HALF-YEAR FINANCIAL REPORT 2024

This document is a free non-binding translation into English prepared for the convenience of English-speaking readers, for information purposes only, of the French language Half-year Financial Report as filed with the Autorité des Marchés Financiers on September 26, 2024, in accordance with Article L 451-1-2 of the Monetary and Financial Code.

In the event of any ambiguity or conflict between corresponding statements or items contained in this English translation and the original French version, the relevant statements or items of the French version shall prevail. The free translations of the auditor's reports presented in this document apply to the French version of the financial statements.

Copies of this Half-Year Financial Report are available free of charge at the registered office of Aelis Farma SA, 1 rue Lafaurie de Monbadon, 33000 Bordeaux.

This half-year report is also available on the Company's website (www.aelisfarma.com) as well as on the centralized storage site for regulated information of listed companies managed by the French Department of legal and administrative information (www.info-financiere.fr).

Section 1 - Introductory statements 3
1.1.	Person responsible for the half-year financial report	3
1.2.	Responsibility statement	3
1.3.	About Aelis Farma	3
1.4.	A word of the CEO	4
	Section 2 - Comments on the activity during the first half of 2024	6
2.1.	Situation and development of the Company's activity during the financial year	6
2.2.	Review of accounts and results	7
2.3.	Progress made and difficulties encountered	11
2.4.	Main risks and uncertainties facing the Company	11
2.5.	Use of financial instruments by the Company	18
2.6.	Company's activity in terms of research and development	19
2.7.	Activity of subsidiaries and controlled companies	21
2.8.	Foreseeable development and prospects	21
2.9.	Important events since the end of the financial year 2023	22
2.10.	Change to the composition of capital during the first half of 2024	23
	Section 3 - Financial statements prepared in accordance with IFRS as of
	June 30, 2024	24
3.1.	General information	28
3.2.	Highlights of the period	28
3.3.	General accounting rules and policies	29
3.4.	Notes to the statement of financial position	30
3.5.	Notes to the statement of profit or loss	39
3.6.	Note to the cash flow statement	42
3.7.	Transactions with related parties	42
3.8.	Events subsequent to the end of the period	43
3.9.	Off-balance sheet commitments	43

Section 4 - Statutory auditor's report on the half-year financial statements established according to IFRS............................................................................... 44

Section 1 - Introductory statements

1.1. Person responsible for the half-year financial report

Pier Vincenzo Piazza, Chief Executive Officer of Aelis Farma.

1.2. Responsibility statement

"I certify, to the best of my knowledge, that the summarized IFRS financial statements for the past half-year are drawn up in accordance with the applicable accounting standards and give a faithful representation of the assets, financial situation, and results of the Company, and the half-year report in Section 2 presents a faithful picture of the significant events that occurred during the first six-months of the financial year, their impact on the financial statements, the main transactions between related parties as well as a description of the main risks and the main uncertainties for the remaining six months of the fiscal year".

September 26, 2024, Pier Vincenzo Piazza, Chief Executive Officer of Aelis Farma

1.3. About Aelis Farma

Founded in 2013, Aelis Farma is a biopharmaceutical company that is developing a new class of drugs, the Signaling Specific inhibitors of the CB¹ receptor of the endocannabinoid system (CB1- SSi). These new molecules hold great potential in the treatment of many brain diseases. CB1-SSi were developed by Aelis Farma on the basis of the discovery of a new natural defense mechanism of the brain made by the team of Dr. Pier Vincenzo Piazza, CEO of the Company (Vallée & al. Science 2014).

Aelis Farma is developing two first-in-class drug candidates that are at the clinical stage, AEF0117 and AEF0217, and has a portfolio of new CB1-SSi that are being developed for the treatment of other diseases associated with dysregulation of CB¹ receptor activity.

AEF0117, which targets cannabis use disorders (addiction and psychosis), completed in the first half of 2024 the additional non-clinical and clinical developments required for entry into phase 3, and the evaluation of the last of the 333 patients enrolled in the phase 2B study for the treatment of cannabis addiction. The aim of this phase 2B study was to demonstrate that AEF0117 reduces cannabis use and to determine optimal endpoints and dosage for use in future studies. As announced in the September 4, 2024, press release, preliminary results show:

AEF0117 was well tolerated, and no safety concerns were identified.
The primary endpoint (proportion of patients using cannabis ≤1 day per week), did not show statistically significant effects of AEF0117.
Quantitative endpoints measuring cannabis use have shown, at the highest dose of AEF0117 (1mg/day), a trend of reduction in the whole population of participants treated

and a statistically significant reduction in participants with a moderate CUD, as evaluated using the diagnostic criteria of the DSM-5.

• These data confirm that AEF0117, as observed in previous phase 2A, is pharmacologically active, providing a further validation of the activity of the new pharmacological class developed by Aelis Farma, "the Signaling Specific inhibitors of the CB¹ receptor (CB1-SSi)".

The Company is currently investigating the results to determine the best strategic and regulatory action plan. As a reminder, Aelis Farma has an exclusive option license agreement with Indivior PLC, a leading pharmaceutical company in the treatment of addiction, for the development and commercialization of AEF0117. Indivior PLC indicated that it did not currently expect to exercise the license option on AEF0117 before seeing further additional favorable clinical data.

AEF0217, which targets various cognitive disorders including those associated with Down's syndrome (also known as trisomy 21), completed enrolment in a phase 1/2 study in people with Down's syndrome in June 2024, with results to be announced in the fourth quarter of 2024. The primary objective of this study is to assess the tolerability, safety and pharmacokinetic characteristics of AEF0217 in people with Down's syndrome. This compound has undergone an extensive preclinical proof-of-concept program using highly innovative and predictive tests to assess cognitive functions. In this context, AEF0217 has demonstrated its ability to completely reverse deficits in several animal models of cognitive disorders such as Down syndrome and Fragile X syndrome, as well as in models of certain cognitive deficits associated with aging.

Based in Bordeaux, Aelis Farma has a team of more than 25 highly qualified employees.

1.4. A word of the CEO

"Overall, we are satisfied with the progress made over the first six months of 2024. Thanks to the efficiency, motivation, and commitment of our teams, key clinical milestones have been achieved, in particular for our two first-in-class drug candidates, AEF0117 and AEF0217.

Regarding AEF0117, as planned, we have completed the last patient last visit in the Phase 2B clinical study in cannabis use disorders (CUD). This was a pioneer study, the largest and wellcontrolled study ever carried out in this field, enrolling 333 patients at 11 clinical centers in the United States. The main goal of this study was to demonstrate that AEF0117 reduces cannabis use and to determine the optimal endpoints and doses to be used in future studies. As announced on September 4, 2024, the preliminary results of this Phase 2B show that the primary endpoint (proportion of patients using cannabis ≤1 day per week) was not met by AEF0117. However, quantitative measures of cannabis use showed that AEF0117 at the highest dose (1mg/day) led to a statistically significant reduction in cannabis use in participants with moderate CUD These data indicate that AEF0117 is pharmacologically active, providing further validation of the activity of the new pharmacological class developed by Aelis Farma, the "Signaling Specific inhibitors of the CB¹ receptor (CB1-SSi)".

We are currently completing further analysis to determine the next regulatory and development steps.

AEF0217, after proving to be safe, well tolerated and with good pharmacokinetics characteristics in healthy volunteers in phase 1 studies, has just completed in June 2024 the recruitment of 30 participants in a phase 1/2 study in people with Down syndrome. This multicenter study (Barcelona,

Madrid) aims to confirm the safety and pharmacokinetics properties of this drug candidate in people with Down syndrome. The results of this study will be announced in the fourth quarter of 2024.

Lastly, end of July, we also announced the success of a 4.5 million euros fund-raising round aimed at strengthening the development of new CB1-SSi molecules produced by our platform, with the strategic priority of broadening our therapeutic targets.

The results obtained with AEF0117 in Phase 2B, and released on September 4, 2024, confirm the pharmacological activity of CB1-SSi and, reinforce our conviction that these innovative compounds represent a major discovery that could lead to the development of a whole new class of treatments for plenty of pathologies for which no therapeutic solution is available today."

Pier Vincenzo Piazza, Chief Executive Officer of Aelis Farma

Section 2 - Comments on the activity during the first half of 2024

2.1. Situation and development of the Company's activity during the financial year

2.1.1. Research and development activity during the first half of 2024

For the AEF0117 compound, the main focus in 2024 was:

The last patient's visit of the phase 2B study. This key milestone in the clinical development of AEF0117 took place in mid-April 2024 and initiates preparatory activities for the communication of study results expected in the third quarter of 2024. This double-blind, placebocontrolled study randomized 333 patients at 11 clinical centers in the United States, under the co-direction of Aelis Farma's clinical team and Prof. Frances Levin of Columbia University (New York). Post closing, results of this study have been released (see Section 3.8).
Preparatory work for statistical analysis of phase 2B study data. The CRO Worldwide Clinical Trial Inc. and the Aelis Farma clinical team finalized the monitoring of the clinical data before freezing the database. This review of the data qualifies the quality of the data and ensures that the analyses defined in the statistical analysis plan can be repeated, leading to the study results.
Continuation and completion of additional preclinical studies, with a view to preparing Phase 3 with AEF0117.
Pharmaceutical substance and pharmaceutical product production process. Optimization of the synthesis process and validation of analytical methods have enabled to release batches of AEF0117 active ingredient, which will be used to produce formulations for future studies. We have also initiated the production and stability studies of GMP (Good Manufacturing Practice) grade technical batches of pharmaceutical product, prototypes of those used during future studies.

Concerning AEF0217, the Company's second drug candidate, targeting applications in the field of behavioral deficits of neurodevelopmental disorders and having as its first indication the cognitive deficits of Down syndrome, the first half of 2024 was more particularly devoted to:

Continuation of the phase 1/2 study in adults with trisomy 21, started in December 2022. This study mainly seeks to assess the safety and absorption of AEF0217 in people with Down syndrome. The study has included 30 people and results will be announced in the fourth quarter of 2024. This study, initially planned as a single-center study (IMIM, Barcelona), was transformed into a multi-center study by adding two additional centers in Spain, in order to obtain more robust results.
Further development and optimization of the new formulation of the pharmaceutical product for phase 2B.
Continuation and completion of additional preclinical studies, in preparation for phase 2B with AEF0217.

For the upstream research program (Discovery program), the main activities were:

The design, finalization and optimization of new cell-based assays and the characterization of new compounds using the Company's library of molecules.
Study the molecular mechanisms of action, and the specificity and in vitro toxicity of the new compounds identified.

2.1.2. Human resources and governance

In terms of human resources, during the first half of 2024, a clinical trial manager and a laboratory technician were recruited on a permanent contract.

As at June 30, 2024, the Company had 26 full-time employees.

As of the date of this report, all employees, researchers with contract under the French "scientific competition" initiative and the main key consultants are shareholders of the Company and/or hold securities giving access to the Company's capital (BSA or BSPCE).

2.1.3. Financial resources

On a financial level, during the first half of 2024, the Company was awarded an interest-bearing Innovation R&D loan from Bpifrance for an amount of 1,500,000 euros and a term of 8 years. The loan will be repaid from December 31, 2026, in 20 quarterly installments.

In April 2024, the Company received a third payment under the ICOD program, amounting to 554,393 euros, and corresponding to 85% of the amount of the grant awarded. The balance is due to be paid at the end of the project (i.e. during 2026).

Given the Company's cash position of 12.6 million euros at June 30, 2024, the funds raised in the end of July, 2024 transaction for a total gross amount of 4.5 million euros (as detailed in section 3.8), and non-dilutive financing in the process of being obtained, the Company estimates that, on the basis of planned expenditure, its activities can be financed up to and including the fourth quarter of 2026.

2.1.4. Investments

The main acquisitions during the first half of 2024 correspond to investments in furniture and specific equipment for the move to the Company's new laboratories at the IECB, 2 rue Robert Escarpit, 33607 Pessac. The teams moved in on April 10, 2024.

2.2. Review of accounts and results

The financial information presented in this chapter is taken from the Company's half-year financial statements drawn up in accordance with the presentation rules and valuation methods provided for by the regulations in force.

Readers are invited to read this analysis of the Company's financial situation and results with the Company's financial statements and their accompanying notes presented in Section 3 of the Half-Year Financial Report and any other financial information included in the Half-Year Financial Report.

A reminder of the accounts for the previous period is provided for comparison purposes.

SUMMARY OF NET INCOME STATEMENT

In € thousands	06/30/24	06/30/23
Revenue	2,232	3,734
Other income from ordinary activities	1,892	1,967
Ordinary activities income	4,124	5,701
R&D costs	(6,115)	(7,151)
General and administrative costs	(1,673)	(992)
Current operating income	(3,665)	(2,442)
Other expenses and income	-	-
Operating income	(3,665)	(2,442)
Financial income	83	813
Pre-tax income	(3,583)	(1,629)
Tax	-	(4)
Net income	(3,583)	(1,633)
Earnings per share (€/share)	(0,27)	(0.13)
Diluted earnings per share (€/share)	-	-

Revenue from ordinary activities

During the first half of 2024, the Company recognized revenues of €2,232,000 (€3,734,000 for June 30, 2023) relating to the share of revenue from the option license agreement with Indivior PLC.

Other income from ordinary activities amounts to €1,892,000 and corresponds to grants and rebilling of studies of €1,082,000 (€1,084,000 for June 30, 2023) and a Research Tax Credit of € 809,000 (€883,000 for June 30, 2023).

Current operating income

Current operating income was -€3,665,000 (compared to -€2,442,000 for June 30, 2023) considering:

Research and development costs of €6,115,000 (€7,151,000 for June 30, 2023), which break down as follows:
other purchase and external costs: €4,857,000 (€6,167,000 for June 30, 2023);
staff costs: €1,041,000 (€907,000 for June 30, 2023);
intellectual property costs: €217,000 (€78,000 for June 30, 2023).

The decrease in R&D expenses compared to June 30, 2023, is due in part to the higher level of activity in the first half of 2023 for AEF0117 (phase 2B clinical study and pharmaceutical production activities) compared to the first half of 2024. Expenses for the period correspond to R&D activities for the Company's two compounds AEF0117 and AEF0217, as well as the Disco-very research program (as described in § 2.1.1).

General and administrative expenses of €1,673,000 (compared to €992,000 for June 30, 2023), which break down as follows:
other purchases and external charges: €639,000 (€484,000 for June 30, 2023);

staff costs: €1,034,000 (€508,000 for June 30, 2023).

The increase in personnel costs compared to June 30, 2023, is due in particular to the strengthening of teams and the impact of the expense recognized in connection with the BSA and BSPCE plans in application of IFRS 2.

Financial income

Financial income amounts to €83,000 and mainly comprises income from cash investments. At June 30, 2023, it corresponded mainly to the financial income and expense recognized at the time of settlement of Research and Development transactions, which were self-hedged in dollars.

Net income

The result for the period shows a deficit of €3,583,000.

SUMMARY STATEMENT OF FINANCIAL POSITION

In € thousands	06/30/24	12/31/23
Intangible assets	190	190
Fixed assets	1,451	1,183
Other non-current financial assets	72	38
Deferred tax assets	-	-
Total non-current assets	1,713	1,411
Inventory	-	53
Trade receivables	1,519	1,759
Other receivables and CCAs	4,653	2,828
Cash and cash equivalents	12,585	20,230
Total current assets	18,758	24,870
TOTAL ASSETS	20,471	26,281
Equity	9,944	13,201
Commitments to staff	109	102
Non-current financial debts	3,873	2,946
Other non-current liabilities - provisions	15	-
Deferred income	212	-
Total non-current liabilities	4,209	3,048
Current financial debts	1,211	1,094
Trade payables and related accounts	3,399	4,495
Social and tax debts	471	776
Deferred income	1,236	3,666
Other current liabilities	-	-
Total current liabilities	6,317	10,032
TOTAL LIABILITIES	20,471	26,281

As of June 30, 2024, the Company's balance sheet total amounted to €20,471,000 compared to €26,281,000 as at December 31, 2023.

Non-current assets

Non-current assets amounted to €1,713,000 against €1,411,000 for the previous year. They consist of intangible and tangible fixed assets of €190,000 and €1,451,000 respectively. The increase in property, plant and equipment compared to December 31, 2023, is explained by the acquisition of new equipment as part of the fit-out of the Company's new laboratories within the IECB, and the valuation of the right of use of the latter in application of IFRS 16 on leases, in the amount of €163,000.

Non-current financial assets, of €72,000 mainly correspond to the cash balance of the liquidity contract implemented with Invest Securities.

Current assets

Current assets include:

receivables associated with studies re-invoiced without margin for €1,519,000 at June 30, 2024, against €1,759,000 at December 31, 2023;
other receivables and prepaid expenses amounted to €4,653,000, compared to €2,828,000 the previous year. They correspond in particular to :
prepaid expenses of €1,769,000 as at June 30, 2024, compared to €928,000 as at December 31, 2023. The increase in this item relates to successively executed research and development contracts;
tax credit for 2023 and 2022 amounting to of €2,353,000 against €1,597,000 for the previous financial year;
advances and discounts totaling €241,000 at June 30, 2024, compared to €119,000 at December 31, 2023;
a VAT receivable refund of €178,000 against €127,000 for the previous financial year.

Taking into account the receivables and prepaid expenses described above and the value of cash at closing of €12,585,000, current assets amount to €18,758,000 compared to €28,870,000 for the previous financial year.

Equity

Equity amounted to €9,944,000 (compared to €13,201,000 for the previous financial year), which is mainly due to:

the result for the period of -€3,662,000 and the allocation to issue premium of the previous year's net income of -€5,078,000;
the recognition, in "other comprehensive income", of an impact of €5,000;
the reclassification in shareholders' equity of shares held by the Company and gains and losses on the purchase and sale of treasury shares under the liquidity contract.

Financial debt (current and non-current)

Financial debt amounted to €5,085,000 as at June 30, 2024, compared to €4,040,000 as of December 31, 2023. They break down into:

non-current debts of €3,873,000, made of the Company's long-term loans and repayable advances;
current debts for €1,211,000, made of the Company's short-term loans and repayable advances.

The increase in financial debt is mainly due to:

the grant of an R&D innovation loan by Bpifrance in the amount of €1,500,000, classified in full under non-current liabilities;
the recognition of a debt relating to the right of use of the new laboratories, in application of IFRS 16, for €146,000, of which €57,000 are classified as current liabilities;
the repayment of the Company's bank loans and repayable advances, representing a decrease in debt of €627,000 over the period.

Deferred income (current and non-current)

Deferred income amounted to €1,448,000 compared to €3,666,000, as at December 31, 2023. They correspond to:

the amount paid in advance by the European Union in respect of the ICOD grant (AEF0217), representing a balance of €994,000 at June 30, 2024, taking into account a new payment of €554,000 received in April 2024. The long-term portion of this financing amounts to €212,000;
the portion of revenues relating to the license option granted to Indivior PLC, recognized on a percentage-of-completion basis through costs during the execution of phase 2B of the AEF0117 program, representing €454,000 at June 30, 2024. Sales recognized over the period amounted to €2,232,000, i.e. a balance of deferred income at June 30, 2024, of €446,000 fully classified as short-term.

2.3. Progress made and difficulties encountered

Please refer to § 2.1 and § 2.6 which describe in particular the progress of the research and development program for the first half and provide an update on the various resources and investments.

2.4. Main risks and uncertainties facing the Company

The objective of the Company's risk management policy is to identify and analyze the risks the Company faces, to define the limits within which the risks must be kept and the controls to be implemented to ensure this.

2.4.1. Risk management by governance and management bodies

The management of strategic, operational and financial risks, and of the Company's internal control, is carefully monitored and managed by the Company's management, the financial department, the Audit Committee and the Company's Board of Directors.

The main mission of risk management is to identify, assess and prioritize risks as well as to assist the management of the Company in choosing the most appropriate risk management strategy and, in order to limit the significant residual risks, define and monitor related action plans.

The main objective of internal control is to enable the Company to achieve its objectives, by defining and implementing the appropriate internal controls in order to address the risks identified in the conduct of the Company's activities.

The main task of the internal audit function is to ensure that the internal control systems are effective and, if necessary, offer recommendations to improve them. The major risks that the Company may face are identified and handled under the responsibility of the Company's management, the operations department and the financial department.

The Company's overall risk management and internal control system is based on several elements, in particular, the control of technological risks, the control of other operational risks, and the monitoring of the Company's internal control system.

Systems put in place by the Company to respond to these challenges include in particular:

the establishment of active governance, through a Board of Directors composed of directors representing long-standing investors in the Company, and independent directors with recognized experience and skills in the field of biotechnology in which the Company operates. The Board of Directors meets at least 4 times a year but is convened when any key development in the management or strategy of the Company justifies it; the points discussed during Board meetings always include a legal and financial progress report, a progress report on research and development, a progress report on the Company's other operations such as, for example, human resources, actions taken in terms of communication, potential partnerships and search for dilutive and non-dilutive financing. Regular updates are carried out, as necessary, with the Chairman of the Board of Directors in order to ensure the quality and relevance of exchanges within the Board. The Chairman of the Board of Directors ensures that each member or censor expresses his opinion on the points presented;
authorizations are obtained in the event of anticipated overspending of certain budget envelopes initially defined, of new studies programmed, or of reorientations in the scientific development programs, either through budget revisions, or through specific deliberations.

Committees have been set up and meet at least twice a year (Audit Committee and Compensation Committee):

the Audit Committee deepens the budget preparation process at the end of the year to ensure the relevance and consistency of the proposed expenditure envelopes. It also meets for the review of the annual and half-year accounts, reviews the accounting options adopted, the differences between the expenses incurred and the expenses budgeted, and exchanges with the auditor on the content of its assignment, the key elements analyzed during its work the identified risks and their accounting translation.
the Compensation Committee proposes to the Board the objectives of the Chief Executive Officer at the beginning of the year, on the basis of the Company's strategic and financial plan; these objectives may relate in particular to meeting deadlines for key scheduled studies, filing patents to improve the Company's industrial property protection, obtaining dilutive or non-dilutive financing, recruiting key personnel. At the end of the year, the Committee meets to assess whether the identified objectives have been achieved, also taking into account other events occurring during the year which would have focused the efforts of the management team and proposes to the Board of Directors the corresponding variable compensation. As of the admission of the Company's shares to the regulated market of Euronext Paris, the Compensation Committee is also in charge of appointments and social and environmental responsibility.
on an operational level, the Company's internal control is based in particular on the separation of tasks and the strong involvement of the Company's management in expenditure commitments, settlement authorizations and payments to third parties.

• the development and regular monitoring of the expenditure budget, with fine granularity, provides a predictive management tool for any budgetary changes thanks in particular to regular and frequent exchanges with the key operational players of the Company. The implementation of cost accounting and time tracking tools per employee strengthens the Company's ability to provide reliable and relevant information to the various stakeholders (shareholders, funders, banking partners, etc.).

2.4.2. Management of risks related to the development of the Company's products

The Company's R&D activities are focused on the development of AEF0117, its most advanced product candidate, and AEF0217, as well as new drug candidates. The value of the Company is significantly dependent on the performance and success of preclinical studies and clinical trials of present and future drug candidates.

The Company's strategy for securing its Research and Development activities is centered on the following:

diversification of its product portfolio: in 2018 the Company initiated the development of AEF0217 in the cognitive deficits of Down syndrome (trisomy 21) in order to add a second drug candidate to its pipeline. With the compound having entered the clinical phase in October 2021 (phase 1 program) and thanks to funding through the ICOD program (H2020), the Company is able to consider other phase 2 clinical studies to establish proof of efficacy in other cognitive deficits mediated by the CB¹ receptor. Finally, the Company is hoping to accelerate the development and qualification of its CB1-SSi library with the aim of launching preclinical proof of concept studies and early toxicity and pharmacokinetic studies to select the drug candidates that could enter non-clinical development allowing first in human studies.
Implementation of strategic partnerships with Key Opinion Leaders (KOLs) and key institutions in the targeted fields. For example, since 2014, the development of AEF0117 for cannabis addiction has been carried out in collaboration with the National Institute on Drug Abuse (NIDA), which is part of the US National Institutes of Health (NIH). As well as significant funding, the NIDA has provided the Company with support, particularly in developing proofs of concept in monkeys and drawing up the clinical development strategy and in interactions with the regulatory authorities (FDA). In the case of AEF0217, the establishment of a Scientific Committee made up of KOLs in the field of cognitive disorders was instrumental in validating the preclinical proofs of concept obtained by the Company and a key step in the decision to initiate the studies required for the first-in-human administration of the compound. The ICOD project funded by the H2020 framework has helped the Company engage a number of KOLs in AEF0217's development project and a network of clinical centers to carry out the phase 2 study into cognitive deficits in Down syndrome.
Expansion of the clinical team, under the leadership of Helle Mengel, Head of Clinical Development at the Company, to include specialists in clinical development and in regulatory issues specific to the field of neurosciences. The clinical team also provides vital input into the process of selecting external service providers to supervise the conduct of the studies and in the choice of clinical centers most likely to guarantee recruitment and a high level of operational performance for the studies. The Company believes that the team's in-depth knowledge of the characteristics of the novel mechanism of action of the Company's drug candidates, preclinical proofs of concept, and pharmacological safety studies, are important

factors in ensuring that studies are well targeted and that performance risks are kept to a minimum. Its extensive knowledge of industry good practices, especially in the area of quality audit and control, have helped implement internal procedures that meet the standards of the Company's sector. The team is in regular contact with the Company's Operations Department, which creates dialog, the ability to anticipate problems, to respond quickly to possible operational contingencies and to identify and manage the potential delays and budget overruns that occur in any projects of this scale.

• The Company is constantly monitoring developments in the area of CB¹ receptor modulators in order to identify trends, markets, possible competitors and to be able, if necessary, to form partnerships with academic groups or private entities that are developing technologies relevant to its strategy.

2.4.3. Management of risks related to regulatory authorizations and the future marketing of the Company's products

Since it is potentially the first Company to be able to develop and, if successful, commercialize a drug in the two main indications targeted by the Company (cannabis addition and cognitive deficits related to Down syndrome), the Company faces the risk of not being given a clear regulatory pathway by the regulatory agencies.

To address these issues, the Company's policy is to call on the expertise of external specialists at the very early stages of product development. For that purpose, it works in close collaboration with prominent regulatory consultancy firms with extensive experience in bringing molecules to market. The Company refers to these consultants when drawing up key regulatory development documents, particularly the quality target product profile (QTPP), the target product profile (TPP) and planning the full development programs including the required interactions with the regulatory agencies and the possibility of benefiting from expedited regulatory procedures (especially fast track and orphan drug procedures).

In the case of AEF0117, the Company has also requested a "type B meeting" with the FDA at the end of the Phase 2A clinical study to discuss the overall development plan for this drug candidate for the treatment of cannabis use disorders as well as the protocol of the Phase 2B. Thanks to an industrial partnership signed with Indivior PLC in June 2021, the Company was able to share ideas with a specialist in addiction treatment: recurring Joint Steering Committee meetings between the two parties provide an opportunity for the Company to draw on Indivior PLC's expertise in the "downstream" regulatory and commercial stages (including the future coverage of treatments by the healthcare agencies of the various key target countries).

In the case of AEF0217 in Down syndrome deficits, the creation of the ICOD consortium financed by a European H2020 program has helped the Company to structure a shared development strategy with the most prominent European experts in the field providing added security for the areas of development pursued.

Through these various interactions and participation in international conferences in the Company's areas of expertise, the Company is able to monitor scientific and strategic developments.

The Company mainly analyses issues relating to the competitive positioning of its drug candidates and technologies internally and may also purchase any relevant studies and call upon its network of KOLs.

2.4.4. Management of legal, compliance and intellectual property risks

2.4.4.1. Product liability

In order to protect itself against the risk of liability in the event of any harm caused by its products, the Company takes out specific insurance policies for each clinical trial that it sponsors. Pricing and the amounts covered depend on the local laws and regulations in force in the clinical investigation center in question. In France, the Public Health Code (Code de la santé publique) requires sponsors of clinical trials to carry insurance. In countries where there is no such obligation, the Company has nevertheless taken out an insurance policy covering its liability from the performance of clinical trials. The total value of the policies depends on the number of patients included in the trials and their geographic location. The Company believes that it has sufficient coverage for each of the ongoing trials.

2.4.4.2. Intellectual property risk management

Since its creation, the Company has implemented an intellectual protection policy internally and with regards to third parties.

Internally, the teams of researchers are made aware of the key issues related to intellectual protection. Any exchange with potential partners, whether academic or commercial, is done in compliance with the rules of protection by the establishment of confidentiality agreements, MTA (Material Transfer Agreement, or agreements for the use of the Company's compounds) and review of the contractual clauses by the internal legal team of the Company, and by specialized consultants if necessary. Thus, the Company has two in-house employees combining legal and scientific skills to manage intellectual property issues and to be the expert interlocutors with industrial property consulting companies.

Externally, the Company has recourse to international consulting firms, including those based in the United States, to ensure the quality of the patent application files filed with regard to the regulations of the various countries, but also to exchange with the examiners during the period when applications are assessed.

Aelis Farma pursues an active strategy to protect its inventions and its intellectual property, favoring patents conferring strong protection on the drug candidate molecule itself (composition patent), and subsequently strengthening this intellectual property by filing patents of specific application in the therapeutic fields or therapeutic indications of interest.

By systematically protecting the structure of the molecules of drug candidates developed by the Company, and their main uses, the Company aims to prevent any commercial exploitation of its drug candidates by any third party in any field during the term of validity of composition patents and reinforced in the therapeutic applications of interest by application patents.

The Company also monitors the products marketed by its competitors and will take action for infringement if such actions are revealed.

All external patents and patent applications brought to the Company's attention, especially during the examination of the Company's applications, will be carefully scrutinized for their potential impact on the freedom of use of the Company's technologies.

2.4.4.3. Compliance with personal and medical data protection regulations

The Company also adopts a legal approach to securing each project by protecting individual rights within legal frameworks such as contracts, confidentiality statements and consent forms. The Company implements procedures to protect the personal data of its employees, patients, healthcare professionals and other partners that it interacts with. The Company is transparent on the use of these data in activities such as research.

For clinical trials conducted in the United States, the Company uses service providers that are mandatorily or voluntarily subject to the General Data Protection Regulation and therefore have the level of data protection required in Europe.

2.4.5. Management of risks related to the Company's operations

Issues relating to the selection and monitoring of partners in charge of the production of the Company's products, and clinical and preclinical developments are closely managed by the Company's Operations Department. The process put in place is based on almost systematic competition between the main partners, the considering in this process of their financial strength, their ability to offer the Company scalable solutions to enable these relationships to develop over time (capitalization on the knowledge and know-how of the partners).

As far as possible, the Company uses first-rate service providers, whose size allows them to deal with any contingencies by relocating the activity in the event of force majeure, and who can ensure the implementation of rapid remediation plans if necessary. In accordance with practices in the pharmaceutical industry, the Company has implemented an internal quality process focused in particular on the evaluation of service providers and the monitoring of identified deviations. The Company carries out quality audits of the main service providers in accordance with the standards in force in the pharmaceutical industry.

The search for diversification of supply sources is underway to secure materials qualified as strategic.

Finally, the Company's recruitment policy, which makes it possible to diversify experience and integrate people with knowledge of the various players in the sector, makes it possible to benefit from feedback and to develop the Company's practices.

2.4.5.1. Risks related to the absence of a sales, marketing and distribution organization

The Company's business model is to develop a drug candidate to the point that it is brought to market and find, at least initially, partners for its commercialization. Thus, in the case of AEF0117, the Company has demonstrated its ability to implement such a strategy by signing an option license agreement for the commercialization of this drug candidate in the field of diseases caused by cannabis use. As a result, the management team gained valuable experience in negotiating and setting up partnerships, including through the use of specialist external consultants in order to have the necessary support if other drug candidates are identified.

To implement this strategy of seeking partners, the Company monitors companies within the industry and communicates regularly to increase awareness of its compounds. Its aim is to increase

its participation across a large number of conferences and meetings ("BIO Events") in order to raise its profile. The listing on the regulated market of Euronext Paris in February was part of this strategy to communicate and increase awareness of the Company and its products.

2.4.5.2. Key employee management policy

The Company has implemented a recruitment policy allowing it to duplicate the Company's key positions, diversify the profiles of its employees and cope with the evolution of its Research and Development programs. In this context, its salary policy aims to position its remuneration at market level in order to attract talent on a national or even international level. Aelis Farma also plans to continue its policy of granting profit-sharing tools in the Company's capital, open to all employees of the Company, with the main criterion of retaining employees over time. In the current context of changing working methods following the Covid-19 pandemic, the Company has also put in place arrangements and the necessary technical means allowing its employees to work remotely working mode without loss of efficiency as soon as that might be necessary.

2.4.5.3. Cybersecurity risks

The Company's data set-up is structured around a third-party cloud-based data solution. The service providers' security systems and redundancy help to reduce exposure to a targeted attack. In addition to standard security software, the Company has implemented additional security measures to strengthen the security of its email exchanges, as well as more sophisticated firewalls and antimalware. Strict internal procedures have been introduced for password changes, updates of security software and backups to redundant systems and all employees are reminded of them on a regular basis. In addition, the Company has set up a cyber-insurance policy, covering incident management (breach of data or computer system security, human error, technical incident, etc.), damage suffered by the insured (cyber-extortion, operating loss, cyber embezzlement, etc.), and civil liability coverage linked to cyber incidents.

To ensure the secure transfer and storage of its clinical data, the Company uses service providers with General Data Protection Regulation (GDPR)-compliant procedures that increase the security of clinical data, including data backup and integrity.

2.4.6. Financial risk management

2.4.6.1. Funding and liquidity

The highly capital-intensive nature of the Company's business has led it to develop approaches based on the identification and anticipation of financial needs. The management of these risks is based on:

A regular budgeting process, mainly focused on cash management and controlling the evolution of the R&D budget. This process is shared internally between various players within the business and regularly supervised by the Company's governing bodies (Board of Directors and Audit Committee);
Fundraising efforts by the management team targeting non-dilutive financing from national, European and international partners. This has led to financing from Bpifrance, the Conseil

Régional Nouvelle-Aquitaine and banking partners, as well as grants from the European Union and NIDA-NIH (US National Institutes of Health);

• Dilutive fundraising targeting specialized investors and funds that have supported the Company in the past.

When setting up major financing (fundraising, industrial partnerships), the funds made available are placed with the Company's banking partners, on risk-free media.

2.4.6.2. The research tax credit

The French research tax credit (CIR) constitutes a significant source of financing for the Company. In order to respond in the most appropriate way to the evolution of the regulations and the complexity of the applicable rules, the Company has set up an internal organization aimed at managing these issues as well as possible, in particular for the purposes of selecting expenses and eligible service providers, drawing up the appropriate documentation, and anticipating any adverse developments.

This organization is based on:

the use of external expertise (accountant and firm specializing in this field and in particular in relation to the health sector);
the establishment of regular regulatory monitoring to anticipate changes, learn about case law, ensure the quality of the documentation produced;
the implementation of a risk management process within the operational teams, in order to identify, as soon as the order is placed, the eligibility of service providers and services for the CIR mechanisms at the instigation of the Finance Department;
the qualification of the potential eligibility of expenditure as soon as the budget is drawn up, making it possible to control the issues of financial flows linked to this mechanism;
the implementation of a time monitoring network adapted to the particularities of the Company's research activity and the eligibility or not of each of the milestones as defined by the French Ministry of Research.

2.5. Use of financial instruments by the Company

The Company's exposure to foreign exchange risk is linked to the existence of expenses in a currency other than the euro (mainly in US dollars), the Company's functional currency and the presentation currency of the financial statements.

Since 2021, the Company chose to set up auto-hedging in dollars following the receipt of the \$30 million for the license option agreed with Indivior PLC. Thus, these funds in dollars are used to finance the future costs of the research program carried out in this currency (studies related to AEF0117 in the United States), thus constituting a natural exchange rate hedge.

At December 31, 2023, the expenses covered by the natural currency hedge set up in 2021 had been incurred. The exchange difference relating to these expenses in foreign currencies had therefore been taken to the income statement for the year, and no impact was recognized for the halfyear. At June 30, 2024, the Company had an available cash balance of \$0.7 million, which will be used to pay foreign currency expenses scheduled for the next half-year.

2.6. Company's activity in terms of research and development

The Company has developed a new pharmacological class, Signaling Specific inhibitors of the type 1 receptor of the endocannabinoid system (CB1-SSi), which could make it possible to offer well tolerated and efficient treatments for certain pathological conditions linked to hyperactivity of the CB¹ receptor, the main receptor of the endocannabinoid system. CB1-SSi mimic a natural mechanism the brain uses to combat CB¹ receptor overactivity. This receptor is involved in the regulation of several physiological functions and therefore in the occurrence of several brain diseases, thus giving access to multiple therapeutic areas.

CB1-SSi seem capable of inhibiting only the cellular signals involved in the pathology while sparing the normal physiological activity of the receptor. Thanks to this very innovative mode of action, never tested before in humans, Aelis Farma was able to show that CB1-SSi are, to date, not only effective but also well tolerated and devoid of significant side effects. This mode of action is very different from that of previous generations of CB¹ inhibitors called antagonists which block all receptor activity resulting in significant side effects which made their use in humans difficult. For these reasons, CB1-SSi promise to provide therapeutic solutions for diseases that currently have no treatment.

The products developed by Aelis Farma are new molecular entities (NMEs) belonging to the general chemical class of small molecules and to the new pharmacological class called Signaling Specific inhibitors of the CB¹ receptor of the endocannabinoid system (CB1-SSi).

Aelis Farma has two clinical-stage drug candidates:

AEF0117, the most advanced drug candidate, to combat the harmful effects of cannabis and in particular Cannabis Use Disorders (CUD) which is the current definition of cannabis addiction in the diagnostic manual reference DSM-5. It is estimated that in the European Union, United States, Canada and Australia, approximately 22 million individuals have been diagnosed with CUD. The Company's animal and human studies with AEF0117 suggest that this compound may decrease both motivations to use cannabis and the negative impact of cannabis on the brain. In addition, AEF0117 demonstrated favorable pharmacokinetic, toxicological, pharmaceutical and tolerability characteristics confirming its potential for the treatment of CUD. These results were published in June 2023 in the prestigious scientific journal Nature Medicine (Haney et al., Nat Med 2023). This article is the first concerning an Aelis Farma molecule and provided external validation not only of the efficacy and tolerability of AEF0117, but more generally of the new pharmacological class, CB1-SSi, developed by Aelis Farma. The recently completed development program of AEF0117, which included a Phase 2B study, in patients suffering from CUD and additional clinical and non-clinical studies was conducted in collaboration with Indivior PLC. As indicated in September 2024, preliminary results of the study show that:
AEF0117 has a good safety profile with a similar percentage of adverse events between the different study arms, including placebo.
The primary endpoint (proportion of patients using cannabis ≤1 day per week) did not show statistically significant effects of AEF0117.
The quantitative endpoints measuring the consumption of cannabis showed, at the highest dose of AEF0117 (1mg/day), consistent trends to decrease in the overall population and a statistically significant reduction in participants with moderate CUD, according to the DSM-5 diagnostic criteria.

As already observed in the Phase 2A, these data confirm that AEF0117 is pharmacologically active, thus providing further validation of the activity of the new of drugs developed by Aelis Farma, the "Signaling Specific inhibitors of the CB¹ receptor (CB1-SSi)".

The Company is currently completing the quality control of the data base and running supplementary analysis in order to determine the next regulatory and development steps that will be communicated once this process is completed. Indivior indicated that it did not currently expect to exercise the option on AEF0117 before seeing additional favorable clinical data of the phase 2B.

• AEF0217, the second drug candidate, is being developed for the treatment of cognitive disorders, with the primary target being Down syndrome cognitive impairment (trisomy 21), a significant unmet medical need. An estimated 0.85 million people are living with Down syndrome in the European Union, United States, Canada, Australia and Japan, with an increasing prevalence due to late pregnancy and longer life expectancy for these people. AEF0217 was able to restore working memory deficit in Down syndrome mice, a key cognitive deficit in Down syndrome, without inducing identifiable behavioral or physiological side effects within the therapeutic dose range. Thanks to this unique combination of efficacy and safety, particularly important for the fragile Down syndrome population, AEF0217 could allow a prodigious leap in the quality of life and social integration of people living with Down syndrome. AEF0217 has completed the phase 1 program in healthy volunteers demonstrating a very favorable safety profile and pharmacokinetic characteristics. Enrolment of participants with Down syndrome in the phase 1/2 study was completed in June 2024, and results will be announced in the fourth quarter of 2024. The main objective of this study is to evaluate the safety and pharmacokinetic properties of AEF0217 in people with Down syndrome. This double-blind, placebo-controlled study was conducted at two clinical centers in Spain and included 30 patients.

Disorders linked to excessive cannabis use and cognitive deficits associated with Down syndrome have been selected as a priority by Aelis Farma because they represent major unmet medical needs, thus potentially opening up access to large markets. Aelis Farma is also developing several new CB1-SSi, now in early pre-clinical research, which could offer therapeutic solutions for other brain diseases involving the CB¹ receptor, such as attention deficit hyperactivity disorder (ADHD), autism spectrum disorders, 22q11 deletion syndrome (an orphan disease associated with hyperactivity and psychosis).

Aelis Farma has developed and operates a Research and Development (R&D) platform, which enables the Company to discover drug candidates that act as specific modulators of target receptor signaling. The Aelis Farma R&D platform is made up of three major components:

a library of new original molecules which modify the activity of the CB¹ receptor in a specific and selective way of certain signaling pathways of this receptor. This library has already generated two drug candidates that are now in the clinical stage: AEF0117 for cannabisrelated disorders and AEF0217 for cognitive deficits. It also contains several new compounds that Aelis Farma is developing to treat other diseases that involve the deregulation of the CB¹ receptor;
an efficient research platform composed of: i. A screening laboratory using High Content Screening techniques, which gives Aelis Farma the ability to identify molecules that act as signaling specific inhibitors; ii. An original multifactorial screening procedure, which assesses toxicity, bioavailability and formulation upstream in order to reduce the attrition rate

of the drug development pipeline; iii. Innovative behavioral models that aim to improve the prediction of therapeutic efficacy in humans;

• structuring partnerships with prestigious national and international partners who offer Aelis Farma the best environment to implement the Company's programs.

2.7. Activity of subsidiaries and controlled companies

The Company has no subsidiary and does not control any company.

2.8. Foreseeable development and prospects

The Company's 2024-2025 development program includes a large number of clinical and preclinical studies to advance research programs and enable them to reach the next stage of value creation:

For AEF0117:
We will continue to analyze quantitative measures of cannabis intake in order to determine the next regulatory and development steps, which will be communicated to the market and discussed with Indivior once this process has been completed.
For AEF0217:
The start of a phase 2B trial for the cognitive deficits observed in Down syndrome, scheduled to begin in the first half of 2025 if phase 1/2 is successful;
The Company is also analyzing the possibility of conducting an additional clinical trial in 2025 to assess AEF0217's potential in other cognitive deficits.
For the next drug candidate that will stem from the Discovery program of the Company:
Thanks to its diversified and proprietary CB1-SSi library and screening platform, Aelis Farma has discovered distinct families of CB1 compounds that could address a broad spectrum of diseases associated with the CB1 receptor;
Aelis Farma is initiating preclinical proof of concept studies and early toxicity and pharmacokinetic studies to select the drug candidates that could enter non-clinical development in 2025, allowing first in human studies.

Given the cash position at June 30, 2024, the funds raised in the end of July, 2024 transaction (as detailed in section 3.8), and non-dilutive financing in the process of being obtained, the Company estimates that it has sufficient cash (according to its current forecasts) to carry out its R&D program up to and including the fourth quarter of 2026.

AEF0117 is the object of a license-option agreement with Indivior PLC, which included, following the results of phase 2B with AEF0117 and end-of-program Phase 2 discussions with the FDA (Food and Drug Administration), the payment of \$100 M from Indivior corresponding to the license fee. Indivior, indicated that it did not currently expect to exercise the option on AEF0117 before seeing additional favorable clinical data of the phase 2B.

The Company could also have recourse to other financing by capital increase and/or borrowing. In addition, to ensure its financing, the Company may also count on the payment of the CIR as well as repayable advances and subsidies that it could request in the future as it has been able to do in the past.

2.9. Important events since the end of the financial year 2023

2.9.1. Attribution of warrants

On December 18, 2023, the Board of Directors made use of the authorization granted by the twenty-seventh resolution of the Combined General Meeting of May 24, 2023. In view of the 90,500 BSPCEs still to be allocated following the June 2023 issue, it was decided to issue 60,000 BSPCEs to named beneficiaries under the main terms and conditions of a specific contract, and to allocate 128,000 BSPCEs in December 2023. The latter were effectively subscribed in January 2024.

On April 18, 2024, the Board of Directors made use of the authorizations granted under the twentysixth and twenty-seventh resolutions of the Combined General Meeting of May 24, 2023. It was decided to proceed with the issue and allocation of 30,000 BSAs, as well as the allocation of 8,500 BSPCEs remaining from the December 2023 issue, to named beneficiaries in accordance with the main terms and conditions of a specific contract.

These transactions are equivalent to a total nominal amount of €1,665, representing 1.26% of the share capital at that date, or a total of 3.19%, taking into account the BSCPEs and BSAs granted, out of the maximum of 4% of the share capital at the date of the last grant, as authorized by the delegations.

2.9.2. Additional contributions to the liquidity contract

On January 2, February 6, April 5 and June 13, 2024, the Company made four additional cash contributions each of €50,000, to the resources allocated to the liquidity contract signed on December 27, 2022, with Invest Securities. The purpose of these increases is to rebalance the resources allocated, ensure greater liquidity for the shares, and avoid any price discrepancies not justified by market trends.

2.9.3. Relocation of the Company's laboratories

As part of its ongoing growth, at the end of February 2024 the Company signed a new lease for its new laboratories, covering a total surface area of 306 m2 located at IECB, 2 rue Robert Escarpit, 33607 Pessac, from where the Company's R&D staff will continue to operate the platform's research activities. The relocation of the workforce is scheduled for April 10, 2024.

2.9.4. Allocation of a BPIfrance loan

In January 2024, the Company was awarded an interest-bearing Innovation R&D loan with Bpifrance for an amount of €1,500,000 and a term of 8 years. The loan will be repaid in 20 quarterly installments, including principal and interest. The Company benefits from a grace period of 11 quarterly payments. The first installment is due on December 31, 2026, and the last on September 30, 2031.

2.9.5. Situation in Ukraine and the Middle East

Conflicts that began in February 2022 between Russia and Ukraine, and in October 2023 in the Middle East have had no direct significant impact on the Company's operational activity, as the

Company has no service providers or operations underway in these countries. The indirect impacts of these conflicts, for example in terms of inflation, rising interest rates and availability of raw materials, remain limited. The Company is able to carry on its activities under normal conditions and bear the additional costs incurred.

2.10. Change to the composition of capital during the first half of 2024

There were no changes in capital structure during the year.

Section 3 - Financial statements prepared in accordance with IFRS as of June 30, 2024

CONDENSED STATEMENT OF NET INCOME

In thousands of euros	Note	06/30/24	06/30/23
Revenue	3.5.2	2,232	3,734
Other operating income	3.5.3	1,892	1,967
Revenue from ordinary activities		4,124	5,701
Research and Development costs	3.5.4	(6,115)	(7,151)
General and administrative costs	3.5.5	(1,673)	(992)
Recurring operating profit (loss)		(3,665)	(2,442)
Other operating income and expenses	-	-	-
Operating profit (loss)		(3,665)	(2,442)
Financial income (loss)	3.5.6	83	813
Profit (loss) before tax		(3,583)	(1,629)
Income tax expense	3.5.7	-	(4)
Net income (loss)		(3,583)	(1,633)
Earnings per share (€/share)		(0.27)	(0.13)
Diluted earnings per share (€/share)	3.5.8	-	-

CONDENSED STATEMENT OF COMPREHENSIVE INCOME

In thousands of euros	06/30/24	06/30/23
Net income (loss)	(3,583)	(1,633)
Items that will not be reclassified subsequently to profit or loss	11	1
Actuarial gain (loss) on employee benefit obligation	11	1
Tax effect	-	-
Items that may be reclassified subsequently to profit or loss	-	(886)
Fair value gain/(loss) arising on hedging instruments during the period	-	(886)
Tax effect	-	-
Comprehensive profit (loss)	(3,571)	(2,517)

CONDENSED STATEMENT OF FINANCIAL POSITION

In thousands of euros	Note	06/30/24	12/31/23
Intangible assets	3.4.1	190	190
Fixed assets	3.4.1	1,451	1,183
Other non-current financial assets	3.4.1	72	38
Deferred tax assets		-	-
Total non-current assets		1,713	1,411
Inventory		-	53
Trade receivables	3.4.2	1,519	1,759
Other receivables and prepaid expenses	3.4.2	4,653	2,828
Cash and cash equivalents	3.4.3	12,585	20,230
Total current assets		18,758	24,870
TOTAL ASSETS		20,471	26,281
Equity	3.4.4	9,944	13,201
Commitments to staff		109	102
Non-current financial debts	3.4.6	3,873	2,946
Other non-current liabilities - provisions	3.4.8	15	-
Deferred income	3.4.8	212	-
Total non-current liabilities		4,209	3,048
Current financial debts	3.4.6	1,211	1,094
Trade payables and related accounts	3.4.8	3,399	4,495
Social and tax debts	3.4.8	471	776
Deferred income	3.4.8	1,236	3,666
Other current liabilities		-	-
Total current liabilities		6,317	10,032
TOTAL LIABILITIES		20,471	26,281

CONDENSED STATEMENT OF CASH FLOWS

In thousands of euros	Note	06/30/24	06/30/23
Net income (loss)		(3,583)	(1,633)
(+) Depreciation and amortization of intangible and tangible assets		128	57
(+) Charges to provisions net of reversals		15	-
(+) Expenses related to share-based payments	3.4.5	481	126
(+) Expenses related to defined benefit plans		17	10
(+) Neutralization of the impact of the restatement of public subsidies on net income		33	40
(+) Reclassification of interest income and expenses	3.5.6	(115)	(843)
Net cash flow from operating activities before changes in working capital requirements, financial interest and income taxes		(3,024)	(2,244)
Change in working capital requirement (net of impairments of trade receivables and inventories)		(4,344)	(4,934)
(-) Research tax credit and income taxes for the half-year	3.5.7	(809)	(864)
Net Cash flows from operating activities		(8,177)	(8,041)
Acquisitions of intangible and tangible assets		(165)	(82)
Financial interest received on investment		-	-
Net Cash flows from investing activities		(165)	(82)
Capital increase net of the conversion of bonds	3.4.4	-	115
Costs relating to the capital increase	3.4.4	-	-
Subscription of BSA		-	-
Receipt of advances and innovation loans		1,500	-
Repayment of innovation advances and loans	3.4.6	(390)	(330)
Repayment of debt on lease obligations	3.4.6	(73)	(28)
Bank loan repayments		(237)	(237)
Gross financial interest paid	3.4.6	(74)	(33)
Financial interest received		194	141
Other funding flows	3.4.6	(201)	(300)
Net Cash flows from financing activities		719	(673)
Effect of exchange rate changes	3.5.6	(4)	(149)
Changes in cash		(7,626)	(8,945)
Cash and cash equivalents at beginning of period		20,211	34,396
Cash and cash equivalents at end of period		12,585	25,450

STATEMENT OF CHANGES IN EQUITY ON 06/30/2024

In thousands of euros	Share Capital	Capital related premi ums	Other elements from overall results	Own shares	Re serves	Result	Equity
Equity at 12/31/22	50	32,538	1,319	(285)	457	(14,288)	19,791
Result of the half-year	-	-	-	-	-	(5,078)	(5,078)
Other elements from overall results	-	-	(1,286)	-	-	-	(1,286)
Overall result	-	-	(1,286)	-	-	(5,078)	(6,365)
Increase of capital net of fees	83	120	-	-	(75)	-	127
Own shares	-	-	-	(713)	-	-	(713)
Payment in shares	-	-	-	-	359	-	359
Others	-	-	-	-	-	-	-
Allocation of result N-1	-	(8,394)	-	-	(5,894)	14,288	-
Equity at 12/31/23	132	24,264	32	(998)	(5,152)	(5,078)	13,201
Result of the half-year	-	-	-	-	-	(3,583)	(3,583)
Other elements from overall results	-	-	11	-	-	-	11
Overall result	-	-	11	-	-	(3,583)	(3,571)
Increase of capital net of fees	-	-	-	-	-	-	-
Own shares	-	-	-	(167)	-	-	(167)
Payment in shares	-	-	-	-	481	-	481
Others	-	-	-	-	-	-	-
Allocation of result N-1	-	(4,633)	-	-	(445)	5,078	-
Equity at 06/30/24	132	19,631	44	(1,165)	(5,117)	(3,583)	9,944

STATEMENT OF CHANGES IN EQUITY ON 06/30/2023

In thousands of euros	Share Capital	Capital related premi ums	Other elements from overall results	Own shares	Re serves	Result	Equity
Equity at 12/31/22	50	32,538	1,319	(285)	457	(14,288)	19,791
Result of the half-year	-	-	-	-	-	(5,078)	(5,078)
Other elements from overall results	-	-	(1,286)	-	-	-	(1,286)
Overall result	-	-	(1,286)	-	-	(5,078)	(6,365)
Increase of capital net of fees	83	120	-	-	(75)	-	127
Own shares	-	-	-	(713)	-	-	(713)
Payment in shares	-	-	-	-	359	-	359
Others	-	-	-	-	-	-	-
Allocation of result N-1	-	(8,394)	-	-	(5,894)	14,288	-
Equity at 06/30/23	131	24,252	435	(697)	(2,773)	(9,790)	17,103

3.1. General information

As at the date of these financial statements, the simplified joint-stock Company Aelis Farma (hereinafter "Aelis Farma" or "the Company"), incorporated in October 2013, is a Company domiciled in France, whose registered office is located in Bordeaux (33000) at 1 rue Lafaurie de Monbadon, and registered with the Bordeaux Trade and Companies Register under number 797 707 627. Aelis Farma was a société par actions simplifiée (simplified joint-stock company) until the Annual General Meeting of January 11, 2022, when it was transformed into a société anonyme (joint-stock company) with a Board of Directors.

Aelis Farma is a biotechnology Company specializing in the research and development of treatments related to brain diseases.

The Company has not, since its creation, taken control of any other entity within the meaning of IFRS 10 "Consolidated Financial Statements". These financial statements are therefore not consolidated financial statements but individual financial statements of Aelis Farma only.

On September 25, 2024, the Board of Directors approved and authorized the publication of the condensed financial statements under IFRS for the half-year period ended on June 30, 2024.

3.2. Highlights of the period

Attribution of warrants

Additional contributions to the liquidity contract

During the first half of 204, the Company, through Invest Securities:

Purchased 22,425 shares for a total amount of €294,331.55;
Sold 9,648 shares for a total amount of €127,640.55.

As of June 30, 2024, the Company held 88,488 shares under this contract, i.e. 0.67% of the capital.

Relocation of the Company's laboratories

Allocation of a BPIfrance loan

3.3. General accounting rules and policies

3.3.1. Basis of preparation

The Company's financial statements have been prepared in accordance with the principles defined by the IASB (International Accounting Standards Board), as adopted by the European Union. This normative reference is available on the website of the European Commission: http://eur-lex.europa.eu/legal-content/FR/TXT/?uri=CELEX%3A02008R1126-20160101.

The international framework includes IFRS (International Financial Reporting Standards), IAS (International Accounting Standards), as well as their interpretations in accordance with SIC (Standing Interpretations Committee) and IFRIC (International Financial Reporting Interpretations Committee).

These condensed half-year financial statements as at June 30, 2024, have been prepared in accordance with IAS 34 "Interim Financial Reporting". The significant accounting rules and policies applied in the half-year financial statements are similar to those used by the Company in the financial statements as at December 31, 2023, with the exception of the standards and interpretations adopted by the European Union, applicable from January 1, 2024, and described below:

Amendments to IAS 1: Presentation of financial statements Classification of liabilities as current or non-current;
Amendments to IFRS 16 Leases: Lease Liability in a Sale and Leaseback;
Amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosures: Supplier Finance Arrangements.

These amendments to standards or interpretations do not have a material impact on the half-year financial statements ended June 30, 2024.

For the first half of 2024, the Company has not decided on the early application of any standard, interpretation or amendment. The standards, interpretations and amendments published with

mandatory application after January 1, 2025, that may have an impact on the Company's accounts are as follows:

Amendments to IAS 21 The effects of changes in foreign exchange rates: Lack of Exchangeability;
Amendments to the Classification and Measurement of Financial Instruments (Amendments to IFRS 9 Financial Instruments and IFRS 7 Financial Instruments: Disclosures);
IFRS 18 Presentation and Disclosure in Financial Statements;
IFRS 19 Subsidiaries without Public Accountability: Disclosures.

3.3.2. Principles specific to half-year financial statements

In preparing these condensed half-year financial statements, the main judgments made by the management and the main assumptions used are the same as those applied in the preparation of the annual financial statements for the year ended December 31, 2023.

The methods for determining revenue are subject to the estimation of the allocate of the 30 million USD in advance payments (option fee) received between the two performance obligations as of June 30, 2024. The accounting rules and methods relating to the recognition of revenue are identical to those applied at December 31, 2023, and are detailed in Section 3.5.2. "Revenue".

These estimates are established on the basis of the information available at the time of their establishment.

The Company has been structurally loss-making since its creation, with the exception of the 2021 financial year following the signing of the option license agreement. Cash and cash equivalents amounted to €12.6 million as of June 30, 2024, compared to €25.5 million as of June 30, 2023.

The subsequent phases of development of the Company's drug candidates will require significant financing. Given its current development plans, the Company estimates that the cash and cash equivalents available to it as of June 30, 2024, i.e. €12.6 million, will enable it to cover its cash requirements beyond twelve months following the filing of its next Universal Registration Document.

In this context, the principle of continuity of operation has been retained for the preparation of the accounts as of June 30, 2024.

In addition, the Company's activities are not seasonal or cyclical in nature.

Unless otherwise indicated, financial data is presented in thousands of euros without decimals, the euro being the presentation currency of the Company.

3.4. Notes to the statement of financial position

3.4.1. Non-current assets

NON-CURRENT ASSETS

In thousands of euros	06/30/24	12/31/23
Intangible assets	190	190
Tangible fixed assets	1,451	1,183
Non-current financial assets	72	38

Total non-current assets 1,713 1,411
--------------------------------------------

The increase in tangible fixed assets of €268,000 corresponds mainly to the valuation of the right of use of the Company's new laboratories at the IECB, determined in accordance with IFRS 16 on leases, i.e. €157,000. The Company also made various investments in furniture and equipment as part of the fit-out of its new laboratories.

Non-current financial assets consist of the cash balance of the liquidity contract.

The Company has not found any indication of impairment of fixed assets (tangible or intangible).

3.4.2. Receivables and prepaid expenses

RECEIVABLES AND PREPAID EXPENSES

In thousands of euros	06/30/24	12/31/23
Accounts receivable	1,519	1,759
Social receivables	3	3
Tax receivables	233	157
Prepaid expenses	1,769	928
Tax claim	2,407	1,597
Receivable grants	0	0
Other receivables	241	141
Total receivables and prepaid expenses	6,172	4,587

Receivables and prepaid expenses mainly include:

Accounts receivable for €1,519,000, corresponding to the charge-back of research activities, as part of the financing obtained from NIDA in 2021 (€1,370,000), and to studies reinvoiced without margin (€149,000);
Prepaid expenses for €1,769,000. The increase in this item relates to research and development contracts with successive execution;
Tax receivables for €2,407,000 including the 2024 CIR claim for €756,000 and the 2023 CIR claim for €1,597,000;
Deductible VAT receivables for €178,000;
Other receivables, amounting to €241,000, correspond mainly to advance payments made or credit notes to be obtained.

3.4.3. Cash and cash equivalents

CASH AND CASH EQUIVALENTS

In thousands of euros	06/30/24	12/31/23
Investment securities	7,723	11,488
Cash and cash equivalents	4,862	8,742
Subtotal cash and cash equivalents	12,585	20,230
Bank overdrafts	0	(19)
Net cash	12,585	20,211

The decrease in cash and cash equivalents is mainly due to cash flows generated by the Company's operating activities and to cash flows from financing activities, corresponding mainly to repayment of loans and repayable advances, and the payment of the new Bpifrance innovation loan.

3.4.4. Share capital and share premium

EVOLUTION OF SHARE CAPITAL AND SHARE PREMIUM

In euros	Number of shares	Share capital	Capital related premium
At 12/31/23	13,257,762	€132,577.62	€24,263,791
Capitalization of reserves	-	-	-
Shares issued during the year	-	-	-
Other - appropriation of net income	-	-	€(4,633,052)
At 06/30/24	13,257,762	€132,577.62	€19,630,739

As of June 30, 2024, the capital of the Company is still made of 13,257,762 shares.

The Company did not distribute any dividends during the first half of 2024.

3.4.5. Share-based payments

3.4.5.1. Plan details

CHARACTERISTICS OF PLANS BENEFITING FROM THE IFRS1 EXEMPTION

		Characteristics of IFRS 1-exempted plans
Type Grant date		Total number of awarded share sub scription warrants	Maturity date	Exercise price	Maximum acquisi tion period in years
BSA	12/19/2013	355	12/31/2023	€ 400.00	immediately
TOTAL		355

At the end of the 2023 financial year, all BSA²⁰¹³ had been exercised, generating the issue of 756,000 new shares.

CHARACTERISTICS OF PLANS AND VALUATION HYPOTHESES

		Characteristics of the plans
Type	Date of attribu tion	Total number of granted warrants	Maturity date	Exercise price	Maxi mum ac quisition period in years	Underly ing share value (*)	Volatility	Risk-free rate	Initial val uation of the plan in thou sands of euros (b)
BSA 2017	06/27/18	800	12/20/27	€46.98	4 years	€1.96	73.16%	0.74%	2
BSA 2018	12/18/18	150	12/20/27	€46.98	immedi ate	€1.96	73.16%	0.74%	-
BSA 2020	10/23/20	2,400	10/23/30	€58.73	4 years	€2.45	62.07%	-0.10%	35
BSPCE 2017	06/27/18	15,000	12/20/17	€46.98	4 years	€1.96	73.16%	0.74%	92
BSPCE 2019	03/04/19	9,400	12/20/27	€46.98	4 years	€2.36	61.80%	0.71%	159
BSPCE 02.2020	02/21/20	6,200	12/20/27	€58.73	4 years	€2.45	62.07%	-0.10%	125
BSPCE 10.2020	10/21/20	4,400	12/20/27	€58.73	4 years	€2.45	62.07%	-0.10%	72
BSPCE 2021	04/29/21	1,789	10/21/30	€58.73	4 years	€7.24	45.63%	-0.19%	179
BSPCE 2022	04/01/22	126,000	07/01/32	€14.02	5 years	€11.24	50.80%	0.63%	567
BSPCE 12.2022	01/03/23	31,500	03/31/32	€10.26	4,5 years	€13.60	64.80%	1.72%	265
BSPCE 06.2023	06/22/23	9,500	06/20/33	€13.96	5 years	€14.00	66.80%	2.56%	81
BSPCE 06.2023 (c)	10/10/23	100,000	06/20/33	€13.96	4 years	€13.50	67.60%	2.89%	815
BSPCE 12.2023(1)	12/18/23	119,500	12/17/33	€13.38	(a)	€13.30	64.90%	3.00%	1 595
BSPCE 12.2023(2)	12/18/23	5,000	12/18/33	€13.38	5 years	€13.30	64.90%	3.00%	41
BSPCE 04.2024	04/18/24	8,500	04/18/34	€13.07	5 years	€13.00	63.70%	3.00%	67
TOTAL		440,139							4,097

(*) : amounts expressed after change in Capital Parity

(a) : The BSPCE12.2023(1) will become exercisable after signature of the contract, and acknowledgement by the Board of Directors or the Chief Executive Officer on delegation, of the achievement of the objective set by the Board of Directors on December 18, 2023, and until December 17, 2033, end of the exercise period of the BSPCE12.2023(1), at a rate of 1/36 per month for a period of three (3) years from the date on which the target is reached, except in the event of early exercise or compulsory exercise, and provided that the Grantee is one of the Categories of Beneficiaries of the BSPCE12.2023(1) on the date on which the BSPCE12.2023(1) become exercisable.

(b) : Black & Scholes model

(c) : Following a decision by the Board of Directors on June 24, 2024, this BSPCE plan has been modified with regard to the vesting conditions of the warrants. The accounting impacts will be presented in the 12/31/2024 financial statements.

EVOLUTION OF THE NUMBER OF WARRANTS IN CIRCULATION

		Number of outstanding warrants					Maximum number of
Type	Grant date	12/31/23	Granted	Exercised	Obsolete	06/30/24	shares that can be sub scribed for
BSA 2017	06/27/18	800	-	-	-	800	19,200
BSA 2018	12/18/18	150	-	-	-	125	3,600
BSA 2020	10/23/20	1,000	-	-	-	1,000	24,000
BSPCE 2017	06/27/18	15,000	-	-	-	15,000	360,000
BSPCE 2019	03/04/19	3,917	-	-	-	3,917	94,008
BSPCE 02.2020	02/21/20	6,200	-	-	-	6,200	148,800
BSPCE 10.2020	10/21/20	4,100	-	-	-	4,100	98,400
BSPCE 2021	04/29/21	1,789	-	-	-	1,789	42,936
BSPCE 2022	04/01/22	115,500	-	-	-	115,500	115,500
BSPCE 12.2022	01/03/23	31,500	-	-	-	31,500	31,500
BSPCE 06.2023	06/22/23	109,500	-	-	-	109,500	109,500
BSPCE 12.2023(1)	12/18/23	-	119,500	-	-	119,500	119,500
BSPCE 12.2023(2)	12/18/23	-	8,500	-	-	8,500	8,500
BSPCE 04.2024	04/18/24	-	8,500	-	-	8,500	8,500
TOTAL		289,431	133,000	-	-	422,431	1,179,844

EVOLUTION OF THE NUMBER OF WARRANTS IN CIRCULATION AND WEIGHTED AVERAGE EXERCICE PRICE

		06/30/24	12/31/23
Warrants depending on the period	Number of options	Exercise weighted average price	Number of options	Exercise weighted average price
Outstanding at opening	289,431	€17.87	159,271	€22.57
Obsolete during the period	-	€ -	- 10,500	€14.02
Exercised during the period	-	€ -	- 340	€374.04
Granted during the period	133,000	€13.56	141,000	€13.13
Outstanding at closing	422,431	€16.45	289,431	€17.87
Exercisable at closing	1,179,844	€51.53	31,784	€51.39

The share-based payment expense recognized as personnel expenses includes the following amounts:

SHARE-BASED PAYMENT EXPENSE

In thousands of euros	06/30/24	06/30/23
BSPCE 2022	81	86
BSPCE dec2022	48	40
BSPCE juin2023	12	0

In thousands of euros	06/30/24	06/30/23
BSPCE juin2023-2	89	0
BSPCE décembre2023	246	0
BSPCE avril2024	5	0
Share-based payment	481	126

3.4.6. Financing and financial instruments

GROSS FINANCIAL DEBT

In thousands of euros	06/30/24	12/31/23
Non-current bonds loans	-	-
Bank loans	2,172	910
Lease liabilities	1,000	898
Repayable advances	702	1,139
Derivative financial instruments (liabilities)	-	-
Accrued interests	-	-
Subtotal other non-current financial liabilities	3,873	2,946
Current bond loans	-	-
Bank debts	475	475
Repayable advances	564	484
Lease liabilities	163	114
Bank overdraft	-	19
Accrued interests	9	2
Sub-total other current financial liabilities	1,211	1,094
Gross financial debt	5,085	4,040

The change in gross financial debt during the first half of 2024 is mainly explained by:

the granting of an innovation loan by Bpifrance for a total of €1,500,000, classified under non-current liabilities;
the recognition of a debt relating to the right of use of the new laboratories, in application of IFRS 16, for €146,000, of which €57,000 are classified as current liabilities;
the repayment of the Company's bank loans and repayable advances, representing a decrease in debt of €627,000 over the period.

FINANCIAL DEBTS

In thousands of euros	06/30/24	12/31/23
Less than a year	1,211	1,094
Between 1 and 5 years	2,806	2,495
More than 5 years	1,068	421
Total	5,085	4,040

LEASE LIABILITIES

In thousands of euros	06/30/24	12/31/23
Less than a year	171	114
Between 1 and 5 years	607	475
More than 5 years	393	423
Total	1,170	1,012

FINANCIAL DEBTS EXCLUDING LEASE LIABILITIES

In thousands of euros	06/30/24	12/31/23
Less than a year	1,040	980
Between 1 and 5 years	2,199	2,021
More than 5 years	675	28
Total	3,914	3,028

Reconciliation of changes in gross financial debt and cash flow from financing activities

The variation in borrowing and financial debts can be analyzed as follows:

CHANGE IN INDEBTEDNESS

In thousands of euros	06/30/24	12/31/23
Balance at the beginning of the period	4,040	3,822
Loan subscription	1,500	-
Loan repayments	(627)	(865)
Repayment of lease liabilities	(91)	(92)
Financial interest paid	(74)	(78)
Cash flow from financing activities through financial debts	708	(1 035)
Cost of financial debt	105	159
Increase of rental debts	234	1,095
Changes in derivatives	-	-
Others	-	-
Balance at the end of the period	5,085	4,040

3.4.7. Financial assets and liabilities

BOOK VALUES AND FAIR VALUES BY LEVEL OF FINANCIAL ASSETS AND LIABILITIES

	06/30/24				12/31/23
In thousands of euros	Hierarchy of fair values	Book value	Fair value	Fair value by results	Fair Value by other items of comprehen sive income	Financial instrument at amortized cost	Book value
Other non-current financial assets	Level 3	72	72	-	-	72	38
Receivables	Level 3	1,996	1,996	-	-	1,996	2,152
Other current financial assets	Level 3	-	-	-	-	-	-
Cash and cash equivalent	Level 1	12,585	12,585	12,585	-	-	20,320
Total financial assets	-	14,654	14,654	12,585	-	2,068	22,420
Bank debt – Non-current	Level 3	3,873	3,873	-	-	3,873	2,946
Accounts payable (suppliers and related accounts)	Level 3	3,399	3,399	-	-	3,399	4,495
Bank debt - current and passive cash	Level 3	1,211	1,211	-	-	1,211	1,094
Other debts	Level 3	471	471	-	-	471	776
Total financial liabilities	-	8,954	8,954	-	-	8,954	9,311

Fair value is defined as the price that would be received for the sale of an asset or paid for the transfer of a liability in an arm's length transaction between market participants at the measurement date.

A financial asset is defined as the existence of a contractual right to (receive) an economic benefit that will ultimately result in the receipt of a cash flow or the delivery of an equity instrument (share or other). In this respect, prepaid expenses, for which the future economic benefit is the receipt of goods or services rather than the right to receive cash or another financial asset, and tax receivables, which do not represent a contractual right but result from legal obligations imposed by public authorities, are not financial assets.

A financial liability is defined as :

a contractual obligation either to deliver to another entity cash or another financial asset, or to exchange financial assets or financial liabilities with another entity under conditions that are potentially unfavorable ;
or as a contract which will or may be settled in the entity's own equity instruments, and which is :
a non-derivative for which the entity is or may be obliged to deliver a variable number of the entity's own equity instruments; or
a derivative instrument that will or may be settled other than by exchanging a fixed amount of cash or another financial asset for a fixed number of the entity's own equity instruments. For this purpose, the entity's own equity instruments do not include puttable financial instruments classified as equity instruments under IAS 32.16A and .16B, instruments which

impose on the entity an obligation to deliver to another party a pro rata share of the entity's net assets only on liquidation, and which are classified as equity instruments under IAS 32.16C and .16D, or instruments constituting contracts for the future receipt or delivery of the entity's own equity instruments;

• An there must be a contractual obligation, and as such, deferred income is not a financial liability.

Fair value is based on market data and commonly used valuation models and can be confirmed in the case of complex instruments by reference to values quoted by independent financial institutions.

The categories are defined as follows:

Level 1 input data: inputs directly based on quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date;
Level 2 input data: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly;
Level 3 input data: prices established using valuation techniques based on unobservable data.

3.4.8. Other current and non-current liabilities

OTHER LIABILITIES

In thousands of euros	06/30/24	12/31/23
Others	15	0
Non-current contract liabilities	212	0
Subtotal other non-current liabilities	227	0
Accounts payable (suppliers and related accounts)	3,399	4,495
Social debts	74	649
Fiscal debts	397	127
Others	-	-
Current contract liabilities	1,236	3,666
Subtotal other current liabilities	5,106	8,938
Total other liabilities	5,333	8,938

Liabilities on current and non-current contracts mainly consist of the share of Indivior PLC income (payment of the option) corresponding to the research performance obligations described in part 3.5.2 Revenue. It is recognized over time by costs during the execution of phase 2B of the AEF0117 program from the second half of 2021 until the second half of 2024. They also include the portion of the ICOD grant received in advance, of which €212,000 is recognized in non-current liabilities and €782,000 in current liabilities.

3.5. Notes to the statement of profit or loss

3.5.1. Segment information

In accordance with IFRS 8, segment information is established on the basis of internal management data used for operational performance analysis and resource allocation.

An operating segment is a distinct component of the entity that is engaged in the provision of distinct products and services and is exposed to risks and returns that differ from the risks and returns of other operating segments.

The Company only operates in one operating segment corresponding to the research and development of treatments for brain diseases. The assets, liabilities and operating loss presented in the financial statements relate to the activities of the Company located in France.

3.5.2. Revenue

In June 2021, the Company entered into a sublicense option agreement for AEF0117 with Indivior PLC, a leading group in the treatment of addictions, whereby Aelis Farma granted an option for an exclusive sublicense on the families of patents EP12194704.8 and EP18305177.0 and on the associated know-how. This agreement allows Indivior PLC to exploit worldwide a pharmaceutical product containing the compound AEF0117 or certain other pregnenolone derivatives covered by these patent families, in disorders related to cannabis use, addictions and other compulsive behaviors.

Upon signature of the contract, the Company received a lump sum payment of \$30 million (option fee). If Indivior decides to exercise the option, the Company is entitled to receive a second lump sum payment of \$100 million (license fee), milestone payments based on technical, regulatory and commercial milestones up to \$340 million and royalties ranging between 12% and 20%, on sales of the drug containing AEF0117.

The accounting principles applied to the income from these contracts are taken from the IFRS 15 standard. The detailed analysis of the contract has enabled the identification of two performance obligations within this contract during the option period:

1: The communication of data relating to the performance of the phase 2B study and one toxicity study, during the option period, for which Aelis Farma must make its best efforts, and whose additional data will allow Indivior PLC to exercise the option. The income was allocated to this performance obligation by projecting the future costs relating to the completion of phase 2B, including the direct costs of subcontracting, the direct costs of the teams assigned to the completion of these studies and a share of indirect structural costs, as well as a margin.
2: The sub-license granted to Indivior PLC with right of return, involving the provision, on the date of signature of the contract, of information relating to the Research and Development program drawn up since the origin of the project. Under the residual method, the income related to this performance obligation is measured as the difference between the total amount received of 30 million USD and the income associated with obligation 1. It is recognized as revenue at the signing of the contract.

Thus, the recognition of option income of 30 million USD, i.e. €24,616,000, follows the following schedule:

Upon signature of the contract, in June 2021: €7,921,000;
And, for the balance, i.e. €16,695,000, as the costs relating to the completion of the phase 2B study and the toxicity study are recognized, i.e. from the second half of 2021 for the preparatory phases, and until the results analysis period. In this respect, an additional €1,154,000 have been recognized in 2021, €3,809,000 in 2022 and €9,054,000 in 2023, representing total sales of €21,938,000.

In the 1st half of 2024, taking into account progress in incurring costs, an additional €2,232,000 was recognized in revenue. The remaining €446,000 in deferred income at June 30, 2024 corresponds to the estimated expenses still to be incurred in the second half of 2024.

REVENUE

In thousands of euros	06/30/24	06/30/23
Service sales	2,232	3,734
Total revenue	2,232	3,734

3.5.3. Other income from ordinary activities

BREAKDOWN OF OTHER INCOME FROM ORDINARY ACTIVITIES

In thousands of euros	06/30/24	06/30/23
Research Tax Credit (CIR)	809	883
Subsidies related to income	33	108
Others	1,049	976
Other income from ordinary activities	1,892	1,967

Other income from ordinary activities corresponds in particular to studies re-invoiced without margin and subsidies.

3.5.4. Research and Development costs

BREAKDOWN OF RESEARCH AND DEVELOPMENT COSTS

In thousands of euros	06/30/24	06/30/23
Other purchases and external expenses	(4,857)	(6,167)
Staff costs	(1,041)	(907)
Intellectual Property	(217)	(78)
Research and Development costs	(6,115)	(7,151)

Other purchases and external expenses are lower than at June 30, 2023, due in particular to the end of recruitment for the AEF0117 phase 2B study at the end of the 2023 financial year. The first half of 2024 was mainly devoted to monitoring the study data before the database freeze. During the first half of 2024, the patent covering pathologies linked to cannabinoid dependence was validated at European level, explaining the increase in intellectual property costs.

3.5.5. General and administrative costs

BREAKDOWN OF GENERAL AND ADMINISTRATIVE COSTS

In thousands of euros	06/30/24	06/30/23
Staff costs	(1,034)	(508)
Other purchases and external expenses	(639)	(484)
General and administrative costs	(1,673)	(992)

The increase in personnel expenses compared with June 30, 2023 is mainly due to the strengthening of teams in general and administrative activities (recruitment and time spent by the Company's management) and to the impact of the expense recognized in connection with the BSA and BSPCE plans in application of IFRS 2.

3.5.6. Financial result

COST OF NET FINANCIAL DEBT

In thousands of euros	06/30/24	06/30/23
Income from cash and cash equivalents	195	148
Change in value of assets at fair value through profit or loss	(3)	0
Interest charges on loans	(82)	(64)
Interest charges on rental debts	(22)	(9)
Total cost of net financial debt	88	75

As of June 30, 2024, income from cash and cash equivalents corresponded mainly to interest earned on available cash (euros and dollars). This increase is due to the current rise in market rates. Interest expense on borrowings corresponds mainly to interest on the "PGE" loans contracted in 2020, interest payable on the deferral period of the loan granted by Bpifrance in January 2024, and to interest relating to the recognition of government grants under IAS 20.

OTHER FINANCIAL INCOME AND EXPENSES

In thousands of euros	06/30/24	06/30/23
Exchange gain (losses)	(4)	738
Changes in the fair value of financial instruments	-	-
Amortization of debt issue costs	-	-
Net financial cost related to the update of provisions for pensions	(2)	(1)
Total other financial income and expenses	(6)	737

The financial result for the first half of 2023 comprised mainly the foreign exchange gain recognized on the settlement of Research and Development transactions, which were self-hedged in dollars. The related expenses were incurred in 2023 financial year, and the exchange difference has been recorded to the income statement.

3.5.7. Income taxes

INCOME TAXES

In thousands of euros	06/30/24	06/30/23
Income tax	0	(4)
Deferred income tax	-	-
Total income tax expense	0	(4)

3.5.8. Earnings per share

EARNINGS PER SHARE

Calculation components	06/30/24	06/30/23
Net income (euros)	(3,582,567)	(1,632,767)
Weighted average number of shares issued	13,223,721	12,602,079
Basic earnings per share (euros/share)	(0.27)	(0.13)

DILUTED EARNINGS PER SHARE

Calculation components	06/30/24	06/30/23
Net income (euros)	(3,582,567)	(1,632,767)
Weighted average number of shares issued	13,223,721	12,602,079
Dilutive potential shares	-	-
Weighted average number of diluted shares	-	-
Diluted earnings per share (euros/share)	(0.27)	(0.13)

3.6. Note to the cash flow statement

As of June 30, 2024, cash and cash equivalents amounted to €12,585,000, a decrease of €7,626,000 compared to December 31, 2023. This decrease in net cash surplus was principally due to the Company's research and development projects.

3.7. Transactions with related parties

On April 2, 2024, the Board of Directors decided to continue the consulting contract with the company Thomas Conseil SPRL., of which Mr. François Thomas is the chairman, and censor of the Board of Directors of the Company, on the same terms as for the 2023 financial year. The purpose of the contract is to provide assistance to the Company in the search for financing, and assistance in negotiation.

3.8. Events subsequent to the end of the period

No event subsequent to the end of the period is likely to affect the valuations used in the half-year financial statements as of June 30, 2024. However, the following events are noteworthy:

On July 2, 2024 and August 7, the Company made deux additional cash contributions respectively of €100,000 and €50,000 to the resources allocated to the liquidity contract signed on December 27, 2022, with Invest Securities. The purpose of this increase is to rebalance the resources allocated, ensure greater liquidity for the shares, and avoid any price discrepancies not justified by market trends.
On July 19, 2024, 20,000 BSAavril2024 were subscribed for a total amount of €39,000 out of the 30,000 BSAavril2024 granted by the Board of Directors on April 18, 2024.
On August 2, 2024, the Chief Executive Officer, using the sub-delegation of authority granted by the Board of Directors on July 30, 2024, recorded a capital increase in cash through the issue of 448,824 new shares at a single price of €10.00, representing a total subscription of €4,488,240, including share premium. This capital increase was carried out by means of a Reserved Offering to the categories of persons defined by the fifteenth resolution of the Annual General Meeting of June 4, 2024. The Company's share capital is thus increased to €137,065.86, divided into 13,706,586 shares with a par value of €0.01.
On September 4, 2024, the Company announced the results of the phase 2B study of AEF0117, which demonstrated that :
AEF0117 has a good safety profile, with a similar percentage of adverse events between the different arms of the study, including placebo.
The primary endpoint (proportion of patients using cannabis ≤1 day per week) did not show statistically significant effects of AEF0117.
The quantitative endpoints measuring the consumption of cannabis showed, at the highest dose of AEF0117 (1mg/day), consistent trends to decrease in the overall population and a statistically significant reduction in participants with moderate CUD, according to the DSM-5 diagnostic criteria.
As already observed in the Phase 2A, these data confirm that AEF0117 is pharmacologically active, thus providing further validation of the new of drugs developed by Aelis Farma, the "Signaling Specific inhibitors of the CB1 receptor (CB1-SSi)".
The Company is currently pursuing analyses to investigate the scope of these quantitative improvements to determine the next regulatory and development steps.
Indivior, Aelis Farma's partner for AEF0117, indicated that it did not currently expect to exercise the option on AEF0117 before seeing additional favorable clinical data.
On September 19, 2024, the Company has signed a bank loan agreement with Crédit Agricole for a total amount of €1.5 million. The loan has an interest rate of 4.69% and is repayable over 48 months.

3.9. Off-balance sheet commitments

The Company did not give or receive any new off-balance sheet commitments during the halfyear.

Section 4 - Statutory auditor's report on the half-year financial statements established according to IFRS

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Aelis Farma

1, rue Lafaurie de Monbadon 33000 Bordeaux, France Office: + 33 5 54 54 23 27 [email protected]

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