ANNUAL REPORT 2023

Året i siffror

Dicot´s vision

Dicot AB (559006-3490)

S:t Olofsgatan 11A 753 21 Uppsala

83

Net capitalization during the year 6 Patent families, two of which granted and four applications

110

Subscription rate in the issue of units in January

5,041

Number of shareholders December 31, 2023

83 Equity ratio % % MSEK

56 Individuals who participated in the clinical studies during 2023

47.3 Cash balance at year end Distribution of development costs: 55% Clinical studies 35% Preclinical studies and other R&D 10% Supply chain MSEK

Statement from the CEO

Development work and financing are perhaps the two most crucial components for companies like Dicot. They have a mutual dependency: without development results, it’s challenging to obtain capital. Without capital, no development. Dicot´s 2023 is an excellent example of when these two elements are in harmony, showcasing a strong confidence in our company.

At the end of January 2024, results from our first clinical study of LIB-01 in humans were released. It was a partial report from the initial section of our clinical phase 1 study, whose main objective is safety evaluation. As we had hoped, the results were unequivocal: LIB-01 demonstrated a very good safety profile without any serious adverse effects. We could also determine that the drug was well absorbed by the body.

Getting these positive study results feels like a validation of the quality of last year’s development work. From the conclusion of preclinical studies in the spring, preparations for clinical trials, obtained regulatory approvals, to the launch in August. And all according to a timeline we publicly disclosed back in 2022.

Building and being transparent with a robust timeline is crucial for a company’s credibility. That trust often translates into investment willingness. During the year, three capitalizations were made within the framework of a unit issuance that commenced in January and concluded in November with the final of two warrant rounds. In an otherwise chilly investment climate, we can state that Dicot succeeded far above average with all three capitalizations. Between 83% and 110% subscribed. This demonstrates that the market has a strong confidence in Dicot and our approach to advancing LIB-01.

It also seems that the belief in Dicot’s chosen path has spread within the sexual medicine research community. During the year, we signed an agreement with a world-renowned star in the field, Dr. Harin Padma-Nathan. And in November, during North America’s largest conference in sexual medicine, our CSO Charlotta Gauffin, experienced significant interest in Dicot’s work. Proof of this is the invitation she received from the chairman of the European Society for Sexual Medicine to participate in their annual conference, which took place now in February. Incidentally, this is the third consecutive year we have been selected to present our results.

Now we are eager to take on the future. The last part of the phase 1 study, where participants receive multiple doses, is in full swing and is expected to be reported in the second quarter. After that it won’t be long until we shift our focus to phase 2, where LIB-01´s effect will be examined. We promise to continue to uphold transparency and clarity in all phases, and move at highest possible pace. To maintain the trust of our shareholders and to promptly provide relief to affected men and couples. A big thank you to all our shareholders who have followed and supported Dicot throughout 2023!

Elin Trampe, CEO Dicot

About Dicot

Dicot develops LIB-01 to become a new modern potency drug for the global market. The goal is to develop a completely new generation potency drugs that surpass currently available treatments. With a longer duration of action, fewer adverse effects, and a differentiated mode of action, Dicot aims to significantly improve the treatment of erectile problems and provide affected men and couples with a better quality of life.

Since August 2023, the clinical phase 1 trial of LIB-01 has been ongoing, with its primary objective being to evaluate the candidate’s safety. A report from the first part of the study with single dosing demonstrates a very good safety profile. The study is expected to conclude during the second quarter of 2024. In parallel, preparations for efficacy studies in clinical phase 2 are underway. Prior to the clinical trials, Dicot has conducted comprehensive preclinical studies, verifying LIB-01’s effect across multiple studies.

The active substance in LIB-01 is a semi-synthetically produced molecule based on a folk medicine use. Today, seeds are used as raw material and through an extraction process followed by several synthesis steps, substances in the seeds are converted into the active substance in LIB-01. Simultaneously, studies are underway on an alternative method using cell culture for large-scale production of the starting material, for which Dicot has applied for a patent.

Dicot collaborates with world-leading partners in the development of LIB-01. Manufacturing is outsourced to established international pharmaceutical manufacturers such as Thermo Fisher Scientific, and Dicot has a worldwide network of prominent experts in the field.

Dicot’s primary strategy is to under own auspice develop LIB-01 up to and including phase 2a studies, and subsequently, in partnership with larger established pharmaceutical companies, finance and further develop LIB-01 into a registered drug on the world market.

Dicot thus expects that the later phases of the clinical studies – phases 2b and 3 – will either occur through strategic partnerships or through a sale or licensing of rights to develop and market LIB-01. This strategy allows Dicot to potentially achieve positive cash flows relatively early through partner payments upon contract signing and thereafter through milestone payments upon reaching milestones.

In addition, Dicot expects to receive royalties on future sales.

To optimize the business outcome, Dicot will consider the possibilities of segmenting the market based on regions (such as EU, USA, China, and India) and indications, namely erectile dysfunction and premature ejaculation.

Business idea

Dicot is developing a modern potency drug that will treat erectile dysfunction and premature ejaculation better than existing drugs on the market.

The market

The global sales of erectile dysfunction medication were estimated to reach approximately SEK 50 billion in 2023, and for premature ejaculation, approximately SEK 32 billion. The market value for these two indications is expected to increase by over 40% from 2023 to 2029.

Considering the often experienced shortcomings of currently available drugs - such as side effects, lack of efficacy, and the need for planning - they are far from being used by everyone who needs them, and over half of all men who are prescribed drugs discontinue the treatment.

World market erectile dysfunction today

USD 5 billion global sales 2023

Limiting factors

35-40% don’t achieve desired effect

Planning is often required

Disruptive side effects

= 50% drop-out rate

Significant portion have not tried potency drugs

The addressable market is thus significantly larger than current sales volumes indicate. In addition, the stigma surrounding erectile dysfunction is decreasing, and digital healthcare options are making it easier for more people to seek help.

Future world market erectile dysfunction

Market expansion triggers

New generation potency drug

• Different mode of action

• Sex without the need for planning

• Fewer or no side effects

Lower threshold due to reduced stigma and digital healthcare providers 4% annual growth

”LIB-01 promises a paradigm shift in the treatment of erectile dysfunction. It is the first revolutionary molecule in the field since Viagra.”

Dr. Padma-Nathan

World-leading sexual medicine expert and principal investigator in the development of Viagra.

The necessity of sustainability

Sustainability is now a given for a responsible company. It encompasses corporate governance, social and ethical conduct, and environmental aspects. It’s also a commercial matter as it lays the foundation for a long-term, well-functioning, and profitable business. Sustainability runs like a common thread through Dicot’s structures, below are some examples.

The core of the business and the third UN goal

Good health and well-being is the third of the United Nations’ seventeen sustainability goals, with the rationale that it ”is a fundamental condition for people’s ability to reach their full potential and contribute to the development of society.” Subgoal 3.4 particularly emphasizes the promotion of mental health and well-being. Subgoal 3.7 states that by 2030, everyone should have access to sexual and reproductive health care.

Dicot’s vision is in line with the UN’s sustainability goal number three. The core of Dicot’s business is to develop a drug that drastically improves the treatment of the widespread problem of erectile dysfunction, which according to scientists leads to, among other things, mental health issues and significant negative impact on the well-being of both the man and his partner.

Social and ethical responsibility on all levels

The seeds used to extract the raw material for LIB-01 are harvested in South Africa. There, Dicot follows the ”Nagoya Protocol on Access and Benefit Sharing.” The protocol regulates how genetic resources are obtained, how they are used in research and product development, and how profits from their use are distributed.

Together with our partner in South Africa, Parceval Ltd, we collaborate on the BioInnovation Africa project within the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ). The purpose of the project is to promote sustainable and mutually beneficial business contacts between Europe and Africa. This is achieved by adhering to high ethical, social, and environmental standards in the use of African natural resources, ensuring sustainable and long-term supplies of the drug candidate’s raw materials.

The code of conduct holds us accountable

Our code of conduct ensures that Dicot coherently operates according to the same principles and towards the same goals throughout the value chain. The policy is established by the Board, continuously evaluated, and regulates areas such as environmentally friendly production, working environment, gender equality, and corruption.

The code of conduct holds us accountable for following laws and regulations, acting responsibly and correctly, and demanding the same from our partners. By consistently following the code, we can build long-term relationships with employees, consultants, suppliers, and partners to collectively contribute to sustainable development.

Entering clinical trials

The transition from preclinic to clinic is a significant milestone within drug development. For Dicot, the objective for this first-in-human stage is to explore the substance in humans for the first time and assess its safety profile. The groundwork has been underway for a couple of years. The timeline was to initiate the phase 1 study in mid-2023, and that goal was achieved. 2023 will forever be engraved in the mind of Dicot’s employees.

JANUARY

Funds and partnerships

To initiate a clinical study, financial prerequisites are required, forming a guarantee that the next development stage is at all possible. To secure funding for the phase 1 study, the board decided to conduct a rights issue in January. Despite a chilly financial market, it was oversubscribed, paving the way for the study to commence in the middle of the year.

Simultaneously with the financing efforts, well-respected Clinical Trial Consultants in Uppsala became contracted as clinical partner. Geography was not a criterion in the procurement process, but it was advantageous to have such an important partner nearby. The next company to be enrolled was located on the other side of the Atlantic. American Thermo Fisher Scientific is a world leader in manufacturing serving the pharmaceutical industry and was tasked with producing the study drug, something that could commence already in February.

Sit-down with authorities

The Swedish Medical Products Agency is the authority that must give its approval before a clinical study can commence in Sweden. Without their consent, no progression. During two advisory meetings, the comprehensive preclinical work and all aspects of the clinical study’s design, setup, and starting dose level were presented, with the aim of anchoring the content of the application for initiating clinical trials that Dicot was preparing. The meetings were successful, and the agency representatives responded positively to all proposals.

Toxicology and the arrival

During spring, the preclinical work continued with the very last studies, those concerning the candidate’s toxicity. These results are part of the safety assessment conducted before a clinical study is permitted to start. In April, the final toxicology study was completed, concluding that the entire program had been successful. Now, the preclinical phase could be concluded, and full focus directed towards the next step.

The long-standing goal was to commence the study in the middle of the year, and preparations had to proceed concurrently and according to a tight schedule to ensure that the timeline was met. In early May, the study drug arrived in Sweden.

Summer nights and question rounds

After days and nights of preparations, the formal application to initiate clinical trials was submitted on June 1. While others travelled towards the sun, the Dicot team spent its July with a mandatory question round after the Medical Products Agency and the Ethics Review Board had meticulously reviewed Dicot’s application. Dicot was left with twelve days to respond. Dicot answered in five.

AUGUST

Good to go

One early Tuesday morning, August 15, Dicot receives the decision from the Medical Products Agency: you have the green light to start the clinical trial! Not even the Swedish women’s soccer team’s semifinal loss to Spain later that day can disrupt the feeling of victory. It’s happening. And everything is prepared. Just ten days after approval, the study begins, and participants start to be screened. Another ten days later, the first man receives a single dose in what is called a SAD, Single Ascending Dose.

OCTOBER

Parallel tracks

High speed is always to characterize Dicot’s development process. An efficient study design made it possible to start the second part of the study in parallel with the first part still ongoing. In this part, participants would receive multiple doses in a study known as a MAD, Multiple Ascending Dose. After recruitment in October, this second and final part of the study could start in November.

JANUARY 2024

The reward

The primary purpose of the entire clinical study is to determine the safety of the candidate for a human. Already in January 2024, earlier than initially planned, results from the SAD study were available, showing that LIB-01 has a very good safety profile and that the drug was well absorbed by the body. A worthy reward for a hard-working development team during Dicot’s most exciting year so far.

Capitalization successes

2023 can be classified as a highly successful year for Dicot’s capitalization efforts, especially considering the challenging financial climate. In January, a rights issue of units was conducted, subscribed at 110%. The two included warrant programs were to be utilized in June and November, subscribed at 83% and 85%, respectively. In total, Dicot was able to raise approximately SEK 92 million before issuance costs, securing funding for the clinical phase 1 study and preparations for phase 2.

An increasingly well-stocked patent portfolio

Dicot now has patents or patent applications in six families.

During the year, two new applications were submitted, followed by two more in 2024. These include the oral formulation, a proprietary cell culture method for manufacturing the candidate’s

Patent family 1

starting material, and notably an international application for medicinal substances and their manufacturing via the Patent Cooperation Treaty, enabling protection in 157 countries.

Compounds for treatment of sexual dysfunctions

Patent family 2

Preparation of compounds for treatment of sexual dysfunctions

Patent family 3

Drug substance candidates and their manufacturing methods

Patent family 4

LIB-01 oral drug composition

Patent family 5

Cell cultivation technology for manufacturing of starting material

Patent family 6

Manufacturing and usage of therapeutic substances

Innovations protected as trade secrets

Granted patent

Pending applications

Future applications

Dicot

in San Diego

Throughout the year, Dicot has been highly active in the industry and participated in numerous conferences and congresses. In November, CSO Charlotta Gauffin attended the Sexual Medicine Society of North America conference in San Diego, the largest conference on sexual medicine in North America. She went there alongside Professor François Giuliano, who presented Dicot’s research results, and the sexual medicine expert Dr. Harin Padma-Nathan. The reception was very positive, with particular interest in LIB-01’s long duration of action.

The positive feedback led, among other things, to encouragement from the chairman of the European Society for Sexual Medicine to submit an abstract for the organization’s next conference held in February 2024. Dicot was also encouraged to participate in the next World Meeting on Sexual Medicine in Rio.

Cell culture project scaling up

In 2022, Dicot initiated a research project with Uppsala University and the W. Szafer Institute of Botany in Poland to investigate whether the starting material for LIB01 could be produced using plant cells grown in cultures. This is an established method with scalability benefits used for many drug substances derived from nature. Just before the summer, the results from the laboratory tests showed that the technology is effective. Now, the project is advancing with scale-up tests and optimization work to evaluate the method on a larger scale, as well as making comparisons with the existing process - where starting material is extracted from natural plant materialwhich continues in parallel.

Quickfire interview: CTO Mats Silvander

In August, Mats Silvander assumed the role of CTO, a position that had not previously existed at Dicot. He brings over twenty years of industry experience from roles such as Director of Operations, CTO, Vice President of Product Development, and Quality Manager.

1 What was your initial reaction when you stepped foot inside Dicot in August?

The team exuded a sense of calm confidence, positivity, and at the same time, a clear drive forward and towards a mutual goal. I felt that I would enjoy being here. Looking back, I realize that my initial feeling was right. It’s really exciting to be part of this future driven group.

2 How does Dicot’s way of working differ from your previous experiences?

Since Dicot has few employees and operates with a network of suppliers, partners, and consultants, you have to take on a broad range of responsibilities. This means that job titles matter less than the content of what you deal with, do, or propose.

3 What has been the focus during your first months?

I have made my mark on the IP strategy and submitted new patent applications and also brought in a new intellectual property agency. Another focus area has been supply chain, particularly securing deliveries for upcoming clinical studies but also working towards a sustainable long-term supply chain. After all, there is a significant difference between supplying materials for early clinical phases and for a commercial product.

4 How would you describe Dicot’s culture in three words?

Positive, innovative, agile.

5 You have a PhD in physical chemistry. Do you find it useful at Dicot?

In fact, I really do. Especially in patent matters where chemistry and bioprocesses come into play, as well as in the various manufacturing stages for our candidate.

Dicot’s study drug is manufactured by Thermo Fisher Scientific.

Photo: Thermo Fisher Scientific

Management report

The Board of Directors and the Chief Executive Officer of Dicot AB (publ), company registration number 559006-3490, hereby submit the annual report for the financial year 2023. The annual report has been prepared in Swedish kronor, SEK. The company has its registered office in Uppsala.

General about the business

Dicot is a pharmaceutical company specializing in sexual health, developing the candidate drug LIB-01 for the global market. The goal is to create a drug that has a longer duration of action, fewer side effects, and with a differentiated mode of action to help more people. Dicot aims to significantly improve the treatment of erectile dysfunction, enhancing the quality of life for affected men and couples.The goal is to develop LIB-01 to become the first choice of treatment for erectile dysfunction and premature ejaculation.

Dicot is in the clinical phase with LIB-01, conducting an ongoing phase 1 trial primarily focused on evaluating the safety profile. Prior to clinical trials, an extensive preclinical program was conducted, in which the efficacy of LIB-01was verified in several studies.

The global sales of erectile dysfunction drugs amounted to SEK 50 billion in 2023, and premature ejaculation drugs amounted to SEK 32 billion, totalling SEK 82 billion. The global demand is growing rapidly, and a significant portion of men in need refrain from using available drugs. Therefore, the potential for LIB-01 is substantial.

Dicot’s main strategy for LIB-01 is to develop it under its own auspice until clinical phase 2a study and thereafter in partnership with major established pharmaceutical companies to finance and develop LIB-01 into a registered drug on the world market.

At the end of the year, about twenty partners and experts were associated with Dicot. All except the CEO, CSO (Chief Scientific Officer), and CTO (Chief Technical Officer) are engaged on a consultancy basis or through outsourcing.

Significant events during the financial year

The financing for the entire phase 1 study was secured through a unit issuance in January, with two associated series of subscription options that could be exercised in June and November. The subscription rate reached 110% in the unit issuance, and 83% and 85% for the respective options, which was a welcome development in a time when many companies struggled to secure funding. Net proceeds after expenses amounted to a total of SEK 83.2 million for Dicot.

The preclinical toxicology program required for the initiation of clinical trials was completed in April, demonstrating a favorable safety profile from studies conducted in accordance with Good Laboratory Practice, both in single and repeated dosing.

During the first half of the year, the study drug for the phase 1 studies was manufactured by Thermo Fisher Scientific.

The Medical Products Agency and the Ethics Review Board granted their approvals in August to commence Dicot’s phase 1 study with LIB-01. The study began in August, with the first participants dosed in early September, and the first part of the study was completed in December.

The share capital has been reduced during the year through a transfer to the share premium reserve to create a more appropriate capital structure.

Dicot’s study results have been presented at several leading conferences, including the European Society for Sexual Medicine in February and the Sexual Medicine Society of North America in November.

Intensive work on patents and intellectual property rights has been carried out during the year. This includes the oral formulation used in the phase 1 study and several drug substances under development and their manufacturing methods.

An alternative technique involving cell cultivation for large-scale production of the starting material for LIB-01 has been investigated during the year. The technology has proven to be effective on a laboratory scale, which is why upscaling tests and optimization work are ongoing. The existing process of extracting starting materials from natural plant material will continue in parallel.

Jan-Eric Österlund was elected new board member at the annual general meeting in May 2022. In August, Mats Silvander assumed the new strategic role of Chief Technical Officer to lead and develop work on supply chain and intellectual property, among other responsibilities.

Significant events after the financial year

Positive results from the first part of the phase 1 study were presented in January. They demonstrate a very good safety profile and no serious side effects. The study also shows that LIB-01 is well absorbed and provides good exposure in the body, confirming that the oral base formulation chosen by the company is suitable for administration to humans, providing a strong foundation for phase 2 clinical trials.

In order to secure technology for large-scale commercial production of LIB-01, Dicot applied for a patent in January for a new manufacturing method of the starting material. This involves a proprietary approach to cell cultivation developed in collaboration with Uppsala University. The method enables the production of starting material using plant cells grown in cultures, essentially an established technology for large-scale commercial manufacturing.

As part of the preparations for a phase 2a clinical trial in the second half of 2024, Clinical Trial Consultants AB has during the spring been contracted for the implementation of the study, and the study drug to be used has been manufactured according to Good Manufacturing Practice by Thermo Fisher Scientific.

Significant risks

For a detailed account of risk factors, please see Dicot’s EU growth prospectus, January 9, 2023.

Clinical trials

The outcome of clinical trials cannot be guaranteed. The studies may fail to demonstrate the expected efficacy based on the chosen study profile, or they may reveal side effects. This could result in the need for more extensive and/or costly studies. In the worst-case scenario, it may lead to failure to obtain market approval and termination of the studies.

Collaboration partners

A large part of Dicot’s development takes place in collaboration with CROs (clinical research organizations) and CMOs (contract manufacturing organizations) and in the future in the form of expected alliances with pharmaceutical companies. There is a risk of delays in finding suitable partners. There is also a risk that pharmaceutical companies demand additional studies before entering into an agreement. This could increase Dicot’s costs.

Dependence on raw materials

Dicot relies on suppliers for the delivery of the raw materials currently used to produce the starting material for LIB-01. There is a risk that Dicot’s suppliers will not be able to deliver ordered raw materials or that the raw materials can no longer be produced. If this risk occurs, it will have a negative impact on Dicot’s production of LIB-01 and, by extension, on Dicot’s operations, earnings, and financial position.

Dependence on key individuals

Dicot’s future growth is deemed to be highly dependent on the knowledge, experience, and commitment of the company’s management, the Board of Directors and other key individuals. If one or more key persons leave Dicot, this may have negative consequences for the business and its results, as well as if new qualified key persons cannot be recruited to the desired extent.

Profitability and capital requirements

It cannot be ruled out that it will take longer than expected before Dicot achieves continuous, stable profitability. In addition, it cannot be ruled out that Dicot in the future will have a greater capital requirement than what is currently deemed necessary. There are no guarantees that such an increased capital requirement can be acquired on terms acceptable to the shareholders and the market. A deterioration in profitability may also have a negative impact on the company’s market value.

Protection of intellectual property rights and know-how

Intellectual property rights are an important part of Dicot and its operations. There is a risk that Dicot cannot fully utilise or protect its rights. There is also a risk that new products are developed that circumvent Dicot’s current and potential future intellectual property rights. Furthermore, Dicot is dependent on know-how, and it cannot be ruled out that competitors develop corresponding know-how or that Dicot fails to protect its knowledge or brand in an effective manner. Such a development could have a negative impact on the company.

Financing and liquidity

In January, Dicot raised SEK 54.8 million before issue costs through an unit issue oversubscribed at 110%, resulting in a net gain of SEK 49.9 million, including the set-off of guarantee compensation in a subsequent directed issue.

In June, Dicot received SEK 20.7 million before issue costs (subscription rate 83%), and in November, SEK 16.5 million (85%) through subscriptions in the warrant series TO4 and TO5, in which the net gain from both amounted to SEK 33.3 million.

To ensure Dicot’s continued development and management, the Board of Directors and management team continuously evaluate various financing options. Following the positive results from the first part of the phase 1 study, the Board of Directors and management team carefully considered various options and, to maintain the development pace, decided to contract suppliers for the phase 2 studies to come. The board assesses the company’s ability as favourable to obtain sufficient financing to sustain and cover the costs of the development pace that the company strives for. If financing fails, despite signed agreements, it represents an uncertainty regarding the company’s ability to continue operations.

Cap table as of December 31, 2023

Multi-year comparison

Proposal for appropriation of profits

Earnings per share

1,188,035

7,013,371

Cash Flow Statement

Change in Equity

Note 1 - Accounting and valuation principles

The annual report has been prepared in accordance with the Annual Accounts Act and BFNAR 2012:1 Annual report and consolidated accounts (K3). The accounting principles are unchanged compared to the previous year.

Valuation principles

Receivables

Receivables have been recognised at the amounts at which they are expected to be received.

Other assets, provisions, and liabilities

Other assets, provisions, and liabilities have been measured at their acquisition cost unless otherwise stated below.

Revenue recognition

Revenues have been recognised at the fair value of what has been or will be received and is recognised to the extent that it is probable that the economic benefits will be realised by the company and the revenue can be calculated reliably.

Government grants

Government grants are recognised at fair value when there is reasonable assurance that the grant will be received and that the company will fulfil all related conditions. Grants received are recognised as other operating income in the income statement.

Intangible fixed assets

The company uses the cost model for internally generated intangible assets. This means that all development costs are expensed as incurred.

Note 2 – Other Operating Income

Tangible fixed assets

Property, plant and equipment are recognised at cost less accumulated depreciation and any impairment losses. The assets are depreciated on a straight-line basis over the assets’ estimated useful life. The useful life is reassessed at each balance sheet date. The following useful lives are applied:

Equipment, tools and machinery: 5 years

Borrowing costs

The borrowing costs incurred when the company borrows capital are recognised in the in the income statement in the period in which they arise.

Income tax

Current tax is the income tax for the current financial year which relates to the taxable profit for the year and that part of the previous financial year’s income tax that has not yet been recognised. Current tax is assessed at the probable amount based on the tax rates and tax regulations applicable on the balance sheet date.

Deferred tax relating to future tax effects is not recognised in the income statement and balance sheet. The total unutilised deficit amounts to 170 240 (117 501) KSEK. Considering that the company has consistently reported losses, and there is some uncertainty when tax surpluses arise, no deferred tax asset related to the loss carryforward is recognized.

Note 3 – Remuneration to Auditors

Note 4 – Staff

Compensation, etc.

The agreement with the CEO includes a mutual notice period of six months.

Note 5 – Equipment

Note 6 – Information on Share Capital

The number of shareholders at the end of the year was 5,041, an increase of 49% since the beginning of the year. The stock has been listed on the Spotlight Stock Market under the name Dicot since June 20, 2018.

There are a total of six outstanding incentive programs in Dicot. The exercise price for the options and future subscription price are based on the Black & Scholes model. There are no benefits for option holders, and therefore no attributable costs to the company.

(1,080,000)

Note 7 – Definition of Key Ratios

Key Ratios

Equity Ratio (%)

Net Sales

Result After Financial Items

Adjusted equity (equity and untaxed reserves, net of deferred tax) as a percentage of total assets

The main revenues of the business, invoiced costs, incidental revenues, and revenue adjustments.

Results after financial income and expenses but before taxes.

Note 8 - Significant events after the end of the financial year

Positive results from the first part of the phase 1 study were presented in January. They demonstrate a very good safety profile and no serious side effects. The study also shows that LIB-01 is well absorbed and provides good exposure in the body, confirming that the oral base formulation chosen by the company is suitable for administration to humans, providing a strong foundation for phase 2 clinical trials.

In order to secure technology for large-scale commercial production of LIB-01, Dicot applied for a patent in January for a new manufacturing method of the starting material. This involves a proprietary approach to cell cultivation developed in collaboration with Uppsala University. The method enables the production of starting material using plant cells grown in cultures, essentially an established technology for large-scale commercial manufacturing.

As part of the preparations for a phase 2a clinical trial in the second half of 2024, Clinical Trial Consultants AB has during the spring been contracted for the implementation of the study, and the study drug to be used has been manufactured according to Good Manufacturing Practice by Thermo Fisher Scientific.

Uppsala, on the day indicated by our electronic signatures

Eva Sjökvist Saers Fredrik Buch

Mikael von Euler-Chelpin Chairman of the Board Director Director

Per-Göran Gillberg Michael Zell

Jan-Eric Österlund Elin Trampe Director Director Director Chief Executive Officer

Our audit report has been issued on the day indicated by our electronic signatures.

Öhrlings PricewaterhouseCoopers AB

Lars Kylberg

Authorized Public Accountant

Auditor’s report

To the general meeting of the shareholders of Dicot AB, corporate identity number 559006-3490

Report on the annual accounts

Opinions

We have audited the annual accounts of Dicot AB for the year 2023. The annual accounts of the company are included on pages 13-24 in this document.

In our opinion, the annual accounts have been prepared in accordance with the Annual Accounts Act and present fairly, in all material respects, the financial position of Dicot AB as of 31 December 2023 and its financial performance and cash flow for the year then ended in accordance with the Annual Accounts Act. The statutory administration report is consistent with the other parts of the annual accounts.

We therefore recommend that the general meeting of shareholders adopts the income statement and balance sheet for Dicot AB.

Basis for Opinions

We conducted our audit in accordance with International Standards on Auditing (ISA) and generally accepted auditing standards in Sweden. Our responsibilities under those standards are further described in the Auditor’s Responsibilities section. We are independent of Dicot AB in accordance with professional ethics for accountants in Sweden and have otherwise fulfilled our ethical responsibilities in accordance with these requirements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinions.

Significant uncertainty factor regarding the assumption of continued operation

We would like to draw attention to the management report and the paragraph ”Financing and liquidity” in which the board describes that the company has decided to contract suppliers for future studies, the implementation of which is dependent on the company receiving sufficient funding. As the financing is not secured, we assess that there is a significant uncertainty factor that could lead to significant doubts about the company’s ability to continue operations.

We have not modified our opinion in this respect.

Other Information than the annual accounts

This document also contains other information than the annual accounts and is found on pages 1-12. The Board of Directors and the Managing Director are responsible for this other information.

Our opinion on the annual accounts does not cover this other information and we do not express any form of assurance conclusion regarding this other information.

In connection with our audit of the annual accounts, our responsibility is to read the information identified above and consider whether the information is materially inconsistent with the annual accounts. In this procedure we also take into account our knowledge otherwise obtained in the audit and assess whether the information otherwise appears to be materially misstated.

If we, based on the work performed concerning this information, conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of the Board of Directors and the Managing Director

The Board of Directors and the Managing Director are responsible for the preparation of the annual accounts and that they give a fair presentation in accordance with the Annual Accounts Act. The Board of Directors and the Managing Director are also responsible for such internal control as they determine is necessary to enable the preparation of annual accounts that are free from material misstatement, whether due to fraud or error.

In preparing the annual accounts, The Board of Directors and the Managing Director are responsible for the assessment of the company’s ability to continue as a going concern. They disclose, as applicable, matters related to going concern and using the going concern basis of accounting. The going concern basis of accounting is however not applied if the Board of Directors and the Managing Director intend to liquidate the company, to cease operations, or has no realistic alternative but to do so.

Auditor’s responsibility

Our objectives are to obtain reasonable assurance about whether the annual accounts as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs and generally accepted auditing standards in Sweden will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these annual accounts.

A further description of our responsibility for the audit of the annual accounts is available on Revisorsinspektionen’s website: www.revisorsinspektionen.se/revisornsansvar. This description is part of the auditor´s report.

Report on other legal and regulatory requirements

Opinions

In addition to our audit of the annual accounts, we have also audited the administration of the Board of Directors and the Managing Director of Dicot AB for the year 2023 and the proposed appropriations of the company’s profit or loss.

We recommend to the general meeting of shareholders that the profit be appropriated in accordance with the proposal in the statutory administration report and that the members of the Board of Directors and the Managing Director be discharged from liability for the financial year.

Basis for Opinions

We conducted the audit in accordance with generally accepted auditing standards in Sweden. Our responsibilities under those standards are further described in the Auditor’s Responsibilities section. We are independent of Dicot AB in accordance with professional ethics for accountants in Sweden and have otherwise fulfilled our ethical responsibilities in accordance with these requirements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinions.

Responsibilities of the Board of Directors and the Managing Director

The Board of Directors is responsible for the proposal for appropriations of the company’s profit or loss. At the proposal of a dividend, this includes an assessment of whether the dividend is justifiable considering the requirements which the company’s type of operations, size and risks place on the size of the company’s equity, consolidation requirements, liquidity and position in general.

The Board of Directors is responsible for the company’s organization and the administration of the company’s affairs. This includes among other things continuous assessment of the company’s financial situation and ensuring that the company’s organization is designed so that the accounting, management of assets and the company’s financial affairs otherwise are controlled in a reassuring manner. The Managing Director shall manage the ongoing administration according to the Board of Directors’ guidelines and instructions and among other matters take measures that are necessary to fulfill the company’s accounting in accordance with law and handle the management of assets in a reassuring manner.

Auditor’s responsibility

Our objective concerning the audit of the administration, and thereby our opinion about discharge from liability, is to obtain audit evidence to assess with a reasonable degree of assurance whether any member of the Board of Directors or the Managing Director in any material respect:

• has undertaken any action or been guilty of any omission which can give rise to liability to the company, or

• in any other way has acted in contravention of the Companies Act, the Annual Accounts Act or the Articles of Association.

Our objective concerning the audit of the proposed appropriations of the company’s profit or loss, and thereby our opinion about this, is to assess with reasonable degree of assurance whether the proposal is in accordance with the Companies Act. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with generally accepted auditing standards in Sweden will always detect actions or omissions that can give rise to liability to the company, or that the proposed appropriations of the company’s profit or loss are not in accordance with the Companies Act.

A further description of our responsibility for the audit of the administration is available on Revisorsinspektionen’s website: www.revisorsinspektionen.se/revisornsansvar. This description is part of the auditor´s report.

Uppsala on the day shown by our electronic signature.

Öhrlings PricewaterhouseCoopers AB

Lars Kylberg Authorized Public Accountant