BRAIN Biotech : Annual Report 2021/22

Creating a

#Biobased Future

BRAIN Biotech AG

Darmstädter Straße 34 - 36

64673 Zwingenberg, Germany

Fon: +49 (0) 62 51 / 9331- 0

Fax: [phone] / 9331-1⁜1

E-Mail:[e-mail]

Web: www.brain-biotech.com

BRAIN Biotech AG Annual Report 2021/22

BRAIN Biotech AG

BRAIN Group key financials

Overview

BRAIN at a glance

in € million	2021/22	2020/21	2019/20
Consolidated income statement data:
Revenue	49.5	38.4	38.2
Total operating performance	53.1	40.7	39.2
EBITDA	-1.3	-2.5	-3.9
Adjusted EBITDA	-0.1	-2.1	-2.0
Net loss for the reporting period	-6.3	-4.7	-9.0
Consolidated balance sheet data:
Total equity	34.2	41.8	26.1
Equity ratio (in %)	43.9	53.8	36.2
Total assets	78,0	77.7	72.2
Consolidated cash flow data:
Cash flows from operating activities	-1.5	-3.9	-4.8
Cash flows from investing activities	-12.7	-2.2	-4.5
Cash flows from financing activities	-2.0	11.6	13.1

The BRAIN Group

BRAIN Biotech AG ("BRAIN") is one of Europe's leading industrial biotechnology companies. Since it was founded in 1993, the company has developed continuously from a service provider specializing in research & development to a corporate Group offering extensive science services and a product business for the B2B market. In the specialty enzymes area, BRAIN Group today covers the entire value chain - from development through to fermentation and production on an industrial scale.

The products business with enzymes forms one pillar of the business of BRAIN Biotech AG. The second pillar is based on the research and development (R&D) of in-house incubator projects as well as joint

At the Potsdam site, AnalytiCon Discovery performs high-throughput screening of natural product -based active ingredients for customers from the pharmaceutical and food industry, among others.

Products business (BioIndustrial)

BRAIN Group's established products business includes enzymes and enzyme-based products from the four subsidiaries Biocatalysts, Breatec, Biosun and WeissBioTech, which operate directly on the market. The Group´s product portfolio also includes flavors and microbial starter cultures. The product activities focus on the food & beverage sector as a customer group.

The German company BRAIN Biotech AG is the parent company of the international BRAIN Group with its subsidiaries AnalytiCon Discovery GmbH, AnalytiCon Discovery LLC, Biocatalysts Ltd (78.7 %), Biocatalysts Inc., Biosun Biochemicals Inc., Breatec B.V. (62 %) and WeissBioTech GmbH. Until the end of the 2021/22 financial year, the Group also included L.A. Schmitt GmbH.

BRAIN Group's head office and Technology Campus are based in Zwingenberg, situated approximately 50 km south of the city of Frankfurt am Main in Germany's Hesse region. BRAIN Group's fermentation and production are located in Continental Eu- rope, the UK and the USA.

BRAIN Group holds a minority investment in SolasCure Ltd., which is included in the consolidated financial statements as an equity accounted interest.

development projects as a service provider for industry partners.

R&D-driven business (BioScience)

The Technology Campus in Zwingenberg is the starting point for product developments and innovative solutions in the categories of

• enzymes
• microbial production strains
• bioprocesses

Fermentation and production of enzymes and other proteins on an industrial scale is conducted at the bioprocessing facilities of Biocatalysts Ltd. (Car- diff, Wales, UK). Further blending and mixing capacities are located at Bisoun (Tampa, Florida, USA), Breatec (Nieuwkuijk, Netherlands) and WeissBio- Tech (Büttelborn, Germany).

A significant current development project from the "enzymes" category is aimed at applications for the proprietary genome editing nucleases "BEC" and "BMC". These and further CRISPR-Cas nucleases are currently being developed into a technology platform under the Akribion Genomics brand.

With our innovative products and as an experienced solution provider, we are a strong partner to industry customers striving to make processes and products more sustainable. We utilize innovative biotechnological processes to shape a bio-based future and to enable companies gain access into the bioeconomy.

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Inhaltsverzeichnis

Contents

01 Company management	6
Letter from the CEO	8
Report from the Supervisory Board	14
Management Board interview	22

02 The company	30
Facts and figures	32
Equity story	34
Value drivers	38
ESG	40
Incubator pipeline	42
Important events in the 2021/22 fiscal year	46
Employees and corporate culture	50
The BRAIN Biotech share and the capital market	54
03 Declaration on Corporate	60
Governance
04 Group management report	76
Basis of the Group	78
Economic and business report	80
Events after the reporting date	92
Outlook	93
Report on risks and opportunities	94
Takeover-relevant information pursuant to Section 315a
of the German Commercial Code (HGB)	107
Corporate governance statement of conformity
pursuant to Section 289f and Section 315d of the
German Commercial Code (HGB)	110

Contents

05 Consolidated Financial statements	112
Consolidated balance sheet	115
Consolidated statement of comprehensive income	116
Consolidated statement of changes in equity	118
Consolidated statement of cash flows	119
Notes	120
Responsibility statement	191
Independant auditor´s report	192

06 Further information	198
Glossary	200
List of graphs and tables	205
Image credits	206
Financial calendar	207
Contact and imprint	208

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01

Company management

	01 Company management	6

Letter from the CEO	8
Report from the Supervisory Board	14
Management Board interview	22

Company management

Letter from the CEO

Dear shareholders,

Adriaan Moelker - CEO BRAIN Biotech AG

We hereby present the annual report of BRAIN Biotech AG for the 2021/22 financial year. Our financial year ended on 30 September 2022.

Consolidated revenue for the financial year under review amounted to € 49.5 million and the Group's total operating performance to € 53.1 million, a very pleasing increase of 29 % and 30 %, respectively, compared to the previous fiscal year. The adjusted operating result before depreciation, amortization and taxes (adjusted EBITDA) posted a significant improvement close to break-even, compared with a loss of € 2.1 million in the previous year, despite the continuing high level of investment.

Both business segments contributed to the extremely pleasing revenue growth as well as the improvement in earnings in an economic environment that proved to be challenging overall.

The ongoing effects of the coronavirus pandemic, Russia's war against Ukraine and the associated energy crisis are not leaving our business unscathed: Laboratory articles and raw materials face supply chains constraints and rising purchasing costs are commonplace. To date, we have successfully mitigated major supply difficulties, and we are passing on cost increases to our customers wherever possible. Thanks to our successful coronavirus prevention measures, we averted major downtime within our workforce.

Biotechnology on the rise

Biotechnology has gained in public attention and social acceptance over the past two years, largely thanks to the development of mRNA-based coronavirus vaccines. However, bio- technology solutions for industrial processes are also garnering increasing attention - in industry itself as well as in politics and society. Germany's Ministry of Education and Research has launched its "biooekonomie.de" digital public information platform, thereby helping to ensure that topics such as precision fermentation and alternative proteins are communicated to the public and better understood. Germany's Ministry of Economic Affairs and Climate Action is also promoting the topic of industrial biotechnology - including events for business participants and a dialog platform for the public.

Companies wish and need to become more sustainable. Many industrial companies have now recognized that processes based on fossil raw materials can be replaced by alternative, non-fossil starting materials and processes. However, companies that operate process plants whose investment costs have already been amortized are for cost reasons often reluctant to replace them with new ones. Nevertheless, increasing pressure on industry, not only from the capital market but also from consumers, will continue to drive the decarbonization of industrial processes.

A further reason why biotechnology is currently attracting greater attention is growth in demand for food, while at the same time agricultural land is diminishing constantly and climatic conditions are changing. Today, food proteins for affluent societies derive largely from industrial livestock farming as well as from fishing. The food proteins of the future may be produced

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