Rua Bioscience Limited, Annual Meeting 2025

October 20^th 2025

Rua Bioscience Limited (RUA)

The company will hold its Annual Shareholders Meeting at 3.00pm Tuesday 28 October 2025.

It will be a virtual meeting. You can join the meeting online at this link.

Company Overview

The company was founded in October 2017 and listed on the NZX in October 2020. It is the only NZX-listed company headquartered in Te Tairāwhiti, and the first founded by a Māori community. It describes itself as a New Zealand exporter of bioactive extracts and products. Its primary objective is to establish a leading position within the medicinal cannabis industry.

Current Strategy

The strategy is to help the world access the power of bio actives for health and healing with a strong focus on quality, sustainability, and innovation.

Previous Year Shareholder Meeting

NZSA recorded the following key items at last year’s annual shareholder meeting:

1. The company is struggling with cash flow.
2. To keep the company viable, they are selling their manufacturing facility in Gisborne.
3. Last year, sales were very low.

The meeting report is available at this link.

Disclaimer

To the maximum extent permitted by law, New Zealand Shareholders Association Inc. (NZSA) will not be liable, whether in tort (including negligence) or otherwise, to you or any other person in relation to this document, including any error in it.

Forward looking statements are inherently fallible.

Information on www.nzshareholders.co.nz and in this document may contain forward-looking statements and projections. For any number of reasons, the future could be different – potentially materially different. For example, assumptions may be wrong, risks may crystallise, unexpected things may happen. We give no warranty or representation as to any future financial performance or any other future matter. We may not update our website and related materials for changes.

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Information included on www.nzshareholders.co.nz and in this document is for information purposes only. It is not an offer of financial products, or a proposal or invitation to make any such offer. It is not financial advice and does not take into account any person’s individual circumstances or objectives. Prior to making any investment decision, NZSA recommends that you seek professional advice from a licensed financial advice provider.

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Key

The following sections calculate an objective rating against criteria contained within NZSA policies.

Governance

NZSA assessment against its key policy criteria are summarised below.

Directors Fees: We note the Remuneration Policy “An additional allowance may be paid to Directors for any takeover or merger activity to remunerate the Directors for additional work required in relation to such activities.” NZSA is relatively supportive of an explicit headroom allowance for such an eventuality.

We commented in 2024 on the disclosure associated with share options awarded to Directors. Discussions with the company has confirmed that no current director receives options for their directorship, although one Executive Director has received share options under the Employee Share Ownership Programme (ESOP) as a consequence of his employment.

Director Share Ownership:  There is no disclosure as to whether Directors are required to own shares. NZSA policy is whilst this should be encouraged it should be up to each Director to decide depending on their personal circumstances.

We note all Directors own shares.

CEO Remuneration:  The company discloses its remuneration policy on its website, which includes an overview of the remuneration philosophy applicable to the company. The Remuneration and Nominations Committee are responsible for implementing the policy.

Incentives: The CEO is paid a base remuneration only and participates in the Employee Share Options programme (ESOP). We note that the Remuneration Policy does offer scope for an incentive scheme: “The terms and conditions of any STI or LTI scheme will be identified in the individual employment agreement of the Senior Management Team member to whom it applies.”

Confusingly, the table detailing CEO Remuneration includes headings related to STI and LTI, even though there is no current scheme in place. We encourage the company to simplify this disclosure in future.

NZSA encourages fulsome disclosure in relation to any incentive payments made to the CEO, including disclosure of measures (or measure ‘groups’), weightings, targets, and the level of achievement versus target for each component associated with any awards. This methodology is supported by the new NZX Remuneration Reporting Template.

The company does not disclosed disclosure the gender pay gap or CEO/employee remuneration ratio.

Golden Parachutes: In the interests of transparency, NZSA believes there should be explicit disclosure around the severance terms and notice periods associated with the CEO, including whether specific termination payments are offered. The company makes no such disclosure.

Director Independence:  A majority of Directors are independent.

Board Composition:  The Annual Report does not include a skills matrix that attributes skill sets to individual Directors to demonstrate how they contribute to the governance of the company. We believe that it is in director’s interest to highlight the value they add to the company.

We note the company as appointed Kale Panoho as a Board Observer and congratulate the company for this initiative to mentor and develop the next generation of Directors. NZSA believes it is important that NZX companies take responsibility as part of their ESG commitment.

The nature of the company’s board indicates a commitment to thought, experiential and social diversity, with relevant experience for Rua.

Director Tenure:  NZSA looks for evidence of ongoing succession or ‘staggered’ appointment dates that reduce the risks associated with effective knowledge transfer in the event of succession. We also prefer a term maximum of 9-12 years, unless there are exceptional circumstances that may apply.

Board appointments dates range from 2017 to 2023, indicating a commitment to succession planning and/or skills development.

ASM Format: Rua Bioscience Limited is holding a virtual meeting. NZSA prefers a hybrid meeting (i.e., physical, and virtual) as a way of promoting shareholder engagement while maximising participation. 

Shareholders should have the opportunity to meet with Directors the CEO and senior management on a face-to-face basis. The company has almost 2,900 shareholders. We would encourage the Board to consider rotating a physical meeting to centres where shareholders reside. Discussion with the company has noted that they are focused on preserving cash this year as RUA generates revenue opportunities.

Last year, NZSA noted the separate “site open day” held by Rua, recognising the role they play in their community. While laudable, it is difficult to see this as a substitute for shareholders to engage with the company.

Independent Advice for the Board & Risk Management: NZSA looks for evidence, through disclosures, that a Board has access to appropriate internal and external expertise to support board assurance activities. We also look to see Boards are across their risk management responsibility.

Rua has entered into a service arrangement with Computershare New Zealand for the provision of company secretarial support, which includes assistance with the proper functioning of the Board and in keeping the appropriate policies and procedures up to date and operative.

Directors can seek external independent advice with the prior approval of the Chair. We note there is no internal audit function, but clear statements around how the Audit and Risk Committee manage internal audit processes.

There is good disclosure around risk management in the Annual Report and the Corporate Governance Statement.

Audit

NZSA assessment against its key policy criteria are summarised below.

Audit Independence:  Good disclosure.

Audit Rotation:  We note the Audit Firm PwC was appointed in 2019 and, although not disclosed as such, the Lead Audit Partner (LAP) would have been appointed at this time. As required by the NZX Listing Rules the company discloses the LAP is rotated at 5 years so this will occur this year.

There is no disclosure as to any policy on audit firm rotation, but we continue to expect disclosure of appointment dates of both the LAP and audit firm in future annual reports.

Environmental Sustainability

While Rua Bioscience’s size continues to exempt it from mandatory climate-related disclosure requirements, NZSA maintains that it is in the best interest of shareholders and the long-term direction of the company to continue improving the level of disclosure around environmental sustainability.

Despite its size, Rua offers a thorough disclosure of key emissions data.

Rua has now completed its fourth annual greenhouse gas (GHG) inventory covering Scopes 1–3. In FY25, Scope 1 and 2 emissions reduced slightly (–2.4%), while Scope 3 emissions were further refined with more data for Purchased Goods and Services. Although total reported emissions increased in line with sales growth, emissions from internal operations decreased, indicating progress in operational efficiency.

The company has reiterated its intention to establish formal emissions reduction targets and to explore renewable energy options. While these remain at the planning stage, the continuation of voluntary disclosure and ongoing improvements in data quality are positive steps. NZSA encourages Rua to translate these intentions into measurable commitments over time.

NZSA does not complete RAG assessments on non-Climate Reporting Entities.

Ethical and Social

NZSA assessment against its key policy criteria are summarised below.

Whistleblowing:  Good disclosure.

Political Donations: Whilst the Annual Report discloses a donation, there is no specific disclosure around political donations. NZSA expects an explicit statement as to whether political donations are made.

Financial & Performance

Rua Bioscience’s share price rose from $0.046 to $0.05 (as of 16^th September 2025) over the last 12 months – a 9% increase. This compares favourably with the NZX 50 which rose 4% in the same period. The capitalisation of RUA is $11.2m placing it 110^th out of 115 companies on the NZX by size and makes it a small company.

¹ per share figures based off actual shares at balance date (not weighted average)

Rua Bioscience have started generating revenues and as such 2025 was a milestone year. Customer revenues of $1.5m were achieved, a large increase on the $85k delivered in 2024.

Operating expenses were contained to $5.1, and this resulted in a net loss after tax of -$3.5m, the lowest loss in the last 5 years. EPS for FY 25 were -$0.015. If these revenues can grow substantially and are scalable then the company may be able to make a profit.

The auditor, PWC have provided a disclaimer of opinion (page 40 of the annual report). In it they state that: “Given the inherent uncertainty in forecasting the Group’s future cash flows and the absence of adequate committed funding to deliver the forecast, we were unable to obtain sufficient appropriate audit evidence to conclude on the appropriateness of the going concern basis. For the same reasons, we were unable to obtain sufficient appropriate audit evidence to support the assumptions used in the impairment assessment and, consequently, the carrying values of the assets. As a result, we were unable to determine whether any adjustments might be necessary to the value of the Group’s assets in the consolidated statement of financial position, the impairment charge and loss after tax in the consolidated statement of profit or loss and other comprehensive income, and the related movements in the consolidated statement of changes in equity”.

RUA’s NTA fell to $0.01, and shares trade at a 315% premium to NTA.

During the year the company took on $725k of current debt. The company also raised $1.6m by way of an equity raise. We note that at balance date the RUA had only $241k of cash at bank. The current ratio is still positive at 1.24. Operating Cashflows were -$2.8m and if the current trajectory continues, the company will have to successfully raise capital or lift revenues substantially if it wishes to remain a going concern.

On the 7^th August the company announced that they had raised $1.2m at 3 cents per share to fund sales growth.

Fang Group Investment Limited is the largest individual shareholder with a 10.55% stake.

Whether or not RUA will be successful is ultimately dependant on contracts for their products and the ability to generate revenues that are greater than costs. A promising start has been made with significant revenue growth but they will still require significant funding to achieve success.

Resolutions

This is an administrative resolution.

We will vote undirected proxies IN FAVOUR of this resolution.

Teresa Ciprian was appointed to the Board in August 2022. She has governance and senior management experience across listed companies, state-owned entities, family enterprises and privately held businesses, spanning consumer packaged goods, agriculture, horticulture, IT, regulatory bodies, and agri-research.

We will vote undirected proxies IN FAVOUR of this resolution.

This resolution relates to the following. Full details are set out in the Notice of Meeting.

• 16,799,999 fully paid ordinary shares in the Company (the Placement Shares), which were issued by way of a private placement to selected wholesale investors between 7 August 2025 and 12 September 2025 at an issue price of $0.03 per Share; and
• 5,926,673 warrants in the Company (the Warrants) issued to certain wholesale investors at an exercise price of $0.015 per share between 14 May 2025 and 11 September 2025 in connection with the Company’s debt facility arrangements.

We will vote undirected proxies IN FAVOUR of this resolution.

The Notice of Meeting states “The Directors wish to seek the approval of shareholders to enable them to issue up to a further 49,993,744 new fully paid ordinary shares in the Company (New Shares) to assist with ongoing funding requirements of the Company, including scaling its sales efforts in key international markets, particularly Germany, Australia, Aotearoa New Zealand, United Kingdom and Czechia. The New Shares will be the same class of shares as the existing ordinary shares on issue in the Company.”  Full details are set out in the Notice of Meeting.

We will vote undirected proxies IN FAVOUR of this resolution.

Proxies

You can vote online or appoint a proxy at https://www.investorvote.com.au/

Instructions are on the Proxy/voting paper sent to you.

Voting and proxy appointments close 3.00pm Sunday 26 October 2025.

Please note you can appoint the Association as your proxy. We will have a representative attending the meeting.

The Team at NZSA