Important assumptions:           

1 Annual R&D costs: starting Y0 at US$4 million, increasing by US$1 million each of subsequent years, for virology tests, respiratory toxicology tests, cost of consultants, test sample, etc.

2 Australian R&D Incentive Tax Rebate 43.5% received in the following year

3 HKSE listing expenses US$5 million on total raise US$15 + US$75 million.

4 Annual administration overheads: US$1 million.

5 Global COVID infections to reach 20% of world population (note that about half of American adults say they have been infected with COVID-19 at some point—considerably more than have reported testing positive. Spanish Flu infected 28% of global population by 1921. Mutations have enabled immune escapes despite immunity from vaccines and prior infections. We assume new infections at 20% of global population anually for the next 5 years in the event of the onset of another respiratory disease pandemic with a high probability being the Avian Flu.  (Link) However annual cases of Upper Respiratory Tract Infections (URI) will far exceed Covid infection cases. See assumption 6.

6 Covirix will capture 5% market share of the global infections market (ie 7.6 billion x 20% global infections x 5%) initially from Yr1, and 5% market share at Yr2, with increase of 5% market share for each subsequent year. A global study of Upper Respiratory Tract Infections in 204 countries from 1990 to 2019 found that URIs reached 17.2 billion cases in 2019.This was equivalent to an average of 2.26 URI cases per person annually globally. Our assumed number of courses however, is equivalent to in yr 1 and 2: 0.44%, yr3: 0.88%, yr 4: 1.32%, yr 5: 1.76% of annual URI cases.  (Link)

7 Covirix oral inhalable wholesaled at US$65 each course ex-factory gate. We assume the current sales practice of pharmaceutical company direct to government sales to continue.

8 $20 per course for Cost Of Goods (COG) sold includes drug compound, packaging, inhaler cost but does not include logistics costs, freight, insurance, and storage costs which are to be borne by government.

9 No revenue has been allowed for sales for Long Covid treatment though we estimate that, 50% of people who have recovered after infections without early treatment with our antiviral, may still suffer from Long Covid.

10 Terminal value at 20 times year 5 projected cash flows based on takeover value of COVIRIX Medical Holdings Ltd. COVIRIX Medical Pty Ltd will be restructured for the pre-IPO to be a wholly owned subsidiary of COVIRIX Medical Holdings Ltd which will be seeking listing on HKSE under the Biotech sector of Chapter 18A HKSE Listing Rules. It is assumed that COVIRIX Medical Holdings’ business will be acquired and be taken over by year 6 at 20X Yr5 cashflows.

11 Pre-IPO investors placement shares issued price US$3 per share. IPO price at US$4 per share.

12 Number of COVIRIX Medical shares used for valuation is 86.065 million shares assuming completion of pre-IPO offer of US$15 million and planned IPO offer US$75 million.

13 Present Value Discount rate at 10%, 15%, 20%, 25%.

14 Australian Corporate tax payable at 30%, however under the Patent Box legislation introduced into the Federal Parliament on 10 Feb 2022 company profits derived from Australia or US granted medical and biotechnology patents will receive a concessional tax rate of 17 per cent from July 1, 2022.

15 AUD to USD fixed at 68 cents exchange rate.