Ann: Half Yearly Report and Accounts, page-3

Clearly need to kick some backside in the Korean and Singapore sales teams. Possibly kick them altogether along with a few of themselves.

Usual obvious complaints. Costs too high, revenue growth too slow. Balance sheet only supported by recent share placement.

I wrote to these guys a year ago forewarning of this eventuality, specifically on cash flows and capital. I got a crappy generic response so purposely held off until recently before buying. The technology this company has, we all know, is brilliant. Its been a very poorly managed company, the evidence to that quite clear in this report. They made big mistakes in leaving the cash raise so late in the day (the share price fall becomes self-fulfilling on expectations of a discounted raise) and then made mistakes on execution as they admit themselves and we all know the reporting errors:

"The increase in net loss after tax from ordinary activities during the half-year ended 30 June 2023 is attributable mainly to the share-based payment expense, which is a non-cash item. This increase is primarily due to the options issued to the lead manager of the share placement from December 2022 to June 2023."

The company can't keep throwing money at new markets, if the ones previously focused on do not produce continuously growing revenues. And frankly the explanation for losses a load of rubbish:

"The net loss after tax from ordinary activities during the half-year ended 30 June 2022 is mainly attributable to an increase in operational and marketing costs as the Company continues to penetrate new markets with participation in more Trade Shows and Exhibitions and sign up of craniofacial distributors in South Africa, the United Arab Emirates and Colombia, and a Maxillofacial distributor in Australia. In addition, the Company continues to engage with its distribution partners to ensure sales teams are educated and supported to drive adoption and sales."

A year ago the half yearly accounts featured practically the identical blurb, WORD FOR WORD.

No. The reason for your losses is you are throwing money at sales locations that then fail to deliver when established and your general Sales, marketing, and business development expenses have been larger than the revenues achieved, even on a lagged basis. They did at least only grow by the increase in sales revenues this year, but still not good enough. Stop throwing new money at new geographical sales locations and look at previously established sales locations and ask why (with the exception of Vietnam) they are going backwards.

This report confirms entirely why the stock has dropped 73% in a year. All that said, if they can somehow reverse the losses of revenues in S.Korea and Singapore and continue to grow the sales as seen in the rest of SE Asia, the picture could very soon brighten.