Operator: Good afternoon, ladies and gentlemen, and welcome to the AOTI, Inc. results presentation.

Throughout today's recorded meeting, attendees will be in listen-only mode. Questions are encouraged.

They can be submitted at any time just using the Q&A tab situated on the right-hand corner of your screens. Please simply type in your questions at any time and press Send.

Before we begin, we'd like to submit the following poll, and I'm sure the company would be most grateful for your participation. I'd now like to hand over to the management team.

Mike, Jayesh, good afternoon.

Good afternoon. Welcome, everybody, and we're going to walk through our results presentation.

You've got myself here, Mike Griffiths, CEO, and our CFO, Jayesh Pankhania, here.

Hi.

A little summary of who we are. We're a company focused on both saving limbs and indirectly saving the lives of our patients by healing their chronic wounds more durably.

Our overall mission is to really help people with chronic disease get back to living their lives to the fullest. A strong, value-driven company.

Our market is defined by our leading, unique topical wound oxygen therapy, which is proven to heal hard-to-heal wounds more effectively. The investment case, we believe, is strong and compelling.

The hard-to-heal wound market is significant, and we'll give you some ideas of the SOM and SAM in a little bit. We have an established product with very strong clinical evidence that's demonstrated better healing with lower recurrence, there's a significant clinical, but also cost saving for payers.

The company had organic growth in '25 of over $66 million, and positive cash flow and EBITDA. With clear business model for expansion, and significant future growth as broader coverage comes down the pipe.

As I said, we are profitable and cash-generative business already. The product that we have is called TWO2.

It's a unique multimodality therapy that allows us to combine oxygen with noncontact compression and humidification. This allows us to heal these very difficult wounds at a much higher efficacy, six times more likely to heal at 12 weeks, but probably more importantly, in a way that we produce stronger tissue and they stay healed over 12 months.

This then results in significant reductions in hospitalizations and amputations, which obviously has the added benefit of reducing cost of care for these patients as well as obviously improving their quality and quantity of life. From a business point of view, our fundamentals are very strong, and we believe the business is well positioned for long-term sustainable growth.

Our mainstay product is our TWO2 therapy, which is differentiated and clinically proven, and is also cost-effective and cost saving. We saw in '25 good revenue growth despite significant healthcare headwinds in the US, and this was substantially greater growth than the advanced wound care devices market as a whole.

We continue to evolve and invest in our business model and strategy so we're increasingly well positioned to reaccelerate growth as these US headwinds start to abate, and also as broader coverage comes into play. Regarding broader coverage, which is driven by CMS Medicare coverage determination, this will be transformational for the company over time as it will open up significant new market segments.

As a company, because we are not just a manufacturer, we're actually a provider that delivers this care to the patients at home, we're establishing an outcome-based at-home category within the advanced wound care market based around our platform, and this creates additional strategic advantages and very meaningful barriers to entry for competitors. We've made significant operational progress in the last year and implemented a number of organizational changes that's allowing us to have greater focus on delivering patient outcomes and improving sales rep productivity, and we're seeing positive signs from a number of changes we made last year.

We continue to progress our market access and getting provider IDs, which is the ticket to play in Medicaid, which is the insurance in the US for people with low levels of income. We now have 19 states additional to our ability to service Medicare nationwide.

We see continuous array of payer endorsements demonstrating and validating what we expect to be from a CMS local coverage determination in the near term. These include achieving provider IDs in California, but also independent health technology assessments and resultant commercial payer insurance coverage for our therapy by Cigna, one of the large insurers in the US.

In Germany, we've seen national treatment recommendations from the German regulatory agency, G-BA, and likewise in the UK, the National Institute of Clinical Excellence last year published a fast-track treatment recommendation based on the quality of evidence, and we're now beginning to start servicing the NHS through the supply schedule. Last but not least, we're seeing good progress rolling our Eyes on the Wound engagement platform, which we'll talk about a little bit later.

Now I'm going to pass you over to Jayesh to talk through some of the financial highlights.

Thanks, Mike. How did we do last year?

We had good revenue growth despite US healthcare market disruption. Our revenue growth was 14% to $66.5 million, and within that, Arizona contributed around $9 million, on an underlying basis outside of Arizona, the business grew 15%.

Mike will explain later on the situation in Arizona. From a profit perspective, adjusted EBITDA decreased slightly to $7.5 million.

That was driven by an increase in investments in the commercial team and market access, which will drive future growth, but also in the noncash CECL provision, which increased as a result of the Arizona situation. Adjusted EBITDA margin was 11.3%, and profit before tax was $3 million, compared to a loss last year of $0.9 million.

In terms of working capital, our receivables increased to a total of $21.8 million, largely as a result of payment delays by Arizona insurers. As previously mentioned in our trading update, the business will cease taking on new patients from the 1st of April in Arizona.

That will limit our debtor build-up going forward, reduce our working capital needs, and will support our positive operating cash flow. Our inventory also increased due to commitments made in anticipation of growth in the early part of last year, and we expect that to normalize in FY '26.

From a net debt perspective, our net debt was $6.5 million, compared to net cash of $0.9 million at the end of last year. Compared to the half year, though, our net debt at the half year was $5.4 million, indicating a better half-two cash performance.

Since the end of last year, we drew an additional $11 million loan with SWK, bringing the total loan balance now to $19.5 million, and that additional drawdown came with a reduced interest charge and longer amortization, which strengthens our balance sheet and ensures the business can navigate the unprecedented changes across the US healthcare landscape at the moment. What do we think for 2026?

We think 2026 is going to be a transitional year. We will still have ongoing challenges from the One Big Beautiful Bill, and as we embed our revitalized sales structure to drive productivity and leverage market growth.

We expect revenue growth for FY '26 to be in the low single digits, but if you take out Arizona, we expect the underlying growth to be in the mid-teens. Adjusted EBITDA is expected to be in the high single digits.

Pass back on to Mike for the business overview.

Thanks, Jayesh. We we wanted to articulate more accurately the opportunity size that we have today based on our current reimbursement structure in in predominantly the Veterans Administration across the United States and and in in New York State Medicaid.

We've done a bottom bottom-up build from the US 2024 US claims data looking at hard-to-heal wounds of the lower extremity just in those two sectors. By doing that, we estimate that the obtainable market today is about $400 million.

With about $66.5 million of revenue to date, we have about a 16% penetration, plenty of upside for us to continue to expand and and go deeper into these sectors as we as we work on broader coverage. When broader Medicare coverage is established, and when it flushes down the system and opens up all of the payer pathways that it influences, we estimate that that will drive a serviceable market of about 26 point $26 billion, a 65-fold increase.

When we talked about CMS coverage being, transformational for the business, you can see it magnifies the business opportunity 65-fold. Now we've been executing over the last few years in different phases.

The first phase was focused on the Veterans Administration nationwide and New York State Medicaid, where we have clear coverage in place. Phase we're working on at the moment has been working into other state Medicaids and getting provider IDs so we're able to service various sectors of those those those payer pathways, and establishing the precedents needed for then when we receive broader coverage from CMS so we can take advantage of the maximum $26 billion opportunity.

We had some good progress earlier this year also in the private sector where Cigna, one of the big insurers, as I mentioned earlier, passed coverage criteria for our therapy and and cover it as a covered service already. As Jayesh mentioned, in Arizona we've had some very good success in driving adoption and adherence to our therapy and and we've been able to move prescribers along wanting to utilize.

However, in the last year we've we've had certain restrictions with regards to payments from from insurers, and this has been driven largely by what what's been really a perfect storm of issues in Arizona in addition to the pressures created and and and the and the upheaval created by the Big Beautiful Bill. You can see here the number of different things that have affected the state.

Consequently, so that we limit our exposure, we we had no choice even though we're having good, intensive, our efforts with the state to towards a resolution, but we have had no choice to decide to cease enrolling and treating new patients from April forward until we get a resolution from the state relative to the payment issues. However, we are confident in collecting historical debt due to the the the process that we've taken.

With some of the organizational changes we mentioned earlier, we we've taken our sales force and we're we're utilizing what was a predominantly VA sales force with certain areas where we had dedicated reps also for Medicaid, and made more geography- and territory-based. If you look at where we have headcount, we have either headcount or infrastructure that that encompasses about 26 US states, which involves about 86% of the US population.

We're driving these reps to take advantage of all pathways for business additional to VA in in those states today, but clearly then once we get broader Medicare coverage, these reps can then take advantage of that broader coverage with the same prescribers they're working with today. We believe we'll be able to hit the ground running without significant capital needs, and as we're doing this, we're working very aggressively to drive the rep performance and and the outcomes that we get from them.

Something that's very unique is, as I said earlier, we're not just a manufacturer, but we're also a provider here. What we're doing is we're building a new outcome-based home care category, which really resonates with the administration in the US move away from fee-for-service that could be prone to such fraud and abuse towards more of an outcome-based care.

We are already the market leader in the topical oxygen space, having over 75% of the topical oxygen segment, the advanced wound care market. Our outcome-based platform is really based on three pillars: our unique differentiated therapy that allows us significantly better clinical and long-term outcomes; the fact that we are an accredited home care provider and have direct patient access and own a channel all the way to the patient at home; and then last but not least, the evolution of our Eyes on the Wound platform, which is a patient data analytics and engagement platform that allows us to deliver more effective care and it enhances engagement with patients, caregivers, prescribers, but very importantly, with payers so we can demonstrate and deliver these outcomes to the payers on on on a on an ongoing basis.

As we said, CMS coverage is something that will be transformative for the business, transformation for the business, because it opens up a market opportunity 65-fold from where we have today. We believe that a local coverage determination is expected in the near term, and it unlocks not only Medicare, and Medicare is the over-65 population, which have the highest prevalence of chronic disease, but also accelerates access to Medicaid, which is the people of lower-income insurance, and other payer channels as well.

We will then, once we receive coverage and it flushes through the system, we'll be able to leverage our existing commercial infrastructure, which would support without additional investment the ability to hit the ground running and to drive, patient access. We're confident of a positive decision based on the, repeat and ongoing clinical and economic evaluations that we've achieved over the last year in both the US, Germany, and the UK, where we've had positive recommendations based on similar grade-based assessments of of the evidence as as CMS would do.

Additionally, we have very strong advocacy support from both patient groups like the American Diabetes Association and clinical groups like the Wound Healing Society in the US, which help bolster our the support for coverage for our therapy. To summarize, our fundamentals of our business are strong, and we are positioned very well for sustainable growth.

We have a unique, differentiated product that shows both clinical, long-term clinical benefits, but also health economic and cost savings. We generated good revenue growth in in 2025 despite unprecedented headwinds and and growth was substantially better than the advanced wound care devices as a whole.

We keep we're continuing to invest and develop in our long-term business strategy, and we increasingly well positioned to accelerate growth as as these headwinds start to abate and turn into tailwinds, but also as we get broader coverage. We believe CMS Medicare coverage determination will be be forthcoming in the near term, and as we have pointed out, this will be transformational because it will untap the much greater market potential for our therapy in the US.

Last but not least, we are building an outcome-based at-home category within advanced wound care that great creates significant barriers to entry to others and strategic advantage, which later on can be expanded to include broader chronic care management of these patients at home, as many of these patients, as have multiple comorbidities. I think with that, then, we'll we'll pass it back, and we'll look and see if we have any questions and answers.

That's great. Mike, Jayesh, thank you very much indeed for updating investors.

Ladies and gentlemen, please do continue to submit your questions just using the Q&A tab situated on the right-hand corner of your screen. Just while the guys take a couple of moments just to look at your questions submitted already, I'd just like to remind you a recording will be available shortly after today's presentation.

Mike, Jayesh, you've received a number of questions from investors this afternoon. Thank you to everybody for your engagement.

Perhaps, Mike, if I may just ask you to moderate through the Q&A, if I could ask you to read out the questions and give a response where it's appropriate to do so, and I'll pick up from you at the end.

One question was why did we not stop Arizona sales earlier in order to avoid the buildup of receivables? This is a very good question.

We have been working with Arizona State Medicaid to resolve the payment issues. We had very good payment terms with insurers up for a year and a half prior to this, but we take very responsibly managing and treating these patients, and we do believe we meet coverage criterion and medical necessity requirements that these payments will be made and will be made over time even if we don't come with clear coverage policy with the state.

We believe it was the right thing to do to continue treating patients. As of last year, it's just built to a point now that we feel in order to limit continuing receivables and the pressure on our working capital that we need now to take this stance, and hopefully the state will move forward with coverage in the near future.

Another question here: What gives you confidence in achieving CMS approval? It's really CMS coverage.

What gives us confidence is the body of evidence and the quality of the clinical trials and various other health technology assessments in both the US, including ECRI and the coverage by Cigna, the big commercial insurer, and in the UK with NICE, National Institute of Clinical Excellence, and G-BA, the German body, that have all looked at the evidence and come to consistent coverage decisions based on assessing the quality of it, which is the process that CMS are mandated to do by law. Let me see.

Sorry, having trouble reading it. Okay.

Could your data platform evolve into a stand-alone value driver? I think definitely over time.

We see our platform that allows us to engage with the patients and caregivers, but also to capture information and generate automated reports back for prescribers. That then can be evolved then to payers where we can demonstrate that we actually deliver the outcomes in the real world.

A lot of this is being driven by an AI backbone. We see our focus today is to use it as a value-driving platform for our therapy to deliver outcomes, but it could certainly be expanded to do more chronic care management in the future.

Yes, we do think so.

Should I take that one on cash flow?

Yes, go ahead, Jayesh.

The question is, can you give a monthly picture of your budgeted cash flow over the next 12 months and be clear on the minimum debt headroom you expect to have over the year? We don't provide monthly cash flow data, but what I can tell you is that we've got sufficient headroom for the next 12 months in a number of scenarios, even in a downside scenario, which we had to go through as part of our going concern assessment for the audit, and which the auditors have signed off on.

In a nutshell, we've got sufficient headroom and sufficient cash resources to build on where we are at the moment and expand the business.

Another question here: Operationally, how prepared are you to scale rapidly if CMS coverage is received? As we pointed out, we have a sales infrastructure that encompasses a headcount and offices across 26 different states.

As soon as CMS coverage is received and completed finally through the system, we can start treating patients in those states, utilize that existing infrastructure. We certainly have also in the background plenty of capacity both with devices and consumables, we will be able to hit the ground running and allow ourselves then to scale as that coverage comes into play.

There's another question on the non-US territories absorbing cash, if so, how much? I think, obviously in FY '25, that was an area that was an investment for us in terms of getting the coverage both in the UK and in Germany, and was a net cash drain on the business.

Going forward, our expectation is that that will get towards a break-even situation and start contributing on a going-forward basis. It is in that position now where it's starting to make that transition to be a net contributor.

Very good. Another question here: Can you help me understand why obtaining Medicaid provider IDs in so many different jurisdictions, and we had nine in '24 and now we're up to 19, we're making good progress, has still not translated into significant revenues, and when do you anticipate significant revenues?

Medicaid is a joint administered program where it's funded jointly by the federal government and state government, but administered by the states. Even though we are a provider nationwide for Medicare, we need to get provider IDs in each state to be able to service Medicaid patients.

We were having great success with getting provider IDs, for instance, Arizona was an example, to driving business even prior to having clear coverage policy in place with the state, like we have in New York, for instance. However, the turbulence that's been created by the Big Beautiful Bill has made that less reliable.

However, we need to have the provider IDs so we can serve certain subsets of the Medicaid population today that sets predication for need, but also for pricing for Medicare when they come to make a coverage pricing determination as part of their process. We do expect that we will start seeing some revenue from other Medicaid states, but until CMS or the effect of the Big Beautiful Bill and that turbulence abate and/or CMS national coverage is achieved, when the codes and coverage then is flushed through the system, which will start unlocking all payer groups, including Medicaid, we don't believe most expansion states on Medicaid will be substantial in the near term.

That's great. Mike, Jayesh, I think you've taken every question from investors.

Thank you once again to you all for your engagement this afternoon. Mike, Jayesh, I know investor feedback is important.

I'll shortly send those on the call to give you their thoughts and expectations, but perhaps before doing so, Mike, I could just ask you for a couple of closing comments.

Yes. I'd like to thank everybody for joining us here.

We have a lot going on and in an exciting space, and we do good by helping people save their limbs and improve their quality of life in doing so. Thank you for joining us.

That's great. Mike, Jayesh, thank you once again for updating investors.

If I could please ask those on the call not to close your session, we'll redirect you so you can provide the company with your thoughts and expectations. On behalf of the management team of AOTI, would like to thank you for attending today's presentation, and good afternoon.