5.A Operating Results This operating and financial review should be read together with our consolidated financial statements in this Annual Report, which have been prepared in accordance with IFRS as issued by the IASB. Financial Overview We have incurred significant losses since our inception. We have incurred net losses during most of our fiscal periods since our inception. As at June 30, 2026, we had accumulated losses of $1,068.4 million. Our net loss for the year ended June 30, 2026 was $57.5 million. We anticipate that we may continue to incur significant losses for the foreseeable future. There can be no assurance that we will ever achieve or maintain profitability. We expect our future capital requirements will continue as we: •continue the research and clinical development of our product candidates, including rexlemestrocel-L for Chronic Lower Back Pain ("CLBP"), rexlemestrocel-L for Chronic Heart Failure ("CHF"), remestemcel-L (Ryoncil®) in adults with steroid-refractory acute graft-versus-host disease (“SR-aGvHD”) and seek label extensions for Ryoncil® in the United States; •initiate and advance our product candidates into larger clinical studies; •progress commercialization of Ryoncil® for pediatric SR-aGVHD in the United States; •seek to identify, assess, acquire, and/or develop other and combination product candidates and technologies; •seek regulatory and marketing approvals in multiple jurisdictions for our product candidates that successfully complete clinical studies and identify and apply for regulatory designations to facilitate development and ultimate commercialization of our products; •establish and maintain collaborations and strategic partnerships with third parties for the development and commercialization of our product candidates, or otherwise build and maintain a sales, marketing, and distribution infrastructure and/or external logistics to commercialize Ryoncil® in the United States and any other products for which we may obtain marketing approval; 85 Table of Contents •further develop and implement our proprietary manufacturing processes in both planar technology and our bioreactor programs, and expand our manufacturing capabilities and resources for commercial production; •continue to seek coverage and reimbursement from third-party payors, including government and private payors for Ryoncil® and future products; •make interest payments, principal repayments and other charges on our debt financing arrangements; •make milestone or other payments under our agreements pursuant to which we have licensed or acquired rights to intellectual property and technology; •seek to maintain, protect, and expand our intellectual property portfolio; •seek to attract and retain skilled personnel; and •develop and maintain the compliance and other infrastructure necessary to support product commercialization and distribution. We have commenced generating revenue from our first approved product, Ryoncil®, from sales in the US market. However, we expect to continue to incur losses in the foreseeable future given our ongoing product manufacturing and development and selling, general and administration expenses for Ryoncil® and research and development expenses for our other product candidates. Therefore, beyond the next twelve months we will need additional capital to fund our operations, which we may raise through equity offerings, debt financings, other third-party funding, marketing and distribution arrangements or other collaborations, strategic alliances and licensing arrangements. We do not know when, or if, we will generate revenues from our product sales significant enough to generate profits. While we have started generating revenue from the commercialization of Ryoncil® for pediatric SR-aGVHD, we do not expect to generate revenue from other product sales unless and until we obtain additional regulatory approvals of and commercialize more of our other cell-based product candidates. For further discussion on our ability to continue as a going concern, see Note 1(i) in our accompanying financial statements. Product Sales. In December 2024, the FDA approved Mesoblast’s Ryoncil® for the treatment of pediatric SR-aGvHD in children 2 months and older. We began commercializing Ryoncil® in the United States for the treatment of pediatric patients with SR-aGvHD in March 2025. Our product revenues consist of sales of Ryoncil® in the United States. Revenues for product sales received from our customers are recognized net of allowances for customer credits for estimated government rebates and chargebacks, distribution fees, distributor and off-label discounts, patient assistance programs, freight and packaging costs and returns. These sales allowances and accruals are recorded based on estimates. Estimates are assessed as of the end of each reporting period and are updated to reflect current information. Royalty and Milestone Revenue. Royalty and milestone revenue relates to upfront, royalty and milestone payments recognized under development and commercialization agreements; milestone payments, the receipt of which is dependent on certain clinical, regulatory or commercial milestones; as well as royalties on product sales of licensed products, if and when such product sales occur; and revenue from the supply of products. Payment is generally due on standard terms of 30 to 60 days. Amounts received prior to satisfying the revenue recognition criteria are recorded as deferred consideration in our consolidated balance sheet, depending on the nature of the arrangement. Amounts expected to be recognized as revenue within the 12 months following the consolidated balance sheet date are classified within current liabilities. Amounts not expected to be recognized as revenue within the 12 months following the consolidated balance sheet date are classified within non-current liabilities. Cost of Revenues. Cost of revenues consist primarily of amortization of currently marketed products on a straight-line basis over the life of the asset and cost of inventories on product sales. Cost of inventories represents the costs involved in the manufacture of our products and other costs incurred in bringing inventories to their existing condition and location prior to sale. Cost of revenues also includes the costs for inventory that has been written off. 86 Table of Contents Research and Development. Research and development expenditure is recognized as an expense as incurred. Our research and development expenses consist primarily of: •third party costs comprising all external expenditure on our research and development programs such as fees paid to Contract Research Organizations (“CROs”) and consultants who perform research on our behalf and under our direction, rent and utility costs for our research and development facilities, and database analysis fees; •third party costs under license and/or sub-license arrangements for the research and development, license, manufacture of products and/or product candidates, such as payments for options to acquire rights to products and product candidates as well as contingent obligations under the agreements; •fees paid to our contract manufacturing organizations, which perform process development on our behalf and under our direction; •costs related to laboratory supplies used in our manufacturing development efforts; •movements of provisions against the carrying value of inventory; •product and manufacturing support costs consisting primarily of salaries and related overhead expenses for personnel in research and development and manufacturing functions (for example wages, salaries and associated on costs such as superannuation, share-based incentives and payroll taxes, plus travel costs and recruitment fees for new hires); and •intellectual property support costs comprising payments to our patent attorneys to progress patent applications and all costs of renewing our granted patents. Our research and development expenses are not charged to specific products or programs, since the number of clinical and preclinical product candidates or development projects tends to vary from period to period and since internal resources are utilized across multiple products and programs over any given period of time. As a result, our management does not maintain and evaluate research and development costs by product or program. Acquired in-process research and development is capitalized as an asset and is not amortized but is subject to annual impairment review during the development phase. Upon completion of its development, the acquired in-process research and development amortization will commence. Selling, General and Administration. Selling, general and administration expenses consist primarily of: •salaries and related costs including share-based incentives for directors and employees in commercialization, marketing, corporate and administrative functions, including the executives of those areas; •third party costs comprising all external expenditure on our commercial activities, such as research pertaining to market access and pricing, brand marketing and initiation of trade and distribution contracts; •third party costs under license and/or sub-license arrangements for the commercialization of products and/or product candidates; and •legal and professional services, rent and depreciation of leasehold improvements, insurance and information technology services. Fair Value Remeasurement of Contingent Consideration. Remeasurement of contingent consideration pertains to the acquisition of the MSC assets from Osiris Therapeutics, Inc. (“Osiris”). The fair value remeasurement of contingent consideration is recognized as a net result of changes to the key assumptions of the contingent consideration valuation such as developmental timelines, market growth, probability of success and payment, market penetration, product pricing and the increase in valuation as the time period shortens between the valuation date and the potential settlement dates of contingent consideration. The fair value remeasurement of contingent consideration also includes the remeasurement of the milestone paid in relation to the FDA approval of Ryoncil® in the treatment of children with SR-aGVHD in the United States in December 2024. Fair Value Movement of Warrants. Remeasurement of warrants pertains to the warrants granted under our credit-line facility and to Oaktree Capital Management, L.P ("Oaktree") in relation to the refinancing and amendment of our senior debt facility. The fair value movement of warrants is recognized when there is a change in the valuation assumptions such as share price, risk-free interest rates and volatility. 87 Table of Contents Other Operating Income and Expenses. Other operating income and expenses primarily comprise of interest income, research and development tax incentive, foreign exchange gains and losses and foreign withholding tax. Foreign exchange gains and losses relate to unrealized foreign exchange gains and losses on our foreign currency amounts in our Australian based entity, whose functional currency is the A$, and foreign currency amounts in our Switzerland, Singapore and United States based entities, whose functional currencies are the US$, plus realized gains and losses on any foreign currency payments to our suppliers due to movements in exchange rates. Interest Revenue. Interest revenue is accrued on a time basis by reference to the principal outstanding and at the effective interest rate applicable. Finance Costs. Finance costs primarily consists of remeasurement of borrowing arrangements, interest expense in relation to finance lease charges, accrued interest expense and interest expense in relation to the amortization of transaction costs and other charges associated with the borrowings as represented in our consolidated balance sheet using the effective interest rate method over the period of initial recognition through maturity. Remeasurement of borrowing arrangements recognized pertain to our five-year credit-line facility and loan and security agreements with NovaQuest Capital Management, L.L.C. (“NovaQuest”) and Oaktree. Remeasurement of borrowing arrangements is recognized when there is a modification of the borrowing arrangement with no significant change to the contractual cash flows of the borrowings at the remeasurement date or when there is a revision in the estimated future cash flows which is recorded as an adjustment of the carrying amount of the financial liability. The carrying amount is recalculated by computing the present value of the revised estimated future cash flows at the financial instrument’s original effective interest rate. Income Tax Benefit/Expense. Income tax benefit/expense consists of net changes in deferred tax assets and liabilities recognized on the balance sheet during the period. 88 Table of Contents Results of Operations Comparison of Our Results for the Year ended June 30, 2026 with the Year ended June 30, 2025 The following table summarizes our results of operations for the years ended June 30, 2026 and 2025, together with the changes in those items in dollars and as a percentage. Year Ended June 30, (in U.S. dollars, in thousands except per share information) 2026 2025 $ Change % Change Consolidated Income Statement Data: Revenues: Product sales, net $ 115,153 $ 11,263 103,890 NM Royalty revenue 5,097 5,935 (838) (14 %) Total revenues 120,250 17,198 103,052 NM Cost of revenues (including amortization of currently marketed intangible assets, 2026: $6,126, 2025: $3,937) (16,667) (5,130) (11,537) NM Research & development (97,509) (34,807) (62,702) 180 % Selling, general and administration (57,346) (39,309) (18,037) 46 % Fair value remeasurement of contingent consideration 12,057 (14,887) 26,944 (181 %) Fair value movement of warrants 859 (4,962) 5,821 (117 %) Other operating income and expenses 5,308 3,053 2,255 74 % Finance costs (23,839) (22,968) (871) 4 % Loss before income tax (56,887) (101,812) 44,925 (44 %) Income tax (expense)/benefit (613) (330) (283) 86 % Loss attributable to the owners of Mesoblast Limited $ (57,500) $ (102,142) 44,642 (44 %) Losses per share from continuing operations attributable to the ordinary equity holders: Cents Cents Cents % Change Basic - losses per share (4.44) (8.46) 4.02 (47 %) Diluted - losses per share (4.44) (8.46) 4.02 (47 %) * NM = not meaningful. Revenues Revenues were $120.3 million for the year ended June 30, 2026, compared with $17.2 million for the year ended June 30, 2025, an increase of $103.1 million. The following table shows the movement within revenues for the years ended June 30, 2026 and 2025, together with the changes in those items. Year Ended June 30, (in U.S. dollars, in thousands) 2026 2025 $ Change % Change Revenue: Product sales, net 115,153 11,263 103,890 NM Royalty revenue 5,097 5,935 (838) (14 %) Revenue $ 120,250 $ 17,198 103,052 NM * NM = not meaningful. In December 2024, the FDA approved Ryoncil® for the treatment of SR-aGVHD in pediatric patients. We recognized net product sales of $115.2 million for the year ended June 30, 2026 compared to $11.3 million for the year ended June 30, 2025, an increase of $103.9 million. During the year ended June 30, 2026, we secured broad institutional adoption of Ryoncil® at leading pediatric transplant centers across the United States, onboarding more than 50 sites since launch. We also expanded payer coverage and reimbursement access to over 280 million covered lives across commercial and government payors, supporting increased patient treatment and facilitating market penetration. 89 Table of Contents Total gross to net adjustments for the years ended June 30, 2026 and 2025 were 13.4% and 14.6% of gross product revenue, respectively. Our gross to net adjustments for the period include government rebates and chargebacks, discounts and distribution fees, other sales related deductions, co-pay assistance and other discounts. Royalty revenue from sales of TEMCELL in Japan and Alofisel® decreased by $0.8 million for the year ended June 30, 2026 compared to the year ended June 30, 2025. Royalty income on sales of TEMCELL in Japan by our licensee JCR were $5.1 million in the year ended June 30, 2026 compared to $5.8 million in the year ended June 30, 2025, a decrease of $0.7 million. Royalty income on sales of Alofisel® by our licensee Takeda decreased by $0.1 million in the year ended June 30, 2026 compared with the year ended June 30, 2025. Cost of Revenues Cost of revenues were $16.7 million for the year ended June 30, 2026, compared to $5.1 million for the year ended June 30, 2025. The increase is due to the commencement of product sales of Ryoncil® in March 2025 following FDA approval of the product for the treatment of pediatric SR-aGVHD in December 2024, as well as the related amortization of current marketed products. Year Ended June 30, (in U.S. dollars, in thousands) 2026 2025 $ Change % Change Cost of revenues: Cost of inventories 10,541 1,193 9,348 NM Amortization of current marketed products 6,126 3,937 2,189 56 % Cost of revenues $ 16,667 $ 5,130 11,537 NM * NM = not meaningful. Cost of inventories on the commercial sales of Ryoncil® was $10.5 million for the year ended June 30, 2026 compared to $1.2 million for the year ended June 30, 2025, an increase of $9.3 million. Cost of inventories as a percentage of net product sales was 9% for the year ended June 30, 2026 compared to 11% for the year ended June 30, 2025, resulting in a gross profit margin, excluding amortization of currently marketed products, of 91% and 89%, respectively. We recognized $6.1 million in relation to the amortization of current marketed products for the year ended June 30, 2026, compared to $3.9 million for the year ended June 30, 2025. This amount relates to the amortization of our MSC assets, which began following the FDA approval of Ryoncil® for the treatment of pediatric SR-aGVHD in December 2024, upon which our MSC assets were reclassified from in-process research and development ("IPRD") acquired to current marketed products. Research and development Research and development expenses were $97.5 million for the year ended June 30, 2026, compared with $34.8 million for the year ended June 30, 2025, an increase of $62.7 million. The $62.7 million increase in research and development expenses is primarily due to higher clinical trial costs including platform technology costs and third party costs. Year Ended June 30, (in U.S. dollars, in thousands) 2026 2025 $ Change % Change Research and development: Product and manufacturing support costs 28,846 29,368 (522) (2 %) Third party costs 30,052 8,162 21,890 NM Platform technology 33,582 (6,156) 39,738 NM Intellectual property support costs 5,029 3,433 1,596 46 % Research and development $ 97,509 $ 34,807 62,702 180 % * NM = not meaningful. 90 Table of Contents Product and manufacturing support costs, which consist primarily of salaries and related overhead expenses for personnel in research and development and manufacturing functions, have decreased by $0.5 million, for the year ended June 30, 2026 compared with the year ended June 30, 2025. Of this decrease, $1.8 million relates to a decrease in product support costs for research and development functions partially offset by an increase of $1.3 million in product support costs for manufacturing functions. Third party costs, which consist of all external expenditure on our research and development programs, increased by $21.9 million in the year ended June 30, 2026 compared with the year ended June 30, 2025 primarily due to clinical advancements during the period. In the year ended June 30, 2026, we incurred costs on our MPC-06-ID (CLBP) and MPC-150-IM (CHF) products primarily to support BLA filings for both CLBP and for CHF patients with left ventricular assist devices ("LVAD"). We also incurred clinical costs on Ryoncil® for expanded development activities in the adult population. Platform technology costs increased by $39.7 million for the year ended June 30, 2026 compared with year ended June 30, 2025. The increase is primarily due to a reversal of $23.0 million in December 2024 in relation to the provision against the carrying value of pre-launch inventory as a result of FDA approval of Ryoncil® for pediatric SR-aGVHD during the year ended June 30, 2025. There was also an increase in costs to our contract manufacturing organizations to support BLA filings for both CLBP and for CHF patients with LVADs, process development of our proprietary technology that facilitates the increase in yields necessary for the long-term commercial supply of our product candidates and next generation manufacturing processes to reduce labor, drive down cost of inventory and improve manufacturing efficiencies in our MPC and MSC based products. Also included in research and development expenses are intellectual property support costs, which consist of payments to our patent attorneys to progress patent applications and costs of renewing our granted patents. These costs have increased by $1.6 million in the year ended June 30, 2026 compared with the year ended June 30, 2025 primarily due to the write-off of the carrying value of certain intellectual property licenses disposed of during the period. Selling, general and administration Selling, general and administration expenses were $57.3million for the year ended June 30, 2026, compared with $39.3 million for the year ended June 30, 2025, an increase of $18.0 million. This increase was primarily due to an increase in selling, marketing and distribution and legal and professional fees. Year Ended June 30, (in U.S. dollars, in thousands) 2026 2025 $ Change % Change Selling, general and administration: Labor and associated expenses 21,227 18,734 2,493 13 % Corporate overheads 13,024 11,426 1,598 14 % Selling, marketing and distribution 16,091 4,676 11,415 NM Legal and professional fees 7,004 4,473 2,531 57 % Selling, general and administration $ 57,346 $ 39,309 18,037 46 % * NM = not meaningful. Labor and associated expenses increased by $2.5 million from $18.7 million for the year ended June 30, 2025 to $21.2 million for the year ended June 30, 2026. This increase is primarily due to an increase in overall cost of salaries and associated expenses by $4.0 million in the year ended June 30, 2026 compared with the year ended June 30, 2025. Director fees in the year ended June 30, 2026 also increased by $0.3 million compared with the year ended June 30, 2025. Labor and associated expenses also experienced unfavorable exchange rate fluctuations of $0.5 million in the year ended June 30, 2026 compared with the year ended June 30, 2025, as the A$ strengthened against the US$ given the majority of management and administration expenses are incurred in A$ by our headquarter office located in Australia. These increases were offset by a decrease of $2.3 million in share-based payment expenses. Corporate overhead expenses increased by $1.6 million from $11.4 million for the year ended June 30, 2025 to $13.0 million for the year ended June 30, 2026 primarily due to an increase in travel, information technology support services and sponsorship expenses. 91 Table of Contents Selling, marketing and distribution increased by $11.4 million from $4.7 million for the year ended June 30, 2025 to $16.1 million for the year ended June 30, 2026 primarily due to increased commercial activities for Ryoncil® following FDA approval of the product for the treatment of pediatric SR-aGVHD in December 2024. Legal and professional fees increased by $2.5 million for the year ended June 30, 2026 compared with the year ended June 30, 2025 primarily due to activities undertaken to replace our borrowings during the year ended June 30, 2026. Fair value remeasurement of contingent consideration Fair value remeasurement of contingent consideration was a $12.1 million gain for the year ended June 30, 2026 compared with a $14.9 million loss for the year ended June 30, 2025. Within the $12.1 million gain for the year ended June 30, 2026, we recognized a gain of $7.9 million due to the fair value remeasurement of the contingent consideration milestone payment made in January 2025 through the issuance of shares that were subject to a 12-month lock-up period. At the end of the lock-up period, the contingent consideration milestone liability has been transferred to trade and other payables. A further gain of $4.2 million in the year ended June 30, 2026 was due to the remeasurement of contingent consideration pertaining to the acquisition of MSC assets. This gain was a result of changing the key assumptions of the contingent consideration valuation such as probability of success and probability of payment. Within the $14.9 million loss for the year ended June 30, 2025, we recognized a loss of $10.3 million due to the remeasurement of the milestone paid in relation to the FDA approval of Ryoncil® in the treatment of children with SRaGVHD in the United States in December 2024. The contingent consideration milestone was paid in January 2025 through the issuance of shares, which were subject to a 12-month lock-up period. If the share price decreased over the lock-up period an additional payment equal to the reduction in the share price multiplied by the amount of issued shares under that milestone payment was required to be paid. This loss reflects the fair value remeasurement of the issued shares as at June 30, 2025. In the year ended June 30, 2025, a further loss of $4.6 million was recognized due to the remeasurement of contingent consideration pertaining to the acquisition of MSC assets from Osiris. This loss was a net result of changing the key assumptions of the contingent consideration valuation such as probability of success, development timelines and the increase in valuation as the time period shortens between the valuation date and the potential settlement dates of contingent consideration including the impact of receiving FDA approval for Ryoncil® in the treatment of children with SR-aGVHD in December 2024. With respect to future milestone payments, contingent consideration will be payable in cash or shares at our discretion. With respect to commercialization, product royalties will be payable in cash which will be funded from royalties received from net sales. Fair value movement of warrants Fair value movement of warrants was a $0.9 million gain for the year ended June 30, 2026 compared with a $5.0 million loss for the year ended June 30, 2025. This $0.9 million gain for the year ended June 30, 2026 is a net result of changes to the key valuation inputs of the warrants, primarily the movement in the share price, with other factors such as risk-free interest rates and volatility. Other operating income and expenses In relation to other operating income and expenses, we recognized an income of $5.3 million for the year ended June 30, 2026, compared with an income of $3.1 million for the year ended June 30, 2025, an increase in income of $2.2 92 Table of Contents million. The following table shows movements within other operating income and expenses for the year ended June 30, 2026 and 2025, together with the changes in those items: Year Ended June 30, (in U.S. dollars, in thousands) 2026 2025 $ Change % Change Other operating income and expenses: Interest income (3,914) (3,554) (360) 10 % Foreign exchange (gains)/losses (net) (1,069) 106 (1,175) NM Derecognition of lease liability (388) — (388) NM Derecognition of right-of-use asset 85 — 85 NM Government grant revenue (22) (3) (19) NM Foreign withholding tax — 480 (480) (100 %) Research and development tax incentive income — (82) 82 (100 %) Other operating (income) and expenses $ (5,308) $ (3,053) (2,255) 74 % * NM = not meaningful. The $0.4 million increase in interest income for the year ended June 30, 2026 compared with the year ended June 30, 2025 was primarily driven by higher A$ and US$ cash deposits held by us in the year ended June 30, 2026, when compared to the year ended June 30, 2025. We are subject to foreign exchange gains and losses on foreign currency cash balances, creditors and debtors. In the year ended June 30, 2026, we recognized a foreign exchange gain of $1.1 million, primarily due to movements in exchange rates on US$ liabilities held in Mesoblast Limited, whose functional currency is the A$, as the A$ appreciated against the US$. In the year ended June 30, 2025, we recognized a foreign exchange loss of $0.1 million. In the year ended June 30, 2026, we recognized a gain of $0.4 million for the derecognition of lease liability. There was no derecognition of lease liability in the year ended June 30, 2025. In the year ended June 30, 2025, we recognized an expense of $0.5 million of foreign withholding tax expenses primarily related to the write-off of foreign withholding tax receivable based on management's assessment of the likelihood of recovery. There was no foreign withholding tax recognized in the year ended June 30, 2026. Finance costs Year Ended June 30, (in U.S. dollars, in thousands) 2026 2025 $ Change % Change Finance costs: Remeasurement of borrowing arrangements 1,965 416 1,549 NM Facility fee 2,002 799 1,203 151 % Interest expense 19,872 21,753 (1,881) (9 %) Finance costs $ 23,839 $ 22,968 871 4 % * NM = not meaningful. In the year ended June 30, 2026, we recognized an overall loss of $2.0 million for remeasurement of borrowing arrangements in relation to the adjustment of the carrying amount of our financial liability to reflect the revised estimated future cash flows from our existing five-year credit-line facility and extinguished credit facilities with NovaQuest and Oaktree, an increase in losses of $1.5 million as compared with a $0.4 million loss for the year ended June 30, 2025. In relation to our extinguished credit facility with NovaQuest, we recognized a gain of $0.5 million in the year ended June 30, 2026 for remeasurement of borrowing arrangements in relation to the adjustment of the carrying amount of our financial liability to reflect the revised estimated future cash flows as a net result of changes to the key assumption in development timelines, and decrease in loss of $0.7 million as compared with a $0.2 million loss recognized for the year ended June 30, 2025. 93 Table of Contents In relation to our extinguished credit facility with Oaktree, we recognized a loss of $1.5 million in the year ended June 30, 2026 for remeasurement of borrowing arrangements in relation to repaying the outstanding balance and extinguishing our loan with Oaktree, which has been replaced with a new $125.0 million five-year credit-line facility. In the year ended June 30, 2025, we recognized a loss of 0.2 million for remeasurement of borrowing arrangements in relation to the adjustment of the carrying amount of our financial liability to reflect the revised estimated future cash flows. In relation to our existing five-year credit-line facility, we recognized a $1.0 million loss in the year ended June 30, 2026 for remeasurement of borrowing arrangements in relation to the adjustment of the carrying amount of our financial liability to reflect the revised estimated future cash flows. No remeasurement of borrowing arrangements was recognized in the year ended June 30, 2025. We recognized $2.0 million for facility fees in relation to convertible note warrants issued under a financing facility during the year ended June 30, 2026, an increase of $1.2 million compared with the year ended June 30, 2025. Interest expenses decreased by $1.9 million from $21.8 million for the year ended June 30, 2025 to $19.9 million for the year ended June 30, 2026. In the year ended June 30, 2026, in relation to our extinguished loan and security agreement with Oaktree, we recognized $3.8 million of interest expenses, compared with $8.7 million for the year ended June 30, 2025. Within this $3.8 million recognized in the year ended June 30, 2026, $2.1 million was recognized with regards to interest expense paid and a further $1.7 million of interest expense was recognized with regard to the amortization of transaction costs incurred on the outstanding loan principal for the year ended June 30, 2026 using the effective interest rate method over the period of initial recognition through maturity. In the year ended June 30, 2026, in relation to our extinguished loan and security agreement with NovaQuest, we recognized $12.1 million of interest expense, a decrease of $0.5 million as compared with $12.6 million for the year ended June 30, 2025. Within this $12.1 million recognized in the year ended June 30, 2026, $8.3 million was recognized with regards to interest expense paid and a further $3.8 million of interest expense was accrued on the loan principal balance. In the year ended June 30, 2026, in relation to our credit-line facility, we recognized $3.3 million of interest expense on the loan balance. There was no interest expense recognized in the year ended June 30, 2025 in relation to this credit-line facility. In line with IFRS 16 Leases, we also recognized interest expenses of $0.5 million and $0.4 million in relation to lease charges for the years ended June 30, 2026 and 2025, respectively. Loss after income tax Year Ended June 30, (in U.S. dollars, in thousands) 2026 2025 $ Change % Change Loss before income tax (56,887) (101,812) 44,925 (44 %) Income tax (expense)/benefit (613) (330) (283) 86 % Loss after income tax $ (57,500) $ (102,142) 44,642 (44 %) Loss before income tax was $56.9 million for the year ended June 30, 2026 compared with $101.8 million for the year ended June 30, 2025, a decrease in the loss by $44.9 million. This decrease is the net effect of the changes in revenues and expenses that have been discussed above. A non-cash income tax expense of $0.6 million was recognized in the year ended June 30, 2026, in relation to the net change in deferred tax assets and liabilities recognized on the consolidated balance sheet during the period. A non-cash income tax expense of $0.3 million was recognized in the year ended June 30, 2025 in relation to the net change in deferred tax assets and liabilities recognized on the consolidated balance sheet during the period. Comparison of Our Results for the Year ended June 30, 2025 with the Year ended June 30, 2024 For results of operations for the years ended June 30, 2025 and 2024, together with the changes in those items in dollars and as a percentage and the related discussions on these results, refer to Results of Operations within “Item 5.A 94 Table of Contents Operating Results” in our Annual Report on Form 20-F for the year ended June 30, 2025, filed with the SEC on August 29, 2025. Certain Differences Between IFRS and U.S. GAAP IFRS differs from U.S. GAAP in certain respects. Management has not assessed the materiality of differences between IFRS and U.S. GAAP. Our significant accounting policies are described in “Item 18 Financial Statements – Note 22”. Quantitative and Qualitative Disclosure about Market Risk We are exposed to interest rate risk, share price risk, price risk and foreign currency exchange risk. We make use of sensitivity analyses which are inherently limited in estimating actual losses in fair value that can occur from changes in market conditions. For further assessment on our market risks, see “Item 18. Financial Statements – Note 10(a).” Off-Balance Sheet Arrangements We did not have during the periods presented, and we do not currently have, any off-balance sheet arrangements, other than the purchase commitments and contingent liabilities as mentioned below. Contractual Obligations and Commitments Contractual commitments: Purchase commitments means an agreement to purchase goods or services that is enforceable and legally binding that specifies all significant terms, including: fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the transaction. Purchase obligations are not recognized as liabilities at June 30, 2026. For a description of our contractual commitments, refer to "Item 18. Financial Statements - Note 14(b)." Lease commitment – as lessee: We lease various offices under non-cancellable leases expiring within 1 to 6 years. The leases have varying terms, escalation clauses and renewal rights. On renewal, the terms of the leases are renegotiated. We also lease a manufacturing suite under a manufacturing services agreement with Lonza for the supply of commercial product for the launch of Ryoncil® for the treatment of pediatric SR-aGVHD in the US market. Management has determined that this agreement has a non-cancellable lease term expiring within 2 years from June 30, 2026. Contingent liabilities We acquired certain intellectual property relating to our MPCs, or Medvet IP, pursuant to an Intellectual Property Assignment Deed, or IP Deed, with Medvet Science Pty Ltd, or Medvet. Medvet’s rights under the IP Deed were transferred to Central Adelaide Local Health Network Incorporated, or CALHNI, in November 2011. In connection with our use of the Medvet IP, on completion of certain milestones we will be obligated to pay CALHNI, as successor in interest to Medvet, (i) certain aggregated milestone payments of up to $2.2 million, and single-digit royalties on net sales of products covered by the Medvet IP, for cardiac muscle and blood vessel applications and bone and cartilage regeneration and repair applications, subject to minimum annual royalties beginning in the first year of commercial sale of those products and (ii) single-digit royalties on net sales of the specified products for applications outside the specified fields. We have entered into a number of agreements with other third parties pertaining to intellectual property. Contingent liabilities may arise in the future if certain events or developments occur in relation to these agreements and as of June 30, 2026 we have assessed that the probability of outflows is remote. Capital commitments We did not have any commitments for future capital expenditure outstanding as of June 30, 2026. 95 Table of Contents Australian Disclosure Requirements Significant Changes in the State of Affairs There have been no significant changes within the state of our affairs during the year ended June 30, 2026 except as noted in the “Important Corporate Developments” section included in Item 4.A. Likely Developments and Expected Results of Operations A review of our operations for the year ended June 30, 2026, together with our business strategies and prospects for future years, are outlined in “Item 5. Operating and Financial Review and Prospects” of this Annual Report. Certain information regarding developments in operations in future years and the expected results of those operations has been excluded, to the extent permitted by law, on the basis that such information relates to the impending developments or matters in the course of negotiation, and disclosure would likely result in unreasonable prejudice to the Group. The information omitted includes forward-looking projections prepared for internal management purposes, information on product candidates and pipeline assets that remain subject to change, and matters that may risk compromising confidentiality with partners, suppliers or regulators. Our operating activities are focused on advancing late-stage product candidates and generating revenue from sales of Ryoncil®. These are the primary components of our business that management monitors and assesses in making decisions about resource allocation and performance evaluation. Further details on financial performance are provided in “Item 18. Financial Statements”. Environmental Regulations Our operations are not subject to any significant environmental regulations under either Commonwealth of Australia or State/Territory legislation. We consider that adequate systems are in place to manage our obligations and are not aware of any breach of environmental requirements pertaining to us. 5.B Liquidity and Capital Resources Sources of Liquidity As of June 30, 2026, we held total cash reserves of $102.9 million. We continue our focus on measured allocation of resources for our planned commercial, research and development activities and as a result reports net cash usage for operating activities of $43.8 million for the year ended June 30, 2026. We recognized net product sales of $115.2 million for the year ended June 30, 2026. In December 2025, we entered into a $125.0 million five-year non-dilutive credit-line facility, secured by royalties from TEMCELL®. We drew down the full $125.0 million facility in two tranches of $75.0 million and $50.0 million during December 2025 and June 2026, respectively. The proceeds were used to extinguish our existing debt arrangements, with Oaktree Capital Management, Inc. and NovaQuest Capital Management, L.L.C. The credit-line has a fixed interest rate of 8.00% per annum, a substantial reduction from prior facilities, and a five-year interest only period through to December 2030. We expect that existing cash and cash equivalents, together with cash from the commercialization of Ryoncil® will be sufficient to fund our forecast operating cash usage over the next twelve months. As a result, the consolidated financial statements have been prepared assuming that we will continue as a going concern, which contemplates the realization of assets and the satisfaction of our liabilities in the normal course of business. Our primary sources of liquidity have historically been equity raisings, upfront and milestone payments from strategic license agreements, and borrowings under our loan agreements, and since March 2025, we have been recognizing revenue from sales of Ryoncil®. While in the long-term we expect to be able to complete transactions and achieve approval of our other product candidates to provide liquidity as needed, there can be no assurance as to whether we will be successful or, if successful, what the terms or proceeds may be. 96 Table of Contents Cash flows Year Ended June 30, (in U.S. dollars, in thousands) 2026 2025 $ Change % Change Cash Flow Data: Net cash (outflows) in operating activities (43,830) (49,954) 6,124 (12 %) Net cash (outflows)/inflows in investing activities (1,023) 120 (1,143) NM Net cash (outflows)/inflows by financing activities (15,329) 147,336 (162,665) (110 %) Net (decrease)/increase in cash and cash equivalents (60,182) 97,502 (157,684) (162 %) * NM = not meaningful. Comparison of cash flows for the Year ended June 30, 2026 with the Year ended June 30, 2025 Net cash outflows in operating activities Net cash outflows for operating activities were $43.8 million for the year ended June 30, 2026, compared with $50.0 million for the year ended June 30, 2025, a decrease of $6.1 million. The decrease of $6.1 million is due to an increase in cash inflows of $82.2 million and an increase in cash outflows of $76.1 million in the year ended June 30, 2026, compared with the year ended June 30, 2025. The $82.2 million increase of inflows comprised: inflows of $83.0 million from product sales of Ryoncil® in the year ended June 30, 2026, compared with $Nil in the year ended June 30, 2025; inflows from royalty income earned on sales of TEMCELL in Japan and Alofisel® decreased by $0.2 million during the year ended June 30, 2026, compared with the year ended June 30, 2025; $0.9 million of receipts for research and development tax incentive during the year ended June 30, 2025, compared to $Nil for the year ended June 30, 2026, a decrease of $0.9 million; and inflows from interest receipts increased by $0.3 million in the year ended June 30, 2026, compared with the year ended June 30, 2025. Outflows for payments to suppliers and employees increased by $76.1 million from $60.1 million for the year ended June 30, 2025 to $136.2 million for the year ended June 30, 2026, primarily due to an increase in payments for activities to support BLA filings for both CLBP and CHF patients with LVADs, process development of our proprietary technology that facilitates the increase in yields necessary for the long-term commercial supply of our product candidates and next generation manufacturing processes and product manufacturing to support Ryoncil® sales. We also increased spend in relation to research and development and advertising and marketing as clinical trials and commercialization activities increased. Net cash (outflows)/inflows in investing activities Net cash outflows for investing activities increased by $1.1 million in the year ended June 30, 2026, compared with outflows of $0.1 million for the year ended June 30, 2025, primarily due to the proceeds from rental deposits which was released to us in the year ended June 30, 2025 as we relocated our New York office. Net cash (outflows)/inflows in financing activities Net cash outflows for financing activities decreased by $162.7 million for the year ended June 30, 2026, compared with the year ended June 30, 2025. The decrease of $162.7 million is due to a decrease in cash inflows of $32.7 million and an increase in cash outflows of $130.0 million in the year ended June 30, 2026, compared with the year ended June 30, 2025. The $32.7 million decrease in cash inflows comprised: $125.0 million receipt of proceeds drawn pursuant to a five-year credit facility during the year ended June 30, 2026, compared with $Nil for the year ended June 30, 2025; $161.2 million of proceeds received from a global private placement during the year ended June 30, 2025, compared with $Nil during the year ended June 30, 2026, an increase in inflows of $161.2 million; received $7.7 million in receipts from employee share option exercises during the year ended June 30, 2026, compared with $5.2 million for the year ended June 30, 2025, an increase in inflows of $2.5 million; received $1.6 million of proceeds from warrant exercises during the year ended June 30, 2025, compared with $Nil for the year ended June 30, 2026, a decrease in inflows of $1.6 million; received receipts of $2.6 million during the year ended June 30, 2026 for shares issued in a prior period, compared with $Nil for the year ended June 30, 2025. 97 Table of Contents The $130.0 million increase in cash outflows comprised: repayment of the outstanding principal balances of $125.0 million of our debts under our credit facilities with Oaktree and NovaQuest during the year ended June 30, 2026 compared with principal repayments of $7.8 million to Oaktree during the year ended June 30, 2025, an increase of $117.2 million; payments of $17.8 million and $5.3 million for interest and other costs of finance during the years ended June 30, 2026 and 2025, respectively, a increase of $12.5 million; payments of $5.3 million and $1.3 million for borrowings costs in the years ended June 30, 2026 and 2025, respectively, a decrease of $4.0 million; payments of $0.5 million and $4.3 million for capital raising costs in the years ended June 30, 2026 and 2025, respectively, a decrease of $3.8 million. Operating Capital Requirements We do not know when, or if, we will generate revenues from our product sales significant enough to generate profits. While we have started generating revenue from the commercialization of Ryoncil® for pediatric SR-aGHVD, we do not expect to generate significant revenue from other product sales unless and until we obtain additional regulatory approvals of and commercialize more of our other cell-based product candidates. We anticipate that we will continue to incur losses for the foreseeable future as we continue the development of, and seek additional regulatory approvals for our cell-based product candidates, and continue the commercialization of approved products, including Ryoncil® for pediatric SR-aGVHD, either directly ourselves or through a collaborator or partner. We are subject to all of the risks inherent in the development of new cell-based products, and we may encounter unforeseen expenses, difficulties, complications, delays and other unknown factors that may adversely affect our business. We have our first approved product, Ryoncil®, which has commenced generating revenues from sales in the US market, however we expect to continue to incur losses in the foreseeable future given our ongoing manufacturing commercialization and development and selling, general and administration expenses for Ryoncil® and research and development expenses for our other product candidates. Therefore, beyond the next twelve months we will need additional capital to fund our operations, which we may raise through a combination of equity offerings, debt financings, other third-party funding, marketing and distribution arrangements and other collaborations, strategic alliances and licensing arrangements. Additional capital may not be available on reasonable terms, if at all. If we are unable to raise additional capital in sufficient amounts or on terms acceptable to us, we may have to significantly delay, scale back or discontinue the development or commercialization of one or more of our product candidates. If we raise additional funds through the issuance of additional debt or equity securities, it could result in dilution to our existing shareholders, increased fixed payment obligations and the existence of securities with rights that may be senior to those of our ordinary shares. If we incur further indebtedness, we could become subject to covenants that would restrict our operations and potentially impair our competitiveness, such as limitations on our ability to incur additional debt, limitations on our ability to acquire, sell or license intellectual property rights and other operating restrictions that could adversely impact our ability to conduct our business. Any of these events could significantly harm our business, financial condition and prospects. Borrowings For a description of our borrowing arrangements, refer to "Item 18. Financial Statements - Note 5(e)." 5.C Research and Development, Patents and Licenses For a description of the amount spent during each of the last three fiscal years on company-sponsored research and development activities, as well as the components of our research and development expenses, see “Item 5.A Operating Results – Results of Operations.” For a description of our research and development process, see “Item 4.B Business Overview.” 5.D Trend Information As a biotechnology company, we are subject to costs of our clinical trials and other work necessary to support applications for regulatory approval of our product candidates. Health regulators have increased their focus on product safety. In addition, regulators have also increased their attention on whether or not a new product offers evidence of substantial treatment effect. These developments have led to requests for more clinical trial data, for the inclusion of a higher number of patients in clinical trials, and for more detailed analyses of the trials. As a result, we expect these aspects of our research and development expenses to increase. Notwithstanding this upward trend, our research and development 98 Table of Contents expenses may still fluctuate from period to period due to varied rates of patient enrollment and the timing of our clinical trials as our existing trials are completed and new trials commence. We cannot predict with any degree of accuracy the outcome of our research or commercialization efforts. 5.E Critical Accounting Estimates See “Item 18. Financial Statements.”