Beroni : 2021 Annual Financial Report

ABOUT BERONI GROUP

Beroni Group is an international biopharmaceutical enterprise dedicated to the innovation and commercialization of drugs and therapies to combat various global diseases such as cancer and infectious diseases. Its diversified portfolio is comprised of FDA / CE-approved virus diagnostic kits, an e-commerce platform for the sale of pharmaceutical products and a development pipeline targeting oncology and cell therapies. Beroni has operations in Australia, United States, China and Japan. It is listed on the National Stock Exchange of Australia and traded on the OTC markets in the USA.

Beroni Group Limited and

Its Subsidiaries

ABN 20 613 077 526

Consolidated Financial Statements For the Year Ended 31 December 2021

Beroni Group Ltd Table of Contents

Year Ended 31 December 2021

Contents

Page

A message from the Chairman ………………………………………………………………………… 3

Directors' report

……………………………………………………………………… 5

Other Shareholder Information ……………………………………………………………………… 15

Corporate Directory ……………………………………………………………………… 17

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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ... . . . . . . . …. 23

Notes to the consolidated financial statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. …... 24

Directors' declaration

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60

Independent auditor's report

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ……... 61

Beroni Group Ltd

A Message from the Chairman Year Ended 31 December 2021

A MESSAGE FROM THE CHAIRMAN

Dear Fellow Shareholders

On behalf of the Board and Management of Beroni Group Limited ("Beroni" or the "Company"), I am pleased to present the 2021 Annual Report.

Like the previous year, 2021 was another challenging year as the COVID-19 pandemic continued into its second year. The slow-down in the global economy and the COVID-19 restrictions imposed in many countries have affected many businesses. Despite the odds, we have been able to maintain our revenues and also develop new revenue streams from new products especially our new COVID-19 test kits.

I am pleased to say that Beroni has publicly lodged the IPO application for listing on the Nasdaq stock market in December 2021. This is after many months of hard work and dedication. Our application is still subject to review by the US SEC. The successful listing of Beroni on the Nasdaq stock market will be a major milestone in our strategic development as it will give us access to a wide range of short- and long-term investment sources in the huge U.S. capital markets.

Financial Performance

Beroni reported FY2021 revenue of $2.20 million (FY2020 $1.80 million), and underlying EBITDA of -$2.19 million (FY2020: -$9.04 million) and NPAT -$2.88 million (FY2020: -$9.86 million). Despite the ongoing pandemic, this year's sales have improved by 22% over the previous year's sales. The growth is mainly attributed to the new products introduced in the second half of 2020 especially the COVID-19 antigen test kits and probiotic health supplements which have brought in new sales throughout this year. We will continue to look at new ways to promote and expand the sales to more consumers through the e-commerce networks in China. We will also look at expanding our sales to other markets and developing new quality healthcare products.

Expenses have decreased significantly this year mainly due to reversal of some past impairment losses as a result of improvement in the recovery of overdue customer debts and the significant write-off of the shares expense in 2020 related to the issue of shares to Medicine Plus in 2018 as partial settlement for the acquisition which has not yet been completed.

Research and Development

Beroni has a drug development pipeline focusing on oncology and immunotherapy. We are preparing to start the phase II clinical trial of the cancer drug, PENAO in Australia, most likely in the second half of 2022. Depending on the timing of our capital raising plans, we also intend to commence the clinical trials for several new innovative cell therapies in China and Japan such as gamma-delta T cell, dendritic cell vaccine, protein R8 for treatment of various cancer types. We are now considering to start the clinical study for the development of a medical solution for detecting and treating cancers and coronaviruses using nanobody technology.

In January 2022, Beroni signed a contract to build an R&D centre in Zhuhai China which is expected to be completed in June 2022. The new R&D centre will be used to conduct some of our planned clinical trials. The Company will bring professional staff, scientists, technicians, and support teams together into a state-of-the-art hub for innovation and development of the company's future products and services. We will always explore research programs with significant potential value and benefits and are open to collaborating with industry partners in the international markets.

Our Vision

I would like to reiterate our corporate vision which is to become a world's leading player in the biopharmaceutical industry by developing and commercialising innovative drugs and therapies to address significant unmet medical needs worldwide and to improve overall human health. We will continue to pursue the following strategies:

• • Advance key product candidates with a focus on cancer and infectious diseases;

• • Identify and develop additional product candidates through clinical development in order to expand our current pipeline;

• • Strengthen our position in the development of innovative drugs and therapies;