rights to 700,000 shares; 700,000 warrants have been issued in the framework of the authorized capital. 426,050 warrants were accepted by the beneficiaries, out of which 289,101 warrants are still outstanding as of December 31, 2023; • On October 25, 2019, warrants giving rights to 939,500 shares; 939,500 warrants have been issued in the framework of the authorized capital. 602,025 warrants were accepted by the beneficiaries, out of which 529,700 warrants are still outstanding as of December 31, 2023; • On December 11, 2020, warrants giving rights to 561,525 shares; 561,525 warrants have been issued in the framework of the authorized capital. 557,050 warrants were accepted by the beneficiaries, out of which 489,317 warrants are still outstanding as of December 31, 2023; • On October 11, 2021, warrants giving rights to 777,050 shares; 777,050 warrants have been issued in the framework of the authorized capital. 874.200 warrants were accepted by the beneficiaries, out of which 799,083 warrants are still outstanding as of December 31, 2023; • On October 5, 2022, warrants giving rights to 323,700 shares; 323,700 warrants have been issued in the framework of the authorized capital. 568,500 warrants were accepted yet by the beneficiaries, out of which 543,500 warrants are still as of December 31, 2023; and • On September 4, 2023, warrants giving rights to 598,500 shares; 598,500 warrants have been issued in the framework of the authorized capital, out of which 284,000 warrants has been offered to the beneficiaries as of December 31, 2023. 188,375 warrants were accepted by the beneficiaries, out of which 188,375 warrants are still outstanding as of December 31, 2023. As a result, as of December 31, 2023, there are 2,961,589 warrants outstanding which represent respectively 6.67% of the total number of all its issued and outstanding shares and 5.56% of the total voting financial instruments. For further information and overview of the features of the various warrant plans, refer to disclosure note 5.14. 3.4. Changes to the share capital In accordance with the BCCA, the Company may increase or decrease its capital by decision of the Extraordinary General Shareholders’ Meeting taken with a majority of 75% of the votes cast, at a meeting where at least 50% of the share capital of the Company is present or represented. If the attendance quorum of 50% is not met, a new Extraordinary General Shareholders’ Meeting must be convened at which the shareholders may decide on the agenda items, irrespective of the percentage of share capital present or represented at such meeting. There are in this respect no conditions imposed by the Company’s articles of association that are more stringent than those required by law. Within the framework of the powers granted to it under the authorized capital, the Board of Directors may also increase the Company’s capital as specified in its articles of association. 8 7 2023 Annual Report 3.5. Major Shareholders The information in the table below is based on information known to the Company or ascertained by the Company from public filings made by the shareholders as of the date of this Annual Report. On May 23, 2019, the Shareholders’ Meeting decided to voluntarily “opt in” and submit the Company to the new Belgian Code of Companies and Associations. Furthermore, the Shareholders’ Meeting decided to activate the possibility offered by Article 7:53 of the code of companies and associations and approved the grant of double voting right to the registered shares held by a shareholder in a registered form for more than two years. NAME OF BENEFICIAL OWNER 5% Shareholders CFIP CLYD LLC (affiliate of Fortress Investment Group) [1] TOLEFI SA [2] Directors and Members of the Executive Committee Michel Lussier Serge Goblet Directors and Members of the Executive Committee as a group SHARES BENEFICIALLY OWNED Number Percentage 22,858,654 4,209,163 156,550 56,180 212,730 55.18% 10.16% 0.38% 0.14% 0.52% [1] Since May 3, 2021, 2,295,701 shares held by TOLEFI SA benefit from a double voting right. [2] Since December 8, 2023, 6,500,000 shares held by CFIP CLYD LLC benefit from a double voting right. On the basis of the transparency notifications received by the Company as of the date of this Report, the two main shareholders are CFIP CLYD LLC (who holds 55.18% of the shares and 58.37% of the voting rights) and TOLEFI SA (who holds 10.16% of the shares and 12.93% of the voting rights). As a consequence, the two main shareholders of the Company hold together 71.30% of the voting rights attached to the shares of the Company. 3.6. Anti-takeover provisions under Belgian laws Under Belgian law, public takeover bids for all the outstanding voting securities issued by the issuer are subject to the supervision of the FSMA. If the latter determines that a takeover violates Belgian law, it may lead to suspension of the exercise of the rights attached to any shares that were acquired in connection with the envisaged takeover. Pursuant to the Belgian law of April 1, 2007 on public takeovers, a mandatory takeover bid must be made when, as a result of its own acquisition or the acquisition by persons acting in concert with it, a person owns, directly or indirectly, more than 30% of the securities with voting rights in a company with registered office in Belgium whose securities are admitted to trading on a regulated or recognized market. The acquirer must offer to all other shareholders the opportunity to sell their shares at the highest of (i) the highest price offered by the acquirer for shares of the issuer during the 12 months preceding the announcement of the bid or (ii) the weighted average price of the shares on the most liquid market of the last 30 calendar days prior to the date on which the obligation of the acquirer to offer the takeover of the shares of other shareholders starts. As required by the article 34 of the Royal Decree of 14 November 2007, the following elements must be disclosed which may have an impact in the event of a takeover bid: a) Celyad’s capital structure, with an indication of the different classes of shares and, for each class of shares, the rights and obligations attached to it and the percentage of total share capital that it represents on December 31, 2023 As from the date of this Report, the share capital of the Company amounts to €32,948,800.70 represented by 41,428,572 shares of no-par value, fully paid up. There are no different classes of Celyad shares. 8 8 2023 Annual Report b) Restrictions, either legal or prescribed by the articles of association, on the transfer of securities The articles of association of the Company do not contain any restriction on the transfer of the shares. c) Holders of any securities with special control rights and a description of those rights There are no such holders except specific shareholders with a double voting rights as described above. d) System of control of any employee share scheme where the control rights are not exercised directly by the employees There is no such system. e) Restrictions, either legal or prescribed by the articles of association, on the exercise of voting rights There are no such restrictions. f) Agreements between shareholders which are known to Celyad and may result in restrictions on the transfer of securities and/or the exercise of voting rights The Company has no knowledge of agreements which may result in restrictions on the transfer of its securities and/or the exercise of voting rights. g) Rules governing the appointment and replacement of directors: The Chairperson of the Board is in charge of the nomination procedure. The Board is responsible for proposing members for nomination to the shareholders’ meeting, in each case based on the recommendation of the Nomination & Remuneration Committee. For any new appointment to the Board, the skills, knowledge and experience already present and those needed on the Board will be evaluated and, in the light of that evaluation, a description of the role and skills, experience and knowledge needed will be prepared (a “profile”). When dealing with a new appointment, the Chairperson of the Board must ensure that, before considering the candidate, the Board has received sufficient information such as the candidate’s curriculum vitae, an assessment of the candidate based on the candidate’s initial interview, a list of the positions the candidate currently holds, and, if applicable, the necessary information for assessing the candidate’s independence. If a legal entity is appointed as a director, it is obliged to appoint, in accordance with the provisions of the BCCA, a natural person as a permanent representative, who may represent the legal entity in all its dealings with the Company. The legal entity director may not dismiss its permanent representative without simultaneously appointing a new representative. Any proposal for the appointment of a director by the shareholders’ meeting should include a recommendation from the Board based on the advice of the Nomination & Remuneration Committee. This provision also applies to shareholders’ proposals for appointment. The proposal must specify the proposed term of the mandate, which must not exceed four years. It must be accompanied by relevant information on the candidate’s professional qualifications together with a list of the positions the candidate already holds. The Board will indicate whether the candidate satisfies the independence criteria. 8 9 Until such time as the Fortress Shareholders own in the aggregate less than 10% of the then outstanding shares for a certain period Fortress Shareholders shall have the right to select (i) up to the number of designees (i.e. Fortress Designees) set forth under the heading “Directors” in the table below to be members of the Board of Directors and (ii) up to the number of Fortress Designees set forth under the heading “Observers” in the table below to be non-voting observers of the Board of Directors. 2023 Annual Report Ownership Percentage 50% 30% 10% Directors Observers 51% of the members of the Board of Directors, rounded up to the nearest whole number greater of (i) four and (ii) a percentage of the members of the Board of Directors equal to the aggregate ownership percentage of the Shareholders, rounded up to the nearest whole number three one one one In addition, it is underlined that until such time as Tolefi owns in the aggregate less than 5% of the Shares for a certain period Tolefi shall have the right to nominate one individual to be appointed as director (i.e. the Tolefi Designee). In addition, the Company shall not, without approval of a reinforced board majority (positive vote of 72.5% of the members of the Board of Directors) is the Tolefi Designee so requests, decide on the following matters (i) incur or issue any indebtedness in an aggregate principal amount in excess of USD 1,000,000, (ii) amend, modify, supplement or waive any material terms of any existing indebtedness, (iii) repay, redeem, purchase, defease or otherwise satisfy any indebtedness prior to the scheduled maturity thereof, (iv) incur off-balanced- sheet commitments with a value in excess of EUR 20,000,000 in the aggregate, (v) consummate a business acquisition or combination or asset acquisition transaction for consideration in excess of EUR 20,000,000, (vi) disposal of non-IP assets with a value in excess of EUR 1,000,000 or (vii) use the authorized capital of the Company. Appointments are generally made for a maximum term of four years. Outgoing directors will be eligible for re-election. However, when an independent director has served on the Board for more than 12 years, he is in not eligible for a fourth term as independent director of the Company. Before proposing any director for re-election, the Board should take into account the evaluations made by the Nomination & Remuneration Committee. The mandates of those directors who are not re- appointed for a new term will terminate immediately after the shareholders’ meeting which decides on any re-appointment or appointment. The directors may be revoked by the shareholders’ meeting at any time. If at any time a vacancy is created on the Board of Directors, the remaining directors may temporarily appoint a director to the board to fill the vacancy. Any director so appointed will hold office for the remainder of the term of appointment of the director that it replaces. The definitive appointment of the replacing director is added to the agenda of the following shareholders’ meeting. h) Rules governing the amendment of the articles of association Pursuant to the BCCA, any amendment to the articles of association such as an increase or decrease in the capital of the Company, and certain other matters such as the approval of the dissolution, merger or de-merger may only be authorized with the approval of at least 75% of the votes validly cast at an Extraordinary General Shareholders’ Meeting where at least 50% of the Company’s share capital is present or represented. If the attendance quorum of 50% is not met, a new Extraordinary General Shareholders’ Meeting must be convened at which the shareholders 9 0 may decide on the agenda items, irrespective of the percentage of share capital present or represented at such meeting. 2023 Annual Report i) Powers of the Board of Directors in particular to issue or buy back shares The Board of Directors has the most extensive powers in order to perform all acts which are useful or necessary so as to complete the Company’s corporate purpose. The Board of Directors has the power to perform all acts which are not expressly assigned by law or by the articles of association to the shareholders’ meeting. However, until such time as the Fortress Shareholders own in the aggregate less than 10% of the then outstanding shares for a period of more than thirty (30) consecutive days, the Company shall not, directly or indirectly, without the consent of Fortress, (i) incur or issue any indebtedness that would encumber any intellectual property of the Company, (ii) issue any Equity Securities (defined as any share and any other security, financial instrument, certificate or other right (including options, futures, swaps and other derivatives) representing, being exercisable, convertible or exchangeable into or for, or otherwise providing a right to acquire, directly or indirectly, any of the securities mentioned above or any other security or financial instrument the value of which is based on any of the foregoing) of the Company that are senior to the ordinary shares with respect to the right to receive (x) dividends or other distributions to shareholders or (y) proceeds in the event of the liquidation, dissolution or winding-up of the Company (including for such purposes in connection with any change of control transaction), (iii) alter, amend or change the rights, preference or privileges of the shares, including in connection with any reclassification, recapitalization, reorganization or restructuring, (iv) recommend, directly or indirectly, or take any other action to (A) increase or decrease the size of the Board of Directors or (B) co-opt or appoint to the Board of Directors in place of a Fortress Designee any person other than a Fortress Designee, (v) make any proposal to amend, repeal or otherwise modify any provision of the Company’s articles of association that would be reasonably expected to adversely affect the interests of Fortress or any Fortress Shareholder or (vi) make any proposal to modify the rights of any Equity Securities of the Company in a manner adverse to Fortress The Board of Directors has to power to establish an audit committee and other committees, the powers of which it will determine. On November 14, 2023, the shareholders’ meeting of the Company approved the renewal of the authorization to use the authorised capital technique for a further period of 5 years and up to a maximum of EUR 12,000,000. The Board of Directors may increase the share capital, as provided for above, by contribution in cash or, within the limits and conditions set forth by the law, by contribution in kind, or by incorporation of available or unavailable reserves or of issue premium. In the latter events, the increase may take place with or without issuance of new shares. The capital increase within the framework of the authorised capital may as well by effected by issuing convertible bonds or subscription rights – whether or not attached to another security - which may give rise to the creation of shares in accordance with the applicable legal provisions. In the event of a capital increase or the issuance of convertible bonds or subscription rights, the Board of Directors may, in the Company’s interest, restrict or cancel the preferential subscription right provided for by the applicable legal provisions, including in favour of one or more of specific persons, whether or not they are employees of the company or of its subsidiaries. The shareholders’ meeting also decided to approve the renewal of the powers conferred to the Board of Directors to increase the capital upon receipt by the Company of the communication made by the FSMA according to which it has received a notice of public offer to acquire it, and for a period of 3 years. Regarding agreements on severance pay, reference is made to the Remuneration Report. 9 1 j) Significant agreements to which the Celyad is a party and which take effect, alter or terminate upon a change of control of Celyad following a takeover bid, and the effects thereof, except where their nature is such that their disclosure would be seriously prejudicial to Celyad; this exception shall not apply where Celyad is specifically obliged to disclose such information on the basis of other legal requirements 2023 Annual Report There are no such agreements. k) Agreements between Celyad and its Board members or employees providing for compensation if the Board members resign or are made redundant without valid reason or if the employment of the employees ceases because of a takeover bid There are no such agreements. 3.7. Financial services Citibank N.A. was acting as depositary bank for the ADS issued by the Company until the end of the ADR Program and the termination of the deposit agreement on October 26, 2023. 9 2 2023 Annual Report 4. CONSOLIDATED FINANCIAL STATEMENTS 4.1 Responsibility statement We hereby certify that: • • To the best of our knowledge, the consolidated financial statements as of December 31, 2023, prepared in accordance with the International Financial Reporting Standards as issued by the International Accounting Standards Board and as adopted by the European Union, and the legal requirements applicable in Belgium, give a true and fair view of the assets, liabilities, financial position, comprehensive loss, changes in equity and cash flows of the Company and the undertakings included in the consolidation taken as a whole; and that The management report includes a fair review of the development and the performance of the business and the position of the Company and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face. Mont-Saint-Guibert, April 4, 2024, on behalf of the Board of Directors, Hilde Windels* Chair of the Board Michel Lussier* Co-Founder, Interim CEO *Permanent representative of HILDE WINDELS BV *Permanent representative of MEL MANAGEMENT SRL 9 3 4.2. Statutory auditor’s report to the general meeting of shareholders of Celyad Oncology SA for the year ended December 31, 2023 (consolidated financial statements) 2023 Annual Report T : +32 (0)87 69 30 00 F : +32 (0)87 67 93 58 www.bdo.be Rue Waucomont 51 B-4651 Battice CELYAD ONCOLOGY SA Statutory auditor’s report to the general meeting for the year ended 31 December 2023 (Consolidated financial statements) Free translation 9 4   STATUTORY AUDITOR’S REPORT TO THE GENERAL MEETING OF CELYAD ONCOLOGY SA FOR THE YEAR ENDED 31 DECEMBER 2023 (CONSOLIDATED FINANCIAL STATEMENTS) 2023 Annual Report Free translation In the context of the statutory audit of the consolidated financial statements of Celyad Oncology SA (‘the Company’) and its subsidiaries (together referred to as 'the Group'), we hereby present our statutory auditor’s report. It includes our report of the consolidated financial statements and the other legal and regulatory requirements. This report is an integrated whole and is indivisible. We have been appointed as statutory auditor by the general meeting of 5 May 2023, following the proposal formulated by the administrative body upon recommendation of the Audit Committee. Our statutory auditor’s mandate expires on the date of the General Meeting deliberating on the financial statements closed on 31 December 2025. We have performed the statutory audit of the consolidated financial statements of the Group for the first year. REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS Unqualified opinion We have performed the statutory audit of the Group’s consolidated financial statements, which comprise the consolidated statement of financial position as at 31 December 2023, and the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies and other explanatory information, and which is characterised by a consolidated statement of financial position total of 16.282.000 EUR and for which the consolidated statement of profit or loss shows a loss for the year of 8.426.000 EUR. In our opinion, the consolidated financial statements give a true and fair view of the Group’s net equity and financial position as at 31 December 2023, as well as of its consolidated financial performance and its consolidated cash flows for the year then ended, in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union and with the legal and regulatory requirements applicable in Belgium. Basis for unqualified opinion We conducted our audit in accordance with International Standards on Auditing (ISA) as applicable in Belgium. Our responsibilities under those standards are further described in the 'Statutory auditor's responsibilities for the audit of the consolidated financial statements' section in this report. We have complied with all the ethical requirements that are relevant to the audit of consolidated financial statements in Belgium, including those concerning independence. We have obtained from the administrative body and company officials the explanations and information necessary for performing our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. 9 5 2023 Annual Report Key audit matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current year. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Financial funding Description of the Matter As described in the note 5.2.1 “going concern” to the consolidated financial statements, the Company has disclosed that based on its current scope of activities, the Group estimates that its treasury position as of 31 December 2023 is sufficient to cover its cash requirements at least until May 2025, so that there is no material uncertainty on the Company’s ability to continue as a going concern. This area was important to our audit given the significant estimates included in management forecasts and the sensitivity to the expected cash burn schedule, based on the expectations about future financial resources needed to run the activities on a going concern basis. Procedures performed Our audit procedures included, amongst others: • • • • • • We obtained the business plan and the cash forecast for the year 2024 and 2025 and reviewed it for consistency and mathematical accuracy; We made some retrospective analysis about the forecast's reliability; We challenged the reasonableness of the assumptions underlying this budget and cash forecast, especially the structure of costs to be assumed over 2024, the cut-off of costs on an annual basis as well as the revenue expectations; We verified the effective availability of the cash and short-term receivables with external relevant supporting documents; Within our subsequent procedures, we have checked the actual cash position at the end of the first quarter 2024 against the budgeted cash position; We verified the adequacy and completeness of the disclosures as included in the notes 5.2.1 and 5.4 “going concern” of the consolidated financial statements. Responsibilities of the administrative body for the drafting of the consolidated financial statements The administrative body is responsible for the preparation of consolidated financial statements that give a true and fair view in accordance with the International Financial Reporting Standards (IFRS) as adopted by the European Union and with the legal and regulatory provisions applicable in Belgium, and for such internal control as the administrative body determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatements, whether due to fraud or error. In preparing the consolidated financial statements, the administrative body is 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 administrative body either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so. Statutory auditor’s responsibilities for the audit of the consolidated financial statements Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a statutory auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but it is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or 9 6 2023 Annual Report in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements. When executing our audit, we respect the legal, regulatory and normative framework applicable for the audit of the consolidated financial statements in Belgium. However, a statutory audit does not guarantee the future viability of the Group, neither the efficiency and effectiveness of the management of the Group by the administrative body. Our responsibilities regarding the continuity assumption applied by the administrative body are described below. As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: • • • • • • Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control; Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control; Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the administrative body; Conclude on the appropriateness of the administrative body’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our statutory auditor’s report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our statutory auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern; Evaluate the overall presentation, structure and content of the consolidated financial statements and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation; Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the management, the supervision and the performance of the Group audit. We assume full responsibility for the auditor’s opinion. We communicate with the Audit Committee regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control identified during the audit. We also provide the Audit Committee with a statement that we respected the relevant ethical requirements relating to independence, and we communicate with them about all relationships and other issues which may influence our independence, and, if applicable, about the related measures to guarantee our independence. 9 7 From the matters communicated with the Audit Committee, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current year, and are therefore the key audit matters. We describe these matters in our statutory auditor’s report, unless law or regulation precludes public disclosure about the matter. 2023 Annual Report OTHER LEGAL AND REGULATORY REQUIREMENTS Responsibilities of the administrative body The administrative body is responsible for the preparation and the contents of the director’s report on the consolidated financial statementsand for the other information included in the annual report on the consolidated financial statements. Responsibilities of the statutory auditor In the context of our mission and in accordance with the Belgian standard (version revised 2020) which is complementary to the International Standards on Auditing (ISA) as applicable in Belgium, it is our responsibility to verify, in all material aspects, the director’s report on the consolidated financial statements and the other information included in the annual report on the consolidated financial statements, as well as to report on these elements. Aspects relating to the director’s report on the consolidated financial statements and to the other information included in the annual report on the consolidated financial statements In our opinion, after having performed specific procedures in relation to the director’s report, this director’s report is consistent with the consolidated financial statements for the same financial year, and it is prepared in accordance with article 3:32 of the Code of companies and associations. In the context of our audit of the consolidated financial statements, we are also responsible for considering, in particular based on the knowledge we have obtained during the audit, whether the director’s report on the consolidated financial statements and the other information included in the annual report on the consolidated financial statements, namely: • • the chapters 1.8 to 1.15 of the activity report, chapter 2.7 about the remuneration report, contain a material misstatement, i.e. information which is inadequately disclosed or otherwise misleading. Based on the procedures we have performed, there are no material misstatements we have to report to you. Statement concerning independence • • Our audit firm and our network did not provide services which are incompatible with the statutory audit of the consolidated financial statements and our audit firm remained independent of the Group during the terms of our mandate. The fees related to additional services which are compatible with the statutory audit as referred to in article 3:65 of the Code of companies and associations were duly itemised and valued in the notes to the consolidated financial statements. European Single Electronic Format (ESEF) In accordance with the draft standard of the Institute of Réviseurs d’Entreprisesconcerning the standard on auditing the conformity of financial statements with the European Single Electronic Format (hereinafter “ESEF”), we also audited the conformity of the ESEF format with the regulatory technical 9 8 2023 Annual Report standards established by Commission Delegated Regulation (EU) 2019/815 of 17 December 2018 (hereinafter: “Delegated Regulation”). The administrative body is responsible for preparing, in accordance with ESEF requirements, the consolidated financial statements in the form of an electronic file in ESEF format (hereinafter “digital consolidated financial statements”) included in the annual financial report. It is our responsibility to obtain sufficient and appropriate supporting information to conclude that the format and mark-up language of the digital consolidated financial statements comply in all material aspects with the ESEF requirements under the Delegated Regulation. Based on our work, we believe that the format and the mark-up of information in the official version ofthe digital consolidated financial statements included in the annual financial report of Celyad Oncology as at 31 December 2023 comply in all material aspects with the ESEF requirements under the Delegated Regulation. Other statements • This report is in compliance with the contents of our additional report to the Audit Committee as referred to in article 11 of regulation (EU) No 537/2014. Battice, 4 April 2024 BDO Réviseurs d’Entreprises SRL Statutory auditor Represented by Christophe Pelzer* Auditor *Acting for a company 9 9 4.3. Consolidated financial statements as at December 31, 2023 4.3.1. Consolidated statements of financial position 2023 Annual Report (€’000) NON-CURRENT ASSETS Goodwill and Intangible assets Property, Plant and Equipment Non-current Grant receivables Other non-current assets CURRENT ASSETS Trade and Other Receivables Current Grant receivables Other current assets Short-term investments Cash and cash equivalents Assets held for sale TOTAL ASSETS EQUITY Share Capital Share premium Other reserves Capital reduction reserve Accumulated deficit NON-CURRENT LIABILITIES Lease liabilities Recoverable Cash advances (RCAs) Contingent consideration payable and other financial liabilities Post-employment benefits Other non-current liabilities CURRENT LIABILITIES Lease liabilities Recoverable Cash advances (RCAs) Trade payables Other current liabilities TOTAL EQUITY AND LIABILITIES Notes December 31, 2023 December 31, 2022 5.6 5.7 5.8 5.8 5.9 5.9 5.9 5.10 5.11 5.7 5.13 5.13 5.13, 5.22 5.2.16, 5.13 5.2.16, 5.13 5.19 5.16 5.20 5.15 5.17 5.19 5.16 5.18 5.18 5,161 390 1,830 2,804 137 11,121 457 2,258 1,402 — 7,004 — 16,282 6,304 32,949 — 35,734 295,993 (358,372) 7,046 902 4,505 — 1 1,638 2,932 156 366 1,243 1,167 16,282 4,891 864 309 3,454 264 14,825 1,118 — 1,017 — 12,445 245 19,716 4,317 78,585 6,317 34,800 234,562 (349,947) 4,973 118 4,584 — 13 258 10,426 137 437 4,752 5,100 19,716 The accompanying disclosure notes form an integral part of these consolidated financial statements. 4.3.2. Consolidated statements of comprehensive loss (€'000) Revenue Cost of sales Gross profit Research and Development expenses General & Administrative expenses Change in fair value of contingent consideration Impairment of Oncology intangible assets Other income Other expenses Operating Loss5 Financial income Financial expenses Loss before taxes Income taxes Loss for the period Basic and diluted loss per share (in €) Other comprehensive income/(loss) Items that will not be reclassified to profit and loss Remeasurements of post-employment benefit obligations, net of tax Items that may be subsequently reclassified to profit or loss Currency translation differences Other comprehensive income / (loss) for the period, net of tax Total comprehensive loss for the period Total comprehensive loss for the period attributable to Equity Holders (1) For the year ended December 31, Notes 2023 2022 5.23 5.24 5.25 5.29 5.29 5.28 5.28 5.31 5.31 5.21 5.32 102 (69) 33 (4,602) (6,028) — — 2,334 (194) (8,457) 30 (84) (8,511) 63 (8,448) (0.34) 23 23 (1) (1) 22 (8,426) (8,426) — — — (18,928) (10,546) 14,679 (35,084) 9,360 (338) (40,857) 185 (198) (40,870) (65) (40,935) (1.81) (15) (15) 4 4 (11) (40,946) (40,946) [1] For 2023 and 2022, the Group does not have any non-controlling interests and the losses for the year are fully attributable to owners of the parent. 5 The operating loss arises from the Company’s loss for the period before deduction of financial income, financial expenses and income taxes. The purpose of this measure by Management is to identify the Company’s results in connection with its operating activities. 1 00 The accompanying disclosure notes form an integral part of these consolidated financial statements. 4.3.3. Consolidated statements of changes in equity 2023 Annual Report (€’000) Balance as of January 1, 2022 Share-based payments Total transactions with owners, recognized directly in equity Loss for the period Currency Translation differences Remeasurements of defined benefit obligation Total comprehensive loss for the period Balance as of December 31, 2022 Balance as of January 1, 2023 Capital increase Transaction costs associated with capital increases Reduction of share premium by absorption of losses Reduction of share capital by absorption of losses Share-based payments Total transactions with owners, recognized directly in equity Loss for the period Currency Translation differences Remeasurements of defined benefit obligation Total comprehensive loss for the period Balance as of December 31, 2023 Share capital (non- distributable) Share premium (non- distributable) 48,513 — 43,349 — — — — — — 78,585 78,585 9,794 — — (55,430) — (45,636) — — — — 32,949 — — — — — 6,317 6,317 — (316) (6,001) — — (6,317) — — — — — Other reserves2 (distributable1) Capital reduction reserve (distributable1) Accumulated deficit (distributable1) 30,958 1,624 1,624 — 4 — 4 34,800 34,800 — — — — 935 935 — (1) — (1) 191,213 — — — — — — 234,562 234,562 — — 6,001 55,430 — 61,431 — — — — 35,734 295,993 Total Equity 30,994 1,624 1,624 (40,935) 4 (283,039) — — (40,935) — (15) (15) (40,950) (40,946) (349,947) (349,947) — — — — — — (8,448) — 23 (8,425) (358,372) 4,317 4,317 9,794 (316) — — 935 10,413 (8,448) (1) 23 (8,426) 6,304 (1) Pursuant to Belgian law (“BCCA”), the calculation of amounts available for distribution to shareholders, as dividends or otherwise, must be determined on the basis of the Company’s standalone non-consolidated statutory financial statements of Celyad Oncology SA prepared under Belgian GAAP, and not on the basis of IFRS consolidated financial statements. For more information, see note 5.13. (2) Other reserves include Share-base payment reserve, Other equity reserve from conversion of convertible loan in 2013 and Currency Translation Difference. The accompanying disclosure notes form an integral part of these consolidated financial statements. 1 01 4.3.4. Consolidated statements of Cash flows (€'000) Cash Flow from operating activities Loss for the period Non-cash adjustments Intangibles - Amortization Property, plant & equipment - Depreciation Loss on disposal of Intangibles assets Loss on disposal of Property, plant and equipment Gain on sale of Property, plant and equipment Gain on sale of CTMU activities Remeasurement of Leases Provision for onerous contract Change in fair value of contingent consideration payable and other financial liabilities Impairment of Oncology intangible assets Remeasurement of Recoverable Cash Advances (RCAs) Grant income (RCAs and others) Share-based payment expense Post-employment benefits Change in working capital Trade receivables, other (non-)current receivables Trade payables, other (non-)current liabilities Net cash used in operations Cash Flow from investing activities Acquisition of Property, Plant & Equipment Acquisitions of Intangible assets Proceeds from sale of Property, Plant & Equipment Proceeds from net investment in lease Proceeds from sale of CTMU activities Acquisition of short-term investments Proceeds from short-term investments Net cash from/(used in) investing activities Cash Flow from financing activities Repayments of leases Proceeds from issuance of shares and exercise of warrants Proceeds from RCAs & other grants Repayment of RCAs & other grants Net cash from/(used in) financing activities Net cash and cash equivalents at beginning of the period Change in Cash and cash equivalents Effects of exchange rate changes on cash and cash equivalents Net cash and cash equivalents at the end of the period 2023 Annual Report For the year ended December 31, Notes 2023 2022 4.3.2 5.6 5.7 5.28 5.28 5.28 5.28 5.28 5.17, 5.18 5.20 5.29 5.19 5.28 5.14 5.15 5.7 5.6 5.7 5.9 5.7 5.10 5.10 5.19 5.13 5.19 5.18, 5.19 5.11 (8,448) 509 285 — 32 (1,087) — — 51 — — (73) (896) 935 (12) (1,205) (5,293) (15,202) (899) (35) 1,341 — — — — 407 (145) 9,490 330 (320) 9,355 12,445 (5,440) (1) 7,004 (40,935) 613 827 58 132 — (5,187) (169) 2,171 (14,679) 35,084 (1,447) (2,047) 1,624 (40) 306 (4,321) (28,010) (123) — — 235 6,000 — 1,090 7,202 (896) (124) 4,491 (230) 3,241 30,018 (17,567) (6) 12,445 The accompanying disclosure notes form an integral part of these consolidated financial statements. 1 02 2023 Annual Report 5. Notes to the consolidated financial statements 5.1 General information Celyad Oncology SA and its affiliates will be collectively referred to as “the Company”, “the Group”, “Celyad”, “we” or “us”. The Company is a biotechnology company focused on the research and development of chimeric antigen receptor T cell (CAR T) therapies for cancer. Celyad Oncology SA was incorporated on July 24, 2007, under the name “Cardio3 BioSciences”. Celyad is a limited liability company (Société Anonyme) governed by Belgian law with its registered office at Axis Parc, Rue Edouard Belin 2, B-1435 Mont-Saint-Guibert, Belgium (company number 0891.118.115). The Company’s ordinary shares are listed on Euronext Brussels and Euronext Paris regulated markets, all under the ticker symbol CYAD. The Company has two fully owned subsidiaries (together, the Group) in the United States (Celyad Inc. and Corquest Medical, Inc.). These consolidated financial statements have been approved for issuance by the Company’s Board of Directors on April 4, 2024. These statements have been audited by BDO Réviseurs d'Entreprises SRL, the statutory auditor of the Company and independent registered public accounting firm. The Annual Report is available to the public free of charge to the above-mentioned address or via the Company’s website (https://celyad.com/investors/regulated-information/). Key event 2023 On January 1, 2023, the Company sold all the leasehold improvements, and furniture associated to the Group’s corporate offices located at Rue Edouard Belin 2, 1435 Mont-Saint-Guibert, Belgium, for a total value of €1.3 million. The Company has used part of this money to refurbish and move to its new facility located at Rue Dumont 9, 1435 Mont-Saint-Guibert, Belgium. The move to these new spaces has been effective in the fourth quarter of 2023. As from January 1, 2023, until the date the Company moved into the new corporate offices (Dumont 9), the Company leased its previous facilities (Belin, 2) from Cellistic, under a new lease contract for an amount of €0.3 million. Effective January 9, 2023, the clinical team (8 employees) has joined the organization of ProPharma Group Holdings LLC, a global reputed CRO with whom Celyad has simultaneously entered into a service agreement for support relating to the closing of its clinical trials. The clinical trials remain under the Company responsibility as sponsor, while the clinical workforce has been transferred to said partner to secure a seamless closing of the clinical studies, preserving the best interests of the patients and investigational sites. 5.2 Basis of preparation and significant accounting policies The consolidated financial statements of the Group for the twelve months ended December 31, 2023 and 2022 (the “year” or “the period”) include Celyad Oncology SA and its subsidiaries. The significant accounting policies used for preparing these consolidated financial statements are explained below. 5.2.1. Basis of preparation The consolidated financial statements have been prepared on an historical cost basis, except for: • Contingent consideration and other financial liabilities 1 03 The policies have been consistently applied to all the years presented, unless otherwise stated. The consolidated financial statements are presented in euro and all values are presented in thousands (€000) except when otherwise indicated. Amounts have been rounded off to the nearest thousand and in certain cases, this may result in minor discrepancies in the totals and subtotals disclosed in the financial tables. 2023 Annual Report Statement of compliance The consolidated financial statements of the Group have been prepared in accordance with International Financial Reporting Standards, International Accounting Standards and Interpretations (collectively, IFRSs) as issued by the International Accounting Standards Board (IASB) and as endorsed by the European Union. The preparation of the consolidated financial statements in accordance with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgment or complexity, are areas where assumptions and estimates are significant to the financial statements. They are disclosed in note 5.4. Going concern The Group is pursuing a strategy to develop products and platforms that will help our partners to treat medical needs in oncology. Management has prepared detailed budgets and cash flow forecasts for the years 2024 and 2025. These forecasts reflect the strategy of the Group and include significant expense and cash outflow estimations in relation to the development of its proprietary technology platforms and intellectual property, partly compensated by grants funding and tax incentives. As of December 31, 2023, the Company had cash and cash equivalents of €7.0 million. The Company projects that its existing treasury position should be sufficient to fund operating expenses and capital expenditure requirements into the second quarter of 2025 (until at least General Assembly of May 2025). After due consideration of detailed budgets and estimated cash flow forecasts for the years 2024 and 2025 (which are leaner following the restructuring actions already implemented in 2022 and 2023), the Company projects that its existing treasury position will be sufficient to fund its estimated operating and capital expenditures over at least the next 12 months from the date that the financial statements are issued. This statement is prepared on a conservative approach with respect to future revenues which are only considered if committed at closing date. Accordingly, the consolidated financial statements have been prepared on a basis that assumes the Company will continue as a going concern and contemplates the realization of assets and satisfaction of liabilities and commitments in the ordinary course of business. Impact of geopolitical situation In February 2022, Russia launched a military invasion of Ukraine. The ongoing military operations in Ukraine and the related sanctions targeted against Russia and Belarus may have an impact on the European and global economies. The Company has no operations or suppliers based in Ukraine, Belarus, Russia or any zone of conflicts, and consequently there has not been a negative impact on our operations to date. However, the general economic impacts of the conflict are unpredictable and could lead to market disruptions, including significant volatility in commodity prices, credit and capital markets. Given the continuing conflict, the operations of the Company could be disrupted due to the demise of commercial activity in impacted regions and due to the severity of sanctions on the businesses upon which the Company and its suppliers rely. Further, state-sponsored cyberattacks could expand as part of the conflict, which could adversely affect the Company’s ability to maintain or enhance key cyber security and data protection 1 04 measures. To date, the Company has not experienced any material adverse impacts, but the Company is not able to reliably predict the potential impact of the conflict on its future business or operations. 2023 Annual Report Changes to accounting standards and interpretations The Group has applied the same accounting policies and methods of computation in its 2023 year-end consolidated financial statements as compared to 2022, except for those that relate to new standards and interpretations. None of the new standards, interpretations and amendments, which are effective for periods beginning after January 1, 2023, which have been issued by the IASB have a material effect on the Group’s financial statements. None of the new standards, interpretations and amendments, which will be effective for periods beginning after January 1, 2024 and are not yet effective as of December 31, 2023 and/or not yet adopted by the European Union as of December 31, 2023, are expected to have a material effect on the Group's future financial statements as either they are not relevant to the Group’s activities, or they require accounting which is consistent with the Group’s current accounting policies. 5.2.2. Consolidation Subsidiaries Subsidiaries are all entities (including structured entities) over which the Group has control. The Group controls an entity when the Group 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 over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date control ceases. Inter-company transactions, balances and unrealized gains on transactions between group companies are eliminated. Unrealized losses are also eliminated. When necessary, amounts reported by subsidiaries have been adjusted to conform with the Group’s accounting policies. 5.2.3. Foreign currency translation 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 Euros, which is the Group’s presentation currency. Transactions and balances Foreign currency transactions (mainly USD) are translated into the functional currency using the applicable exchange rate on the transaction dates. Monetary assets and liabilities denominated in foreign currencies are retranslated at the presentation currency spot rate of exchange ruling at the reporting date. Foreign currency exchange gains and losses arising from settling foreign currency transactions and from the retranslation of monetary assets and liabilities denominated in foreign currencies at the reporting date are recognized in the income statement. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates as of the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is determined. Group companies The results and financial position of all group entities that have a functional currency different from the presentation currency are translated into the presentation currency as follows: 1 05 2023 Annual Report • • Assets and liabilities for each statement of financial position presented are translated at the closing rate at the date of that statement of financial position; Income and expenses for each income statement are translated at average exchange rate (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the rate on the dates of the transactions); and • All resulting translation differences are recognized in other comprehensive income. 5.2.4. Revenue So far, the primary revenue generated by the Group relates to the sale of licenses. Licensing revenue The Group enters into license and/or collaboration agreements with third-party biopharmaceutical partners. Revenue under these arrangements may include non-refundable upfront payments, product development milestone payments, commercial milestone payments and/or sales-based royalty payments. Upfront payments License fees representing non-refundable payments received at the time of signature of license agreements are recognized as revenue upon signature of the license agreements when the Group has no significant future performance obligations and collectability of the fees is assured. Milestone payments Milestone payments represent amounts received from the Group’s customers or collaborators, the receipt of which is dependent upon the achievement of certain scientific, regulatory, or commercial milestones. Under IFRS 15, milestone payments generally represent a form of variable consideration as the payments are likely to be contingent on the occurrence of future events. Milestone payments are estimated and included in the transaction price based on either the expected value (probability-weighted estimate) or most likely amount approach. The most likely amount is likely to be most predictive for milestone payments with a binary outcome (i.e., the Group receives all or none of the milestone payment). Variable consideration is only recognized as revenue when the related performance obligation is satisfied, and the Group determines that it is highly probable that there will not be a significant reversal of cumulative revenue recognized in future periods. Royalty revenue Royalty revenues arise from the Group’s contractual entitlement to receive a percentage of product sales achieved by co-contracting parties. As the Group’s co-contracting partners currently have no products based on a Celyad-technology approved for sale. The Group has not received any royalty revenue to date. Royalty revenues, if earned, will be recognized on an accrual basis in accordance with the terms of the contracts with the Group’s customers when sales occur and there is reasonable assurance that the receivables from outstanding royalties will be collected. Sales of goods (medical devices) Sales of medical devices are recognized when the Group has fulfilled the performance obligations under the terms of the sales contract, which includes delivery of the promised goods. 5.2.5. Other income Government Grants 1 06 2023 Annual Report The Group’s grant income reported under ‘Other income’ in the consolidated statement of comprehensive loss is generated from: (i) recoverable cash advances (RCAs) granted by the Regional government of Wallonia; (ii) R&D tax credits granted by the Belgian federal government; and (iii) grants received from the European Commission under the Seventh Framework Program (“FP7”), Federal Belgian Institute for Health Insurance (Inami) and Regional authorities. Once a government grant is recognized, any related contingent liability (or contingent asset) is treated in accordance with IAS 37. Government grants relating to costs are deferred and recognized in the consolidated statement of comprehensive loss over the period necessary to match them with the costs that they are intended to compensate. Based on the nature of transactions, cash inflows received from government grants provide the entity with financing for the designated activity. They are in substance financing cash inflows consistent with the cash proceeds from RCAs and other grants and are disclosed in the consolidated statements of cash flows as “Cash Flow from financing activities”. The Group’s grant income is recognized in the consolidated statement of comprehensive loss under “Other income/expense” and as a non-cash adjustment in “cash flows from operating activities” in the consolidated statements of cash flows. Recoverable cash advances (RCAs) The Group receives grants from the Walloon Region in the form of recoverable cash advances (RCAs). RCAs are dedicated to support specific development programs. All RCA contracts, in essence, consist of three phases, i.e., the “research phase”, the “decision phase” and the “exploitation phase”. During the research phase, the Group receives funds from the Region based on statements of expenses. In accordance with IAS 20.10A and IFRS Interpretations Committee (IC)’s conclusion that contingently repayable cash received from a government to finance a research and development (R&D) project is a financial liability under IAS 32, ‘Financial instruments; Presentation’, the RCAs are initially recognized, concomitantly with the occurrence of subsidized expense, as a financial liability at fair value (calculated based on present value of future repayment of grants), determined as per IFRS 9. The benefit (RCA grant component) consisting in the difference between the cash received (RCA proceeds) and the above-mentioned financial liability’s fair value (RCA liability component) is treated as a government grant in accordance with IAS 20. The RCA grant component is recognized in profit or loss under "Other income" on a systematic basis over the periods in which the entity recognizes the underlying R&D expenses subsidized by the RCA. The fair market value adjustments to the RCA liability are recognized in the consolidated statement of comprehensive loss under “Other income/expense” and as a non-cash adjustment in “cash flows from operating activities” in the consolidated statements of cash flows. The RCAs liability contains two components: • • The fixed part of the reimbursement of 30% is refundable based upon an agreed repayment schedule. The initial recognition at fair value is performed using the discount rate at the date of the convention and the assumption of exploitation until the end of repayment schedule. The variable part (from 70% and up to 170%) is refundable to the extent of the revenue generated within exploitation phase. The initial recognition at fair value of the variable part of the component is based on probability-weighted discounted cash flows estimated using Key assumptions listed in note 5.6.2. 1 07 2023 Annual Report The sales-independent reimbursements and sales-dependent reimbursements are, in the aggregate (including the accrued interests), capped at 200% of the principal amount paid out by the Walloon Region. The RCAs liability component (RCA financial liability) is subsequently measured at amortized cost using the cumulative catch-up approach under which the carrying amount of the liability is adjusted to the present value of the future estimated revenue, discounted at the liability’s original effective interest rate. The resulting adjustment is recognized within profit or loss under “Other income/expense”. At the end of the research phase, the Group should within a period of six months decide whether or not to exploit the results of the research phase (decision phase). The exploitation phase may have a duration of up to 20 years. In the event the Group decides to exploit the results under an RCA, the relevant RCA becomes contingently refundable, and the fair value of the RCA liability adjusted accordingly, if required. For more information on the potential financial consequences of these exploitation decisions in terms of potential reimbursements and sales percentage fees to be paid to the Walloon Region, refer to note 5.16. When the Group does not exploit (or ceases to exploit) the results of programs under an RCA, it has to notify the Region of this decision. This decision is the sole responsibility of the Group. The related liability is then discharged by the transfer of such results to the Region. Also, when the Group decides to renounce its rights to patents which may result from the research, title to such patents will be transferred to the Region. In that case, the RCA liability is extinguished and reflected in the statement of income (loss) under “Other income/expense”. R&D Tax credits Since 2013, the Group applies for R&D tax credits, a tax incentive measure for European SME’s established by the Belgian federal government. When capitalizing its R&D expenses under the tax reporting framework, the Group may either i) get a reduction of its taxable income (at current income tax rate applicable); or ii) if no sufficient taxable income is available, apply for the refund of the unutilized tax credits, calculated on the R&D expenses amount for the year. Such settlement occurs at the earliest 5 financial years after the tax credit application filed by the Group. Considering that R&D tax credits are ultimately paid by the public authorities, the related benefit is treated as a government grant under IAS 20 and booked into other income, in order to match the R&D expenses subsidized by the grant. Other government grants The Group has received and will continue to apply for grants from European (FP7), Regional authorities and Federal Belgian Institute for Health Insurance (Inami). These grants are dedicated to partially finance early stage projects such as fundamental research, applied research, prototype design, etc. To date, all grants received are not associated with any conditions. As per each grant agreement, grants are paid upon submission by the Group of a statement of eligible expenses. The Group incurs expenses first and then submits application for the grant receipt according to the terms of the grant agreement. These government grants are recognized in profit or loss under "Other income" on a systematic basis over the periods in which the entity recognizes the underlying R&D expenses subsidized. 5.2.6. Intangible assets The following categories of intangible assets apply to the current Group operations: Separately acquired intangible assets 1 08 2023 Annual Report Intangible assets acquired from third parties are recognized at cost, if and only if it is probable that future economic benefits associated with the asset will flow to the Group, and that the cost can be measured reliably. Subsequent payments of contingent consideration are capitalized when incurred. Following initial recognition, intangible assets are carried at cost less any accumulated amortization and accumulated impairment losses. The useful Iife of intangible assets is assessed as finite, except for Goodwill. They are amortized over the expected useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortization period and the amortization method for an intangible asset with a finite useful life are reviewed at least at each financial year end. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are accounted for by changing the amortization period or method, as appropriate, and are treated as changes in accounting estimates and applied prospectively. The amortization expense on intangible assets with finite lives is recognized in the income statement in the expense category consistent with the function of the intangible asset. Patents, Licenses and Trademarks Licenses for the use of intellectual property are granted for a period corresponding to the intellectual property of the assets licensed. Amortization is calculated on a straight-line basis over this useful life. Patents and licenses are amortized over the period corresponding to the intellectual property (IP) protection and are assessed for impairment whenever there is an indication these assets may be impaired. Indication of impairment is related to the value of the patent demonstrated by the preclinical and sublicensing results of the technology. Intangible assets acquired in a business combination Goodwill Goodwill is an asset representing the future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized. Goodwill is measured as a residual at the acquisition date, as the excess of the fair value of the consideration transferred and the assets and liabilities recognized (in accordance with IFRS 3). Goodwill has an indefinite useful life and is not amortized but tested for impairment at least annually or more frequently whenever events or changes in circumstances indicate that goodwill may be impaired, as set forth in IAS 36 (Impairment of Assets). Goodwill arising from business combinations is allocated to cash generating units, which are expected to receive future economic benefits from synergies that are most likely to arise from the acquisition. These cash generating units form the basis of any future assessment of impairment of the carrying value of the acquired goodwill. Internally generated intangible assets Except qualifying development expenditure (discussed below), internally generated intangible assets are not capitalized. Expenditure is reflected in the income statement in the year in which the expenditure is incurred. Research and development costs Research costs are expensed as incurred. Development expenditures on an individual project are recognized as an intangible asset when the Group can demonstrate development phase. 1 09 2023 Annual Report For the industry in which the Group operates, the life science industry, the technical feasibility of completing and the availibility of probable future benefits tend to be the most difficult to achieve. For medical devices this is usually met at the moment of CE marking. Following initial recognition of the development expenditure as an asset, the cost model is applied requiring the asset to be carried at cost less any accumulated amortization and accumulated impairment losses. Amortization of the asset begins when development has been completed and the asset is available for use. It is amortized over the period of expected future benefit. Amortization is recorded in Research & Development expenses. During the period of development, the asset is tested for impairment annually, or earlier when an impairment indicator occurs. As of statement of financial position dates, only the development costs of C-Cathez have been capitalized under “Development costs” and are being amortized over a period of 17 years which corresponds to the period over which the intellectual property is protected. 5.2.7. Property, plant and equipment Property, plant and equipment is stated at cost, net of accumulated depreciation and/or accumulated impairment losses, if any. Repair and maintenance costs are recognized in the income statement as incurred. Depreciation is calculated on a straight-line basis over the estimated useful life of the asset as follows: • • • Land and buildings: 15 to 20 years Plant and equipment: 5 to 15 years Laboratory equipment: 3 to 5 years • Office furniture: 3 to 10 years • • Leasehold improvements: based on remaining duration of office building lease Right-of-use assets: over lease term An item of property, plant and equipment and any significant part initially recognized is derecognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the income statement when the asset is derecognized. The assets’ residual values, useful lives and methods of depreciation are reviewed at each financial year end, and adjusted prospectively, if applicable. 5.2.8. Leases The Group leases various offices, facilities, cars and IT-equipment. The lease term covers the non-cancellable period for which the Group has the right to use an underlying asset which includes the periods covered by an option to terminate the lease if the Group is reasonably certain not to exercise that option. The Group has considered a non-cancellable period of 9 years for the lease of the building. 5.2.9. Impairment of non-financial assets The Group assesses at each reporting date whether there is an indication that an asset may be impaired, unless there are indications of impairment at other points throughout the period. If any indication exists, or when annual impairment testing for an asset is required, the Group estimates the asset’s recoverable amount. 1 10 As of the statement of financial position dates, the Group has two cash-generating units which consist of the development and commercialization activities on: • • CYAD products candidate series based on CAR T technology, for the immune-oncology segment; and C-Cathez commercialized medical device, for the cardiology segment. 2023 Annual Report 5.2.10. Cash and cash equivalents Cash and cash equivalents in the statement of financial position comprise cash at banks and on hand and very short-term deposits with an original maturity of three months or less. Cash and cash equivalents are carried in the statement of financial position at their nominal value. 5.2.11. Financial assets Financial assets are mainly grant receivable, trade receivables and cash and cash equivalents carried at amortized cost. 5.2.12. Financial liabilities 5.2.12.1. Classification The Group’s financial liabilities include “bank loans”, “lease liabilities”, “recoverable cash advances”, “contingent consideration and other financial liabilities”, “trade payables” and relevant financial liabilities within “Other (non-) current liabilities”. The Group classifies and measures its financial liabilities at ‘amortized cost’ using the effective interest method. The subsequent measurement of financial liabilities depends on their classification as explained above. In particular: Recoverable cash advances Recoverable cash advances granted by the Walloon Region are subsequently measured at amortized cost using the cumulative catch-up approach, as described in section 5.2.5 above. Trade payables and other payables After initial recognition, trade payables and other payables are measured at amortized cost using the effective interest method. 5.2.13. Share-based payments Certain employees, managers and members of the Board of Directors of the Group receive remuneration, as compensation for services rendered, in the form of share-based payments which are “equity-settled”. Measurement The cost of equity-settled share-based payments is measured by reference to the fair value at the date on which they are granted. The fair value is determined by using an appropriate pricing model, further details are given in note 5.14. Recognition 1 11 The cost of equity-settled share-based payments is recorded as an expense, together with a corresponding increase in equity, over the period in which the service conditions are fulfilled. The cumulative expense recognized for equity-settled transactions at each reporting date until the vesting date reflects the extent to which the vesting period has expired and the Group’s best estimate of the number of equity instruments that will ultimately vest. 2023 Annual Report Modification Where the terms of an equity-settled transaction award are modified, the minimum expense recognized is the expense as if the terms had not been modified, if the original terms of the award were met. An additional expense is recognized for any modification that increases the total fair value of the share-based payment transaction, or is otherwise beneficial to the employee as measured at the date of modification. The incremental fair value granted is the difference between the fair value of the modified equity instrument and the original equity instrument, both estimated as at the date of the modification. If the modification occurs during the vesting period, the incremental fair value granted is included in the measurement of the amount recognized for services received over the period from the modification date until the date when the modified equity instruments vest, in addition to the amount based on the grant date fair value of the original equity instruments, which is recognized over the remainder of the original vesting period. If the modification occurs after vesting date, the incremental fair value granted is recognized immediately, or over the vesting period if the employee is required to complete an additional period of service before becoming unconditionally entitled to those modified equity instruments. Forfeiture An equity-settled award can be forfeited with the departure of a beneficiary before the end of the vesting period, or cancelled and replaced by a new equity settled award. If a new award is substituted for the cancelled award, and designated as a replacement award on the date that it is granted, the cancelled and new awards are treated as if they were a modification of the original award, as described in the previous paragraph. Cancellation If the cancellation occurs during the vesting period, it is treated as an acceleration of vesting, and the Group recognizes immediately the amount that would otherwise have been recognized for services received over the remainder of the vesting period. If the cancellation occurs after the vesting period, no adjustments will be made to the accounting. 5.2.14. Income Taxes Tax is recognized in the income statement, except to the extent that it relates to items recognized in other comprehensive income or directly in equity. In this case, the tax is also recognized in other comprehensive income or directly in equity, respectively. Deferred tax Deferred tax is provided using the liability method on temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. Deferred tax liabilities are recognized for all taxable temporary differences, except: • Where the deferred tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; 1 12 2023 Annual Report • In respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future. Deferred tax assets are recognized for all deductible temporary differences, carry forward of unused tax credits and unused tax losses (except if the deferred tax asset arises from the initial recognition of an asset or liability in a transaction other than a business combination and that, at the time of the transaction affects neither accounting nor taxable profit or loss), to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilized. The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is not probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilized. Unrecognized deferred tax assets are reassessed at each reporting date and are recognized to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date. Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current income tax liabilities and the deferred taxes relate to income taxes levied by the same taxation authority or either the same taxable entity or different taxable entities where there is an intention to settle the balances on a net basis. 5.2.15. Earnings (loss) per share The basic net profit/(loss) per share is calculated based on the weighted average number of shares outstanding during the period. The diluted net profit/(loss) per share is calculated based on the weighted average number of shares outstanding including the dilutive effect of potentially dilutive ordinary shares such as warrants and convertible debts. Potentially dilutive ordinary shares should be included in diluted earnings (loss) per share when and only when their conversion to ordinary shares would decrease the net profit per share (or increase net loss per share). 5.2.16. Equity The basic net profit/(loss) per share is calculated based on the weighted average number of shares outstanding during the period. The equity is comprised of the following (further details are given in note 5.13); • • Share capital: Share capital is comprised of the nominal amount of the parent’s ordinary shares. This capital is not distributable in the form of dividends under Belgian Companies and Associations Code. Share premium: Share premium is comprised of: (1) the amount received attributable to share capital, in excess of the nominal amount of shares issued by the parent company, reduced by; (2) issuance costs directly attributable to the capital increase; and (3) absorption of the accumulated deficit into the share premium, as approved by the Company’s shareholders in accordance with Belgian Companies and Associations Code. • Other reserves: Other reserves are comprised of: (1) Share-base payment reserve; (2) Other equity reserve from conversion of convertible loan in 2013; and (3) Currency Translation differences. 1 13 • • Capital reduction reserve: Capital reduction reserve is comprised of the absorption of historical losses of the Company into the share premium or into the share capital, as approved by the Company’s shareholders in accordance with Belgian Companies and Associations Code. Accumulated deficit: Accumulated deficit is comprised of cumulative historical losses of the Company. 2023 Annual Report 5.2.17. Assets held for sale The assets held for sales end of 2022 were effectively sold in January 2023. These assets are not considered as a specific line of activity. There were no more assets held for sale in 2023. 5.3. Risk Management Financial risk factors Interest rate risk The interest rate risk is very limited as the Group has only a limited amount of finance leases and no outstanding bank loans. So far, because of the immateriality of the exposure, the Group did not enter into any interest hedging arrangements. Credit risk The Group has a limited amount of trade receivables due to the fact that sales to third parties are not significant and thus the Group’s credit risk arises mainly from cash and cash equivalents and deposits with banks and financial institutions. The Group only works with international reputable commercial banks and financial institutions. The maximum credit risk, to which the Group is theoretically exposed as at the statement of financial position date, is the carrying amount of financial assets. Given the current nature and size of operations of the Group, the requirement of the Group to measure the loss allowance for a financial instrument at an amount equal to the lifetime expected credit losses (ECL), mainly apply to trade and other receivables (resulting mainly from the amendment of the Mesoblast license agreement). The Group recognized a bad debt accrual on this receivable at the reporting date and considers there is no significant additional credit risk related to this receivable. As such, no additional ECL allowance has been recognized for any other financial asset. Foreign exchange risk The Group is exposed to foreign exchange risk as certain collaborations or supply agreements of raw materials are denominated in USD. Moreover, the Group has also investments in foreign operations, whose net assets are exposed to foreign currency translation risk (USD). So far, because of the immateriality of the exposure, the Group did not enter into any currency hedging arrangements. At December 31, 2023, the foreign exchange risk exposure exists mainly on the cash denominated in USD. A depreciation of 1% on the USD versus EUR would translate into an unrealized foreign exchange loss of €1k for the Group at December 31, 2023. Liquidity risk The Group monitors its risk to a shortage of funds using a recurring liquidity planning tool. Refer to note 5.4 for the going concern assessment. The Group’s objective is to maintain a balance between continuity of funding and flexibility through the use of bank deposit and leases. 1 14 Refer to note 5.19 for an analysis of the Group’s non-derivative financial liabilities into relevant maturity groupings based on the remaining period at the statement of financial position date to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows. 2023 Annual Report Capital management The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an adequate structure to limit to cost of capital. 5.4 Critical accounting estimates and judgments The preparation of the Group’s financial statements requires Management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities, at the end of the reporting period. Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of the asset or liability affected in future periods. In the process of applying the Group’s accounting policies, Management has made judgments and has used estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are addressed below. 5.4.1 Critical accounting estimates Measurement and impairment of non-financial assets With the exception of goodwill and certain intangible assets for which an annual impairment test is required, the Group is required to conduct impairment tests where there is an indication of impairment of an asset. Measuring the fair value of non-financial assets requires estimates by management. These estimates could change substantially over time as new facts emerge or new strategies are taken by the Group. Further details (including sensitivity analysis) are contained in note 5.6.2. Onerous Contract & Invoice to receive accruals The Group recorded a provision for onerous contracts in order to cover the contractual obligations, mainly on clinical activities follow-up and studies closing costs, after the Group’s decision, in the fourth quarter of 2022, to discontinue the development of its remaining clinical programs CYAD-02, CYAD-101 and CYAD- 211 (see notes 5.17 and 5.18). The Group also recognized expenses under comprehensive income statement through accruals for invoices to receive based on estimated amounts of rendered services or delivered goods during the year 2023 but not yet invoiced as per December 31, 2023 (see note 5.18). The Group makes these estimates based on the input from the management and communication with the vendors. Share-Based Payments 1 15 The fair value of the warrants has been determined at grant date based on the valuation method chosen, the Black-Scholes formula, which requires several parameters. This method implies the estimation of the Expected share value volatility. This estimation is based on past-years volatility of the group quotation. 2023 Annual Report Leases (IFRS 16) The Group has considered a non-cancellable period of 9 years for the lease for the Group’s new headquarter (Dumont 9 building in Mont-Saint-Guibert, Belgium). The calculation under IFRS 16 implied estimation of the IBR (incremental borrowing rate). 5.4.2 Critical accounting judgments Going Concern When assessing going concern, the Board of Directors considers mainly the following factors: • • • • The treasury available at the statement of financial position date; The cash burn projected in accordance with the approved budget for next 12-month period as the date the financial statements are issued, which are subject to judgments by management while considering all information available at the reporting date such as significant expenses and cash outflows in relation to – among others – the closing of clinical trials and the continuation of research and development projects ; The availability of grant funding and outcome of ongoing and future grant applications payback loan to be received for the next 12-month period; and The financial facilities open to the company for raising new funds by capital increase operations. Recoverable Cash Advances received from the Walloon Region As explained in note 5.2.5, accounting for RCAs requires initial recognition of the fair value of the loan received to determine the benefit of the below-market rate of interest, which shall be measured as the difference between the initial carrying value of the loan and the proceeds received. Loans granted to entities in their early stages of operations, for which there is significant uncertainty about whether any income will ultimately be generated and for which any income which will be generated will not arise until a number of years in the future, normally have high interest rates. Judgment is required to determine a rate which may apply to a loan granted on an open market basis and to determine projected revenue that will derive in the future from the products that benefited from the support of the Walloon Region. The estimated projected revenue by management is similar to the ones used for impairment of non-financial assets (see note 5.6.2). In accordance with the RCA agreements, the fixed component are assessed when calculating estimated future cash flows (30% of the initial RCA, which is repayable when the Group exploits the outcome of the research financed) and the variable component is estimated to zero. After initial recognition, RCA liabilities are measured at amortized cost using the cumulative catch-up method requiring management to regularly revise its estimates of payments and to adjust the carrying amount of the financial liability to reflect actual and revised estimated cash flows. Grant accounting (Other non-current liabilities) The Group has considered an ‘other non-current liability’ of €1.5 million related to a potential repayment of a grant due by the Group taking into account the fact that the fulfillment of all the attached conditions is subject to uncertainties, making the underlying grant income not reasonably certain at reporting date and thus not yet recognized. It is not expected by the Group that this liability will be required to be settled within the next 12 months, implying that an “other non-current liability” was accounted for. The judgment 1 16 applied within the grant accounting about the probabilities and timing of possible repayment is subject to revision at each reporting date. 2023 Annual Report 5.5 Operating segment information The chief operating decision-maker (CODM), who is responsible for making strategic decisions, allocating resources and assessing performance of the Group, has been identified as the Board of Directors. Since the acquisition of the oncological platform in 2015, the management and the CODM have determined that there are two operating segments, being: • • the immuno-oncology segment regrouping all assets developed based on the CAR T-cell platform; and the cardiology segment, regrouping the Cardiopoiesis platform, C-Cathez. Corporate segment includes costs for general and administration functions not allocated to the other business segments. Although the Group is currently active in Europe and in the US, no geographical financial information is currently available given the fact that the core operations are currently still in a study phase. No disaggregated information on product level or geographical level or any other level currently exists and hence also not considered by the Board of Directors for assessing performance or allocating resources. The CODM does not review assets by segments, hence no segment information per assets is disclosed. As of December 31, 2023, the main Group’s non-current assets are located in Belgium. Since 2017, the Group is fully focused on the development of its immuno-oncology platform. Therefore, for the year ended December 31, 2023, most of the R&D expenses were incurred in the immuno-oncology segment, in line with prior year. € '000 Revenue recognized at a point in time Revenue recognized over time Total Revenue Cost of Sales Gross Profit Research & Development expenses General & Administrative expenses Net Other income/(expenses) Operating Profit/(Loss) Net financial income/(expenses) Profit/(Loss) before taxes Income Taxes Loss for the year 2023 € '000 Revenue recognized at a point in time Revenue recognized over time Total Revenue Cost of Sales Gross Profit Research & Development expenses General & Administrative expenses Change in fair value of contingent consideration Impairment of Oncology intangible assets Net Other income/(expenses) Operating Profit/(Loss) Net financial income/(expenses) Profit/(Loss) before taxes Income Taxes Loss for the year 2022 For the year ended December 31, 2023 Cardiology Immuno- oncology Corporate Group Total 102 — 102 (69) 33 (711) — (38) (716) — (716) — (716) — — — — — (3,891) — 1,346 (2,545) (52) (2,597) 65 (2,532) — — — — — — (6,028) 832 (5,196) (2) (5,198) (2) (5,200) 102 — 102 (69) 33 (4,602) (6,028) 2,140 (8,457) (54) (8,511) 63 (8,448) For the year ended December 31, 2022 Cardiology Immuno- oncology Corporate Group Total — — — — — (587) — — — (63) (650) (19) (669) — (669) — — — — — (18,341) — 14,679 (35,084) 9,148 (29,598) (132) (29,730) (65) (29,795) — — — — — — (10,546) — — (63) (10,609) 138 (10,471) — (10,471) — — — — — (18,928) (10,546) 14,679 (35,084) 9,022 (40,857) (13) (40,870) (65) (40,935) 1 17 2023 Annual Report 5.6. Intangible assets 5.6.1. Intangible assets details and balance roll forward The change in intangible assets is broken down as follows, per class of assets: (€'000) Goodwill In-process research and development Development costs Patents, licenses, trademarks Software Total Capitalized costs At January 1, 2022 Additions Divestiture At December 31, 2022 Additions Divestiture At December 31, 2023 Accumulated amortization At January 1, 2022 Amortization charge Divestiture Impairment At December 31, 2022 Amortization charge Divestiture Impairment 883 — (239) 644 — — 644 — — — (644) (644) — — — 33,678 1,084 13,285 — — — — 876 (213) 33,678 1,084 13,948 — — — — — — 263 — (165) 98 35 — 49,193 876 (617) 49,452 35 — 33,678 1,084 13,948 133 49,487 — — — (33,678) (33,678) — — — (610) (66) — — (676) (66) — — (12,186) (229) (13,025) (547) 3 (762) (13,492) (438) — — — 131 — (98) (5) — — (613) 134 (35,084) (48,588) (509) — — At December 31, 2023 (644) (33,678) (742) (13,930) (103) (49,097) Net book value Capitalized costs Accumulated amortization At December 31, 2022 Capitalized costs 644 (644) — 644 33,678 (33,678) — 33,678 1,084 13,948 (676) (13,492) 408 1,084 456 13,948 98 (98) — 133 49,452 (48,588) 864 49,487 Accumulated amortization (644) (33,678) (742) (13,930) (103) (49,097) At December 31, 2023 — — 342 18 30 390 Goodwill and IPR&D resulted from the purchase price allocation exercise performed for the acquisition of Oncyte LLC in 2015. As of December 31, 2023, and 2022, Goodwill and IPR&D are not amortized but tested for impairment. As of December 31, 2022, Management recognized a full impairment loss on the Goodwill and IPR&D. The capitalized development costs relate to the development of C-Cathez. The development costs of C- Cathez were capitalized in May 2012 and are being amortized until 2029. No other development costs have been capitalized to date. All other programs (C-Cure, CYAD-01, CYAD-02, CYAD-101, CYAD-211…) development costs have been assessed as not being eligible for capitalization and have therefore been recognized in the income statement as research and development expenses. Software is amortized over a period of 3 to 5 years. Patents, licenses and trademarks, mainly relate to the following items: 1 18 2023 Annual Report • • Exclusive Agreement for Horizon Discovery’s shRNA Platform to develop next-generation allogenic CAR T Therapies acquired for €0.9 million at the end of December 2018. Since acquisition, the Company capitalized milestone payments for a total amount of €0.3 million. This patent is being amortized over the remaining intellectual property protection of 20 years, with the first patent application filed in 2008. As of December 31, 2022, Management recognized a full impairment loss on the remaining value of the Horizon Discovery’s shRNA platform; and An intangible asset has been capitalized in January 2022 for $1.0 million (€0.9 million), reflecting the Group's opportunity to explore new partnership for the C-Cathez, which is being amortized over a period of 2 years (see note 5.8). 5.6.2. Impairment testing Impairment testing is detailed below. Immuno-oncology CGU impairment test Goodwill and IPR&D exclusively relate to the acquisition of the former entity Oncyte LLC (meanwhile liquidated into Celyad Oncology SA) which was acquired in 2015. Management performs an annual impairment test on goodwill and on 'indefinite lived assets' that are not amortized in accordance with the accounting policies stated in notes 5.2.6 and 5.2.9. The impairment test has been performed at the level of the immuno-oncology segment. The recoverable amount associated to this CGU is calculated based on the fair value less costs to sell model using Level 3 fair value measurements for which the Group developed unobservable inputs and requires the use of assumptions. As of December 31, 2022, due to the early stage of the implementation of the new strategy and the fact no firm sublicence contract nor collaboration contract was concluded as of December 31, 2022, Management had to recognize that significant uncertainty exist on the timing and amount of the new strategy outcomes and therefore had to conclude that the possibility of any inflow was remote regarding accounting standards definition. Therefore, Management recognized a full impairment loss on the remaining value of the goodwill, IPR&D and Horizon Discovery’s shRNA platform. This accounting conclusion, which reflected a picture of the situation at December 31, 2022, does not affect the Management’s commitment to continue the exploitation of these IPs in its new strategy. As soon as a future event (such as a firm sublicense or collaboration contract) will increase the probability of revenue, indicating that the probability is more than remote and consequently that the recognized impairment losses may no longer exist or may have decreased, the Group will estimate the cash-generating unit’s recoverable amount. The reversal will be limited so that the carrying amount of the asset does not exceed its recoverable amount. An impairment loss recognized on goodwill is however not reversed in a subsequent period. As of December 31, 2023, Management has determined that there have been no event that increase the probability of revenue, indicating that the probability is more than remote such as there is no reversal of the impairment loss to be recognized. 1 19 5.7. Property, plant and equipment 2023 Annual Report (€’000) Capitalized costs At January 1, 2022 Additions Disposals Currency translation adjustments Transfers to Assets held for sale At December 31, 2022 Additions Disposals Currency translation adjustments Transfers to Assets held for sale At December 31, 2023 Accumulated depreciation At January 1, 2022 Depreciation charge Disposals Currency translation adjustments Transfers to Assets held for sale At December 31, 2022 Depreciation charge Disposals Currency translation adjustments Transfers to Assets held for sale At December 31, 2023 Net book value Capitalized costs Accumulated depreciation At December 31, 2022 Capitalized costs Accumulated depreciation At December 31, 2023 Property Equipment Furniture Leasehold Total 3,025 146 3,760 116 (3,171) (2,180) — — — 947 — — — 947 (1,281) (439) 1,720 — — — (83) — — — (83) — — — 947 (83) 864 1 (421) 1,276 192 (830) — 209 847 (2,948) (268) 1,834 — 414 (968) (176) 810 — (210) (544) 1,276 (968) 309 847 (544) 303 250 15 (45) — (220) — 46 — — — 46 (238) — 18 — 220 — (2) — — — (2) — — — 46 (2) 44 4,057 — (2,903) 11 (989) 176 666 (27) — (172) 643 (3,377) (120) 2,575 (5) 751 (176) (24) 3 — 173 (24) 176 (176) — 643 (24) 619 11,092 277 (8,299) 12 (1,630) 1,452 1,851 (857) — 37 2,483 (7,844) (827) 6,147 (5) 1,385 (1,144) (285) 813 — (37) (653) 1,452 (1,144) 309 2,483 (653) 1,830 Property, Plant and Equipment is mainly composed of right-of-use on leased offices, facilities and equipment (including vehicles), office furniture, leasehold improvements, and laboratory equipment. The addition of the year 2023, under equipment, furniture and leasehold improvements are mainly associated to the refurbishment and move to its new facility located at Rue Dumont 9, 1435 Mont-Saint- Guibert, Belgium, which has been effective in the fourth quarter of 2023 (see note 5.1). The disposals of the equipment for the year 2023 are mainly related to termination of lease agreements on company cars and laboratory equipment, sales of laboratory equipment and disposals of obsolete laboratory equipment and computers after refurbishment of the Group's new laboratory. 1 20 5.8. Non-current grant receivables and other non-current assets 2023 Annual Report (€'000) R&D Tax credit receivable Total Non-current Grant receivables Deposits Total Other non-current assets As at December 31, 2023 2022 2,804 2,804 137 137 3,454 3,454 264 264 Since 2018, the Group recognized R&D tax credit receivables from the Federal Government on an annual basis. For the year ended December 31, 2023, the Group recorded an additional R&D tax credit of €0.1 million and classified as current grant receivables the fiscal year 2018 R&D tax credit for €0,8 million (see note 5.9). During the year ended December 31, 2022, the Group received €0.8 million related to the fiscal year 2017 R&D tax credit. Based on facts and circumstances, the Group believes that all the non-current receivables and/or financial fixed assets are recoverable and thus, the Group estimates that no reserve is required. The non-current assets relate to security deposits paid to the lessors of the building leased by the Group and a deposit to the Social Security administration. The decrease compared to December 31, 2022 is mainly due to headcount reduction. 5.9. Trade receivables, grant receivables and other current assets (€'000) Trade receivables Advance deposits Total Trade and Other receivables Current Grant receivables (RCAs) Current Grant receivables (Others) Total Current Grant receivables Prepaid expenses VAT receivable Income and other tax receivables Total Other current assets Total Trade receivables, advances and other current assets As at December 31, 2023 2022 380 77 457 — 2,258 2,258 1,260 98 44 1,402 4,117 909 209 1,118 — — — 667 316 34 1,017 2,135 The decrease of trade and other receivables is mainly due to credit notes received following the closing of clinical studies and termination of the lease associated to the previous corporate offices (Belin 2) for €0.2 million, payment received for an amount of €0.1 million related to the sales of the C-Cathez, recognition of a bad debt accrual on trade and other receivable for €0.1 million and payment of the cross-charge of expenses to Cellistic associated to the management of the transition phase before moving of the Group’s to its new headquarter for €0.2 million. As of December 31, 2023, the increase in current grant receivables for €2.3 million is driven by the fiscal year 2018 R&D tax credit which was effectively received early 2024. The increase in other current assets is mainly driven by the increase on prepaid expenses on insurances (mainly D&O run-off insurance) for €0.6 million due to timing difference on the period covered by the insurance after the Nasdaq delisting and a decrease on VAT receivable as a result of decreased clinical activities compared to year-end 2022. 1 21 5.10 Section left blank 5.11. Cash and cash equivalents (€'000) Cash at bank and on hand Total 2023 Annual Report As at December 31, 2023 2022 7,004 7,004 12,445 12,445 The Group’s cash and cash equivalents amounted to €7.0 million at December 31, 2023 which accounts for a decrease of €5.4 million as compared to year-end 2022, mainly as a result of the Group’s operations expenses partly compensated by net cash proceeds from the capital increases for €9.5 million. Cash at banks earn interest at floating rates based on daily bank deposit rates. For the years ended December 31, 2023, and 2022, the earned bank interests have been insignificant. 5.12. Subsidiaries fully consolidated The consolidation scope of the Group is as follows, for both current and comparative year presented in these year-end financial statements: Name As of December 31, 2023 Celyad Oncology SA Celyad Inc CorQuest Medical Inc As of December 31, 2022 Celyad Oncology SA Celyad Inc CorQuest Medical Inc Biological Manufacturing Services SA Country of Incorporation and Place of Business Nature of Business Proportion of ordinary shares directly held by parent (%) Proportion of ordinary shares held by the Group (%) Proportion of ordinary shares held by non- controlling interests (%) BE US US BE US US BE Biopharma Biopharma Medical Device Biopharma Biopharma Medical Device Manufacturing Parent company 100% 100% Parent company 100% 100% 100% 100% 100% 100% 100% 100% 0% 0% 0% 0% 0% Biological Manufacturing Services SA (“BMS”) was acquired in May 2016. BMS owned Good Manufacturing Practices (“GMP”) laboratories until end of September 2022 after the sale of the Group’s GMP grade cell therapy manufacturing facility to Cellistic. In December 2023, the Group has dissolved BMS, and all the assets and liabilities of BMS, have been fully distributed to and assumed by the Group. 1 22 5.13. Share Capital The number of shares issued is expressed in units. Total number of issued and outstanding shares Total share capital (€'000) 2023 Annual Report As of December 31, 2023 41,428,572 32,949 2022 22,593,956 78,585 As of December 31, 2023, the share capital amounted to €32.949 million represented by 41,428,572 fully authorized, subscribed and paid-up shares. This number does not include warrants issued by the Group and granted to certain directors, employees and non-employees of the Group. As of December 31, 2023, total number of authorized shares remains available for issuance are 30,769,230. Recent history of the capital of the Company On September 4, 2023, 3,930,770 new shares were issued by decision of the board of directors and subscribed for by TOLEFI SA, CFIP CLYD LLC (“Fortress”), an affiliate of Fortress Investment Group, as well as other historical shareholders, in the framework of a private placement for a global cash proceed of €2.0 million. On November 14, 2023, 14,903,846 new shares were issued by decision of the board of directors and subscribed for by CFIP CLYD LLC (“Fortress”), an affiliate of Fortress Investment Group, in the framework of a private placement for a global cash proceed of €7.8 million. During the extraordinary shareholders meeting of December 22, 2023, the shareholders, in accordance with Belgian Companies and Associations Code, approved the absorption of approximately €6.0 million of accounting losses into share premium and approximately €55.4 million of accounting losses into share capital. As a result, share premium and share capital has been reduced by a cumulative amount of €61.4 million in the 12 months period ended December 31, 2023 (€296.0 million of loss absorption has been approved and recorded from inception to December 31, 2023) against capital reduction reserve. This transaction has no impact on the total equity, comprehensive income (loss), assets (including cash) nor liabilities. As of December 31, 2023, all shares issued have been fully paid. 1 23 The following share issuances occurred since the incorporation of the Company: 2023 Annual Report Category Transaction date Description Class A shares Class A shares Class B shares Class B shares Class B shares Class B shares Class B shares Class B shares Class B shares Class B shares Class B shares Class B shares Class B shares Class B shares Class B shares Class B shares Class B shares Ordinary shares Ordinary shares Ordinary shares Ordinary shares Ordinary shares Ordinary shares Ordinary shares Ordinary shares Ordinary shares Ordinary shares Ordinary shares Ordinary shares Ordinary shares Ordinary shares Ordinary shares Ordinary shares Ordinary shares Ordinary shares Ordinary shares Ordinary shares Ordinary shares Ordinary shares Ordinary shares Ordinary shares Ordinary shares Ordinary shares Ordinary shares Ordinary shares Ordinary shares Ordinary shares Ordinary shares Ordinary shares Ordinary shares Ordinary shares Ordinary shares Ordinary shares Ordinary shares Ordinary shares Ordinary shares Ordinary shares 24 July 2007 Company incorporation 31 August 2007 Contribution in kind (upfront fee Mayo License) 23 December 2008 Capital increase (Round B) 23 December 2008 Contribution in kind (Loan B) 28 October 2010 Contribution in cash 28 October 2010 Contribution in kind (Loan C) 28 October 2010 Contribution in kind (Loan D) 28 October 2010 Contribution in cash 28 October 2010 Exercise of warrants 28 October 2010 Contribution in kind (Mayo receivable) 28 October 2010 Contribution in cash 31 May 2013 Contribution in kind (Loan E) 31 May 2013 Contribution in kind (Loan F) 31 May 2013 Contribution in kind (Loan G) 31 May 2013 Contribution in kind (Loan H) 31 May 2013 Contribution in cash 4 June 2013 Conversion of warrants 11 June 2013 Conversion of Class A and Class B shares in ordinary shares 5 July 2013 Initial Public Offering 15 July 2013 Exercise of over-allotment option 31 January 2014 Exercise of warrants issued in September 2008 31 January 2014 Exercise of warrants issued in May 2010 31 January 2014 Exercise of warrants issued in January 2013 30 April 2014 Exercise of warrants issued in September 2008 16 June 2014 Capital increase 30 June 2014 Capital increase 4 August 2014 Exercise of warrants issued in September 2008 4 August 2014 Exercise of warrants issued in October 2010 3 November 2014 Exercise of warrants issued in September 2008 21 January 2015 Contribution in kind (Celdara Medical LLC) 7 February 2015 Exercise of warrant issued in May 2010 3 March 2015 Capital increase 11 May 2015 Exercise of warrant issued in May 2010 24 June 2015 Capital increase 4 August 2015 Exercise of warrant issued in May 2010 4 August 2015 Exercise of warrant issued in October 2010 1 February 2017 Exercise of warrant issued in May 2013 2 May 2017 Exercise of warrant issued in May 2013 1 August 2017 Exercise of warrant issued in May 2013 23 August 2017 Contribution in kind (Celdara Medical LLC) 9 November 2017 Exercise of warrant issued in May 2013 9 November 2017 Exercise of warrant issued in October 2010 7 February 2018 Exercise of warrant issued in May 2013 22 May 2018 Capital increase 16 Sept 2019 Capital increase 8 January 2021 Capital increase 29 March 2021 Capital increase 9 April 2021 Capital increase 29 April 2021 Capital increase 21 May 2021 Capital increase 14 June 2021 Capital increase 28 June 2021 Capital increase 22 July 2021 Capital increase 20 October 2021 Capital increase 8 December 2021 Capital increase 4 September 2023 Capital increase 14 November 2023 Capital increase # of shares 409,375 261,732 137,150 67,502 21,000 92,068 57,095 73,793 12,300 69,455 9,048 118,365 56,936 654,301 75,755 219,016 2,409,176 4,744,067 1,381,500 207,225 5,966 333 120,000 2,366 284,090 284,090 5,000 750 5,000 93,087 333 713,380 500 1,460,000 666 5,250 207,250 4,900 7,950 328,275 5,000 866 4,500 2,070,000 2,000,000 262,812 200,000 300,000 300,000 182,000 6,800 300,000 300,000 300,000 6,500,000 3,930,770 14,903,846 Par value (in €) 0.15 36.30 35.36 35.36 22.44 35.36 35.36 35.36 22.44 44.20 44.20 38.39 38.39 4.52 30.71 31.96 0.01 — 16.65 16.65 22.44 22.44 4.52 22.44 44.00 44.00 22.44 35.36 22.44 37.08 22.44 44.50 22.44 60.25 22.44 35.36 2.64 2.64 2.64 32.35 2.64 35.36 2.64 22.29 9.08 4.94 6.19 5.83 5.23 4.58 4.98 4.46 3.46 3.38 4.44 0.52 0.52 1 24 Share Capital Share premium Other reserves Accumulated Deficit (€000) Nature of the transactions Balance as at January 1, 2022 Loss for the period Share Based Payment Currency Translation differences Remeasurements of defined benefit obligation Balance as at December 31, 2022 Capital increase Transaction costs associated with capital increases Reduction of share premium by absorption of losses Reduction of share capital by absorption of losses Loss for the period Share Based Payment Currency Translation differences Remeasurements of defined benefit obligation Balance as at December 31, 2023 Capital reduction reserve 234,562 — — — — 234,562 — — 6,317 — — — — 6,317 — (316) 78,585 — — — — 78,585 9,794 — — (6,001) 6,001 (55,430) 55,430 — — — — 32,949 — — — — — — — — — 2023 Annual Report Number of shares 22,593,956 — — — — (308,997) (40,935) — — (15) (349,947) 22,593,956 — 18,834,616 — — (8,448) — — 23 — — — — — — 33,172 — 1,624 4 — 34,800 — — — — 935 (1) — 295,993 35,734 (358,372) 41,428,572 The total number of shares issued and outstanding as of December 31, 2023, totals 41,428,572 ordinary common shares. Capital reduction reserve During the extraordinary shareholders meeting of December 22, 2023, the shareholders, in accordance with Belgian Companies and Associations Code, approved the absorption of approximately €6.0 million of accounting losses into share premium and approximately €55.4 million of accounting losses into share capital. As a result, share premium and share capital has been reduced by a cumulative amount of €61.4 million in the 12 months period ended December 31, 2023 (€296.0 million of loss absorption has been approved and recorded from inception to December 31, 2023) against capital reduction reserve. This transaction has no impact on the total equity, comprehensive income (loss), assets (including cash) nor liabilities. 5.14. Share-based payments The Group operates an equity-based compensation plan, whereby warrants are granted to directors, management and selected employees and non-employees. The warrants are accounted for as equity-settled share-based payment plans since the Group has no legal or constructive obligation to repurchase or settle the warrants in cash. Each warrant gives the beneficiaries the right to subscribe to one common share of the Group. The warrants are granted for free and have an exercise price equal to the lower of the average closing price of the Group’s share over the 30 days prior to the offer, and the last closing price before the day of the offer, as determined by the Board of Directors of the Group. Changes in the number of warrants outstanding and their related weighted average exercise prices are as follows: Outstanding as at January 1, Granted Forfeited Exercised Expired At December 31, Weighted average exercise price (in €) 8,36 0,65 1,18 — 10,82 6,18 2023 Number of warrants 2,339,646 756,875 (55,716) — (79,216) 2,961,589 Weighted average exercise price (in €) 13,06 1,82 2,74 — 15,80 8,36 2022 Number of warrants 2,136,556 594,450 (109,108) — (282,252) 2,339,646 1 25 Warrants outstanding at the end of the year have the following expiry date and exercise price: 2023 Annual Report Warrant plan issuance date Vesting date Expiry date 06 May 2013 05 May 2014 05 November 2015 08 December 2016 26 October 2018 25 October 2019 11 December 2020 11 October 2021 05 October 2022 04 September 2023 06 May 2016 05 May 2017 05 November 2018 08 December 2019 26 October 2021 25 October 2022 10 December 2023 11 October 2024 05 October 2025 04 September 2025 06 May 2023 05 May 2024 05 November 2025 08 December 2021 31 December 2023 31 December 2024 31 December 2027 31 December 2028 05 October 2032 04 September 2033 Number of warrants outstanding as at December 31, 2023 Number of warrants outstanding as at December 31, 2022 Average exercise price per share — 35,698 79,315 7,500 289,101 529,700 489,317 799,083 543,500 188,375 2,961,589 2,500 35,698 79,315 7,500 365,817 529,950 498,883 819,983 — — 2,339,646 2.64 38.25 30.67 32.04 18.26 7.13 6.27 2.37 0.68 0.56 The Group has a reserve of 410,125 authorized warrants for share based compensation plan as of December 31, 2023. Warrants issued on October 5, 2022 On October 5, 2022, the Board of Directors issued a new plan of 323,700 warrants. Warrants were offered in different tranches to beneficiaries (employees, non-employees and directors). Out of the warrants offered, 568,500 warrants were accepted by the beneficiaries and 543,500 warrants are outstanding as of December 31, 2023. The difference between the number warrants offered on the 2022 plan and the number of newly issued warrants by the Board on October 5, 2022 is driven by the offer of additional warrants from the reserve of authorized warrants available from previous years plans. These warrants will vest in equal tranches over a period of three years. The warrants become 100% vested after the third anniversary of issuance. The warrants that are vested can only be exercised as from the end of the third calendar year following the issuance date, thus starting on January 1, 2026. The exercise price of the different tranches ranges from €0.52 to €0.87. Warrants not exercised within 10 years after issue become null and void after the 31st of December of the 7th year. Warrants issued on September 4, 2023 On September 4, 2023, the Board of Directors issued a new plan of 598,500 warrants, out of which 284,000 warrants were offered in a first tranche to beneficiaries (employees, non-employees and directors). Out of the warrants offered, 188,375 warrants were accepted by the beneficiaries and 188,375 warrants are outstanding as of December 31, 2023. These warrants will vest over a period of two years. Half (50%) of the Warrants allocated to each Beneficiary shall vest on the first anniversary of the Offer. The second half (50%) of the Warrants allocated to each Beneficiary shall vest at a rate of 1/12th per month over a 12-month period following the first anniversary of the Offer. The First Tranche of Warrants will be exercisable between the first anniversary of the Offer and the tenth anniversary of the Offer. The Second Tranche of Warrants will be exercisable between the second anniversary of the Offer and the tenth anniversary of the Offer. The exercise price of the first tranche was €0.56. Warrants not exercised within 10 years after issue become null and void. As a result, as of December 31, 2023, there are 2,961,589 warrants outstanding which represent respectively 6.67% of the total number of all its issued and outstanding shares and 5.56% of the total voting financial instruments. The fair value of the warrants has been determined at grant date based on the Black-Scholes formula. The variables, used in this model, are: 1 26 06 May 2013 05 May 2014 05 Nov. 2015 08 Dec. 2016 26 Oct. 2018 Warrants issued on 25 Oct. 2019 10 Dec. 2020 2023 Annual Report 11 Oct. 2021 04 Oct. 2022 04 Sep. 2023 Total Number of warrants issued Number of warrants accepted Number of warrants not fully vested as of December 31, 2023 Average exercise price (in €) Expected share value volatility Risk-free interest rate Average fair value (in €) Weighted average remaining contractual life 266,241 100,000 466,000 100,000 700,000 939,500 561,525 777,050 323,700 598,500 4,832,516 253,150 94,400 353,550 45,000 426,050 602,025 557,050 874,200 568,500 188,375 3,962,300 — — — — — — 79,050 — — 10,000 89,050 2.64 38.25 30.67 32.04 17.49 7.13 6.27 2.37 0.68 0.56 39.55% 67.73% 60.53% 61.03% 58.82% 59.14% 58.84% 56.86% 64.73% 85.41% 2.06% 1.09% 0.26% (0.40)% (0.06)% (0.38)% (0.66)% (0.30)% 2.74% 3.26% 12.44 25.19 20.04 16.18 8.41 3.99 3.47 1.36 0.54 0.48 (0.66) 0.34 1.84 (2.07) (0.18) 0.81 3.94 4.78 8.76 9.68 The total expense recognized in the income statement for the outstanding warrants totals €0.9 million for the year 2023 (€1.6 million of expense for the prior year 2022). 5.15 Section left blank 5.16. Recoverable Cash Advances (€'000) Non-Current portion as at January 1, Non-Current portion as at December 31, Current portion as at January 1, Current portion as at December 31, Total Recoverable Cash Advances as at January 1, Total Recoverable Cash Advances as at December 31, As at December 31, 2023 2022 4,584 4,505 437 366 5,021 4,871 5,851 4,584 362 437 6,213 5,021 The Group receives government support in the form of recoverable cash advances from the Walloon Region in order to compensate the research and development costs incurred by the Group. Refer to notes 5.2.5 and 5.19.2. At December 31, 2023, the Group has been granted recoverable cash advances amounting to €25.8 million related active contracts. Out of this amount: i) €21.9 million have been received to date; ii) €1.3 million should be received in 2024 depending on the progress of the different programs partially funded by the Region; iii) €2.6 million have been decommitted due to the end of the expenses submission period linked to the R&D period. 1 27 For further details, reference is made to the table below which shows, for active contracts (i) the year for which amounts under those agreements have been received and initially recognized on the statement of financial position for the financial liability and deferred grant income components and (ii) a description of the specific characteristics of those recoverable cash advances including repayment schedule and information on other outstanding advances. Underlying R&D is ongoing. In 2024, the Group will have to make exploitation decisions on the remaining RCA (agreement numbered 8436). 2023 Annual Report (in €'000) Id 5915 6633 7027 7502 7685 8087 8088 1910028 8212 8436 8516 Total Amounts received for the years ended December 31, Amounts to be received As at December 31, 2023 Project Contractual amount Prior years (1) 2022 2023 Cumulated cashed in 2024 and beyond Amounts decommitted Status C-Cathez C-Cathez C-Cathez CAR T-cell THINK CYAD01 - Deplethink CYAD02 - Cycle1 CwalityCAR CYAD-101 Immunicy New engagers 910 1,020 2,500 2,000 3,496 2,492 3,538 2,102 3,300 3,394 1,095 25,847 910 1,020 2,500 2,000 3,496 2,070 2,246 948 2,195 1,697 — 19,082 — — — — — — 222 1,113 775 348 — 2,458 — — — — — — — — 330 — — 330 910 1,020 2,500 2,000 3,496 2,070 2,468 2,061 3,300 2,045 — 21,870 — — — — — — — — — 1,349 — 1,349 — Exploitation — Exploitation — Exploitation — Exploitation — Exploitation 421 Exploitation 1,071 Exploitation 41 Exploitation — Exploitation — Research 1,095 Exploitation 2,628 Amount reimbursed (cumulative) 810 306 725 140 175 40 49 — — — — 2,245 (1)Cumulated cashed in amount on RCAs, related to prior years, has been reduced by €0.3 million compared to 2022 as this amount, after the closing of the convention in 2023, has been considered as covering the grant received from the regional government (contract numbered 8516), not referring to RCAs and not subject to reimbursement. The convention 8516 signed in 2021 had two components: RCA and other grant not referring to RCAs and not subject to reimbursement. Regarding active contracts (in exploitation or research status): The contract 5915 has the following specific characteristics: • • • • • • Funding by the Region covers 70% of the budgeted project costs; Certain activities have to be performed within the Region; In case of an out-licensing agreement or a sale to a third party, the Group will have to pay 10% of the price received (excl. Of VAT) to the Region; Sales-independent reimbursements, sales-dependent reimbursements, and amounts due in case of an out-licensing agreement or a sale to a third party, are, in the aggregate, capped at 100% of the principal amount paid out by the Region; Sales-dependent reimbursements payable in any given year can be set-off against sales- independent reimbursements already paid out during that year; The amount of sales-independent reimbursement and sales-dependent reimbursement may possibly be adapted in case of an out-licensing agreement, a sale to a third party or industrial use of a prototype or pilot installation, when obtaining the consent of the Walloon Region to proceed thereto. The RCA liability associated to the contract 5915 amounted to €0.1 million. The other contracts have the following specific characteristics: • • • • • Funding by the Region covers from 45% to 70% of the budgeted project costs; Certain activities have to be performed within the European Union; Sales-independent reimbursements represent in the aggregate 30% of the principal amount; Sales-independent reimbursements and sales-dependent reimbursements are, in the aggregate (including the accrued interests), capped at 200% of the principal amount paid out by the Region; Interests (at Euribor 1 year (as applicable on the first day of the month in which the decision to grant the relevant RCA was made + 100 basis points) accrue as of the 1st day of the exploitation phase; 1 28 2023 Annual Report • • The amount of sales-independent reimbursement and sales-dependent reimbursement may possibly be adapted in case of an out-licensing agreement, a sale to a third party or industrial use of a prototype or pilot installation, when obtaining the consent of the Region to proceed thereto. In case of bankruptcy, the research results obtained by the Group under those contracts are expressed to be assumed by the Region by operation of law. The RCA liability associated to the other contracts amounted to €4.8 million, which mainly incorporate the sales-independent reimbursements for €4.8 million and the sales-dependent reimbursements for €0.0 million. The table below summarizes, in addition to the specific characteristics described above, certain terms and conditions for the recoverable cash advances: Contract number Research phase Percentage of total project costs Turnover- dependent reimbursement Turnover-independent reimbursement Interest rate accrual Amounts due in case of licensing (per year) resp. Sale (€’000) 5915 6633 7027 7502 7685 8087 8088 1910028 8212 8436 01/08/08- 30/04/11 01/05/11- 30/11/12 01/11/12- 31/10/14 01/12/15- 30/11/18 01/01/17- 31/12/19 01/05/19- 30/06/21 01/05/19- 31/12/21 06/06/19- 05/06/22 01/01/20- 30/06/23 01/11/20- 31/12/23 70% 60% 50% 45% 45% 45% 45% 45% 45% 45% 5.00% €40k in 2012 and €70k each year after 0.27% 0.33% 0.19% 0.33% 0.22% 0.21% 0.01% 0.46% 0.32% From €10k to €51k starting in 2013 until 30% of advance is reached From €25k to €125k starting in 2015 until 30% of advance is reached From €20k to €50k starting in 2019 until 30% is reached. From €35k to €70k starting in 2019 until 30% is reached. From €20k to €61k starting in 2022 until 30% is reached From €25k to €74k starting in 2022 until 30% is reached From €21k to €41k starting in 2022 until 30% is reached From €33K to €99K starting in 2024 until 30% is reached From €20K to €61K starting in 2024 until 30% is reached N/A 10% with a minimum of 100/Y Starting 01/06/13 Starting 01/01/15 Starting 01/12/19 Starting 01/01/21 Starting 01/07/22 Starting 01/01/22 Starting 06/06/22 Starting 01/07/23 Starting 01/01/24 N/A N/A N/A N/A N/A N/A N/A N/A N/A 5.17. Other non-current liabilities (€'000) Onerous contracts - non-current liabilities Other non-current liabilities Total Other non-current liabilities As at December 31, 2023 2022 71 1,567 1,638 124 134 258 As of December 31, 2022, the Group recorded a provision for onerous contracts for a total amount of €2.2 million in order to cover the contractual obligations, mainly on clinical activities follow-up and studies closing costs, after the Group’s decision in the fourth quarter of 2022, to discontinue the development of its remaining clinical programs CYAD-02, CYAD-101 and CYAD-211. As of December 31, 2023, €2.1 million of the provision has been used during the year 2023, in line with the current portion of the provision booked as of December 31, 2022, (see note 5.18) and the Group recorded an additional provision for €0.1 million, such as the remaining provision to cover the contractual obligations associated to clinical activities follow-up and studies closing costs reached an amount of €0.2 million. The non-current portion of this provision as of December 31, 2023 amounts to €0.1 million. The current portion of the provision is €0.1 million as of December 31, 2023 (see note 5.18). As of December 31, 2023, the remaining non-current liability is €0.1 million. The Group has considered an other non-current liabilities of €1.5 million related to potential repayment due by the Group taking into account the relevant probabilities of the related income. 1 29 5.18. Trade payables and other current liabilities (€'000) Total Trade payables Social security Payroll accruals Onerous contracts - current liabilities Other current grant liabilities Other current liabilities Total Other current liabilities Total Trade payables and other current liabilities Trade payables 2023 Annual Report As at December 31, 2023 2022 1,243 98 398 143 80 448 1,167 2,410 4,752 94 1,294 2,113 889 710 5,100 9,852 Trade payables are non-interest-bearing liabilities and are normally settled on 90-day terms. Their decrease is mainly attributable to the timing of the expenses and the related payments combined with a decrease of activities after the sale of the Group's Cell Therapy Manufacturing Unit (CTMU) activities and the strategic shift from an organization focused on clinical development to one prioritizing R&D discovery and the monetization of its IP portfolio through partnerships, collaborations and license agreements through the second semester of the year 2022. The Group recognized estimated accruals for invoices to receive based on estimated amounts of rendered services or delivered goods during the year 2023 but not yet invoiced as per December 31, 2023 for an amount of approximately €0.7 million. Other current liabilities As of December 31, 2023, the decrease on social security and payroll accruals of €0.9 million compared to December 31, 2022 is mainly related to the headcount reduction in 2022 and 2023. As of December 31, 2022, the Group recorded a provision for onerous contracts, refer to note 5.17. The remaining current portion of the provision is €0.1 million as of December 31, 2023 The other current liabilities attached to grants is mainly explained by the excess of cash proceeds compared to the eligible expenses. The decrease compared to year-end 2022 is mainly related to the conventions 8212 and 8436 due to eligible expenses subsidized by the convention recognized in 2023. Other current liabilities decreased by €0.3 million, which is mainly explained by a decrease on withholding taxes due to timing of the related payments and headcount reduction in 2022 and 2023. Other current liabilities also include €0.2 million contract liabilities on two specific customers contracts (€ 0.2 million end of 2022) No discounting was performed to the extent that the amounts do not present payments terms longer than one year at the end of each financial year presented. 5.19. Financial liabilities 5.19.1. Maturity analysis The table below analyses the Group’s non-derivative financial liabilities into relevant maturity groupings based on the remaining period at the statement of financial position date to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows, except for advances repayable which are presented at amortized cost. Contingent consideration liability has not been disclosed 1 30 in the table below, because as of statement of financial position date, it does not meet the definition of a contractual obligation. Commitments relating to contingent consideration are detailed in the disclosure note 5.34.1. 2023 Annual Report Financial liabilities reported as at December 31, 2023: (€'000) As at December 31, 2023 Lease liabilities (undiscounted) Advances repayable Trade payables Total financial liabilities Financial liabilities reported as at December 31, 2022: (€'000) As at December 31, 2022 Lease liabilities (undiscounted) Advances repayable Trade payables Total financial liabilities Total Less than one year One to five years More than five years 1,445 4,871 1,243 7,559 235 366 1,243 1,844 693 1,315 — 2,008 517 3,190 — 3,707 Total Less than one year One to five years More than five years 259 5,021 4,752 10,032 141 437 4,752 5,330 118 1,277 — 1,395 — 3,307 — 3,307 5.19.2. Changes in liabilities arising from financing activities The change in lease liability balances is detailed as follows: LEASES FINANCIAL LIABILITY ROLL FORWARD (€'000) Opening balance at January 1, New leases Payments Remeasurement Closing balance at December 31, As at December 31, 2023 2022 255 952 (145) (4) 1,058 2,632 170 (896) (1,651) 255 New leases 2023 are mainly related to lease agreement for the Group’s new headquarter (Dumont 9 building in Mont-Saint-Guibert, Belgium). As of December 31, 2022, the remeasurement of the lease liabilities is mainly driven by the early termination of the leases on properties during the fourth quarter of 2022. The change in recoverable cash advance liability balances is detailed as follows: RECOVERABLE CASH ADVANCE LIABILITY ROLL FORWARD (€'000) Opening balance at January 1, Repayments New Liability component Remeasurement Closing balance at December 31, As at December 31, 2023 2022 5,021 (320) 243 (73) 4,871 6,213 (230) 485 (1,447) 5,021 1 31 2023 Annual Report The RCAs are initially recognized as a financial liability at fair value, calculated based on present value of future repayment of grants (using initial effective discount rates ranging between 0% and 7% for the fixed part and between 13% to 25% for the variable part, depending on RCAs listed in note 5.16), determined as per IFRS 9. The benefit (RCA grant component) consisting in the difference between the cash received (RCA proceeds) and the financial liability’s fair value (RCA liability component) is treated as a government grant in accordance with IAS 20. The RCAs liability component (RCA financial liability) is subsequently measured at amortized cost using the cumulative catch-up approach under which the carrying amount of the liability is adjusted to the present value of the future estimated cash flows (future estimated cash flow are measured by the management using same key assumptions than for the impairment testing in note 5.6.2). The resulting adjustment is recognized within profit or loss (note 5.2.12). The change in the recoverable cash advances liability at the statement of financial position date mainly reflects both the new grants received in current year as well as the remeasurement of the liability at amortized cost, based on the Group’s updated business plan and related cash flow projections (see note 5.28). The year-end balance also captures the repayments of contractual turnover independent lump sums to the Walloon Region. As documented in the note 5.6.2, at December 31, 2022, Management had to conclude that the possibility of any cash flow, associated with CAR T-cell and NKG2D-based therapies were remote and thus the fair value of the sales dependent liability is estimated to be zero, resulting remeasurement gain of €1.4 million. As of December 31, 2023, Management has determined that there have been no event that increase the probability of revenue, indicating that the probability is more than remote, such as there is no change in the fair value of the sales dependent liability. 5.20. Financial instruments 5.20.1. Financial instruments not reported at fair value on statement of financial position The carrying and fair values of financial instruments that are not reported at fair value in the consolidated financial statements were as follows for the current and comparative periods: (€'000) Financial Assets (‘Amortized cost’ category) within: Other non-current assets Trade receivables and other current assets Cash and cash equivalents Total As at December 31, 2023 2022 137 457 7,004 7,598 264 1,118 12,445 13,827 For the above-mentioned financial assets, the carrying amount reported as per December 31, 2023, is a reasonable approximation of their fair value. (€'000) Financial Liabilities (‘Financial liabilities at amortized cost’ category) within: Lease liabilities RCAs liability Trade payables Total As at December 31, 2023 2022 1,058 4,871 1,243 7,172 255 5,021 4,752 10,028 1 32 2023 Annual Report For the above-mentioned financial liabilities, the carrying amount reported as per December 31, 2023, is a reasonable approximation of their fair value except for RCAs that are valued at fair value at around 3.8 million euro. 5.20.2. Financial instruments reported at fair value on statement of financial position Contingent consideration and other financial liabilities are reported at fair value in the statement of financial position using Level 3 fair value measurements for which the Group developed unobservable inputs. After initial recognition, contingent consideration liabilities are re-measured at fair value with changes in fair value recognized in profit or loss in accordance with IFRS 3. The change in the balance is detailed as follows: (€'000) Opening balance Contingent consideration at January 1, Milestone payment Fair value adjustment Closing balance Contingent consideration at December 31, As at December 31, 2023 2022 — — — — 14,679 — (14,679) — The contingent consideration and other financial liabilities refer to the acquisition of the Group’s immuno- oncology platform and corresponds to the fair value of the potential future payments due to Celdara Medical, LLC and Dartmouth College (as disclosed within note 5.34.1). The valuation is prepared by the Finance Team on a quarterly basis and reviewed by the Management. The Management’s key assumptions about projected cash flows when determining fair value less costs to sell are the same key assumptions than for impairment testing purposes (see note 5.6.2). There has not been any change in valuation technique in 2023 compared to 2022. As documented in the note 5.6.2, at December 31, 2022, Management had to conclude on the full reversal of the contingent consideration and other financial liabilities associated the potential future payments due to Celdara Medical, LLC and Dartmouth College associated to the Group’s immuno-oncology platform at December 31, 2022. This accounting conclusion, which reflected a picture of the situation at December 31, 2022, doesn’t affect the Management’s commitment to continue the exploitation of these IPs in its new strategy. As soon as a future event (such as a firm sublicense or collaboration contract) will increase the probability of revenue, indicating that the probability is more than remote, the Group will reassess the contingent consideration and other financial liabilities proportionally to the revised fair value of such consideration. As of December 31, 2023, Management has determined that there has been no event that increase the probability of revenue, indicating that the probability is more than remote, such as there is no change in the fair value of the contingent consideration. 5.21. Income taxes The Group reports income taxes in the income statement as detailed below: INCOME TAX EXPENSE IN PROFIT OR LOSS (€'000) Current tax (expense) / income Deferred tax (expense) / income Total income tax expense in profit or loss For the year ended December 31, 2023 2022 63 — 63 (65) — (65) 1 33 The Group has a history of losses. In 2023, the Group was eligible for tax consolidation regarding the fiscal year 2022 and recognized a current tax income. The following table shows the reconciliation between the effective and theoretical income tax at the nominal Belgian income tax rate of 25.00% for the years 2023 and 2022: 2023 Annual Report EFFECTIVE INCOME TAX RECONCILIATION (€'000) Loss before tax Permanent differences Tax disallowed expenses Share-based payment Nominal tax rate Income tax at nominal tax rate1 Deferred tax assets not recognized Effective tax expense Effective tax rate For the year ended December 31, 2023 2022 (8,511) (40,870) 88 1,231 25.00% 1,872 (1,872) — 0% 1,248 1,624 25.00% 9,500 (9,565) (65) 0% 1 The difference in foreign tax rate in the US (25.80%) compared to the Belgian rate (25.00%) is not distinctively disclosed in this table due to non-materiality of the operations of the Group’s subsidiary Celyad Inc. As having not yet reached the commercialization step, the Group accumulates tax losses that are carried forward indefinitely for offset against future taxable profits of the Group. Significant uncertainty exists however surrounding the Group’s ability to realize taxable profits in a foreseeable future leading the Group to not recognizing any net deferred tax assets in its statements of financial position. Deferred tax assets and liabilities are detailed below by nature of temporary differences for the current year: DEFERRED TAX ASSETS AND LIABILITIES, PER TAX BASES (€'000) Intangibles assets Recoverable cash advances liability Contingent consideration liability Employee Benefits liability Other temporary difference Tax-losses carried forward Unrecognized Gross Deferred Tax assets/(liabilities) Netting by tax entity Unrecognized Net Deferred Tax assets/(liabilities) For the year ended December 31, 2023 Liabilities Net Assets — 1,222 — — 68 82,867 84,157 (90) 84,067 (90) — — — — — (90) 90 — (90) 1,222 — — 68 82,867 84,067 — 84,067 Deferred tax assets and liabilities are detailed below by nature of temporary differences for the prior year: DEFERRED TAX ASSETS AND LIABILITIES, PER TAX BASES (€'000) Intangibles assets Recoverable cash advances liability Contingent consideration liability Employee Benefits liability Other temporary difference Tax-losses carried forward Unrecognized Gross Deferred Tax assets/(liabilities) Netting by tax entity Unrecognized Net Deferred Tax assets/(liabilities) For the year ended December 31, 2022 Liabilities Net Assets — 1,226 — 3 272 78,332 79,833 (216) 79,617 (216) — — — — — (216) 216 — (216) 1,226 — 3 272 78,332 79,617 — 79,617 The Group’s main deductible tax base relates to tax losses carried forward, which have indefinite term under both BE and US tax regimes applicable to its subsidiaries. The remaining temporary differences refer to differences between IFRS accounting policies and local tax reporting policies. 1 34 The change in the Group’s net deferred tax asset balance is detailed below: UNRECOGNIZED DEFERRED TAX ASSET BALANCE ROLL FORWARD (€'000) Opening balance at January 1, Temporary difference creation or reversal Change in Tax-losses carried forward Change in US tax rate applicable Closing balance at December 31, 2023 Annual Report For the year ended 2023 2022 79,617 (85) 4,535 — 84,067 74,562 (606) 5,661 — 79,617 The net increase in the balance mainly relates to the additional losses reported for the current year. As of December 31, 2023, the Group has a total accumulated tax losses of €316.0 million, which generate unrecognized deferred tax assets, not subject to expiration. 5.22. Other reserves (€’000 ) Balance as at January 1, 2022 Vested share-based payments Currency Translation differences subsidiaries Balance as at December 31, 2022 Vested share-based payments Currency Translation differences subsidiaries Balance as at December 31, 2023 Share based payment reserve Other equity reserve from conversion of convertible loan in 2013 Currency Translation Difference Total 17,975 1,624 — 19,599 935 — 20,534 16,631 — — 16,631 — — 16,631 (1,434) — 4 (1,430) — (1) (1,431) 33,172 1,624 4 34,800 935 (1) 35,734 The amount of €16.6 million has been accounted for as other reserves following the conversion of the loans E, F, G and H on May 31, 2013, as a legacy IFRS adjustment on fully settled contribution-in-kind convertible loans. 5.23. Revenue (€'000) Out-licensing revenue Other revenue Total For the year ended December 31, 2023 2022 — 102 102 — — — The Group’s license and collaboration agreements have generated no revenue for the year ended December 31, 2023 similar to the year ended December 31, 2022. The Group did not enter into any new license agreements for the 12-month period ended December 31, 2023. The Group does not expect to generate material revenue unless and until the Group concludes partnerships with outside parties around the licensing of the patents around allogeneic CAR T-cell therapies and NKG2D- based therapies. The other revenue recognized for the year ended December 31, 2023, is part of contract with customer to sell C-Cathez medical devices. 1 35 5.24. Research and Development expenses The following table is a summary of manufacturing expenses, clinical, quality and regulatory expenses and other research and development expenses, which are aggregated and presented as research and development expenses in the Group’s consolidated financial statements. 2023 Annual Report (€'000) Employee expenses Preclinical study costs IP filing and maintenance fees Depreciation Rent and utilities Share-based payments Travel & Living Clinical study costs Process development and scale-up Consulting fees Others Total R&D expenses For the year ended December 31, 2023 2022 1,923 766 746 721 286 141 75 (156) — — 100 4,602 9,062 1,233 831 1,231 610 425 126 4,280 396 320 415 18,928 The changes in the R&D expenses are mainly driven by: • • • • • • The decrease of employee expenses mainly related to headcount reduction through the year ended December 31, 2022 to support the Group’s reorganization around preclinical and clinical programs; The decrease on clinical study costs mainly due to the Group’s decision to discontinue the development of its remaining clinical programs CYAD-02, CYAD-101 and CYAD-211 taken in December 2022 for which a provision had been recorded to cover for contractual obligations through 2023 for an amount of €2.1 million (whose €2.1 million were used during the year 2023). In relation to the closing activities of the clinical studies through the year 2023, additional savings have been recognized mainly associated to the closing of sites, central labs and clinical research organization (“CRO”); The decrease of preclinical activities after the Group’s decision to adopt and implement over the last few months of the year 2022 the new business strategy to focus on early stage discovery research in areas of expertise where it can leverage the differentiated nature of its platforms; The decrease of the expenses associated with the share-based payments (non-cash expenses) related to the warrants plan offered to the employees, managers and directors, mainly related to the decrease in the fair market value of stock options issued over the previous years and the headcount reduction through the year ended December 31, 2022, partly compensated by the accelerated vesting costs recognized in 2023 on warrant plans 2023, 2022 and 2021; The decrease in depreciation and rent and utilities due to sale of the assets associated to the Manufacturing Business Unit included facilities and equipment, office furniture, leasehold improvements, and laboratory equipment in September 2022 and to the sale of certain fixed assets of the Group to Cellistic as of January 1, 2023, mainly associated to the Belin 2 building for which the Group executes short term lease (less than 12 months) of a part of Belin 2 building from Cellistic before moving to the new Group’s headquarter during the second semester of 2023 (see note 5.1); and The decrease of process development costs, consulting fees and other costs associated with the manufacturing activities after the Group’s decision to adopt and implement over the last few months of the year 2022 the new business strategy to focus on early stage discovery research and discontinue the development of clinical programs and associated manufacturing activities. 1 36 5.25. General and Administrative expenses (€'000) Employee expenses Consulting fees Share-based payments Insurances Communication & Marketing Rent Depreciation Travel & Living Post-employment benefits Other 2023 Annual Report For the year ended December 31, 2023 2022 1,861 1,623 794 989 215 106 73 47 11 309 6,028 3,801 2,870 1,199 1,967 239 109 209 115 (55) 92 10,546 Total General and Administration expenses The changes in the General and Administrative expenses are mainly driven by: • • • • The decrease of employee expenses mainly related to headcount reduction and management changes through the year ended December 31, 2022 to support the Group’s reorganization; The decrease in insurances costs (D&O insurance principally) due to additional expenses recognized during the first semester of the year 2022, associated to previous capital raise which occurred at year-end 2021 and a decrease of the insurance following the Group's delisting from the Nasdaq market; The decrease on consulting fees mainly associated with the reversal of transaction costs which occurred at year-end 2022, for an amount of €0.6 million, mainly linked to the LPC equity facility not subject to further capitalization and not available to be offset against a future capital raise as the equity facility expired early January 2023. In addition, the Nasdaq delisting and the reorganization of the Group has also led to a reduction of the consulting fees (legal fees associated to HR matters, audit fees, IT consultancy...); and The decrease of the expenses associated with the share-based payments (non-cash expenses) related to the warrants plan offered to the employees, managers and directors, mainly related to the decrease in the fair market value of stock options issued over the previous years and the headcount reduction through the year ended December 31, 2022, partly compensated by the accelerated vesting costs recognized in 2023 on warrant plans 2023, 2022 and 2021. 5.26. Depreciation and amortization (€'000) Depreciation of property, plant and equipment Amortization of intangible assets Total depreciation and amortization For the year ended December 31, 2023 2022 285 509 794 827 613 1,440 The amortization expenses decreased compared to the year 2022 mainly due to end of depreciation of tangible assets and timing of new acquisitions related to new corporates offices and laboratories located in Dumont 9, mainly through the second semester of 2023, combined with a decrease on amortization of intangible assets due to the impairment of the remaining value on the Horizon Discovery’s shRNA platform intangible asset as of December 31, 2022. The depreciation of property, plant and equipment is mainly driven by the amortization expenses relating to right-to-use leased assets and new leasehold improvements and 1 37 laboratories equipment associated to the Group's new offices located in Dumont 9. See notes 5.2.28, 5.6, 5.7 and 5.30. 2023 Annual Report 5.27. Employee benefit expenses (€'000) Salaries, wages and fees Executive Committee compensation Share-based payments Social security Post-employment benefits Hospitalization insurance Other benefit expenses Total Employee expenses For the year ended December 31, 2023 2022 1,544 1,650 935 455 75 52 19 4,730 7,470 3,599 1,624 1,237 147 226 128 14,432 Total employee expenses decreased fees in 2023 compared expenses decreased compared to 2022, which reflects the impact of the reorganization of the Group (including one-off expenses), consistent with a total staff full time equivalent (“FTE”) reduction of 73.7% for the year 2023. The decrease of the Executive Committee compensation[DA1] [DG2] is due to the its reorganization through the year 2022 (including one-offs expenses).) and through the first semester of the year 2023. This impact of FTE reduction also reflects the decrease in post-employment benefits, hospitalization insurance and other benefit expenses. to 2022. Salaries, wages and The decrease of the expenses associated with the share-based payments (non-cash expenses) related to the warrants plan offered to the employees, managers and directors, mainly related to the decrease in the fair market value of stock options issued over the previous years and the headcount reduction through the year ended December 31, 2022, partly compensated by the accelerated vesting costs recognized in 2023 on warrant plans 2023, 2022 and 2021. FTE Research & Development General and Administration Total FTE 5.28. Other income and other expenses Other income (€'000) Grant income (RCAs) Grant income (Other) Remeasurement of RCAs R&D tax credit Gain on sales of Property, plant and equipment Gain on sale of CTMU activities Remeasurement of Leases Other Total Other Income For the year ended December 31, 2023, other income is mainly related to: For the year ended December 31, 2023 2022 16.1 8.5 24.6 82.6 11.0 93.6 For the year ended December 31, 2023 2022 565 331 73 128 1,087 — — 150 2,334 1,137 910 1,447 462 — 5,187 169 48 9,360 1 38 2023 Annual Report • Grant income (RCAs): additional grant income has been recognized in 2023 on grants in the form of recoverable cash advances (RCAs) for contracts numbered 8212 and 8436. In accordance with IFRS standards, the Company has earned grants for the period amounting to €0.8 million, out of which €0.2 million is accounted for as a financial liability and the remaining €0.6 million as a grant income. The decrease compared to December 31, 2022, is mainly associated with the decrease on additional grant income recognized on the conventions due to advancement of the subsidized programs and closing of conventions in 2023; • Grant income (Others): additional grant income has been recognized in 2023 on grants received from the regional government (contract numbered 8516), not referring to RCAs and not subject to reimbursement. The convention has been closed in 2023 which explains the decrease of additional grant income recognized on this convention compared to December 31, 2022; • • R&D tax credit: the current year income decreased compared to December 31, 2022, due to lower eligible expenses on clinical activities and prioritization of discovery research in areas of expertise where it can leverage the differentiated nature of the Group’s platforms; The decrease on the remeasurement income on the recoverable cash advances (RCAs) is mainly related to the Group decision to discontinue its remaining clinical programs in 2022 (see note 5.19.2); • Gain on sale of Property, plant & equipment results from the terms of the asset purchase agreement between Celyad Oncology and Cellistic under which Cellistic agreed to acquire certain fixed assets of the Group for a total consideration of €1.3 million, effective as of January 1, 2023 (see note 5.1). The book value of the assets sold to Cellistic was €0.2 million. As of December 31, 2022, in accordance with IFRS 5, Non-current Assets Held for Sale and Discontinued Operations, these fixed assets had been classified as non-current assets held for sale and presented in the consolidated statement of financial position as a line item entitled “Assets held for sale”; and • Other income associated to cross-charge of expenses to Cellistic associated to the management of the transition phase before moving of the Group’s to its new headquarter for €0.2 million (see note 5.1). In addition, and for comparison purpose, for the year 2022, other income was also related to: • Gain on sale of CTMU activities results from the terms of the asset purchase agreement between Celyad Oncology and Cellistic under which Cellistic agreed to acquire Celyad Oncology’s Manufacturing Business Unit for a total consideration of €6.0 million (see note 5.1). The book value of assets sold to Cellistic was €0.6 million (see note 5.7) and allocated goodwill totaled €0.2 million (see note 5.6.1); and • Remeasurement of leases: results from the difference between the decrease in the lease liability and the decrease in the right-of-use asset both primarily driven by the termination of leases associated to CTMU facilities and the termination of the lease associated to the previous corporate offices of the Group before their relocation in 2023. 5.29 Section left blank 1 39 5.30. Leases Amounts recognized in the consolidated statements of financial position 2023 Annual Report (€’000) Property, Plant and Equipment owned (excluding right-of-use assets) Right-of-use assets Total Property, Plant and Equipment As of December 31, 2023 2022 873 957 1,830 86 223 309 1 40 The consolidated statements of financial position shows the following amounts relating to leases for which the Group is a lessee: 2023 Annual Report (€’000) Cost At January 1, 2022 Additions Disposals At December 31, 2022 Additions Disposals Transfers At December 31, 2023 Accumulated depreciation At January 1, 2022 Depreciation charge Disposals At December 31, 2022 Depreciation charge Disposals Transfers At December 31, 2023 Net book value Cost Accumulated depreciation At December 31, 2022 Cost Accumulated depreciation At December 31, 2023 Property Vehicles Equipment Total 3,025 146 (3,171) — 947 — — 947 (1,281) (439) 1,721 — (83) — — (83) — — — 947 (83) 864 454 7 (131) 331 5 (167) — 169 (241) (105) 98 (248) (53) 164 — (137) 331 (248) 83 169 (137) 32 541 — — 541 — (112) (235) 194 (283) (118) — (401) (79) 112 235 (133) 541 (401) 140 194 (133) 61 4,020 153 (3,302) 872 952 (279) (235) 1,310 (1,805) (663) 1,819 (649) (215) 276 235 (353) 872 (649) 223 1,310 (353) 957 The additions for the year 2023 are mainly related to the lease agreement for the Group’s new headquarter (Dumont 9 building in Mont-Saint-Guibert, Belgium). This lease commenced from April 1, 2023. See note 5.1. Other movements for the year 2023 are mainly related to disposals associated to the termination of lease agreements on company cars and laboratory equipment. The disposals for the year 2022 were mainly related to the termination of the lease agreement associated to the CTMU facilities and the termination of the lease agreement for previous corporate offices before their relocation in 2023. 1 41 Amounts recognized in the consolidated statements of comprehensive loss The consolidated statements of comprehensive loss show the following amounts relating to leases: 2023 Annual Report (€’000) Depreciation charge of right-of-use assets Property Vehicles Equipment Interest on lease liabilities (including in Financial expenses)1 Interest on sublease receivable (including in Financial income)1 Variable lease payments not included in the measurement of lease liabilities Remeasurement of Leases Expenses relating to short-term leases and leases of low-value assets Total expenses related to leases 1 Interests on leases are presented as operating cash flow. For the year ended December 31, 2023 2022 83 53 79 56 — — — 328 599 439 105 118 150 (11) — (169) 126 758 The decrease in the expenses related to leases, compared to the year ended December 31, 2022, primarily results from termination of leases associated to CTMU facilities and the termination of the lease associated to the previous corporate offices (Belin, 2) in 2022 before their relocation in 2023. As from January 1, 2023, until the date the Company moved into the new corporate offices (Dumont 9), the Company leased its previous facilities (Belin, 2) from Cellistic, under a new lease contract for an amount of €0.3 million, which explains the increase in the expenses relating to short-term leases compared to the year 2022 (see note 5.1). Total cash outflows for leases (€’000) Cash outflow for leases (IFRS16) Cash outflow for interest on lease liabilities Cash outflow for short-term leases and leases of low-value assets Total cash outflow for leases For the year ended December 31, 2023 2022 145 56 328 529 896 150 126 1,172 The decrease in total cash outflow for lease primarily results from termination of leases associated to CTMU facilities and the termination of the lease associated to the previous corporate offices (Belin, 2) in 2022 before their relocation in 2023 through a less expensive new lease agreement and from the termination of lease associated to laboratory equipment in 2023. 1 42 5.31. Finance income and expenses (€’000) Interest finance leases Interest on overdrafts and other finance costs Interest on RCAs Foreign Exchange differences Finance expenses Finance income on the net investment in lease Interest income bank account Foreign Exchange differences Other financial income Finance income Net Financial result 2023 Annual Report For the year ended December 31, 2023 2022 56 13 13 2 84 — 30 — — 30 (54) 150 33 14 — 198 11 1 173 — 185 (13) The decrease of the financial income of €0.2 million refers mainly to the decrease on the gain on foreign exchange differences due to the higher revaluation of the USD in 2022. The decrease of the financial expenses of €0.1 million refers mainly to interest expenses associated to lease agreements after termination of the previous lease agreements associated to CTMU facilities and previous corporate offices which occurred through the second semester of 2022, partly compensated by new lease agreement for new corporate offices after the relocation in 2023 (see notes 5.1 and 5.30). 5.32. Loss per share The loss per share is calculated by dividing loss for the year by the weighted average number of ordinary shares outstanding during the period. As the Group is incurring net losses, all of the outstanding warrants have an anti-dilutive effect. As such, there is no difference between the basic and the diluted earnings per share. In case the warrants would be included in the calculation of the loss per share, this would decrease the loss per share. (€’000) Loss of the year attributable to Equity Holders Weighted average number of shares outstanding Earnings per share (non-fully diluted) in € Outstanding warrants 5.33. Contingent assets and liabilities As at December 31, 2023 (8,448) 25,721,950 (0.33) 3,038,305 2022 (40,935) 22,593,956 (1.81) 2,339,646 As described in note 5.2.5, the Group has to reimburse certain government grants received in the form of recoverable cash advances under certain conditions. For more information on the potential financial consequences of these exploitation decisions in terms of potential reimbursements and sales percentage fees to be paid to the Walloon Region, refer to note 5.16. In 2024, the Group will have to make exploitation decisions on the remaining RCA (agreement numbered 8436). 5.34. Commitments 5.34.1. Celdara Background In January 2015, the Group entered into an agreement with Celdara Medical, LLC, or Celdara in which the Group purchased all outstanding membership interests of OnCyte, LLC, or OnCyte. In connection with this transaction, the Group entered into an asset purchase agreement to which Celdara sold to OnCyte certain 1 43 data, protocols, regulatory documents and intellectual property, including the rights and obligations under two license agreements between OnCyte and The Trustees of Dartmouth College, or Dartmouth, related to the Group’s CAR T development programs. In March 2018, the Group dissolved the affairs of its wholly owned subsidiary OnCyte. As a result of the dissolution of OnCyte, all the assets and liabilities of OnCyte were fully distributed to the Group including its license agreement with Dartmouth. 2023 Annual Report Amended Asset Purchase Agreement In August 2017, the Group entered into an amendment to the asset purchase agreement described above. In connection with the amendment, the following payments were made to Celdara: (i) an amount in cash equal to $10.5 million, (ii) newly issued shares of Celyad valued at $12.5 million, (iii) an amount in cash equal to $6.0 million in full satisfaction of any payments owed to Celdara in connection with a clinical milestone related to the Group’s CAR T NKR-2 product candidate, (iv) an amount in cash equal to $0.6 million in full satisfaction of any payments owed to Celdara in connection with the Group’s license agreement with Novartis International Pharmaceutical Ltd., and (v) an amount in cash equal to $0.9 million in full satisfaction of any payments owed to Celdara in connection with the Group’s former license agreement with Ono Pharmaceutical Co., Ltd. Under the amended asset purchase agreement, the Group is obligated to make certain development-based milestone payments to Celdara up to $40.0 million, certain development-based milestone payments up to $36.5 million and certain sales-based milestone payments up to $156.0 million. The Group is required to make tiered single-digit royalty payments to Celdara in connection with the sales of CAR T products, subject to reduction in countries in which there is no patent coverage for the applicable product or in the event Celyad is required to secure licenses from third parties to commercialize the applicable product. The Group is also required to pay Celdara a percentage of sublicense income, including royalty payments, for each sublicense ranging from the mid-single digits to the mid-twenties, depending on which of a specified list of clinical and regulatory milestones the applicable product has achieved at the time the sublicense is executed. The Group is required to pay Celdara a single-digit percentage of any research and development funding received by us, not to exceed $7.5 million for each product group. The Group can opt out of the development of any product if the data does not meet the scientific criteria of success. The Group may also opt out of development of any product for any other reason upon payment of a termination fee of $2.0 million to Celdara. The Trustees of Dartmouth College (“Dartmouth”) As described above, as a result of the Group’s acquisition of all of the outstanding membership interests of OnCyte and the asset purchase agreement among the Group, Celdara and OnCyte, OnCyte became the Group’s wholly-owned subsidiary and acquired certain data, protocols, regulatory documents and intellectual property, including the rights and obligations under two license agreements between OnCyte and Dartmouth. The first of these two license agreements concerned patent rights related, in part, to methods for treating cancer involving chimeric NK and NKP30 receptor targeted therapeutics and T cell receptor-deficient T cell compositions in treating tumor, infection, GVHD, transplant and radiation sickness, or the CAR T License, and the second of these two license agreements concerned patent rights related, in part, to anti-B7-H6 antibody, fusion proteins and methods of using the same, or the B7H6 License. In August 2017, the Group and Dartmouth entered into an amendment agreement in order to combine its rights under B7H6 Agreement with its rights under the CAR T License, resulting in the termination of the B7H6 License, and in order to make certain other changes to the agreement. In connection with the amendment, the Group paid Dartmouth a non-refundable, non-creditable amendment fee in the amount of $2.0 million in 2017. Under the amended license agreement, Dartmouth granted the Group an exclusive, worldwide, royalty-bearing license to certain know-how and patent rights to make, have made, use, offer for sale, sell, import and commercialize any product or process for human therapeutics, the manufacture, use or sale of which, is covered by such patent rights or any platform product. Dartmouth reserves the right to 1 44 2023 Annual Report use the licensed patent rights and licensed know-how, in the same field, for education and research purposes only. The patent rights included in the amended license agreement also include the patents previously covered by the B7H6 License. In consideration for the rights granted to the Group under the amended license agreement, the Group is required to pay to Dartmouth an annual license fee as well as a low single-digit royalty based on annual net sales of the licensed products by the Group, with certain minimum net sales obligations beginning April 30, 2024 and continuing for each year of sales thereafter. Under the amended license agreement, in lieu of royalties previously payable on sales by sublicensees, the Group is required to pay Dartmouth a percentage of sublicense income, including royalty payments, (i) for each product sublicense ranging from the mid-single digits to low-single digits, depending on which of a specified list of clinical and regulatory milestones the applicable product has achieved at the time the sublicense is executed and (ii) for each platform sublicense in the mid-single digits. Additionally, the agreement requires that the Group exploits the licensed products, and the Group has agreed to meet certain developmental and regulatory milestones. Upon successful completion of such milestones, the Group is obligated to pay to Dartmouth certain clinical and regulatory milestone payments up to an aggregate amount of $1.5 million and a commercial milestone payment in the amount of $4.0 million. The Group is responsible for all expenses in connection with the preparation, filing, prosecution and maintenance of the patents covered under the agreement. As further amended in December 2021, this agreement allows Dartmouth to terminate the amended license after April 30, 2026, extended from the prior date of April 30, 2024, in the event that Celyad fails to meet the specified minimum net sales obligations for any year ($10 million during first year of sales, $40 million during the second year of sales and $100 million during the third year of sales and every year of sales thereafter), unless Celyad pays to Dartmouth the royalty Celyad would otherwise be obligated to pay had Celyad met such minimum net sales obligation. Dartmouth may also terminate the license if Celyad fails to meet a milestone within the specified time period, unless Celyad pays the corresponding milestone payment. In connection with the December 2021 amendment, the Group agreed to certain protective provisions of any sublicenses and paid Dartmouth a non-refundable, non-creditable amendment fee and an additional non- refundable, non-creditable sublicense fee to be paid on an annual basis. In accordance with IFRS 3, these contingencies are recognized on the statement of financial position at year-end, on a risk-adjusted basis (see note 5.20.2). 5.34.2. Horizon Discovery / PerkinElmer In April and June 2018, the Group signed two research and development collaboration and license agreements with Horizon Discovery Group plc, or Horizon, to evaluate the utility of Horizon’s SMART vector shRNA reagents to reduce expression of one or more defined targets in connection with the development of the Group’s product candidates. The first agreement was focused on targets related to Group’s autologous CAR T candidate, CYAD-02. The second agreement was focused on targets related to its allogenic CAR T product candidate CYAD-211 and one pre-clinical allogenic product candidate not yet publicly announced, called CYAD-203. In December 2018, the Group exercised its option to convert the second agreement into an exclusive license agreement, in connection with which the Group paid Horizon an up-front payment of $1 million. In September 2019, the Group exercised its option to convert the first agreement into an exclusive license agreement, in connection with which the Group has paid Horizon an up-front payment of $0.1 million and an additional milestone of $0.1 million for the first IND filed by us for CYAD-02. In September 2020, the Group paid an additional milestone of $0.2 million for the first IND filed by the Group for CYAD-211. Under these exclusive license agreements combined, Horizon is eligible to receive additional milestone payments in development, regulatory and commercial milestone payments, in addition to low single digit royalties on net sales, subject to customary reductions. In December 2020, Horizon Discovery was acquired by PerkinElmer, Inc. (Horizon/PKI). 1 45 2023 Annual Report As previously disclosed in note 5.33.2 of the 2021 Annual Report, Horizon/PKI informed the Group they believe the Group is in material breach of these agreements as a result of certain disclosures the Group has made in connection with its obligations as a publicly traded company in the United States and Belgium, although they have not formally delivered to the Group a notice of material breach or termination. The Group believes any such assertion of material breach would be without merit and the Group would expect to vigorously defend any such notice of material breach. Any dispute under these agreements would be subject to arbitration in The Hague under the International Chamber of Commerce Rules. The Group is currently in discussions with Horizon about possible amendments to these agreements in connection with which the Group would retain freedom to operate under the in-licensed patents. Of note, the Group has filed patent applications which, if issued, would cover other aspects of the product candidates described above as well as products developed by third parties that deploy similar technology and targets. These patent applications encompass the downregulation of one or more of the targets covered under the Horizon/PKI agreements, the use of shRNA to downregulate such targets in immune cells and the combination of shRNAs with a chimeric antigen receptor in immune cells. The Group is also developing a second generation shRNA platform that does not incorporate any of the Horizon Discovery/Perkin Elmer, Inc. technology described above. The Group’s discontinued allogeneic CAR T product candidate, CYAD-101, does not incorporate any of the Horizon Discovery/Perkin Elmer, Inc. technology described above. 5.35. Related-party transactions 5.35.1. Remuneration of key management Key management consists of the members of the Executive Committee and the entities controlled by any of them. Number of Executive Committee members (€’000) Short term employee benefits[1] Post employee benefits Share-based compensation Other employment costs[2] Management fees Total benefits Executive Committee outstanding fees payables As at December 31, 2023 2022 5 7 For the year ended December 31, 2023 2022 963 20 413 40 987 2,423 273 2,294 53 790 143 1,200 4,480 781 (1) Include salaries, social security, bonuses, lunch vouchers (2) Company cars The decrease of the short term employees benefits and cumulative outstanding warrants as of December 31, 2023 is mainly due to the reorganization of the Executive Committee through the years 2022 and 2023. Number of warrants granted Number of warrants lapsed Cumulative outstanding warrants Exercised warrants 5.35.2. Transactions with non-executive directors (€'000) Share-based compensation Management fees Total benefits Non-executive directors outstanding fees payables As at December 31, 2023 2022 304,250 (33,000) 651,400 — 489,700 (127,250) 696,400 — For the year ended December 31, 2023 2022 163 250 413 49 230 382 612 93 1 46 2023 Annual Report As at December 31, 2023 2022 180,000 (20,000) — 320,000 40,000 (60,000) — 230,000 Number of warrants granted Number of warrants lapsed Number of exercised warrants Cumulative outstanding warrants 5.35.3. Transactions with shareholders There were no transactions with the Group’s shareholders, for 2023 or 2022. 5.36. Events after the close of the fiscal year There were no subsequent events that have occurred between year-end and the date when the financial statements were authorized by the Board for issue. 5.37. Statutory accounts as of December 31, 2023 and 2022 according to Belgian GAAP This section contains selected financial information, consisting of the balance sheet, income statement and certain notes, as derived from the statutory financial statements of Celyad Oncology SA as of and for the year ended December 31, 2023 (including comparative information as of and for the year ended December 31, 2022). These financial statements were prepared in accordance with the applicable accounting framework in Belgium and with the legal and regulatory requirements applicable to the financial statements in Belgium and are filed with the National Bank of Belgium. These statutory financial statements are approved by the Shareholders’ Meeting on May 6, 2024 and the statutory auditor has issued an unqualified audit opinion including emphasis of matter paragraph related to going concern with respect to these statutory financial statements. The full set of the statutory financial statements is available on the website of the National Bank of Belgium (www.nbb.be). 1 47 5.37.1. Balance Sheet (in €) ASSETS FIXED ASSETS II. Intangible fixed assets III. Tangible fixed assets Installations machinery and equipment Furniture and vehicles Leasing and similar rights Other fixed assets IV. Financial fixed assets CURRENT ASSETS VII. Amounts receivable within one year Trade debtors Others amounts receivable VIII. Amounts receivable more than one year Others amounts receivable IX. Investment X. Cash at bank and in hand XI. Deferred charges and accrued income TOTAL ASSETS CAPITAL AND RESERVES I. Capital Issued capital II. Share Premium V. Accumulated profits (losses) PAYABLES VIII. Amounts payable after more than one year Credit institutions; leasing and other similar obligations Other financial loans Other debts IX. Amounts payable within one year Current portion of amounts payable after one year Trade debts Suppliers Taxes; remunerations and social security costs Taxes Remunerations and social security costs Other amounts payable X. Accrued charges and deferred income TOTAL LIABILITIES 2023 Annual Report 2023 2022 1,109,208 29,638 934,831 187,863 66,637 61,380 618,951 144,739 13,883,669 2,847,398 456,711 2,390,687 2,778,707 2,778,707 4,000,000 2,997,458 1,260,106 14,992,877 8,216,155 32,948,801 32,948,801 — (24,732,646) 6,776,722 4,136,059 47,998 3,979,492 108,569 2,409,653 388,625 1,228,582 1,228,582 549,096 53,033 496,063 243,351 231,010 14,992,877 16,547,889 — 431,406 49,017 43,022 100,181 239,186 16,116,483 17,935,680 1,451,131 1,099,745 351,386 4,892,421 4,892,421 — 11,030,263 561,865 34,483,569 23,154,801 78,584,224 78,584,224 13,653,439 (69,082,863) 11,328,768 3,547,847 86,866 3,292,803 168,178 7,580,921 404,354 4,719,299 4,719,299 1,454,949 325,083 1,129,866 1,002,319 200,000 34,483,569 1 48 5.37.2. Income statement (in €) Operating income Turnover Capitalization of development costs Other operating income Non recurring operating income Operating charges Direct Material Services and other goods Remuneration; social security and pensions Depreciation of and other amounts written off formations expenses; intangible and tangible fixed assets (-) Write-downs on inventories, on orders in progress and on trade receivables (appropriations -; write-backs +) Other operating charges (-) Non recurring operating expenses Operating profit (loss) Financial income Income from current assets Other financial income Financial charges (-) Interest on financial debts Other financial charges Non-recurring financial charges Profit (loss) on ordinary activities before taxes (-) Income taxes (-) (+) Profit (loss) for the period available for appropriation 5.37.3. Notes Statement of intangibles assets (in €) Acquisition value at the end of the preceding period Movements during the period Acquisitions, included produced fixed assets Sale, transfer and withdraw Acquisition value at the end of the period Depreciation and amounts written down at end of the preceding period Movements during the period Recorded Sale, transfer and withdraw Depreciation and amounts written down at the end of the period Net book value at the end of the period 2023 Annual Report 2023 7,879,391 102,890 4,419,121 2,073,936 1,283,444 (17,416,548) (257,267) (8,725,449) (2,740,513) (4,532,791) (124,899) (1,023,037) (12,592) (9,537,157) 198,870 30,178 168,692 (15,538,242) (1,503) (664,903) (14,871,836) (24,876,529) 143,883 (24,732,646) 2022 24,810,541 1,314,292 13,907,397 4,351,669 5,237,183 (64,428,603) (1,382,867) (14,333,627) (8,077,655) (17,826,879) (132,064) (2,194,826) (20,480,685) (39,618,062) 938,905 717 938,188 (1,399,784) (2,052) (371,734) (1,025,998) (40,078,941) 456,505 (39,622,436) 2023 224,319,843 4,453,345 228,773,188 224,319,843 4,423,707 228,743,550 29,638 2022 210,787,212 13,907,397 374,766 224,319,843 186,336,521 38,114,213 130,891 224,319,843 — 1 49 Statement of tangible fixed assets (in €) LAND AND BUILDINGS Acquisition value at the end of the preceding period Movements during the period Acquisitions, included produced fixed assets Acquisition value at the end of the period Depreciation and amounts written down at end of the preceding period Movements during the period Recorded Depreciation and amounts written down at end of the period Net book value at the end of the period INSTALLATIONS, MACHINERY & EQUIPMENT Acquisition value at the end of the preceding period Movements during the period Acquisitions, included produced fixed assets Sale, transfer and withdraw Acquisition value at the end of the period Depreciation and amounts written down at end of the preceding period Movements during the period Recorded Sale, transfer and withdraw Depreciation and amounts written down at end of the period Net book value at the end of the period FURNITURE AND VEHICLES Acquisition value at the end of the preceding period Movements during the period Acquisitions, included produced fixed assets Sale, transfer and withdraw Acquisition value at the end of the period Depreciation and amounts written down at end of the preceding period Movements during the period Recorded Sale, transfer and withdraw Depreciation and amounts written down at end of the period Net book value at the end of the period LEASING AND OTHER SIMILAR RIGHT Acquisition value at the end of the preceding period Movements during the period Acquisitions, included produced fixed assets Sale, transfer and withdraw Acquisition value at the end of the period Sale, transfer and withdraw Depreciation and amounts written down at end of the preceding Movements during the period Recorded Recorded Sale, transfer and withdraw Depreciation and amounts written down at end of the period Net book value at the end of the period Whereof: Land and buildings Installation, machinery & equipment Furniture and vehicles OTHER TANGIBLE ASSETS Acquisition value at the end of the preceding period Movements during the period Acquisitions, included produced fixed assets Sale, transfer and withdraw Acquisition value at the end of the period Depreciation and amounts written down at end of the preceding period Movements during the period Recorded Sale, transfer and withdraw Depreciation and amounts written down at end of the period Net book value at the end of the period FIXED ASSETS UNDER CONSTRUCTION AND ADVANCE PAYMENTS Acquisition value at the end of the preceding period Movements during the period Acquisitions, included produced fixed assets Transfers from one heading to another Acquisition value at the end of the period Depreciation and amounts written down at end of the preceding period Movements during the period Recorded Depreciation and amounts written down at end of the period Recorded Net book value at the end of the period 2023 Annual Report 2023 2022 — — — — — — — 195,339 180,707 67,775 308,271 146,322 28,929 54,844 120,407 187,864 847,794 52,939 757,018 143,715 804,772 17,854 745,547 77,079 66,636 194,000 194,000 93,820 38,800 132,620 61,380 — 61,380 — — — — — — — — 945,847 69,640 820,148 195,339 195,339 18,636 546,527 146,322 49,017 2,069,310 53,859 1,275,375 847,794 1,993,782 25,537 1,214,547 804,772 43,022 194,000 — — 194,000 55,020 38,800 — 93,820 100,180 — 100,180 — 1,164,491 1,301,699 665,226 1,187,265 642,452 925,305 23,501 925,305 23,501 618,951 — — — — — — — — 137,208 — 1,164,491 848,316 110,377 33,389 925,305 239,186 — — — — — — — — 1 50 Affiliated companies - Participating interest and shares (in €) AFFILIATED COMPANIES - PARTICIPATING INTEREST AND SHARES Acquisition value at the end of the preceding period Movements during the period Acquisitions Sales and disposals Transfers from one heading to another Net book value at the end of the period Reevaluation surpluses at the end of the preceding period Movements during the period Recorded Acquisitions from third parties Cancelled Transferred from one heading to another Net book value at the end of the period Amounts written down at the end of the preceding period Movements during the period Recorded Written back Acquisitions from third parties Cancelled owing to sales and disposals Transferred from one heading to another Net book value at the end of the period Uncalled amounts at the end of the preceding period Movements during the period Uncalled amounts at the end of the period Total Net book value at the end of the period AFFILIATED COMPANIES - AMOUNTS RECEIVABLE Acquisition value at the end of the preceding period Movements during the period Appropriations Repayments Amounts written down Amounts written back Exchange differences Other movements Net book value at the end of the period Accumulated amounts written down on amounts receivable at the end of the period OTHERS COMPANIES - AMOUNTS RECEIVABLE Net book value at the end of the preceding period Movements during the period Appropriations Repayments Amounts written down Amounts written back Exchange differences Other movements Net book value at the end of the period Accumulated amounts written down on amounts receivable at the end of the period Other investments and deposits (in €) Other Investments and deposits Acquisition value at the end of the preceding period Movements during the period Additions Reimbursements (-) Net book value at the end of the period Investment and deposits (in €) Less than one year More than one year Net book value at the end of the period Statement of capital 2023 2023 Annual Report 2023 2022 3,629,632 3,629,632 101,459 2,122,148 14,751,173 16,360,116 3,629,632 2,525,998 1,500,000 14,871,836 1,025,998 1,045,202 16,352,632 2,525,998 7,484 1,103,634 14,751,173 11,733,351 2,402,535 615,287 14,751,173 259,460 2,217 (14,751,173) — 261,677 23,600 148,022 137,255 — 261,677 — 2023 2022 261,677 23,600 148,022 137,255 259,460 2,217 — 261,677 2023 4,000,000 — 4,000,000 2022 — — — 1 51 (in €) Issued capital Structure of the capital Different categories of shares Registered Dematerialized Unpaid capital Uncalled capital Capital called, but unpaid Shareholders having yet to pay up in full Authorized unissued capital Statement of capital 2022 (in €) Issued capital Structure of the capital Different categories of shares Registered Dematerialized Unpaid capital Uncalled capital Capital called, but unpaid Shareholders having yet to pay up in full Authorized unissued capital Statement of amounts payable 2023 Annual Report Amounts 32,948,801 Number of shares 41,428,572 xxxxxxxxxxxxxxx xxxxxxxxxxxxxxx 27,678,953 13,749,619 xxxxxxxxxxxxxxx xxxxxxxxxxxxxxx 12,000,000 Amounts 78,584,224 Number of shares 22,593,956 2,368,025 20,225,931 xxxxxxxxxxxxxxx xxxxxxxxxxxxxxx xxxxxxxxxxxxxxx xxxxxxxxxxxxxxx 4,409,554 (in €) Analysis of amounts payable after more than one year Current portion of amounts initially payable after more than one year Amounts payable expiring over one year and before 5 years Amounts payable expiring over five years Analysis by current position of amounts initially payable after more than one year Leasing charges and similar Other debts (loans) Other debt Tax, wage and social amounts payable Taxes Non expired taxes payable Remuneration and social security Other amounts payable related to remuneration and social security 2023 2022 388,625 1,368,599 2,767,460 86,866 4,437,818 53,033 496,063 404,354 1,303,055 2,244,792 125,178 3,827,023 325,083 1,129,867 1 52 Operating results (in €) Other operating income Subsidies and recoverable cash advance received from the Walloon Region Operating charges Employees recorded in the personnel register Total number at the closing date Average number of employees calculated in full-time equivalents Number of actual worked hours Personnel costs Remuneration and direct social benefits Employer’s social security contributions Employer’s premiums for extra statutory insurances Other personnel costs (+)/(-) Pensions Impairment of trade receivables On trade receivables Record Withdrawal Provisions for risks and charges Addition Use of and withdrawal Other operating charges Taxes related to operations Other charges Hired temporary staff and persons placed at the enterprise’s disposal Total number at the closing date Average number calculated as full-time equivalents Number of actual worked hours Charges to the enterprise Financial results (in €) Interest income Other financial income Interest charges Foreign exchange difference Other financial charges Income and charge of exceptional size or incidence (in €) Non-recurring income Non-recurring financial income Non-recurring operating charges Non-recurring financial charges Income tax (in €) Status of deferred taxes 2023 Annual Report 2023 2022 1,613,293 3,591,599 17 19.6 31,994 1,932,431 546,088 — 166,541 95,453 124,899 — — — 927 1,022,109 — — — — 32 66 106,336 6,443,302 1,318,334 — 85,479 230,540 132,064 — — — 1,755 2,193,071 — 0.1 184 6,054 2023 2022 — 168,691 — 638,596 26,308 — 932,090 2,051 113,508 43,874 2023 1,283,444 — 12,592 14,871,836 2022 5,237,183 — 20,480,685 1,025,998 2023 2022 Accumulated tax losses deductible from future taxable profits 316,385,698 298,819,049 The total amount of value added tax and taxes borne by third parties (in €) The total amount of value added tax and taxes borne by third parties The total amount of value added tax charged To the enterprise (deductible) By the enterprise Amounts retained on behalf of third parties Payroll withholding taxes 2023 2022 2,308,912 1,842,989 3,101,244 1,684,830 919,873 1,902,421 1 53 Financial relationship with Amount of direct and indirect remunerations and pensions, included in the income statement, as long as this disclosure does not concern exclusively or mainly, the situation of a single identifiable person 2023 Annual Report (in €) To non-executive directors Financial relationship with auditors 2023 2022 249,750 382,000 (in €) Auditor’s fees Auditor’s special missions fees Fees for special missions executed by related parties to the Auditor 2023 2022 129,000 14,800 — 277,058 12,750 — 5.37.4. Summary of valuation rules Valuation rules are determined by the Board of Directors in accordance with the Royal Decree of April 29, 2019, executing Belgian Companies and Associations Code and related to the annual accounts requirements for companies. Formation expenses are booked as intangible fixed assets and amortized over 5 years. Intangible fixed assets acquired from a third party or acquired through a contribution in kind are recorded at the acquisition value. Intangible fixed assets not acquired from a third party are valued at their cost of production in such a way that they do not exceed a prudent estimation of their future economical use or their future return. Intangible assets developed internally are capitalized when perspectives of future return are probable and clearly identified. Internal development expenses are capitalized when authorization to start a phase III trial of the related program is obtained. Development expenses of a medical device are capitalized when the device is CE marked. These intangible fixed assets are – in principle – amortized prorate temporis over 5 years starting the year of the first revenue generation associated with the related asset. Licenses and patents recognized as intangible assets under item 21 are amortized over the remaining life of the underlying license or patent agreements. Furniture and fixtures are depreciated over 3, 5 or 10 years depending on the economic life of the assets. An impairment test is performed each year at year end on all tangible and intangible assets. Exceptional depreciation or amortization expenses may result from such impairment analysis. Financial fixed assets are booked at acquisition value. A write-off is accounted for when the financial fixed asset is permanently impaired. There is no inventory. Direct materials purchased are directly expensed taken into account their short lifetime. Amounts receivable are booked as asset at nominal value. Amounts receivable in foreign currencies are converted in EUR at the exchange rate at closing date. Negative exchange differences resulting from the conversion in EUR at the exchange rate at closing date are expensed; positive exchange differences are accounted for as deferred income. Amounts receivable are written-off when their realizable value is estimated to be lower than their carrying value. Bank deposits are valued at their acquisition value. Cash and cash equivalents are valued at nominal value. When the nominal value includes interests, these latter are accounted for through the balance sheet caption “deferred charges and accrued income”. A write-off is accounted for when their realizable value is estimated to be lower than their carrying value. 1 54 2023 Annual Report Amount payables are booked at nominal value. Amount payables in foreign currencies are converted in EUR at the exchange rate at closing date. Negative exchange differences resulting from the conversion in EUR at the exchange rate at closing date are expensed; positive exchange differences are accounted for as deferred income. Recoverable advances are recognized in operating income prorated on the associated R&D costs as soon as there is reasonable assurance that these advances are acquired. Recoverable cash advances contracted with the Walloon Region are subject to reimbursement plans that are both fixed (30% of the recoverable advance) and variable. When the decision to exploit the outcome of the research and development program partially financed by the Walloon Region is notified to the Region, the fixed part of the reimbursements is recognized in debts. The presentation of short-term and long-term debt is based on perspectives of revenue generation and reviewed on a yearly basis. The variable part of reimbursements, depending on turnover, will be paid in the year of income. An off-balance sheet commitment is presented in the appendix and corresponds to the Company’s best estimate of the amount potentially reimbursable to the Region and not recognized in debts (including variable part). 1 55 FINANCIAL CALENDAR  Annual shareholders meeting  First half interim results May 6, 2024 September 20, 2024 2023 Annual Report CELYAD CONTACT DETAILS Michel Lussier* Interim Chief Executive Officer *Permanent representative of Mel Management SRL Email: investors@celyad.com Paper copy in French and English can be obtained free of charge via the Company’s registered office. CELYAD ONCOLOGY SA Axis Business Park Rue André Dumont 9 1435 – Mont-Saint-Guibert Belgium Tel: +32 10 39 41 00 RPM: Nivelles – BE0891 118 115 Email: info@celyad.com Website: www.celyad.com 1 56 2023 Annual Report 0 

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