AnteoTech : Quarterly Update / Appendix 4C

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Quarterly Business Update

Period Ending 31 December 2021

For personal use

ASX Code: ADO Shares on Issue 1,970 million

CEO

Mr Derek Thomson

Company Secretary

Mr Tim Pritchard

Principal and Registered Office

Unit 4, 26 Brandl St, Eight Mile Plains, Qld 4113, Australia

Telephone

+61 7 3219 0085 Internet www.anteotech.com Email contact@anteotech.com

ABN

75 070 028 625

Key Activities

Activities for the quarter focused on:

Life Sciences - engagement with the Therapeutic Goods Administrator ("TGA") on achieving regulatory approval for Eugenie Reader and SARS-CoV-2 Ag Rapid Antigen Test ("RAT") and ongoing engagement with Australian industry and government bodies on the position of Rapid Antigen testing and domestic manufacturing as well as the progression of European sales and planning.

Energy - commercialisation opportunities for AnteoX, with engagements progressing positively.

Highlights for the Q2 FY22 Quarter Include:

• Validation of scalability of manufacturing at Operon.
• Renewal of AnteoBind contract with Ellume for further five years.
• Strengthening of internal marketing and sales capability through the commencement of Ian Steinhardt in Head of Markets position.
• Positive initial outcomes recorded pairing AnteoX with SBR binders, the market-dominant binder type.
• Receipt of $1,965,463 under the Federal
  Government's Research & Development (R&D) Tax
  Incentive Scheme.

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Dear Shareholders

Along with the board, I am pleased to provide you with our quarterly Activities Report.

Markets for rapid antigen testing (RATs) continued to be extremely dynamic during the December '21 quarter.

The Omicron variant caused a high volume of COVID-19 infection across the globe, creating the need for more testing. In Australia, the laboratory-based PCR testing infrastructure buckled under the pressure of increased numbers of infections and Christmas travellers seeking to cross borders with required COVID-19 free test results. In late December, the Australian Federal Government reversed their stance on the use of RATs as a front-line tool for controlling the pandemic. This sudden change in policy caused a supply shortage of RATs, all of which are currently imported, creating further spread of the disease.

The primary issue at hand in relation to the lack of supply of RATs in Australia is the lack of sovereign manufacturing capability. We call upon Federal and State Governments to support the Australian lateral flow In Vitro Diagnostic (IVD) industry to build local manufacturing capability for lateral flow IVD devices.

As a response to the ongoing evolution of variants and a need to ensure test performance standards are maintained, governments worldwide continue to set the quality bar higher by increasing the regulatory requirements for market entry and continued market participation. In Europe, this has manifested in broader adoption of the EU Common List for procurement of RATs in varied segments. In Australia, the TGA has adopted a guidance note from the European Commission's Medical Device Co-ordination Group (MDCG) on the clinical performance evaluation of RATs. The MDCG requirements underpin the new European In Vitro Diagnostic Regulations (IVDR) that focus on test efficacy using prospective sampling in the 0 - 7 days post-onset symptoms range. A prospective trial involves the recruitment of patients for direct harvesting of samples to be tested on the EuGeni platform for SARS-CoV-2 Ag RDT1.

The TGA has advised us we must add prospective clinical data to support our test performance claims generated using stored samples to align our technical data with the MDCG guidelines. We are currently collecting this data via trials in Australia and Europe, which will also provide the required data set for entry to the EU Common List and IVDR registration.

Operationally the commencement of Ian Steinhardt in the role of Head of Markets added significant skills and expertise to our go-to-market efforts in Australia and Europe. We continued to scale and optimise our manufacturing at Operon and made sound progress in our development of the COVID- 19 Flu A/B multiplex tests and Sepsis biomarker tests.

Key business development activities during the quarter included the strengthening of our relationships with State Governments for the supply of EuGeni tests once TGA approved and, importantly, the renewal of the Ellume contract for the ongoing supply of AnteoBind for a further five years.

The Energy team realised a significant milestone during the quarter by proving a stable mixture of AnteoX and SBR binder. This achievement provides a platform for commercialising AnteoX in a segment that uses SBR, the most commonly used binder in the carbon plus silicon active material anode market, the largest segment of the silicon harnessing anode market.

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During the current quarter, our primary focus was on fulfilling the articulated TGA requirements to sell the EuGeni SARS-COV-2 RDT in the Australian market. We have developed a high performing product that the Australian population deserves to be able to use.

I look forward to updating you on our progress as we reach key milestones.

Derek Thomson

Chief Executive Officer

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Supporting Scaled Revenue Generation

Our vision for the business is long term - 10 years plus - development of lateral flow tests on the EuGeni platform to detect a range of conditions. To do this we transformed from raw material supplier, and we are using the COVID-19 market opportunities where possible to facilitate the transition.

We have spent time preparing the business to scale revenues and increase market operations.

We have done this to hedge risk and protect long term shareholder value.

In vitro diagnostic (IVD) manufacture is heavily regulated. To operate in chosen markets successfully, organisations must ensure ongoing supply of product of the highest quality and performance. The products must be fully supported by the manufacturer and integrate the support of OEM suppliers, distributors and supply chain organisations. Any questionable aspect of quality or support will risk scrutiny by regulatory authorities whilst in market and this could lead to penalties and / or removal of product from the market. Many organisations close to AnteoTech have been the subject of such scrutiny and been forced to remove product batches or entire products from the market and this has caused the organisation valuable reputational damage that will hinder further developments.

To ensure compliance with regulatory requirements and ensure product quality is maximised, it is best practice to build processes from product development through manufacturing, distribution, product support and market surveillance that are fully integrated. This requires the involvement of all parties in the chain, including, in the case of AnteoTech, distributors around the world, an outsourced manufacturer in Spain and OEM's such as Axxin and others supplying component parts of our product. It also requires the company to develop products aligned to development procedures recognised by regulators. The standard required by regulators to assess adherence to market operations and development is ISO13485. AnteoTech graduated to legal manufacturer level of this standard in September 2021.

To be able to confidently supply a volume of product into any market, a legal manufacturer must integrate three primary elements being Manufacturing, Distribution and Quality Management. Any scaled selling of product carries considerable commercial risk if the integration of these elements is not robust. Whilst we recognise that there has been a significant and immediate imperative to turn on sales to support the Life Science business, we have balanced our progression to ensure we also protect long term security of the business. We are now confident that we have progressed these elements to the point that our scaled selling risk is reduced.

1. Manufacturing

Nano technology is a complex science with many variables. Scaling up the technology to produce a product with enough volume to supply a market can be a difficult process due the number of variables that can cause issues. Since April 2021 we have been gradually scaling production at Operon and have resolved issues relating to supplier material variations, batch quality of supplied particle, interface issues between Operon produced product and Axxin produced product. These types of issues are very common in IVD manufacturing, and we often use our close relationships with Operon, Ellume and other manufacturers to discuss issues and share resolution pathways.

It is inevitable that manufacturing will encounter difficulties in the future due to the many variables at play. However, having committed the effort of the last eight months we are now confident that our product can be produced at the scale required to support a large volume of sales.

2. Distribution

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guidelines, it is important that these elements be established with each distributor. This takes some time and to date we have provided all material and training to existing distributors and continue to work with them to finalise quality procedures.

We will continue to expand our distribution network and we are in the process of continuing to build out our distributor support team under the leadership of Ian Steinhardt.

3. Quality Management

The cornerstone of market operations for a legal manufacturer of an IVD is the Quality Management function. This function provides processes and procedures that underpin all aspects of the business from acquisition of regulatory approval through development and all in-market operations, including manufacturing, distribution, and post-sale activity.

We have invested heavily in this area over the past year as it was a cornerstone element of the transformation of the business from a raw material supplier to a legal manufacturer of an IVD. It has taken time to build the team and establish the systems and processes that will stand up to regulatory scrutiny. Having a baseline level of the Quality Management function in place is mandatory to hedge the commercial risk of failing to deliver a high level of quality.

Whilst we know we need to continue this very important work, we currently have a Quality function that will begin to support scaled market operations.

Sales and Market

At the Annual General Meeting in November, CEO Derek Thomson presented the CY22 Revenue Generation Approach, outlining the four key areas of focus. The Quarter's activities were focused on execution of these areas.

CY22 - REVENUE GENERATION APPROACH

processes to sell to target segments. Execution via our global

For

3. Build Reputation

• Leverage Quality Processes to Ensure High Standard Products.
• Create Case Studies / Product Advocates
• Create Solutions Based on EuGeni Differentiators

COVID & SEPSIS Families

Assisted Living

Hospitals

Laboratories

2. Regulatory Approvals

Streamline regulatory registration and complete FDA (US) & IVDR (Europe) approval cycles.