Micro-X Limited (MX1) Earnings Call Transcript & Summary

Welcome, ladies and gentlemen, to the Annual General Meeting of Micro-X. My name is Kingsley Hall, and I'm the Company Secretary of Micro-X. I'd like to begin by acknowledging the Ghana people, the traditional custodians of the land on which we meet today and pay my respects to their elders, past and present. I extend that respect to Aboriginal and Torres Strait Islander peoples attending today. Today's meeting is being held in a hybrid format, both here in person at Tonsley, in Adelaide and online via the Zoom webinar platform. We're voting to be facilitated by the Computershare voting platform. This allows shareholders, proxies and guests to attend the meeting virtually, if they choose. All attendees can watch a live webcast of the meeting. In addition, shareholders and proxies have the ability to ask questions via Zoom and submit votes via the Computershare meeting platform by clicking the link published in the Notice of Meeting. For those attending in person today, we'll have a roving microphone available to ask questions at the relevant time in the meeting. If you're on Zoom, depending on the format of your video screen, you might find it helpful to select, Fit for Window, from the Zoom View Options in the toolbar. Today's meeting is being recorded and parts of it, including the Chair's address and the CEO's presentation will be uploaded to the company's website and the questions can be submitted on Zoom at any time from any registered shareholder. To ask a question, press on the Q&A icon within Zoom. This will open a new screen. And at the bottom of that screen, there's a section for you to type your question. Once you finish typing, please hit the Arrow symbol to send. Please note that while you can submit questions from now on, the Chair will not address them until the relevant time in the meeting. Please also note that your questions may be moderated or if we receive multiple questions on one topic, amalgamated together. For those attending here in person, a roving microphone will be available for questions at the allotted time in the meeting. Finally, due to time constraints, it may not be possible to answer all questions. If this happens, we'll answer them in due course via e-mail or by posting responses on the Investor Presentations section of our website. Voting today will be conducted by way of poll on all items of business. In order to provide you with enough time to vote the Chair will shortly open voting for all resolutions. As mentioned earlier, voting today will be managed by the Computershare meeting platform as set out in the Notice of Meeting. If you've not already lodged your proxy vote, you may vote live and online during this meeting via Computershare. If you've not already downloaded the application, please do so now. You will need your post code and shareholder identification number to log in. The steps for voting are very straightforward, but if you have any difficulty logging into the voting application, please contact Computershare on (613) 9415-4024. I will now introduce Mr. David Knox, Chair of Micro-X.

Thank you, Kingsley. Good afternoon, ladies and gentlemen. All shareholders and other interested parties, it is with pleasure that I also welcome you to 2022 Annual General Meeting of Micro-X Limited. I am David Knox, and I will be your Chair for today's meeting. As the appointed hour has been reached and a quorum is present, I declare the meeting open. Before proceeding with the formal matters for today, let me first introduce my fellow directors. Our Managing Director and CEO, Mr. Peter Rowland; and our non-Executive Directors, Mr. Jim McDowell, who is here with me today; and Mr. Patrick O'Brien; Dr. Alexander Gosling; and Ms. Ilona Meyer, who are with us on the Zoom link. In addition, Mr. Justin Humphrey is here representing Grant Thornton. Thank you for joining us. The company's auditor, should any questions or matters need to be directed to the auditors. As Kingsley mentioned, voting today will be conducted by way of a poll on all items of business. Please note that voting is now open. Any shareholders attorneys, proxies or corporate representatives attending the meeting in person will have been issued with a blue voting cards upon registration. If you've not registered to vote, please see the Computershare staff at the entrance. I will commence by providing you with my address to the meeting. On behalf of the Micro-X Board, I am pleased to welcome all shareholders to the 2022 Annual General Meeting, which is being held for the first time in a hybrid capacity at Tonsley in Adelaide and also virtually. My second year as Chair of Micro-X Board has seen significant growth across our 4 business units, marked by a phenomenal, phenomenal commitment by our team to overcome challenges in developing a world-leading technology. Our business has further matured over the past 12 months with advances in our product portfolio through new tube designs and our in-house high-voltage technology, creating new commercial opportunities while also reducing the cost of our existing products. Of our achievements this year, one of the most strategically important was the $15 million collaboration signed with a global X-ray technology manufacturer, Varex Imaging. From a strategic viewpoint, the deal shows the value of our technology, ensures our technology is adopted and recognized across industries and above all else, provides us with a significantly stronger balance sheet to drive our business into the future. From a commercial perspective, the agreement provides mutual benefits in technology collaboration, access to markets and potential cross-selling opportunities. In the past year, we've made good progress to our next product to be launched, the Argus X-ray Camera, which is in its final stages of technical development testing, while our submission to the Australian Department of Defense is being evaluated. Customer interest in Argus continues to build with engagement with police and military sectors in our prelaunch activities. While we have faced delays in bringing Argus to market, because of the technical challenges and entirely new design of X-ray tube and miniaturization of a high-power generator, our talented staff are working tirelessly to overcome this. And I look forward to bringing you further news about the first customer demonstrations of Argus in early '23. The Department of Homeland Security continues to support the development of our CT Baggage Scanner and Self-Screening Checkpoint. Our strategic decision to establish a presence in Seattle, led by our General Manager of Airport security, Brian Gonzalez, has enabled strong connections with our U.S. customers and technology partners. Our technology is the sole enabler of this next generation of passenger screening, which combines our baggage screener with technology partners to bring an innovative and much desired solution to poor passenger experiences at security checkpoints currently being faced in airports around the world. Likewise, our CT Brain Scanner is poised to revolutionize pre-hospital stroke care, particularly in remote regions where access to essential health infrastructure is not immediate. Internationally, our technology is capturing the interest of air ambulance and emergency services, highlighting the importance of point-of-care diagnosis for the treatment of strokes. We continue to work with our partners, including the Australian stroke alliance with clinical trials, due to commence in 2024. With the continued disruption brought by the COVID pandemic and the current financial instability, health care companies across the world are facing tougher challenges and many have had made difficult decisions, including the reduction of staff numbers and recapitalization. Micro-X has not been immune from these challenges, and we remain focused on ensuring we are in a strong position going forward. This year, we cut 20% from our cost base on a like-for-like basis, and we'll continue tight cost management into the future, ensuring we direct our resources for the best outcome for shareholders. Adoption of our mobile DR has been slower than we expected. Our experience has been that our product is received with [ growing trades ]. However, it is often -- as is often the case with new technology, full adoption takes time. A key part of our commercial strategy this year has also been to secure larger, better network distribution partners. And we believe that the appointment of the 2 largest independent distributors of radiology equipment in the U.S., Medlink and MXR, finally gives us a truly national footprint. We look forward to completing the FDA registration process for our Rover with the Vieworks Detector and software, which will trigger a Medlink $1 million of minimum annual Rover sales. Last week, we received a very strong commendation for our technology from Ukraine. I quote, "This will save thousands of lives of Ukrainian citizens." They have further told us that 1 machine at the [indiscernible] is taking up to 400 images a day with almost 7,000 images taken since May. To place this usage in context, in designing the Rover, we predict a daily use would not exceed 60 exams a day. I would like to acknowledge the significant challenges our staff have faced over the past year and thank them for their ongoing dedication to the company and to deliver on our promises to you, the shareholders. We remain committed to our goal to establish our technology worldwide and build a global company. This year, we have continued to strengthen our commercial sales capability, building a network of independent distributors in the U.S., in Europe and also the Middle East. Order renewal continues with the Ilona Meyer joining us as Non-Executive Director this year, bringing her wealth of experience in governance, health care and emerging technologies. We look forward to welcoming Andrew Hartmann, a highly experienced global sales and marketing executive, onto the Board in the near term, which will be conditional on the approval of Varex investment from Australia's Foreign Investment Review Board. Our technology is only made possible by you, the shareholders and I appreciate your ongoing support, both for the company and our vision to realize the commercial potential of our technology across the health and security sectors. I acknowledge that like many technology companies this year, our share price is disappointing. Our focus is to deliver outcomes, which will demonstrate a long-term value of the company for our investors. In closing, due to the deal with Varex, our balance sheet has been strengthened and extends our runway into 2024. I expect this pace of commercialization will increase over the coming year, and we're very focused on our first Argus sales being a big part of those activities and moving to complete our first prototypes of the miniature baggage scanner. I'll now hand over to our CEO and Managing Director, Peter Rowland, for a presentation on our business plan and outlook. Thank you.

Thank you, David. So obviously, Micro-X is all about miniaturizing x-ray. Our technology, we're branding as Nano Electronic X-ray, NEX, as a little catch cry to -- because this is the technology that underpins all the products that we have. And you can see there the illustration of the big difference it makes, that's in our first product, the [Mobile ] tray. So the financial highlights for the year, a big lift in revenue, obviously. A large part of that because of the major contracts, $14 million worth of contracts that we secured during the year. While Mobile DR sales have been fairly flat, that caused us to relook at our cost base and realign that with the slower ramp-up in our direct sales as we transition from a sales model where it was Carestream doing all the selling into one where we are establishing our own global network of distributors. U.S.A. and APAC, obviously, the key focus for most of our sales, but we're expecting that Europe and the Middle East will grow as we get European approval. And our distributors in the Middle East get some traction as well. And as David mentioned, our cash position gives us a runway into 2024. So we're very comfortable there. Operationally, all 4 business units, very busy through the year. I'll talk individually about each of the business units in some detail, but the highlights here. In Mobile DR, the Rover, the big thing, as David mentioned, is building this cadre of distribution partners through the U.S. and Europe to get the sales traction that we need. The launch of the new high-powered version of the Rover, something we've achieved and getting that certified in Europe is a key priority for us. In Argus, the ID X-ray camera, the key thing there is building the preparation for sales. We've got 2 very, very capable formerly EOD practitioners themselves, 1 in the U.S., 1 in Australia, and they've been preparing the market for the launch of the product. So we have a number of people very keen to take first demos. And of course, the response during the year to the Australian Department of Defence Tender for Land 154 has been an important part of this year's activity. In checkpoints, 2 big milestones there have been the acceptance of the designs that we prepared for both the CT Baggage Scanner and the Checkpoint itself, a little bit more detail about that. So that says that our customer, the Department of Homeland Security, is very happy with the design progress of those products. And similarly, in the Brain CT Scanner in our partnership with Johns Hopkins University is predicting that our imaging architecture solution for the Brain CT Scanner will actually outperform conventional CT in by about a factor of we'll have 4x better resolution than conventional CT in a unit that's going to weigh 50 kilograms, and be cheap enough to put it in the back of an ambulance. So that's pretty exciting. I want to talk a little bit just about the technology that underpins all of this because we are at the end of a technology company. Three different tubes that are occupying our attention at the moment. The first generation on the left is the next tube, which went first in the nano and then it's in Rover, is now being in production for the year for many years. And its reliability is every bit as good as we've been predicting. The second one you'll see is a reverse polarity tube, which is -- it works in a very high duty cycle. So we have a lot of heat to get rid of. And for that reason, we have to turn upside down. That's created a few little challenges for us. But it's still performing. The design is performing very well. And you'll see that the progression in the size is getting smaller, even though that's 160 kilovolts. And then the last little tube on the left is our concept for the tube that will power the brain CT, and that's a task that we'll be getting onto during this coming year. So that will be in our CT scanner. Now there's no point in miniaturizing an X-ray tube. If the electronics you need to power at the high voltage is giant, and because in the end, you need to approach this as a holistic product. So we identified while there's obvious cost and supply chain benefits about bringing this technology in-house. But a really important reason for bringing in-houses, we need to be as inventive in our high-voltage electronics as we have been in our X-ray tube. And I have to say the guys have done an amazing job. The generator there on the right is our version of generator, which is powering the Rover. It's a little bit smaller and about the same weight as the one we have been buying from Canada but it's 4x the energy. So that's outstanding to squeeze that performance into that package. So which means that the Rover that has 4x the capability of the first generation has the same weight, size, look, feel, as the original version. So that's important. On the left, you'll see the generator that's powered in Argus, a huge technology triumph to get that so small. So but that integration of the high voltage with electronics with the tube is a key part of us being able to make outstanding product designs going forward.

You have mentioned that they use this electricity in [indiscernible] high voltage...

No, it all runs off battery, all runs off battery, all battery-operated. The other common thread to our technology, and this is the third leg of our technology stool is the imaging software. The images that are 4 different products gather can be processed with -- there's a lot of commonality to how we do the imaging, reconstruction and indeed the imaging processing to gather as much information as you can from the image. And the team that we're building in Seattle, in particular, on the Checkpoint businesses will be the core of our software development going forward. But the techniques have a lot of commonality. So again, the same theme is the same investment in technology that finds application in all the different products. The strategic collaboration with Varex, recently breaking news, is actually really important for the company. the validation on in global markets of this technology because Varex is the recognized world leader in X-ray technology. There's hardly an X-ray company in the world that doesn't buy some of their technology from Varex in Salt Lake City, both in X-ray tubes and detectors and high-voltage components. So for them to want to make this alliance with Micro-X sends a very strong signal to global markets about the maturity and strength and leadership of our technology in this world market. So it's really got a lot of people internationally taking notice. As part of the deal, they have a license to make multi-beam X-ray tubes. Now that is not a conflict with our road map of products, all of which use single-emitter x-ray tubes. So this license gives us an opportunity to monitorize an area of the technology that we have developed and own but had no plans to use. So it's quite a smart deal for us for that reason. And backing that the company because they want to see a long-term collaboration wants to make an investment of 9.9% of the company. They've done half of that already, and with Andrew Hartmann joining the Board, I think the alliance between our companies going forward will be very strong. So going over to the business units and please, that message is very strong. It's 1 company, 4 business units, talk to each of them in turn here. Obviously, Mobile DR, our first technology-proving product, is still extraordinarily competitive. We get nothing but rave reviews from users around the world. The versatility, it started in hospitals. It's moving to military hospitals. Here in Adelaide, we have 2 door-to-door X-ray services. The unit is so mobile and so easy to maneuver. They're doing X-rays of patients in their front living room at home as well as, obviously, being able to wheel it into aged care facilities to X-ray patients who've got serious mobility issues. And of course, the veterinary market as well. But we've got over 250 units in service in 35 countries around the world, and it's demonstrating the reliability of this technology. We offer tubes for life guarantee because this electronic emitter is so reliable. We're guaranteeing a 10-year life for the tube, which is the intended life of the equipment. That's unheard of. And it really underlines and supports the concept in the -- we talked about the old-fashioned X-ray tubes being the incandescent light bulb moving to the LED and the great increase in efficiency and life. And it's an exact parallel in our x-ray world. David touched on the feedback we're getting from the Ukraine. We have 12 units in the Ukraine, bought by a U.S.-based charity, which was actually funded to do so by the U.S. government. We are in contact with the doctors that are using some of these, one particular in [indiscernible] , and they're desperate for us to get some more units. And we're hopeful that might be possible one way or another. But the use they're making of it, as David said, is outstanding. There was one unit that we remoted into. We saw 6,500 x-rays taken in 43 days, which gives you a level of indication of the kind of human casualty. And it might not be very obvious to see. But if you look carefully in that X-ray, which is a screen shot that this doctor sent us and literally, a screen shot with his mobile phone and sent it to us. But you can see this patient here has a bullet wound that's a high-velocity bullet that shattered his humerus. You can see the -- you can actually see the track of the bullet in the soft tissue in the x-ray. The entry wound on the inside and the exit wound on the outside. But that's the kind of trauma use that they're doing. And if they need 400 of those x-rays a day, you get some idea of the intensity of the conflict. And we're very proud that our technology and the quality and design and build is standing up to that when required. Also, saving lives. Of course, the Argus, the concept here, of course, you might be familiar is to be able to remove the ELD technician from anywhere near the explosive device. The concept of the camera, which, i.e., self-contained with the X-ray source and detector in the 1 unit. Means that they x-ray can be taken. It's a self-contained unit that can be carried down range by the robot.

Disrupt [indiscernible] the base [indiscernible].

Our x-ray doesn't do that. The standard way they disrupt bombs is a high-speed water cannon, which is directed at the energetic components within the bomb. So what they need from us is a high-resolution image to show what's inside, to show how they can aim the water disruptor. So huge effort from the mechanical design team here in squeezing that technology. It's our first x-ray product operating at 160,000 volts, which has its challenges and squeezing that into such a small package at only 17 kilograms as required some enormous invention. But we'll be very excited to start this in the new year. As David mentioned, we've had a few challenges as we transition this into manufacturing. Our yield was not high enough, which indicated that the technology wasn't yet as robust as we needed for a full product launch. One of the issues that we've had is the epoxy encapsulation of the high voltage. And it turns out that there's a lot of science that we needed to learn about the chemistry and physics of using epoxy as a high-voltage insulator. But we're through those and hoping we're proving -- we're through those issues in the coming few weeks. But the product itself is very well-designed, already operating. And as you've seen that, producing exactly the kind of high-resolution images that we were banking on. In checkpoints, the market opportunity is huge in EUR 24 billion, we estimate. And what we're doing here is enabling a dream of the TSA, the Transportation Safety Administration, in the U.S., to change from the traditional checkpoint to one that's self-service. As you're probably aware, everything in airports is now self-service from check-in, to getting your boarding card, to getting rid of your whole luggage, to access to the boarding gate. It's all self-service. The only thing that still needs to be manned is the checkpoint. And that's what they want to attack. The unusual thing is that with this system of self-service, you can actually get a higher level of security as well as a better passenger experience. Normally, those are mutually exclusive. And that's why everyone is getting very excited. The little illustration on the right shows 7 of our self-service portals, which is 7 because that's the same footprint as one normal conveyor belt x-ray system and airports, of course, thinking how many square meters do I need. So that's the concept of what we're doing. We have 2 contracts from the Department of Homeland Security, which is the owning body, if you like, of the TSA within the U.S. government. The first is for the CT Baggage Scanner itself. And as I mentioned earlier, we've passed the first design review of that. So we're in detailed design leading to the supply of a prototype of that in early part of next year. The TSA are so pleased with how we're doing. They've actually amended the contract recently. You may have seen our announcement for us to make a second prototype because they want to accelerate the program by doubling up the testing in parallel to assess the capability there. The second contract is for the design of the self-screening portal itself. That contract is ongoing, will complete in about a year. The concept there is integrating the document recognition, the scanning and the CT image of the baggage and again, self-service, so that you can do that in itself. So -- and again, that design that we've produced has been accepted at the first design review by the DHS. So we're into the next stage of that contract. I'll show you a little video here. The genesis of this, it was put together quite quickly for a conference last week in Las Vegas. The TSA organize every year an international conference where they ask -- invite basically airports or the security chiefs of airports around the world to come and listen to watch news from the TSA. So it's TSA talking about their direction and their achievements and their sense of the problems to airports around the world. Obviously, TSA is somewhat of the thought leaders in airport security. So there are airports from all over the world there, including from Sydney and Melbourne Airport. And of course, TSA with this vision of the new world, wanted us to present how is this going to look to everyone at this conference. So we put this video together very quickly, which kind of shows you -- brings to life what the self-service portal is going to look like. So our passenger here. This is actually one of our engineers in the Seattle office and some of our colleagues. So access into the portal, that's the baggage scanner. So when one person leaves, then it's free for the next passenger to come in. So they get the document scan, which allow them entry. The cabin -- you don't need to take anything out of the cabin bag because it's a CT image. So your personal effects and that go in. All the time the passenger is moving, they're being scanned by the millimeter wave. So that. And then while we produce a 3-dimensional image like this that can be viewed, the first assessment is done in an automated way by our software. So only if the software detects something will a human need to look at a 3-dimensional image to resolve the potential threat. Once it's clear, then you pick your bags up and you walk out of the portal. So that's a first little glimpse of what the airport of the future is going to look like, thanks to Micro-X technology. So great job there from the team in Seattle. Lastly, the Brain CT Scanner. Similarly, great progress on schedule, commercial product in 3 years, a year and a bit from now, we'll be doing our first imaging of cadavers and from there, into patient trials. Live patient trial requires a bit more paperwork. But our partners, Johns Hopkins, as I mentioned before, are predicting that our image quality is going to beat that of conventional CT. Just to remind you that the goal here is we've got an image. We've got to be able to image a bleed because this device works by confirming that there is no bleed. If there is no bleed in the brain, then it's safe to administer, to thrombolyse the patient, to basically give the clot-busting drug. Because if there is a bleed and you give a clot-busting drug, then the patient dies. So hence, they will not start that treatment without the CT image. And our image is likely to become the new standard of care with that level of resolution because we'll outperform our standard helical CT. So we're pretty excited about that as indeed, our people around the world. So the interest we're getting from people around the world, literally tracking us down and saying, "When can I buy one?" And the case of the Norwegians, they want to help in the regulatory approval and early imaging tests is really quite exciting. On the ESG front, something that we're monitoring that's very important to the company. We have a reconciliation action plan in development. Our diversity and employment is something that we're working hard on. Very pleased with our safety record. Our production environment completely -- almost completely staffed by ex-GMH Holden employees who had a great attitude to safety, which they've broadened with us. And so our injury record really very good. Working on electricity usage. We have been using a lot of electricity in our tube production in [indiscernible], but we found ways to reduce that significantly as a contribution to the ESG goals. Working very, very hard with our local community here promoting STEM because we -- this company will have an appetite for clever young engineers and technical people in manufacturing for a long time. So promoting interest in STEM with school children is our investment in the future. We have been working on a big improvement in our IT security even before the events of recent months. And something that we take for granted. We've been qualified to ISO 13485 for 6 years now and get audited every single year. So every single one of our processes in management and the operation of the company is audited every year. So as a testament to good governance, that quality assurance rating is very important. So I'd look for next year, getting Argus into its first sales which will happen in the first half of '23. We've got a number of potential first customers in mind, but obviously, the Department of Defence Land 154 Tender decision, which hopefully will come sometime in the next month or 2 will be a big influence on that. Our CT Baggage Scanner, our first prototypes delivered to the TSA during the year, completing the design of the self-screening checkpoint, and that's really being designed from the ergonomic point of view, that passenger interaction that video was all about. Growth in the mobile VR sales with pipeline and increasing the conversion launch in Middle East, important. Obviously, brain CT development continues to get something ready for first imaging. And obviously, our support for the technology transfer that we've signed with Varex. So thank you for that.

Thank you very much, Peter, and thank you also for the questions as we went along. The opportunity will come now to answer further answer questions. But before I do that, we'll now proceed with the formal matters for today. The purpose of this meeting is set out in the Notice of Meeting dispatched to shareholders. And unless there are any objections, I will take the Notice of Meeting as having been read. There are 11 items of business for today. As detailed on the slides you should now see and we will present on individual slides with the proxy received for each. Ten of these require 4 more resolutions. As shown in the current slide, Resolution 3, being the reelection of Andrew Hartmann as Director has been withdrawn as the Varex subscription for an additional 5% of Micro-X is still pending for our investment review Board approval. The first item is to receive and consider the financial accounts and the reports of the directors and the auditors for the financial year ending 30th of June 2022. It's not a requirement that shareholders vote in relation to the accounts. However, we are pleased to answer any questions relating to them or any other matter you would like to raise at this moment. So if there's any shareholder of any questions or comments, if you do, please submit them via the Q&A function within Zoom or through the roving microphone in person. There will also be an option for general questions at the end of our formal business. Kingsley, does any shareholder or any questions or comments?

We have 2 questions, David, at this point. The first 1 was submitted in advance of the AGM asking, "Since the outbreak of COVID-19, the supply chain of various companies has been affected. I would like to know a little about the current state of our supply chain and if there are any problems."

Yes, I'm going to pass this to Peter. But before I do, I'd just like to make a few general comments. First of all, we're here in Tonsley. Tonsley is our manufacturing facility for all of the critical technology. The second point that Peter has already made is that we've brought the generator technology in-house. And originally, it came from Canada. And now, as you see, growth generated for the Rover, but also the generator for Argus has come in-house. So we are working to bring technologies home where we can. And in doing that, obviously, we don't eliminate the supply chain issues, but we do seek to reduce them. Peter, I'm sure can add more color. Can I just ask -- will you take a microphone because otherwise, our shareholders who are not in this room can't hear your question. So by all means.

Well, I would just ask you said the generators. I'm asking about the batteries, are they same thing?

Yes. So it's a very good question. Peter, generators and batteries. Excellent question, by the way.

Generator is a slightly unusual term due to the history of the x-ray industry. But it's the industry term for what's in fact, a high-voltage power supply. It's a high-voltage power supply. So the battery system is different. All the battery control electronics are part of Australian-designed and produced. Batteries themselves come from the U.S.A. But now with the -- to answer the initial question, with something in excess of 90% of the value of our Rover cart, now Australian-sourced. Our supply chain issue is much less than they were at the outbreak of COVID. Like every company in the world, we're experiencing difficulty sourcing electronic components. So there's quite a large overhead in looking at redesigns and substitute components where to replace things that aren't available. The good news is in the generator designs that we've done for both Rover and now for the Argus. Because those designs have been done quite recently, we've actually based those designs around components, which are more easily obtained than some of the things that the car industry, for instance, the chips there that are almost unobtainable. So our -- we work at it very hard is the answer. But -- the -- we're not in any huge problem at the moment with sourcing.

Thank you, Peter. Kingsley?

Yes, second question, David. "Could we please have an update on image quality with the Argus? Have we reached our goal, quality? Or are we still working towards that?"

Thank you very much, Kingsley. This is definitely a question for Peter.

No, we've attained the image quality that was in our design target, which was exactly the same as what we demonstrated to the Australian Department of Defense 5 years ago. The unit -- with the bench top demo that we did 5 years ago was huge. So as we've shrunk it down to this miniature pack -- miniature size and the simplicity that we've got in the system. We've maintained the same image quality. the target there is not to replicate a normal extra image. But to -- all the bomb technicians said, we just need component resolution. We need to be able to see the wires, we need to be able to look at a component and say, yes, I recognize that. That's the battery, that's the detonator, that's the switch. The image that you saw, we can see down to about 300 microns. That's about 0.3 of the millimeter wires are showing up on the image, and that's more than enough for all you need to make a decision about what to do with this weapon.

In the room? Are there some questions in the room? Any further online, Kingsley?

No, David.

Given there are no further questions, we'll move to the formal resolutions that need to be considered. And I remind you, at the end of the meeting, there will be another opportunity to ask questions. So if you have any, please do that then. Proxies received in relation to the formal resolutions are set out in the following slides. The first item requiring a resolution is to adopt the Remuneration Report forming part of the Directors Report for the financial year ending 30th of June 2022. I move that the Remuneration Report be adopted on the basis set out in the Notice of Meeting. Kingsley, does any shareholder any questions or comments on the Remuneration Report?

No.

The next item of business is the reelection of Ms. Ilona Meyer as the Director of the company. I move that Mr. Ilona Meyer, being a director who was appointed by the company's Directors on the seventh of March 2022, pursuant to the constitution of the company and being eligible for reelection, offers herself for reelection, is hereby reelected as the Director of the company. Kingsley, does any shareholder have any questions or comments?

No, David.

Yes, a question in the room. Let's get a microphone, if we could.

My name is Chris Maxworthy, I'm a shareholder and also a member of the ASA. It's an observation rather than a question. For future meetings, could we perhaps have the percentage breakdown, in addition to the raw numbers.

Yes.

That would be standard practice.

It's running at what, about 95% plus, isn't it right now?

Yes, about 96%.

96%. Yes, it's running about 96% on this particular resolution.

[indiscernible]

Yes, that's fine. We can certainly do that. I'm familiar with that. And now to Resolution 4. The next item requiring resolution is to ratify the issue of shares to Varex. I move that for the purposes of ASX Listing Rule 7.4 and for all other purposes, shareholders ratify the issue of the Tranche A placement shares on the terms and conditions set out in the Explanatory Statement. Does any shareholder have any questions or comments?

None.

Thank you. The next item requiring a resolution is to ratify the second tranche of shares to Varex, which is subject to FIRB approval. I move that for the purposes of ASX Listing Rule 7.4 and for all other purposes, shareholders ratify the agreement to issue the Tranche B placement shares on the terms and conditions set out in the Explanatory Statement. Is there any shareholder have any questions or comments, Kingsley?

None.

The next item requiring a resolution is to approve the issue of Performance Rights to Ms Ilona Meyer under the Employee Equity Plan. I move that for the purposes of ASX Listing Rule 10.14, Sections 200B and 200E of the Corporations Act and for other -- all other purposes, a conditional on Resolution 2 being approved in accordance with its terms, shareholders approved the issue of performance rights to Ms. Ilona Meyer or her nominee under the Employee Equity Plan on the terms and conditions set out in the Explanatory Statement. Does any shareholder have any questions or comments?

No.

I'll now hand over to Peter to present Resolution 7.

Thank you, David. The next item of business is the approval of the issue of shares to Mr. David Knox in lieu of cash payments for directors fees. I move that pursuant to, and in accordance with ASX Listing Rule 10.11 and for all other purposes, shareholders approve the issue of up to 667,927 shares to Mr. David Knox or his nominee, on the terms and conditions set out in the Explanatory Statement accompanying this Notice of Annual General Meeting. Does any shareholder have any questions or comments?

No, Peter.

Okay. If there are no further questions, I will now hand back to David.

So the next item of business is the approval of the issue of shares to Mr. Patrick O'Brien in lieu of cash payments for his Directors' fees. I move that pursuant to and in accordance with ASX Listing Rule 10.11, and for all other purposes, shareholders approved the issue of up to 434,153 shares to Mr. Patrick O'Brien or his nominee on the terms and conditions set out in the explanatory statement accompanying this notice of Annual General Meeting. Are there any questions, Kingsley?

No.

The next item of business is the approval of the issue of shares for Dr. Alexander Gosling in lieu of cash payments for Director fees. I move that the pursuant to and accordance with ASX Listing Rule 10.11 and for all other purposes, shareholders approve the issue of up to 434,153 shares to Dr. Alexander Gosling or his nominee on the terms and conditions set out in the Explanatory Statement accompanying this Notice of Annual General Meeting. Does any shareholder have any questions or comments?

No.

The next item of business is the approval of the issue of shares to Mr. James McDowell in lieu of cash payments for the Director fees. I move the pursuant to in accordance with ASX Listing Rule 10.11, and for all other purposes, shareholders approve the issue of up to 434,153 shares to Mr. James McDowell or his nominee on the terms and conditions set out in the Explanatory Statement accompanying this Notice of Annual General Meeting. Kingsley, does any shareholder or any questions?

We do have one. The question now asking, "Wondering if any of the resolutions need to be formally seconded as well as being moved by the Chairman?"

I don't think so.

No, they do not.

You for the question, though. Turning to Resolution 11. The next item of business is the approval of the issue of shares to Ms. Ilona Meyer in lieu of cash payments for Director fees. I move that pursuant to in accordance with ASX Listing Rule 10.11, and for all other purposes and condition on Resolution 2 being approved in accordance with its terms, shareholders approve the issue of up to 434,153 shares to Ms. Ilona Meyer or her nominee on the terms and conditions set out in the Explanatory Statement accompanying this Notice of Annual General Meeting. Does any shareholder have any questions or comments? Yes? Can we have the microphone at the front. John?

Can I ask, these shares are issued, they might be [ blocked ]. There's no listing issue price?

Yes, there is. So these shares to Directors -- through approval of these resolutions, Directors have the ability to either take their fees in cash or if they choose to do so, they can take a percentage of their fees as shares. And the share price is set basically as the VWAP. So the average share price for the...

It's leading into the end of each quarter.

That's why it's such a peculiar figure.

Yes. That's why it's a very odd figure. And it depends ultimately on the share price at the time as to what the number of shares is. And it also, Directors can take 50% of the shares or 100% if they wish.

And there's no restriction for the Director subsequently selling issues?

The restriction on selling the shares is the same as all Directors are restricted, and they only can trade in open periods, and they have to satisfy themselves in trading that they don't have any information that other shareholders, all of -- all shareholders have before they can trade. In effect, it makes it quite difficult trade. Thank you for the questions. So that brings us to an end of the resolutions required to be voted on at this meeting. Now there's an opportunity now for the call for any further general questions attendees might have before we finalize proceedings for the day. So please, if you've got any further questions out in the room or on Zoom, please ask your question either with the roving microphone or via the Zoom system. Any further questions? We have one in the room.

Just to put a clarification. You're hoping to sell the Argus before next June? Is that it?

I'll ask Peter for that, but yes.

Yes. Yes, very much so.

Yes, it's very important, Argus development because obviously, we have Mobile DR is in full commercialization. Argus is the next is the next commercialization product. So it's very important for us that we successfully develop. And ultimately, that we win the Australian tender as well. But we'll see.

Did I understand correctly that Micro-X has now got a 5% holding in Varex?

No. No, other way around. Varex will have on FIRB approval a 9.9% approved holding in Micro-X. So they were on FIRB approval. Currently, they have a 4.9% holding in us. But on FIRB approval, which we expect reasonably soon, but obviously, we can't front run that, then we will have -- they will own 9.9%. And they will be able to nominate a board member, which they've done, which is Andrew Hartmann, who is a very Senior, an ideal Board member as he's in the business in the largest market in the world. And he heads their sales and marketing. So he's ideal for joining our Board. But that cannot occur until we have FIRB approval. Kingsley, are there any further questions?

No, there aren't. Not online.

So ladies and gentlemen, that concludes all the items of business. In a couple of minutes, I'll close the voting system. Please ensure that you've cast your vote on all resolutions. For holders in the room, please place your voting cards in the ballot box circulating in the room right now. Please ensure it is signed in order for it to be counted. I will now pause for 2 minutes to allow you time to finalize all your voting. [Voting]

So that concludes the formal business to be dealt with today. The results of these votes will be released to the ASX later this afternoon. For those attending today's Annual General Meeting in person, I now invite you to move to the Micro-X building to tour the facility and meet some of our highly qualified staff. To those in the room, I thank you very much for attending. To those online, I also thank you very much for attending. We had good numbers in both places. I now declare the meeting closed. Thank you, everybody.

Thank you.