TruScreen : 2022 Half Year Report

TRUSCREEN GROUP LIMITED

TRUSCREEN GROUP LIMITED

Interim Unaudited Financial Statements

For the Six Months Ended 30 September 2021

TRUSCREEN GROUP LIMITED

Table of contents

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Review of Operations	1
Consolidated statement of profit or loss and other comprehensive income	6
Consolidated statement of financial position	7
Consolidated statement of changes in equity	8
Consolidated statement of cash flows	9
Notes to the interim unaudited condensed financial statements	10

TRUSCREEN GROUP LIMITED

REVIEW OF OPERATIONS

Highlights for Half Year ended 30 September 2021

• Strong revenue and Single Use Sensor (SUS) sales growth of 25% and 35% year on year (YOY) respectively
• Launch of TruScreen Made in China device for the Chinese market
• Firmware upgrade and cervical cancer screening device enhancements
• Continuous expansion and first sales in Eastern Europe
• Ongoing excellent trial results confirm efficacy of TruScreen cervical cancer screening device

Cervical cancer screening technology company, TruScreen Group Limited (NZX/ASX: TRU) ('TruScreen' or 'the Company), is pleased to provide its unaudited financial results for the six months to 30 September 2021 (1H FY22), along with the following operational update. TruScreen reports according to the New Zealand financial year, which runs from 1 April to 31 March.

The Company reported an operating loss of $1.26m (1H FY21: $1.51m), a 20% reduction over the prior year. Despite the negative impacts of COVID-19 in some of our markets, notably Russia and Vietnam, product revenue increased by 25% YOY.

Pleasingly, SUS unit sales were 35% higher YOY although getting new cervical cancer screening devices installed in hospitals was hampered by ongoing COVID-19 restrictions.

Net operating cash outflow was $1.7m (1H FY21: $1.6m). An Australian research and development tax offset was received just after quarter-end in the amount of $0.6m. Cash operating costs were 22% higher in 1H FY22, at $2.5m (1H FY21: $2.1m), reflecting the Company's increased investment in research and development which resulted in re-engineered firmware that enhanced cybersecurity and facilitated self- calibration which will reduce future operating costs. The Australian tax offset for the related research will be received in the next financial year.

The loss for the six months included a non-cash amortisation and depreciation charge of $0.30m (1H FY21: $0.35m).

As at 30 September 2021, the Company had cash and cash equivalents of $3.67m, which was supplemented by a research and development tax offset receipt of $0.6m from the Australian Tax Office on 1 October 2021.

Half-Year Commentary

TruScreen continued to make good market and technical progress in 1H 22 and, going forward, is well placed to build upon this success as the COVID-19 pandemic wanes.

Market development - China

TruScreen has continued to successfully expand in China, its most established market and the world's largest addressable cervical cancer screening market.

With the launch of the TruScreen Made in China device, developed specifically for the Chinese market, the Company's China distributor Beijing Siweixiangtai (SWXT) has expanded its addressable distribution market. It is now marketing this TruScreen device to the growing Health Check sector. SWXT anticipates the first major placement of TruScreen devices in the private Health Check sector to commence before the end of the 2021 calendar year.

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TRUSCREEN GROUP LIMITED

This development provides TruScreen with revenue upside, as China's Health Check sector is rapidly growing, aided by support from provincial governments, private organisations, and non-government organisations (NGOs). Major public hospitals will have separate Health Check clinics offering a wide range of women's health medical checks, including cervical cancer screening.

Market development - Europe

TruScreen has, at the same time, continued to broaden its market access throughout Central and Eastern Europe, with the Company's current focus on Serbia and Poland. The market access strategies in these two countries are now being actively supported by key opinion leader engagement, clinical trials, and local clinical evaluation initiatives.

TruScreen is currently in the final planning stages for a clinical trial in Poland, led by a well-known medical opinion leader in that country. The pilot phase of this trial will screen women in five centres across Poland to evaluate the clinical performance of the TruScreen device. TruScreen anticipates the results of the trial will facilitate market access throughout Poland as well as neighbouring countries.

TruScreen has recently concluded training in Serbia targeting new key opinion leaders and clinicians. The training has enabled the commencement of planned local clinical evaluations and facilitated the commencement of early market activities with the first sales being concluded in September.

The World Health Organisation (WHO) has highlighted that innovative technologies such as TruScreen's portable and real time device are applicable for use in low-and-middle-income countries (LMIC). Leveraging our success in Zimbabwe and partnership with its National Aids Council, we are having dialogues with potential distributors in markets where TruScreen is not currently represented, and where TruScreen as a primary cervical cancer screening device can make a positive difference to women's health.

Upgraded firmware

After twelve months of development work, TruScreen has completed verification and validation of a key firmware update that is now being progressively released to TruScreen devices already in the market. The firmware update enhances the device's cyber security framework and allows TruScreen devices to more effectively interface with compatible hospitals' systems. By incorporating a state-of-the-art optical calibration feature, the firmware has reduced the need for the device to return to service centres for scheduled re-calibration. This reduced service-related downtime means clients have their devices online for longer time periods, boosting operational efficiencies.

The new firmware update also includes enhancements to the user interface and battery management features. These were developed in collaboration with the Company's distributors and in response to market feedback, a demonstration of the collaborative nature of the relationship TruScreen has with these crucially important groups.

Clinical trials continue to show promising results

A new study, published in the European Journal of Obstetrics and Gynaecology and Reproductive Biology1, concludes that TruScreen's cervical cancer screening technology meets or exceeds the effectiveness of alternative cervical cancer screening methods. The study evaluated the efficacy of TruScreen in screening for cervical abnormalities, in a real-world,primary cervical cancer screening setting in China.

1 1 Yingting Wei, Wenjing Wang, Mengxing Cheng, Zubei Hong, Liying Gu, Jiaxin Niu, Wen Di, Lihua Qiu, Clinical evaluation of a real-time optoelectronic device in cervical cancer screening, Yingting We et al., European Journal of Obstetrics & Gynecology and Reproductive Biology, 2021, ISSN 0301-2115,

https://doi.org/10.1016/j.ejogrb.2021.09.027. (https://www.sciencedirect.com/science/article/pii/S0301211521004826)

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TRUSCREEN GROUP LIMITED

The TruScreen screening device was found to be very effective at detecting cervical intraepithelial neoplasia grade 2 or worse (CIN2+ or CIN3+).

The Chinese Obstetrics and Gynaecology Association (COGA) national clinical trial which has screened ~15,000 women in 64 top-tier public hospitals across 9 provinces in China, has concluded. The COGA evaluation compares the TruScreen technology to Liquid Based Cytology (LBC) and human papillomavirus (HPV) DNA testing, targeting a nationwide consensus on Truscreen technology applications in China as the main outcome of this large-scale trial.

The final report from this trial is still awaited, however preliminary results from two major provincial trials (See NZX announcements 2 September 2019 and 19 October 2020) showed TruScreen to be better or on parity than tests for HPV and LBC.

Outlook

TruScreen's Strategic Plan for FY22 and beyond will see the Company focus on three key areas: continuous product improvement, rapid expansion in China, and growth into other key markets.

I would like to take the opportunity to thank shareholders for your ongoing support and encourage you to stay up to date with TruScreen news via the NZX/ASX announcements platforms as well as our website and social media accounts.

Anthony Ho

Chairman

29 November 2021

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