Ann: Preliminary Final Report and Full Year Accounts, page-8

It has become a foot race: cash burn vs revenue growth.

I didn't hate the update, but not a lot of runs on the board either. Still clearing the decks. But as I noted before, tic toc tic toc.. their approach of totally overhauling the distribution approach is now 10months in, and so October 2021 AGM / 1H22 results will need to show something positive.

Some key things I noted:

• Revenueup ~9% to $25m (Penthrox up45% to $19m, Breathe-a-tec down 40% to $5.3m, Vet flat at $0.4m)
• Penthroxdistribution: New research around effectiveness of Penthrox;UK growing 41%; expanding Galen’s distribution from UK//Ireland to Nordicregion; new distribution in central Europe scaling up; MVP expanding salesstaff from 1 to 9 in continental Europe; Australian sales flat due to handoverof distribution back to MVP and clearing inventory; Seeking new partnership inCanada; FDA approval progressing albeit slowly with planned clinical trialprotocol to be submitted in 1H22; China trial started enrolling in 4Q21.
• Spacesaver: Walmart private label finally launched in FY21; General slowdown due toCovid; impairment of $4.7m goodwill; not expecting significant growth - so much for being the cash cow to fund expansion in Penthrox.
• Continuous Flow: Lidocaine stillthe most advanced, but “no licenses have been achieved, making reliableestimation of the technology’s value-in-use difficult”, $4.3m impairment. I have noted before I assume this is worth $0 even though it could have significant upside, operationally just been too difficult.
• Cash flow: $36m in cash reservesafter the recent raise; growth CAPEX of $15m in FY21; new distribution means gross profits up ($15 to 19m) but so are admin expenses ($4 to $14m); tictoc. This will become a real issue in FY22 when admin expenses grow with new MVP distribution team in Europe and Australia.
• Outlook: Expecting strongEuropean Penthroxsales growth - but this probably needs to be +$7m in 1H22 just to cover the additional distribution costs.
• Next report will beOctober 2021 at the AGM.