Ann: AGM Live Stream Webinar Registration Open, page-87

Hi All
I was lucky enough to spend a few quality hours immediately after the AGM in private with all the board and few other select share holders – most of whom you know.  In particular had very good open chats with Simon Buckingham, David St Denis, John Seaburg and Matt Ratty.
I didn't take notes during the webinar or meeting so this is my recollections and thoughts. @Eire2011 has done a very comprehensive and excellent post – I'll try and fill in the gaps based on the conversations I had, but he's definitely nailed the collective sentiment.  Thx Joe.
For starters, I was really impressed at how professional the ENTIRE board is. Just chatting to SB and DSD was confidence building. Just watching them – you see cohesiveness, mutual 2 way respect between all members that is well deserved IMO.  AHZ are lucky to have WP, but also DSD, JS, SB and Ratty. Quite frankly – I really like having large Ratty as a shareholder on the board and this sentiment was echoed by the other shareholders in attendance. After meeting all them together, at once, it reinforced how special AHZ is becoming → the base of that pyramid being the leadership team. You don't get these perceptions when you watch the AGM - you only get them by meeting them in person and being there.  
The main message from the board is that they are very quickly building a very good bankable business. Its not buzzwords – they have a very good plan and know how to execute for long term growth and profitability. Basically that means they have sufficient collateral, can repay loans from revenues, profitable, and growing. I know some of you will complain about the share price and I get it. I decided a long while back to stay invested and even bought an extra 100k shares leading up to the AGM around 20.5 to 21.5. If it goes back to those prices, I'll be liquidating more other stocks to buy more.  Again read @Eire2011 post who also participated. There are reasons it “appears” slow right now yes – but there are also reasons why 2020 will be met and why we will be CF+ and profitable by end of CY2018. For those who don't understand what 2020 means – it means putting 20 million dollars in the bank in 2020.

Cardiocel 3D → For me I've always tried to understand why its taken so long to get this product to the market and the incredibly slow roll out. It was made very clear to me that imagine if one of the top surgeons who are trialling 3D used it incorrectly and there was a negative outcome. The surgeon wouldn't blame himself – he would slam 3D and that would be the end of our journey before it even began.  This is the path we used to follow under previous management.  Now its a different journey, and this is the reason as DSD and SB explained, they have taken the very cautious approach whereby every operation is carefully chosen, planned and supported with a rep elbow to elbow in the operation to prove beyond a shadow of a doubt that 3D will never be the issue.  This is a long game.  AHZ cannot afford to mess this up due to a few investors lack of patience - those days are behind us.  Those like myself who are long term investors are on the cusp of receiving many years of significant returns.
There has also been a few comments on HC regarding how many surgeons were polled noting 85% said yes they would use it STRAIGHT AWAY.  So DSD clarified that there are approximately 1700 operations per year right now in the USA that would be able to use 3D right now. AHZ polled 7 of the TOP surgeons in the USA. 6 Said they would immediately use 3D, the 7th said he wanted to see it first. These are the top surgeons.  There are only 25 surgeons who perform operations that can use 3D.  
The simple maths is this is potentially worth up to 1700 * $7000 USD per year. You can never guarantee a result but the numbers will start to add up and this is just one part of how revenue will start to grow significantly. If you aren't one of the surgeons using 3D, you might start to lose customers to those who do use it.  
Remember there is India coming on line any millisecond, Australia about June and most of south east Asia with it.  These will also use 3D.  The numbers compound and grow!
Europe has been very slow with a few issues. Germany is often stated as the biggest market in Europe but France is also a big market – I think 2nd biggest. Regarding ability to sell Cardiocel in France – the feedback until recently was apparently something like “What does the Necker-Enfants use?” If it wasn't CC, then other hospitals wouldn't use. Unfortunately it wasn't.   DSD stated that AHZ only just recently got the Necker on board which opens up the potential for other hospitals. Now the plan is AHZ go back and knock on those doors again... but this time we get to say “Well the Necker uses the CC family – Will that be cash or credit Sir?” Again – here is potential for the start of significantly more revenue growth in Europe.
Regarding TAVR – my understanding is there will be a partnership before we even get close to start selling TAVR. My understanding full market release after FDA approval and trials will be about 2-3 years away but the partnership could come any time between 6 months and 2 years. The partnership will likely involve a very decent sized upfront payment. I took several photos which WP said were ok to put on HC so here is one below showing the relative size compared to my wife's finger.  Its a cool piece of tech - and a game changer.
  
Delivery handle simple yet worth every penny of that ~$30k USD its going to be sold for.


When I looked at this photo of WP holding the TAVR - the caption in my mind went something like - "for patients, it will be inserted into the femoral artery - for competitors, it will be taken as a suppository."

Regarding immunotherapy→ intent is to get a partner and a deal is presently being negotiated → apparently at a late stage. Nothing guaranteed in terms of certainty or when, but main point is that its got to attract its own funding and looking in good shape. WP and Prof Frazer working on this. The deal sounded like it will involve a significant cash payment. It also sounded at a very advanced stage, but again until pen is on paper, its just potential.  Personally I've been more negative on the immunotherapy for a while as was worried it would drain funds.  Now I'm hearing the opposite so i'm just going to watch on the sidelines for a while.

Regarding CC IDN's → several tenders in play or coming up. I believe June 2018 is D-Day for one of the bigger ones.  The interesting one for me was a not-for profit organisations where they manage over 10 million patients and have their own doctors and hospitals. Its in these hospitals best interests to keep lifetime costs down by being efficient with product selection etc. Imagine only doing an operation once using CC family, or potentially several times with more negative outcomes using a competitor product. This is where CC family should start hitting its straps in terms of winning IDN's. These tenders typically come up every 3 years so its just a waiting game but in play soon. Name of hospital withheld as not sure of impact but I looked it up and its real.  

I was impressed by Ratty – I don't care how old he is – I see respect from the other more experienced members of the board. He has a few ideas and plans regarding getting interest from institutional investors who will buy shares on market – hence not diluting us. These investors will likely start buying once they get 100% confirmation we are CF+ but then it will be game on. Imo it probably won't be morgans )). I asked Ratty about his own personal time lines and although he told me the date regarding how long he intends to stay invested, all I'm just going to say is Ratty is in this for the very long haul – I was surprised and it gave me inspired confidence. He has a VERY long term vision; he appears hungry and he knows how to get it. Again – I'm impressed and happy with his outlook and commitment and patience for a young buck.

Regarding the 3D vascular product, at this stage its a CC tube with a seam. Development is ongoing and the challenges relate to being able to seal the seam which is a high pressure vascular product. At present its still less than 50% probability of success but growing and interesting to hear how much emphasis is being placed on using the key advantages of Adapt and building a growing portfolio of products which will have NO competition and yet growing markets. Again – read the post by @Eire2011

Had interesting chat with the chairman John Seaburg and as all members of the board - a true gentlemen but knows his game. He's been involved in this industry since before people were having open heart surgeries and now been through 2 paradigm shifts in how heart operations are done. He knows this industry very well and said something like ( I can't remember his exact words but remember the intent) WP is on top of this game and we couldn't find a better CEO – he might have come from a drug company and has bought some lessons from that industry which makes AHZ even better. Although me and @suckii know this already )), its nice to hear it reinforced by your chairman!  He wasn't saying it because he is paid to, he was saying it because he truly believed it.  

Simon, John, The Saint, WP and Ratty are all partly driven by that primal need to be the best. Its called Ego – you can see it – its fantastic. Why – because its not KPI driven. Its not about money for them. Money is secondary. For this team – its about being the best in a situation. But what differentiates them from past management teams is they also exhibit integrity (they do what they say they are going to do and hit the stated targets), empathy to shareholders (otherwise WP would never answer all my crazy question), cohesiveness (previously there was none).

So just joining the dots for some of you as a summary of the day...
There are “potentially” 2 significant deals in immunotherapy and TAVR that could and should create step jumps in the share price on announcement. Nobody knows when but TAVR has to happen – its that good.

The share price today is a trial yes. Its also an opportunity. I'm taking the opportunity. In a 12 months time at the next AGM, we will be cash flow positive perhaps also with large cash injection in the form of a TAVR deal, immunotherapy deal, and institutional investors buying on market for the long term. Its not a dream - there are logical methodical steps that are being acted on right now.  An example is the slow rollout of 3D – it HAS to be done right but the pay back is for YEARS!.

Markets are opening – Australia TGA around June. India any millisecond from now. China is still a few years away but that will contribute to 2020. Again it must be done right.  Every market that opens is more products that AHZ can sell. The slow rollouts and trials are being done in the US – other markets should be quicker to grow based on the USA experience.

Lastly – there were lots of people from HC – I didn't get to meet all but tried. @haveachat, @suckii, gordon, Damian, @SsFxX , Adam, Iain, @manyhoods, @dazdesb, @musky45, @eath93, @ciroc, angus and wife and a few others. Always good to meet the person behind the post. Keeps it real.

Had a nice intro chat to Barb Ferres – sounds like she reads a lot of our HC jibber jabber and knew most of us which I found funny.
Anyway, all IMO
DYOR, GLTAH and definitely going to the next AGM so hope to see more of you there.  Well worth it.
cheers
David