Final settlement of audit results with NCBiR

Current report no. 41/2022

Date of drafting: 16 November 2022.

Subject: Final settlement of audit results with NCBiR

Legal basis: Article 17(1) of the MAR Regulation - confidential information

The Management Board of Captor Therapeutics S.A. with its registered office in Wrocław (the "Company"), with reference to current report no. 5/2022 of 26 January 2022 and no. 10/2022 of 8 April 2022 (the “Reports”) concerning the audit (the "Audit") commissioned by the Company to external, reputable financial and legal advisors, informs that the Company has received letters from the National Centre for Research and Development ("NCBiR") concerning the EU projects covered by the Audit (the "Projects"). NCBiR, after reviewing the results of the Audit, did not raise any objections to the calculations concerning the reimbursement of direct costs resulting from the irregularities identified in the Audit, but indicated that the Company should additionally reimburse a lump sum (indirect costs) on these expenses in the total amount of PLN 802,917.68 for all the Projects. The Company, after analyzing the letters from NCBiR, agreed with NCBiR's arguments and today (November 16, 2022) returned the above amount to NCBiR along with statutory interest i.e. in total PLN 1,031,837.68.

In the opinion of the Company's Management Board, the above refund represents the final settlement of the irregularities arising from the Audit. However, it should be stipulated that based on NCBiR's rules for awarding EU funds, independent institutions or NCBiR may verify the Company's expenses again in the future (irrespective of the Audit) and adopt different findings, although to the best of the Company's knowledge there are no grounds for doing so.

It should also be noted that the ongoing settlement of costs relating to the Projects is being carried out by NCBiR without disruption and without adversely affecting the progress of the R&D work.

For the avoidance of any doubt, the Management Board indicates that the potential irregularities are not related to the substantive or qualitative scope of the Projects and that the progress made in the research and development of the Projects and the information indicated in the interim reports and current reports in which the Company reported on the progress remains valid.