Ann: Letter to Shareholders, page-69

Well, The letter addresses three things that all holders are concerned with.

1) Current SP
2) Consolidation
3) Future fund raising

Also, noteworthy is that IMU will be contacting shareholders shortly on funding issues and possible consolidation - which I believe has to happen to mke the company stronger and attract future investors.

Below are some excerpts from the letter.

1. Share Price

For many investors, the share price is the measurement of how the company isdoing, and we understand that. When the price is depressed and people arelosing money on their investment, anxiety levels rise, and questions are raisedabout what is wrong with the company. When you have a company that was valuedat $3 billion several years ago, and is now worth $200 million, it’s onlynatural to ask what is wrong and to blame the Board and CEO. We understand andaccept that sentiment – we too are investors in the business.

We recognise that you are worried about your company’s performance, and futureprospects, and we can assure you that the Board and management are deeplyfocused on getting it right. But from a practical perspective, we have nodirect control over the daily trading of the shares.

While external factors have to be considered, such as the last 3 difficultyears for biotech companies, the recent market turmoil caused by the US tariffsituation, and the 28% decline in the US biotech index (XBI) since the start ofthe year, we don't want to just blame these issues for our current share price.

We admit to not knowing exactly why we have been hit so hard by the shareprice, but let me be transparent with some explanations;

• Slow news on CF33 and OnCARlytics programs – it is correct that data read outs are a little slower than expected. In the MAST CF33 study, we spent some time streamlining the manufacturing process, focused enrolment on specific indications like biliary tract with strict inclusion and exclusion criteria which impeded enrolment as only a few trial sites can participate, these patients are only seen at specialised centers. On the onCARlytics study, this involves bringing two separate areas of oncology together, those that practice in hematology and solid tumours to combine a blood cancer drug in combination with onCARlytics which is a therapy to treat solid tumours. This requires educating and training the solid tumour specialist on administrating a hematology drug and more time and effort at the hospital centers to co-ordinate after finding patients that meet the inclusion and exclusion criteria.
• Market perception that we are a high cash burn business – the reality is that in fact we are – drug development, particularly CAR Ts, cost large sums of money, and the specialist medical and scientific teams and facilities needed to manufacture and run these programs, are not cheap.
• Short Position – at the time of writing the Company’s short position is 5.20%. We think this has had a knock-on effect to other sellers/investors who view a short position as an expectation that the share price will fall, and possibly this has dragged other sellers in -- we have no control over that. In the US, increasing short interest has been a steady trend for years across SMID-cap biotech (small to mid-sized companies), with the average company now seeing almost 10% of their shares short. That’s up from 5-6% in 2021/2022 and nearly double the average for Russell 2000 index. (a small-cap U.S. stock market index that makes up the smallest 2,000 stocks in the Russell Index.)
• No licensing deals, particularly HER-Vaxx – we have not yet signed a deal with any of our programs. Business development or licensing is a slow process and has to remain confidential until a deal is signed. Lack of news does not mean we are doing nothing. We are actively marketing at all the major industry conferences around the world and have direct dialogue with those pharmaceutical companies which are involved in the same technology space as Imugene.
  

2. Raising Money andCapital Markets

Some shareholders have asked why we are always raising money and dilutingshareholders.
Most biotech companies which are in clinical development stage (i.e. humanclinical trials), including Imugene, face long dated negative cash flows, highcapital needs, high risk and zero revenues.
Running three technology platforms is capital intensive. Azer-cel is anallogeneic cell therapy trial which is characterised by high manufacturing andclinical trial costs.

Apart from the recent $20 million convertible note, the last time we raisedmoney was in Aug/Sept 2023 and only 9.3% came from retail shareholders.

Due to the capital demands of our business, we monitor the markets carefullyand remain in touch regularly with Australian and US bankers/brokers. We willannounce any capital raise when it is complete, not before.
Some shareholders have asked questions about consolidating the shares and aNasdaq listing. These are relevant items for consideration and are regularlyunder review by the Board and an announcement will be made, if and when adecision to proceed, is reached.