Identified issues

I feel it necessary to voice my concerns about the way in which this Company is being run by management. I've conducted some analysis and these are my concerns. This is a copy of an article that I published in L inkedin recently.

I'd appreciate shareholder thoughts on my comments.

This article is the second in a series highlighting the issues that mum and dad investors face when investing in small-cap stocks. A major concern in this space is the lack of effective regulatory oversight, which allows companies to operate without sufficient transparency and accountability. Chimeric Therapeutics (ASX: CHM) provides yet another example of these challenges.

Transparency and accountability are cornerstones of investor confidence, yet recent events at Chimeric Therapeutics have raised serious concerns about selective disclosure and potential regulatory breaches.

I recently sent a formal letter to Chimeric requesting clarification on several key issues regarding trial disclosures and capital raise timing. The company responded with a generic statement claiming compliance with obligations but failed to address any of the specific concerns raised. Given this lack of transparency, I believe it is crucial to publicly outline these issues.

CORE-NK Phase 1B Trial Discrepancies

The timeline of announcements and public statements regarding the CORE-NK trial being conducted at MD Anderson (MDA) does not align, raising concerns about the accuracy and completeness of disclosures to the market:

• 8 February 2024– Announcement:"1st patient treated in ADVENT-AML Phase 1B clinical trial."
• 5 June 2024– Announcement:"Phase 1B ADVENT-AML trial advances to next cohort."Three patients treated in the first cohort (Dose Level 1); none experienced dose-limiting toxicities. Second cohort now open for enrolment (Dose Level 2).
• 25 July 2024– Company Presentation:"Cohort 1 deemed safe and moved to Cohort 2."
• 29 July 2024– Interview with now CEO Rebecca McQualter who stated:"Dosed six patients already at MDA and we're moving really quickly into the second cohort now." By this date, three patients at Dose Level 1 and three at Dose Level 2 had been treated.
• 21 October 2024- Announcement: "$5 million placement to progress CHM CDH-17 trial" "Executive Chairman Paul Hopper to participate with $1 million investment"
• 24 October 2024– Announcement:"Dose finding complete in ADVENT-AML Phase 1B clinical trial."
• 16 December 2024– Announcement:"Phase 1B CHM CORE-NK trial advances to initiate treatment of newly diagnosed AML patients. "Stated that "Dose escalation has been completed successfully with 6 relapsed or refractory Acute Myeloid Leukemia (AML) patients completing treatment with no dose-limiting toxicities or unexpected safety findings."

Issues Identified:

1. Delayed Market Disclosure– By 29 July 2024, six patients had been dosed (three at Dose Level 1 and three at Dose Level 2), yet full dose escalation results were not formally disclosed to the market until 16 December 2024. Issue: While this confirms safety, it does not provide data on patient efficacy (e.g., remission rates, response durability, survival data). Investors rely on these metrics to evaluate a biotech’s true value. Concern: Was selective reporting used to maintain a positive market perception without revealing the full clinical picture?
2. Chimeric Receives Monthly Updates from MD Anderson – As the Company is entitled to receive regular trial updates, it should have been in possession of key safety and efficacy data well before the 21 October 2024 capital raise. Concern: Despite receiving monthly updates, Chimeric has not released any efficacy data to date, which is unusual for a clinical-stage biotech company. If efficacy data were available, why were they not disclosed in a timely manner? Was this information considered in decisions surrounding the capital raise?
3. False Market Concerns - a) 7 October 2024 - Announcement During Suspension from trading: "AML patient achieves complete response in CHM CORE-NK trial. "This significant milestone was obscured by a prolonged trading suspension (between 1 October - 21 October 2024), limiting market awareness. (This NK trial is separate to the trial being conducted at MDA. This trial is being conducted at UH Seidman Cancer Center in Ohio and this patient is the first and currently only patient treated in the blood cancer arm of the Phase 1b trial) b) Lack of Efficacy Data Disclosure: No efficacy results were shared for the CHM CORE-NK dose escalation trial, leaving investors without key insights into treatment impact. c) CHM CDH-17 Trial Results Released Only on LinkedIn, Not ASX– The first three patients dosed in this groundbreaking clinical trial represented the very first time in the world that this approach had been tested in humans. Despite its significance, the company only disclosed this via a LinkedIn media article rather than an ASX announcement. The LinkedIn article contained actual results for the first three patients dosed (including one achieving stable disease at 60 days), making the lack of an ASX announcement even more concerning. These results were further elaborated on during a subsequent investor webinar, reinforcing the importance of this information. d) Withholding Market-Sensitive Data for ASH Conference: On5 February 2025, the CEO stated in an interview that there would be"ongoing updates about our really exciting frontline AML trial coming out shortly. "However, the CEO also stated that because of the MD Anderson partnership,"we’ll probably save the data and take it to ASH at the end of the year."(ASH is: American Society of Hematology)Concern: No updates have been released to date, despite the CEO’s statement. False Market Risk: If material efficacy data exist but are being selectively withheld to maintain market perception or align with a conference timeline, this could mislead investors.
4. $4 Million Philanthropic Donation: The Company recently announced a $4 million non-dilutive donation from a philanthropic family in the USA.Concern: Based on publicly available information, in my opinion there is no clear justification for such a significant donation. Key Question: Were the donors privy to material, non-public information that was not disclosed to the broader market?
5. Regulatory Compliance & Insider Trading: Concerns: ASX Listing Rule 3.1 requires immediate disclosure of market-sensitive information. The delay in announcing the completion of dose escalation and lack of efficacy data could be seen as non-compliant. Potential Insider Trading (Section 1043A of the Corporations Act) If trial data or efficacy results were known prior to the 21 October 2024 capital raise but not disclosed, it raises concerns about whether insiders had access to material non-public information.

Potential Breaches of Directors’ Duties

Under the Corporations Act 2001 (Cth), directors owe duties to act with care and diligence, in good faith, and not misuse their position:

• S.180 (Duty of Care and Diligence)– Were disclosures and capital raises conducted in a way that ensured fairness and transparency?
• S.181 (Duty to Act in Good Faith)– Was information selectively withheld in a manner that disadvantaged certain investors?
• S.182 & S.183 (Improper Use of Position/Information)– Were insiders aware of material, non-public information when making investment decisions?

Final Thoughts

Regulatory oversight in the small-cap sector is weak, leaving retail investors vulnerable to selective disclosures and governance failures. Chimeric’s share price has declined 83% in the past 12 months, yet certain directors and key management personnel received cash bonuses of up to $157,948 for reasons such as ‘driving the development of assets and increasing stakeholder value. ’This raises further questions about whether executive incentives are aligned with shareholder outcomes.

Given the lack of regulatory enforcement by ASIC and the ASX, it is critical for retail investors to stay informed and challenge companies on their disclosure practices. If small-cap governance does not improve, investor confidence in the sector will continue to erode.