Aroa Biosurgery Limited (ARX) Earnings Call Transcript & Summary

Also present are your Board of Directors, Brian Ward and myself, in person and the other directors online, mostly overseas, as of course as you're aware, I think. Also here, we have a joint company secretaries, James Agnew any Tracy Weimar. The agenda for today's meeting is set out on the slide. I'll do a very short introduction followed by a presentation to be made. And then, Brian Ward, before we get to the financial statements. At present, we have here, Stanley, from auditors, to ask any questions should there be any. When we get to the resolutions of the formal part of the meeting, and we won't read out the resolutions. They'll be shown on the screen and the voting procedure is something that James will get you to go through these and outline how that's going to work.

Thanks, Jim. We actually -- we're going to have a couple of presentations. So we'll deal with the voting procedures after those presentations. But I guess just wanted to give you instruction as related to questions. So what we'll do is we'll work through in-person questions before turning to questions submitted online, okay? For those in-person attendees, just make sure you raise your hand, identify yourself as a shareholder or a guest. We will then invite you to speak. So that the online audience can hear, can you just make sure that you're -- you speak loud and clearly. And if you are acting as a proxy for a shareholder, please state clearly who you are appointed to represent when introducing yourself to the meeting. Questions In terms of the questions for remote attendees, questions can be submitted by clicking the Q&A box you can see located on your screen. This is highlighted in yellow in the screen shot now shown. There may be some delay during the course before we get to your questions, so we ask for your patience. Where appropriate during the course of the meeting, we will ask our Joint Company Secretary, Tracy Weimar, to read our questions. I will now hand it back to Jim.

Thank you, James. Just a few introductory words for me. I thought it's worthwhile to reemphasize the attributes that give us great confidence in the future of the company, particularly in light of our share price over the last year. Our success is centered around providing clinically effective products to both improve patient outcomes and lower hospital costs, and do so in large markets and so allow us to build a successful business for our shareholders. So how are we doing? Our business is based on applying our AROA ECM technology across a wide range of clinical uses that now spans 4 product portfolios. And clinical results in all areas are reinforcing the effectiveness of our technology. Over 6 million Aroa devices have been applied in treating patients. There are now 83 peer-reviewed clinical publications and an expanding library of real-life case studies. We're investing substantially in clinical studies, which we need to for us to achieve widespread uptake in our target markets. The studies observed how our products compared to standard of care and competitive alternatives. As health care budgets come under increasing strain, hospitals and other health service providers must achieve more with less. The combination of effective clinical outcomes and also our overall cost to hospitals is what distinguishes us. We are seeing examples of lower cost of care in many procedures, and expect to leverage the study data to demonstrate the financial benefits of our products through lower complication rates and faster heating times. Dr. Barnaby May, our Chief Scientific officer, will shortly be providing an update on these states and the anticipated highlights for the coming year. We estimate the market for AROA ECR-based products in trauma, general surgery, hernia and breast reconstruction, the areas we are already serving, to exceed USD 3 billion. So we are only scratching the service. The challenges for medical practitioners and hospitals replacing existing products are significant. So the rate of uptake of our products is not easy to predict. But as I've just noted, our strategy of demonstrating value to both patients and hospitals is key. We are seeing this in consistent growth across televised sales as well as Aroa Direct. The company has contracts in place with all 4 of the largest U.S. group purchasing organizations, enabling more than 95% of U.S. hospitals to access our products. We are seeing deeper penetration within existing accounts and increasing average sales rep product subsequently across all categories of tenure. TELA Bio established its sales team a few years for us and is also on a strong growth trajectory. In May, TELA Bio delivered its 13th consecutive quarter of at least 35% year-on-year growth, and they're forecasting revenue this year of between USD 74.5 to USD 76.5 million. A few words about last year's sales performance and the outlook for this year. Last year, Aroa direct sales continued to perform well, led by [ Myriad's ] growth of 73%. Our sales to TELA Bio were down as they reduced inventory in the first 6 months of the year. This meant we shipped less product in spite of TELA Bio's sales continues growth. As a result, our total sales for the year were below initial guidance despite increasing the uptake in both our distribution channels. More recently, our sales via TELA Bio are more in line with their market performance. And so our overall sales' increasing effect, as Brian will share on his address. At a time when the market capitalization of Aroa has fallen, I thought it worthwhile to outline how the company considers its underlying value. We aim to build a very successful business, regardless of market conditions. We set our goals in a classical manner, that is we target marketing, market share, share pricing, margins and costs in existing and new product markets. This results in a net present value that underpins highly valued business and so our confidence in the future. I would like to take this opportunity to thank everyone working at Aroa for their contributions over last year. One of the benefits of a maturing business is that we're able to build on the experience of the capable people that have got to here and are also able to secure high-class additional talent. So we see no limitation to attracting and retaining the skills we need for the next stage of our journey. Turning to our Board. In March, we were pleased to welcome Darla Hutton after Steve Engle retired. Steve played a valuable role in shaping the company's direction. And he was a pleasure to work with. Darla is a global commercial operations executive and is standing for election at this meeting. She brings experience, significant on-the-ground sales and marketing experience in the medical devices sector with crucial insights to drive sales of our products within the U.S. and beyond. Per our director rotation policy, Phil McCaw and John Pinion, are also retiring by orientation and offer themselves for reelection today. I'll now hand it over to Dr. Barnaby May and Brian Ward. But before I do, I want to express my sincere appreciation to Aroa shareholders. As I outlined, we are just getting started, so thank you for your continued support. Barnaby?

Thank you, Jim. Barnaby May, Chief Scientific Officer. So I've been with Aroa now since 2008. And my brief today was to give a bit of a sort of retrospect of where we are at in terms of our portfolio of evidence. But then also a prospectively looking forward to what to expect this year. Since we started publishing back in 2008, as Jim mentioned, we're now at a stage where we've got over 80 publications in peer review. And this is, in part, a huge shout out to the team at Aroa, but also to all of those collaborators that have joined us along the journey. So these are also research academics, but also our clinical [ practices ] as well. So these 80 publications are summarizing data from, not only our preclinical studies, but also from our clinical studies as well, so studies focusing on our wound care product Endoform, more recently, our Myriad range of products, but then also the products, our reinforced biologics for -- in Europe here. Now what's really interesting is when you start to aggregate over all of these publications and start to look at the cumulative number of patients that we've published outcomes for, so we're currently at around 3,500 published patient data. So we've now got a really good lens on clinical outcomes. So stepping back, what have we learned, so -- from our preclinical publications? So to date, we've published over 20 peer reviewed publications, focusing at that sort of deeper understanding around our platform technology, AROA ECM, or Aroa extracellular matrix. And what we've shown in those preclinical publications is the retention of native structure and also composition, okay? So really, this exemplifies the sort of optimal platform technology for the types of clinical applications where we're using Aroa products. If we then turn clinically, what are we seeing when we take some of our Aroa products and then use them in a clinical setting. So the overwhelming feedback that we have from our clinical customers is the rate at which we can quickly regenerate tissue, right, that's been lost or is missing. The second key point is the resilience of our material. So we're finding particular application of our products in contaminated soft tissue defects, and the feedback that we have from our surgical customers are the persistence of our material in these wounds where it otherwise may be degraded quite quickly. So we just dig into some of the data from some of our publications. And in these coming slides, I'm just focusing on our peer-reviewed publications to date for the Myriad product range. One of the things I mentioned, we've noticed is that how quickly we can regenerate tissue in some of these complex volumetric defects. So if you look across these 3 examples here, and we take into account the rate in which we can regenerate tissue that's damaged or missing, typically, we're setting at around 3, 3.5 weeks of time to grow up missing or damaged tissue. Often, this is in situations where we've got exposed structures. So by that, I mean, bone and tendon, which are avascular structures and are typically very hard to get tissue coverage over. So how does that compare with some of our competitor products? Well, it's not unreasonable to see in the peer-reviewed literature, some of our competitor products taking in the range of sort of 6 to 8 weeks to regenerate missing tissue. The other key point that we're seeing clinically is the persistence of our material and how robust it is, particularly in these contaminated soft tissue defects things. So by that, I mean those types of defects like necrotizing soft issue infections or Fournier's gangrene, some of the large complex ventral hernias. The column in the middle, the CDC contamination grade. So the Centers for Disease Control has a contamination gradings for -- runs from 1, which is a clean wound all the way through to 4, which is a heavily contaminated or an infected one. Most of our publications are focusing in on these contaminated wounds, right, so grade 2 and 3, right? Now what's really interesting is that if you then start to look at our infection rates, right, you may assume that if you've got a relatively contaminated defect, you may see high instances - incidences of infections. Most typically, our published rates for infection are at 0%. Now how does that compare with some of our contemporaries in the space here? It's not unusual in the scientific literatures to see infection rates reported 20%, 30%, sometimes 40% with some of our competitor products. So this really speaks to the quality of our AROA ECM scaffold and how it can be used in these particularly complex contaminant defects. And then finally, I did want to talk just around this reapplication number, right? So often with these types of products, the way surgeons are typically using them is with -- via repeat weekly applications, right? Now because our material appears to withstand local bacterial contamination, but also local tissue inflammation, our reapplication rates are typically 1-product application, whereas some of our competitor products are being reapplied up to 7, 8, 9x, right? So that directly reduces the overall cost of care for these complex soft issue defects. What can we expect this financial year? So speaking to the first item on this list, and please, this is not an exhaustive list. It's meant to show some of the key highlights that we're expecting for this financial year. As a lot of the shareholders will be aware, we're running a large prospect of registry study for our Myriad products. We expect the first publication to come out from a subgroup analysis of that data set. We expect that to publish in this quarter of this financial year. And that's a study looking at the application of our Myriad Matrix product and also Myriad Morcells and complex lower extremity reconstructions. We're reporting out 130 defects. To my knowledge, this will be one of the largest studies published looking at the application of these types of technologies in complex lower extremity reconstruction in limb salvage. The second project on that list also comes out of the Myriad registry study. So this is looking at outcomes from traumatic wounds. So we currently have, as part of the Myriad registry study, 10 sites that are participating in the study. Several of those are Level 1 trauma centers based in North America, and they are utilizing our Myriad products on some of their complex traumatic defects, and we'll be reporting out a subgroup of that data set also this year, which will capture in the range of 40 to 50 traumatic defects. Number 3 on the list, this is a follow-up publication to a publication that we put out about 2 years ago, looking at real-world evidence to support the utilization of our outpatient wound care product in the form. In this instance here, we're turning our attention to venous leg ulcers. Our prior publication focused on diabetic foot ulcers. So the publication this financial year will focus on venous leg ulcers. Again, this will be a very large data set, so upwards of 2,000 wounds in that analysis. And then finally, #4 on that list is the randomized controlled trial that we're running for the Symphony product, which is our outpatient skin substitute product. This is a randomized study comparing the healing outcomes using Symphony versus standard-of-care. That study is currently fully enrolled, and we expect to report out on that in Q4 of this financial year. And I'll pass to Brian.

All right. Thank you, Barnaby. So I'm going to quickly talk about sales. And a bit of what I want to talk about is why we think Aroa is going to be successful over the next few years. So most of our focus for our direct sales effort in the U.S. has been on Myriad. So Myriad is our top priority. We've had this product on the market for 3 years, 3 years with our own direct sales team. And obviously, in that time, you've seen us come from a relatively low base to strong sales. So last year, it grew greater than 70% year-on-year. So we've got good strong sales momentum there. When we initially started with Myriad, we started in relatively small wounds and just all salvage and some colorectal procedures. More recently, we've been moving into much larger procedures in trauma centers and having a lot of success there. So we're certainly seeing a change in the mix of procedures we were selling Myriad. We're seeing Myriad being used in much larger, much more valuable cases. So it's finding a place in these large volumetric defects. And we think that's an area where it can really shine. As Barnaby talked about, we're getting more and more compelling clinical evidence coming through. So we're showing that rapid rate of tissue formation, that resilience, that persistence, which really makes a difference for conversions. From a value perspective, not only is it the clinical value that we're bringing, but we're also bringing large cost savings to hospitals, and I'll talk a little bit about that later in the presentation. As Jim mentioned earlier, we have a tiny sliver of the total market that's available for Myriad. So we think it's got a very long way to run, and we're really just getting started with the opportunity for this product. On the TELA Bio side, TELA Bio is a key partnership for us. TELA is responsible for the commercialization of our OviTex products in the U.S. We have a co-development arrangement with them. We're also involved in manufacturing the products for them. Now over the last 10 years or so, we've built out a wide portfolio of products for TELA Bio, where we started in complex hernia. We've expanded into more straightforward hernias and robotic surgery. And then more recently expanded again to launch a product in inguinal hernia. So we're building out a large portfolio of products there. I think there's over 50 SKUs now. And we're also now on our second generation product for breast reconstruction. So that portfolio is maturing a lot, and we really think that portfolio is well positioned now for success. You'll see our year-on-year sales or TELA Bio's year-on-year sales had continued to grow strongly. So last year, based on normalizing to our financial year, they grew 40% year-on-year. Again, the data there is compelling. So the BRAVO study showed that the rates of recurrence, which is a critical metric in repairing ventral hernias, recurrence rates were very low, so less than 3%. If you compare that to the norms in that market, that's typically 10% to 30%. So very low rate of recurrence, and that really stands out. It's been completely different from what's typically been seen in that market before. That BRAVO study has also been now repeated by independent investigators that are getting similar results in their studies as well. Like our Myriad products, the OviTex products bring disruptive value. So they allow clinicians to access products that are very affordable, but also lead to significant cost savings for the hospital as well. And also, like Myriad, OviTex, it only has a tiny portion of the total addressable market for those products. So there's a very long way to go with OviTex in terms of gaining market share. So I want to talk a little bit about why we think our ROIC and when and why we think we're well placed to do very well in these markets? And I think as people in this room will know, building a company like this, it's not straightforward. You have -- it's not a straight line. You have some rabbit holes. You have some things that don't go well and some things that do go well. But we think over the medium to long term, we can build a very successful company. And I think that comes down to some critical factors that really contribute to our competitive advantage and to our ability to build a winning business model, and I want to talk about 4 of those things. So the first thing is the value that we can bring to our stakeholders. So Barnaby talked about the clinical outcomes. And certainly, we are seeing very good clinical outcomes when we compare these products to alternatives. When we first started out, the publications that we're producing, the numbers of patients in those patients were -- in those studies were relatively small. I think what you're going to see this year is a big change in gears in terms of the quality of data that we're now starting to generate. So what we will see now is very large studies, coming through that are much more convincing. So the small studies that we did at the beginning were helpful in terms of getting clinicians to initially use the product, but to get a much larger proportion of clinicians to use the product, you need larger studies, and we're beginning to see that data coming through. So an example Barnaby gave in terms of the lower limb salvage study coming through this year. 130 patients is a very large number for these sorts of studies. So we think that's really going to make a difference as those studies come through. It's not just the clinical outcomes that are really demonstrating the value of these products. The way our hospitals get paid for using or for performing the procedures where our products are used is as a lump sum fee. So for them, their payment is capped. So they don't want to end up having additional complications or additional costs associated with these procedures. So what we've been able to show now is that we're controlling the rates complication. We're keeping those low. And particularly, as Barnaby mentioned, very low rates of infection, which is unusual for these sorts of products. I'm just seeing a big difference there. As Barnaby mentioned as well, fewer applications. So that's fewer applications of the product, but it's also less going back to the operating room, less costs for them in terms of their people, and it's easier for them operationally to run their hospitals. We're seeing, with this rapid tissue formation, a shorter length of stay, so they can get to definitive closure a lot quicker and get the patient out. We're also -- our products have typically been discounted from the market leaders. And this has been important certainly through COVID and while hospitals have been under financial stress to get our products going, and so we're saving them money right across the board, and we think that's very compelling for them in the future. I think we've got a very unique product portfolio as well. So we've put a lot of focus on developing our platform technologies. And we have some very unique resources and capabilities within the company. Developing the AROA ECM platform has been a big effort earlier on, but now we're in a position to be able to leverage that effort and a cost for us to generate new products and line extensions is very small. And so we have this huge capacity to increase the scope and breadth of our product range at a relatively limited cost. We also have some very unique technical capabilities within this company. So what we do is very unusual globally. So we've managed to attract some people with very deep specialist expertise in this area. I think we've got a leading global team in this industry. On the Enivo side, we're developing a second platform technology. This is a completely new class of product, and we believe this is going to lead to a family of new products that will be very complementary to our existing offerings. So if you take these 3 things as a whole, we have a very strong pipeline of products that we can feed to our sales team for quite a period of time that will continue to drive productivity. We're also developing more and more commercial leverage. So we've been able to attract, to our rollout. people that are very experienced in the commercialization of these types of products. So look -- if I look around our senior leadership team in the U.S., they've been in this very particular market for at least 10 years, some of them over 15 years. So very high-quality group of people with deep expertise in this market. We're not encumbered with a legacy sales model. We're developing our sales capabilities in new ways. And I think we're certainly adapting to changes that are happening within the U.S. And I think we're well placed to do very well with our sales organization. I think the other thing that's unique about our commercial team is that they're very energized by our vision for what we can do with this technology. So we've positioned these products to provide more access for more people. And we believe that these products have been rationed to a small group of people that have limited capacity to heal, but we also think that there's a much broader opportunity for these products, to use them in many more patients. And I think that's something that's really energizing our sales team. And then lastly, I think for a small company, we've got fantastic GPO access. So we're able to prospect over 95% of the accounts in the U.S. because of the great job that they've done in terms of opening up GPO access. So we're very well positioned in that respect. The other thing that really stands out about Aroa is our ability to manufacture our products at large-scale at a very high quality, but at an extremely low cost. So if you look at most medical device companies, their cost of goods is typically 35% to 40%. So they're working on margins around 60% to 65%. Aroa has very high margins. So our cost of goods is typically less than 10%, so our margins are typically more than 90%. That's unusual for a device company, and it puts us in a very good position. That should improve over time. So we have process improvements coming along that will improve those margins. But we also have a change in sales mix happening as well, where, increasingly, our products are much higher margin. So we see that shifting to our favor in the future. We also have a manufacturing process that, in order to scale it up, we can do that at relatively modest cost. So there's not a lot of capital investment to double manufacturing capacity now. So we're able to do that very well within the funding that we receive to expand the business. So if you think about why are we going to win, I think we have a very unique value proposition. We have the right portfolio of products and we have the ability to build out that portfolio over time at relatively low cost. We've attracted a great commercial team with a lot of insight into this market, and we have relatively low cost of goods, so high margins. If you look at it financially, we see that Myriad and OviTex is going to continue to drive growth. So we did $69 million this year. Our guidance is $80 million to $87 million next year. Gross margin will continue to improve, so going from 85% last year to north of 85% this year. We see our sales team maturing and becoming increasingly productive over time as they spend more time in their territories as we build out their portfolio. R&D will track from -- in excess of 20% at the moment to about 10%. So -- and that's more than enough to provide a sort of portfolio that we need for the future. And EBITDA margins will expand. So this year, we lost $3 million. Our guidance for next year is $2 million to $6 million. So we're making this transition from being the loss-making to moving to be profitable. We see that profitability increasing over time, but at the same time, we're able to maintain high growth on top of mind. So any -- I'm happy to take any questions. Well, I'll hand it back to Jim.

Tracy, do we have any questions from online?

There are no questions online at the moment.

Thank you. Yes.

My name is [indiscernible]. I'm a shareholder. I wish to inquire whether your products are also, I'd say, in Australia?

I might just repeat the questions because the people online might struggle to hear from the floor. The question was whether our products are available in Australia.

We don't. We're not selling directly in Australia at the moment. However, we do have our Myriad product group there. And quite recently, we have supplied product into a burn center up in Queensland. So it is a market that we want to build out our presence in, but we are doing on a relatively limited basis at the moment.

Another question?

I have a question for Brian. It's just another Ukraine war is, should I say, everybody knows that. And I think your product will, should I say, save a lot of children's lives. They heal more quickly. And also, if you are in that market, then the European countries or the American -- America or Australia, then that means marketing, that sort of thing. And I'm suggesting that -- to request for the Australian government to keep some money to buy your product to send to Ukraine just as humanitarian aid. And also I'd say, for example, AUD 1 million is just a tiny, tiny from the Australian government, yes. But there's just a little bit of logistics, how to reach, risk [ bear ] and also the Ukrainian manual and don't know English. So that needs to be on the pack.

Okay. That's a great idea, but we haven't helped the Australian -- we have provided a little bit of -- we've donated some product to Ukraine last year, but that's -- look, we're looking for opportunities with government agencies on aid. It makes a whole lot of sense. Yes.

It is a very good organization, then last year, the major, [ through which ], organization met?

I couldn't give you that off the top of my head. I mean, it was done through a distributor, [indiscernible] that we had through personal relationships, yes, it was my understanding. Not through NGO. Yes.

It's just I have read an article on the news and in Herald, 2 or 3 patients is introducing a gentleman. I think he's called -- oh, yes. Do you know him? Yes, he's ex-army officer and he knows how to distribute those products in Ukraine. Yes, it's just very impressive because he already had a and he is trying to do so much good deeds.

Okay. Well, thank you very much.

Thank you. Are there any more questions?

Jim, a question has come through online. I'll just read it out for you. It comes from [ Colin McArthur ]. "Most of the studies appear to be registry studies. Could you please advise what RCTs have been published or are in progress?"

Yes. Great question. Yes, you're obviously right. Yes, our primary focus for the Myriad portfolio is data coming out of our observational prospect of registry study. With regards to randomized control trials, we have the Symphony RCT, which I spoke about during my presentation. That's currently fully enrolled at 120. We expect to report that out in Q4 of this financial year. But also just to signal as well, there's been quite a number of comparative studies that have been published looking at performance outcomes with our reinforced biologics. Brian referred to the BRAVO study, but there's also probably half a dozen comparative studies that have been peer reviewed, looking at the performance of our reinforced biologics versus some of the competitive hernia issues, whether that's the biologics or the synthetic measures as well. And generally, the -- sort of the take home is low recurrence rates with those products.

Thanks, Barnaby. We now come to the formal part of the business. And the first votes to consider -- if you have any questions regarding the financial statements, which are included in the annual report, that's distributed to the shareholders. With this, we have here, Stanley, the auditors, James Agnew. He's our Chief Financial Officer. Are there any questions for James or for all clear? Tracy, are there any questions remotely?

Jim, there are no questions on this particular topic. There are others that we can perhaps pick up a bit later in the meeting.

Do you want to pick those in relation to the presentations of Barnaby and Brian?

It's - yes.

Well, I think we should deal with them now. You okay, Brian?

Okay. Yes. Yes.

Okay. Let me just read it out in that case, which is, "What are your thoughts on why the Aroa products are performing so well in contaminated environments?"

This is a question that we get fairly regularly. And without sort of solid data at hand, I speculate that it's down to a couple of factors. So the first thing to note is when we're placing our roll of products, what we see in terms of the quality of the tissue, right, so one of the key take-homes in the clinical observations is just the quality of the vasculature within that regenerated tissue, right? So if you're thinking about bacterial contamination and fighting off infection, obviously, having a really robust blood supply in that newly built tissue is going to be key to warding off infection. So that's probably the first thing to note. The second thing to note as well is that our products and our platform technology will elicit an anti-inflammatory response in the tissue, with those being degenerated, right, as opposed to a pro-inflammatory response, right? So I think that's another key factor when we think about the reduced infection rates that we're seeing. The third piece as well is that we do know from the published data that there are components of the extracellular matrix that have bacteriostatic properties. So I think it's probably not down to one particular feature of our products. It's probably an overlap of several features. Hopefully, that answered the question.

Any more, Tracy?

Not at this time.

Then, James, let's get towards the resolution that you're going to give us that other procedure?

So Jim has called a poll on all resolutions at today's meeting. We will shortly be opening voting, so I'll briefly outline how you can do vote in this. For those attending in person, I understand that the voting procedures were explained to you during registration, but please raise your hand if there's any questions. Shareholders and authorized representatives attending online can vote via the webinar poll. If you have lodged a proxy form and voted before the meeting, you do not need to vote again at this meeting unless you wish to change your proxy instruction. For those of you that -- who have yet to vote for the meeting, please cast your votes when the webinar poll is opened. You'll know that the webinar poll is opened when a window similar to that now is displayed appears on your screen. 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. Until we close voting, you can change your vote. The poll results will be tallied after the meeting, and we will announce the results later today. Our share registry, Boardroom, has provided a report on valid proxy votes received before this meeting. We will display the results of the proxy votes on the screen as we go through each resolution. We will now move to the resolutions, which are up for consideration 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. Guests are reminded that we are now in the formal business of the meeting. The opportunities, therefore, for questions and comments is limited to Aroa shareholders and their authorized representatives. I will now hand the floor back to Jim.