Announcement PDF Avecho Biotechnology Limited Appendix 4E Preliminary final report 1. Company details Name of entity: Avecho Biotechnology Limited ABN: 32 056 482 403 Reporting period: For the year ended 31 December 2025 Previous period: For the year ended 31 December 2024 2. Results for announcement to the market $ Revenues from ordinary activities up 9.3% to 1,237,762 Loss for the year attributable to the owners of Avecho Biotechnology Limited up 41.5% to (4,416,623) The loss for the Consolidated Entity after providing for income tax amounted to $4,416,623 (31 December 2024: $3,122,048). The reported losses are Typical of companies in the biotech sector at the Company’s stage of development profile, reflecting the substantial upfront investment required. Further information on the results is detailed in the 'Review of operations' section of the Directors' report which is part of the Annual Report. 3. Net tangible assets Reporting period Previous period Cents Cents Net tangible assets per ordinary security 0.04 0.10 4. Control gained over entities Not applicable. 5. Loss of control over entities Not applicable. 6. Dividends Current period There were no dividends paid, recommended or declared during the current financial year. Previous period There were no dividends paid, recommended or declared during the previous financial year. 7. Dividend reinvestment plans Not applicable. 8. Details of associates and joint venture entities Not applicable. Avecho Biotechnology Limited Appendix 4E Preliminary final report 9. Foreign entities Details of origin of accounting standards used in compiling the report: Not applicable. 10. Audit details Details of audit: This report and the accompanying Annual Report of Avecho Biotechnology Limited for the year ended 31 December 2025 has been audited and the audit report is attached as part of the Annual Report. 11. Attachments Details of attachments (if any): Annual report of Avecho Biotechnology Limited for the year ended 31 December 2025 is attached. 12. Signed Signed ___________________________ Date: 27 February 2026 Dr Gregory Collier Chairman Avecho Biotechnology Limited ABN 32 056 482 403 Annual Report - 31 December 2025 Avecho Biotechnology Limited Contents 31 December 2025 1 Corporate directory 2 Directors' report 3 Auditor's independence declaration 18 Consolidated statement of profit or loss and other comprehensive income 19 Consolidated statement of financial position 20 Consolidated statement of changes in equity 21 Consolidated statement of cash flows 22 Notes to the consolidated financial statements 23 Consolidated entity disclosure statement 47 Directors' declaration 48 Independent auditor's report to the members of Avecho Biotechnology Limited 49 Shareholder information 53 Avecho Biotechnology Limited Corporate directory 31 December 2025 2 Directors Dr Gregory Collier (Chairman) Dr Ross Murdoch (Non-Executive Director) Mr Matthew McNamara (Non-Executive Director) Ms Kathy Connell (Non-Executive Director) Chief Executive Officer Dr Paul Gavin Company Secretary Ms Melanie Leydin Registered office Unit A8, 2A Westall Road and Principal place of business Clayton VIC 3168 Australia Telephone: +61 3 9002 5000 Email: info@avecho.com.au Share registry Computershare Investor Services Pty Limited Yarra Falls, 452 Johnston Street Abbotsford VIC 3067 Australia Telephone: +61 3 9415 5000 Fax: +61 3 9473 2500 Auditor Grant Thornton Audit Pty Ltd Collins Square Tower 5 727 Collins Street Melbourne VIC 3008 Stock exchange listing Avecho Biotechnology Limited securities are listed on the Australian Securities Exchange. (ASX code: AVE) Website www.avecho.com.au Avecho Biotechnology Limited Directors' report 31 December 2025 3 The directors present their report, together with the financial statements, on the consolidated entity consisting of Avecho Biotechnology Limited (referred to hereafter as the 'Company' or 'parent entity') and the entities it controlled (referred to hereafter as the 'Consolidated Entity') at the end of, or during, the year ended 31 December 2025. Directors The following persons were directors of Avecho Biotechnology Limited during the whole of the financial year and up to the date of this report, unless otherwise stated: Dr Gregory Collier (Chairman) Dr Ross Murdoch (Non-Executive Director) Mr Matthew McNamara (Non-Executive Director) Ms Kathy Connell (Non-Executive Director) Principal activities Avecho Biotechnology Limited develops and commercialises innovative Human and Animal Health products using its proprietary drug delivery system called TPM® (Tocopherol Phosphate Mixture). TPM® is derived from Vitamin E using unique, proprietary and patented processes and is proven to enhance the solubility and oral, dermal and transdermal absorption of drugs and nutrients. Avecho’s lead asset is a proprietary cannabidiol (“CBD”) TPM soft-gel capsule demonstrated to increase CBD absorption. The CBD capsule is currently undergoing Phase III clinical development for the treatment of insomnia. Dividends There were no dividends paid, recommended or declared during the current or previous financial year. Review of operations Phase III CBD insomnia trial advances toward interim analysis During the 2024 financial year, the Company continued dosing on its pivotal Phase III Clinical Trial (“the Trial”) for its proprietary TPM®-enhanced CBD soft-gel capsule targeting insomnia. The trial was expanded to increase efficiencies, with the addition of three new clinical trial sites and protocol amendments aimed at increasing the rate of recruitment. Towards end of 2025, a total of 190 patients had been dosed with study medication, representing the majority of the approximately 210 participants required for the planned interim analysis. Recruitment has continued into early 2026 to enrol the remaining participants. The Company noted that the pace of recruitment reflects the highly specific inclusion and exclusion criteria designed to select the patient population most appropriate for assessing the product’s efficacy and safety, which is intended to maximise the likelihood of a successful clinical outcome. Once recruitment is complete, Avecho will move to the final steps required to conduct the interim analysis, with formal timelines to be confirmed at that point. The Company is targeting completion of the interim analysis in the first half of 2026, which is expected to represent a major clinical and commercial inflection point for the CBD TPM® program. Licensing agreement In March 2025, the Company received independent commercial validation of the value of the CBD program, entering into a licensing agreement with Sandoz AG (Sandoz) for the exclusive commercialisation rights of its TPM®-enhanced CBD product in Australia. Sandoz is a global leader in generic pharmaceutical and biosimilar medicines that provides over 800 million patient treatments annually around the world. Avecho and Sandoz working towards plans for TGA registration and commercialization, with an initial focus on increasing the rate of recruitment on the Phase III clinical trial. Several initiatives are now underway which have accelerated recruitment as the trial proceeds towards an interim analysis. Avecho received an upfront payment of A$4.8 million (USD 3 million) and entitled for future payments of US$16 million for achieving development milestones prior to commercial sales. In addition, Avecho will be entitled for tiered royalties ranging from 14% to 19% on net sales upon commercialisation. Under the agreement, Sandoz would be purchasing the product from Avecho for commercial sales. Avecho retains the rights to commercialise the product in all other territories, with Sandoz granted a right of first refusal to exceed any commercial offers Avecho receives. Following the successful licensing of Australian rights to Sandoz, Avecho has broadened its business development efforts to target additional international markets. Licensing discussions remain active across multiple jurisdictions as the Company seeks to secure further agreements beyond Australia. Avecho Biotechnology Limited Directors' report 31 December 2025 4 Avecho raises $2.5 million to accelerate commercial manufacturing for CBD insomnia product In October 2025, Avecho announced it had secured firm commitments from institutional and sophisticated investors to raise $2.5 million (before transaction costs) via a placement, providing funding to accelerate commercial manufacturing activities required to support a future TGA submission and commercial supply of its lead CBD TPM® soft-gel capsule for insomnia. The Company completed the placement on 3 November 2025. Proceeds from the Placement are being used to bring forward and complete critical manufacturing activities required for regulatory approval and future commercialisation. These include manufacturing registration batches for long-term stability testing, scaling up production to commercial batch sizes, finalising regulatory manufacturing documentation, and producing capsules for use in the second Phase III CBD insomnia trial patient cohort. Funding will also support ongoing trial costs through to the interim analysis. The accelerated manufacturing program is designed to position Avecho to lodge a TGA submission as soon as possible following a successful Phase III outcome, while also preparing for future commercial supply in Australia and potential expansion into additional markets, including through ongoing licensing discussions. Corporate Activities In May 2025, the Company received R&D Grants of $1,695,102 for the year ended 30 December 2024 under the Australian Government’s R&D Tax Incentive Scheme. The Company repaid $931,512 R&D advances provided by Endpoints Capital. The loan arrangement enabled the Company to access anticipated R&D tax refunds earlier during the 2024 financial year, allowing timely reinvestment into the Phase III program. Review of financial results The loss for the Consolidated Entity after providing for income tax amounted to $4,416,623 (31 December 2024: $3,122,048). Revenue for the period consisted mainly of Vital ET® sales, with the sales during 2025 increased by 9% to $1,237,762 (31 December 2024: $1,132,672), compared to the 2024 financial year. R&D tax incentives for the year was $1,995,884 (31 December 2024: $1,635,464). Overall increase in R&D tax incentives is consistent with the increased R&D activities attributable to the Phase III Clinical Trial evaluating the efficacy of its oral cannabidiol capsule for the treatment of insomnia. The Company invested $4,311,137 (31 December 2024: $3,591,156) on R&D activities during the year. Expenses from continuing operations, primarily comprising administrative and corporate costs, increased 27% to $2,581,540 (31 December 2024: $2,039,467). Share based payments, payroll and investor relationship expenses were the key contributors for the increase in the operating expenses. At 31 December 2025, the Consolidated Entity held $4,663,491 in cash and cash equivalents (31 December 2024: $2,374,534). The net assets of the Consolidated Entity decreased by $1,710,088 to $1,559,650 as at 31 December 2025 (31 December 2024: $3,269,738). Net asset position of the Consolidated Group includes $4,832,762 upfront licensing fee received from with Sandoz Group AG, which has been treated as a “contract liability” for accounting purposes. Working capital, being current assets less current liabilities, was $6,347,425 as at 31 December 2025 (31 December 2024: $3,099,882). The net operating cash inflows for the year was $1,103,098 (31 December 2024: outflow $3,968,718). In addition to the funds received from Sandoz as noted below, Avecho raised $2.5 million (before transaction costs) via a placement in November 2025, providing funding to continue with the Phase III CBD insomnia trial. Significant changes in the state of affairs On 3 March 2025, Avecho announced that it has signed a licensing and development agreement with Sandoz. Under the terms of the agreement, Sandoz will pay Avecho a US$3 million (~A$4.8 million) upfront payment for the exclusive rights to commercialize the CBD capsule for insomnia in Australia, with a first right of refusal for additional international territories. Avecho is also eligible for up to $US16M in development milestones prior to commercialization, along with tiered royalties ranging from 14-19% on net sales. Avecho will oversee the manufacturing and supply of the CBD capsule through third-party CMOs and will supply the finished product to Sandoz for commercialization. On 28 March 2025, the Company announced the receipt of the US$3M (~A$4.79M) from Sandoz AG. On 16 April 2025, the Company issued 4,166,666 fully paid ordinary shares at an issue price of $0.006 (0.60 cents) per share to employees under the Company's Equity Incentive Plan. Avecho Biotechnology Limited Directors' report 31 December 2025 5 On 27 May 2025, the Company issued 142,618,373 Options to directors and employees at an exercise price of $0.0066 (0.66 cents), expiring on 27 November 2028, subject to various vesting conditions. On 28 May 2025, the Consolidated Entity received R&D Grants of $1.7m for the year ended 31 December 2024 under the Australian Government’s R&D Tax Incentive Scheme. On 3 November 2025, the Company issued 500,000,000 fully paid ordinary shares at an issue price of $0.005 per share, raising approximately $2.5 million (before transaction costs). On the same day, the Company also issued 20,000,000 options, each exercisable at $0.012, with an expiry date of 10 May 2026. There were no other significant changes in the state of affairs of the Consolidated Entity during the financial year. Matters subsequent to the end of the financial year No matter or circumstance has arisen since 31 December 2025 that has significantly affected, or may significantly affect the Consolidated Entity's operations, the results of those operations, or the Consolidated Entity's state of affairs in future financial years. Risks and uncertainties The Consolidated Entity is subject to risks that are specific to the Consolidated Entity and the Consolidated Entity’s business activities, as well as general risks. Future funding risks The Consolidated Entity had cash and cash equivalents of $4.7 million, and net assets of $1.6 million as at 31 December 2025. The Consolidated Entity requires additional financing in the future to sufficiently fund the continued research, development and operations and its other longer-term objectives. The Consolidated Entity's ability to raise additional funds will be subject to, among other things, factors beyond the control of the Consolidated Entity and its Directors, including cyclical factors affecting the economy and share markets generally. If for any reason the Consolidated Entity was unable to raise future funds, its ability to achieve its milestones or continue future development / commercialisation of its technology / product would be significantly affected. The Directors regularly review the cash flow requirements and ability to raise additional funding to ensure the Consolidated Entity’s ability to generate sufficient cash inflows to settle its creditors and other liabilities. Research and development risk The Consolidated Entity's product range includes products that are in pre-clinical and clinical development phases and need to be further tested before they can be commercialised. Pre-clinical and clinical development of the Consolidated Entity's products could take several years to complete and might fail for several reasons including but not limited to lack of efficacy, failure to obtain regulatory approval, difficulty or failure to manufacture the Consolidated Entity’s products on a large scale, or toxicity. The Consolidated Entity monitors product developments and engages proactively with key stakeholders to manage this risk. Regulatory and licensing risks The research, development, manufacture and sale of products is subject to a number of regulations prescribed by government authorities in Australia and overseas. Generally, there is a high rate of failure for drug candidates proceeding through pre- clinical and clinical trials. Further, even if the Consolidated Entity views the results of a trial to be positive, regulatory authorities may disagree with the Consolidated Entity’s interpretation of the data. Thus, any product deploying Avecho’ technology may be shown to be unsafe, non-efficacious, difficult or impossible to manufacture on a large scale, uneconomical to market, compete with superior products marketed by third parties, fail to secure meaningful reimbursement approval, or not be as attractive as alternative treatments. In addition, the Consolidated Entity is currently entitled to receive R&D Grants under the Australian Government’s R&D Tax Incentive Scheme. There is a risk that the Australian Government may make material changes to the scheme, which may impact the funding available to the Consolidated Entity for its operations. The Consolidated Entity monitors legislative and regulatory developments and engages proactively with key stakeholders to manage the above risks. Avecho Biotechnology Limited Directors' report 31 December 2025 6 Dependence on service providers and third-party collaborators There is no guarantee that the Consolidated Entity will be able to find suitable third-party providers to complete the development and commercialisation of its products. The Consolidated Entity therefore is exposed to the risk that any of these parties can experience problems related to operations, financial strength or other issues, and collaborative agreements may be terminable by the Consolidated Entity’s service providers or partners. Non-performance, suspension or termination of relevant agreements could negatively impact the progress or success of the Consolidated Entity’s product development efforts, financial condition and results of operations. The Consolidated Entity monitors commercial developments and engages proactively with key stakeholders to manage this risk. Reliance on key personnel The Consolidated Entity’s success depends to a significant extent upon its key management personnel, as well as other management and technical personnel including those employed on a contractual basis. The loss of the services of such personnel or the reduced ability to recruit additional personnel could have an adverse effect on the performance of the Consolidated Entity. The Consolidated Entity maintains a mixture of permanent staff and expert consultants to advance its programs and ensure access to multiple skill sets. The Consolidated Entity reviews remunerations and staffing requirements regularly. Intellectual property risk The Consolidated Entity’s ability to leverage its innovation and expertise is dependent on its ability to protect its intellectual property including maintaining patent protection for its product candidates and their respective targets and any improvements to it. A failure or inability to protect the Consolidated Entity’s intellectual property rights could have an adverse impact on operating and financial performance. The Consolidated Entity may incur significant costs in maintaining or defending its intellectual property rights. The Consolidated Entity proactively monitors applications and renewals of patents and licences; and requires relevant stakeholders to comply with the requirements set out in the confidentiality policy. IT system failure and cyber security risks Any information technology system is potentially vulnerable to interruption and/or damage from a number of sources, including but not limited to computer viruses, cyber security attacks and other security breaches, power, systems, internet and data network failures, and natural disasters. The Consolidated Entity is committed to preventing and reducing cyber security risks through outsourcing the IT management to a reputable services provider. In addition, the Consolidated Entity has an insurance policy covering IT and cyber security matters. Environmental regulation The Company is registered with relevant authorities to use certain compounds in the manufacture of goods. All waste chemicals are disposed of using accredited service providers with notification to the relevant authorities. The Company is not aware of any breaches of any environmental regulations. Avecho Biotechnology Limited Directors' report 31 December 2025 7 Information on directors Name: Dr Gregory Collier Title: Non-Executive Chairman Qualifications: PhD Experience and expertise: Dr Collier has more than 25 years’ experience spanning operational, clinical and scientific aspects of pharmaceutical research, development and commercialisation. Dr Collier has led the planning and execution of multiple commercial transactions including in and out licensing deals and major M&A activities, and he has successfully taken a drug from discovery through to regulatory approval. Notably, Dr Collier steered ChemGenex Pharmaceuticals Limited from a research- based Company with a market capitalisation of $10 million to a Company with completed clinical trials and regulatory dossiers submitted to the FDA and EMA. In 2011, ChemGenex was sold to Cephalon Inc. (now subsidiary of Teva Pharmaceuticals Industries Limited) for $230 million. Prior to his commercial pharmaceutical career, Dr Collier had an outstanding academic career resulting in over 150 peer reviewed publications, and senior authorship on 33 patents. Dr Collier was the inaugural Alfred Deakin Professor at Deakin University, and also held positions at Melbourne University, Monash University and the University of Toronto. In 2010, Dr Collier was awarded the Roche Award of Excellence for his contribution to the biotechnology industry. Other current directorships: None Former directorships (last 3 years): None Interests in shares: 9,833,333 ordinary shares Interests in options: 11,749,999 quoted options 6,338,595 unquoted options Name: Dr Ross Murdoch Title: Non-Executive Director Qualifications: PhD GAICD Experience and expertise: Dr Murdoch has over 30 years' experience as a leader within the global healthcare, pharmaceutical and biotechnology industries. He has held senior management and executive positions in Australia, the USA and Europe, with responsibility for the strategy, development and commercialisation of products, product portfolios and the building and rebuilding of new and existing businesses. Highlights of his career include Senior Vice President at Shire Pharmaceuticals (one of the world’s leading specialty pharmaceutical companies), based in the USA and Switzerland, where he founded and grew both the Emerging Products Business and Haematology Business and President and COO of Prana Biotechnology Limited based in Australia. Dr Murdoch was the CEO of Avecho from January 2015 to March 2019, prior to transitioning to a non-executive director of the Company. Dr Murdoch has a BSc degree with honours from Monash University, a PhD in Clinical Pharmacology from the University of Melbourne and additional postgraduate training in Health Economics from Monash University Business School. He is also a Graduate of the Australian Institute of Company Directors. Other current directorships: None Former directorships (last 3 years): None Interests in shares: 3,333,333 ordinary shares Interests in options: 2,499,999 quoted options 3,169,298 unquoted options Avecho Biotechnology Limited Directors' report 31 December 2025 8 Name: Matthew McNamara Title: Non-Executive Director Qualifications: BSc (Hons), MBA Experience and expertise: Mr McNamara was appointed as a Director of the Company on 13 January 2020 and was re-appointed as a Director at the Annual General Meeting held on 23 May 2023. Mr Matthew McNamara has over 35 years’ executive and funds management experience in the healthcare and medical sciences sector. He has a BSc (Hons) in Molecular Biology, has a MBA and is a GAICD. In 2003, he founded BioBridge Australia, a biotechnology commercialisation advisory company and advised a number of public biotechnology / investment companies. Mr McNamara is currently Director and Chief Investment Officer of Horizon 3 Healthcare, a healthcare fund manager. He is presently a director of Microbio Pty Ltd, ESN Cleer Pty Ltd and Cardiac Dimensions Pty Ltd. He has held previous directorship in Adherium Ltd (ASX: ADR), Avita Medical Ltd (ASX: AVH), Bioxyne Ltd (ASX: BXN) and Saluda Medical Pty Ltd. Mr McNamara has also served as CIO of BioScience Manager Pty Ltd and was CEO of SciCapital Pty Ltd, a Life Sciences Venture Capital fund. Other current directorships: None Former directorships (last 3 years): None Interests in shares: 1,666,666 ordinary shares Interests in options: 2,499,999 quoted options 3,169,298 unquoted options Name: Kathy Connell Title: Non-Executive Director Experience and expertise: Ms Connell is an internationally recognised healthcare and life sciences leader with deep and broad investment and licensing expertise, delivering a solid track record of value creating deals across pharmaceuticals, medtech, vaccines consumer and digital healthcare for some of the world’s largest companies. For the past 20 years, Ms Connell has held senior executive leadership positions in biotechnology, pharmaceutical, medical device and consumer health sectors specialising in business development, licensing, acquisitions and venture investment, as well as having worked in healthcare and lifesciences executive search and management consulting with Korn Ferry. During her tenure at Johnson & Johnson and Sanofi, Ms Connell led external innovation investment, licensing and acquisition across ANZ, with more than $US1B of capital being deployed in Australia with industry, academia, VCs and government organisations. A dedicated advocate of diversity, equity and inclusion, Ms Connell co-founded Medicines Australia’s Pharmaceutical Australia Inclusion Group (PAIG) – a special working group designed to foster diverse and inclusive corporate cultures and was awarded BioMelbourne Network’s Woman of the Year in 2018 for her leadership in supporting Australia’s high priority strategic growth sectors of biotech, medtech and pharmaceuticals. Ms Connell serves as a Non-Executive Director for ASX listed Opthea as well as Proto Axiom, a biotech investment company with an incubation arm and BioNSW, the peak body for Life Sciences companies and professionals in NSW. She is also an advisory board member for Flinders University Medical Device Research Institute. Ms Connell is a registered psychologist, holding tertiary degrees and qualifications in Applied Science, Psychology, Mediation and Law as well as being a Graduate of the Australian Institute of Company Directors. Other current directorships: Opthea Limited (ASX / NASDAQ: OPT) Former directorships (last 3 years): None Interests in shares: None Interests in options: 7,162,942 unquoted options 'Other current directorships' quoted above are current directorships for listed entities only and excludes directorships of all other types of entities, unless otherwise stated. Avecho Biotechnology Limited Directors' report 31 December 2025 9 'Former directorships (last 3 years)' quoted above are directorships held in the last 3 years for listed entities only and excludes directorships of all other types of entities, unless otherwise stated. Company secretary Melanie Leydin - BBus (Acc. Corp Law) CA FGIA Ms Leydin holds a Bachelor of Business majoring in Accounting and Corporate Law. Ms Leydin is a member of the Institute of Chartered Accountants, Fellow of the Governance Institute of Australia and is a Registered Company Auditor. Ms Leydin graduated from Swinburne University in 1997, became a Chartered Accountant in 1999 and from February 2000 to October 2021 was the principal of Leydin Freyer which was acquired by Vistra in November 2021. Ms Leydin is now Vistra Australia's Managing Director and Regional Managing Director. Vistra is a prominent provider of governance and compliance solutions and finance and accounting solutions in the Fund, Corporate, Capital Markets, and Private Wealth sectors. Ms Leydin has over 30 years’ experience in the accounting profession and over 20 years’ experience holding Board positions including Company Secretary and CFO of ASX listed entities. Ms Leydin has extensive experience in relation to public company responsibilities, including ASX and ASIC compliance, control and implementation of corporate governance, statutory financial reporting, reorganisation of Companies, initial public offerings, secondary raisings and shareholder relations. Meetings of directors The number of meetings of the Company's Board of Directors ('the Board') held during the year ended 31 December 2025, and the number of meetings attended by each director were: Full Board Held Attended Gregory Collier 7 7 Ross Murdoch 7 6 Matthew McNamara 7 7 Katherine Connell 7 7 Held: represents the number of meetings held during the time the director held office. The full Board assumes the responsibility of the Remuneration & Nomination Committee and Audit & Risk Committee. Remuneration report (audited) The remuneration report details the key management personnel remuneration arrangements for the Consolidated Entity, in accordance with the requirements of the Corporations Act 2001 and its Regulations. Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly, including all directors. The remuneration report is set out under the following main headings: ● Principles used to determine the nature and amount of remuneration ● Details of remuneration ● Service agreements ● Share-based compensation ● Relationship between remuneration and the Consolidated Entity's performance ● Additional disclosures relating to key management personn