Review of Operations Directors’ Report Chairman’s Letter CEO’s Report Financial Report Shareholder Information 2 MATERIAL ACCOUNTING POLICIES (CONTINUED) Share-based payments INOVIQ operates an Incentive Option Plan. The non-cash expense of issuing options under the plan is calculated using either a Binomial or Monte Carlo option pricing model. These models require the input of a number of variables including an estimate of future volatility and a risk-free interest rate. Impairment For intangible assets with indefinite useful lives or intangible assets not yet available for use, impairment is assessed and tested annually. All other intangible assets are tested for impairment when an impairment indicator exists. Where impairment is tested annually or an impairment indicator exists, the recoverable amount of the asset is determined. Refer to Note 10 for key estimates adopted when testing intangible assets for impairment. Deferred tax assets Deferred tax assets are recognised only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses. Deferred tax assets, including those arising from unutilised tax losses, require management to assess the likelihood that the Group will comply with relevant tax legislation and will generate sufficient taxable profit in future years in order to recognise and utilise those deferred tax assets. Estimates of future taxable profit are based on forecast cash flows from operations and existing tax laws in each jurisdiction. These assessments require the use of estimates and assumptions such as the operating performance over the life of the assets. (xxiii) Research and Development Research costs are expensed as incurred. Development expenditures on an individual project are recognised as an intangible asset when the Group can demonstrate: – The technical feasibility of completing the intangible asset so that the asset will be available for use or sale – Its intention to complete and its ability and intention to use or sell the asset – How the asset will generate future economic benefits – The availability of resources to complete the asset – The ability to measure reliably the expenditure during development Following initial recognition of the development expenditure as an asset, the asset is carried at cost less any accumulated amortisation and accumulated impairment losses. Amortisation of the asset begins when development is complete and the asset is available for use. It is amortised over the period of expected future benefit. During the period of development, the asset is tested for impairment annually. (xxiv) Share-based payments Equity-settled share-based payments to employees and others providing similar services are measured at the fair value of the equity instruments at the grant date. The fair value excludes the effect of non-market-based vesting conditions. Details regarding the determination of the fair value of equity-settled share-based transactions are set out in Note 22. The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the group’s estimate of the number of equity instruments that will eventually vest. At each reporting date, the group revises its estimate of the number of equity instruments expected to vest as a result of the effect of non-market-based vesting conditions. The impact of the revision of the original estimates, if any, is recognised in profit or loss such that the cumulative expense reflects the revised estimate, with a corresponding adjustment to reserves. Equity-settled share-based payment transactions with parties other than employees are measured at the fair value of the goods or services received, except where that fair value cannot be estimated reliably, in which case they are measured at the fair value of the equity instruments granted, measured at the date the entity obtains the goods or the counterparty renders the service. 3 PRODUCT INCOME For the year ended 30 June 2026 $ For the year ended 30 June 2025 $ Product revenue – hTERT – at a point in time 294,002 294,314 Product revenue – Molecular NETs – at a point in time 138,045 253,261 432,047 547,575 43 Annual Report 2026
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