Aroa Biosurgery Limited (ARX.XA) Earnings Call Transcript & Summary

Disclaimer some forward-looking to consider. So just be aware of that. Now first, I'd just like to introduce the Board, myself and Brian Ward are here, Brian, of course, is the Aroa's Managing Director and CEO. Also again online are the remaining directors, John Diddams, who's non-Executive Independent Director and Chair of the Audit Committee; Darla Hutton, who's also independent non-Executive Director; Phil McCaw, who is a Non-Executive Director, independent; Dr. Catherine Mohr, also independent and Chair of the Remuneration Committee; and John Pinion also independent, who is Chair of the Risk Committee. Also with us are our 2 joint company Secret, James Agnew, who's with us here; and Tracy, who's online. We also have with us our audit partner, Jana from BDO. Just here's the agenda for today. I'll just briefly go through that. We'll start with a few remarks from myself, followed by a presentation from Brian Ward and at the conclusion of those, you are welcome to ask questions about both of those presentations. That will be followed by the consideration of the financial statements and the resolutions and voting will be completed -- after voting is completed, we'll have an open session for questions and answers. And James, you're taking us through the [indiscernible].

Thanks Jim. So as it relates to questions, we'll start with, firstly, the people in the room. So if you have a question, simply raise your hand it to card, please identify yourself as a shareholder or a guest, or if you're a proxy on behalf of a shareholder, then please identify who you are a proxy for, okay? So in terms of the people that are online, you'll see that there is a Q&A function on the bottom of your screen. So if you'd like to ask a question, you can simply click on that box located on the screen. There may be some delay before we get to your question. So we do ask you to be patient, okay? Where appropriate during the course of the meeting, we may ask our joint company Secretary, Tracey Weimer to read out those questions. And with that, I'll hand it back to Jim.

Thank you, James. I'm very pleased to report that the previous year has been another successful 1 for Aroa Biosurgery. Our business has grown by 23%. Margins have increased. Cash has been efficiently managed. Extensions to our product range were implemented -- and including the first quarter of this financial year, 3 consecutive quarters of positive operating cash flow have now been recorded. 2025 saw solid growth in Aroa direct sales of Myriad and of Ovatech sales from [indiscernible]. Aroa direct sales now make up more than half of our total sales, a reflection of the stellar efforts of our sales and marketing team. We expect to continue delivering very strong growth through 2026 and beyond. The recently introduced U.S. tariffs will have some impact but we anticipate that this will be offset to some extent by growing Aroa and TELA Bio sales outside of the U.S. TELA Bio holds European sales rights for Optix and sales in this region are making an increasingly larger contribution to their total sales. At the last meeting, we signaled that -- at the last meeting, we signaled that a number of clinical studies were expected to be published during the year. The results of these studies further underscore the efficacy and value of Aroa across a wide range of applications, which Brad will cover in some detail in his presentation. Our growing clinical evidence confirms the benefits patients are experiencing and the value our products are bringing to health providers. These include reduced hospital space, faster healing, minimal infection rates and fewer procedures. These are qualities that demonstrate Health care providers are receiving very significant value from our products. I cannot emphasize enough how critical it is that we deliver value to hospitals. It is key to our ongoing growth as health systems place increasing emphasis on proven impact and demonstrable value. continuing to add to the robust body of evidence, validating the value of our technology is paramount. And I'm be to see how well we have been performing in that regard. Product development. During 2025, we developed enhancements to existing product lines for overtax devices, including a inguinal hernia repair device and larger format options for the OviTex PRS range used and reconstructed for surgery. We're also actively progressing commercialization of our Enivo technology developed to manage postoperative debt space. Preclinical and clinical studies required for FDA clearance are underway and are expected to conclude within the next 36 months. We believe a Enivo addresses a very significant unmet clinical need and has the potential to elevate the standard of care across a broad range of surgical procedures. So it remains a very important development for us. I know this importance is the development of our manufacturing processes to keep improving our scale of operations product margins and resilience, which we continue to do incrementally. Just a few words about TELA Bio who continue to play in imported role in our strategy. We received significant cash flow as their business grows, and this supports the development of our own sales and marketing capability in the U.S. Accordingly, TELA Bio's success benefits us greatly. Some of the Australian investment market sentiment regarding Tele has, in our view, been overly negative. And unfortunately, this affects sentiment towards ARR. Our view is that the robust clinical performance of OviTex product range coupled with sustained sales growth provides strong grounds for confidence in this aspect of our business. My remarks about our company performance are focused on the achievements over the last year, which are only a reflection of the efforts of all the talent and hard-working people in our business. We are extremely fortunate that our success provides such a worthwhile working environment for our people. It is very satisfying to be working in a purpose-led business where the impact of your efforts improves people's lives. So on behalf of the Board, thank you, everybody, for your contribution to our continuous success, thank you. Over to you, Brian.

Welcome. Nice to see you all. So what I can overdo was just really sort of a short review of where is Aroa is today and the progress that we have made. So I want to start by thinking about like what is it that we're trying to do. And I think the way we thought about this business from the beginning was that -- this type of technology historically has really been limited to a large extent to a small number of patients. And if you think about it, it's been rationed because it was very expensive. And therefore, a broad range of patients haven't had the opportunity to benefit from it. So our premise has been that, we wanted to bring high-quality products to the market, make it affordable and make it much more accessible to a wider range of patients because we think that it could have a huge impact for patients more broadly. So that's been the thought that we've had, we entered this business. And so we've developed this Aroa ECM and Aroa ECM has turned out to be a fantastic technology platform. And it's really based on a few things. So based on the fact that the material that we're using has very strong regenerative properties. So it has great structure fantastic biology. But what's different compared to a lot of products is that it has very good compatibility. And part of that's a result of the manufacturing process that we put into place. So we believe that we've created a whole new class of product here that really elevates the performance of this technology. So it's all well and good. And you okay, so then how do you translate that into commercial success. And so to do that, we think there's 3 things that you've got to do -- it's got to -- it's 1 thing to have a technology, but as a product has got to perform very well clinically. So it was sort of said about doing 3 things to make ourselves success. Well so demonstrating that we have world-leading outcomes making sure that we can deliver unmatched value. And then thirdly, making sure that this technology can have widespread impact. And I'll talk a little bit about each of these 3 things. So I want to talk about outcomes. And so when you think about surgeons adopting a new technology. It's very important that you have evidence that substantiates the use of your product in a range of different clinical procedures. So the way we started was just relatively small studies. So case studies or case series with different patients and different procedures. And we've now advanced a lot over the last 4 or 5 years. where we have been able to undertake much larger studies that are much more convincing and are really starting to, in a very robust way demonstrate the value of this technology. And I want to talk about a few of these because they're really important. Just to give you a sort of a sense of the scale of the evidence that we're bringing to bear now. So we now have 79 clinical publications and that we've produced based on our technology. And that's been over -- it's about 4,100 patients. It's a large body of clinical evidence that we are now able to show that our technology works. And I think 1 thing we've done over the last year is deliver the first study from our master registry, which is a very large prospective study in Lavalin extremity. So this is what we call the LAURA study, that's the LEAD Autherone study. And it's probably the largest published study of lower limb cellpage in the clinical literature. So a very significant study. So it's 120 patients. And what we looked at was the time at it took to heal, the complication rate in the number of applications. And we've been able to show that patients, the tissue in these patients filled in within 30 days. we had 0 complications and a single application. Now that is very different from what has previously been seen in the area. So not uncommon for it to take longer to heal. Complications are common with these sorts of procedures because the patients are very complicated. They tend to have infection. They tend to have underlying diseases that prevent healing. So things like bone infection, they tend to have exposed structures. So all of these things inhibit healing. So it's an absolutely stunning outcome for these sorts of applications. And it's not just a single patient here or there. This is a large study. So very pleased with us. And it's now forming the basis of our sales strategy in terms of pursuing inpatient lower limb salvage procedures, which essentially is quite a large part of the market for this type of product. We've also published this year another large real-world study. So again, this is a complicated wound. So typically chronic diabetic ulcers and venous ulcers, which don't heal actually, what central I should have said is this is the second study that we published in this area. So we've previously stated published a study in diabetic ulcers. The study this year is in venous leg ulcers, both very large studies, again, probably the largest studies that have been published in this area. And what we've seen is -- and I'll focus on the venous leg ulcers study is 830 patients and they closed in up to 8 weeks faster than typically seen with a comparable product. So that's the standard of care. So 8 weeks faster that wound is closed. Now that some patients closed quicker, but the most complicated patients in the study, which are the ones that typically don't close -- closed 8 weeks faster. And the likelihood or the probability of healing for our patients was up to 40% higher. So we're changing the trajectory and the likelihood of these wounds healing in these patients. So I want to talk a little bit about the TELA Bio overtake. So again, we're seeing here great outcomes. And so this is a study, the BRAVO study in ventral hernia, 2 participants. And what are the complications in ventral hernia where the highest complication you get there is that a lot of these patients have recurrence. So they have their hernia repaired they go home and then later, they reformate and there's a complication that they have to go back and have further surgery. So typically, for these patients with other products and if you look through the clinical literature, you'll typically see that the recurrent rates recurrence rates are between 10% and 30%. So what we've been able to show here is that the recurrence rate with over tax was just over 2%. So a fantastic result compared to the current standard of care. And again, the patients are complicated. So commonly infected and many of these patients have had previous surgery that has failed. And so a fantastic outcome for these patients as well. So if you look across these 3 studies, what you're seeing is that we're changing the rate of healing and we're changing it in patients that typically have had poor outcomes before. So in the patients with lower limb salvage diabetic ulcers is very common for those patients to end up reputations. So what we're doing here is we're preventing those patients going on are progressing to amputation. In ventral hernia, what we're doing is we're preventing the recurrence of intra and those patients having to go back and have further operations or sometimes just having to be managed with that hernia. So we're definitely changing the standard of care and changing what can be achieved for patients. So [indiscernible] talked about this, is we're delivering value for the various stakeholders. And so -- and it's very important that we deliver value for hospitals. And we can do this really in 2 ways. So the first way is to reduce their costs. And so that's not just about the cost of the product. It's about the expenses that they have for that patient to resolve their problem. And so for these patients, Being able to have fewer interventions, take them to surgery once and saves them money to be able to prevent complications so they don't have to treat them for infections or further complications, save some money as well. And we've priced our products affordably as well. So there is a saving in terms of acquisition costs as well. There's also operational improvement. So the fact that they can use a single product to cover a wide range of different types of procedures, means that, that's easier for training. It's easier for inventory management and frees up resources for them in the hospital as well. And then very importantly, it's great for patients as well. So if you don't have an amputation of course, you're satisfied. If you don't have to go into surgery again, that's fantastic as well. So we're not only helping hospitals financially, operationally, but also making a big difference for patients. The other thing that we're seeing with this technology is that it's very versatile. So typically, when you look at other products that could be used for similar procedures, they tend to have relatively narrow applications. So some products are good for 1 or 2 specific procedures. And then other products are good for other procedures. What we're seeing with the Aroa ECM technology is that it's very versatile and can be used very successfully across a broad range of procedures. So it has this ability to be a universal product that's very successful in healing a wide range of different challenges. So that's very helpful again for hospitals as well. So what we have seen is success in the areas that are always very focused on. So that's lower limb salvage trauma, great success in earlier and breast and often in combination with bigger pressure wound therapy as well, seen great success there. And then as I said, a whole range of other more minor procedures, but nevertheless, quite important for the hospital implications. So I'll talk a little bit about the financials. But maybe before I do that, I think -- if you think about what do we need to be successful? I think if we can tick the boxes on our clinical outcomes, tick the box on delivering value to hospitals, but also tick the box on being able to be used across a wide range of differences. I think it sets us up really well and puts us on a very strong position commercially to succeed. So just a brief overview of the numbers. So last year, top line grew by 23%. Importantly, Myriad continues to grow strongly. So 38% growth for Myriad. Manufacturing is a relatively mature part of the business, and we're seeing margin improvements there, certainly increasing the scale of what we're doing in manufacturing. Last year, we delivered EBITDA of $4.2 million, which we're thrilled about. We're making that transition to profitability. And as Jim said, we're cash flow positive for the second half of the year. And so we expect this year to continue doing that. And to be sort of now transitioning to be both a high-growth company in terms of revenue, but also seeing increased profitability over the next few years as well. So in terms of guidance, we've got guidance out there for $92 million to $100 million, and that's based on Myriad continuing to grow in excess of and normalized EBITDA of $5 million to $8 million. So we think we're well positioned to continue to built the company. It takes -- in this industry, it takes some time. Good things take time. But we believe that we really are building a good thing here. So I'll finish with that and open it up for any questions that people might have.

[indiscernible] explained to put a framework in my mind. The question that I ask, have you done benchmarking it against your competitors as a selling tool, I mean your costs or your returns you got, I imagine you have that you can use as a selling tool?

Yes, we have. So we've done it in a couple of ways. So we've done it clinically. So 1 of the studies in there sort of shows how does our product or a couple of studies show how does our product compare to the outcomes that you get with competitors. And then we can -- so that's 1 way we can do it. We can also look at the clinical outcomes versus outcomes that are published with other products. And so then if you take that information, you can translate that into a financial story -- so you can look at, okay, for example, with Myriad if you only use it once. And if you don't get infections, what's the financial implications of that to the hospital. Yes, exactly. So we have -- we've built some models to show hospital administrators. What is the difference between using a product like Myriad versus using a competing product?

So use that as a tool on the market [indiscernible]?

We do. it's relevant for different people. So you tend to find not so relevant to surgeons but very pertinent to hospital administrators. Yes, yes. .

So the standard competing product is as surgical risk?

It varies depending on the particular procedure. So for example, in hernia, yes, it would be, it would be synthetic mesh. And some of the other some of the other procedures where it's you're trying to regenerate soft tissue or maybe I don't turn a biologic product. So it does depend a little bit on the specific market segment that you're talking about. .

[indiscernible] to replace all those competing products with a bit of product.

completely Yes, that's exactly. And that's that goal Yes, Yes. Yes, we're very ambitious about that. It will take some time, but absolutely. Yes. Yes. .

Yes. Most of your revenue, I assume, is still derived from the U.S. market. So where do you see development beyond the U.S. .

Yes. So we're about 95% of the revenues coming through from the U.S. So we've had -- we have been working on the international market through local distributors. And I think it's a much more heterogeneous market. We have clearances now in Europe, and we're beginning to get some traction in Europe. Middle East, we've got -- we're growing the business there as well, a little bit in South Asia as well. So -- over the next few years, we'll put more and more effort into that. The last -- that's 3 or 4 that's really been about getting established in the U.S. But we can see it particularly as we now have more evidence that we can carry into these other markets, that's going to help us in what Yes. So short answer is we're kind of -- we'll be putting more emphasis into that over the next few years .

Priorities Europe, China?

Yes, yes. So secondly, Europe is -- so if you think about Europe, the U.K. and Germany are kind of key markets there. This more minor markets that we -- the other Austria, Switzerland, some of the other minor markets. But it's kind of -- the challenge in Europe is the hospital systems and the way host systems work is all quite different. And it's a little bit more complicated. But yes. China at the moment not really. We've been investigating options there, but still a bit of work to do there.

It's good to see you have got to profit. So how is still growing revenue relatively speedily. How do you balance that desire to show profit versus reinvestment back in the business? What's -- have you got a guidance as to how much you're going to spend on capital expenditure?

The CapEx -- on the CapEx side, adding incremental manufacturing capacity is relatively inexpensive, and you tend to do it in steps. So we have now a step a good base of manufacturing capacity. So I think those investments are relatively small. The -- yes, the sort of balance between revenue and profitability, I think that goal is to be a high-growth company and invest in sales and marketing. I think we're best in the commercial expansion, and we're going to continue to do that. At the same time, we want to grow profitability and show that we're sustainable through that growth to profitability. So in terms of striking a balance between those 2 variables. I think we're well placed to be able to do both. But I think it is important with the type of company with the stage that we're at, that we do continue to make good -- most important that we make progress on revenue expansion.

I suppose 1 way to think about it, that is as you get larger and your sales growth, you'd like to see an expansion of the EBITDA margin. I think it's one of the [indiscernible] not quite enough.

So it's a balancing it, right, because we want to enable to expand margin and hold back revenue growth as well. So that's striking about I mean 20 on both would be great. if we get to that, that's the magic formula, and we're aware of that -- as for our specialty 2020, exactly. Yes. .

I was just adding to Philip's comments about CapEx. What's your R&D product development pipeline looking like and sort of future thoughts on that?

Yes. So we've got -- we've got the 2 technology platforms. We've got the Aroa ECM and the Enivo platform. And we're really progressing both of those. So for the Aroa ECM, it's really predominantly line extensions. So relatively simple projects in simple products that are tweaked for specific procedures -- and so we've seen that in how we built out Myriad and we're saying with TELA Bio, just expanding the range of products. So that relatively simple, and we'll continue to do that. On the Enivo side, we still have to get a Enivo cleared by the FDA. And so we're working through that. We had a setback there. We thought we'd get that cleared earlier through the review process I've asked for more. So we have a preclinical program at the moment showing that the third component of that device is essential to its use. We're just wrapping that up and we'll go back to the FDA with that. We think we'll address the questions for the study that we're just completing. And then it's a clinical study. That clinical study is probably 18 to 24 months to complete. So it's frustrating. It's really frustrating the time that is taking us to get this done. But we think that Enivo is a huge opportunity. It's a completely new class of product a whole lot of opportunities there, perhaps well with our sales team as well. So that's coming along. I think from a sales perspective, I feel like our sales team have got plenty of things to sell now. So it's not holding them back, in fact, in a way if we had it now, it might complicate things. So it's good to have them focused on the products that they've got, and then this will come in behind it. So I think what it does do is make sure that the revenue doesn't top out, we can continue to build the company over the next 10 to 20 years.

Yes. Brian, I think it's good to also, I say, sell the products to Europe cetera because now the $7 versus Europe, we are in a very good position. Euro has never been so good. The rate against newsletter dollar for more than 10 years already. But now I'm thinking of why -- that why we are so difficult to market our product to Australia? Besides to the hospital have been marketing our projects in Australia?

Yes. So at the moment, we don't have a sales effort focused in Australia. We do have our Myriad product is cleared in Australia. And even though we have been promoting it, we're getting increased interest from Australia. We're actually selling product into Australia without promoting it. So that's certainly on our radar in terms of increasing our sales efforts there. The -- Australia a little bit like a much smaller market. So you kind of need our thought was that we needed a slightly wider portfolio of products to really have a critical mass for sales representation there. We're kind of working through that at the moment. But yes, Australia we will see increasing sales in Australia.

[indiscernible] is 5x the population of the shares, and I have a suggestion. According to your annual report decision, you have some, what should I say, obsolescence product, are they because end of expiration date that about less than $1 million for those products are the end of expiration date.

Yes, they are. So there's a shelf life on product. So it's typically 3 years. And so if we don't sell it within 3 years, then we -- it becomes obsolete.

Yes. Because also I say when I was in Hong Kong, I know that the public hospital like [indiscernible] hospital, [indiscernible] hospitals all their drugs, medicine. They only have 3 months valid, so they buy very cheap, but the turnover is very big as they use that then I'm thinking of using or going to expire product as a marketing tool for example 3 months like to expire, then we may into Australia, through [indiscernible] to the defense there in Australia because our relationship with Australia have never been so great before. Beside defense, we can have fire. We can have and then spread to hospitals, et cetera, is full to live coins to try our products. is better than dispose that [indiscernible] month end of exploration products for the promote in Australia. And also to the colleges like our science technology to grow in New Zealand, and then we have a manufacturing plant in New Zealand that this would be -- to be happy not to build our partners.

And we do see -- I mean 1 thing we do see, and we'll see this change over time is that as the proteins overlay, you said that obsolescence should become less of an issue. So early on in manufacturing these products, you do relatively large batches. And because the sales level is low, you don't necessarily get sell product through as the volumes go up, that's becoming less of a problem. And so we should see that. But yes, I think you -- it's a good thought. Yes.

I remember reading a while back there, the company was working on a device to drain fluids from bound women's [indiscernible] -- and is that [indiscernible].

Yes. So probably it probably was. so the wounds that we're targeting -- what we're targeting with the Enivo device is internal lines. So where you're not on the surface, but where you've had surgery and within that internal wound, you get fluid accumulation that then leads to problems for the patient. So that's exactly if that's what it was related to, that was probably us. Yes.

[indiscernible]?

No, no, no. So we -- this is the product that we're developing, the nivo product. And so that's something that's still progressing. We've got 2 of the -- 2 of the parts that are cleared by the FDA. There's 1 more component that is to be clear why that's all Yes. No, it has -- unfortunately, we've had to stick our heads down and get on to get some stuff done to get it so we can sell it Yes. Yes. Tracy, any questions online.

We actually -- we don't have any questions through the Q&A function at the moment. We do have someone with their hand raised. And if I could just ask that person to type in their question, then we'd be able to answer it. But otherwise, not at the moment.

Okay. Well, shall I just Yes, maybe 1 more question here. And then if I ask the question, I'll come back to that and then we might close this. Yes.

Yes, the world is full of ruminants is dozens of them -- does your IP cover the full we range? Or...

It does Yes. So yes, we can...

Somebody can't compete using our packers.

Yes, that's right. No, that's right. So the patents are for the use of any for stomach tissue from any animal intertie regeneration applications. And so goats, cow, sheep and we've chosen to sheep -- whatever. Yes. So yes, we've got a monopoly on that that's led us a key part of -- so many bets. That's it. I mean there are some other unique things. I mean I think the farming system here and a traceability here is hugely helpful. Some of the disease status in this country -- we're very lucky that we don't have many of the diseases that exist in other parts of the world that could potentially be problematic. So we have a really unique little a unique -- it's much like a closed here because we're in this little highland at the bottom of the world. We've got a very unique pool of livestock that makes us quite a special opportunity.

Using sheep in New Zealand makes sense Pandion product event.

Exactly. Yes, completely Tracy, is that question? Is there a question there? Or should we carry on.

No. No, there's no questions come in, in their hand has been lowered. So I suggest we carry on. And if they indeed have that question, they can type it in as we go.

Right. Okay. Well, I'm going to hand it back to you, Jim.

Next year much of that -- and as you can see, it served us well having a bit started -- we're now going to go on to the formal part of the meeting. So first of those just to consider receive and consider the financial statements which you have received we don't require approval by shareholders. That has been not taken by the Board. But -- and we have with us came to you as the Chief Financial Officer of [indiscernible] has representation of PDO, Are there any questions regarding the financial statements in the room first. You had a good job today. Tracy, are there any questions from there are both audience.

No, Jim, there are no questions.

Then I'll just hand over to James before we get to the resolutions. -- talk about the procedural catalyst.

Thanks, Jim. So Jim has called a poll on all resolutions at today's meeting. We will shortly be opening voting. Okay. So I'll briefly outline how you can do this. So for those of you who are attending in person, the [indiscernible] the voting procedure should have been explained to the registration process. if you're sort of still uncertain about that process and simply raise your hand and someone come and talk to you. Once we complete all of the work for all of the resolutions, Lorraine here, we'll have a box, okay. And she'll seeing that around the room, we can put your completed voting paper in the ballots, okay? . For those voting for those shareholders and offers representatives that are attended online, we will do open up a poll on the webinar that you can vote. If you have lodged a proxy form and voted before the meeting, then you do not need to vote again unless you wish to change your proxy instruction. Okay? For those of you who have not yet voted before the meeting, please cast your folks when the web a hole is open. You will know when the webinar pole is open when a window similar to that showed on the screen, appears to vote, simply select the option for which you would like to cast your vote. -- that will then be marked to submit your vote, simply click on the submit button. And until we close the voting, you can continue to change your folk okay? The poll results will be tallied after the meeting, and we will announce results later today. As it relates to proxies, our share registry, Automic, has provided a report on ballot proxy works that were received 2 hours prior to the meeting. We will display those results on the screen as we go through each of those resolutions. But please note that the votes may have changed, obviously, in the intervening period. So what we'll do now is we'll move to the resolutions where you're up for considerations today. Details are set out in the notice of meeting and are taken as read. For online attendees, the poll is now open, and you may cast your votes as we go through the resolutions. I guess, I reminded that as we are now in the formal part of the meeting, the opportunity for questions and comments is limited to Aroa shareholders and the outer representatives only. I will now hand the floor to Brian, who will take us through the first resolution.

Great. Thanks, James. So I now refer to Resolution 1, which is for Jim McLean's reelection as a director of the company. The Board, with Jim McLean abstaining, supports the reelection of Mr. McClain and recommends that shareholders vote in favor of it. I'd now invite Jim to provide a few remarks.

Thank you, Brian. It's been a great privilege and pleasure I might say being a Director of this company from some of its earlier stages. And I just thank the board for its support and thank the shareholders that I've had contact with previously. One of the most tangible things about this job is that I'm working with people who are clever and a board who is particularly clear as well. So this is an opportunity to continue something I enjoy should I receive your enforcement. So thank you very much.

Thank you, Jim. I now move that shareholders consider and if thought fit pass this ordinary resolution. Does any shareholder have any questions or comments. Tracy, are there any questions online?

There are no questions online, Brian.

Okay. And is the proxy both Okay. I'll now hand the floor back to Jim to take us through the remaining resolutions.

Thank you, Brian. Resolute 2. Resolution 2 is regarding orders remuneration and is that the Board is authorized to fix the reparation or of the auditors for the fiscal year ended March 2026. I move that shareholders consider and if thought fit past this ordinary resolution. Are there any questions? Tracy, any online questions?

No online questions.

Thank you. And I'll move to the next resolution. Next resolution is seeking approval for the company to issue equity securities under the Aroa Omnibus incentive plan. The your notes to accompany the annual meeting have given explanation to this. And if you require any further explanation, please let us stop I move that shareholders consider and if thought fit pass us on the resolution. Are there any questions? Are there any online questions, Tracy?

No online questions, Jim.

I now refer to Resolution 4, the last resolution, which is the issue of long-term incentives to Brian Ward under the Omnibus scheme. Again, those details surrounding that award those awards are covered in the notes accompanying the Notice of Annual General Meeting. The Board with prior staining recommends that we vote the you vote in favor of this resolution. I believe the shareholders consider a pass this ordinary resolution. Are there any questions? Are there any questions online Tracy?

No online questions, Jim. .

For those of you in the room, there will now pass around the box. We'll now give shareholders a few minutes to complete voting. Please if you need the help, signal if you're in the room signal. It seems to be pretty quiet in the room, and I hope online shareholders are managing their voting as well. That being the case, I now to clear the poll closed. The results will be announced to the ASX later today after having been tallied. So we now have an opportunity for any questions which we had a few -- thank you for Brian's presentation. Are there any questions on the floor? Yes.

[indiscernible] started the best in company about 10 years ago. We still haven't sent a dividend. We do expect to get a dividend to be in a position to pay it out.

Part of the foreseeable future and as far as dividend is concerned, we are looking to essentially reinvest in the medium term on dipping the value of our shares through the your -- so that your returns are evident through the share price, something you're very patiently waited for this stage. And it hasn't happened. But Brian, do you want to talk about that.

Yes. I think we share price. I think our belief is the company is fundamentally undervalued based on how we look at the financial performance of the business. So I think simply on the Australian Stock Exchange, there's been a big flow of capital out of Smallcap into medium and large cap and that's a phenomenon that's happened over the last couple of years. We think that's going to correct it. So for us, we're just focused on building the business. and creating success for the business. And sometimes that will be corrected and we think shareholders get rewarded. But yes, I think we're just dealing with a certain point in time. And I think there's a huge opportunity for the company to grow over the next 5 to 10 years, and I think we're well positioned to capitalize on that.

So when do you think unless you hit that

Look, I mean all of us, we'd like to see it I don't know. It's hard. I mean it's hard to project it,

But until you get to that point this year value is not going to go up.

I know and it's painful. Yes. I know.

If I see on the actual on the costs. You've got a very heavy payroll.

Yes. Yes. I mean if you look at the sales -- sorry, salaries and wages A big part of that is building out our U.S. team. And so we are investing in that. And so that is a big cost for us. But we have seen sales productivity improving considerably over the last couple of years. And so that's going to come right for us. But it is part of building out this type of business that we are focused on making sure that we can grow that top line, and we do need those people, and we got to be able to do that.

As not dig responsibilities of the directors to actually generate back to the company and back to your shareholders.

Well, yes. I mean, I guess the -- what our responsibilities as 1 is to grow the value of the company through improving business performance. And then as a consequence of that, that flows through to the share price. So profitability is 1 metric obviously, revenue being another metric that drives value as well. But yes, over the long term profitability is obviously key. The answer is yes.

Yes. It is yes. Sure. -- what we are focusing on doing and perhaps guide his remarks about to previous question about how do you balance expense your reinvestment against profitability is the thing that we wrestle with, and we listen to shareholders. And I think all of it to our shareholders. have exactly the same ambition here.

So the intravenous solutions problem that occurred last year, which had the share price quite badly. It's a bit of a black swan event that come back in?

Sorry, I just missed the first part of it. what was the...

Intravenous solutions problem, which you [indiscernible]. And of course, supply of resolution in Yes. We've got some topical event happened.

Yes. What happened was there was a cyclone that came through the South, took out the largest manufacturer of intravenous solutions. So -- what that meant was that a lot of routine surgery didn't happen for a few months yet. They say late, not something that you typically see -- but yes, I think you get these crazy things that happen. We've seen a little bit of similar things with to -- well, on Donald Trump to say the call it cyber attacks and stuff like that, taking down whole hospital systems. It's just -- I think it's just part of being in button you get those crazy things that happen Yes. I mean it's eco when you look at the business on a quarter-by-quarter basis, you get some of those crazy stuff that goes on. But I think year-on-year, the trajectory is there in terms of growth.

What do you see the biggest risk is in the business? And how are you mitigating?

Sorry. Yes. risk as the TELA Bio situation and their ability to fund their way through to profitability. And I think certainly, in Australia, there's a group of shareholders that had quite a pessimistic view on that. I mean our view is that the capital markets in the U.S. are pretty deep. -- tell us being successful, the product is successful. So we don't see a sort of a binary situation there, we tell either this wonderfully successful or fails. We think that, that will continue to be a significant part of our business. And that will continue to be good for us.

Does TELA Bio have any other products?

They do, but 95% of the revenue is based on Aroa products, the other products that they have kind of complementary to using Aroa products. So the value and cases that they're doing is predominantly than selling the Aroa products.

They're looking to expand their product range?

I suspect that they will over time, but I think this is still going to be fundamental to their success.

More products possibly means more people on the road doesn't it?

Possibly. I mean, I think for them, it's about covering the full country. And they still don't have that completely national footprint. So I see them building out to cover other hospitals that they can't cover at the moment. Yes.

Just looking at your forecast and what I've tracked over your reports and things like that, they seem pretty consumed. I mean, I can understand why you want to do that. I'm a bit more optimistic than what you have?

Generally an optimist person, you're going to have to be I think we've put out something there that we're pretty confident that we can here. Yes. Yes.

[indiscernible] product still at a time to vantage for stopping leading quicker?

This question was [indiscernible] prior to strength in those online per that. Brian, can you just talk to that.

Yes. Look, I mean these sorts of this type of materials used in dental procedures, and we have certainly done some preliminary work looking at that. We actually have a product clear view in the industry. So it's not -- we are core focuses with business, but there's certainly the sort of adjacent opportunity in the industry.

I do know that 1 of our employees who went in for a dental procedure just recently took along some material to help the as what they were.

Once tooth extraction from dental clinic, they gave me those things for stocking breeding on the wood. I discovered the quite similar to a master of thing. And they are very expensive not just like those things sold in the pharmacy. They are special now and they are making USA. Then can we hour product to the dentist, dental industry in U.S., not here.

Look, sir, we have -- so when you promote it's got to have a particular approval to do that. We do have an approval for that, and it is an area that we are investigating, but it's sort of it's a bit of a side but the main part of what we're doing. Yes. Yes. So yes.

That's good. I hope that you be successful in future.

I might see if we've got the cringe. Tracy, have we got any olive questions.

No online questions at this time.

Are there any more questions from the floor? not appearing to be. I thank you very much for attending and call the meeting to a conclusion. Thank you very much, and thank you for your support over a long time that you've.

Yes. Thank you Yes.