Suda : Appendix 4E Priliminary Report

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ABN: 35 090 987 250

and Controlled Entities

Name of entity: Suda Limited ABN 35 909 987 250

The current reporting period is the financial year ended 30 June 2016. The previous corresponding period is the financial year ended 30 June 2015.

No interim dividends were paid and no final dividends are proposed.

The revenue is consistent with the prior year and was generated by Suda Ltd's subsidiary company Westcoast Surgical and Medical Supplies Pty Ltd. Whilst maintaining revenue, the Group has reduced operating costs resulting in a decrease in the loss attributable to members from $3.37m for FY2015 to $2.23m for FY2016.

This preliminary report is based on financial statements that are in the process of being audited.

ASX Release No 827 31 August 2016 Page 1 of 10

The consolidated loss of the consolidated group after providing for income tax attributable to owners of the parent entity amounted to $2,230,877 (2015: $3,367,191). The loss decreased by 34% on the loss reported for the year ended 30 June 2015. Key developments during the year are explained below.

ZolpiMist™ oral spray for the treatment of insomnia

In December 2015, SUDA amended its cross-licence and collaboration agreement with Amherst Pharmaceuticals (Amherst), a US specialty pharmaceutical company based in New Jersey. As a result, SUDA has expanded its license to ZolpiMist™ to include all countries excluding North America. In the US market, ZolpiMist was successfully relaunched by Magna Pharmaceuticals in March 2016. SUDA is working with a multi-national contract manufacturer regarding the manufacture of ZolpiMist in their facility in Australia. The Company has also embarked on the initial steps towards registration of ZolpiMist by the Australian Therapeutics Good Administration.

ArTiMist® oral spray for the treatment of paediatric malaria

SUDA acquired the minority interest in its subsidiary company Malaria Research Company Pty Ltd (MRC) in August 2015 for

$1.2m as full and final settlement of all outstanding liabilities between SUDA and the minority interest shareholder. The Directors believed that this acquisition was an important step towards SUDA's objective to commercialise ArTiMist® through a collaboration or trade sale.

In July 2015, the Company was granted a patent in Africa for its novel ArTiMist anti-malarial spray. The patent was issued by the African Regional Intellectual Property Organization (ARIPO) which is an intergovernmental organisation for cooperation among African states in intellectual property matters. ARIPO comprises 19 member states, including the major countries in malaria-endemic Sub-Saharan Africa.

SUDA and its Clinical Advisory Board finalised the design of the proposed trial of ArTiMist in the pre-referral setting and presented the protocol to the World Health Organisation. SUDA, through its UK-based company, applied for funding through the Horizon 2020 Research and Innovation program (European & Developing Countries Clinical Trials Partnership). Unfortunately, the Company was not successful in its grant application although it had received a very positive response. The Directors of the Company are of the opinion, based on current reports from the UK, that there is a reduction in European grants for UK-based scientists, universities and companies following Brexit and that SUDA Europe Ltd's chance of a successful application were greatly reduced due to the political climate in Europe.

SUD-001 sumatriptan oral spray for the treatment of migraine

Early in the financial year, SUDA had a Type C meeting with the US Food and Drug Administration (FDA) whereby the FDA acknowledged SUDA's proposed development strategy and requested only minor justifications to the study design. Furthermore, the agency had no comments regarding SUDA's plans for chemistry, manufacturing, controls and non-clinical studies of SUD-001. The FDA also requested that SUDA submit a paediatric study plan in migraineurs aged 6-17 years who could benefit from SUDA's first-in-class oral-spray migraine therapy.

Under the acknowledged development plan, SUDA expects to save significant time and capital by avoiding the need to conduct costly efficacy studies in adults prior to registration of SUD-001 in the US.

SUD-002 ondansetron for the treatment of chemotherapy-induced nausea and vomiting

SUDA received the North American rights back to SUD-002 from Amherst under the amended agreement in December 2015. SUDA is completing stability and compatibility studies with the SUD-002 formulation before requesting a meeting with the FDA to discuss the submission of a New Drug Application. In July 2015, SUDA received a Notice of Grant from the US Patent Office for a new patent covering SUD-002, entitled "Buccal, Polar and Non-Polar Spray Containing Ondansetron".

SUD-003 sildenafil oral spray for the treatment of erectile dysfunction

SUDA is continuing the development of a new-generation formulation of SUD-003, which includes flavouring, taste masking and a new and novel process that is designed to enhance and further improve the permeation characteristics and bioavailability. The Company has completed in vitro and ex vivo studies and is conducting an in vivo study before presenting a clinical development plan to the FDA. SUDA also plans to lodge a new patent application for the novel permeation-enhancing technology that has been developed with new-generation SUD-003 sildenafil formulation. This platform technology has broad application for optimising mucosal permeation of many types of molecules.

Westcoast Surgical & Medical Supplies (Westcoast)

Westcoast continues to be a strong player in the supply of medical consumables within the Aged Care, Allied Health, Mining and Hospital sectors in Western Australia. During the year, Westcoast reduced operating costs whilst maintaining revenue in a difficult economic environment.

The significant events during the 2015-16 financial year were:

1. Acquired minority shareholding in MRC

   The minority shareholder sold its 20% shareholding in MRC to SUDA for $1.2 million. This payment was in full and final settlement of all outstanding liabilities between the two companies.

2. FDA response to SUD-001

   SUDA submitted a Type C meeting briefing package to the FDA in June 2015 containing details of the proposed pivotal study of SUD-001 and other activities intended to support a New Drug Application in the USA. The Company received a written response from the US FDA regarding the development plan for the Company's SUD-001 sumatriptan oral spray for the treatment of migraine.

3. Patent application for SUD-003 in the USA

   The US Patent and Trademark Office has allowed SUDA's first patent application for its sildenafil based products, SUD-003 and SUD-004, in the USA. The patent application (US 14/363,245) is titled: "Oral Spray Formulations and Methods for Administration of Sildenafil". A patent directed to similar subject matter has already been granted in New Zealand and patent applications are pending in other jurisdictions

4. Rolled over 2013 convertible notes

   The Company's 2013 convertible note matured on 30 September 2015. At that date, the number of convertible notes on issue were 1,625,000. A total of 920,000 convertible notes were redeemed on 30 September, 705,000 rolled over under amended terms and new subscribers to the 2015 convertible note totalled 1,025,000.

5. Statement of claim received from HC Berlin Pharma AG

The Company received a Statement of Claim in relation to a lawsuit between the Company and HC Berlin Pharma AG (in liquidation). The Administrator is seeking a payment of EURO 4.0 million with interest of 5% from 25 August 2008.

Based on legal advice, the Directors of SUDA are confident that the Administrator's Statement of Claim is deficient and factually incorrect and, as such, has little chance of success.

The Directors have recommended that no dividend be paid by the company in respect of the financial year ended 30 June 2016.

There have been no after balance date events.

The Board thanks our shareholders for their ongoing support and looks forward to an exciting 2016/17 year.