Appendix 4C Quarterly Activity Report for Quarter Ended September 30, 2023 - Seite 2

FIANANCIAL REPORT

Management and the Board have undertaken a detailed review of expenditures and have put in place a plan that focuses on preservation of cash by implementing significant cost containment strategies and enacting substantial payroll reductions. We have already managed to reduce net operating cash usage over the past two years by 37%, and the cost containment that we have now put in place ensure that we will be operating in an even more fiscally prudent manner which is expected to reduce spend by a further 23% year on year.

These activities to preserve cash are complemented by initiatives currently underway to increase cash inflows which would by design enable us to prudently invest in our Phase 3 programs for SR-aGVHD and back pain. In this regard, we are working on corporate initiatives to strengthen our balance sheet, including royalty monetization and strategic partnerships to both access existing commercial distribution channels and supplement costs of development.

Cash balance at the end of the quarter was US$53.2 million, with net operating cash spend of US$14.2 million. We have implemented a cost containment plan to achieve a targeted 23% reduction (US$15 million) in projected FY2024 annual net operating cash spend compared with FY2023, which will be partially offset by investment in our Phase 3 programs for SR-aGVHD and CLBP.
Revenue from royalties on sales of TEMCELL HS Inj.² sold in Japan by our licensee for the quarter were US$1.6 million. On a constant currency basis, royalties on sales were US$1.7 million for the quarter ended September 30, 2023, a growth of 24% compared with US$1.4 million in the comparative quarter in FY2023.³

Other
Fees to Non-Executive Directors were US$83,121, consulting payments to Non-Executive Directors were US$76,200 and salary payments to full-time Executive Directors were US$293,834, detailed in Item 6 of the Appendix 4C cash flow report for the quarter.⁴ From 1 August 2023, Non-Executive directors have voluntarily deferred 50% cash payment of their director fees and agreed to receive the remaining 50% of their fees in equity-based incentives and Executive Directors (our Chief Executive and Chief Medical Officers) have voluntarily reduced their base salaries for FY24 by 30% in lieu of accepting equity-based incentives.