30 June 2021

Prior to publication, the information contained within this announcement was deemed by the Company to constitute inside information as stipulated under the UK Market Abuse Regulation. With the publication of this announcement, this information is now considered to be in the public domain.

ADVANCED ONCOTHERAPY PLC

("Advanced Oncotherapy" or the "Company")

Final Results for the year ended 31 December 2020

Completed significant progress in line with the Company's objective to deliver an operational LIGHT system with a 230MeV beam in H2 2021

Signed further commercial partnerships demonstrating the unmet need for proton therapy

Advanced Oncotherapy (AIM: AVO), the developer of next-generation proton therapy systems for cancer treatment called LIGHT systems (LIGHT), today announces its audited results for the year ended 31 December 2020.

Key Highlights (including post-period):

·      Strong progress towards completing the first operational LIGHT system capable of accelerating protons at 230 MeV and the Company remains on track to attain this milestone during H2 2021:

·      Completed the manufacture of all critical hardware for the first LIGHT system and machine installation process was optimised to enable the reduction of the start-up time for future LIGHT systems.

·      Infrastructure is now in place to support assembly and testing activities; site preparation at Daresbury is ready to support the ultra-high vacuum tests and the high-voltage conditioning of the accelerating structures.

·      The LIGHT system is now capable of supporting the delivery of a proton pulse every 5 milliseconds.

·      Full medical software suite is integrated, and the Company obtained the re-certification of ISO 13485.

·      Signed a lessor financing partnership with Kineo Finance, formerly known as DiaMedCare, providing easier access to the Company's LIGHT system through a flexible financing solution that reduces the need for large initial upfront payments from customers.

·      Signed multiple commercial partnership agreements with external stakeholders:

·      Announced a partnership with The London Clinic to operate the Company's first commercial LIGHT facility in Harley Street, London:

§ Cancer partnership entered into between The London Clinic and the Cleveland Clinic in London resulting in more patients being referred to the proton therapy centre in Harley Street.

·      Entered into an agreement for the sale of a LIGHT system to the Mediterranean Hospital in Cyprus. As part of the agreement, the Company will receive €50m and share of profits from clinical services.

·      Collaboration with University Hospitals Birmingham (UHB) NHS Foundation Trust for the installation of a LIGHT system. The envisaged location of the machine is the UHB campus in Birmingham and it is intended that a revenue sharing arrangement will be implemented.

·      Post-period, signed a Letter of Intent with Saba Partners for the proposed purchase of a three-treatment room for LIGHT system in Switzerland.

·      Published new data supporting the versatility of the LIGHT platform and the potential to address a high unmet medical need.

·      Pursued additional financing in 2020 to support its operations:

·      Signed two financing agreements with VDL and Nerano Pharma, providing the Company with £40m of funding to further the development of LIGHT and advance manufacturing.

·      Completed two equity fundraises totalling £23.2m to strengthen the Company's balance sheet and contribute to the funding for progressing the assembly, documentation, verification and validation activities.

·      Lori Cross appointed as a Non-Executive Director on the Board.

Nicolas Serandour, Chief Executive Officer of Advanced Oncotherapy, said:

"I am pleased with the Company's progress over the past year, which would not have been possible without the outstanding work of our staff and their devotion to save lives. In these unprecedented times and despite challenges brought by Covid-19, the Company continued to focus its efforts towards achieving its objective of delivering an operational LIGHT system with a 230MeV beam in 2021.

Research published in 2020 and in the first half of 2021 holds great promise for the use of LIGHT in two exciting new treatment areas. A study published by the Mayo Clinic highlighted the benefits of combining a high-density proton radiation beam, such as the one designed with LIGHT, with immuno-oncology drugs to more effectively treat a wider range of patients than is possible with proton therapy or immunotherapy alone, including those with metastatic cancers. The constant proton beam output intensity of LIGHT also offers an ideal platform for FLASH radiotherapy in which patients, regardless the location of the tumour in the body, are treated in one single visit, as opposed to the usual 20-35 visits.

"Looking ahead, we are confident in our ability to meet our targets. We bolstered our financial position through additional financing in the period to support activities needed to ensure the LIGHT system is operational and with a 230MeV beam. In line with our strategy, we also continued to develop partnerships with key stakeholders including Kineo Finance, the London Clinic, University Hospitals Birmingham and Mediterranean Hospital in Cyprus. Despite Covid-19, this has been a strong operational period for the Company, and we look forward to what the future holds for Advanced Oncotherapy."

Posting of Annual Report and Notice of Annual General Meeting

The annual report for the year ended 31 December 2020, which includes notes to the financial statements, will be available shortly from the Company's website at www.advancedoncotherapy.com and will shortly be posted or emailed to shareholders together with a notice of Annual General Meeting to be held at the Company's administrative head office at Level 3, 4 Tenterden Street, London W1S 1TE on Friday, 30 July 2021 at 2.00pm.

The Notice of Annual General Meeting sets out arrangements in light of the current British government restrictions placed on public gatherings in response to the COVID-19 outbreak. Under the current prohibition on public gatherings, it may not be possible for Shareholders to attend the General Meeting in person. Shareholders are strongly urged to vote by proxy in advance of the deadline by completing their form of proxy in accordance with the instructions and further details are set out in the form of proxy.

Notes for editors

About Advanced Oncotherapy Plc

Advanced Oncotherapy, a UK headquartered company with offices in London, Geneva, The Netherlands and in the USA, is a provider of particle therapy with protons that harnesses the best in modern technology. Advanced Oncotherapy's team "ADAM," based in Geneva, focuses on the development of a proprietary proton accelerator called, Linac Image Guided Hadron Technology (LIGHT). LIGHT's compact configuration delivers proton beams in a way that facilitates greater precision and electronic control.

Advanced Oncotherapy will offer healthcare providers affordable systems that will enable them to treat cancer with innovative technology as well as expected lower treatment-related side effects.

Advanced Oncotherapy continually monitors the market for any emerging improvements in delivering proton therapy and actively seeks working relationships with providers of these innovative technologies. Through these relationships, the Company will remain the prime provider of an innovative and cost-effective system for particle therapy with protons.

STATEMENT FROM THE EXECUTIVE CHAIRMAN

Dear shareholders,

It is my great pleasure to introduce another annual report and accounts at such a pivotal time in Advanced Oncotherapy's development.

2020 will certainly be remembered all over the world for the Covid-19 pandemic, an unprecedented health crisis of epic proportions bearing profound social, economic and financial consequences. My first and foremost thoughts are for all of those who lost their dear ones over the past year. I also want to express my utmost gratitude to all our employees and partners who have shown remarkable dedication, agility and resilience during these unprecedented circumstances.

As Albert Einstein suggested, out of crises can emerge new and incredible opportunities, particularly if traditional approaches and paradigms are questioned and challenged. This Covid-19 pandemic is no exception; it underscores three major opportunities for Advanced Oncotherapy:

·      The Covid-19 pandemic has been a wake-up call for governments to do more to tackle cancer. Cancer is a pandemic in itself and time is exceedingly precious. Every minute during 2020, nine people were diagnosed with cancer in Western Europe¹.A one-month delay in treating cancer results in a 6 to 13% higher risk of dying². Sadly, 50% of governments had their cancer services partially or completely disrupted as a result of the Covid-19 pandemic³ and it is estimated that some 50,000 people in the UK are probably missing a cancer diagnosis⁴. Yet, the stark impact of the pandemic on cancer care has made everyone realise the actual human cost of neglecting non-communicable diseases like cancer. With the number of new cancer cases currently expected to rise by more than 45% over the next twenty years⁵, more actions must be taken to bend the curve and raise further awareness at all levels. We have already seen governments, payers and other healthcare stakeholders seeking new ways to accelerate the fight against cancer and deploy new initiatives. Advanced Oncotherapy has a key role to play in this broad eco-system.

·      The Covid-19 pandemic is reshaping oncology practice and delivery of cancer care broadly, shifting care onto virtual platforms and minimising the number of hospital patient visits through more efficient and targeted radiation therapy systems. These new solutions facilitate access to innovation of cancer centres and support more partnerships to accelerate the convergence of radiation with targeted drugs. These are a few important changes we foresee and which we believe will continue well beyond the short- to mid-term of the active pandemic.

·      The Covid-19 pandemic has taken a terrible toll around the world - but some sectors have been more affected than others. People with underlying conditions, including cancer, or those living in countries with under-developed healthcare infrastructure have been hit disproportionately hard by the virus. This makes our purpose centred around defeating cancer through the democratisation of proton therapy more meaningful than ever. We want to play our part and have an impact in broadening access to cancer therapy by making proton therapy more accessible and affordable. All the decisions we have taken were not always the easiest ones, but they were the right ones to serve our purpose and I am convinced that many patients around the world and all our stakeholders will soon reap the rewards of our strategy.

In the face of these challenges, we continued to make progress on our strategy. This is a testament to the leadership of Nicolas and his management team who have navigated the Company through the year and ensured people across our Company remained focused on our purpose and project. Ensuring our LIGHT system can deliver a proton beam for all radio-sensitive tumours remains our number one priority for 2021.

The success of our strategy and execution plan relies on well- proven design and industrial processes. It is also predicated on four important strategic pillars:

·      differentiated, asset-light and patient-centric business model;

·      commitment to do business responsibly and sustainably;

·      continued innovation with clear metrics to prioritise initiatives and assess their expected return; and

·      unique culture embedded in our governance framework.

DIFFERENTIATED, ASSET-LIGHT AND PATIENT-CENTRIC BUSINESS MODEL

The commercial launch of LIGHT represents a shift away from competition and into a space where, as a technology disrupter, we can provide long-term attractive return opportunities for our customers.

LIGHT has been designed to treat at an affordable cost a large spectrum of tumours. Its potential goes well beyond the hard- to-treat tumours such as head and neck tumours. Its ability to deliver radiation pulse-by-pulse 200 times per second⁶ combined with its significantly narrower proton beam⁷ make it perfectly suited to sculpt radiation doses based on the irregular shape of the tumour, taking into account potential tumour motion as a result of breathing and heart movements.

As we seek to deliver our mission of democratising proton therapy, it is clear to me that there is a significant need to reduce the high upfront capital costs associated with legacy proton therapy systems. This is key to lowering the hurdle to wider adoption of proton therapy, particularly for many local and smaller treatment centres. Our LIGHT system is well placed to do exactly that: through a reduction of the building costs and the implementation of a different financing model:

·      Building costs - The LIGHT system is modular and therefore can be easily installed directly into clinical facilities. It produces proton beams at the required energy level for treatment without the need for degraders, greatly decreasing the need for expensive shielding and thus reducing the building and installation cost. This is of paramount importance when considering that the building and the installation of a proton therapy system - which can be in excess of $200 million depending on the site and configuration - represent up to two-thirds of the project cost;

·      Financing model - The modular design of LIGHT also means that it can be used as a financing security for future purchase orders. Unlike legacy systems, LIGHT can become available to customers through tailor-made lease financing solutions. This has been the basis of the partnership we announced in January 2021 with DiaMedCare AG, the Swiss-based active asset financing partner in the life sciences sector. Under the terms of the partnership agreement, DiaMedCare will acquire LIGHT systems and lease them back to the Company's customers that are commissioning the LIGHT system for oncology treatments. In addition, subject to contracts, DiaMedCare will also be able to bridge manufacturing costs until delivery of the LIGHT system to customers.

Another building block of our business model lies in the opportunity to receive a share of the future profits generated by the proton centres in addition to the proceeds associated with the sale of the LIGHT systems. Recent examples of this include agreements with the London Clinic, the Mediterranean Hospital in Limassol, Cyprus and Saba Partners. This is being made possible because of our competitive pricing offering regardless of the clear and superior profile of the LIGHT system as well as our commitment to deploy product upgrades without penalising early technology adopters. The benefits of this approach are manifold. This helps us broaden our customer base and drive adoption whilst generating additional potential revenue streams. This should also facilitate stable cash generation, with profitability supported by long term service contracts and margin profit share agreements.

In summary, I am confident that the business model we are building around the superiority of LIGHT and centred around customers' needs is a long-term sustainable growth model that will prove rewarding for Advanced Oncotherapy's shareholders.

COMMITMENT TO DO BUSINESS RESPONSIBLY AND SUSTAINABLY WITH A CLEAR SOCIAL PURPOSE

Many years ago, CERN designed LIGHT with the view of doing the right thing for patients, society and our planet:

·      it can be installed in a contiguous and densely populated environment, allowing patients to be treated at proximity to their families;

·      it can be easily installed directly into existing clinical facilities;

·      it can be transported in standard containers and trucks; it does not require expensive cranes or load handling devices; and

·      as a result of being able to be operated with an efficiency constantly above 90% which drastically limits stray radiation and reduces the need to build large shielding, it can be integrated in an environmentally friendly manner.

We must acknowledge the legacy of the pioneering scientists who have been involved in this breakthrough innovation. We are also determined to continue to raise our game. This is why, together with our partners, we are committed to support the treatment of children at cost in the catchment area and train physicians and engineers, when deploying the LIGHT solution in countries with limited healthcare access.

As part of our journey to democratise proton therapy and improve the health and well-being of the 19 million people diagnosed with cancer every year, of which 57% are in low and middle-income countries where survival rates are currently lowest, we have an important objective: achieving a 230MeV beam on our LIGHT system that is being assembled in Daresbury. Yet, we recognise that to be successful in the long-term we need to have a vision that goes beyond the first machine. This means we must have the right foundation in place to operate ethically and sustainably. At Advanced Oncotherapy, we have been focused on this for many years. We believe in the need to transition to an economy that is centred on sustainability.

In 2020, we also formed a dedicated, cross-disciplinary ESG working group bringing HR, Finance and Supply Chain together. We are committed to enhancing our ESG performance and are developing a structured roadmap defining our key areas of focus and development. We will set out a clear roadmap intended to build on this platform, pinpointing specific areas of focus to deliver against internal and external expectations.

LIGHT FLASH AND THE COMBINATION OF LIGHT WITH IMMUNOTHERAPY, TWO MAJOR OPPORTUNITIES WHICH CAN LEAD TO A PARADIGM SHIFT IN THE USE OF PROTON THERAPY

Innovation is not a choice; it is a necessity to achieve sustainable competitive advantage and create value. It is also a "must" because the LIGHT platform - as the first commercial linear proton accelerator - lends itself perfectly to future upgrades. We are particularly excited about the prospects of FLASH, which paves the way for treating patients in one visit. Due to its smaller beam size and tailored made treatment plan, the use of our LIGHT system - in combination with specific immunotherapeutic agents - also holds great promises. Such approach can be designed to elicit an immune response in resistant tumours as well as tackling metastases based on radiation targeted at the primary tumour.

UNIQUE CULTURE EMBEDDED IN OUR GOVERNANCE FRAMEWORK

Culture is at the heart of execution, driving results and creating value, which is why it remains our key priority. Our culture continues to foster agility, embrace change, encourage entrepreneurism, focus on execution and deliver high performance. It pivots on the mindset of our team and partners, who inspire trust, listen, find out, collaborate, take risks, find solutions, encourage and celebrate.

To help our employees and partners achieve their best and support the Company's priorities, the Board continues to adapt. As announced in June 2020, we have streamlined the size of the Board for corporate governance purposes and to ensure we have a more agile and balanced Board to reflect the Company's strategy. As a result, Mr Gabriel Urwitz, Mr Peter Sjöstrand, Mr Chunlin "Allen" Han, and Dr Yuelong Huang (all Non-Executive Directors of the Company) stepped down at the Company's Annual General Meeting in July 2020. In addition, in the context of our vision to build a more balanced and international business, we were delighted to welcome Lori Cross as a Non-Executive Director in September 2020. Lori is a successful business executive with over 35 years of experience in transforming leading global medical technology and life sciences organisations and commercialising disruptive healthcare business models.

LOOKING AHEAD

At Advanced Oncotherapy we believe that in the next 20 years the industry will need more than 10,000 proton therapy treatment rooms, representing a 50-fold increase over the current global capacity. This, we think, will be driven by the increasing realisation and demonstration that proton therapy allows radiation oncologists to effectively irradiate tumours whilst sparing up to 60% of the surrounding healthy tissue compared to conventional radiation therapy. We want to play a fundamental role in the transformation of this market. To truly unlock this potential, the industry needs more precise and cost-efficient proton therapy systems. We believe proton therapy systems based on our proprietary LIGHT technology can achieve this.

We are cognisant that our journey towards the democratisation of proton therapy has not been and will not be linear, but we know that continued focus on the vision is the right path to take for shareholders, customers, partners, colleagues and our communities. This is why, during this unprecedented year, we took the decision to weather the storm whilst continuing to invest in the business and our strategy. As a result, jobs were protected, and we proceeded with our plans to invest behind the commercial launch of LIGHT and the set-up of our assembly site. This strategy was offset by some discretionary one-off cost savings. Looking ahead, we expect these investments to deliver higher growth over time and significant value.

Finally, I would like to thank my fellow Board members, the senior leadership team and all of the Group's employees for the exceptional work they have done during this unprecedented year. I appreciate the patience shown by our shareholders who share my view of the value accretion potential. I am very grateful for their continued support.

Dr Michael Sinclair

Executive Chairman

29 June 2021

¹ Source: WHO

² Source: The British Medical Journal

³ Dr. André Ilbawi, from WHO

⁴ Source: Macmillan Cancer Support

⁵ Source: WHO

⁶ This is approximately ten times faster than cyclotrons

⁷ Up to 10 times smaller versus cyclotrons

STATEMENT FROM THE CHIEF EXECUTIVE OFFICER

At Advanced Oncotherapy, we have a unique opportunity to help democratise proton therapy. We believe the Company's technology is truly disruptive with the ability to bring profound change to the treatment paradigm within the radiation oncology market. That said, we remain cognisant that success in achieving this also requires us to navigate a highly regulated and fast-changing environment.

Over the past year, Advanced Oncotherapy has made significant progress towards achieving its corporate objective of having its first LIGHT system generating a 230MeV beam in 2021, despite the global impact of the Covid-19 pandemic. I am proud of the way in which the Company has adapted and responded to challenges presented in order to support patients, healthcare systems, partners and our employees. In this statement, we will reflect on the operational progress made as well as our financial results for the period ended 31st December 2020.

The Covid-19 pandemic and the way we responded

The Covid-19 pandemic dominated all aspects of life and business during 2020 and in these unprecedented times Advanced Oncotherapy was no exception. From mid-March 2020, we saw an impact on our operations due to decisions by governments to implement lockdowns to tackle and constrain the impact of the outbreak and, as a result, our assembly site in Daresbury, Cheshire, UK was closed for two months. The integration and testing activities resumed from May 2020, but due to the nature of our project - assembling a radiation-based system in a confined space - we were unable to deploy full resources to the same extent as we had done previously. In addition, the pandemic disrupted our supply chain, preventing some of our key suppliers from performing maintenance and quality tests.

In the midst of the outbreak of Covid-19, we had to rapidly adapt our organisation. Throughout this period, we prioritised the health and safety of all our employees and, in order to achieve this objective, we performed a full risk assessment, implemented our business continuity plan, adapted to the latest Covid-19 guidance provided by the UK Government and implemented new policies to ensure strict compliance with the Health and Safety requirements.

As many organisations have done as a result of the pandemic, we also changed the way we worked together with the majority of employees working from home from mid-March 2020. The smooth and successful transition to communicating via video meetings, best practice sharing sessions, and rebalancing workloads across the business enhanced workplace engagement for most. As an organisation, we hope to continue using many of the new ways of doing business post-pandemic whilst embracing flexible working solutions for all employees.

In order to continue progress with regards to the development of the LIGHT system over the past year, our team initially focused on progressing documentation required for regulatory approval - with most of the day-to-day work carried out by our employees remotely. This was a significant workstream, given that LIGHT has more than 15,000 components, and we have made excellent progress to enhance our documentation workstreams and software development. Working with P-Cure, the supplier of the patient positioning system (PPS), the Company enhanced key documentation to ensure the efficient installation of future systems, enabling quicker system start-up and commissioning.

During 2020, with the shifts in employee working conditions, the Board decided that it was important to continue investing behind our strategic priorities. As an organisation, we want to emerge from the pandemic in a stronger competitive position, placing a high priority on keeping our valuable workforce as intact as possible and completing our ongoing projects. Accordingly, we invested in enhancing our IT infrastructure with the installation of simultaneous stream multi-video and audio communication systems helping our team at Daresbury with remote technical guidance from the Company's R&D facility in Geneva, Switzerland. Our verification and validation testers also received new qualifications, thus removing the need for external consultants and reducing future uncertainty, potential delays and additional costs. This strategy was complemented with decisive actions to mitigate the financial impact triggered by Covid-19 where we introduced measures aimed at reducing non-essential spending and safeguarding our net financial position.

Our strategic approach to the challenges brought by Covid-19 enabled us to continue to make progress throughout the year. As a result, we have entered into a new phase with a sharper business and a higher confidence in our ability to deliver sustainable long-term growth.

THE PROGRESS WE MADE IN 2020

Understanding the basics of LIGHT…

With the introduction of LIGHT technology, we are pushing the boundaries of what can be achieved between physics and engineering to create something that has never been done before. The complexity of the project and the competitive barriers of entry arise from the various specialities needed for the design, production and testing of the machine.

To assess the operational achievements made during the year, it is therefore important to understand the conceptual science behind the acceleration of protons in our LIGHT system. Protons are accelerated with an electric field and then steered and focused with a magnetic field. Electric fields along the accelerator switch from positive to negative at a given frequency pulling protons forward along the accelerator. This acceleration occurs in radiofrequency (RF) cavities, called radio-frequency quadrupole (RFQ), side-coupled drift tube linacs (SCDTLs) and coupled cavity linacs (CCLs). These cavities are specially designed metallic chambers which allow radio waves to interact with passing bunches of protons.

Each time a bunch of protons passes the electric field in an RF cavity, some of the energy from the radio waves is transferred to the protons, nudging them forward. The higher the energy level protons gain, the quicker they travel through the LIGHT accelerator and the deeper in the body they will travel before stopping and releasing their energy which is where most radiation damage will occur. It is important that protons do not collide with gas molecules on their journey through the LIGHT accelerator, so the beam is contained in an ultra-high vacuum inside a metal beam pipe.

As we develop the LIGHT system, specific expertise is needed by the Company in a number of areas including: environmental health and safety, radiation safety, electromagnetic compatibility and electromagnetic interference, beam dynamics, electrical engineering, electronics, mechanical engineering, vacuum technology, magnet technology, RF technology, power converters, IT, radiation protection, cooling and ventilation, survey and alignment, electrical networks, and civil and structural engineering.

… to assess the operational achievements during the year

During 2020, the Company reached a number of significant milestones in its goal to ensure that our first LIGHT system is operational by the end of 2021 with a 230MeV beam. We remain on track with this objective.

All the accelerating RF cavities required for accelerating protons to their maximal energy have now been manufactured and delivered to the Daresbury assembly site. The patient positioning system (PPS), which includes the diagnostic quality CT scanner used to scan patients in a seated position, the real-time X-ray verification system which enables imaging of a moving tumour, and the robotic chair which can move and rotate the patient with high accuracy and precision, have also all been delivered.

In order to deposit bunches of protons 200 times per second onto the tumour, radio waves which transfer their energy to protons must have the right characteristics in terms of amplitude (height of the radio wave) and frequency (how close the waves are); both of which must be stable. The successful configuration and testing of the modulator- klystron systems (MKS) has been completed and was a result of close collaboration with our supplier, ScandiNova.

As a result, the MKS now support the LIGHT system's capability to vary the proton beam energy from 70 MeV to 230 MeV in only five milliseconds. Even within a tumour, different cells may respond in different ways to treatment or radiation. The ability to change the intensity of the beam, i.e, the number of protons per pulse, is particularly important in tailoring our solution to patient needs and to optimising the treatment plan for patients. The higher the intensity of the beam, the more densely the radiation will be delivered, resulting in more damage made to the tumour. During the initial conditioning phase, the full intensity was achieved representing a key step forward in the assembly of the LIGHT system; this provides the basis for an optimised treatment plan which broadens the potential spectrum of tumours which can be successfully treated.

The software system that controls the accelerator and supports the medical treatment has been an important area of focus during the period. Proton therapy systems include a wide range of software, ranging from the preparation of the full treatment plan, daily proton delivery to patient workflow and recording of patient data. To respond to one of the key challenges currently faced by end users, the lack of an integrated control software suite, we have worked with Raysearch and successfully tested a seamless software suite customised for LIGHT. This provides users with a single interface for patient preparation, treatment and follow-up processes, whilst limiting potential risks and facilitating a better end user experience for clinicians and healthcare workers.

In addition, we have further strengthened relationships with our key stakeholders, including suppliers and regulatory partners. This was showcased by our decision to follow the US Food and Drug Administration (FDA) pre-submission process, an approach that gives us regular and expanded access to the FDA. This will provide us with a critical step in gaining valuable feedback from the FDA ahead of certification whilst de-risking our regulatory plan.

Infrastructure in place to support assembly and testing activities

The purpose of the site located at Daresbury, Cheshire is to assemble and test the various units of the LIGHT system so that the proton beam meets the relevant medical, health and safety requirements and standards. This infrastructure is now in place and can set the course for future success. The most critical parts include fixed and temporary shielding walls, the stands on which the RF cavities are conditioned, the ultra-high vacuum, the cooling systems and the instruments needed for testing.

Most importantly, this means that we have now been able to start conditioning the accelerating structures. The conditioning process is time-consuming, and we had to implement extra precaution measures for the first system. As part of the conditioning process, we have had to gradually increase the power that the RF cavities can receive so that their performance is reliable and optimised, which is arguably one of the most important tasks to be undertaken before generating proton beams. If not done correctly, the high-precision engineering modules can be damaged. With three conditioning stands successfully installed, we can now perform parallel tests and condition the full LIGHT system.

Quality: the epicentre of our operations

Completing our regulatory plan requires the Board and management team's relentless focus and is an integral part of developing our infrastructure and the manufacture of our LIGHT system to ensure its safety, efficiency and reliability. The importance we place on quality requires robust processes across our entire organisation in accordance with the stringent requirements of the relevant regulatory bodies that oversee clearance and approval for use of medical devices.

Our regulatory plan largely revolves around performing verification and validation activities, meaning that each individual part, system and sub-system of LIGHT must be tested and documented with the view of ensuring that our product not only meets all the requirements from a user's standpoint but has also been manufactured to the specifications provided to suppliers and all relevant standards. These activities are currently being performed in accordance with the standards of excellence required for medical devices and the ISO-13485 certification which we successfully obtained in January 2019.

A subsequent external audit was performed in December 2020 by Lloyd's Register focused on installation, integration and product safety management operations. The review confirmed that the design, development and the manufacturing control activities were in compliance with the highest standards for safety and product performance. This result provides a strong platform for the continued integration of the LIGHT system, as it highlights our focus on quality and the need to have robust processes in accordance with the stringent requirements associated with medical devices.

Commercial momentum

At Advanced Oncotherapy, prior to March 2020, we made strong inroads through commercial partnerships with The London Clinic (TLC), the Mediterranean Hospital of Limassol (MHL) in Cyprus and University Hospitals Birmingham NHS Foundation Trust (UHB).

In our partnership with TLC, we entered into a memorandum of understanding to sell a LIGHT system and structured the partnership in such a way that Advanced Oncotherapy will receive a share of the profit generated by TLC's proton therapy service. TLC is one of the UK's largest private charitable hospitals and has a pioneering cancer treatment centre in its Duchess of Devonshire wing that is at the forefront of advancing healthcare through the adoption of new technologies. Since this announcement in February 2020, we have made good progress in defining the patient workflow, and fine-tuning our referral strategy whilst taking into account opportunities to treat more patients following the decision of the Cleveland Clinic (London) to refer cancer patients to TLC.

Following the announcement of our research collaboration with the world leading Cleveland Clinic in December 2019, the Cleveland Clinic has now installed the LIGHT treatment planning system (TPS) software and commenced a two-year study to evaluate the target conformity of proton mini-beams in comparison with X-ray stereotactic body radiation therapy and stereotactic radiosurgery.

In February 2020, we entered into an agreement to sell a three- treatment room system to the MHL in Cyprus for €50 million and to receive a share of the profit generated from this proton therapy service. The MHL provides high-quality medical services to not only citizens of Cyprus but also to tourists seeking medical treatment. Under the terms of the agreement, the installation of a three-treatment room system is due to commence before the end of 2023, subject to customary conditions and documentation being in place. Discussions with planners are ongoing and we have worked with the MHL to progress the technical and planning requirements. Further updates in respect to the agreement and the schedule of payments to be received by Advanced Oncotherapy will be made at the appropriate time.

During the period, we also announced a collaboration with UHB in line with our continuous efforts to fast-forward our growth and the roll-out of the LIGHT system. Our partnership with UHB is aimed at treating patients in Daresbury in the context of our certification plan. The partnership also envisages the installation of a machine in Birmingham at Queen Elizabeth Hospital Birmingham, which is part of the UHB campus. UHB is preparing to install LIGHT beam data into its TPS and we are cooperating to plan for the initial Daresbury patient indications. In addition, we agreed on an appropriate revenue sharing arrangement with UHB and we will also work with them to jointly develop further advanced technical and clinical features to increase the awareness of proton therapy for the treatment of cancer.

In light of the Covid-19 pandemic, country wide lockdowns enforced in March 2020 reduced the time we spent with potential customers. However, as 2020 progressed our business development efforts evolved and since the beginning of 2021, we are experiencing an acceleration in commercial discussions, as demonstrated by the recent letter of intent with Saba Partners for the installation and maintenance of a LIGHT system in Glion, Switzerland, in a contract valued at up to US$107 million.

Financing foundations

We have been able to continue to make progress with our activities as a result of the completion of equity investments totalling £30 million (including warrants and shares issued in lieu of fees) since the beginning of 2020, despite the difficult equity market conditions. We also secured additional financial flexibility through a strategic funding partnership and debt facility of up to £40 million, of which €20 million (£18 million) was from our long-standing supplier, VDL Groep, and US$30 million (£22 million) from Nerano Pharma, an existing investor of Advanced Oncotherapy. In August 2020, the Company drew down US$10 million from the interest-bearing secured convertible facility with Nerano Pharma.

In May 2021 the Company extended the repayment date of the existing £10 million loan facility with Credit Suisse AG on a rolling quarterly basis through to May 2022.

The mix of equity and debt financing arrangements secured during the period provides the Company with greater financial flexibility and allows us to further the development of our LIGHT system and advance our pipeline of construction opportunities.

The past year was pivotal for Advanced Oncotherapy, as we took our first strategic steps in securing funding arrangements to advance our pipeline of construction opportunities. This was reflected in January 2021, when we announced a partnership with DiaMedCare (renamed Kineo Finance since June 2021) the globally active asset financing partner in the life sciences and other innovative technology sectors. Under the terms of the partnership agreement, DiaMedCare will acquire LIGHT systems and lease them back to the Company's customers that are commissioning the LIGHT system for oncology treatments. In addition, DiaMedCare will also be able to bridge manufacturing costs until delivery of the LIGHT system to customers, which is expected to make the business less capital-intensive in the future. This partnership will play a crucial role in removing the upfront costs of acquiring and installing LIGHT by converting CapEx to OpEx. Vendor financing, such as this agreement, is expected to unlock significant additional upside and accelerate the speed of adoption.

Continued innovation with clear metrics to prioritise initiatives and assess their expected return

At Advanced Oncotherapy, we believe that we must continually and tirelessly fight cancer. To do so, we intend to use the versatility of the LIGHT platform to deploy new features uniquely positioning Advanced Oncotherapy in the battle against cancer. However, to achieve our mission, we recognise the need for discipline and having the right processes in place to ensure delivery against our strategy and value creation.

As a result, we have formed a global screening and incubation team led by ADAM's Executive Chairman, Professor Steve Myers, whose role is to identify new opportunities based on a clear set of criteria. These include: monitoring long-term trends and innovative subjects in industry and society; analysing growth potential of new ideas; assessing how potential new business areas fit with the overall mission of the Company; and reviewing whether internal developments or partnerships are the best way forward.

Such processes have been crafted with the ultimate objective of striking the right balance between optimising and prioritising resources and objectives, promoting an effective team working environment, establishing a creative culture and keeping a commitment to build the future of radiation therapy. We hope that this team will help to develop a deep and robust pipeline of future opportunities for the LIGHT system which fills us with excitement.

Our financial results

The Group recorded a comprehensive loss of £23.4 million in the year ended 31 December 2020 (2019: £21.3 million), with shareholder funds as at 31 December of £44.1 million (2019: £42.9 million). Cash and cash equivalents at the year-end were £2,317,451 (2019: £3,235,167), although these year-end figures do not take into account post period financing agreements.

Outlook

Looking ahead, 2021 is set to be an important year for us with our goal of having the first LIGHT system generating a full energy beam, and in due course the commencement of treating patients with our clinical partner UHB. We have made notable progress at our Daresbury site over the past year and the ongoing work at the site to optimise our machine installation process will reduce the start-up time for future LIGHT systems and support the assembly of future machines through our commercial contracts. Our financing agreements announced during the period will be key to continuing the development of the LIGHT system and advancing our pipeline of construction opportunities.

In line with our business model, we have signed a number of commercial partnerships and will continue to seek further opportunities for partnerships and future purchase orders of the LIGHT system. We are confident about future orders of the LIGHT system and expect further acceleration of our commercial pipeline when our machine is fully operational, taking advantage of the unique exemption in proton therapy which provides the opportunity for manufacturers to sell machines prior to certification.

IN CLOSING

Under extraordinary circumstances, our employees have shown immense creativity and a can-do attitude in their wholehearted efforts to deliver on our execution plan throughout 2020. Their determination and hard work made it possible for us to make clear operational progress. I believe this comes as a consequence of our crystal-clear purpose and long-established Company values: life, safety, quality and innovation. This progress also follows our continued investment in our people and organisation, creating an inclusive, diverse and safe working environment in which colleagues have equal opportunities to thrive and fulfil their potential.

We have many important milestones ahead of us during 2021 which I outlined during our Investor Day in October 2020, but we remain on track to have our first LIGHT system generating a 230MeV beam by the end of 2021, a major inflection point for Advanced Oncotherapy.

I feel privileged to be leading this great Company and am pleased to see the operational progress made day to day by all our employees. I would like to thank our team for their agility and commitment over the past twelve months given the difficult circumstances. Special thanks must go to our partners and collaborators, without whom we could not succeed in our operational goals, and our Board of Directors for their continued support and constructive strategic advice to the organisation. Finally, I would like to send a thank you to our shareholders for their continued support as we continue to progress on our ambition to democratise proton beam therapy as a treatment for cancer.

Nicolas Serandour

Chief Executive Officer

29 June 2021

1. GENERAL INFORMATION

Advanced Oncotherapy PLC ("the Company") is a public limited company incorporated and domiciled in the UK. Its registered office is Level 17, Dashwood House, 69 Old Broad Street, London EC2M 1QS.

The nature of the operations and principal activities of the Company and its subsidiary undertakings (the "Group") is to provide particle therapy with protons that harnesses the best in modern technology

The Company's ordinary shares are traded on the AIM market of the London Stock Exchange ("AIM").

2. BASIS OF PREPARATION

The financial information set out in this announcement does not constitute statutory accounts as defined by section 435 of the Companies Act 2006. It has been prepared in accordance with the prepared in accordance with the recognition and measurement principles of international accounting standards in conformity with the requirements of the Companies Act 2006 and in accordance with the AIM rules and is therefore not in full compliance with IFRS. The financial information has been prepared on the historical cost basis modified to include certain assets and liabilities at fair value.

The financial information is based on the financial statements for the year ended 31 December 2020 which are authorised for issue. The audit report will not be modified but does include a material uncertainty in respect of going concern. It does not contain a statement under 498(2) or 498(3) of the Companies Act 2006.